Facility II Credit Agreement - CWM Mortgage Holdings Inc., Independent National Mortgage Corp., Independent Lending Corp. and First Union National Bank of North Carolina
AMENDED AND RESTATED
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FACILITY II
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CREDIT AGREEMENT
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THIS AMENDED AND RESTATED FACILITY II CREDIT AGREEMENT (the "Agreement") is
made as of the 28th day of August, 1996, by and among CWM MORTGAGE HOLDINGS,
INC., a Delaware corporation ("CWM"), INDEPENDENT NATIONAL MORTGAGE CORPORATION,
a Delaware corporation ("Indy Mac"), INDEPENDENT LENDING CORPORATION, a Delaware
corporation ("ILC" and, together with CWM and Indy Mac, the "Companies"), the
lenders from time to time party hereto, their respective successors and assigns
(each a "Lender" and collectively the "Lenders"); FIRST UNION NATIONAL BANK OF
NORTH CAROLINA, a national banking association, as issuer of the Letters of
Credit referred to below (in such capacity, the "L/C Bank"); and FIRST UNION
NATIONAL BANK OF NORTH CAROLINA, a national banking association, as
administrative agent for the Lenders and the L/C Bank (in such capacity, the
"Administrative Agent").
STATEMENT OF PURPOSE
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The parties hereto (other than the L/C Bank) have previously entered into
that certain Facility II Credit Agreement dated as of May 30, 1995, as
subsequently amended and modified from time to time (as so amended and modified,
the "Existing Facility II Agreement"). The parties hereto desire to amend and
restate the Existing Facility II Agreement in its entirety and hereby agreed
that from and after the date hereof, this Amended and Restated Facility II
Credit Agreement among the parties shall supersede the Existing Facility II
Agreement in all respects and shall constitute the entire agreement among the
parties hereto with respect to the subject matter contained herein. All
capitalized terms not otherwise defined herein are defined in Paragraph 16
hereof.
Now, therefore, for good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the parties hereto agree as follows:
AGREEMENT
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1. Tranche A Credit Facility.
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1(a) Lending Limit. Subject to the conditions set forth herein, the
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Lenders severally agree that they shall from time to time up to and including
the Business Day immediately preceding the Maturity Date, advance and readvance
their respective Percentage Shares of loans (the "Tranche A Loans" or a "Tranche
A Loan") to the Companies in amounts not to exceed, in the aggregate at any one
time outstanding (determined after giving effect to the other transactions
contemplated by the Loan Request pursuant to which said Tranche A Loan was
requested), the lesser of:
(1) The Aggregate Tranche A Credit Limit; and
(2) The Collateral Value of the Tranche A Borrowing Base minus
the aggregate dollar amount of Swing Line Loans outstanding which have been
identified by the Companies in the applicable Loan Request as being
scheduled for repayment by Tranche A Loans (and which are not being repaid
by any Tranche A Loan requested).
Provided, however, that notwithstanding anything contained herein to the
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contrary, at no time may the sum of all Tranche A Loans outstanding, all Tranche
B Loans outstanding, all Tranche C Loans outstanding, all Tranche D Loans
outstanding, all Tranche E Loans outstanding, all Tranche F Loans outstanding,
all Tranche G Loans outstanding, the aggregate amount of all L/C Drawings which
have not been reimbursed by the Companies (and which are not being repaid with
the proceeds of a Tranche G Loan on such date), the maximum aggregate amount
available to be drawn under all outstanding Letters of Credit, and all Swing
Line Loans outstanding exceed the lesser of (i) the Aggregate Collateral Value
of the Borrowing Base or (ii) the Aggregate Facility Commitment at such time.
1(b) Interest Rate. All Tranche A Loans shall bear interest at the
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Applicable Corporate Rate, unless the Companies elect to have a Tranche A Loan
bear interest at (i) the Applicable Eurodollar Rate as permitted herein or (ii)
an interest rate established pursuant to Paragraph 7(u) below.
1(c) Payment of Interest. The Companies shall pay to the
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Administrative Agent for distribution to each Lender interest on Tranche A Loans
outstanding hereunder from the date disbursed
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to but not including the date of payment. Interest on Tranche A Corporate Rate
Loans shall be payable monthly, in arrears, as provided in Paragraph 7(l) below,
and interest on a Tranche A Eurodollar Loan shall be payable at the end of the
applicable Interest Period.
2. Tranche B Credit Facility.
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2(a) Lending Limit. Subject to the conditions set forth herein, the
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Lenders severally agree that they shall, from time to time up to and including
the Business Day immediately preceding the Maturity Date, advance and readvance
their respective Percentage Shares of loans (the "Tranche B Loans" or a "Tranche
B Loan") to the Companies in amounts not to exceed, in the aggregate at any one
time outstanding (determined after giving effect to the other transactions
contemplated by the Loan Request pursuant to which said Tranche B Loan was
requested), the lesser of:
(1) The Aggregate Tranche B Credit Limit; and
(2) The Collateral Value of the Tranche B Borrowing Base minus
the aggregate dollar amount of Swing Line Loans outstanding which have been
identified by the Companies in the applicable Loan Request as being
scheduled for repayment by Tranche B Loans (and which are not being repaid
by any Tranche B Loan requested).
Provided, however, that notwithstanding anything contained herein to the
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contrary, at no time may the sum of all Tranche A Loans outstanding, all Tranche
B Loans outstanding, all Tranche C Loans outstanding, all Tranche D Loans
outstanding, all Tranche E Loans outstanding, all Tranche F Loans outstanding,
all Tranche G Loans outstanding, the aggregate amount of all L/C Drawings which
have not been reimbursed by the Companies (and which are not being repaid with
the proceeds of a Tranche G Loan on such date), the maximum aggregate amount
available to be drawn under all outstanding Letters of Credit, and all Swing
Line Loans outstanding exceed the lesser of (i) the Aggregate Collateral Value
of the Borrowing Base or (ii) the Aggregate Facility Commitment at such time.
2(b) Interest Rate. All Tranche B Loans shall bear interest at the
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Applicable Corporate Rate, unless the Companies elect to have a Tranche B Loan
bear interest at (i) the Applica-
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ble Eurodollar Rate as permitted herein or (ii) an interest rate established
pursuant to Paragraph 7(u) below.
2(c) Payment of Interest. The Companies shall pay to the
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Administrative Agent for distribution to each Lender interest on Tranche B Loans
outstanding hereunder from the date disbursed to but not including the date of
payment. Interest on Tranche B Corporate Rate Loans shall be payable monthly, in
arrears, as provided in Paragraph 7(l) below, and interest on a Tranche B
Eurodollar Loan shall be payable at the end of the applicable Interest Period.
3. Tranche C Credit Facility.
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3(a) Lending Limit. Subject to the conditions set forth herein, the
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Lenders severally agree that they shall, from time to time up to and including
the Business Day immediately preceding the Maturity Date, advance and readvance
their respective Percentage Shares of loans (the "Tranche C Loans" or a "Tranche
C Loan") to the Companies in amounts not to exceed, in the aggregate at any one
time outstanding (determined after giving effect to the other transactions
contemplated by the Loan Request pursuant to which said Tranche C Loan was
requested), the lesser of:
(1) The Aggregate Tranche C Credit Limit; and
(2) The Collateral Value of the Tranche C Borrowing Base minus
the aggregate dollar amount of Swing Line Loans outstanding which have been
identified by the Companies in the applicable Loan Request as being
scheduled for repayment by Tranche C Loans (and which are not being repaid
by any Tranche C Loan requested).
Provided, however, that notwithstanding anything contained herein to the
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contrary, at no time may the sum of all Tranche A Loans outstanding, all Tranche
B Loans outstanding, all Tranche C Loans outstanding, all Tranche D Loans
outstanding, all Tranche E Loans outstanding, all Tranche F Loans outstanding,
all Tranche G Loans outstanding, the aggregate amount of all L/C Drawings which
have not been reimbursed by the Companies (and which are not being repaid with
the proceeds of a Tranche G Loan on such date), the maximum aggregate amount
available to be drawn under all outstanding Letters of Credit, and all Swing
Line Loans outstanding exceed the lesser of (i) the Aggregate Collateral Value
of the
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Borrowing Base or (ii) the Aggregate Facility Commitment at such time.
3(b) Interest Rate. All Tranche C Loans shall bear interest at the
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Applicable Corporate Rate, unless the Companies elect to have a Tranche C Loan
bear interest at (i) the Applicable Eurodollar Rate as permitted herein or (ii)
an interest rate established pursuant to Paragraph 7(u) below.
3(c) Payment of Interest. The Companies shall pay to the
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Administrative Agent for distribution to each Lender interest on Tranche C Loans
outstanding hereunder from the date disbursed to but not including the date of
payment. Interest on Tranche C Corporate Rate Loans shall be payable monthly, in
arrears, as provided in Paragraph 7(l) below, and interest on a Tranche C
Eurodollar Loan shall be payable at the end of the applicable Interest Period.
4. Tranche D Credit Facility.
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4(a) Lending Limit. Subject to the conditions set forth herein, the
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Lenders severally agree that they shall, from time to time up to and including
the Business Day immediately preceding the Maturity Date, advance and readvance
their respective Percentage Shares of loans (the "Tranche D Loans" or a "Tranche
D Loan") to the Companies in amounts not to exceed, in the aggregate at any one
time outstanding (determined after giving effect to the other transactions
contemplated by the Loan Request pursuant to which said Tranche D Loan was
requested), the lesser of:
(1) The Aggregate Tranche D Credit Limit; and
(2) The Collateral Value of the Tranche D Borrowing Base minus
the aggregate dollar amount of Swing Line Loans outstanding which have been
identified by the Companies in the applicable Loan Request as being
scheduled for repayment by Tranche D Loans (and which are not being repaid
by any Tranche D Loan requested).
Provided, however, that notwithstanding anything contained herein to the
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contrary, at no time may the sum of all Tranche A Loans outstanding, all Tranche
B Loans outstanding, all Tranche C Loans outstanding, all Tranche D Loans
outstanding, all Tranche E Loans outstanding, all Tranche F Loans outstanding,
all Tranche G Loans outstanding, the aggregate amount of all L/C Drawings which
have
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not been reimbursed by the Companies (and which are not being repaid with the
proceeds of a Tranche G Loan on such date), the maximum aggregate amount
available to be drawn under all outstanding Letters of Credit, and all Swing
Line Loans outstanding exceed the lesser of (i) the Aggregate Collateral Value
of the Borrowing Base or (ii) the Aggregate Facility Commitment at such time.
4(b) Interest Rate. All Tranche D Loans shall bear interest at the
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Applicable Corporate Rate, unless the Companies elect to have a Tranche D Loan
bear interest at (i) the Applicable Eurodollar Rate as permitted herein or (ii)
an interest rate established pursuant to Paragraph 7(u) below.
4(c) Payment of Interest. The Companies shall pay to the
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Administrative Agent for distribution to each Lender interest on Tranche D Loans
outstanding hereunder from the date disbursed to but not including the date of
payment. Interest on Tranche D Corporate Rate Loans shall be payable monthly, in
arrears, as provided in Paragraph 7(l) below, and interest on a Tranche D
Eurodollar Loan shall be payable at the end of the applicable Interest Period.
5. Tranche E Credit Facility.
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5(a) Lending Limit. Subject to the conditions set forth herein, the
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Lenders severally agree that they shall, from time to time up to and including
the Business Day immediately preceding the Maturity Date, advance and readvance
their respective Percentage Shares of loans (the "Tranche E Loans" or a "Tranche
E Loan") to the Companies in amounts not to exceed, in the aggregate at any one
time outstanding (determined after giving effect to the other transactions
contemplated by the Loan Request pursuant to which said Tranche E Loan was
requested), the lesser of:
(1) The Aggregate Tranche E Credit Limit; and
(2) The Collateral Value of the Tranche E Borrowing Base minus
the aggregate dollar amount of Swing Line Loans outstanding which have been
identified by the Companies in the applicable Loan Request as being
scheduled for repayment by Tranche E Loans (and which are not being repaid
by any Tranche E Loan requested).
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Provided, however, that notwithstanding anything contained herein to the
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contrary, at no time may the sum of all Tranche A Loans outstanding, all Tranche
B Loans outstanding, all Tranche C Loans outstanding, all Tranche D Loans
outstanding, all Tranche E Loans outstanding, all Tranche F Loans outstanding,
all Tranche G Loans outstanding, the aggregate amount of all L/C Drawings which
have not been reimbursed by the Companies (and which are not being repaid with
the proceeds of a Tranche G Loan on such date), the maximum aggregate amount
available to be drawn under all outstanding Letters of Credit, and all Swing
Line Loans outstanding exceed the lesser of (i) the Aggregate Collateral Value
of the Borrowing Base or (ii) the Aggregate Facility Commitment at such time.
5(b) Interest Rate. All Tranche E Loans shall bear interest at the
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Applicable Corporate Rate, unless the Companies elect to have a Tranche E Loan
bear interest at (i) the Applicable Eurodollar Rate as permitted herein or (ii)
an interest rate established pursuant to Paragraph 7(u) below.
5(c) Payment of Interest. The Companies shall pay to the
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Administrative Agent for distribution to each Lender interest on Tranche E Loans
outstanding hereunder from the date disbursed to but not including the date of
payment. Interest on Tranche E Corporate Rate Loans shall be payable monthly, in
arrears, as provided in Paragraph 7(l) below, and interest on a Tranche E
Eurodollar Loan shall be payable at the end of the applicable Interest Period.
6. Tranche F Credit Facility.
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6(a) Lending Limit. Subject to the conditions set forth herein, the
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Lenders severally agree that they shall, from time to time up to and including
the Business Day immediately preceding the Maturity Date, advance and readvance
their respective Percentage Shares of loans (the "Tranche F Loans" or a "Tranche
F Loan") to the Companies in amounts not to exceed, in the aggregate at any one
time outstanding (determined after giving effect to the other transactions
contemplated by the Loan Request pursuant to which said Tranche F Loan was
requested), the lesser of:
(1) The Aggregate Tranche F Credit Limit; and
(2) The Collateral Value of the Tranche F Borrowing Base minus
the aggregate dollar amount of Swing Line
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Loans outstanding which have been identified by the Companies in the
applicable Loan Request as being scheduled for repayment by Tranche F Loans
(and which are not being repaid by any Tranche F Loan requested).
Provided, however, that notwithstanding anything contained herein to the
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contrary, at no time may the sum of all Tranche A Loans outstanding, all Tranche
B Loans outstanding, all Tranche C Loans outstanding, all Tranche D Loans
outstanding, all Tranche E Loans outstanding, all Tranche F Loans outstanding,
all Tranche G Loans outstanding, the aggregate amount of all L/C Drawings which
have not been reimbursed by the Companies (and which are not being repaid with
the proceeds of a Tranche G Loan on such date), the maximum aggregate amount
available to be drawn under all outstanding Letters of Credit, and all Swing
Line Loans outstanding exceed the lesser of (i) the Aggregate Collateral Value
of the Borrowing Base or (ii) the Aggregate Facility Commitment at such time.
6(b) Interest Rate. All Tranche F Loans shall bear interest at the
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Applicable Corporate Rate, unless the Companies elect to have a Tranche F Loan
bear interest at (i) the Applicable Eurodollar Rate as permitted herein or (ii)
an interest rate established pursuant to Paragraph 7(u) below.
6(c) Payment of Interest. The Companies shall pay to the
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Administrative Agent for distribution to each Lender interest on Tranche F Loans
outstanding hereunder from the date disbursed to but not including the date of
payment. Interest on Tranche F Corporate Rate Loans shall be payable monthly, in
arrears, as provided in Paragraph 7(l) below, and interest on a Tranche F
Eurodollar Loan shall be payable at the end of the applicable Interest Period.
6A. Swing Line Facility.
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6A(a) Swing Line Lending Limit. Subject to the conditions
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set forth herein, First Union agrees that it shall, from time to time up to and
including the Business Day immediately preceding the Maturity Date, advance and
readvance loans (the "Swing Line Loans" or a "Swing Line Loan") to the Companies
in amounts not to exceed, in the aggregate at any one time outstanding, the
lesser of:
(1) The Maximum Swing Line Commitment; and
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(2) (i) The Aggregate Collateral Value of the Borrowing Base,
minus (ii) the sum of (A) the aggregate dollar amount of Regular Loans
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outstanding, (B) the aggregate amount of all L/C Drawings which have
not been reimbursed by the Companies (and which are not being repaid with
the proceeds of a Tranche G Loan on such date) and (C) the maximum
aggregate amount available to be drawn under all outstanding Letters of
Credit;
Provided, however, that:
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(1) In calculating the availability of Swing Line Loans under
this Paragraph 6A(a) at any date, the aggregate amount of Swing Line Loans
outstanding shall not include any Swing Line Loans which will be repaid
with Regular Loans to be advanced on such date in accordance with the terms
of this Agreement (provided that no Swing Line Loans shall be repaid with
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Tranche G Loans);
(2) Notwithstanding anything contained herein to the contrary,
at no time may the sum of all Tranche A Loans outstanding, all Tranche B
Loans outstanding, all Tranche C Loans outstanding, all Tranche D Loans
outstanding, all Tranche E Loans outstanding, all Tranche F Loans
outstanding, all Tranche G Loans outstanding, the aggregate amount of all
L/C Drawings which have not been reimbursed by the Companies (and which are
not being repaid with the proceeds of a Tranche G Loan on such date), the
maximum aggregate amount available to be drawn under all outstanding
Letters of Credit, and all Swing Line Loans outstanding exceed the lesser
of (i) the Aggregate Collateral Value of the Borrowing Base or (ii) the
Aggregate Facility Commitment at such time; and
(3) Notwithstanding anything contained herein to the contrary,
at no time may (A) the sum of all Swing Line Loans outstanding which have
been identified by the Companies in the applicable Loan Request as being
scheduled for repayment by Tranche A Loans, plus all Tranche A Loans
outstanding, exceed the lesser of the Collateral Value of the Tranche A
Borrowing Base or the Aggregate Tranche A Credit Limit; (B) the sum of all
Swing Line Loans outstanding which have been identified by the Companies in
the applicable Loan Request as being scheduled for repayment by Tranche B
Loans, plus all Tranche B Loans outstanding, exceed the lesser of the
Collateral Value of the Tranche B
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Borrowing Base or the Aggregate Tranche B Credit Limit; (C) the sum of all
Swing Line Loans outstanding which have been identified by the Companies in
the applicable Loan Request as being scheduled for repayment by Tranche C
Loans, plus all Tranche C Loans outstanding, exceed the lesser of the
Collateral Value of the Tranche C Borrowing Base or the Aggregate Tranche C
Credit Limit; (D) the sum of all Swing Line Loans outstanding which have
been identified by the Companies in the applicable Loan Request as being
scheduled for repayment by Tranche D Loans, plus all Tranche D Loans
outstanding, exceed the lesser of the Collateral Value of the Tranche D
Borrowing Base or the Aggregate Tranche D Credit Limit; (E) the sum of all
Swing Line Loans outstanding which have been identified by the Companies in
the applicable Loan Request as being scheduled for repayment by Tranche E
Loans, plus all Tranche E Loans outstanding, exceed the lesser of the
Collateral Value of the Tranche E Borrowing Base or the Aggregate Tranche E
Credit Limit; or (F) the sum of all Swing Line Loans outstanding which have
been identified by the Companies in the applicable Loan Request as being
scheduled for repayment by Tranche F Loans, plus all Tranche F Loans
outstanding, exceed the lesser of the Collateral Value of the Tranche F
Borrowing Base or the Aggregate Tranche F Credit Limit.
6A(b) Interest Rate. Each Swing Line Loan shall bear
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interest at the Applicable Corporate Rate which corresponds to the type of
Regular Loan identified by the Companies in the applicable Loan Request as being
scheduled to repay such Swing Line Loan (provided that no Swing Line Loan may be
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repaid with a Tranche G Loan).
6A(c) Payment of Interest. The Companies shall pay to the
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Administrative Agent for distribution to First Union interest on Swing Line
Loans outstanding hereunder from the date disbursed to but not including the day
of payment or refunding pursuant to Paragraph 6A(d) below. Interest on Swing
Line Loans shall be payable monthly, in arrears, as provided in Paragraph 7(l)
below.
6A(d) Refunding of Swing Line Loans. Upon demand by First Union,
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Swing Line Loans shall be refunded or participations therein acquired, as
applicable, in accordance with the following provisions. Such refunding or
acquisition will occur no later than 4:00 p.m. (Charlotte, North Carolina time)
on the day of such demand if made before 2:00 p.m. (Char-
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lotte, North Carolina time) and no later than 12:00 noon (Charlotte, North
Carolina time) on the next succeeding Business Day if demand therefor is made
after 2:00 p.m. (Charlotte, North Carolina time).
(1) Prior to the occurrence of an Event of Default or Potential
Default, Swing Line Loans shall be refunded by the Lenders. Such
refundings shall be made by the Lenders in accordance with their respective
Percentage Shares and shall, thereafter, be reflected as actual Regular
Loans of the Lenders on the books and records of the Administrative Agent.
The type of Regular Loan made by the Lenders in connection with the
refunding of any Swing Line Loan shall be the type of Loan identified by
the Companies in the Loan Request for such Swing Line Loan as being
scheduled to repay such Swing Line Loan.
(2) After the occurrence of any Event of Default or Potential
Default, each Lender (other than First Union) shall irrevocably and
unconditionally purchase from First Union, without recourse or warranty
(except that such outstanding Swing Line Loans in fact were made in
accordance with the provisions of this Agreement, and are not subject to
any Liens arising out of any act of First Union), an undivided interest and
participation in any Swing Line Loans then outstanding, by paying to First
Union, in dollars immediately available to First Union, an amount equal to
such Lender's Percentage Share of such Swing Line Loans, and thereafter,
except as otherwise provided in the second succeeding sentence, the
Lenders' respective interests in such Swing Line Loans, and the remaining
interest of First Union in such Swing Line Loans, shall in all respects be
treated as Regular Loans under this Agreement of the type identified by the
Companies in the Loan Request for such Swing Line Loan as being scheduled
to repay such Swing Line Loan, but such Swing Line Loans shall continue to
be evidenced by the Note which evidences the Swing Line Loans. If any
Lender does not pay any amount which it is required to pay to First Union,
First Union shall be entitled to recover such amount on demand from such
Lender, together with interest thereon, at the Applicable Corporate Rate,
for each day from the date of such demand, if made prior to 2:00 p.m.
(Charlotte, North Carolina time) on any Business Day, or, if made after
2:00 p.m. from the next Business Day following the date of such demand,
until the date such amount is paid to First Union by such Lender. If such
Lender does not pay
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such amount forthwith upon First Union's demand therefor, and until such
time as such Lender makes the required payment, First Union shall be deemed
to continue to have outstanding a Swing Line Loan in the amount of such
unpaid participation obligation for all purposes of this Agreement other
than those provisions requiring such other Lender to purchase a
participation therein. First Union shall upon the request of such Lender,
furnish to such Lender a participation certificate evidencing the
participation purchased by such Lender.
(3) [Intentionally Omitted].
(4) Notwithstanding anything contained in this Agreement to the
contrary, no Lender shall be obligated to refund or acquire a participation
interest in any Swing Line Loans made by First Union unless (i) First Union
believed in good faith that all conditions specified in Paragraph 6A(a)
above and Paragraph 9 below to the making of such Swing Line Loans were
satisfied at the time such Swing Line Loans were made, or (ii) such Lender
had actual knowledge that any such condition had not been satisfied and
failed to notify First Union in writing prior to the time First Union made
such Swing Line Loan that First Union was not authorized to make a Swing
Line Loan until such condition had been satisfied, or (iii) the
satisfaction of any such condition that was not satisfied had been waived
by the requisite Lenders in accordance with the provisions of this
Agreement, or the making of such Swing Line Loan in the face of such non-
satisfied condition or conditions had been consented to by the requisite
Lenders in accordance with the provisions of this Agreement.
6B. Letter of Credit Facility.
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6B(a) Credit Limit. Subject to the conditions set forth herein, the
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L/C Bank agrees that it shall, from the date hereof up to but not including the
Business Day immediately preceding the Maturity Date, issue Letters of Credit
for the account of homebuilders who are the Obligors under Construction Loans
made by the Companies pursuant to this Agreement; provided that the maximum
aggregate amount available to be drawn under all outstanding Letters of Credit
at any time shall not exceed at any time the lesser of:
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(1) the L/C Credit Limit, minus the sum of: (i) the aggregate
dollar amount of all L/C Drawings which have not been reimbursed by the
Companies and (ii) the aggregate dollar amount of all Tranche G Loans
outstanding; and
(2) the Aggregate Collateral Value of the Borrowing Base minus
the sum of: (i) the aggregate dollar amount of all L/C Drawings which have
not been reimbursed by the Companies; and (ii) the aggregate dollar amount
of all Loans (including without limitation Tranche G Loans) outstanding;
Provided, however, that for purposes of the calculations under this Paragraph
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6B(a), the L/C Bank shall, so long as there shall not exist an Event of Default
or Potential Default, deem unreimbursed L/C Drawings outstanding on any date not
to include L/C Drawings being paid with a Tranche G Loan on such date.
6B(b) Purpose. The Letters of Credit shall be issued for the purpose
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of providing support for homebuilders who are Obligors under Construction Loans
made pursuant to this Agreement, which Letters of Credit shall provide credit
support as may be required by local authorities for the construction of certain
improvements with respect to single-family tract home developments developed by
such homebuilders which are financed with the proceeds of such Construction
Loans.
6B(c) Terms of Letters of Credit. Each Letter of Credit shall be in
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the form of that attached hereto as Exhibit X.
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6B(d) Procedures for Issuance of Letters of Credit. At such
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time as the Companies desire to have the L/C Bank issue a Letter of Credit, it
shall, no later than 2:00 p.m. (Charlotte, North Carolina time) on the Business
Day immediately preceding the proposed Issuance Date, execute and telecopy to
the Collateral Agent, the Administrative Agent and the L/C Bank a completed and
duly executed L/C Availability Certificate, together with the Required Documents
for the issuance of a Letter of Credit. Subject to the conditions precedent set
forth in Paragraph 9(b) below, on the proposed Issuance Date, the L/C Bank,
assuming receipt of the L/C Availability Certificate and the Required Documents,
shall no later than 5:00 p.m. (Charlotte, North Carolina time) on the Business
Day immediately preceding the proposed Issuance Date issue the requested Letter
of Credit
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on behalf of the Companies pursuant to the directions set forth on the L/C
Availability Certificate and in each case in accordance with the terms stated
herein, such Letter of Credit to be delivered to the Companies via overnight
courier for receipt by the Companies on the Issuance Date.
6B(e) Letter of Credit Demands. Any payment by the L/C Bank under any
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Letter of Credit honoring a drawing made thereunder (an "L/C Drawing" or,
collectively and severally, the "L/C Drawings"), shall be reimbursed by the
Companies for the account of the L/C Bank on or before the close of business on
the Business Day immediately following the Business Day on which the Companies
receive notice from the Administrative Agent that such L/C Drawing has been
made. Prior to the Maturity Date, and subject to the conditions set forth in
Paragraph 9 below, such reimbursement may be effected by the borrowing of a
Tranche G Loan and disbursement of the proceeds thereof directly to the L/C
Bank. After the Maturity Date, such reimbursement shall be effected as set forth
in Paragraph 6B(k) below.
