EXHIBIT 10.4
Confidential Portion
FACILITY I marked "XXXX"
---------- CONFIDENTIAL
CREDIT AGREEMENT TREATMENT PREVIOUSLY
---------------- REQUESTED
THIS FACILITY I CREDIT AGREEMENT (the "Agreement") is made as of the
30th day of May, 1995, by and among CWM MORTGAGE HOLDINGS, INC., a Delaware
corporation ("CWM"), INDEPENDENT NATIONAL MORTGAGE CORPORATION, a Delaware
corporation ("INMC"), INDEPENDENT LENDING CORPORATION, a Delaware corporation
("ILC" and, together with CWM and INMC, the "Companies"), the lenders from time
to time party hereto, their respective successors and assigns (each a "Lender"
and collectively the "Lenders"); and FIRST UNION NATIONAL BANK OF NORTH
CAROLINA, a national banking association, as administrative agent for the
Lenders (in such capacity, the "Administrative Agent").
STATEMENT OF PURPOSE
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The Companies have requested the Lenders to extend to the Companies
various revolving credit facilities, and the Lenders have agreed to do so on the
terms and subject to the conditions set forth herein. All capitalized terms not
otherwise defined herein are defined in Paragraph 12 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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(a) Lending Limit. Subject to the conditions set forth herein,
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the 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.
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 and all
Tranche B Loans outstanding exceed the Aggregate Facility Commitment at such
time.
(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 3(u) below.
(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 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 3(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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(a) Lending Limit. Subject to the conditions set forth herein,
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the 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 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.
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 and all
Tranche B Loans outstanding exceed the Aggregate Facility Commitment at such
time.
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(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 Applicable Eurodollar Rate as permitted herein or (ii)
an interest rate established pursuant to Paragraph 3(u) below.
(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 3(l) below, and interest on a Tranche B
Eurodollar Loan shall be payable at the end of the applicable Interest Period.
3. Miscellaneous Lending Provisions.
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(a) Conversion and Continuation.
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(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 one Eurodollar Business
Day's 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 has occurred
and is continuing on the day occurring one Eurodollar Business Day
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 one Eurodollar
Business Day's 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
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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 has occurred and is
continuing on the day occurring one Eurodollar Business Day 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.
(3) Notwithstanding anything contained in this Agreement to
the contrary, at no time shall there be Eurodollar Loans outstanding
with more than five (5) dif ferent Interest Periods.
(b) Inability to Determine Rate. If the Administrative Agent
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determines (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.
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(c) Illegality. Notwithstanding any other provisions herein, if
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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: (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 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 3(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 3(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 11(i) below, which such assignment shall be made pursuant
to the terms and provisions contained in Paragraph 11(i) below.
(d) Requirements of Law; Increased Costs. In the event that any
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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 with any request or directive (whether or not having
the force of law) by any central bank or other Governmental Authority:
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(1) subjects any Lender to any tax of any kind whatsoever
with respect to this Agreement or any Loans made hereunder, 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);
(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, or other credit extended by, or any other
acquisition of funds by, any office of such Lender which are not otherwise
included in the determination of the Eurodollar Rate, the Applicable
Eurodollar Rate or the Corporate Rate; or
(3) imposes on such Lender 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 to reduce any amount receivable in
respect thereof or to reduce the rate of return on the capital of such Lender or
any Person controlling such Lender, then, in any such case, the Companies shall
promptly pay to the Administrative Agent for remittance to such Lender, upon its
written demand made through the Administrative Agent, any additional amounts
necessary to compensate such Lender for such additional cost or reduced amounts
receivable or rate of return as determined by such Lender with respect to this
Agreement or Loans made hereunder, subject to the limitations set forth in the
following sentence. If a Lender becomes entitled to claim any additional
amounts pursuant to this Paragraph 3(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 pursuant to this Paragraph 3(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, through the
Administrative Agent, will designate a different lending office for those Loans
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. A certificate as to any
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additional amounts payable pursuant to the foregoing sentence containing the
calculation thereof in reasonable detail submitted by a Lender, 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 to reduce any amount receivable in respect
thereof or to reduce the rate of return on the capital of such Lender or any
Person controlling such Lender, then in lieu of the provisions, payments 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 11(i)
below, which such assignment shall be made pursuant to the terms and provisions
contained in Paragraph 11(i) below.
(e) Funding. Each Lender shall be entitled to fund all or any
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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.
(f) Funding Indemnification -- Prepayment. In addition to all
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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 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 lending 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
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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.