6B(f) Absolute Obligation to Repay. The Companies' obligation to
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repay L/C Drawings and any and all other amounts payable to the L/C Bank
hereunder shall be absolute, irrevocable and unconditional under any and all
circumstances whatsoever and irrespective of any set-off, counterclaim or
defense to payment which the Companies may have or have had, against the L/C
Bank, any Lender or any other Person (except as may be otherwise provided
below), including, without limitation, any set-off, counterclaim or defense
based upon or arising out of:
(1) any requisition, statement or any other document presented
under any L/C Document proving to be forged, fraudulent or invalid in any
respect (so long as such requisition, statement or document is reasonably
believed by the L/C Bank or the Administrative Agent to be genuine) or any
statement therein being untrue or inaccurate in any respect;
(2) the theft or loss of any Letter of Credit, or the forgery of
any signature on any Letter of Credit (other than by the L/C Bank or any
officer, employee or agent thereof) or the alteration, in any manner or to
any extent, of any Letter of Credit;
14
<PAGE>
(3) the invalidity or unenforceability of any L/C Document;
(4) any claim, defense or other right which the Companies may
have at any time against the L/C Bank or any other Person (except as may be
otherwise provided in this Paragraph 6B(f));
(5) the inaccuracy or incompleteness of any statement under any
L/C Drawing; or
(6) any other circumstance or happening whatsoever similar to any
of the foregoing.
Without limiting the foregoing the Companies acknowledge and agree that the L/C
Bank, the Administrative Agent, the Collateral Agent, the Lenders and each of
their respective officers, employees and agents shall be entitled to rely and
shall be fully protected in relying on any writing, resolution, notice, consent,
certificate, instruction (whether oral or otherwise), receipt or other document,
instrument or agreement reasonably believed by them to be genuine and to have
been signed, sent or given by the proper party or parties.
6B(g) INTENTIONALLY DELETED.
---------------------
6B(h) Delivery of Payments. Prior to the Maturity Date, all
--------------------
amounts payable by the Companies to the L/C Bank under the Credit Documents,
including, without limitation, interest, fees and payments by way of
indemnification, shall be made directly to the Administrative Agent for the
benefit of the L/C Bank, to be promptly remitted by the Administrative Agent in
such manner and to such accounts as the L/C Bank may from time to time direct.
The L/C Bank will as soon as practicable give Administrative Agent written
notice of any failure by the Companies to pay or perform any of the L/C
Obligations.
6B(i) Responsibility for Instructions. The L/C Bank and the
-------------------------------
Administrative Agent shall be entitled to rely on the authority of any Person
purporting to be a Person designated on a list of authorized signers delivered
to the L/C Bank and the Administrative Agent from time to time as authorized by
the Companies to make requests according to the procedures set forth in
Paragraph 6B(d) above and shall have no liability to the Companies on account of
any action taken by the L/C Bank or the Administrative Agent in reliance on such
telephonic requests.
15
<PAGE>
The Companies' obligation to repay L/C Drawings and other L/C Obligations shall
not be affected in any manner or to any extent by any failure by the
Administrative Agent, the L/C Bank, or the Companies to receive written
confirmation of or receipt by any of such Persons of written confirmation at
variance with a telephonic request made hereunder.
6B(j) Letter of Credit Fee. The Companies hereby agree to
--------------------
pay to the L/C Bank, for the pro rata benefit of the Lenders, a non-refundable
letter of credit fee with respect to each Letter of Credit issued at a rate of
one-half percent (0.50%) per annum of the amount in which such Letter of Credit
is issued, such fee to be payable on the Issuance Date thereof.
6B(k) Letters of Credit Outstanding on Maturity Date. Notwithstanding
----------------------------------------------
anything to the contrary contained in this Section 6B or elsewhere in this
Agreement, in the event that there are any Letters of Credit outstanding on the
Maturity Date, the Companies shall either (i) arrange for the replacement of
such Letters of Credit and return all such original Letters of Credit to the L/C
Bank, or (ii) (A) deposit with the L/C Bank into an account designated by the
L/C Bank an amount (the "Cash Collateral") equal to the maximum aggregate amount
available to be drawn under all outstanding Letters of Credit, and (B) enter
into a reimbursement agreement with the L/C Bank with respect to such
outstanding Letters of Credit, which reimbursement agreement shall be
substantially in the form of the L/C Bank's standard form L/C reimbursement
agreement. Such reimbursement agreement shall provide, inter alia, that
----- ----
immediately upon honoring after the Maturity Date any L/C Drawing
under any Letter of Credit, the L/C Bank shall be authorized to apply so much of
the Cash Collateral as may be necessary to reimburse such L/C Drawing without
demand or prior notice of any kind to the Companies; provided, however, that the
-------- -------
L/C Bank shall notify the Companies as promptly as reasonably possible after any
such application of Cash Collateral.
6C. Tranche G Credit Facility.
-------------------------
6C(a) Lending Limit. Subject to the conditions set forth
-------------
herein, the Lenders severally agree that they shall (and the Companies hereby
irrevocably authorize and direct them) from time to time up to and including the
Business Day immediately preceding the Maturity Date, advance and readvance
their respective Percentage Shares of loans (the "Tranche G Loans" or a "Tranche
G Loan") directly to the Administrative
16
<PAGE>
Agent for the benefit of the L/C Bank for the account of the Companies and at
the request of the L/C Bank, for the purpose of reimbursing the L/C Bank for
unrepaid L/C Drawings, in amounts not to exceed, in the aggregate at any one
time outstanding, the lesser of:
(1) The L/C Credit Limit minus the sum of (i) the aggregate
amount of all unrepaid L/C Drawings and (ii) the maximum aggregate amount
available to be drawn on all outstanding Letters of Credit; and
(2) The Aggregate Collateral Value of the Borrowing Base
minus the sum of (i) the aggregate dollar amount of all Loans outstanding,
and (ii) the aggregate amount of all unrepaid L/C Drawings, and (iii) the
maximum aggregate amount available to be drawn under all outstanding
Letters of Credit.
Provided, however, that (i) for purposes of the calculations under this
-------- -------
Paragraph 6C(a), the Lenders shall, so long as there shall not exist an Event of
Default or Potential Default, deem unrepaid L/C Drawings outstanding on any date
not to include L/C Drawings being paid with a Tranche G Loan on such date; and
(ii) notwithstanding anything contained herein to the contrary, at no time may
the sum of all Tranche A Loans outstanding, all Tranche B Loans outstanding, all
Tranche C Loans outstanding, all Tranche D Loans outstanding, all Tranche E
Loans outstanding, all Tranche F Loans outstanding, all Tranche G Loans
outstanding, the aggregate amount of all L/C Drawings which have not been
reimbursed by the Companies, the maximum aggregate amount available to be drawn
under all outstanding Letters of Credit, and all Swing Line Loans outstanding
exceed the lesser of (i) the Aggregate Collateral Value of the Borrowing Base or
(ii) the Aggregate Facility Commitment at such time.
6C(b) Interest Rate. All Tranche G Loans shall bear interest at the
-------------
Applicable Corporate Rate.
6C(c) Payment of Interest. The Companies shall pay to the
-------------------
Administrative Agent for distribution to each Lender interest on Tranche G Loans
outstanding hereunder from the date disbursed to but not including the date of
payment. Interest on Tranche G Corporate Rate Loans shall be payable monthly, in
arrears, as provided in Paragraph 7(l) below.
7. Miscellaneous Lending Provisions.
--------------------------------
17
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7(a) Conversion and Continuation.
---------------------------
(1) The Companies may elect from time to time to convert
Eurodollar Loans to Corporate Rate Loans by giving the Administrative Agent
at least one Business Day's prior irrevocable notice of such election. Any
conversion of Eurodollar Loans may only be made on the last day of the
applicable Interest Period. The Companies may elect from time to time to
convert Corporate Rate Loans to Eurodollar Loans by giving the
Administrative Agent at least two Eurodollar Business Days' prior
irrevocable notice of such election. All such elections shall be made by
means of a Loan Request. Upon receipt of a Loan Request, the Administrative
Agent shall promptly notify each of the Lenders affected thereby thereof.
No Corporate Rate Loan shall be converted into a Eurodollar Loan if an
Event of Default or Potential Default has occurred and is continuing on the
day occurring two Eurodollar Business Days prior to the date of the
conversion requested by the Companies or on the date of conversion. All or
any part of outstanding Loans may be converted as provided herein, provided
that partial conversions shall be in a principal amount of $1,000,000 or
whole multiples of $100,000 in excess thereof.
(2) (A) Any Eurodollar Loan may be continued as such upon the
expiration of the Interest Period with respect thereto by the Companies
giving the Administrative Agent at least two Eurodollar Business Days'
prior irrevocable notice of such election as set forth in a Loan Request,
and (B) if the Companies shall fail to give notice as provided above, the
Companies shall be deemed to have elected to continue the affected
Eurodollar Loan on the last day of the relevant Interest Period as a
Eurodollar Loan having the same Interest Period as the continued Eurodollar
Loan; provided, however, that no Eurodollar Loan may be continued as such
when any Event of Default or Potential Default has occurred and is
continuing on the day occurring two Eurodollar Business Days prior to the
proposed date of such continuation, but shall be automatically converted to
a Corporate Rate Loan on the last day of the then current Interest Period
applicable thereto, and the Administrative Agent shall notify the Lenders
affected thereby and the Companies promptly that such automatic conversion
will occur.
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<PAGE>
(3) Notwithstanding anything contained in this Agreement to the
contrary, at no time shall there be Eurodollar Loans outstanding with more
than five (5) different Interest Periods.
7(b) Inability to Determine Rate. If the Administrative Agent
---------------------------
(which determination shall be conclusive and binding upon the Companies,
provided such determination is made on a reasonable basis) that by reason of
circumstances affecting the London interbank eurodollar market adequate and
reasonable means do not exist for ascertaining the Eurodollar Rate for any
Interest Period, the Administrative Agent shall forthwith give facsimile notice
of such determination, confirmed in writing, to each Lender affected thereby and
to the Companies. If such notice is given: (1) no Loan may be funded as a
Eurodollar Loan, (2) any Loan that was to have been converted to a Eurodollar
Loan shall, subject to the provisions hereof, be continued as a Corporate Rate
Loan and (3) any outstanding Eurodollar Loan shall be converted on the last day
of the then current Interest Period with respect thereto to a Corporate Rate
Loan. Until such notice has been withdrawn by the Administrative Agent, the
Companies shall not have the right to convert a Loan to a Eurodollar Loan or
fund any Loan as a Eurodollar Loan or to continue a Eurodollar Loan as such.
The Administrative Agent shall withdraw such notice in the event that the
circumstances giving rise thereto no longer exist and that adequate and
reasonable means exist for ascertaining the Eurodollar Rate for the Interest
Period requested by the Companies, and following withdrawal of such notice by
the Administrative Agent, the Companies shall have the right to fund any Loan as
a Eurodollar Loan or convert a Loan to a Eurodollar Loan or to continue a
Eurodollar Loan in accordance with the terms and conditions of this Agreement.
7(c) Illegality. Notwithstanding any other provisions herein, if
----------
any regulation, treaty or directive or any change therein or in the
interpretation or application thereof, shall make it unlawful for any Lender to
make or maintain Eurodollar Loans as contemplated by this Agreement: (1) the
commitment of such Lender hereunder to continue Eurodollar Loans or to convert
Corporate Rate Loans to Eurodollar Loans shall forthwith be suspended and the
Administrative Agent shall forthwith give facsimile notice to the Companies of
such illegality, and upon giving such notice, (2) such Lender's Loans then
outstanding as Eurodollar Loans, if any, shall be converted automatically to
Corporate Rate Loans at the end of their respective Interest
19
<PAGE>
Periods or within such earlier period as required by law. In the event of a
conversion of any such Loan prior to the end of its applicable Interest Period
the Companies hereby agree promptly to pay any Lender affected thereby, upon
demand, the amounts required pursuant to Paragraph 7(f) below, it being agreed
and understood that such conversion shall constitute a prepayment for all
purposes hereof. The provisions hereof shall survive the termination of this
Agreement and payment of the outstanding Loans and all other amounts payable
hereunder. If subsequently the Administrative Agent determines that the cause of
such illegality has ceased to exist, the Administrative Agent will so advise the
Companies by facsimile notice and the Companies may convert such Corporate Rate
Loans to Eurodollar Loans or request that any Loan be funded as a Eurodollar
Loan as provided in Paragraph 7(j) below. Notwithstanding anything contained
herein to the contrary, in the event that any law, regulation, treaty or
directive or any change therein or in the interpretation or application thereof
shall make it unlawful for any Lender to make or maintain Eurodollar Loans as
contemplated by this Agreement, then in lieu of the provisions and procedures
set forth above, the Company may, at its sole option, elect to require such
Lender to assign all of its Maximum Commitment and Loans to another Lender or to
another party meeting the criteria set forth in Paragraph 15(i) below, which
such assignment shall be made pursuant to the terms and provisions contained in
Paragraph 15(i) below.
7(d) Requirements of Law; Increased Costs. In the event that any
------------------------------------
change subsequent to the date hereof in any applicable law, order, regulation,
treaty or directive issued by any central bank or other Governmental Authority,
or in the governmental or judicial interpretation or application thereof, or
compliance by any Lender or the L/C Bank or any participant in the L/C
Obligations pursuant to a Participation Agreement (an "L/C Participant") with
any request or directive (whether or not having the force of law) by any central
bank or other Governmental Authority:
(1) subjects any Lender, the L/C Bank or any L/C Participant to
any tax of any kind whatsoever with respect to this Agreement or any Loans
made hereunder or any Letter of Credit issued pursuant hereto (or any
participations therein), or changes the basis of taxation of payments to
such Lender of principal, fee, interest or any other amount payable
hereunder (except for change in the rate of tax on the overall net income
of such Lender);
20
<PAGE>
(2) imposes, modifies or holds applicable any reserve, capital
requirement of general application to similarly situated financial
institutions, special deposit, compulsory loan or similar requirements
against assets held by, or deposits or other liabilities in or for the
account of, advances or loans by, letters of credit issued by, or other
credit extended by, or any other acquisition of funds by, any office of
such Lender which are (in the case of Loans) not otherwise included in the
determination of the Eurodollar Rate, the Applicable Eurodollar Rate or the
Corporate Rate; or
(3) imposes on such Lender, the L/C Bank or any L/C Participant
any other condition;
and the result of any of the foregoing is to increase the cost to such Lender of
making, renewing or maintaining any Loan or the cost to the L/C Bank of issuing
or maintaining any Letter of Credit or the cost to any L/C Participant of
participating therein, or to reduce any amount receivable in respect thereof or
to reduce the rate of return on the capital of such Lender, the L/C Bank or such
L/C Participant or any Person controlling such Lender, the L/C Bank or such L/C
Participant, then, in any such case, the Companies shall promptly pay to the
Administrative Agent for remittance to such Lender, the L/C Bank or such L/C
Participant, upon its written demand made through the Administrative Agent, any
additional amounts necessary to compensate such Lender, the L/C Bank or such L/C
Participant for such additional cost or reduced amounts receivable or rate of
return as determined by such Lender, the L/C Bank or such L/C Participant with
respect to this Agreement or Loans made hereunder or Letters of Credit issued
pursuant hereto, subject to the limitations set forth in the following sentence.
If a Lender, the L/C Bank or an L/C Participant becomes entitled to claim any
additional amounts pursuant to this Paragraph 7(d), it shall, promptly after it
obtains knowledge thereof and determines to request compensation hereunder,
notify the Companies in writing through the Administrative Agent of the event by
reason of which it has become so entitled, provided that (A) any amounts owed by
the Companies to such Lender, the L/C Bank or such L/C Participant pursuant to
this Paragraph 7(d) shall begin to accrue on the later to occur of (1) the date
on which such amounts began to be incurred, and (2) the date which is thirty
(30) days prior to the date such notice is submitted to the Companies, and (B)
such Lender, the L/C Bank or such L/C Participant, through the Administrative
21
<PAGE>
Agent, will designate a different lending office for those Loans or Letters of
Credit affected by such event if such designation will avoid the need for, or
reduce the amount of, such compensation, so long as any such designation is
reasonably convenient for such Lender, the L/C Bank or such L/C Participant. A
certificate as to any additional amounts payable pursuant to the foregoing
sentence containing the calculation thereof in reasonable detail submitted by a
Lender, the L/C Bank or an L/C Participant, through the Administrative Agent, to
the Companies shall be conclusive in the absence of manifest error. The
provisions hereof shall survive the termination of this Agreement and payment of
the outstanding Loans and all other amounts payable hereunder. Notwithstanding
anything contained herein to the contrary, in the event that any change occurs
as described in subparagraphs (1), (2) or (3) hereof, the result of which is to
increase the cost to any Lender of making, renewing or maintaining any Loan or
the cost to the L/C Bank or any L/C Participant of issuing or maintaining any
Letter of Credit or participating therein or to reduce any amount receivable in
respect thereof or to reduce the rate of return on the capital of such Lender,
the L/C Bank or such L/C Participant or any Person controlling such Lender, the
L/C Bank or such L/C Participant, then in lieu of the provisions, payments and
procedures set forth above, the Company may, at its sole option, elect to
require such Lender, the L/C Bank or such L/C Participant to assign all of its
Maximum Commitment and Loans, or its Letter of Credit or participation therein,
as applicable, to another Lender, another L/C Bank or another L/C Participant,
as applicable, or to another party meeting the criteria set forth in Paragraph
15(i) below, which such assignment shall be made pursuant to the terms and
provisions contained in Paragraph 15(i) below.
7(e) Funding. Each Lender shall be entitled to fund all or any
-------
portion of its Loans in any manner it may determine in its sole discretion, but
all calculations and transactions hereunder shall be conducted as though all
Lenders actually fund all Eurodollar Loans through the purchase in London of
offshore dollar deposits in the amount of the relevant Eurodollar Loan in
maturities corresponding to the applicable Interest Period.
7(f) Funding Indemnification -- Prepayment. In addition to all other
-------------------------------------
payment obligations hereunder, in the event any Loan which is outstanding as a
Eurodollar Loan is prepaid prior to the last day of the applicable Interest
Period, whether following a voluntary prepayment or a mandatory prepayment, the
Companies shall immediately pay to the Lenders holding the
22
<PAGE>
Eurodollar Loans prepaid, through the Administrative Agent, an amount equal to
the excess, if any, of (i) the amount of interest which would have accrued on
the principal amount of the Eurodollar Loan so prepaid to the last day of the
Interest Period for such Eurodollar Loan at the applicable rate of interest
hereunder for such Eurodollar Loan over (ii) the interest component of the
amount the Administrative Agent would have bid in the London interbank market
for dollar deposits of leading banks of amounts comparable to such principal
amount repaid and maturities comparable to such period, as reasonably determined
by the Administrative Agent, together with an additional amount compensating
each such Lender for losses and reasonable expenses incurred by such Lender in
connection with such prepayment, including, without limitation, such as may
arise out of a re-employment of funds obtained by such Lender and from fees
payable to terminate the deposits from which such funds were obtained, such
interest amount, losses, and expenses and the method of calculation thereof
being set forth in reasonable detail and a statement delivered to the Companies
by such Lender. Under no circumstances shall any Lender have any obligation to
remit monies to the Companies upon prepayment of any Eurodollar Loan even under
circumstances which do not result in the necessity of the payment by the
Companies of any amount hereunder. The provisions hereof shall survive
termination of this Agreement and payment of the outstanding Loans and all
amounts payable hereunder.
7(g) Funding Indemnification -- Failure to Borrow, Default or Failure
----------------------------------------------------------------
to Continue or Convert. In addition to all other payment obligations
----------------------
hereunder, in the event the Companies shall fail to borrow an Eurodollar Loan or
to continue or to make a conversion to a Eurodollar Loan after the Companies
have given notice thereof as provided in Paragraph 7(a) above, or if after
giving a notice to have any Lender make a Eurodollar Loan, such Lender is not
obligated to do so due to the existence of an Event of Default or Potential
Default, then the Companies shall immediately pay any Lender holding the
Eurodollar Loan not borrowed, continued or converted, or which would have been
obligated to make such Eurodollar Loan, through the Administrative Agent, an
additional amount compensating each such Lender for losses and expenses incurred
by such Lender in connection with such failure to borrow, continue or convert a
Eurodollar Loan, or the occurrence of an Event of Default or Potential Default
including, without limitation, such as may arise out of re-employment of funds
obtained by such Lender and from fees payable to terminate the deposits from
which such funds were obtained, such losses and expenses and the method of
calculation thereof being set forth in
23
<PAGE>
reasonable detail in a statement delivered to the Companies by such Lender. The
provisions hereof shall survive termination of this Agreement and payment of the
outstanding Loans and all other amounts payable hereunder.
7(h) INTENTIONALLY DELETED.
---------------------
7(i) Use of Proceeds. (i) The proceeds of all Tranche A Loans shall
---------------
be used by the Companies solely for the purposes of acquiring Eligible A/B
Mortgage Loans to be held for sale by the Companies and of originating
Warehousing Loans which Warehousing Loans shall be secured by Mortgage Loans
pledged by sub-borrowers to the Companies; (ii) the proceeds of all Tranche B
Loans shall be used by the Companies solely for the purpose of acquiring or
retaining Eligible A/B Mortgage Loans to be held for investment by the
Companies; (iii) the proceeds of all Tranche C Loans shall be used by the
Companies solely for the purpose of acquiring and maintaining Servicing
Contracts and Master Servicing Contracts; (iv) the proceeds of all Tranche D
Loans shall be used by the Companies solely for the purpose of originating
Construction Loans, which Construction Loans shall be secured by mortgages or
deeds of trust from sub-borrowers in favor of the Companies with respect to the
real property and improvements being pledged and constructed with the proceeds
thereof; (v) the proceeds of all Tranche E Loans shall be used by the Companies
solely for the purpose of originating Servicing Loans, which Servicing Loans
shall be secured by the servicing rights and servicing receivables pledged by
sub-borrowers to the Companies; (vi) the proceeds of all Tranche F Loans shall
be used by the Companies solely for the purpose of originating
Foreclosure/Repurchase Loans, which Foreclosure/Repurchase Loans shall be
secured by the Foreclosure Mortgage Loans and Repurchase Mortgage Loans pledged
by sub-borrowers to the Companies; and (vii) the proceeds of all Tranche G Loans
shall be used by the Companies solely for the purpose of repaying to the L/C
Bank the amount of any unrepaid L/C Drawings; provided, however, that so long as
-------- -------
the aggregate principal amount of outstanding Tranche A Loans, Tranche B Loans,
Tranche C Loans, Tranche D Loans, Tranche E Loans and Tranche F Loans is less
than the Aggregate Collateral Value of the Borrowing Base, the Companies may use
the proceeds of any Tranche A Loans, Tranche B Loans, Tranche C Loans, Tranche D
Loans, Tranche E Loans or Tranche F Loans for any general corporate purpose of
the Companies.
7(j) Request For Loans; Making of Loans.
----------------------------------
24
<PAGE>
(1) (a) If the Companies desire to borrow a Swing Line Loan
hereunder, the Companies shall make a Loan Request to the
Administrative Agent no later than 4:45 p.m. (Charlotte, North
Carolina time) on the proposed funding date, which Loan Request shall
identify the type of Regular Loan which is scheduled to repay such
Swing Line Loan (provided that no Swing Line Loan may be repaid with a
--------
Tranche G Loan). First Union shall make available the amount of the
proposed Swing Line Loan by crediting the amount thereof in
immediately available same day funds to the Funding Account on such
date.
(b) If the Companies desire to borrow a Corporate Rate Loan
(other than a Swing Line Loan or a Tranche G Loan) hereunder, the
Companies shall make a Loan Request to the Administrative Agent no
later than 2:00 p.m. (Charlotte, North Carolina time) on the proposed
funding date, which Loan Request shall be forwarded promptly by the
Administrative Agent to the Lenders by facsimile transmission no later
than 2:45 p.m. (Charlotte, North Carolina time) on such date. The
applicable Lenders shall make available the amount of their respective
Percentage Shares of the proposed Corporate Rate Loan by crediting the
amount thereof in immediately available same day funds to the Funding
Account no later than 3:30 p.m. (Charlotte, North Carolina time) on
such date.
(c) In the event that an L/C Drawing has not been repaid by the
Companies as required by Paragraph 6B(e) above, the L/C Bank may, at
its sole option, notify the Administrative Agent no later than 2:00
p.m. (Charlotte, North Carolina time) on any date that it requests the
funding on such date of a Tranche G Loan in the amount of such
unrepaid L/C Drawing, which notice shall be forwarded promptly by the
Administrative Agent to the Lenders by facsimile transmission no later
than 2:45 p.m. (Charlotte, North Carolina time) on such date. The
applicable Lenders shall make available the amount of their respective
Percentage Shares of the proposed Tranche G Loan by crediting the
amount thereof in immediately available same day
25
<PAGE>
funds to the Administrative Agent for the benefit of the L/C Bank in
such account as the Administrative Agent may direct, no later than
3:30 p.m. (Charlotte, North Carolina time) on such date.
(2) If the Companies desire to borrow or continue a Eurodollar
Loan or to convert a Corporate Rate Loan (other than a Tranche G Loan) to a
Eurodollar Loan as provided in Paragraph 7(a) above, the Companies shall
make a Loan Request to the Administrative Agent no later than 2:00 p.m.
(Charlotte, North Carolina time) on the day occurring at least two
Eurodollar Business Days prior to the date of the borrowing, conversion or
continuation requested therein, and the Administrative Agent shall notify
the Lenders of the contents of such Loan Request no later than 2:45 p.m.
(Charlotte, North Carolina time) on such Business Day. The applicable
Lenders shall make available the amount of their respective Percentage
Shares of the proposed Eurodollar Loan by crediting the amount thereof in
immediately available same day funds to the Funding Account no later than
3:30 p.m. (Charlotte, North Carolina time) on the proposed day of
borrowing. Notwithstanding any provision hereof to the contrary, the
parties agree that each Eurodollar Loan shall be in a principal amount of
$1,000,000 or whole multiples of $100,000 in excess thereof.
(3) Each Corporate Rate Loan (other than a Swing Line Loan) and
each Eurodollar Loan shall be allocated among and funded by the Lenders in
accordance with their applicable Percentage Shares. The failure of any
Lender to make its Percentage Share of any Regular Loan to be made by it as
part of any borrowing shall not relieve any other Lender of its obligation
hereunder to advance its applicable portion of the principal amount thereof
but no Lender shall be responsible for the failure of any other Lender to
make the advance required of it.
(4) Notwithstanding anything herein to the contrary, on any day
on which (i) the aggregate outstanding principal balance of Loans is less
than $180,000,000, (ii) the maximum amount which may be outstanding at any
time as Tranche A Loans and Tranche B Loans under this Agreement is not
outstanding, (iii) there are Tranche A Corporate Rate Loans or Tranche B
Corporate Rate Loans outstanding under the Facility I Agreement, and (iv)
the conditions set forth in Paragraphs 9(b)(2), 9(b)(3), 9(b)(4) and
9(b)(5) are met
26
<PAGE>
(both before and after giving effect to the Loans referenced in this
Paragraph 7(j)(4)), the Administrative Agent shall notify the Lenders by
facsimile transmission no later than 3:00 p.m. (Charlotte, North Carolina
time) on such date of a proposed Corporate Rate Loan to be made on such
date, and the applicable Lenders shall make available the amount of their
respective Percentage Shares of the proposed Corporate Rate Loan in an
aggregate amount not to exceed the principal amount of "Corporate Rate
Loans" made under the Facility I Agreement to be prepaid pursuant to and as
required under Paragraph 3(n)(4) of the Facility I Agreement by crediting
the amount thereof in immediately available same day funds to the Funding
Account no later than 3:30 p.m. (Charlotte, North Carolina time) on such
date. The Administrative Agent shall use the proceeds of all Loans made
pursuant to this Paragraph 7(j)(4) to prepay "Corporate Rate Loans" made
under the Facility I Agreement pursuant to and as required under Paragraph
3(n)(4) of the Facility I Agreement. All amounts so advanced by the Lenders
under this Paragraph 7(j)(4) shall be considered to be Tranche A Loans or
Tranche B Loans, as applicable, for all purposes under this Agreement
notwithstanding the fact that no Loan Request shall have been submitted by
the Companies in connection therewith.
7(k) Notes. The joint and several obligations of the Companies to
-----
repay the Loans shall be evidenced by (i) notes payable to the order of each
Lender, as applicable, in the form set forth as Exhibit A-2 in the Addendum, and
-----------
(ii) a Facility II Swing Line Promissory Note payable to the order of First
Union, in form and content acceptable to First Union (collectively, the
"Notes").
7(l) Interest and Fee Billing and Payment; Notice of Interest Rates.
--------------------------------------------------------------
(1) The Administrative Agent shall (A) in the case of the
Corporate Rate Loans and any Loans bearing interest at a rate established
pursuant to Paragraph 7(u) below, on or before the fifth Business Day of
each month, and (B) in the case of Eurodollar Loans, on the last day of the
applicable Interest Period, deliver to the Companies an interest and fee
billing for the immediately preceding month or Interest Period, as the case
may be, which billing shall set forth interest accrued and payable on Loans
and fees payable hereunder for such period to be collected by the
27
<PAGE>
Administrative Agent and which billing shall be payable, in the case of a
billing delivered pursuant to subparagraph (A) above, no later than the
second Business Day following receipt thereof by the Companies and, in the
case of a billing delivered pursuant to subparagraph (B) above, on the last
day of the applicable Interest Period.
(2) In the event that any Lender has entered into a separate
letter agreement with the Companies pursuant to Paragraph 7(u) below
regarding interest rates for Loans made by such Lender, such Lender shall
be responsible for notifying the Administrative Agent, on or before the
third Business Day of each month, of the interest owing to such Lender for
such month pursuant to such letter agreement, and the Administrative Agent
shall incorporate such interest amount delivered to it by such Lender into
the interest and fee billing referred to in subparagraph (1) above. The
Administrative Agent shall have no duty to independently confirm the
accuracy of any such information delivered to it by any Lender.
(3) The Administrative Agent shall, on each day on which a Loan
is made, confirm to the Companies the interest rate which is to be
applicable to each such Loan (other than interest rates established
pursuant to Paragraph 7(u) below), each such interest rate to be expressed
as a decimal and rounded to the nearest 1/1000th of one percent. Such
confirmation shall take the form of a verbal confirmation by the
Administrative Agent to a designated representative of the Companies,
followed by a written confirmation of such rate no later than the close of
business of the Administrative Agent on the Business Day following the
making of such Loan.
(4) The Administrative Agent shall bill the Companies directly
for all amounts payable to the L/C Bank, and the Companies shall remit all
such amounts directly to the Administrative Agent for the benefit of the
L/C Bank as provided in Paragraph 6B(h) above.
7(m) Repayment of Principal. Subject to the prepayment requirements
----------------------
of Paragraph 7(r) below and the required application of proceeds from the sale
or other disposition of Mortgage Loans or servicing rights as provided in the
Security Agreement and in the Custodial Agreement, the Companies shall pay the
principal amount of each Eurodollar Loan which is not continued or convert-
28
<PAGE>
ed pursuant to Paragraph 7(a) on the last day of the applicable Interest Period
relating thereto and shall pay the principal amount of all other Loans on the
Maturity Date.
7(n) Borrowing Base Conformity; Mandatory Prepayments.
------------------------------------------------
(1) The Companies shall cause to be maintained with the
Collateral Agent a Tranche A Borrowing Base such that the Collateral Value
of the Tranche A Borrowing Base is not less than, at any date, the sum of
the aggregate dollar amount of outstanding Tranche A Loans plus the
aggregate dollar amount of outstanding Swing Line Loans which have been
identified by the Companies in the applicable Loan Request as being
scheduled for repayment by Tranche A Loans.
(2) The Companies shall cause to be maintained with the
Collateral Agent a Tranche B Borrowing Base such that the Collateral Value
of the Tranche B Borrowing Base is not less than, at any date, the sum of
the aggregate dollar amount of outstanding Tranche B Loans plus the
aggregate dollar amount of outstanding Swing Line Loans which have been
identified by the Companies in the applicable Loan Request as being
scheduled for repayment by Tranche B Loans.
(3) The Companies shall cause to be maintained with the
Administrative Agent a Tranche C Borrowing Base such that the Collateral
Value of the Tranche C Borrowing Base is not less than, at any date, the
sum of the aggregate dollar amount of outstanding Tranche C Loans plus the
aggregate dollar amount of outstanding Swing Line Loans which have been
identified by the Companies in the applicable Loan Request as being
scheduled for repayment by Tranche C Loans.
(4) The Companies shall cause to be maintained with the
Collateral Agent a Tranche D Borrowing Base such that the Collateral Value
of the Tranche D Borrowing Base is not less than, at any date, the sum of
the aggregate dollar amount of outstanding Tranche D Loans plus the
aggregate dollar amount of outstanding Swing Line Loans which have been
identified by the Companies in the applicable Loan Request as being
scheduled for repayment by Tranche D Loans.
(5) The Companies shall cause to be maintained with the
Collateral Agent a Tranche E Borrowing Base such that the Collateral Value
of the Tranche E Borrowing Base is not less than, at any date, the sum of
the aggregate dollar
29
<PAGE>
amount of outstanding Tranche E Loans plus the aggregate dollar amount of
outstanding Swing Line Loans which have been identified by the Companies in
the applicable Loan Request as being scheduled for repayment by Tranche E
Loans.
(6) The Companies shall cause to be maintained with the
Collateral Agent a Tranche F Borrowing Base such that the Collateral Value
of the Tranche F Borrowing Base is not less than, at any date, the sum of
the aggregate dollar amount of outstanding Tranche F Loans plus the
aggregate dollar amount of outstanding Swing Line Loans which have been
identified by the Companies in the applicable Loan Request as being
scheduled for repayment by Tranche F Loans.
(7) The Companies shall prepay Loans to the Administrative Agent
on behalf of the Lenders, upon telephonic or facsimile demand by the
Administrative Agent, on any day (A) in the amount by which the aggregate
principal amount of outstanding Tranche A Loans, plus the aggregate
principal amount of outstanding Swing Line Loans which have been identified
by the Companies in the applicable Loan Request as being scheduled for
repayment by Tranche A Loans, exceeds the Collateral Value of the Tranche A
Borrowing Base, (B) in the amount by which the aggregate principal amount
of outstanding Tranche B Loans, plus the aggregate principal amount of
outstanding Swing Line Loans which have been identified by the Companies in
the applicable Loan Request as being scheduled for repayment by Tranche B
Loans, exceeds the Collateral Value of the Tranche B Borrowing Base, (C) in
the amount by which the aggregate principal amount of outstanding Tranche C
Loans, plus the aggregate principal amount of outstanding Swing Line Loans
which have been identified by the Companies in the applicable Loan Request
as being scheduled for repayment by Tranche C Loans, exceeds the Collateral
Value of the Tranche C Borrowing Base, (D) in the amount by which the
aggregate principal amount of outstanding Tranche D Loans, plus the
aggregate principal amount of outstanding Swing Line Loans which have been
identified by the Companies in the applicable Loan Request as being
scheduled for repayment by Tranche D Loans, exceeds the Collateral Value of
the Tranche D Borrowing Base, (E) in the amount by which the aggregate
principal amount of outstanding Tranche E Loans, plus the aggregate
principal amount of outstanding Swing Line Loans which have been identified
by the Companies in the applicable Loan Request as being scheduled for
repayment by Tranche E Loans,
30
<PAGE>
exceeds the Collateral Value of the Tranche E Borrowing Base, (F) in the
amount by which the aggregate principal amount of outstanding Tranche F
Loans, plus the aggregate principal amount of outstanding Swing Line Loans
which have been identified by the Companies in the applicable Loan Request
as being scheduled for repayment by Tranche F Loans, exceeds the Collateral
Value of the Tranche F Borrowing Base, (G) in the amount by which the sum
of the aggregate principal amount of outstanding Tranche A Loans, Tranche B
Loans, Tranche C Loans, Tranche D Loans, Tranche E Loans, Tranche F Loans,
Tranche G Loans and Swing Line Loans, the aggregate amount of all L/C
Drawings which have not been reimbursed by the Companies (or with a Tranche
G Loan), and the maximum aggregate amount available to be drawn under all
outstanding Letters of Credit, exceeds the lesser of (1) the Aggregate
Facility Commitment or (2) the Aggregate Collateral Value of the Borrowing
Base, or (H) in the amount by which the sum of the aggregate principal
amount outstanding of all outstanding Tranche G Loans, plus the aggregate
amount of all L/C Drawings which have not been reimbursed by the Companies
(or with a Tranche G Loan), plus the maximum aggregate amount available to
be drawn under all outstanding Letters of Credit exceeds the lesser of (1)
the L/C Credit Limit or (2) the Aggregate Collateral Value of the Borrowing
Base less the aggregate principal amount of all Loans outstanding (other
than Tranche G Loans); said prepayment to be made on the date on which
demand is made by the Administrative Agent if made prior to 12:00 p.m.
(Charlotte, North Carolina time) or, if made later than 12:00 p.m.
(Charlotte, North Carolina time), before 12:00 p.m. (Charlotte, North
Carolina time) on the next Business Day.
(8) If at such time as the Companies shall be required to prepay
Loans under this Paragraph 7(n) there shall not have occurred and be
continuing an Event of Default, in lieu of prepaying the Loans as required,
the Companies may deliver to the Collateral Agent or the Administrative
Agent, as applicable, additional Collateral such that after giving effect
to the inclusion of such Collateral in the respective borrowing bases, the
Companies shall be in compliance with the requirements of subparagraphs (1)
through (7) above.
7(o) Nature and Place of Payments. All payments made on account of
----------------------------
Obligations shall be made to the Administrative Agent for distribution to the
Lenders and the L/C Bank, as
31
<PAGE>
applicable, and the Administrative Agent is hereby irrevocably authorized to
debit the Settlement Account and distribute amounts held therein as provided in
Paragraph 7(s) below on account thereof. All payments made on account of the
Obligations shall be made without setoff or counterclaim in lawful money of the
United States of America in immediately available same day funds, free and clear
of and without deduction for any taxes, fees or other charges of any nature
whatsoever imposed by any taxing authority. If such payments (other than
principal payments made via wire transfers under the Federal Reserve System on
Swing Line Loans held solely by First Union, i.e., the other Lenders have not
purchased participations therein pursuant to Paragraph 6A(d)(2) above) are
received by the Administrative Agent by 3:30 p.m. on any Business Day
(Charlotte, North Carolina time) such payment will be credited on such Business
Day. If a payment (other than principal payments made via wire transfers under
the Federal Reserve System on Swing Line Loans held solely by First Union) is
received after 3:30 p.m. (Charlotte, North Carolina time) by the Administrative
Agent, such payment will be credited on the next succeeding Business Day and
interest thereon shall be payable at the then applicable rate until credited,
provided, that the Administrative Agent shall use its best efforts to credit
--------
such payment on the Business Day received. Principal payments via wire transfers
under the Federal Reserve System on Swing Line Loans held solely by First Union
will be credited as of the Business Day on which First Union receives credit for
such funds in its account with the Federal Reserve Bank. All amounts received by
the Administrative Agent on account of the Obligations shall be disbursed by the
Administrative Agent to the applicable Lenders (or, in the case of amounts
received on account of the L/C Obligations, to the L/C Bank) by wire transfer on
the date of receipt if received by the Administrative Agent by the applicable
deadline for payment thereof as specified above, or if received later, on the
next succeeding Business Day. If any payment required to be made by the
Companies hereunder becomes due and payable on a day other than a Business Day,
the due date thereof shall be extended to the next succeeding Business Day and
interest thereon shall be payable at the then applicable rate during such
extension.
7(p) Post-Maturity Interest. Any Obligations not paid when due
----------------------
(whether at stated maturity, upon acceleration or otherwise) shall bear interest
from the date due until paid in full at a per annum rate equal to four percent
(4%) above the interest rate otherwise applicable thereto or if such Obligations
32
<PAGE>
do not otherwise bear interest, four percent (4%) above the Applicable Corporate
Rate.
7(q) Computations. All computations of interest and fees payable
------------
hereunder shall be based upon a year of 360 days for the actual number of days
elapsed.
7(r) Prepayments.
-----------
(1) The Companies may voluntarily prepay Loans hereunder
(including Eurodollar Loans subject to and on the conditions contained in
Paragraph 7(f)) in whole at any time or in part from time to time upon
notice to the Administrative Agent on or prior to the date of such
prepayment; provided that any partial prepayment shall be in a minimum
--------
amount of $250,000.
(2) Loans hereunder are subject to mandatory prepayment pursuant
to Paragraph 7(n) above and, in addition, by application of proceeds of the
sale or other disposition of Collateral as provided in the Security
Agreement and in the Custodial Agreement.
(3) The Companies shall pay in connection with any prepayment
hereunder all interest accrued but unpaid on Loans to which such prepayment
is applied pursuant to Paragraph 7(s) below and any amounts payable
pursuant to Paragraph 7(f) above concurrently with payment to the
Administrative Agent of any principal amounts.
7(s) Allocation of Payments Received.
-------------------------------
(1) Prior to the occurrence of an Event of Default and
acceleration of all Loans outstanding hereunder or termination of the
commitments of the Lenders to advance Loans hereunder and of the commitment
of the L/C Bank to issue or maintain Letters of Credit hereunder, principal
amounts received by the Administrative Agent with respect to Loans shall be
allocated (i) first, to First Union in payment of any Swing Line Loans
-----
which have not been refunded with Regular Loans, then (ii) next, among the
----
Lenders on account of the Obligations pro rata in accordance with their
respective Percentage Shares, and all amounts received by the
Administrative Agent with respect to unreimbursed L/C Drawings shall be
allocated to the L/C Bank.
33
<PAGE>
(2) Following the occurrence of an Event of Default and
acceleration of all Loans outstanding hereunder or termination of the
commitments of the Lenders to advance Loans hereunder and of the commitment
of the L/C Bank to issue or maintain Letters of Credit hereunder, all
amounts received by the Administrative Agent on account of the Obligations
shall be disbursed by the Administrative Agent as follows:
(i) First, to the payment of reasonable costs and expenses
incurred by the Administrative Agent and Collateral Agent in the
performance of their duties and enforcement of their rights under the
Credit Documents, including, without limitation, all reasonable costs
and expenses of collection, reasonable attorneys' fees, court costs
and foreclosure expenses;
(ii) Second, to First Union in payment of any Swing Line
Loans outstanding (A) in which the Lenders are obligated to purchase
participations pursuant to the terms and provisions of Paragraph
6(A)(d)(2) above, (B) which have not been refunded with Regular Loans,
and (C) in which participations have not been purchased by the Lenders
pursuant to the terms and provisions of Paragraph 6A(d)(2) above;
(iii) Third, to the Lenders (and to the L/C Bank, if any L/C
Drawings remain unreimbursed for more than one (1) Business Day), pro
rata in accordance with their respective Repayment Shares, until the
outstanding Loans, unreimbursed L/C Drawings and other Obligations
shall have been paid in full, provided that all such amounts described
--------
herein shall be applied first to interest and then to principal, as
applicable, provided further that for the sole purpose of this
-------- -------
Paragraph 7(s)(2)(iii), the Lenders' and the L/C Bank's respective
Repayment Shares shall be adjusted to take into account interest which
may be owing to any Lender or the L/C Bank at a rate determined
pursuant to the provisions of Paragraph 7(u) below, and provided
--------
further that for the sole purpose of this Paragraph 7(s)(2)(iii),
-------
First Union's Repayment Share shall be adjusted to exclude Swing Line
Loans outstanding which, by application of Paragraph 6A(d)(4) above,
the Lenders are not obligated to refund;
34
<PAGE>
(iv) Fourth, to First Union in payment of any Swing Line
Loans outstanding which, by application of Paragraph 6A(d)(4) above,
the Lenders are not obligated to refund; and
(v) Fifth, to such Persons as may be legally entitled
thereto.
7(t) Fees. The Companies shall pay the following fees:
----
(1) To the Administrative Agent for the account of the Lenders,
an annual commitment fee equal to one quarter of one percent (0.25%) of the
Aggregate Facility Commitment, such fee to be payable upon the date hereof and
annually upon each anniversary of the date hereof.
(2) To the Administrative Agent for its own account, such
arrangement, agency and syndication fees as have been agreed to in writing by
the Companies and the Administrative Agent pursuant to that certain letter
agreement dated as of February 17, 1995, as such fees may be adjusted from time
to time by agreement of the Companies and the Administrative Agent.
(3) To the Collateral Agent for its own account, such collateral
handling fees as are agreed to in writing by the Companies and the Collateral
Agent.
(4) To each of the Co-Agents for its own account, such co-agency
fees as have been agreed to in writing in that certain letter dated as of June
19, 1995 from the Companies to the Co-Agents, as modified from time to time in
writing by the Companies and the Co-Agents.
7(u) Notwithstanding anything contained in this Agreement to the
contrary, each of the Lenders shall have the option of entering into separate
letter agreements from time to time with the Companies whereunder each such
Lender may establish an interest rate for Loans made by such Lender hereunder
which corresponds to the balance contained in accounts of the Companies held by
or maintained with each such Lender.
7(v) Each Lender that is not incorporated under the laws of the United
States of America or a state thereof agrees that it will deliver to the
Companies and the Administrative Agent (i) two duly completed copies of United
States Internal Revenue Service Form 1001 or 4224 or successor applicable form,
35
<PAGE>
as the case may be, or other manner of certification, establishing that payments
of interest hereunder are either not subject to or totally exempt from United
States Federal withholding tax and (ii) an Internal Revenue Service Form W-8 or
W-9 or successor applicable form. Each such Lender also agrees to deliver to
the Companies and the Administrative Agent two further copies of the said Form
1001 or 4224 and Form W-8 or W-9, or successor applicable forms or other manner
of certification, as the case may be, on or before the date that any such form
expires or becomes obsolete or after the occurrence of any event requiring a
change in the most recent form previously delivered by such Lender to the
Companies, and such extensions or renewals thereof as may reasonably be
requested by the Companies or the Administrative Agent, unless in any such case
an event (including, without limitation, any change in treaty, law or
regulation) has occurred prior to the date on which any such delivery would
otherwise be required which renders all such forms inapplicable or which would
prevent such Lender from duly completing and delivering any such form with
respect to it and such Lender so advises each of the Companies and the
Administrative Agent. Such Lender shall certify (i) in the case of a Form 1001
or 4224, that it is entitled to receive payments under this Agreement without
deduction or withholding of any United States federal income taxes and (ii) in
the case of a Form W-8 or W-9, that it is entitled to an exemption from United
States backup withholding tax.
8. Security Agreement; Custodial Agreement; Additional Documents.
-------------------------------------------------------------
8(a) Security Agreement. On or before the date hereof, the Companies
------------------
shall execute and deliver to the Administrative Agent: (1) a security and
collateral agency agreement in the form set forth as Exhibit B in the Addendum
---------
(the "Security Agreement"), pursuant to which the Companies shall pledge, assign
and grant to the Administrative Agent, for the benefit of the Lenders and the
L/C Bank, a perfected security interest in and lien upon the Collateral, (2)
such UCC financing statements as the Administrative Agent may reasonably request
in connection therewith, and (3) acknowledgement and consent forms, each in form
and substance acceptable to the Administrative Agent, duly executed by each
investor under a Servicing Contract (other than an investor who is one of the
Companies) or by each MBS Fiduciary under a Master Servicing Contract covering
Assigned Servicing Rights or, if such acknowledgment and consent forms are not
available with respect to any Servicing Contract, other evidence reasonably
satisfactory to the Administrative Agent that the Companies' interest in such
36
<PAGE>
Servicing Contract can be pledged as Collateral (for purposes of the foregoing,
a consent may consist of one or more separate documents which, taken as a whole,
evidence the consent of the applicable investor or MBS Fiduciary to the
assignment of the Companies' interest, an agreement to appoint an entity
acceptable to the Administrative Agent as a successor servicer or master
servicer, and a suitable Resignation Letter).
8(b) Custodial Agreement. On or before the date hereof, the Companies
-------------------
shall execute and deliver to the Collateral Agent and the Administrative Agent
that certain Custodial and Intercreditor Agreement dated as of May 23, 1995
among the Companies, the Administrative Agent, Merrill Lynch Mortgage Capital
Inc., Merrill Lynch Credit Corporation, Lehman Commercial Paper Inc., Nomura
Asset Capital Corporation and Bankers Trust Company of California, N.A. in the
form set forth as Exhibit C in the Addendum (the "Custodial Agreement"),
---------
pursuant to which the Companies and the other parties thereto shall agree, with
respect to that portion of the Collateral comprising the Tranche A Borrowing
Base and the Tranche B Borrowing Base, as to the custody thereof by the
Collateral Agent and the relative interests of the parties to the Custodial
Agreement therein.
8(c) Further Documents. The Companies agree to execute and deliver
-----------------
and to cause to be executed and delivered to the Collateral Agent or the
Administrative Agent from time to time such confirmatory and supplementary
security agreements, financing statements and other documents, instruments and
agreements as the Administrative Agent or the Collateral Agent may reasonably
request, which are consistent with the terms of the Credit Documents and which
are in the Administrative Agent's or the Collateral Agent's judgment reasonably
necessary or desirable to obtain for the Collateral Agent or the Administrative
Agent, as applicable, on behalf of the Lenders and the L/C Bank, the benefit of
the Credit Documents and the Collateral.
9. Conditions to Making of Loans and Issuance of Letters of Credit.
---------------------------------------------------------------
9(a) First Loan. As conditions precedent to any Lender's obligation
----------
to make the first Loan hereunder or to the L/C Bank's obligation to issue the
first Letter of Credit hereunder:
(1) The Companies shall have delivered to the Administrative
Agent, in form and substance reasonably
37
<PAGE>
satisfactory to the Administrative Agent and its counsel, each of the
following (with sufficient copies for each of the Lenders and the L/C
Bank):
(i) A duly executed copy of this Agreement;
(ii) A duly executed copy of each of the Security Agreement
and the Custodial Agreement;
(iii) Duly executed copies of each of the Notes;
(iv) Duly executed copies of all financing statements and
other documents, instruments and agreements, properly executed, deemed
necessary or appropriate by the Collateral Agent or the Administrative
Agent, in such Person's reasonable discretion, to obtain for the
Collateral Agent or the Administrative Agent, as applicable, on behalf
of the Lenders and the L/C Bank a perfected security interest in and
lien upon the Collateral, and, prior to the making of the first
Tranche C Loan hereunder, consents duly executed by each investor
under a Servicing Contract (other than an investor who is one of the
Companies) or by each MBS Fiduciary under a Master Servicing Contract
covering Assigned Servicing Rights as more particularly set forth in
Paragraph 8(a)(3) above;
(v) Such credit applications, financial statements, and
authorizations with respect to the Companies as any Lender or the L/C
Bank may reasonably request;
(vi) Certified copies of resolutions of the Board of
Directors of each of CWM, Indy Mac and ILC approving the execution and
delivery of the Credit Documents to which such Person is a party, the
performance of the Obligations thereunder and the consummation of the
transactions contemplated thereby;
(vii) A certificate of the Secretary or an Assistant
Secretary of each of CWM, Indy Mac and ILC certifying the names and
true signatures of the officers of such Person authorized to execute
and deliver the Credit Documents to which such Person is a party;
38
<PAGE>
(viii) A copy of the Certificates of Incorporation of each
of CWM, Indy Mac and ILC, certified by the Secretary of State of the
respective state of organization of such Person as of a recent date;
(ix) A copy of the Bylaws of each of CWM, Indy Mac and
ILC, certified by the respective Secretary or an Assistant Secretary
of such Person as of the date of this Agreement as being accurate and
complete;
(x) Certificates of the Secretary of State of the State
of Delaware, certifying as of a recent date that each of CWM, Indy Mac
and ILC is in good standing;
(xi) An opinion of counsel (which may be in-house
corporate counsel) for the Companies acceptable to the Administrative
Agent;
(xii) Evidence reasonably satisfactory to the
Administrative Agent that each of the Funding Account and the
Settlement Account has been opened;
(xiii) A schedule of the initial Approved Investors,
Approved Repo Lenders and Approved Sub-Servicers;
(xiv) A duly completed Borrowing Base Schedule dated as of
the date of the first Loan hereunder and certified by Borrower to be
true in all material respects;
(xv) A Covenant Compliance Certificate demonstrating in
detail satisfactory to the Lenders and the L/C Bank that the Companies
are in compliance with the covenants set forth in Paragraphs 12(g),
12(h) and 12(i) below;
(xvi) Resignation Letters, duly executed by the Companies
and undated, with respect to each existing Master Servicing Contract
covering Assigned Servicing Rights; and
(xvii) Participation Agreements between each of the Lenders
and the L/C Bank.
39
<PAGE>
(2) All acts and conditions (including, without limitation, the
obtaining of any necessary regulatory approvals and the making of any
required filings, recordings or registrations) required to be done and
performed and to have happened precedent to the execution, delivery and
performance of the Credit Documents and to constitute the same legal, valid
and binding obligations, enforceable in accordance with their respective
terms, shall have been done and performed and shall have happened in due
and strict compliance with all applicable laws.
(3) All documentation, including, without limitation,
documentation for corporate and legal proceedings in connection with the
transactions contemplated by the Credit Documents shall be reasonably
satisfactory in form and substance to the Administrative Agent and its
counsel.
(4) All fees required to be paid to the Administrative Agent and
the Lenders on or before the date hereof pursuant to Paragraph 7(t) above,
shall have been paid prior to (or will be paid concurrently with) the
making of the first Loan or the issuance of the first Letter of Credit
hereunder.