(g) Funding Indemnification -- Default or Failure to Continue or
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Convert. In addition to all other payment obligations hereunder, in the event
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the Companies shall fail to continue or to make a conversion to a Eurodollar
Loan after the Companies have given notice thereof as provided in Paragraph 3(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, then the Companies shall immediately pay any Lender holding the
Eurodollar Loan not 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 continue or convert a Eurodollar Loan,
or the occurrence of an Event of 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
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.
(h) INTENTIONALLY DELETED.
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(i) Use of Proceeds. (i) The proceeds of all Tranche A Loans
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shall be used by the Companies solely for the purpose of acquiring Eligible A/B
Mortgage Loans to be held for sale by the Companies; and (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; provided, however, that so long as the aggregate principal amount
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of outstanding Loans is less than the aggregate of
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the Collateral Value of the Tranche A Borrowing Base and the Collateral Value of
the Tranche B Borrowing Base, the Companies may use the proceeds of any Loans
for any general corporate purpose of the Companies.
(j) Request For Loans; Making of Loans.
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(1) If the Companies desire to borrow a Corporate Rate 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 3:00 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.
(2) If the Companies desire to borrow or continue a
Eurodollar Loan or to convert a Corporate Rate Loan to a Eurodollar Loan as
provided in Paragraph 3(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 one Eurodollar Business Day
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 3:00 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 date 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 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 Loan to be made by it as part of any borrowing
shall not relieve any other Lender of its obligation hereunder to advance
its
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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, a "Loan
Request" made under and pursuant to the terms of the Facility II Agreement
shall be considered to be a Loan Request for all purposes hereunder, and
the Companies shall not be required to submit an additional Loan Request
hereunder, if (i) such "Loan Request" made under and pursuant to the terms
of the Facility II Agreement has been made with respect to Tranche A Loans
or Tranche B Loans and (ii) at the time of making such "Loan Request", the
maximum amount which may be outstanding at any time as Tranche A Loans and
Tranche B Loans under the Facility II Agreement is outstanding.
(k) Notes. The joint and several obligation of the Companies to
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repay the Loans shall be evidenced by notes payable to the order of each Lender,
as applicable, in the form set forth as Exhibit A-1 in the Addendum
(collectively, the "Notes") .
(l) Interest and Fee Billing and Payment; Notice of Interest
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Rates.
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(1) The Administrative Agent shall (A) in the case of the
Corporate Rate Loans 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
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 3(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 Administra-
10
tive 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 3(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.
(m) Repayment of Principal. Subject to the prepayment
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requirements of Paragraph 3(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
converted pursuant to Paragraph 3(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.
(n) Borrowing Base Conformity; Mandatory Prepayments.
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(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.
(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.
(3) 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 out-
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standing 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 exceeds the Collateral Value of the Tranche
B Borrowing Base, or (C) in the amount by which the sum of the aggregate
principal amounts of outstanding Tranche A Loans and Tranche B Loans
exceeds the Aggregate Facility Commitment; 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.
(4) The Companies shall prepay Corporate Rate Loans to the
Administrative Agent on behalf of Lenders, upon telephonic or facsimile
demand by the Administrative Agent, on any day in the amount equal to the
lesser of (y) the aggregate principal amount of outstanding Loans or (z)
the amount by which 1. the maximum amount which may be outstanding at any
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time as Tranche A Loans and Tranche B Loans under the Facility II Agreement
exceeds 2. the aggregate principal amount of outstanding Tranche A Loans
--
and Tranche B Loans under the Facility II Agreement; provided, however,
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that in no event shall this Paragraph 3(n)(4) be construed to require the
Companies to prepay Eurodollar Loans prior to the expiration of the
applicable Interest Period therefore.
(5) If at such time as the Companies shall be required to
prepay Loans under this Paragraph 3(n) there shall not have occurred and be
continuing an Event of Default or Potential Default hereunder, in lieu of
prepaying the Loans as required, the Companies may deliver to the
Collateral Agent 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)
and (2) above.
(o) Nature and Place of Payments. All payments made on account of
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the Obligations shall be made to the Administrative Agent for distribution to
the Lenders and the Administrative Agent is hereby irrevocably authorized to
debit the Settlement Account and distribute amounts held therein as provided in
Paragraph 3(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,
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fees or other charges of any nature whatsoever imposed by any taxing authority
and if 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 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
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use its best efforts to credit such payment on the Business Day received. All
amounts received by the Administrative Agent on account of the Obligations shall
be disbursed by the Administrative Agent to the applicable Lenders 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.
(p) Post-Maturity Interest. Any Obligations not paid when due
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(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 XXXXX percent
(XX%) above the interest rate otherwise applicable thereto or if such
Obligations do not otherwise bear interest, XXXXX percent (XX%) above the
Applicable Corporate Rate.