9(b) Ongoing Loans and Letters of Credit. As conditions precedent to
-----------------------------------
each Lender's obligation to make any Loan hereunder, including the first Loan
and including the conversion of any Loan to another type of Loan or the
continuation of any Eurodollar Loan after the end of the applicable Interest
Period, and as conditions precedent to the L/C Bank's obligation to issue any
Letter of Credit hereunder or to renew or replace any such Letter of Credit, at
and as of the date of advance, conversion, continuance, issuance, renewal or
replacement thereof;
(1) There shall have been delivered (i) in the case of a Loan,
to the Administrative Agent a Loan Request therefor, and (ii) in the case
of a Letter of Credit, to the L/C Bank and the Administrative Agent a L/C
Availability Certificate in connection therewith;
(2) The representations and warranties of the Companies
contained in the Credit Documents shall be accurate and complete in all
material respects as if made on and as of the date of such advance,
conversion, continuance, issuance, renewal or replacement;
40
<PAGE>
(3) There shall not have occurred an Event of Default or
Potential Default which has not been waived pursuant to Paragraph 15(b)
hereof by the requisite number of Lenders (including the L/C Bank, if
applicable);
(4) Following the funding of the requested Loan or the issuance
of the requested Letter of Credit: (i) the sum of the aggregate principal
amount of Tranche A Loans outstanding plus the aggregate principal amount
outstanding of Swing Line Loans which have been identified by the Companies
in the applicable Loan Request as being scheduled for repayment by Tranche
A Loans will not exceed the lesser of: a. the Aggregate Tranche A Credit
-
Limit and b. the Collateral Value of the Tranche A Borrowing Base, (ii) the
-
sum of the aggregate principal amount of Tranche B Loans outstanding plus
the aggregate principal amount outstanding of Swing Line Loans which have
been identified by the Companies in the applicable Loan Request as being
scheduled for repayment by Tranche B Loans will not exceed the lesser of:
a. the Aggregate Tranche B Credit Limit and b. the Collateral Value of the
- -
Tranche B Borrowing Base, (iii) the sum of the aggregate principal amount
of Tranche C Loans outstanding plus the aggregate principal amount
outstanding of Swing Line Loans which have been identified by the Companies
in the applicable Loan Request as being scheduled for repayment by Tranche
C Loans will not exceed the lesser of: a. the Aggregate Tranche C Credit
-
Limit and b. the Collateral Value of the Tranche C Borrowing Base, (iv) the
-
sum of the aggregate principal amount of Tranche D Loans outstanding plus
the aggregate principal amount outstanding of Swing Line Loans which have
been identified by the Companies in the applicable Loan Request as being
scheduled for repayment by Tranche D Loans will not exceed the lesser of:
a. the Aggregate Tranche D Credit Limit and b. the Collateral Value of the
- -
Tranche D Borrowing Base, (v) the sum of the aggregate principal amount of
Tranche E Loans outstanding plus the aggregate principal amount outstanding
of Swing Line Loans which have been identified by the Companies in the
applicable Loan Request as being scheduled for repayment by the Tranche E
Loans will not exceed the lesser of: a. the Aggregate Tranche E Credit
-
Limit and b. the Collateral Value of the Tranche E Borrowing Base, (vi) the
-
sum of the aggregate principal amount of Tranche F Loans outstanding plus
the aggregate principal amount outstanding of Swing Line Loans which have
been identified by the
41
<PAGE>
Companies in the applicable Loan Request as being schedule for repayment by
Tranche F Loans will not exceed the lesser of: a. the Aggregate Tranche F
-
Credit Limit and b. the Collateral Value of the Tranche F Borrowing Base,
-
(vii) the aggregate principal amount of Tranche G Loans outstanding plus
the aggregate amount of all unrepaid L/C Drawings plus the maximum
aggregate amount available to be drawn under all outstanding Letters of
Credit will not exceed the lesser of: a. the L/C Credit Limit and b. the
- -
Aggregate Collateral Value of the Borrowing Base less the aggregate
principal amount outstanding of all Loans (other than Tranche G Loans),
(viii) the aggregate principal amount of Loans outstanding advanced by any
Lender will not exceed its Maximum Commitment, and (ix) the aggregate
principal amount of all Loans outstanding plus the aggregate amount of all
unrepaid L/C Drawings plus the maximum aggregate amount available to be
drawn under all outstanding Letters of Credit will not exceed the lesser of
a. the Aggregate Facility Commitment and b. the Aggregate Collateral Value
- -
of the Borrowing Base;
(5) (i) In the case of a Loan, a. if the Loan is a Tranche A
-
Loan or a Tranche B Loan, the Required Documents for the Mortgage Loans
being funded therewith shall have been received by the Collateral Agent
(except as otherwise provided in subparagraph (o) of the definition of
"Eligible A/B Mortgage Loan"); b. if the Loan is a Tranche C Loan, the
-
Required Documents in connection therewith shall have been received by the
Administrative Agent; c. if the Loan is a Tranche D Loan, the Required
-
Documents for the Construction Loan being funded therewith shall have been
received by the Collateral Agent; d. if the Loan is a Tranche E Loan, the
-
Required Documents for the Servicing Loan being funded therewith shall have
been received by the Collateral Agent; and e. if the Loan is a Tranche F
-
Loan, the Required Documents for the Foreclosure/Repurchase Loan being
funded therewith shall have been received by the Collateral Agent, and (ii)
in the case of a Letter of Credit, the Required Documents therefor shall
have been received by the L/C Bank; and
(6) In the case of a Loan, (i) if the Loan is a Tranche A Loan
or a Tranche B Loan and the Administrative Agent is being requested to
include any Mortgage Loan being funded therewith as an Eligible A/B
Mortgage Loan pursuant to a waiver of eligibility requirements as set forth
in the last paragraph of the definition of "Eligible A/B Mortgage
42
<PAGE>
Loan," or (ii) if the Loan is a Tranche D Loan and the Construction Loan
being funded therewith does not conform to the terms of an approved
underwriting program, including, without limitation, due to the sales price
or construction cost of any single-family tract home to be constructed
therewith, or (iii) if the Loan is a Tranche E Loan and the Servicing Loan
being funded therewith does not conform to the terms of any approved
underwriting program, or (iv) if the Loan is a Tranche F Loan and the
Foreclosure/Repurchase Loan being funded therewith does not conform to the
terms of an approved underwriting program, the Companies shall have
notified the Administrative Agent and the Collateral Agent of the
noncompliance or nonconformity of such Mortgage Loan, Construction Loan,
Servicing Loan or Foreclosure/Repurchase Loan, as applicable.
By making a Loan Request to the Administrative Agent, or by delivery of an L/C
Availability Certificate to the L/C Bank, hereunder, the Companies shall be
deemed to have represented and warranted the accuracy and completeness of the
statements set forth in subparagraphs (b)(2) through (b)(6) above.
10. Representations and Warranties of the Companies.
-----------------------------------------------
Each of CWM, Indy Mac, and ILC represents and warrants to the
Administrative Agent, the L/C Bank and each Lender, and the Companies
collectively represent and warrant to the Administrative Agent, the L/C Bank and
each Lender, as applicable, that:
10(a) Financial Condition. (i) The consolidated financial statements
-------------------
of CWM, and the financial statements of Indy Mac, each dated as of the Statement
Date and for the fiscal period then ended, copies of which have been furnished
to each Lender and the L/C Bank, present fairly, in accordance with GAAP, the
financial condition of the Companies at such dates and the results of their
operations and cash flows, for the fiscal period then ended.
10(b) No Change. As of the date hereof there has been no material
---------
adverse change in the business, operations, assets or financial condition of the
Companies, taken as a whole, from that shown on the financial statements dated
as of the Statement Date referred to in Paragraph 10(a) above.
10(c) Corporate Existence; Compliance with Law. Each of CWM, Indy Mac
----------------------------------------
and ILC: (1) is duly organized, validly existing
43
<PAGE>
and in good standing as a corporation under the laws of the State of Delaware,
and is qualified to do business in each jurisdiction where its ownership of
property or conduct of business requires such qualification and where failure to
qualify would have a material adverse effect on the Companies, taken as a whole,
or their property or business or on the ability of the Companies to pay or
perform the Obligations, (2) has the corporate power and authority and the legal
right to own and operate its property and to conduct business in the manner in
which it does and proposes so to do, and (3) is in compliance with all
Requirements of Law and Contractual Obligations, the failure to comply with
which would have a material adverse effect on the business, operations, assets
or financial condition of the Companies, taken as a whole, or on the Collateral.
10(d) Corporate Power; Authorization; Enforceable Obligations. Each of
-------------------------------------------------------
CWM, Indy Mac and ILC has the corporate power and authority and the legal right
to execute, deliver and perform the Credit Documents and has taken all necessary
corporate action to authorize the execution, delivery and performance of the
Credit Documents. The Credit Documents have been duly executed and delivered on
behalf of each of CWM, Indy Mac and ILC and constitute legal, valid and binding
obligations of each such Person enforceable against such Person in accordance
with their respective terms, subject to the effect of applicable bankruptcy and
other similar laws affecting the rights of creditors generally and the effect of
equitable principles whether applied in an action at law or a suit in equity.
10(e) No Legal Bar. The execution, delivery and performance of the
------------
Credit Documents, the borrowing hereunder and the use of the proceeds thereof
and of any Letter of Credit issued pursuant hereto, will not violate any
Requirement of Law or any Contractual Obligation of either CWM, Indy Mac or ILC
the violation of which would have a material adverse effect on the business,
operations, assets or financial condition of the Companies, taken as a whole, or
on the Collateral or create or result in the creation of any Lien (except the
Lien created by the Security Agreement or by the Custodial Agreement) on any
assets of the Companies.
10(f) No Material Litigation. Except as disclosed on Exhibit D set
---------------------- ---------
forth in the Addendum, no litigation, investigation or proceeding of or before
any court, arbitrator or Governmental Authority is pending or, to the knowledge
of the Companies, threatened by or against CWM, Indy Mac or ILC or against any
of
44
<PAGE>
the properties or revenues of such Person which, if adversely determined,
would have a material adverse effect on the business, operations, property or
financial condition of the Companies, taken as a whole, or on the Collateral.
10(g) Taxes. To the best of the Companies' knowledge, all tax returns
-----
that are required to be filed by or on behalf of the Companies have been filed
(or the time for such filing has been extended in accordance with applicable law
or regulations) and all taxes shown or to be shown to be due and payable on said
returns or on any assessments made against the Companies or any of their
property (other than taxes which are being contested in good faith by
appropriate proceedings and as to which the Companies have established adequate
reserves in conformity with GAAP) have been paid or provided for.
10(h) Investment Company Act. Neither CWM, Indy Mac nor ILC is an
----------------------
"investment company" or a company "controlled" by an "investment company" within
the meaning of the Investment Company Act of 1940, as amended.
10(i) Federal Reserve Board Regulations. Neither CWM, Indy Mac nor
---------------------------------
ILC is engaged or will engage, principally or as one of its important
activities, in the business of extending credit for the purpose of "purchasing"
or "carrying" any "margin stock" within the respective meanings of such terms
under Regulation U. No part of the proceeds of any Loan issued hereunder will be
used, directly or indirectly, for "purchasing" or "carrying" "margin stock" as
so defined or for any purpose which violates, or which would be inconsistent
with, the provisions of the Regulations of the Board of Governors of the Federal
Reserve System pertaining to the foregoing.
10(j) ERISA. Each of CWM, Indy Mac and ILC and each of such Person's
-----
ERISA Affiliates are in compliance in all respects with the requirements of
ERISA and no Reportable Event has occurred under any Plan maintained by any of
such Persons or any of such Persons' ERISA Affiliates which is likely to result
in the termination of such Plan for purposes of Title IV of ERISA.
10(k) Assets. The Companies are the legal and beneficial owners of all
------
property and assets reflected in the interim financial statements referred to in
Paragraph 10(a) above, except property and assets sold or otherwise disposed of
in the ordinary course of business subsequent to the date thereof. There are no
outstanding Liens on any of the Companies' properties or assets,
45
<PAGE>
and there are no security agreements to which any of CWM, Indy Mac or ILC is a
party, nor any title retention agreements, whether in the form of leases or
otherwise, of any personal property, except as permitted under Paragraph 12(a)
below.
10(l) Securities Acts. Neither CWM, Indy Mac nor ILC has issued any
---------------
unregistered securities in violation of the registration requirements of Section
5 of the Securities Act of 1933, as amended, or any other existing applicable
law, and each of such Persons is in compliance, in all material respects, with
all existing applicable rules, regulations and requirements under the Securities
Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended.
Neither CWM, Indy Mac nor ILC is required to qualify an indenture under the
Trust Indenture Act of 1939, as amended, in connection with such Person's
execution and delivery of the Notes.
10(m) Consents, etc. No consent, approval, authorization of, or
-------------
registration, declaration or filing with, any Governmental Authority is required
on the part of the Companies in connection with the execution and delivery of
the Credit Documents (other than the consents referred to in Paragraph 8(a)(3)
above and filings to perfect the security interests granted in the Credit
Documents) or the performance of or compliance with the terms, provisions and
conditions hereof or thereof, except such consents as have been obtained by the
Companies.
10(n) Joint Benefit. The Companies engage in complimentary lines of
-------------
business and therefore each Loan made hereunder to any of the Companies, and
each Letter of Credit made available hereunder, benefits all of the Companies.
11. Affirmative Covenants. Each of CWM, Indy Mac and ILC hereby covenants
---------------------
and agrees, and the Companies, jointly and severally, hereby covenant and agree,
with the Administrative Agent, the L/C Bank and each Lender that, as long as any
Obligations remain unpaid or the L/C Bank or any Lender has any obligation to
issue, maintain or participate in any Letter of Credit (provided that with
--------
respect to any Letter of Credit which remains outstanding on the Maturity Date,
so long as the Companies shall have complied with the requirements of Paragraph
6B(k) above regarding such Letter of Credit, such covenants shall expire and
shall have no further effect after the Maturity Date) or to make Loans
hereunder, each of CWM, Indy Mac and ILC, or the Companies, as applicable,
shall:
46
<PAGE>
11(a) Financial Statements. Furnish or cause to be furnished to the
--------------------
Administrative Agent:
(1) Within ninety (90) days after the last day of each fiscal
year of the Companies, a copy of the 10-K statement as filed annually by
the Companies with the Securities and Exchange Commission;
(2) Within forty-five (45) days after the last day of each
fiscal quarter of the Companies, a copy of the 10-Q statement as filed
quarterly by the Companies with the Securities and Exchange Commission;
(3) Within ten (10) days after the last day of each calendar
month, a Covenant Compliance Certificate of an Authorized Officer of the
Companies, demonstrating in detail reasonably satisfactory to the
Administrative Agent the Companies' compliance with the financial covenants
set forth in Paragraphs 12(g), 12(h), 12(i) and 12(j) below as of and at
the end of such month;
(4) Within ninety (90) days after the last day of each fiscal
year of the Companies, consolidating financial statements for CWM (except
for CWM Mortgage Obligations II, Inc. and CWM Mortgage Obligations III,
Inc.), each dated as of the last day of such fiscal year for the fiscal
year then ended, which consolidating financial statements shall present
fairly, in accordance with GAAP (except for the accounting of Indy Mac,
which is not consolidated with CWM under GAAP), the financial condition of
CWM and its consolidated subsidiaries (including Indy Mac for this purpose)
at such date and the results of their operations and cash flows for the
fiscal year then ended; and
(5) Within forty-five (45) days after the last day of each
fiscal quarter of the Companies, consolidating financial statements for CWM
(except for CWM Mortgage Obligations II, Inc. and CWM Mortgage Obligations
III, Inc.), each dated as of the last day of such fiscal quarter for the
fiscal quarter then ended, which consolidating financial statements shall
present fairly, in accordance with GAAP (except for the accounting of Indy
Mac, which is not consolidated with CWM under GAAP), the financial
condition of CWM and its consolidated subsidiaries (including Indy Mac for
this purpose) at such date and the results of their operations and cash
flows for the fiscal year then ended.
47
<PAGE>
Upon receipt of any of the items listed in subparagraphs (1), (2), (3), (4)
or (5) above, the Administrative Agent shall promptly furnish copies of such
items to the Lenders and the L/C Bank.
11(b) Certificates; Reports; Other Information. Furnish or cause to
----------------------------------------
be furnished to the Administrative Agent and the Collateral Agent:
(1) No less frequently than monthly, within thirty (30) days
after the last day of each calendar month unless otherwise requested in
writing, reports in form and content satisfactory to the Administrative
Agent containing the following information: (A) a Loan Purchase/Sale
Schedule for such month; (B) a Delinquency Report for such month; (C) a
Master Servicing Delinquency Report for such month; (D) a Servicing Report
for such month; (E) a Master Servicing Report for such month; (F) with
respect to the Tranche D Facility, 1. a Monthly Tract Sales Report for such
-
month, 2. a Daily Trial Balance Report for such month, 3. a Budget Status
- -
Report for such month, and 4. a Life of Loan/Unit History Report for such
-
month; (G) with respect to each of the Tranche D Facility, the Tranche E
Facility and the Tranche F Facility, Origination and Repayment Statistics
Reports in the forms of Exhibits U, V, and W, respectively, set forth in
---------- - -
the Addendum; (H) the Borrowing Base Schedule for such month; (I) with
respect to each of the Tranche A Facility and the Tranche B Facility, a
Position Report for such month; and (J) with respect to the Tranche A
Facility, an investor commitment summary relating to the status of the
Take-out Commitments and Hedging Arrangements.
(2) Promptly, such additional financial and other information,
including, without limitation, financial statements of the Companies or any
Approved Investor, Approved Repo Lender or Approved Sub-Servicer, and
information regarding the Collateral as the Administrative Agent, the
Collateral Agent, the L/C Bank or any Lender, through the Administrative
Agent, may from time to time reasonably request;
(3) Promptly, and in any event within five (5) business days
after received or sent by the Companies, (i) true and complete copies of
any and all notices, correspondences and similar documentation prepared by,
or on behalf
48
<PAGE>
of any investor under a Servicing Contract or any MBS Fiduciary under a
Master Servicing Contract in the event such notices, correspondence or
documentation declare or allege that any Company is (or will be after the
passage of time) in default under a Servicing Contract or Master Servicing
Contract or which terminates or threatens to terminate a Servicing Contract
or Master Servicing Contract;
(4) To the Administrative Agent (to be forwarded by the
Administrative Agent to each of the Lenders and to the L/C Bank) a copy of
any 8-K statement or S-3 registration statement filed by the Companies with
the Securities and Exchange Commission as promptly as possible after such
filing;
(5) To the Administrative Agent with respect to any Construction
Loan which is secured by a mortgage or deed of trust on a single-family
tract home which has remained unsold for more than one hundred eighty (180)
days, within thirty (30) days after such single-family tract home has
remained unsold for more than one hundred eighty (180) days, an appraisal
of such home prepared by an independent third party appraiser proposed by
the Companies and acceptable to the Administrative Agent;
(6) To the Administrative Agent on a semiannual basis within
thirty (30) days after each April 1 and October 1, an appraisal of the
Assigned Servicing Rights relating to Master Servicing Contracts prepared
by an independent third party proposed by the Companies and acceptable to
the Administrative Agent; provided, however, that (A) the Administrative
-------- -------
Agent reserves the right to request such appraisal with respect to Assigned
Servicing Rights related to Master Servicing Contracts more frequently than
semiannually if deemed necessary in the reasonable business judgment of the
Administrative Agent, and (B) the Companies shall deliver a similar
appraisal to the Administrative Agent with respect to Assigned Servicing
Rights related to Servicing Contracts for all such Assigned Servicing
Rights owned by the Companies in excess of six (6) months, such appraisal
to be delivered within thirty (30) days after such Assigned Servicing
Rights have been owned for six (6) months by the Companies;
(7) To the Administrative Agent upon entry by the Companies into
any Master Servicing Contract with a new MBS
49
<PAGE>
Fiduciary or any Servicing Contract with a new investor, a Resignation
Letter with respect to such MBS Fiduciary or investor, which Resignation
Letter shall be executed by the Companies and undated;
(8) To the Administrative Agent upon request therefor after the
occurrence and during the continuance of an Event of Default, the
Additional Required Documents in connection with any Mortgage Loan,
Construction Loan, Servicing Loan, Foreclosure/ Repurchase Loan or
Warehousing Loan which has been funded with the proceeds of any Loan; and
(9) To the Administrative Agent upon request for a Tranche A Loan
made with respect to any Warehousing Loan, (A) a copy of the warehousing
loan agreement between the Companies and the applicable sub-borrower
relating to such Warehousing Loan and, (B) upon request of the Majority
Lenders, (i) a copy, certified by an Authorized Officer of the Companies,
of all UCC-1 financing statements listing the applicable sub-borrower as
debtor and the Companies as secured party, signed by the sub-borrower and
covering any collateral being pledged under the applicable warehousing loan
agreement, and (ii) UCC-3 Financing Statements listing the Companies as
assignor and the Administrative Agent as assignee and assigning the right,
title and interest of the Companies in the personal property which has been
pledged by the applicable sub-borrower to the Companies as security for
such Warehousing Loan.
11(c) INTENTIONALLY OMITTED.
11(d) Maintenance of Existence and Properties. Maintain the corporate
---------------------------------------
existence of each of CWM, Indy Mac and ILC and obtain and maintain all rights,
privileges, licenses, approvals, franchises, properties and assets necessary or
desirable in the normal conduct of the business of the Companies, and comply
with all Contractual Obligations and Requirements of Law, except where the
failure to so comply would not have a material adverse effect on the business,
operations, assets or financial condition of the Companies, taken as a whole, or
on the Collateral. CWM will at all times remain qualified as a REIT, ILC will at
all times remain qualified as a "qualified REIT subsidiary," as defined in the
Code, and CWM will at all times own at least ninety-nine percent (99%) of the
economic interest in Indy Mac.
50
<PAGE>
11(e) Inspection of Property; Books and Records; Audits.
-------------------------------------------------
(1) Keep proper books of record and account in which full, true
and correct entries in conformity with GAAP and all Requirements of Law
shall be made of all dealings and transactions in relation to its business
and activities; and
(2) Permit: (i) representatives of the Administrative Agent, the
Collateral Agent, the L/C Bank or any Lender to a. visit and inspect any of
-
the properties of the Companies and examine and make abstracts from any of
the books and records of the Companies at any reasonable time and as often
as may reasonably be desired by the Administrative Agent, the Collateral
Agent, the L/C Bank or any Lender (but, prior to the occurrence of an Event
of Default, only upon not less than two Business Days' prior notice), and
b. discuss the business, operations, properties and financial and other
-
condition of the Companies with officers and employees of the Companies,
and with their independent certified public accountants, and (ii)
representatives of the Collateral Agent and the Administrative Agent to
conduct periodic operational audits of the Companies' business and
operations. The expenses of the Administrative Agent, the Collateral
Agent, the L/C Bank or any Lender incurred in connection with any visit,
inspection, examination, discussion or audit performed pursuant to this
Paragraph 11(e)(2) shall be borne by such parties incurring such expenses
except as otherwise provided in Paragraph 11(g).
11(f) Notices. Promptly give written notice to the Administrative
-------
Agent (which shall promptly transmit a copy of such notice to the L/C Bank and
to each of the Lenders) of:
(1) The occurrence of any Potential Default or Event of Default
known to the Chief Executive Officer, President, Chief Operating Officer,
Chief Accounting Officer, Senior Vice President of Warehouse Lending,
Senior Vice President of Construction Lending or Senior Vice President of
Secondary Marketing of CWM and the proposed method of cure thereof;
(2) Any litigation or proceeding affecting the Companies or the
Collateral which could have a material adverse effect on the Collateral or
the business, opera-
51
<PAGE>
tions, property, or financial condition of the Companies, taken as a whole;
and
(3) A material adverse change known to the Chief Executive
Officer, President, Chief Operating Officer, Chief Accounting Officer,
Senior Vice President of Warehouse Lending or Senior Vice President of
Construction Lending or Senior Vice President of Secondary Marketing of any
of the Companies in the business, operations, property or financial
condition of the Companies, taken as a whole; and
(4) Any changes in the following senior management positions of
any of the Companies: Chief Executive Officer, President, Chief Operating
Officer, Chief Accounting Officer, Senior Vice President of Warehouse
Lending, Senior Vice President of Construction Lending or Senior Vice
President of Secondary Marketing.
11(g) Expenses. Pay all reasonable out-of-pocket costs and expenses
--------
(including reasonable fees and disbursements of counsel): (1) of the
Administrative Agent, the Collateral Agent and the L/C Bank incident to the
preparation and negotiation of the Credit Documents and the Participation
Agreements, (2) of the Administrative Agent and the Collateral Agent associated
with any periodic audits conducted pursuant to Paragraph 11(e)(2)(ii) above if
such audit discloses a material adverse change in the financial condition or
operations of the Companies, taken as a whole, and (3) of the Administrative
Agent, the Collateral Agent, the L/C Bank, and each of the Lenders incident to
the enforcement of payment of the Obligations, whether by judicial proceedings
or otherwise, including, without limitation, in connection with bankruptcy,
insolvency, liquidations, reorganization, moratorium or other similar
proceedings involving the Companies or a "workout" of the Obligations. The
obligations of the Companies under this Paragraph 11(g) shall be effective and
enforceable whether or not any Loan is advanced by any Lender hereunder and
whether or not any Letter of Credit is issued, maintained or participated
hereunder and shall survive payment of all other Obligations.
11(h) Credit Documents. Comply with and observe all terms and
----------------
conditions of the Credit Documents.
11(i) Insurance. Obtain and maintain insurance with responsible
---------
companies in such amounts and against such risks as are usually carried by
corporations engaged in similar businesses
52
<PAGE>
similarly situated, including, without limitation, errors and omissions coverage
and fidelity coverage in form and substance acceptable to the Administrative
Agent, and furnish the Administrative Agent on request full information as to
all such insurance, and to provide within five (5) days after receipt of such
request, certificates or other documents evidencing the renewal of each such
policy.
12. Negative Covenants. Each of CWM, Indy Mac and ILC hereby agrees, and
------------------
the Companies, jointly and severally, hereby agree, that, as long as any
Obligations remain unpaid or the L/C Bank or any Lender has any obligation to
issue, maintain or participate in any Letter of Credit (provided that with
--------
respect to any Letter of Credit which remains outstanding on the Maturity Date,
so long as the Companies shall have complied with the requirements of Paragraph
6B(k) above regarding such Letter of Credit, such covenants shall expire and
shall have no further effect after the Maturity Date) or to make Loans
hereunder, CWM, Indy Mac and ILC, and the Companies, as applicable, shall not at
any time, directly or indirectly:
12(a) Liens. Create, incur, assume or suffer to exist, any Lien
-----
upon the Collateral except as contemplated by the Security Agreement or the
Custodial Agreement, or create, incur, assume or suffer to exist any Lien upon
any of the other property and assets (including the Assigned Servicing Rights
and any other servicing rights) of the Companies except:
(1) Liens for current taxes, assessments or other governmental
charges which are not delinquent or which remain payable without penalty,
or the validity of which are contested in good faith by appropriate
proceedings upon stay of execution of the enforcement thereof, provided the
Companies shall have set aside on the books of the Companies and shall
maintain adequate reserves for the payment of same in conformity with GAAP;
(2) Liens, deposits or pledges made to secure statutory
obligations, surety or appeal bonds, or bonds for the release of
attachments or for stay of execution, or to secure the performance of bids,
tenders, contracts (other than for the payment of borrowed money), leases
or for purposes of like general nature in the ordinary course of the
Companies business;
53
<PAGE>
(3) Purchase money security interests for property (except
Mortgage Loans) hereafter acquired, conditional sale agreements, or other
title retention agreements, with respect to property hereafter acquired;
provided, however, that no such security interest or agreement shall affect
any servicing rights or extend to any property other than the property
acquired; and
(4) Liens securing Permitted Secured Debt (including without
limitation liens securing Indebtedness incurred pursuant to the Facility I
Agreement).
12(b) Indebtedness. Create, incur, assume or suffer to exist, or
------------
otherwisebecome or be liable in respect of any Indebtedness except:
(1) The Obligations;
(2) Trade debt or accounts payable incurred in the ordinary
course of business, paid within sixty (60) days after the same has become
due and payable or which is being contested in good faith, provided
provision is made to the reasonable satisfaction of the Administrative
Agent for the eventual payment thereof in the event it is found that such
contested trade debt is payable by the Companies;
(3) Indebtedness secured by Liens permitted under Paragraph
12(a) above;
(4) Indebtedness which is unsecured;
(5) Indebtedness incurred pursuant to repurchase and gestation
financing agreements, whether such Indebtedness is shown on the books of
the Companies as a sale or as a financing;
(6) Indebtedness which is by its terms subordinated in right of
payment to the Obligations and which is evidenced by instruments and
agreements in form and content reasonably satisfactory to the
Administrative Agent;
(7) Indebtedness attributable to collateralized mortgage
obligations of the Companies or any Affiliate thereof;
54
<PAGE>
(8) Indebtedness incurred pursuant to additional financing
secured by Construction Loans of the type which serve as Collateral for the
Tranche D Facility; provided, however, that the Companies may not enter
-------- -------
into any such financing arrangement, nor incur additional outstanding
Indebtedness under any such existing financing arrangement, at any time
when the amount of availability under the Tranche D Facility equals or
exceeds the amount of additional Indebtedness sought to be incurred;
(9) Permitted Other Debt; and
(10) Indebtedness not specifically referred to above but
reflected in the financial statements referred to in Paragraph 12(a) above,
and extensions, renewals, and refinancings of such Indebtedness.
12(c) Consolidation and Merger; Change of Business. (i) Liquidate or
--------------------------------------------
dissolve or enter into any consolidation or merger (provided that any of the
--------
Companies may enter into a consolidation or merger so long as (A) such Company
is the surviving entity after such consolidation or merger, and (B) such
consolidation or merger does not create a default under Paragraph 12(c)(iii)
hereof); (ii) form or enter into any partnership, joint venture, syndicate or
other combination which would have a material adverse effect on the business,
operations, assets or financial condition of the Companies taken as a whole; or
(iii) make any material change in the nature of its business as a mortgage
banker, mortgage conduit, manufactured housing lender, mortgage lender,
warehouse lender, construction lender, servicing-secured lender or servicing-
receivable lender as currently conducted or conduct any business other than in
substantially the same fields of enterprise as currently conducted.
12(d) Acquisitions. Purchase or acquire or incur liability for the
------------
purchase or acquisition of any or all of the assets or business of any Person
for a purchase or acquisition price in excess of $5,000,000, other than in the
normal course of business as currently conducted (it being expressly agreed and
understood that the acquisition of non-recourse servicing is a normal course of
business activity and that the acquisition of recourse servicing is not a normal
course of business activity).
12(e) Underwriting Policies; Warehousing Loan Agreements. Cause,
--------------------------------------------------
agree to, or allow any change which would have a material adverse effect on the
Lenders or their interests under
55
<PAGE>
this Agreement, without the prior written consent of the Administrative Agent,
in or to (i) its programs and procedures with respect to the underwriting and
purchase of Eligible A/B Mortgage Loans which are described in the Indy Mac
Seller/Servicer Guide, (ii) its programs and procedures with respect to the
underwriting and purchase of Construction-to-Permanent Mortgage Loans, (iii) its
underwriting policies with respect to any construction lending programs,
including without limitation programs whereunder the Companies shall extend
Construction Loans, (iv) its underwriting policies with respect to any programs
whereunder the Companies shall extend Servicing Loans, (v) its underwriting
policies with respect to any programs whereunder the Companies shall extend
Foreclosure/Repurchase Loans, (vi) its due diligence procedures with respect to
any programs whereunder the Companies shall extend Warehousing Loans from those
set forth on Exhibit AA hereto, or (vii) its standard form loan agreement with
----------
respect to any Warehousing Loans extended by the Companies from that set forth
on Exhibit BB hereto (provided, however, that with respect to items (vi) and
---------- -------- -------
(vii) above, the Administrative Agent shall be deemed to have granted its
consent to any such proposed change if it fails to notify the Companies to the
contrary within five (5) Business Days of receiving notice from the Companies of
such proposed change). In the event that the Administrative Agent consents in
writing (or by failure to object) to a material change by the Companies in or to
any of the above-described programs, procedures or policies, the Administrative
Agent shall promptly notify the Lenders of the nature and content of such
change.
12(f) Sale of Assets. Sell, lease, assign, transfer or otherwise
--------------
dispose of any of its assets (other than obsolete, no longer useful or worn out
property), whether now owned or hereafter acquired, other than in the ordinary
course of business as currently conducted and at fair market value (it being
expressly agreed and understood that the sale or other disposition of Mortgage-
Backed Securities and Mortgage Loans with or without servicing released and of
mortgage servicing rights is in the ordinary course of business).
12(g) Indebtedness to Net Worth Ratio of CWM. Permit the ratio of
--------------------------------------
(i) the sum of (A) the Adjusted Total Indebtedness of Indy Mac and (B) the
consolidated Adjusted Total Indebtedness of CWM (as shown on the most recent
consolidated financial statements of CWM delivered to the Administrative Agent
pursuant to Paragraph 11(a)), to (ii) the sum of (A) the Book Net Worth of Indy
Mac and (B) the consolidated Book Net Worth of CWM (as shown
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on the most recent consolidated financial statements of CWM delivered to
the Administrative Agent pursuant to Paragraph 11(a)), provided, however that
-------- -------
the sum referenced in the immediately preceding subparagraph (ii) shall be
reduced by the amount of equity in earnings of Indy Mac as shown on the most
recent consolidated financial statements of CWM), on any date to be more than
10.0:1.0.
(h) Minimum Consolidated Book Net Worth of CWM. Permit the
------------------------------------------
consolidated Book Net Worth of CWM at any date (as shown on the most recent
consolidated financial statements of CWM delivered to the Administrative Agent
pursuant to Paragraph 11(a)) to be less than the greater of (i) $250,000,000 or
(ii) eighty percent (80%) of the consolidated Book Net Worth of CWM as of
the date hereof, less the amount of any qualified REIT dividends payable as of
the date hereof.
(i) Minimum Book Net Worth of Indy Mac. Permit the Book Net Worth
----------------------------------
of Indy Mac at any date (as shown on the most recent financial statements of
Indy Mac delivered to the Administrative Agent pursuant to Paragraph 11(a)) to
be less than $5,000,000.
12(j) Minimum Master Servicing Portfolio. Without the written
----------------------------------
consent of the Majority Lenders, transfer any rights to service Mortgage Loans
which would result in the Master Servicing Portfolio at any date being less than
$4,000,000,000.00.
13. Events of Default. Upon the occurrence of any of the following events
-----------------
(an "Event of Default"):
13(a) Companies shall fail to pay (or prepay pursuant to Paragraph
7(n) above) principal or interest on any Loan, or any fee payable to the
Administrative Agent for its own account, to the L/C Bank for its own account,
or for the benefit of the Lenders pursuant to Paragraph 7(t) above, when due, or
any L/C Obligation when due (in the event such L/C Obligation is not satisfied
by funding of a Tranche G Loan pursuant to the terms hereof); or
13(b) Any representation or warranty made or deemed made by the
Companies in any Credit Document or in connection with any Credit Document shall
be inaccurate or incomplete in any material respect on or as of the date made or
deemed made; or
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13(c) Either CWM, Indy Mac or ILC shall fail to maintain its
corporate existence; or
13(d) The Companies shall fail to observe or perform any other term
or provision contained in the Credit Documents and such failure shall continue
for thirty (30) days after notice of such default from the Administrative Agent
to the Companies; or
13(e) There shall exist an "Event of Default" under, and as defined
in, the Facility I Agreement; or
13(f) The Companies shall default in any payment of principal of or
interest on any Indebtedness (other than the Loans, and Indebtedness incurred
pursuant to the Facility I Agreement), in the aggregate principal amount of
$500,000 or more (and without regard for the dollar amount of the defaulted
payment), or any other event shall occur the effect of which is to permit such
Indebtedness to be declared or otherwise to become due prior to its stated
maturity; or
13(g) (1) Either CWM, Indy Mac or ILC shall commence any case,
proceeding or other action (i) relating to bankruptcy, insolvency,
reorganization or relief of debtors, seeking to have an order for relief entered
with respect to such Person, or seeking to adjudicate such Person a bankrupt or
insolvent, or seeking reorganization, arrangement, adjustment, winding-up,
liquidation, dissolution, composition or other relief with respect to such
Person or its debts, or (ii) seeking appointment of a receiver, trustee,
custodian or other similar official for such Person or for all or any
substantial part of its assets, or such Person shall make a general assignment
for the benefit of its creditors; or (2) there shall be commenced against any of
CWM, Indy Mac or ILC any case, proceeding or other action of a nature referred
to in clause (1) above which (i) results in the entry of an order for relief or
any such adjudication or appointment, or (ii) remains undismissed, undischarged
or unbonded for a period of sixty (60) days; or (3) there shall be commenced
against any of CWM, Indy Mac or ILC any case, proceeding or other action seeking
issuance of a warrant of attachment, execution, distraint or similar process
against all or substantially all of the assets of such Person which results in
the entry of an order for any such relief which shall not have been vacated,
discharged, stayed, satisfied or bonded pending appeal within sixty (60) days
from the entry thereof; or (4) any of CWM, Indy Mac or ILC shall take any action
in furtherance of, or indicating its consent to, approval of, or acquiescence in
(other than in
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connection with a final settlement), any of the acts set forth in clauses (1),
(2) or (3) above; or (5) any of CWM, Indy Mac or ILC shall generally not, or
shall be unable to, or shall admit in writing its inability to pay its debts as
they become due; or
13(h) The Companies or any of their ERISA Affiliates shall engage in
any "prohibited transaction" (as defined in Section 406 of ERISA or Section 4975
of the Code) involving any Plan, (2) any "accumulated funding deficiency" (as
defined in Section 302 of ERISA), whether or not waived, shall exist with
respect to any Plan, (3) a Reportable Event shall occur with respect to, or
proceedings shall commence to have a trustee appointed, or a trustee shall be
appointed, to administer or to terminate, any Single Employer Plan, which
Reportable Event or institution of proceedings is, in the reasonable opinion of
the Administrative Agent, likely to result in the termination of such Plan for
purposes of Title IV of ERISA, and, in the case of a Reportable Event, the
continuance of such Reportable Event unremedied for ten days after notice of
such Reportable Event pursuant to Section 4043(a), (c) or (d) of ERISA is given
or the continuance of such proceedings for ten days after commencement thereof,
as the case may be, (4) any Single Employer Plan shall terminate for purposes of
Title IV of ERISA, (5) any withdrawal liability to a Multiemployer Plan shall be
incurred by the Companies or any of their ERISA Affiliates or (6) any other
event or condition shall occur or exist; and in each case in clauses (1) through
(6) above, such event or condition, together with all other such events or
conditions, if any, is likely to subject the Companies or any of their
respective ERISA Affiliates to any tax, penalty or other liabilities in the
aggregate material in relation to the business, operations, property or
financial condition of the Companies taken as a whole; or
13(i) One or more judgments or decrees in an aggregate amount in
excess of $500,000 not covered by insurance shall be entered against the
Companies and all such judgments or decrees shall not have been vacated,
discharged, stayed, satisfied or bonded pending appeal within sixty (60) days
from the entry thereof; or
13(j) With respect to any Letter of Credit which remains outstanding
on the Maturity Date, the Companies shall have failed to comply with the
requirements of Paragraph 6B(k) above regarding such Letter of Credit;
THEN:
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(1) Automatically upon the occurrence of an Event of Default
under Paragraph 13(g) above; and
(2) At the option of any Lender or the L/C Bank upon the
occurrence of an Event of Default under Paragraph 13(a) above; and
(3) In all other cases, at the option of the Majority Lenders,
the L/C Bank's obligation to issue any Letter of Credit and each Lender's
obligation to make Loans hereunder shall terminate and the principal balance of
outstanding Loans and interest accrued but unpaid thereon and all other amounts
payable by the Companies under the Credit Documents shall become immediately due
and payable, without demand upon or presentment to the Companies, which are
expressly waived by the Companies.
Upon the occurrence of any Event of Default hereunder, and promptly upon
notice by the Administrative Agent to the other Lenders, if (a) the ratio of the
amount of Loans outstanding held by any Lender to the aggregate amount of Loans
outstanding held by all Lenders at the time of determination exceeds (b) such
Lender's Percentage Share, then each Lender shall purchase or sell, as
applicable, for cash and at face value and without recourse, such participations
in the Loans made by the other Lenders as shall be necessary to cause (x) the
ratio of the amount of Loans outstanding held by any Lender to the aggregate
amount of Loans outstanding held by all Lenders at such date to equal (y) such
Lender's Percentage Share. Provided, however, that no Lender will be required
-------- -------
to purchase a participation in a Swing Line Loan which, by application of
Paragraph 6A(d)(4) above, it would not have been obligated to refund.
14. The Administrative Agent.
------------------------
14(a) Appointment. The L/C Bank and each Lender irrevocably
-----------
appoints the Administrative Agent as the agent for the L/C Bank and such Lender
under the Credit Documents and to act as secured party, agent, bailee and
custodian for the exclusive benefit of the L/C Bank and the Lenders with respect
to the Collateral, and the L/C Bank and each such Lender hereby irrevocably
authorizes the Administrative Agent as the agent for the L/C Bank and such
Lender, to take such action on its behalf under the provisions of the Credit
Documents and to exercise such
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powers and perform such duties as are expressly delegated thereto by the terms
of the Credit Documents, together with such other powers as are reasonably
incidental thereto including, without limitation, all powers and duties
specifically set forth in the Security Agreement or the Custodial Agreement to
be exercised and performed by the Administrative Agent. The Administrative Agent
is specifically authorized to execute and deliver on behalf of the L/C Bank and
all of the Lenders, the Security Agreement and the Custodial Agreement and to
appoint Bankers Trust of California, N.A. as the Collateral Agent to act on
behalf of the L/C Bank and the Lenders with respect to A/B Collateral and DEF
Collateral (as those terms are defined in the Security Agreement) as described
in the Security Agreement and the Custodial Agreement, including, without
limitation, to act on behalf of the L/C Bank and the Lenders to release
Collateral pursuant to the terms of the Security Agreement and the Custodial
Agreement. The L/C Bank and the Lenders specifically authorize the
Administrative Agent to agree to indemnify the Collateral Agent from and to pay
to the Collateral Agent all costs (including, without limitation, costs incurred
by Collateral Agent as a result of any examination performed by the L/C Bank or
any Lender under Paragraph 12 of the Security Agreement) as set out in the
Security Agreement and to the extent, if any, that the Companies are not
required to or do not reimburse the Administrative Agent for any such
indemnification or costs, then the L/C Bank and the Lenders will do so ratably
in accordance with their Repayment Shares, unless such cost is related to an
examination by the L/C Bank or a Lender under Paragraph 12 of the Security
Agreement, in which case all such costs will be borne by the examining L/C Bank
or Lender; provided, however, that if the Companies are not required to
-------- -------
reimburse the Administrative Agent for any such indemnification or costs due to
the gross negligence or willful misconduct of either the Collateral Agent or the
Administrative Agent, then the L/C Bank and the Lenders shall not be required to
reimburse the Administrative Agent for any such indemnification or costs. The
Administrative Agent shall have no duties or responsibilities except those
expressly set forth therein, nor any fiduciary relationship with the L/C Bank or
any Lender, and no implied covenants, responsibilities, obligations or
liabilities shall be read into the Credit Documents or otherwise exist against
the Administrative Agent.
14(b) Delegation of Duties. The Administrative Agent may execute
--------------------
any of its duties under the Credit Documents by or through agents or attorneys-
in-fact and shall be entitled to advice of counsel concerning such duties. The
Administrative
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Agent shall not be responsible for the negligence or misconduct of any agents or
attorneys-in-fact selected by it with reasonable care.
14(c) Exculpatory Provisions. Neither the Administrative Agent nor
----------------------
any of its officers, directors, employees, agents, counsel, attorneys-in-fact or
Affiliates shall be (1) liable to the L/C Bank, any Lender, the Collateral
Agent, or the Companies for any action taken or omitted to be taken by it or
such Person under or in connection with the Credit Documents (except for its or
such Person's own gross negligence or willful misconduct), or (2) responsible in
any manner to any of the L/C Bank, the Lenders, the Collateral Agent or the
Companies for: (i) any recitals, statements, representations or warranties made
by the Companies or any officer thereof contained in the Credit Documents or in
any certificate, report, statement or other document referred to or provided for
in, or received by the Administrative Agent under or in connection with, the
Credit Documents (except such as are prepared by the Administrative Agent and,
then, only to the extent the Administrative Agent is responsible for
verification of the accuracy and completeness of the information contained
therein or the facts upon which such information is based as expressly provided
herein) or for the value, validity, effectiveness, genuineness, enforceability,
collectability or sufficiency of the Credit Documents or for any failure of the
Companies to perform their obligations thereunder, or (ii) any action taken or
omitted to be taken by the Administrative Agent with respect to the Other
Collateral (as defined in the Security Agreement) in accordance with written
instructions given as permitted under the Credit Documents, or (iii) assuring
compliance of the Credit Documents and the transactions contemplated by the
Credit Documents with any law or regulation binding on such Person, it being
expressly acknowledged, agreed and understood that each such Person has obtained
independent advice satisfactory to it in all such respects. The Administrative
Agent shall be under no obligation to the L/C Bank or any Lender to ascertain or
to inquire as to the observance or performance of any of the agreements
contained in, or conditions of, the Credit Documents (other than agreements
required to be complied with by the Administrative Agent thereunder and subject
to the standards of care set forth herein with respect thereto) or to inspect
the properties, books or records of the Companies. The Administrative Agent
shall be entitled to refrain from exercising any discretionary powers or actions
under this Agreement or any other Credit Document until it shall have received
the prior written consent of one hundred percent (100%) of the Lenders (and,
after
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the occurrence and during the continuance of an Event of Default, the L/C Bank)
to such action.
14(d) Reliance by Administrative Agent. The Administrative Agent
--------------------------------
shall be entitled to rely, and shall be fully protected in relying, upon any
note, writing, resolution, notice, consent, certification, affidavit, letter,
cablegram, telegram, telecopy, telex or teletype message, statement, order or
other document or conversation believed by it to be genuine and correct and to
have been signed, sent or made by the proper Person or Persons and upon advice
and statements of legal counsel (including, without limitation, counsel to the
Companies), independent accountants and other experts selected by the
Administrative Agent. The Administrative Agent may deem and treat the payee of
any Note as the owner thereof for all purposes unless a written notice of
assignment, negotiation or transfer thereof shall have been filed with the
Administrative Agent. As to any Lender or the L/C Bank the Administrative Agent
shall be fully justified in failing or refusing to take any action under the
Credit Documents unless it shall first receive such advice or concurrence of the
Majority Lenders (or all Lenders, as required under the Credit Documents,
including, after the occurrence and during the continuance of an Event of
Default, the L/C Bank) or it shall first be indemnified to its satisfaction by
the Lenders and the L/C Bank against any and all liability and expense which may
be incurred by it by reason of taking or continuing to take any action (other
than liability and expense arising out of the Administrative Agent's gross
negligence or willful misconduct). As to any Lender or the L/C Bank, the
Administrative Agent shall in all cases be fully protected in acting, or in
refraining from acting, under the Credit Documents in accordance with a request
of the Majority Lenders (or all Lenders, if applicable, including, after the
occurrence and during the continuance of an Event of Default, the L/C Bank)
absent gross negligence and willful misconduct on the part of the Administrative
Agent in the method in which it acts or refrains from acting in accordance
therewith, and such request and any action taken or failure to act pursuant
thereto shall be binding upon all the Lenders and the L/C Bank.
14(e) Notice of Default; Agreement to Advance. The Administrative
---------------------------------------
Agent shall be deemed to have no knowledge or notice of the occurrence of any
Event of Default or Potential Default hereunder unless the Administrative Agent
has received notice from a Lender, the L/C Bank or the Companies referring to
the Credit Documents, describing such Event of Default or Potential Default and
stating that such notice is a "notice of de-
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fault". In the event that the Administrative Agent receives such a notice, the
Administrative Agent shall give notice thereof to the Lenders, the L/C Bank and
the Collateral Agent.
14(f) Non-Reliance on Administrative Agent and Other Lenders. Each
------------------------------------------------------
Lender and the L/C Bank expressly acknowledges that neither the Administrative
Agent nor any of its officers, directors, employees, agents, attorneys-in-fact
or Affiliates has made any representations or warranties to it and that no act
by the Administrative Agent hereafter taken, including any review of the affairs
of the Companies, shall be deemed to constitute any representation or warranty
by the Administrative Agent to any such Person or the L/C Bank. Each Lender and
the L/C Bank represents to the Administrative Agent that it has, independently
and without reliance upon the Administrative Agent or any other such Person or
their respective counsel, and based on such documents and information as it has
deemed appropriate, made its own appraisal of and investigation into the
business, operations, property, financial and other condition and
creditworthiness of the Companies and made its own decision to extend credit
hereunder and enter into the Credit Documents. Each Lender and the L/C Bank also
represents that it will, independently and without reliance upon the
Administrative Agent or any other such Person, and based on such documents,
information and legal advice (including, without limitation, advice of
regulatory counsel to it) as it shall deem appropriate at the time, continue to
make its own credit analysis, appraisals and decisions in entering into the
Credit Documents and taking or not taking action thereunder, and to make such
investigation as it deems necessary to inform itself as to the business,
operations, property, financial and other condition and creditworthiness of the
Companies. Except for notices, reports and other documents expressly required to
be furnished to the Lenders and the L/C Bank by the Administrative Agent
hereunder, the Administrative Agent shall not have any duty or responsibility to
provide any Lender or the L/C Bank with any legal advice or credit or other
information concerning the business, operations, property, financial and other
condition or creditworthiness of the Companies which may come into the
possession of the Administrative Agent or any of its officers, directors,
employees, agents, attorneys-in-fact or Affiliates.
14(g) Indemnification. The Companies, jointly and severally, agree
---------------
to indemnify, defend and hold harmless the Administrative Agent in its capacity
as such and each Lender and the L/C Bank from and against any and all claims,
obligations, penalties, actions, suits, judgments, reasonable costs and dis-
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bursements, losses, liabilities and damages (including, without limitation,
reasonable attorneys' fees) of any kind whatsoever which may at any time be
imposed on, assessed against or incurred by such Person in any way resulting
from any action taken or omitted to be taken by the Companies relating to or
arising out of the Credit Documents or any documents contemplated by or referred
to therein or the transactions contemplated thereby. The Administrative Agent
agrees that it will promptly notify the Companies of any such claim, action or
suit asserted or commenced against it and that the Companies may assume the
defense thereof with counsel reasonably satisfactory to the Administrative Agent
at the Companies' sole expense, that the Administrative Agent will cooperate
with the Companies on such defense, and that the Administrative Agent will not
settle any such claim, action or suit without the consent of the Companies;
provided, however, that in the event the Administrative Agent is not reasonably
-------- -------
satisfied with such defense, the Administrative Agent may assume such defense
with counsel satisfactory to the Administrative Agent at the Companies' sole
expense. The Lenders and the L/C Bank agree to indemnify and hold harmless the
Administrative Agent in its capacity as such ratably in accordance with their
Repayment Shares to the extent required by the Companies hereunder if the
Administrative Agent is not reimbursed by the Companies hereunder and without
limiting the obligation of the Companies to do so; provided, however, that the
-------- -------
Lenders and the L/C Bank shall not be required to indemnify the Administrative
Agent under this Paragraph 14(g) for claims, obligations, penalties, actions,
suits, judgments, costs, disbursements, losses, liabilities or damages resulting
from the gross negligence or willful misconduct of the Administrative Agent.
The indemnification obligations of the Companies, the L/C Bank and Lenders under
this Paragraph 14(g) shall survive termination of this Agreement and payment in
full of the Obligations.
14(h) Administrative Agent in Its Individual Capacity. The
-----------------------------------------------
Administrative Agent and its Affiliates may make loans to, accept deposits from
and generally engage in any kind of business with the Companies as though the
Administrative Agent were not the Administrative Agent hereunder. With respect
to such loans made or renewed by it and any note issued to it hereunder, the
Administrative Agent shall have the same rights and powers under the Credit
Documents as any Lender hereunder and may exercise the same as though it were
not the Administrative Agent, and the terms "Lender" and "Lenders" shall include
the Administrative Agent in its individual capacity.
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14(i) Successor Agents. The Administrative Agent may resign as such
----------------
under the Credit Documents upon ninety (90) days' prior written notice to the
other parties hereto. If the Administrative Agent shall resign, then, on or
before the effective date of such resignation, the Majority Lenders shall
appoint a successor agent reasonably acceptable to the Companies or, if the
Majority Lenders are unable to agree on the appointment of a successor agent,
the Administrative Agent shall appoint a successor agent for the Lenders and the
L/C Bank, which successor agent shall be reasonably acceptable to the Companies,
whereupon such successor agent shall succeed to the rights, powers and duties of
the Administrative Agent, and the term "Administrative Agent" shall mean such
successor agent effective upon its appointment, and the former Administrative
Agent's rights, powers and duties shall be terminated without any other or
further act or deed on the part of such former Administrative Agent or any of
the parties to this Agreement or any of the other Credit Documents or successors
thereto. After the Administrative Agent's resignation hereunder, the provisions
of this Paragraph 14(i) shall inure to its benefit as to any actions taken or
omitted to be taken by it while it was Administrative Agent under the Credit
Documents.
14(j) Authority to Execute Security Agreement. The Lenders and the
---------------------------------------
L/C Bank hereby authorize the Administrative Agent to execute the Security
Agreement in its capacity as agent for each of the Lenders and the L/C Bank on
behalf of the Lenders and the L/C Bank, and the Lenders and the L/C Bank
specifically consent to the terms thereof, including without limitation the
appointment of the Collateral Agent as set forth therein pursuant to the terms
contained therein, the authority of the Collateral Agent to administer A/B
Collateral and DEF Collateral (as each such term is defined therein) pursuant to
the terms thereof, and the authority of the Administrative Agent to administer
Other Collateral (as defined therein) pursuant to the terms thereof. The Lenders
and the L/C Bank hereby agree to be bound by all provisions of the Security
Agreement which may be applicable to the Lenders or the L/C Bank, including
without limitation any indemnification provisions running from the Lenders or
the L/C Bank or any of them to the Collateral Agent contained therein.
14(k) Authority to Execute Custodial Agreement. The Lenders and the
----------------------------------------
L/C Bank hereby authorize the Administrative Agent to execute the Custodial
Agreement in its capacity as agent for each of the Lenders and the L/C Bank on
behalf of the Lenders and the L/C Bank, and the Lenders and the L/C Bank
specifically consent to the terms thereof, including without limitation the
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authority of the Collateral Agent to administer A/B Collateral and DEF
Collateral (as each such term is defined in the Security Agreement) pursuant to
the terms thereof. The Lenders and the L/C Bank hereby agree to be bound by all
provisions of the Custodial Agreement which may be applicable to the Lenders or
the L/C Bank, including without limitation any indemnification provisions
running from the Lenders or the L/C Bank or any of them to the Collateral Agent
or the Administrative Agent contained therein.
14(l) Sharing of Set-Offs. If any Lender or the L/C Bank (a
-------------------
"benefitted Party") shall at any time receive any payment of all or part of the
Obligations held by it or receive any collateral in respect thereof (whether
voluntarily or involuntarily, by set-off or otherwise), except pursuant to
Paragraph 7(c) or (d) above or Paragraph 15(i) below, in a greater proportion
than any such payment to and collateral received by any other Lender or the L/C
Bank, if any, in respect of such other Lender's or the L/C Bank's portion of the
Obligations, or interest thereon, such benefitted Party shall purchase for cash
from the other Lenders and the L/C Bank such portion of each such other Lender's
and the L/C Bank's Obligations, or shall provide such other Lenders and the L/C
Bank with the benefits of such collateral, or the proceeds thereof, as shall be
necessary to cause such benefitted Party to share the excess payment or benefits
of such collateral or proceeds ratably with each of the Lenders and the L/C
Bank; provided, however, that if all or any portion of such excess payment or
benefits is thereafter recovered from such benefitted Party, such purchase shall
be rescinded, and the purchase price and benefits returned, to the extent of
such recovery but without interest. The Companies agree that each Lender and the
L/C Bank so purchasing a portion of another's Obligations may exercise all
rights of payment (including, without limitation, rights of set-off) with
respect to such portion as fully as if such Lender or the L/C Bank were the
direct holder of such portion.
15. Miscellaneous Provisions.
------------------------
15(a) No Assignment by Companies. The Companies may not assign their
--------------------------
rights or obligations under this Agreement without the prior written consent of
one hundred percent (100%) of the Lenders and the L/C Bank. Subject to the
foregoing, all provisions contained in this Agreement or any document or
agreement referred to herein or relating hereto shall inure to the benefit of
each Lender and the L/C Bank, its successors and
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assigns, and shall be binding upon the Companies, their successors and assigns.