(q) Computations. All computations of interest and fees payable
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hereunder shall be based upon a year of 360 days for the actual number of days
elapsed.
(r) Prepayments.
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(1) The Companies may voluntarily prepay Loans hereunder,
(including Eurodollar Loans subject to and on the conditions contained in
Paragraph 3(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
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amount of $250,000.
(2) Loans hereunder are subject to mandatory prepayment
pursuant to Paragraph 3(n) above and, in addition, by application of
proceeds of the sale or other disposition of
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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 3(s) below and any amounts payable
pursuant to Paragraph 3(f) above concurrently with payment to the
Administrative Agent of any principal amounts.
(s) Allocation of Payments Received.
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(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, principal amounts
received by the Administrative Agent with respect to Loans shall be
allocated among the Lenders on account of the Obligations pro rata in
accordance with their respective Percentage Shares.
(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, 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 the Lenders, pro rata in accordance
with their respective Repayment Shares, until the outstanding
Loans 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; and
(iii) Third, to such Persons as may be legally
entitled thereto.
(t) Fees. The Companies shall pay the following fees:
----
14
(1) To the Administrative Agent for the account of the
Lenders, an annual commitment fee equal to XXXXXXXXXXXXXXXXXX percent (XXXX%) 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.
(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.
(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,
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
15
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.
4. Security Agreement; Custodial Agreement; Additional Documents.
-------------------------------------------------------------
(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, a perfected security interest in and lien upon the Collateral, and (2)
such UCC financing statements as the Administrative Agent may reasonably request
in connection therewith.
(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.
(c) Further Documents. The Companies agree to execute and
-----------------
deliver and to cause to be executed and delivered to the Collateral 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 reason-
16
ably necessary or desirable to obtain for the Collateral Agent on behalf of the
Lenders, the benefit of the Credit Documents and the Collateral.
5. Conditions to Making of Loans.
-----------------------------
(a) First Loan. As conditions precedent to any Lender's
----------
obligation to make the first Loan hereunder:
(1) The Companies shall have delivered to the Administrative
Agent, in form and substance reasonably satisfactory to the Administrative
Agent and its counsel, each of the following (with sufficient copies for
each of the Lenders):
(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,
in its reasonable discretion, to obtain for the Collateral Agent
on behalf of the Lenders a perfected security interest in and lien
upon the Collateral;
(v) Such credit applications, financial statements,
and authorizations with respect to the Companies as any Lender may
reasonably request;
(vi) Certified copies of resolutions of the Board of
Directors of each of CWM, INMC 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, INMC and ILC certifying the names and
true signatures of the officers
17
of such Person authorized to execute and deliver the Credit
Documents to which such Person is a party;
(viii) A copy of the Certificates of Incorporation of
each of CWM, INMC 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, INMC 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, INMC 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 and
Approved Repo Lenders;
(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; and
(xv) A Covenant Compliance Certificate demonstrating
in detail satisfactory to the Lenders that the Companies are in
compliance with the covenants set forth in Paragraphs 8(g), 8(h)
and 8(i) below.
(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
18
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 3(t)
above, shall have been paid prior to (or will be paid concurrently with)
the making of the first Loan hereunder.
(b) Ongoing Loans. 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, at and as of
the date of advance, conversion or continuance thereof;
(1) There shall have been delivered to the Administrative
Agent a Loan Request therefor;
(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 or continuance;
(3) There shall not have occurred an Event of Default or
Potential Default which has not been waived pursuant to Paragraph 11(b)
hereof by the requisite number of Lenders;
(4) Following the funding of the requested Loan: (i) the
aggregate principal amount of Tranche A Loans outstanding 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 aggregate
principal amount of Tranche B Loans outstanding 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 aggregate principal amount of Loans
outstanding advanced by any Lender will not exceed its Maximum Commitment,
and (iv) the aggregate
19
principal amount of all Loans outstanding will not exceed the Aggregate
Facility Commitment;
(5) The Required Documents for the Mortgage Loans being
funded with the proceeds of such Loan shall have been received by the
Collateral Agent (except as otherwise provided in subparagraph (o) of the
definition of "Eligible A/B Mortgage Loan");
(6) The maximum amount which may be outstanding at any time
as Tranche A Loans and Tranche B Loans under the Facility II Agreement is
outstanding; and
(7) If the Administrative Agent is being requested to include
any Mortgage Loan being funded with a Tranche A Loan or a Tranche B Loan 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 Loan," the Companies shall have notified the
Administrative Agent and the Collateral Agent of the noncompliance or
nonconformity of such Mortgage Loan.
By making a Loan Request to the Administrative Agent 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)(7) above.