15(b) Amendment. This Agreement may be amended by the Administrative
---------
Agent, an assigning Lender and the party accepting the assignment solely in
order to reflect an assignment under Paragraph 15(i) hereof. Except as set forth
in the preceding sentence, neither this Agreement nor any of the other Credit
Documents may be amended or terms or provisions hereof or thereof waived unless
such amendment or waiver is in writing and signed by the Majority Lenders and
the Companies; provided, however, that without the prior written consent of one
hundred percent (100%) of the Lenders and the Companies, no amendment or waiver
shall:
(1) Waive or amend any term or provision of Paragraphs 7(c),
7(d), 7(f), 7(g), 14(g) or 14(l) above or this Paragraph 15(b);
(2) Waive or amend the definitions of Eligible A/B Mortgage
Loan, Construction Loan, Servicing Loan, Foreclosure/Repurchase Loan,
Warehousing Loan, Unit Collateral Value, Tranche A Borrowing Base, Tranche
B Borrowing Base, Tranche C Borrowing Base, Tranche D Borrowing Base,
Tranche E Borrowing Base, Tranche F Borrowing Base, Aggregate Collateral
Value of the Borrowing Base, Collateral Value of the Tranche A Borrowing
Base, Collateral Value of the Tranche B Borrowing Base, Collateral Value of
the Tranche C Borrowing Base, Collateral Value of the Tranche D Borrowing
Base, Collateral Value of the Tranche E Borrowing Base, or Collateral Value
of the Tranche F Borrowing Base;
(3) Reduce the principal of, or rate of interest on, the Loans
or any unrepaid L/C Drawings or reduce any fees payable hereunder or on any
Letters of Credit or extend the required payment dates of any of the
Obligations, any unrepaid L/C Drawings, or any Letter of Credit;
(4) Except as expressly provided for hereunder, modify the
Aggregate Tranche A Credit Limit, the Aggregate Tranche B Credit Limit, the
Aggregate Tranche C Credit Limit, the Aggregate Tranche D Credit Limit, the
Aggregate Tranche E Credit Limit, the Aggregate Tranche F Credit Limit, or
the L/C Credit Limit;
(5) Modify any Lender's Maximum Commitment;
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(6) Modify the definition of "Majority Lenders", "Percentage
Share", or "Repayment Share";
(7) Extend the Maturity Date;
(8) Release any Collateral except as expressly permitted under
the Credit Documents; or
(9) Modify any provision in the Credit Documents which expressly
requires consent of one hundred percent (100%) of the Lenders.
In addition, no amendment or waiver (i) shall, unless agreed to in writing by
the affected Agent, modify the rights or duties of such Agent, or (ii) shall,
unless agreed to in writing by the L/C Bank, waive or amend any term or
provision of Paragraph 6B above or this Paragraph 15(b); reduce the principal
of, or rate of interest on, any unrepaid L/C Drawings or reduce any fees payable
on any Letters of Credit or extend the required payment dates of any unrepaid
L/C Drawings or any Letter of Credit; modify the L/C Credit Limit; modify the
definition of "Majority Lenders" or "Repayment Share"; or extend the Maturity
Date at any time when there are or will be any Letters of Credit outstanding on
the existing Maturity Date. It is expressly agreed and understood that the
failure by the required Lenders (and the L/C Bank, if applicable) to elect to
accelerate amounts outstanding hereunder or to terminate the obligation of the
L/C Bank to issue or maintain any Letter of Credit, or to terminate the
obligation of the Lenders to make Loans hereunder, shall not constitute an
amendment or waiver of any term or provision of this Agreement.
It is expressly agreed and understood that the Companies, in their sole
discretion, may, upon not less than thirty (30) days' prior written notice to
the Administrative Agent and the L/C Bank, replace the L/C Bank, provided that
--------
the replacement L/C Bank shall be a Lender hereunder.
15(c) Cumulative Rights; No Waiver. The rights, powers and remedies
----------------------------
of the Administrative Agent, the Collateral Agent, the L/C Bank and the Lenders
under the Credit Documents are cumulative and in addition to all rights, powers
and remedies provided under any and all agreements among the Companies and the
Administrative Agent, the Collateral Agent, the L/C Bank, and the Lenders
relating hereto, at law, in equity or otherwise. Any delay or failure by the
Administrative Agent, the Collateral
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Agent, the L/C Bank, or the Lenders to exercise any right, power or remedy shall
not constitute a waiver thereof by the Administrative Agent, the Collateral
Agent, the L/C Bank, and the Lenders, and no single or partial exercise by the
Administrative Agent, the Collateral Agent, the L/C Bank, and the Lenders of any
right, power or remedy shall preclude other or further exercise thereof or any
exercise of any other rights, powers or remedies.
15(d) Entire Agreement. This Agreement, the documents and agreements
----------------
referred to herein and that certain letter agreement among the Administrative
Agent and the Companies dated as of February 17, 1995, 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,
except that any Liens granted pursuant to any prior agreements shall not be
impaired and shall continue in full force and effect.
15(e) Survival. All representations, warranties, covenants and
--------
agreements on the part of the Companies contained in the Credit Documents shall
survive the termination of this Agreement and shall be effective until the
Obligations are paid and performed in full or longer as expressly provided
herein.
15(f) Notices. All notices given by any party to the others under the
-------
Credit Documents shall be in writing unless otherwise provided for herein,
delivered personally or by depositing the same in the United States mail,
registered, with postage prepaid, addressed to the party at the address set
forth on Schedule II set forth in the Addendum, or by facsimile addressed to the
-----------
party at the number set forth on Schedule II set forth in the Addendum. Any
-----------
party may change the address to which notices are to be sent by notice of such
change to each other party given as provided herein. Such notices shall be
effective on the date received or, if mailed, on the third Business Day
following the date mailed.
15(g) Governing Law/Waiver of Jury Trial. This Agreement shall be
----------------------------------
governed by and construed in accordance with the laws of the State of North
Carolina. TO THE EXTENT PERMITTED BY LAW, THE COMPANIES HEREBY JOINTLY AND
SEVERALLY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHTS ANY OF THEM
MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR
ARISING OUT OF, UNDER OR IN CONNECTION WITH THE CREDIT DOCUMENTS. THIS PROVISION
IS A MATERIAL INDUCEMENT FOR THE
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<PAGE>
AGENTS, THE L/C BANK AND THE LENDERS ENTERING INTO THE CREDIT DOCUMENTS.
15(h) Sub-Participation by Lenders. Any Lender may at any time sell
----------------------------
to one or more financial institutions (each of such financial institutions being
herein called a "Participant") participating interests in any of the Obligations
held by such Lender and its commitments hereunder; provided, however, that:
(1) No participation contemplated by this Paragraph 15(h) shall
relieve such Lender from its obligations hereunder or under any other
Credit Document;
(2) Such Lender shall remain solely responsible for the
performance of such obligations;
(3) The Companies, the Administrative Agent, the Collateral
Agent, the L/C Bank and the other Lenders shall continue to deal solely and
directly with such Lender in connection with such Lender's rights and
obligations under the Credit Documents; and
(4) The participation agreement between such Lender and the
Participant shall provide that the sole voting rights of the Participant
are with respect to those items on which such Lender is entitled to vote
pursuant to Paragraphs 15(b)(3), 15(b)(7) and 15(b)(8) above or any vote to
amend Paragraph 15(b).
15(i) Assignments by Lenders. Any Lender may assign all or any part
----------------------
of such Lender's Maximum Commitment, subject to the consent of the Companies,
which consent shall not be unreasonably withheld, to any other Lender or to any
other party not a party to this Agreement as of the date hereof; provided,
however, that (x) the accepting Lender or other accepting party shall be a
financial institution with capital of at least $100,000,000, (y) the accepting
Lender's or other accepting party's Maximum Commitment shall be no less than
$5,000,000, and (z) the assigning Lender's Maximum Commitment after such
assignment shall be no less than $10,000,000; except that any Lender may at any
time pledge or assign all or any portion of such Lender's rights under this
Agreement and the other Credit Documents to a Federal Reserve Bank. Any
assignment hereunder shall be in form and content approved by the Administrative
Agent which such approval shall not be unreasonably withheld. Upon any such
assignment (i) this Agreement will be amended by the parties hereto and by the
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<PAGE>
party receiving the assignment to reflect such assignment, (ii) the
Administrative Agent will deliver an updated Commitment Schedule to the
Companies, the L/C Bank and the Lenders reflecting such assignment, (iii) the
outstanding Loans will be reallocated among the Lenders (including the party
receiving the assignment) in accordance with such updated Commitment Schedule,
(iv) if the party receiving the assignment is not currently a party to the
Agreement, the Companies will deliver a Note to such party, and (v) if the party
receiving the assignment is not currently a party to the Agreement, (A) such
party will execute and deliver to the L/C Bank a Participation Agreement in form
and substance satisfactory to the L/C Bank, (B) all existing Participation
Agreements shall be deemed concurrently amended to reflect the adjustment of the
Percentage Shares of the Lenders, including the new Lender, thereunder, and (C)
the L/C Bank shall promptly issue a new Participation Certificate to each
Lender, including the new Lender, reflecting such Lender's revised Participation
Share (as defined in the Participation Agreement) in the L/C Obligations.
15(j) Addition of New Lender. The Company may at any time propose
----------------------
that a financial institution become an additional Lender hereunder other than by
assignment of the Maximum Commitment of an existing Lender; provided, however,
that such additional party shall be a financial institution with capital of at
least $100,000,000 and shall be subject to the consent of the Administrative
Agent, which consent shall not be unreasonably withheld. Upon the addition of
any such party as an additional Lender hereunder, (i) this Agreement will be
amended by the parties hereto and by the party becoming an additional Lender
hereunder to reflect the addition of such party as a Lender hereunder, (ii) the
Administrative Agent will deliver an updated Commitment Schedule to the
Companies, the L/C Bank and the Lenders reflecting the addition of such party as
a Lender, (iii) the outstanding Loans will be reallocated among the Lenders
(including the additional Lender) in accordance with such updated Commitment
Schedule, (iv) the Companies will deliver a Note to such party, and (v)(A) such
additional Lender will execute and deliver to the L/C Bank a Participation
Agreement in form and substance satisfactory to the L/C Bank, (B) all existing
Participation Agreements shall be deemed concurrently amended to reflect the
adjustment of the Percentage Shares of the Lenders, including the additional
Lender, thereunder, and (C) the L/C Bank shall promptly issue a new
Participation Certificate to each Lender, including the new Lender, reflecting
such Lender's revised
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Participation Share (as defined in the Participation Agreement) in the L/C
Obligations.
15(k) Counterparts. This Agreement and the other Credit Documents may
------------
be executed in any number of counterparts, all of which together shall
constitute one agreement.
15(l) Adjustment of Borrowing Base.
----------------------------
(1) On any date on which the sum of (i) the Aggregate Unit
Collateral Values of all Eligible A/B Mortgage Loans included in the
Tranche A Borrowing Base or the Tranche B Borrowing Base which are of the
type described in the last paragraph of the definition of "Eligible A/B
Mortgage Loan" (it being understood that for the purpose of this provision,
the terms "Eligible A/B Mortgage Loans," "Tranche A Borrowing Base" and
"Tranche B Borrowing Base" shall mean both such terms as defined herein and
---- ---
such terms as defined in the Facility I Agreement), (ii) the Collateral
Value of the Tranche D Borrowing Base attributable to Construction Loans of
the type described in the second proviso to the definition of "Construction
Loan" (or, if any such Construction Loan is nonconforming solely due to the
sales price or construction cost of any single-family tract home to be
constructed in connection therewith, the sales price or construction cost
of such home), (iii) the Collateral Value of the Tranche E Borrowing Base
attributable to Servicing Loans of the type described in the proviso to the
definition of "Servicing Loan", and (iv) the Collateral Value of the
Tranche F Borrowing Base attributable to Foreclosure/Repurchase Loans of
the type described in the proviso to the definition of
"Foreclosure/Repurchase Loan" (collectively, the "Nonconforming Collateral
Amount"), exceeds $20,000,000, the Administrative Agent, after consultation
with the Companies, shall make such adjustments to the Tranche A Borrowing
Base, the Tranche B Borrowing Base, the Tranche D Borrowing Base, the
Tranche E Borrowing Base and the Tranche F Borrowing Base, and shall remove
Collateral from the computation of some or all of such Borrowing Bases, as
may be necessary to cause the Nonconforming Collateral Amount to be less
than or equal to $20,000,000.
(2) On any date on which the Collateral Value of the Tranche A
Borrowing Base attributable to Warehousing Loans (it being understood that
for the purpose of this provision, the terms "Warehousing Loans" and
"Collateral
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Value of the Tranche A Borrowing Base" shall mean both such terms as
----
defined herein and such terms as defined in the Facility I Agreement)
---
(collectively, the "Warehousing Collateral Amount") exceeds $150,000,000,
the Administrative Agent, after consultation with the Companies, shall make
such adjustments to the Tranche A Borrowing Base, and shall remove
Warehousing Loans from the computation of the Tranche A Borrowing Base, as
may be necessary to cause the Warehousing Collateral Amount to be less than
or equal to $150,000,000.
15(m) Co-Agents. The Co-Agents shall have no agency duties or
---------
obligations under this Agreement or any of the other Credit Documents.
16. Definitions. For purposes of this Agreement, the terms set forth
-----------
below shall have the following meanings:
"Addendum" shall mean the Amended and Restated Addendum of Schedules and
--------
Exhibits attached to this Agreement and incorporated herein by reference, such
Addendum to be considered to be a part of this Agreement for all purposes.
"Additional Required Documents" shall mean, with respect to any Loan, those
-----------------------------
items described on Exhibit E set forth in the Addendum.
---------
"Adjusted Total Indebtedness", as to any Person, shall mean the
---------------------------
consolidated Indebtedness of such Person less the amount of such Indebtedness
----
attributable to collateralized mortgage obligations of such Person.
"Administrative Agent" shall have the meaning given such term in the
--------------------
introductory paragraph hereof.
"Affiliate" shall mean, as to any Person, any other Person directly or
---------
indirectly controlling, controlled by or under direct or indirect common control
with, such Person. "Control" as used herein means the power to direct the
management and policies of such Person.
"Agent" shall mean either of the Administrative Agent or the Collateral
-----
Agent, as the context may require, and "Agents" shall mean both of the
Administrative Agent and the Collateral Agent.
"Aggregate Collateral Value of the Borrowing Base" shall
------------------------------------------------
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mean at any date the sum of the Collateral Value of the Tranche A Borrowing
Base, the Collateral Value of the Tranche B Borrowing Base, the Collateral Value
of the Tranche C Borrowing Base, the Collateral Value of the Tranche D Borrowing
Base, the Collateral Value of the Tranche E Borrowing Base and the Collateral
Value of the Tranche F Borrowing Base.
"Aggregate Facility Commitment" shall mean, at any time, the sum of the
-----------------------------
Lenders' Maximum Commitments at such time; provided that such sum shall not
-------- ----
exceed $250,000,000 at any time.
"Aggregate Tranche A Credit Limit" shall mean, at any time, one hundred
--------------------------------
percent (100%) of the Aggregate Facility Commitment at such time.
"Aggregate Tranche B Credit Limit" shall mean, at any time, one hundred
--------------------------------
percent (100%) of the Aggregate Facility Commitment at such time.
"Aggregate Tranche C Credit Limit" shall mean, at any time, twenty-five
--------------------------------
percent (25%) of the Aggregate Facility Commitment at such time.
"Aggregate Tranche D Credit Limit" shall mean, at any time, seventy-five
--------------------------------
percent (75%) of the Aggregate Facility Commitment at such time.
"Aggregate Tranche E Credit Limit" shall mean, at any time, twenty-five
--------------------------------
percent (25%) of the Aggregate Facility Commitment at such time.
"Aggregate Tranche F Credit Limit" shall mean, at any time, five percent
--------------------------------
(5%) of the Aggregate Facility Commitment at such time.
"Agreement" shall mean this Agreement, as the same may be amended, extended
---------
or replaced from time to time.
"Applicable Corporate Rate" shall mean, with respect to any Corporate Rate
-------------------------
Loan, the Corporate Rate plus the Applicable Spread.
"Applicable Eurodollar Rate" shall mean, with respect to any Eurodollar
--------------------------
Loan for the Interest Period applicable to such Eurodollar Loan, the rate per
annum (rounded upward, if neces-
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<PAGE>
sary, to the next higher 1/1000 of one percent (.001%)) calculated in accordance
with the following formula:
ER +
---------
Applicable Eurodollar Rate = 1-ERP AS
where
ER = Eurodollar Rate
ERP = Eurodollar Reserve Percentage
AS = Applicable Spread
"Applicable Spread" shall mean (i) with respect to any Tranche A Loan,
-----------------
six-tenths of one percent (0.6%); (ii) with respect to any Tranche B Loan, six-
tenths of one percent (0.6%); (iii) with respect to any Tranche C Loan, one and
one-eighth percent (1.125%); (iv) with respect to any Tranche D Loan, one and
five-eighths percent (1.625%); (v) with respect to any Tranche E Loan, one and
five-eighths percent (1.625%); (vi) with respect to any Tranche F Loan, one and
five-eighths percent (1.625%); and (vii) with respect to any Tranche G Loan, one
and five-eighths percent (1.625%).
"Approved Investor" shall mean any Person pre-approved (which pre-approval
-----------------
may be limited in dollar amounts by type and otherwise) by the Majority Lenders
(including those shown on Schedule III set forth in the Addendum) and which
------------
approval has not been revoked by the Majority Lenders (such revocation to be
effective on the tenth Business Day following notice thereof given to the
Companies by the Administrative Agent in writing); provided, that the
--------
Administrative Agent shall notify the Lenders in writing of any proposed
additional Approved Investor and such proposed Approved Investor shall be deemed
to have been pre-approved five (5) Business Days after such notice has been
given, unless the Majority Lenders shall have notified the Administrative Agent
prior to such date that such proposed Approved Investor is not approved.
"Approved Repo Lender" shall mean any Approved Investor or any other entity
--------------------
pre-approved by the Majority Lenders (including those shown on Schedule III set
------------
forth in the Addendum) and which approval has not been revoked by the Majority
Lenders (such revocation to be effective on the tenth Business Day following
notice thereof given to the Companies by the Administrative Agent in writing);
provided, that the Administrative Agent shall notify the Lenders in writing of
--------
any proposed additional Approved Repo
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<PAGE>
Lender and such proposed Approved Repo Lender shall be deemed to have been pre-
approved five (5) Business Days after such notice has been given, unless the
Majority Lenders shall have notified the Administrative Agent prior to such date
that such proposed Approved Repo Lender is not approved.
"Approved Sub-Servicer" shall mean any Person pre-approved in writing
---------------------
(which pre-approval may be limited in dollar amounts or otherwise) by the
Administrative Agent in its reasonable business judgement (including those shown
on Schedule III set forth in the Addendum) and which approval has not been
------------
revoked by the Administrative Agent in its reasonable business judgement (such
revocation to be effective on the later of (i) the tenth Business Day following
notice thereof given to the Companies in writing or (ii) the first day upon
which the applicable Servicing Contact or Servicing Contracts with such
subservicer may be terminated by the Companies without payment of any
termination fees or similar sums). (It being agreed that Administrative Agent
will promptly notify the Lenders in writing of any additional Approved Sub-
Servicer or any previous Approved Sub-Servicer for which approval has been
revoked.)
"Assigned Servicing Rights" shall mean all now existing and hereafter
-------------------------
arising rights of the Companies to service, collect and administer Mortgage
Loans, and to receive fees and other compensation therefor under Servicing
Contracts and Master Servicing Contracts (whether directly or as assignee of the
right of the original servicer thereunder) between the Companies and private
investors or, in the case of Master Servicing Contracts, an MBS Fiduciary (if
but only if the related Servicing Contracts or Master Servicing Contracts, as
applicable, are satisfactory in form and content to the Administrative Agent and
if but only if the investors under such Servicing Contracts or the MBS Fiduciary
under such Master Servicing Contracts, as applicable, have consented to the
assignment of the related servicing rights to the Administrative Agent for the
benefit of the L/C Bank and the Lenders pursuant to written consents in form and
content satisfactory to the Administrative Agent in its sole discretion, or in
lieu of such a written consent, the Administrative Agent has received evidence
reasonably satisfactory to it that such servicing rights may be assigned to the
Administrative Agent for the benefit of the Lenders and the L/C Bank) as to
which each of the following is accurate and complete (and the Companies by
including such servicing rights as "Assigned Servicing Rights" in any
calculation of the Collateral Value of the Tranche C Borrowing
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Base shall be deemed to so represent and warrant to the Administrative Agent,
the L/C Bank and the Lenders):
(a) The related Servicing Contract or Master Servicing Contract, as
applicable, is in full force and effect, is genuine, is in all respects as
appearing on its face or as represented in the books and records of the
Companies, is free of any default of the Companies and of counterclaims, offsets
and defenses and there does not exist any fact or circumstance that would
entitle the investor or MBS Fiduciary thereunder to terminate said Servicing
Contract or Master Servicing Contract, as applicable, for cause;
(b) The assignment by the Companies of the rights of the Companies under
the related Servicing Contract or Master Servicing Contract, as applicable, as
collateral for the Obligations consistent with the requirements of this
Agreement will not violate any law or regulation the effect of which violation
is to render void or voidable such assignment or to permit the termination of
the rights of the Companies under the related Servicing Contract or Master
Servicing Contract, as applicable;
(c) The servicing obligations under the related Servicing Contract or
Master Servicing Contract, as applicable, are being performed, on a non-recourse
basis, directly by the Companies and not by others pursuant to sub-servicing
arrangements except such sub-servicing arrangements with Approved Sub-Servicers;
and
(d) The Mortgage Loans being serviced under the related Servicing Contract
or Master Servicing Contract, as applicable, are not home equity loans, are not
owned by the Companies and are all first priority Mortgage Loans.
"Assigned Servicing Rights Fair Market Value" shall mean on any date (i)
-------------------------------------------
with respect to Assigned Servicing Rights pertaining to Servicing Contracts, the
purchase price paid by the Companies for such Assigned Servicing Rights,
provided, however, that (A) with respect to any Assigned Servicing Rights
-------- -------
pertaining to Servicing Contracts owned by the Companies in excess of six (6)
months, the Assigned Servicing Rights Fair Market Value of such Assigned
Servicing Rights shall be the lesser of (1) the purchase price paid by the
Companies for such Assigned Servicing Rights or (2) the market value of such
Assigned Servicing Rights, expressed as a percentage, as set forth in the most
recent appraisal of such Assigned Servicing Rights delivered pursuant to
Paragraph 11(b)(6) above, provided further that notwithstanding anything
-------- -------
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<PAGE>
contained herein to the contrary, the Assigned Servicing Rights Fair Market
Value with respect to any Assigned Servicing Rights pertaining to Servicing
Contracts which have been owned by the Companies in excess of one (1) year shall
be zero; and (ii) with respect to Assigned Servicing Rights pertaining to Master
Servicing Contracts, the lesser of (A) the book value of such Assigned Servicing
Rights, expressed as a percentage, or (B) the market value, expressed as a
percentage, of such Assigned Servicing Rights as set forth in the most recent
appraisal delivered pursuant to Paragraph 11(b)(6) above.
"Authorized Officers" shall mean, with respect to the Companies, any of the
-------------------
officers set forth on Schedule IV set forth in the Addendum.
-----------
"Book Net Worth", as to any Person, shall mean the excess of consolidated
--------------
total assets of such Person over consolidated total liabilities of such Person,
each as determined in accordance with GAAP.
"Borrowing Base" shall mean the Tranche A Borrowing Base, the Tranche B
--------------
Borrowing Base, the Tranche C Borrowing Base, the Tranche D Borrowing Base, the
Tranche E Borrowing Base, or the Tranche F Borrowing Base, as the context may
require, and "Borrowing Bases" shall mean, collectively, the Tranche A Borrowing
---------------
Base, the Tranche B Borrowing Base, the Tranche C Borrowing Base, the Tranche D
Borrowing Base, the Tranche E Borrowing Base, and the Tranche F Borrowing Base,
or any lesser combination thereof, as the context may require.
"Borrowing Base Schedule" shall mean a schedule prepared by Collateral
-----------------------
Agent and Administrative Agent and certified to by the Companies in the form of
that set forth as Exhibit F-2 in the Addendum.
-----------
"Budget Status Report" shall mean a schedule substantially in the form of
--------------------
that set forth as Exhibit S in the Addendum.
---------
"Business Day" shall mean any day other than a Saturday, a Sunday or a day
------------
on which banks in Charlotte, North Carolina or Los Angeles, California are
authorized or obligated to close their regular banking business.
"Capitalized Lease Obligations" of any Person shall mean the obligations of
-----------------------------
such Person to pay rent or other amounts under any
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lease of (or other arrangement conveying the right to use) real or personal
property, or a combination thereof, which obligations are required to be
classified and accounted for as capital leases on a balance sheet of such Person
under GAAP and, for the purposes of this Agreement, the amount of such
obligations at any time shall be the capitalized amount thereof at such time
determined in accordance with GAAP.
"Cash Collateral" shall have the meaning given such term in Paragraph 6B(k)
---------------
above.
"Co-Agent" shall mean any of The Bank of New York, Guaranty Federal Bank
--------
F.S.B. or NationsBank of Texas, N.A., and "Co-Agents" shall mean all of such
Lenders collectively.
"Code" shall mean the Internal Revenue Code of 1986, as amended.
----
"Collateral" shall mean, collectively, the "A/B Collateral", the "DEF
----------
Collateral" and the "Other Collateral", as each such term is defined in the
Security Agreement.
"Collateral Agent" shall mean Bankers Trust Company of California, N.A., a
----------------
national banking association, or such other Person which may be designated as
such in accordance with the terms of the Credit Documents.
"Collateral Value of the Tranche A Borrowing Base" shall mean at any date
------------------------------------------------
the sum of (i) the sum of the Unit Collateral Values of all Eligible A/B
Mortgage Loans included in the Tranche A Borrowing Base at such date (including
Eligible A/B Mortgage Loans shipped into pools supporting Mortgage Backed
Securities pending sale of such Mortgage Backed Securities and delivery of the
sale proceeds thereof to the Settlement Account) (which amount shall be subject
to adjustment as provided in Paragraph 15(l) above); plus (ii) the product of
(A) the aggregate outstanding principal balance of those Warehousing Loans made
by the Companies to sub-borrowers and included in the Tranche A Borrowing Base
at such date which are less that thirty (30) days delinquent multiplied by (B)
----------
ninety-eight percent (98%).
"Collateral Value of the Tranche B Borrowing Base" shall mean at any date
------------------------------------------------
the sum of the Unit Collateral Values of all Eligible A/B Mortgage Loans
included in the Tranche B Borrowing Base at such date (which amount shall be
subject to adjustment as provided in Paragraph 15(l) above).
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<PAGE>
"Collateral Value of the Tranche C Borrowing Base" shall mean at any date
------------------------------------------------
the product of the aggregate outstanding principal balance of those Mortgage
Loans being serviced under the Assigned Servicing Rights and included in the
Tranche C Borrowing Base on such date, multiplied by the then current Assigned
----------
Servicing Rights Fair Market Value, multiplied by eighty percent (80%).
----------
"Collateral Value of the Tranche D Borrowing Base" shall mean at any date
------------------------------------------------
the product of the aggregate outstanding principal balance of those Construction
Loans made by the Companies and included in the Tranche D Borrowing Base at such
date which are less than thirty (30) days delinquent, multiplied by eighty
----------
percent (80%); (which amount shall be subject to adjustment as provided in
Paragraph 15(l) above) provided, however, that the Collateral Value of the
-------- -------
Tranche D Borrowing Base shall be subject to the following reductions: (i) in
the event that any Construction Loan is secured by a mortgage or deed of trust
on a single-family tract home which has remained unsold for more than one
hundred eighty (180) days but less than three hundred sixty-five (365) days, the
Collateral Value of the Tranche D Borrowing Base shall be reduced by the product
of (A) the appraised value of such single-family tract home as shown on the
appraisal delivered to the Administrative Agent by the Companies pursuant to
Paragraph 11(b)(5), multiplied by (B) seventy-five percent (75%), multiplied by
---------- ----------
(C) thirty percent (30%); and (ii) in the event that any Construction Loan
is secured by a mortgage or deed of trust on a single-family tract home which
has remained unsold for three hundred sixty-five (365) days or more, the
Collateral Value of the Tranche D Borrowing Base shall be reduced by the product
of (A) the appraised value of such single-family tract home as shown on the
appraisal delivered to the Administrative Agent by the Companies pursuant to
Paragraph 11(b)(5), multiplied by (B) seventy-five percent (75%), multiplied by
---------- ----------
(C) eighty percent (80%).
"Collateral Value of the Tranche E Borrowing Base" shall mean at any date
------------------------------------------------
the product of the aggregate outstanding principal balance of those Servicing
Loans made by the Companies to sub-borrowers and included in the Tranche E
Borrowing Base at such date which are less than thirty (30) days delinquent,
multiplied by eighty percent (80%) (which amount shall be subject to
----------
adjustment as provided in Paragraph 15(l) above).
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"Collateral Value of the Tranche F Borrowing Base" shall mean at any date
------------------------------------------------
the product of the aggregate outstanding principal balance on such date of those
Foreclosure/Repurchase Loans made by the Companies to sub-borrowers and included
in the Tranche F Borrowing Base at such date which are less than thirty (30)
days delinquent, multiplied by seventy percent (70%) (which amount shall be
----------
subject to adjustment as provided in Paragraph 15(l) above).
"Commitment Schedule" shall mean a schedule in the form provided by the
-------------------
Administrative Agent, with the initial Commitment Schedule being set forth
hereto as Schedule I-2 in the Addendum.
------------
"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.
"Companies" shall have the meaning given such term in the introductory
---------
paragraph hereof.
"Construction Loan" shall mean a loan extended by the Companies to a
-----------------
homebuilder for the purpose of enabling such homebuilder to construct single-
family tract homes which such loan shall be made pursuant to an underwriting
program the terms of which shall be approved by the Administrative Agent, and
which such loan shall be secured by mortgages or deeds of trust executed by such
homebuilder in favor of the Companies on all parcels of real property on which
such single-family tract homes are constructed with the proceeds thereof;
provided, however, that in no event may the sales price or construction cost of
-------- -------
any single-family tract home to be constructed with the proceeds of any
Construction Loan exceed $850,000.00 unless such single-family tract home is
specifically approved by the Administrative Agent in its sole discretion;
further provided, that a loan otherwise meeting the requirements of this
----------------
definition but which is not made pursuant to the terms of an approved
underwriting program may be a Construction Loan hereunder for the purposes
hereof so long as (i) the Collateral Value of the Tranche D Borrowing Base
----------
attributable to such a loan (or, if any such loan is nonconforming due solely to
the sales price or construction cost of any single-family tract home to be
constructed in connection therewith, the sales price or construction cost of
such home), when added to (A) the Collateral Value of the Tranche D Borrowing
Base attributable to all other such loans (or, if any such loan is nonconforming
due solely to the sales price or construction cost of any single-
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<PAGE>
family tract home to be constructed in connection therewith, the sales price or
construction cost of such home), (B) the Aggregate Unit Collateral Values of all
Eligible A/B Mortgage Loans included in the Tranche A Borrowing Base or the
Tranche B Borrowing Base which are of the type described in the last paragraph
of the definition of "Eligible A/B Mortgage Loan" (it being understood that for
the purpose of this provision, the terms "Eligible A/B Mortgage Loans," "Tranche
A Borrowing Base" and "Tranche B Borrowing Base" shall mean both such terms as
----
defined herein and such terms as defined in the Facility I Agreement), (C) the
---
Collateral Value of the Tranche E Borrowing Base attributable to Servicing Loans
of the type described in the proviso to the definition of "Servicing Loan", and
(D) the Collateral Value of the Tranche F Borrowing Base attributable to
Foreclosure/Repurchase Loans of the type described in the proviso to the
definition of "Foreclosure/Repurchase Loan," does not exceed $20,000,000, and
(ii) the Collateral Value of the Tranche D Borrowing Base attributable to such a
loan, when added to the Collateral Value of the Tranche D Borrowing Base
attributable to all other such loans, does not exceed twenty percent (20%) of
the Aggregate Tranche D Credit Limit.
"Construction-to-Permanent Mortgage Loan" shall mean a Mortgage Loan made
---------------------------------------
to an Obligor to finance the construction of a single family residence, which
Mortgage Loan converts from a construction loan to a permanent loan upon
completion of the construction of such improvements, and which Mortgage Loan
shall conform to the underwriting guidelines of the Companies for Construction-
to-Permanent Mortgage Loans.
"Contact Office" shall mean the office of the Administrative Agent at One
--------------
First Union Center, 301 South College Street, Charlotte, North Carolina 28288.
"Contractual Obligation" as to any Person shall mean any provision of any
----------------------
security issued by such Person or of any agreement, instrument or undertaking to
which such Person is a party or by which it or any of its property is bound.
"Corporate Rate" shall mean, for any day, a fluctuating interest rate per
--------------
annum equal to the weekly average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by Federal
funds brokers for each seven-day period ending on Wednesday of each week which
includes such day, as published in Statistical Release H.15 by the Federal
Reserve System, or, if such rate is not so published for any
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<PAGE>
week, the average of the quotations for such day on such transactions received
by the Administrative Agent from three Federal funds brokers of recognized
standing selected by the Administrative Agent.
"Corporate Rate Loan" shall mean a Tranche A Corporate Rate Loan, a Tranche
-------------------
B Corporate Rate Loan, a Tranche C Corporate Rate Loan, a Tranche D Corporate
Rate Loan, a Tranche E Corporate Rate Loan, a Tranche F Corporate Rate Loan, a
Tranche G Corporate Rate Loan or a Swing Line Loan, as applicable.
"Corporate Rate Loans" shall mean, collectively, Tranche A Corporate Rate
--------------------
Loans, Tranche B Corporate Rate Loans, Tranche C Corporate Rate Loans, Tranche D
Corporate Rate Loans, Tranche E Corporate Rate Loans, Tranche F Corporate Rate
Loans, Tranche G Corporate Rate Loans and Swing Line Loans.
"Covenant Compliance Certificate" shall mean a certificate in the form set
-------------------------------
forth as Exhibit G in the Addendum.
---------
"Credit Documents" shall mean this Agreement, the Security Agreement, the
----------------
Custodial Agreement, the Notes and each other document, instrument and agreement
executed by the Companies in connection herewith, as any of the same may be
amended, extended or replaced from time to time.
"Custodial Agreement" shall have the meaning given such term in Paragraph
-------------------
8(b) above, as the same may be amended, extended or replaced from time to time.
"CWM" shall mean CWM Mortgage Holdings, Inc., a Delaware corporation.
---
"Daily Trial Balance Report" shall mean a report substantially in the form
--------------------------
set forth as Exhibit R in the Addendum.
---------
"Delinquency Report" shall mean a report substantially in the form set
------------------
forth as Exhibit M in the Addendum.
---------
"Eligible A/B Mortgage Loan" shall mean a Mortgage Loan with respect to
--------------------------
which each of the following statements shall be accurate and complete (and the
Companies by confirming the inclusion of such Mortgage Loan in any computation
of the Collateral Value of the Tranche A Borrowing Base or the Collateral Value
of the Tranche B Borrowing Base shall be deemed to so
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<PAGE>
represent and warrant to the Administrative Agent, the L/C Bank and the Lenders
at and as of the date of such computation):
(b) Said Mortgage Loan is a binding and valid obligation of the
Obligor thereon, in full force and effect and enforceable in accordance with its
terms, subject to the effect of applicable bankruptcy and other similar laws
affecting the rights of creditors generally and the effect of equitable
principles whether applied in an action at law or a suit in equity.
(c) Said Mortgage Loan is genuine in all respects as appearing on its
face and as represented in the books and records of the Companies and all
information set forth therein is true and correct.
(d) Said Mortgage Loan is free of any default of any party thereto
(including the Companies), other than as expressly permitted pursuant to
subparagraph (d) below, counterclaims, offsets and defenses and from any
rescission, cancellation or avoidance, whether by operation of law or otherwise.
(e) No payment under said Mortgage Loan is more than sixty (60) days
past due the payment due date set forth in the underlying promissory note and
deed of trust (or mortgage); provided, however, that a Mortgage Loan which is
-------- -------
more than sixty (60) days delinquent may be an Eligible A/B Mortgage Loan and
may be included in the Tranche B Borrowing Base so long as the Unit Collateral
Value of said Mortgage Loan, when added to the Unit Collateral Values of all
other Mortgage Loans included in the Tranche B Borrowing Base which are more
than sixty (60) days delinquent, does not exceed five percent (5%) of the
Collateral Value of the Tranche B Borrowing Base (including the Collateral Value
of Mortgage Loans more than 60 days past due included or to be included in the
Tranche B Borrowing Base).
(f) 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.
(g) Said Mortgage Loan complies in all material 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
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<PAGE>
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 substantially as required.
(h) All advance payments and other deposits on said Mortgage Loan
have been paid in cash, and no part of said sums has been loaned, directly or
indirectly, by the Companies to the Obligor and there have been no prepayments
on account of said Mortgage Loan except as disclosed to the Collateral Agent.
(i) At all times said Mortgage Loan will be free and clear of all
Liens, except in favor of the Collateral Agent for the benefit of the Lenders
and the L/C Bank.
(j) The Property covered by said Mortgage Loan is insured against
loss or damage by fire and all other hazards normally included within standard
extended coverage in accordance with the provisions of said Mortgage Loan.
(k) The Property covered by said Mortgage Loan is free and clear of
all Liens except of the Companies subject only to (1) the Lien of current real
property taxes and assessments not yet delinquent; (2) covenants, conditions and
restrictions, rights of way, easements and other matters of the public record,
as of the date of recording, as are acceptable to mortgage lending institutions
generally and specifically referred to in a lender's title insurance policy
delivered to the originator of the Mortgage Loan and (i) referred to or
otherwise considered in the appraisal made for the originator of the Mortgage
Loan or (ii) which do not materially adversely affect the appraised value of the
Property as set forth in such appraisal; (3) other matters to which like
properties are commonly subject which do not materially interfere with the
benefits of the security intended to be provided by the Mortgage Loan or the
use, enjoyment, value or marketability of the related Property; and (4) Liens
subordinate in priority to such Lien in favor of the Companies; provided,
--------
however, that such Property may be subject to one (1) Lien prior to the Lien in
-------
favor of the Companies so long as, if said Mortgage Loan is included in the
Tranche B Borrowing Base, the Unit Collateral Value of said Mortgage Loan, when
added to the Unit Collateral Values of all other Mortgage Loans included in the
Tranche B Borrowing Base with respect to which the underlying Property is
subject to one (1) Lien prior to the Lien in favor of the Companies, does not
exceed twenty-five percent (25%) of the
86
<PAGE>
aggregate outstanding principal amount of all Tranche B Loans at such time.
(l) If said Mortgage Loan has been withdrawn from the possession of
the Collateral Agent, and (1) shipped by the Collateral Agent to the Companies
for purposes of correcting clerical or other nonsubstantive documentation
problems pursuant to a trust receipt, or (2) shipped by the Collateral Agent
directly to a permanent investor for purchase, or (3) shipped by the Collateral
Agent directly to a custodian for purposes of formation of a pool supporting a
Mortgage-Backed Security, such shipment shall in all aspects conform to the
requirements of Section 5 of the Custodial Agreement in form, aggregate number
of Mortgage Loans permitted to be shipped, and amount of time such Mortgage
Loans may remain withdrawn from Collateral Agent's possession.
(m) If such Mortgage Loan was originated by the Companies, the date
of the underlying promissory note is no earlier than (i) if such Mortgage Loan
is included in the Tranche A Borrowing Base, forty-five (45) days prior to the
date said Mortgage Loan is first submitted to the Collateral Agent, (ii) if such
Mortgage Loan is included in the Tranche B Borrowing Base and has not previously
been included in the Tranche A Borrowing Base, forty-five (45) days prior to the
date said Mortgage Loan is first submitted to the Collateral Agent, and (iii) if
such Mortgage Loan is included in the Tranche B Borrowing Base and was
previously included in the Tranche A Borrowing Base, one hundred sixty-five
(165) days prior to the date said Mortgage Loan is first submitted to the
Collateral Agent for inclusion in the Tranche B Borrowing Base (provided,
--------
however, that for the purpose hereof, the phrases "Tranche A Borrowing Base" and
-------
"Tranche B Borrowing Base" shall be deemed to mean both such terms as defined in
this Agreement and as defined in the Facility I Agreement).
---
(n) If such Mortgage Loan was acquired by the Companies, such
Mortgage Loan was included in the Tranche A Borrowing Base within forty-five
(45) days of the acquisition of such Mortgage Loan (provided, however, that for
-------- -------
the purpose hereof, the phrase "Tranche A Borrowing Base" shall be deemed to
mean such term as defined in this Agreement and as defined in the Facility I
---
Agreement).
(o) The improvements on the Property were not constructed with the
proceeds of the Mortgage Loan and consist of
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<PAGE>
a completed one-to-four unit single family residence, including but not limited
to a condominium, planned unit development, a townhouse or a co-op; provided,
--------
however, that a Mortgage Loan, the proceeds of which were used to construct the
-------
improvements on the Property relating thereto, may be an Eligible A/B Mortgage
Loan and may be included in the Tranche B Borrowing Base so long as (i) it is a
Construction-to-Permanent Mortgage Loan and (ii) the Unit Collateral Value of
said Construction-to-Permanent Mortgage Loan, when added to the Unit Collateral
Values of all other Construction-to-Permanent Mortgage Loans included in the
Tranche B Borrowing Base, does not exceed the greater of (i) twenty percent
(20%) of the Aggregate Tranche B Credit Limit, or (ii) forty percent (40%) of
the Collateral Value of the Tranche B Borrowing Base (including the Collateral
Value of Construction-to-Permanent Loans included or to be included in the
Tranche B Borrowing Base).
(p) There has been delivered to the Collateral Agent the Required
Documents for said Mortgage Loan; provided, however, that a Mortgage Loan, the
-------- -------
Required Documents for which have not been delivered to the Collateral Agent,
may be an Eligible A/B Mortgage Loan and may be included in the Tranche A
Borrowing Base or in the Tranche B Borrowing Base so long as (i) such Mortgage
Loan meets the requirements set forth for a "Wet Mortgage Loan" as defined in
and pursuant to Section 3.3 of the Custodial Agreement, including the ultimate
delivery of the Required Documents in connection therewith to the Collateral
Agent within the time specified in such Section 3.3; and (ii) the Unit
Collateral Value of said Mortgage Loan, when added to the Unit Collateral Value
of all other Mortgage Loans included in the Tranche A Borrowing Base or the
Tranche B Borrowing Base which are "Wet Mortgage Loans" under the Custodial
Agreement, does not exceed twenty percent (20%) of the aggregate outstanding
principal amount of all Tranche A Loans and Tranche B Loans at such time.
(q) The servicing rights relating to said Mortgage Loan are not
subject to any Lien, claim, interest or negative pledge in favor of any Person
other than as permitted hereunder.
(r) INTENTIONALLY OMITTED.
(s) Said Mortgage Loan has not previously been delivered to the
Collateral Agent, then shipped to an investor or certifying custodian and
returned to the Collateral Agent on account of a deficiency or impairment of
such Mortgage Loan which would cause such Mortgage Loan to be unsuitable for
purchase at a
88
<PAGE>
price customarily obtainable for Mortgage Loans meeting the requirements set
forth in the Indy Mac Seller/Servicer Guide or inclusion in a pool containing
other Mortgage Loans generally conforming to the requirements set forth in the
Indy Mac Seller/Servicer Guide.
(t) The Companies or other originator of such Mortgage Loan obtained
such appraisal in connection with the origination of said Mortgage Loan as would
satisfy all appraisal requirements for said Mortgage Loan if such had been
originated by a federally insured depositary institution.
(u) Said Mortgage Loan is covered by a Take-Out Commitment or a
Hedging Arrangement which is in full force and effect on the date such Mortgage
Loan was closed and continues to be so covered, and the Companies and the
Mortgage Loan are in full compliance therewith (provided, however, that said
-------- -------
Mortgage Loan need not be covered by a Take-Out Commitment or a Hedging
Arrangement if said Mortgage Loan is included in the Tranche B Borrowing Base or
if the Administrative Agent in its sole discretion determines that such Mortgage
Loan is not subject to material interest rate risk exposure).
(v) Said Mortgage Loan has been underwritten and purchased pursuant
to the programs and procedures set forth in the Indy Mac Seller/Servicer Guide.
In determining the eligibility set forth above of any Mortgage Loan, any of the
requirements for eligibility set forth above may be waived by the Administrative
Agent in its sole discretion upon request for such waiver by the Companies prior
to the delivery of such Mortgage Loan to the Collateral Agent with notice of
such waiver to be given to all Lenders and the L/C Bank in the next collateral
report provided to the Lenders and the L/C Bank pursuant to Paragraph 7 of the
Security Agreement if such waiver is in force on the date of such collateral
report; provided, however, that the Unit Collateral Value of any Mortgage Loan
-------- -------
approved by the Administrative Agent as an Eligible A/B Mortgage Loan pursuant
to such a waiver, when added to (i) the Aggregate Unit Collateral Values of all
other Eligible A/B Mortgage Loans included in the Tranche A Borrowing Base or
the Tranche B Borrowing Base which have been approved by the Administrative
Agent pursuant to such a waiver, (ii) the Collateral Value of the Tranche D
Borrowing Base attributable to Construction Loans of the type described in the
second proviso to the definition of "Construction Loan" (or, if any such
Construction Loan is noncon-
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<PAGE>
forming solely due to the sales price or construction cost of any single-family
tract home to be constructed in connection therewith, the sales price or
construction cost of such home), (iii) the Collateral Value of the Tranche E
Borrowing Base attributable to Servicing Loans of the type described in the
proviso to the definition of "Servicing Loan", and (iv) the Collateral Value of
the Tranche F Borrowing Base attributable to Foreclosure/Repurchase Loans of the
type described in the proviso to the definition of "Foreclosure/Repurchase
Loan", does not exceed $20,000,000 (it being understood that for the purposes of
this proviso, the terms "Tranche A Borrowing Base" and "Tranche B Borrowing
Base" shall mean both such terms as defined herein and Facility I Agreement),
---- ---
and further provided, that the Unit Collateral Value of any Mortgage Loan
approved by the Administrative Agent as an Eligible A/B Mortgage Loan pursuant
to such a waiver, when added to the Aggregate Unit Collateral Values of all
other Eligible A/B Mortgage Loans included in the Tranche A Borrowing Base or
the Tranche B Borrowing Base which have been approved by the Administrative
Agent pursuant to such a waiver, does not exceed twenty percent (20%) of the
Aggregate Tranche A Credit Limit (it being understood that for the purposes of
this proviso, the terms "Aggregate Tranche A Credit Limit", "Tranche A Borrowing
Base", "Tranche B Borrowing Base", "Tranche A Loans" and "Tranche B Loans",
shall mean both such terms as defined herein and such terms as defined in the
---- ---
Facility I Agreement).
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
-----
the same may from time to time be supplemented or amended.
"ERISA Affiliate" shall mean, with respect to any Person, any trade or
---------------
business (whether or not incorporated) that is a member of the group of which
such Person is a member and which is treated as a single employer under Section
414 of the Internal Revenue Code of 1986, as amended, and the rules and
regulations thereunder in effect from time to time.
"Eurodollar Business Day" shall mean a Business Day upon which commercial
-----------------------
banks in London, England and New York, New York are open for domestic and
international business (including dealings in United States dollars).
"Eurodollar Loan" shall mean a Tranche A Eurodollar Loan, a Tranche B
---------------
Eurodollar Loan, a Tranche C Eurodollar Loan, a Tranche D Eurodollar Loan, a
Tranche E Eurodollar Loan or a Tranche F Eurodollar Loan, as applicable.
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<PAGE>
"Eurodollar Loans" shall mean, collectively, Tranche A Eurodollar Loans,
----------------
Tranche B Eurodollar Loans, Tranche C Eurodollar Loans, Tranche D Eurodollar
Loans, Tranche E Eurodollar Loans and Tranche F Eurodollar Loans.
"Eurodollar Rate" shall mean, with respect to any Eurodollar Loan for the
---------------
Interest Period applicable to such Eurodollar Loan, the arithmetic average of
the rates at which deposits in immediately available U.S. dollars in an amount
equal to the aggregate amount of Eurodollar Loans proposed to be subject to such
rates having a maturity approximately equal to such Interest Period are offered
to or by reference banks in the London interbank market, as determined by the
Administrative Agent by reference to page 3750 or 4833, as applicable, of the
Telerate Systems Incorporated screen service as of 11:00 a.m. (London time) two
Eurodollar Business Days prior to the first day of such Interest Period.
"Eurodollar Reserve Percentage" shall mean for any day, that percentage
-----------------------------
expressed as a decimal, which is in effect on such day, as specified by the
Board of Governors of the Federal Reserve System (or any successor) for
determining the maximum aggregate reserve requirement (including all basis,
supplemental, marginal and other reserves) which is imposed on eurocurrency
liabilities.
"Event of Default" shall have the meaning set forth in Paragraph 13 above.
----------------
"Facility I Agreement" shall mean that certain Facility I Credit Agreement
--------------------
among the Companies, the Lenders and the Administrative Agent providing for the
extension of certain 364-day revolving credit facilities, as such agreement may
be amended, extended or restated from time to time.
"Fair Market Value" shall mean, with respect to any Mortgage Loan, the
-----------------
market bid price obtainable for such Mortgage Loan, as such market bid price
shall be determined no less frequently than monthly on a reasonable basis by the
Administrative Agent by reference to the average of bids therefor solicited by
the Administrative Agent and obtained from at least three (3) dealers with a
general reputation as being reputable in the pricing of Mortgage Loans.
"First Union" shall mean First Union National Bank of North Carolina, a
-----------
national banking association.
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<PAGE>
"Foreclosure Mortgage Loan" shall mean a Mortgage Loan (i) which is
-------------------------
included in the first priority mortgage/trust deed servicing portfolio of
Mortgage Loans of a sub-borrower to whom the Companies have extended a
Foreclosure/Repurchase Loan secured by said Mortgage Loan, and (ii) with respect
to which such sub-borrower is diligently pursuing the foreclosure of such
Mortgage Loan.
"Foreclosure/Repurchase Loan" shall mean a loan extended by the Companies
---------------------------
to a sub-borrower for the purpose of enabling such sub-borrower to finance the
acquisition of Foreclosure Mortgage Loans or Repurchase Mortgage Loans, which
loan shall be made pursuant to an underwriting program the terms of which shall
be approved by the Administrative Agent and secured by all such Foreclosure
Mortgage Loans and Repurchase Mortgage Loans acquired by such sub-borrower with
the proceeds thereof; provided, however, that a loan otherwise meeting the
-------- -------
requirements of this definition but which is not made pursuant to the terms of
an approved underwriting program may be a Foreclosure/Repurchase Loan hereunder
for the purposes hereof so long as (i) the Collateral Value of the Tranche F
----------
Borrowing Base attributable to such a loan, when added to (A) the Collateral
Value of the Tranche F Borrowing Base attributable to all other such loans, (B)
the Aggregate Unit Collateral Values of all Eligible A/B Mortgage Loans included
in the Tranche A Borrowing Base or the Tranche B Borrowing Base which are of the
type described in the last paragraph of the definition of "Eligible A/B Mortgage
Loan" (it being understood that for the purpose of this provision, the terms
"Eligible A/B Mortgage Loans," "Tranche A Borrowing Base" and "Tranche B
Borrowing Base" shall mean both such terms as defined herein and such terms as
---- ---
defined in the Facility I Agreement), (C) the Collateral Value of the Tranche E
Borrowing Base attributable to Servicing Loans of the type described in the
proviso to the definition of "Servicing Loan", and (D) the Collateral Value of
the Tranche D Borrowing Base attributable to Construction Loans of the type
described in the second proviso to the definition of "Construction Loan" (or, if
any such Construction Loan is nonconforming solely due to the sales price or
construction cost of any single-family tract home to be constructed in
connection therewith, the sales price or construction cost of such home), does
not exceed $20,000,000, and (ii) the Collateral Value of the Tranche F Borrowing
Base attributable to such a loan, when added to the Collateral Value of the
Tranche F Borrowing Base attributable to all other such loans, does not
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<PAGE>
exceed twenty percent (20%) of the Aggregate Tranche F Credit Limit.
"Funding Account" shall mean, collectively, Account No. 2000000718426,
---------------
Account No. 2000000718439, Account No. 2000000718442, Account No. 2000000718455,
Account No. 2000000718468 and Account No. 2000000718471 which accounts are
maintained in the Administrative Agent's name alone with the Administrative
Agent at the Contact Office.
"GAAP" shall mean generally accepted accounting principles in the United
----
States of America in effect from time to time.
"Governmental Authority" shall mean any nation or government, any state or
----------------------
other political subdivision thereof, or any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government.
"Hedging Arrangement" shall mean an arrangement or agreement to which the
-------------------
Companies are party which is designed to diminish the Companies' interest rate
risk exposure, which such arrangements or agreements shall be made in accordance
with the Companies' standard practices as disclosed to and reasonably approved
by the Administrative Agent from time to time.
"ILC" shall mean Independent Lending Corporation, a Delaware corporation.
---
"Indebtedness" of any Person shall mean all items of indebtedness which, in
------------
accordance with GAAP and practices thereof, would be included in determining
liabilities as shown on the liability side of a statement of condition of such
Person as of the date as of which indebtedness is to be determined, including:
without limitation, all obligations for money borrowed and Capitalized Lease
Obligations, all amounts for which such Person may be obligated under gestation
or other repurchase facilities, 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.
"Indy Mac" shall mean Independent National Mortgage Corporation, a Delaware
--------
corporation.
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<PAGE>
"Interest Period" shall mean with respect to any Eurodollar Loan the period
---------------
commencing on the date advanced and ending one, two or three weeks, or one, two,
three or six months, thereafter, as designated in the related Loan Request,
provided, however, that (i) any Interest Period which would otherwise end on a
day which is not a Eurodollar Business Day shall be extended to the next
succeeding Eurodollar Business Day unless by such extension it would fall in
another calendar month, in which case such Interest Period shall end on the
immediately preceding Eurodollar Business Day; (ii) any Interest Period
applicable to a Eurodollar Loan which begins on a day for which there is no
numerically corresponding day in the calendar month during which such Interest
Period is to end shall, subject to the provisions of clause (i) hereof, end on
the last day of such calendar month; and (iii) no such Interest Period shall
extend beyond the Maturity Date.
"Issuance Date" for any Letter of Credit shall mean the date on which such
-------------
Letter of Credit is issued by the L/C Bank in accordance with the provisions of
this Agreement.
"L/C Availability Certificate" shall mean a certificate in the form of that
----------------------------
attached hereto as Exhibit Y.
---------
"L/C Bank" shall have the meaning set forth in the introductory paragraph
--------
hereof and shall include any successor to First Union as the initial "L/C Bank"
hereunder.
"L/C Credit Limit" shall mean $10,000,000.00, as such amount may be
----------------
increased or reduced by written agreement of the L/C Bank, the Companies, the
Administrative Agent and one hundred percent (100%) of the Lenders.
"L/C Documents" shall mean all Letters of Credit and all related documents
-------------
required to be presented in connection with any drawing thereunder.
"L/C Drawing" or "L/C Drawings" shall have the meaning set forth in
----------- ------------
Paragraph 6B(e) above.
"L/C Obligations" shall mean any and all debts, obligations and liabilities
---------------
of the Companies to the L/C Bank (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 L/C
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<PAGE>
Documents, including, without limitation, the obligation of the Companies to
reimburse the L/C Bank for any L/C Drawing under any Letter of Credit.
"L/C Participant" shall have the meaning set forth in Paragraph 7(d) above.
---------------
"Lender" shall have the meaning given such term in the introductory
------
paragraph hereof.
"Letter of Credit" shall mean any letter of credit issued by the L/C Bank
----------------
for the account of the Companies pursuant to the terms of this Agreement in the
form attached hereto as Exhibit X, together with any replacement or renewal
---------
thereof.
"Lien" shall mean any security interest, mortgage, pledge, lien, claim on
----
property, charge or encumbrance (including any conditional sale or other title
retention agreement), any lease in the nature thereof, and the filing of or
agreement to give any financing statement under the Uniform Commercial Code of
any jurisdiction.
"Life of Loan/Unit History Report" shall mean a report substantially in the
--------------------------------
form set forth as Exhibit T in the Addendum.
---------
"Loan" shall mean a Tranche A Loan, a Tranche B Loan, a Tranche C Loan, a
----
Tranche D Loan, a Tranche E Loan, a Tranche F Loan, a Tranche G Loan or a Swing
Line Loan, as applicable.
"Loans" shall mean, collectively, Tranche A Loans, Tranche B Loans, Tranche
-----
C Loans, Tranche D Loans, Tranche E Loans, Tranche F Loans, Tranche G Loans and
Swing Line Loans.
"Loan Purchase/Sale Schedule" shall mean a schedule substantially in the
---------------------------
form of that set forth as Exhibit L in the Addendum.
---------
"Loan Request" shall mean a request for a Loan conveyed to the
------------
Administrative Agent from an duly Authorized Officer of the Companies, with such
request to be confirmed in writing upon the request of the Administrative Agent.
"Majority Lenders" shall mean (i) prior to the occurrence of an Event of
----------------
Default, the Lenders holding not less than fifty-one percent (51%) of the
Percentage Shares; and (ii) after the occurrence and during the continuance of
an Event of Default, the
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<PAGE>
Lenders holding not less than fifty-one percent (51%) of the Repayment Shares
(provided that for the purposes of clause (ii) of this definition, the term
--------
"Lenders" shall be deemed to include the L/C Bank).
"Master Servicing Contract" shall mean the written agreement between an MBS
-------------------------
Fiduciary and one or more of the Companies or their Affiliates providing for the
servicing of a pool or pools of Mortgage Loans underlying Mortgage-Backed
Securities and shall include all manuals, guides, laws, rules and regulations
incorporated by reference in or otherwise governing the terms of the
relationship of such MBS Fiduciary and the Companies thereunder, each of which
Master Servicing Contracts shall be substantially in the form approved by the
Administrative Agent on or prior to the date hereof and shall not contain
material changes to such pre-approved form without the prior consent of the
Administrative Agent.
"Master Servicing Delinquency Report" shall mean a report substantially in
-----------------------------------
the form of that set forth as Exhibit N in the Addendum.
---------
"Master Servicing Portfolio" shall mean the aggregate outstanding principal
--------------------------
amount at the time of determination of the Mortgage Loans serviced by the
Companies or their affiliates under Master Servicing Contracts.
"Master Servicing Report" shall mean a report substantially in the form of
-----------------------
that set forth as Exhibit P in the Addendum.
---------
"Maturity Date" shall mean the earlier of: (a) September 24, 1997, as such
-------------
date may be extended from time to time in writing by one hundred percent (100%)
of the Lenders (and, if there are or will be Letters of Credit outstanding on
the existing Maturity Date, the L/C Bank), in their sole discretion and (b) the
date the Lenders terminate their obligation to make further Loans, and the L/C
Bank terminates its obligation to issue Letters of Credit, hereunder pursuant to
Paragraph 13 above.
"Maximum Commitment" shall mean, with respect to any Lender, the dollar
------------------
amount specified as such Lender's "Maximum Commitment" in the Commitment
Schedule set forth as Schedule I-2 in the Addendum.
------------
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<PAGE>
"Maximum Swing Line Commitment" shall mean with respect to First Union,
-----------------------------
$20,000,000; provided, however, that on any day that the aggregate outstanding
-------- -------
principal balance of all Regular Loans held by First Union equals First Union's
Maximum Commitment, then the Maximum Swing Line Commitment shall be zero ($0).
"MBS Fiduciary" shall refer to an indenture trustee or similar fiduciary in
-------------
its capacity as title holder of a pool or pools of Mortgage Loans underlying
Mortgage-Backed Securities issued by one or more of the Companies or entities
formed by one or more of the Companies or by Affiliates for the purpose of
issuing Mortgage-Backed Securities.
"Monthly Tract Sales Report" shall mean a report substantially in the form
--------------------------
of that set forth as Exhibit Q in the Addendum.
---------
"Mortgage-Backed Security" shall mean any security (including, without
------------------------
limitation, a participation certificate) that represents an interest in a pool
of mortgages, deeds of trusts or other instruments creating a Lien on Property
which is improved by a completed single family residence, including but not
limited to a condominium, planned unit development or townhouse.
"Mortgage Loan" shall mean a residential real estate secured loan,
-------------
including, without limitation: (a) a promissory note, any reformation thereof
and related deed of trust (or mortgage) and security agreement; (b) all
guaranties and insurance policies, including, without limitation, all mortgage
and title insurance policies and all fire and extended coverage insurance
policies and rights of the mortgagee or beneficiary to return premiums or
payments with respect thereto; and (c) all right, title and interest of the
mortgagee or beneficiary in the Property covered by said deed of trust (or
mortgage).
"Multiemployer Plan" shall mean, as to the Companies or any of their ERISA
------------------
Affiliates, a Plan of such Person which is a multiemployer plan as defined in
Section 4001(a)(3) of ERISA.
"Notes" shall have the meaning given such term in Paragraph 7(k) above.
-----
"Obligations" shall mean any and all debts, obligations and liabilities of
-----------
the Companies to the Administrative Agent, the Collateral Agent, the L/C Bank or
the Lenders (whether now existing or hereafter arising, voluntary or
involuntary, whether
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<PAGE>
or not jointly owed with others, direct or indirect, absolute or contingent,
liquidated or unliquidated, and whether or not from time to time decreased or
extinguished and later increased, created or incurred), arising out of or
related to the Credit Documents, including, without limitation, the L/C
Obligations.
"Obligor" shall mean the Person or Persons obligated to pay the
-------
Indebtedness which is the subject of a Mortgage Loan.
"Participant" shall have the meaning given such term in Paragraph 15(h)
-----------
above.
"Participation Agreement" shall mean an agreement satisfactory to the L/C
-----------------------
Bank, in the form attached hereto as Exhibit Z, pursuant to which a Lender
---------
agrees to participate, to the extent of its Percentage Share, in the L/C
Obligations of the Companies to the L/C Bank hereunder (except for any fees
payable by the Companies to the L/C Bank pursuant to this Agreement which by the
terms hereof are to be solely for the account of the L/C Bank).
"Participation Certificate" shall have the meaning given such term in the
-------------------------
Participation Agreement.
"Participation Share" shall have the meaning given such term in the
-------------------
Participation Agreement.
"PBGC" shall mean the Pension Benefit Guaranty Corporation established
----
pursuant to Subtitle A of Title IV of ERISA and any successor thereto.
"Percentage Share" shall mean, with respect to each Lender, the ratio
----------------
expressed as a percentage which (a) such Lender's Maximum Commitment bears to
(b) the Aggregate Facility Commitment.
"Permitted Other Debt" shall mean that Indebtedness described as "Permitted
--------------------
Other Debt" on Exhibit H set forth in the Addendum.
---------
"Permitted Secured Debt" shall mean that Indebtedness which is the subject
----------------------
of a Lien and described as "Permitted Secured Debt" on Exhibit H set forth in
---------
the Addendum.
"Person" shall mean any corporation, natural person, firm, joint venture,
------
partnership, limited liability company, trust, unincorporated organization or
Governmental Authority.
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<PAGE>
"Plan" shall mean, as the Companies or any of their ERISA Affiliates, any
----
pension plan that is covered by Title IV of ERISA and in respect of which such
Person or a Commonly Controlled Entity of such Person is an "employer" as
defined in Section 3(5) of ERISA.
"Position Report" shall mean a report substantially in the form of that set
---------------
forth as Exhibit I in the Addendum.
---------
"Potential Default" shall mean an event which but for the lapse of time or
-----------------
the giving of notice, or both, would constitute an Event of Default.
"Proceeds" shall mean whatever is receivable or received when Collateral or
--------
proceeds are sold, collected, exchanged or otherwise disposed of, whether such
disposition is voluntary or involuntary, and includes, without limitation, all
rights to payment, including return premiums, with respect to any insurance
relating thereto.
"Property" shall mean the real property, including the improvements
--------
thereon, and the personal property (tangible and intangible) which are
encumbered pursuant to a Mortgage Loan.
"Regular Loan" shall mean a Tranche A Loan, a Tranche B Loan, a Tranche C
------------
Loan, a Tranche D Loan, a Tranche E Loan, a Tranche F Loan or a Tranche G Loan,
as applicable.
"Regular Loans" shall mean, collectively, Tranche A Loans, Tranche B Loans,
-------------
Tranche C Loans, Tranche D Loans, Tranche E Loans, Tranche F Loans and Tranche G
Loans.
"REIT" shall mean have the meaning given to such term in the Code.
----
"Repayment Share" shall mean with respect to each Lender and the L/C Bank
---------------
the ratio expressed as a percentage that (i) the aggregate outstanding Loans
held by each Lender or the L/C Bank bears to (ii) the aggregate outstanding
Loans held by all Lenders and the L/C Bank (for the purposes of this definition,
"Outstanding Loans" shall be deemed to include, with respect to the L/C Bank,
any L/C Drawings which remain unreimbursed for more than one (1) Business Day).
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<PAGE>
"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.
"Repurchase Mortgage Loan" shall mean a Mortgage Loan (i) which is included
------------------------
in the first priority mortgage/trust deed servicing portfolio of Mortgage Loans
of a sub-borrower to whom the Companies have extended a Foreclosure/Repurchase
Loan secured by said Mortgage Loan, and (ii) with respect to which such sub-
borrower has received notice that such Mortgage Loan is required to be
repurchased in accordance with the servicing arrangement between such sub-
borrower, as servicer, and the owner of said Mortgage Loan.
"Required Documents" shall mean, with respect to any Loan or Letter of
------------------
Credit, those items described on Exhibit J set forth in the Addendum.
---------
"Requirements of Law" shall mean, as to any Person, the Articles or
-------------------
Certificate of Incorporation and Bylaws or other organizational or governing
documents of such Person, and any law, treaty, rule or regulation, or a final
and binding determination of an arbitrator or a determination of a court or
other Governmental Authority, in each case applicable to or binding upon such
Person or any of its property or to which such Person or any of its property is
subject.
"Resignation Letter" shall mean, with respect to any Master Servicing
------------------
Contract or Servicing Contract covering Assigned Servicing Rights, a letter from
the Companies to the applicable MBS Fiduciary or investor thereunder whereunder
the Companies resign as master servicer or servicer, such letter to be in a form
acceptable to the Administrative Agent.
"Security Agreement" shall have the meaning given such term in Paragraph
------------------
8(a) above, as the same may be amended, extended or replaced from time to time.
"Servicing Contract" shall mean the agreement (which need not be in the
------------------
form of a written contract) between an investor and the Companies providing for
the servicing of Mortgage Loans, including pools of Mortgage Loans underlying
Mortgage-Backed Securities, and shall include all manuals, guides, laws, rules
and regulations incorporated by reference in or otherwise governing the terms of
the relationship of such investor and the Companies thereunder.
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<PAGE>
"Servicing Loan" shall mean a loan extended by the Companies to a sub-
--------------
borrower pursuant to a revolving servicing-secured or servicing-receivables line
of credit between the Companies and such sub-borrower, which such loan shall be
made pursuant to an underwriting program the terms of which shall be approved by
the Administrative Agent, and secured by all the servicing rights or servicing
receivables, as the case may be, of such sub-borrower; provided, however, that a
-------- -------
loan otherwise meeting the requirements of this definition but which is not made
pursuant to the terms of an approved underwriting program may be a Servicing
Loan hereunder for the purposes hereof so long as (i) the Collateral Value of
----------
the Tranche E Borrowing Base attributable to such a loan, when added to (A) the
Collateral Value of the Tranche E Borrowing Base attributable to all other such
loans, (B) the Aggregate Unit Collateral Values of all Eligible A/B Mortgage
Loans included in the Tranche A Borrowing Base or the Tranche B Borrowing Base
which are of the type described in the last paragraph of the definition of
"Eligible A/B Mortgage Loan" (it being understood that for the purpose of this
provision, the terms "Eligible A/B Mortgage Loans," "Tranche A Borrowing Base"
and "Tranche B Borrowing Base" shall mean both such terms as defined herein and
---- ---
such terms as defined in the Facility I Agreement), (C) the Collateral Value of
the Tranche F Borrowing Base attributable to Foreclosure/Repurchase Loans of the
type described in the proviso to the definition of "Foreclosure/Repurchase
Loan", and (D) the Collateral Value of the Tranche D Borrowing Base attributable
to Construction Loans of the type described in the second proviso to the
definition of "Construction Loan" (or, if any such Construction Loan is
nonconforming solely due to the sales price or construction cost of any single-
family tract home to be constructed in connection therewith, the sales price or
construction cost of such home), does not exceed $20,000,000, and (ii) the
Collateral Value of the Tranche E Borrowing Base attributable to such a loan,
when added to the Collateral Value of the Tranche E Borrowing Base attributable
to all other such loans, does not exceed twenty percent (20%) of the Aggregate
Tranche E Credit Limit.
"Servicing Report" shall mean a report substantially in the form of that
----------------
set forth as Exhibit O in the Addendum.
---------
"Settlement Account" shall mean that certain account maintained in the name
------------------
of the Collateral Agent which account shall be the same account as the
"Financial Institution Settlement Account" to be established and maintained for
and on behalf of the
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<PAGE>
Administrative Agent pursuant to Section 5.2(a) of the Custodial Agreement.
"Single Employer Plan" shall mean, as to the Companies or any of their
--------------------
ERISA Affiliates, any Plan of such Person which is not a Multiemployer Plan.
"Statement Date" shall mean December 31, 1994.
--------------
"Swing Line Loan" and "Swing Line Loans" shall have the meanings given such
--------------- ----------------
terms in Paragraph 6A(a) above.
"Take-Out Commitment" with respect to any Mortgage Loan shall mean a bona
-------------------
fide current, unused and unexpired whole loan commitment or forward sale
Mortgage Backed Security (including, without limitation, a Warehouse-Related
MBS) commitment issued in favor of and held by the Companies made by an Approved
Investor, under which said Approved Investor agrees, prior to the expiration
thereof, upon the satisfaction of certain terms and conditions therein, to
purchase such Mortgage Loan or related Mortgage Backed Security (including,
without limitation, a Warehouse-Related MBS) at a Take-Out Price, 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.
"Take-Out Price" with respect to any Mortgage Loan shall mean the specified
--------------
price to be paid for such Mortgage Loan under the applicable Take-Out Commitment
covering said Mortgage Loan.
"Tranche A Borrowing Base" shall mean at any date all Eligible A/B Mortgage
------------------------
Loans purchased by CWM or Indy Mac pursuant to the programs and procedures
described in the Indy Mac Seller/Servicer Guide which have not been included as
---
Collateral in excess of one hundred twenty (120) days and which have been
delivered to and held by the Collateral Agent or otherwise identified as "A/B
Collateral" under the Security Agreement as collateral security for the
Obligations, together with all Warehousing Loans which have been delivered to
and held by the Collateral Agent under the Security Agreement as collateral
security for the Obligations.
"Tranche A Corporate Rate Loans" shall mean Tranche A Loans at such time as
------------------------------
they are bearing interest at the Applicable
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<PAGE>
Corporate Rate or at a rate specified pursuant to Paragraph 7(u) hereof.
"Tranche A Eurodollar Loans" shall mean Tranche A Loans at such time as
--------------------------
they are bearing interest at the Applicable Eurodollar Rate.
"Tranche A Facility" shall mean that revolving credit facility extended by
------------------
the Lenders to the Companies pursuant to Section 1 hereof.
"Tranche A Loan" and "Tranche A Loans" shall have the meanings given such
-------------- ---------------
terms in Paragraph 1(a) above.
"Tranche B Borrowing Base" shall mean at any date all Eligible A/B Mortgage
------------------------
Loans purchased by CWM or Indy Mac pursuant to the programs and procedures
described in the Indy Mac Seller-Servicer Guide which have been delivered to and
held by the Collateral Agent or otherwise identified as "A/B Collateral" under
the Security Agreement as collateral security for the Obligations and which have
not been designated by the Companies to be included in the Tranche A Borrowing
Base.
"Tranche B Corporate Rate Loans" shall mean Tranche B Loans at such times
------------------------------
as they are bearing interest at the Applicable Corporate Rate or at a rate
specified pursuant to Paragraph 7(u) hereof.
"Tranche B Eurodollar Loans" shall mean Tranche B Loans at such time as
--------------------------
they are bearing interest at the Applicable Eurodollar Rate.
"Tranche B Facility" shall mean that revolving credit facility extended by
------------------
the Lenders to the Companies pursuant to Section 2 hereof.
"Tranche B Loan" and "Tranche B Loans" shall have the meanings given such
-------------- ---------------
terms in Paragraph 2(a) above.
"Tranche C Borrowing Base" shall mean at any date all Assigned Servicing
------------------------
Rights identified as "Other Collateral" under the Security Agreement as
collateral security for the Obligations.
"Tranche C Corporate Rate Loans" shall mean Tranche C Loans at such time as
------------------------------
they are bearing interest at the Applicable
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<PAGE>
Corporate Rate or at a rate specified pursuant to Paragraph 7(u) hereof.
"Tranche C Eurodollar Loans" shall mean Tranche C Loans at such time as
--------------------------
they are bearing interest at the Applicable Eurodollar Rate.
"Tranche C Facility" shall mean that revolving credit facility extended by
------------------
the Lenders to the Companies pursuant to Section 3 hereof.
"Tranche C Loan" and "Tranche C Loans" shall have the meanings given such
-------------- ---------------
terms in Paragraph 3(a) above.
"Tranche D Borrowing Base" shall mean at any date all Construction Loans
------------------------
made by the Companies to homebuilders which have been delivered to and held by
the Collateral Agent or otherwise identified as "DEF Collateral" under the
Security Agreement as collateral security for the Obligations.
"Tranche D Corporate Rate Loans" shall mean Tranche D Loans at such time as
------------------------------
they are bearing interest at the Applicable Corporate Rate or at a rate
specified pursuant to Paragraph 7(u) hereof.
"Tranche D Eurodollar Loans" shall mean Tranche D Loans at such time as
--------------------------
they are bearing interest at the Applicable Eurodollar Rate.
"Tranche D Facility" shall mean that revolving credit facility extended by
------------------
the Lenders to the Companies pursuant to Section 4 hereof.
"Tranche D Loan" and "Tranche D Loans" shall have the meanings given such
-------------- ---------------
terms in Paragraph 4(a) above.
"Tranche E Borrowing Base" shall mean at any date all Servicing Loans made
------------------------
by the Companies to sub-borrowers which have been delivered to and held by the
Collateral Agent or otherwise identified as "DEF Collateral" under the Security
Agreement as collateral security for the Obligations.
"Tranche E Corporate Rate Loans" shall mean Tranche E Loans at such time as
------------------------------
they are bearing interest at the Applicable Corporate Rate or at a rate
specified pursuant to Paragraph 7(u) hereof.
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<PAGE>
"Tranche E Eurodollar Loans" shall mean Tranche E Loans at such time as
--------------------------
they are bearing interest at the Applicable Eurodollar Rate.
"Tranche E Facility" shall mean that revolving credit facility extended by
------------------
the Lenders to the Companies pursuant to Section 5 hereof.
"Tranche E Loan" and "Tranche E Loans" shall have the meanings given such
-------------- ---------------
terms in Paragraph 5(a) above.
"Tranche F Borrowing Base" shall mean at any date all
------------------------
Foreclosure/Repurchase Loans made by the Companies to sub-borrowers which have
been delivered to and held by the Collateral Agent or otherwise identified as
"DEF Collateral" under the Security Agreement as collateral security for the
Obligations.
"Tranche F Corporate Rate Loans" shall mean Tranche F Loans at such time as
------------------------------
they are bearing interest at the Applicable Corporate Rate or at a rate
specified pursuant to Paragraph 7(u) hereof.
"Tranche F Eurodollar Loans" shall mean Tranche F Loans at such time as
--------------------------
they are bearing interest at the Applicable Eurodollar Rate.
"Tranche F Facility" shall mean that revolving credit facility extended by
------------------
the Lenders to the Companies pursuant to Section 6 hereof.
"Tranche F Loan" and "Tranche F Loans" shall have the meanings given such
-------------- ---------------
terms in Paragraph 6(a) above.
"Tranche G Corporate Rate Loans" shall mean Tranche G Loans at such time as
------------------------------
they are bearing interest at the Applicable Corporate Rate.
"Tranche G Facility" shall mean that revolving credit facility extended by
------------------
the Lenders to the Companies pursuant to Section 6C hereof.
"Tranche G Loan" and "Tranche G Loans" shall have the meanings given such
-------------- ---------------
terms in Paragraph 6C(a) above.
"Unit Collateral Value" shall mean,
---------------------
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<PAGE>
(a) with respect to each Eligible A/B Mortgage Loan included in the
Tranche A Borrowing Base; ninety-eight percent (98%) of the lesser of: (1) the
unpaid principal balance thereof at the time the Eligible A/B Mortgage Loan is
included in the Tranche A Borrowing Base, or (2) the Fair Market Value.
(b) with respect to each Eligible A/B Mortgage Loan included in the
Tranche B Borrowing Base:
(i) if such Eligible A/B Mortgage Loan is sixty (60) days
delinquent or less, ninety-five percent (95%) of the lesser of: (1) the
unpaid principal amount thereof at the time such Eligible A/B Mortgage Loan
is included in the Tranche B Borrowing Base (or, in the case of a
Construction-to-Permanent Mortgage Loan, the greater of a. the principal
-
amount thereof disbursed at the date of determination or b. the maximum
-
principal amount thereof disbursed at any time), and (2) the Fair Market
Value thereof.
(ii) if such Eligible A/B Mortgage Loan is more than sixty (60)
days delinquent but is less than or equal to one hundred eighty (180) days
delinquent, ninety percent (90%) of the lesser of: (1) the unpaid
principal amount thereof at the time such Eligible A/B Mortgage Loan is
included in the Tranche B Borrowing Base (or, in the case of a
Construction-to-Permanent Mortgage Loan, the greater of a. the principal
-
amount thereof disbursed at the date of determination or b. the maximum
-
principal amount thereof disbursed at any time), and (2) the Fair Market
Value thereof.
(iii) if such Eligible A/B Mortgage Loan is more than one hundred
eighty (180) days delinquent, seventy-five percent (75%) of the lesser of:
(1) the unpaid principal amount thereof at the time such Eligible A/B
Mortgage Loan is included in the Tranche B Borrowing Base (or, in the case
of a Construction-to-Permanent Mortgage Loan, the greater of a. the
-
principal amount thereof disbursed at the date of determination or b. the
-
maximum principal amount thereof disbursed at any time), and (2) the Fair
Market Value thereof.
106
<PAGE>
"Warehouse-Related MBS" shall have the meaning given to such term in the
---------------------
Security Agreement.
"Warehousing Loan" shall mean a loan extended by the Companies to a sub-
----------------
borrower pursuant to a revolving warehousing line of credit between the
Companies and such sub-borrower, which such loan shall be made in accordance
with the due diligence procedures set forth on Exhibit AA hereto and shall be
----------
evidenced by a loan agreement substantially in the form set forth on Exhibit BB
----------
hereto (in each instance without variation therefrom which would have a material
adverse effect on the Lenders or their interests under this Agreement unless
such variation has been consented to by the Administrative Agent pursuant to
Paragraph 12(e) above), and shall be secured by Mortgage Loans originated by
such sub-borrower (all of which are covered by Take-Out Commitments issued in
favor of such sub-borrower) and related collateral, provided that the Collateral
-------- ----
Value of the Tranche A Borrowing Base attributable to such a loan, when added to
the Collateral Value of the Tranche A Borrowing Base attributable to all other
such loans, does not exceed $150,000,000 (it being understood that for purposes
of this provision "such loans" also include "Warehousing Loans" as defined in
the Facility I Agreement and the terms "Tranche A Borrowing Base" and
"Collateral Value of the Tranche A Borrowing Base" shall mean both such terms as
----
defined herein and such terms as defined in the Facility I Agreement).
---
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the day and year first above written.
CWM MORTGAGE HOLDINGS, INC.,
a Delaware corporation
By /s/ Michael W. Perry
Name Michael W. Perry
Title EVP & Chief Operating Officer
INDEPENDENT NATIONAL MORTGAGE
CORPORATION, a Delaware corporation
By /s/ Michael W. Perry
Name Michael W. Perry
Title President & Chief Executive Officer
107
<PAGE>
INDEPENDENT LENDING CORPORATION
a Delaware corporation
By /s/ Michael W. Perry
Name Michael W. Perry
Title President & Chief Executive Officer
FIRST UNION NATIONAL BANK OF NORTH CAROLINA, a
national banking association, as Administrative
Agent, L/C Bank and a Lender
By /s/ Carolyn Eskeridge
Name Carolyn Eskeridge
Title Senior Vice President
THE BANK OF NEW YORK
By /s/ Cynthia E. Crites
Name Cynthia E. Crites
Title Assistant Vice President
CREDIT LYONNAIS, CAYMAN ISLANDS BRANCH
By: /s/ William J. Fischer
Name: William J. Fischer
Title: Vice President & Manager
DRESDNER BANK AG, LOS ANGELES AGENCY &
GRAND CAYMAN BRANCH
By: /s/ Thomas J. Nadramia
Name: Thomas J. Nadramia
Title: Vice President
By: /s/ John W. Sweeney
Name: John W. Sweeney
Title: Assistant Vice President
THE FIRST NATIONAL BANK OF CHICAGO
108
<PAGE>
By: /s/ Margaret K. Gallehugh
Name: Margaret K. Gallehugh
Title: Vice President
GUARANTY FEDERAL BANK F.S.B.
By: /s/ Abbie Y. Tidmore
Name: Abbie Y. Tidmore
Title: Vice President
HIBERNIA NATIONAL BANK
By: /s/ Edward K. Santos
Name: Edward K. Santos
Title: Vice President
FLEET BANK, N.A. (formerly known as
NATWEST Bank N.A.)
By: /s/ Robert W. Pierson
Name: Robert W. Pierson
Title: Vice President
NATIONSBANK OF TEXAS, N.A.
By: /s/ Mary Pat Riggins
Name: Mary Pat Riggins
Title: Vice President
109