6. Representations and Warranties of the Companies.
-----------------------------------------------
Each of CWM, INMC, and ILC represents and warrants to the
Administrative Agent and each Lender, and the Companies collectively represent
and warrant to the Administrative Agent and each Lender, as applicable, that:
(a) Financial Condition. (i) The consolidated financial
-------------------
statements of CWM, and the financial statements of INMC, each dated as of the
Statement Date and for the fiscal period then ended, copies of which have been
furnished to each Lender, 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.
(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
20
shown on the financial statements dated as of the Statement Date referred to in
Paragraph 6(a) above.
(c) Corporate Existence; Compliance with Law. Each of CWM, INMC
----------------------------------------
and ILC: (1) is duly organized, validly existing 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.
(d) Corporate Power; Authorization; Enforceable Obligations. Each
-------------------------------------------------------
of CWM, INMC 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, INMC 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.
(e) No Legal Bar. The execution, delivery and performance of the
------------
Credit Documents, the borrowing hereunder and the use of the proceeds thereof,
will not violate any Requirement of Law or any Contractual Obligation of either
CWM, INMC 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.
21
(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, INMC or ILC or against any of
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.
(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.
(h) Investment Company Act. Neither CWM, INMC 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.
(i) Federal Reserve Board Regulations. Neither CWM, INMC 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.
(j) ERISA. Each of CWM, INMC 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.
22
(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 6(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,
and there are no security agreements to which any of CWM, INMC 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 6(a)
below.
(l) Securities Acts. Neither CWM, INMC 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 and Exchange Act of 1934, as amended.
Neither CWM, INMC 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.
(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 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.
(n) Joint Benefit. The Companies engage in complimentary lines
-------------
of business and therefore each Loan made hereunder to any of the Companies
benefits all of the Companies.
7. Affirmative Covenants. Each of CWM, INMC and ILC hereby covenants
---------------------
and agrees, and the Companies, jointly and severally, hereby covenant and agree,
with the Administrative Agent and each Lender that, as long as any Obligations
remain unpaid or any Lender has any obligation to make Loans hereunder, each of
CWM, INMC and ILC, or the Companies, as applicable, shall:
(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 state-
23
ment 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; and
(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 8(g), 8(h) and 8(i) below as of and at the end of
such month.
(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) the
Borrowing Base Schedule for such month; (D) with respect to each of the
Tranche A Facility and the Tranche B Facility, a Position Report for such
month; and (E) 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 or Approved Repo Lender, and information
regarding the Collateral as the Administrative Agent, the Collateral Agent
or any Lender, through the Administrative Agent, may from time to time
reasonably request;
(3) 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 which
has been funded with the proceeds of any Loan; and
24
(4) To the Administrative Agent (to be forwarded by the
Administrative Agent to each of the Lenders) 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.
(c) INTENTIONALLY OMITTED.
(d) Maintenance of Existence and Properties. Maintain the
---------------------------------------
corporate existence of each of CWM, INMC 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 INMC.
(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 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
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 or any Lender incurred in
connection with any
25
visit, inspection, examination, discussion or audit performed pursuant to
this Paragraph 7(e)(2) shall be borne by such parties incurring such
expenses except as otherwise provided in Paragraph 7(g).
(f) Notices. Promptly give written notice to the Administrative
-------
Agent (which shall promptly transmit a copy of such notice 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 or 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, operations, 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.
(g) Expenses. Pay all reasonable out-of-pocket costs and
--------
expenses (including reasonable fees and disbursements of counsel): (1) of the
Administrative Agent and the Collateral Agent incident to the preparation and
negotiation of the Credit Documents, (2) of the Administrative Agent and the
Collateral Agent associated with any periodic audits conducted pursuant to
Paragraph 7(e)(2)(ii) above if such audit discloses a material adverse change in
the financial condition or operations of the Companies, taken as
26
a whole, and (3) of the Administrative Agent, the Collateral Agent 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 7(g) shall be
effective and enforceable whether or not any Loan is advanced by any Lender
hereunder and shall survive payment of all other Obligations.
(h) Credit Documents. Comply with and observe all terms and
----------------
conditions of the Credit Documents.
(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 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.
8. Negative Covenants. Each of CWM, INMC and ILC hereby agrees, and
------------------
the Companies, jointly and severally, hereby agree, that, as long as any
Obligations remain unpaid or any Lender has any obligation to make Loans
hereunder, CWM, INMC and ILC, and the Companies, as applicable, shall not at any
time, directly or indirectly:
(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 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;
27
(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;
(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 II
Agreement).
(b) Indebtedness. Create, incur, assume or suffer to exist, or
------------
otherwise become 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
8(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;
28
(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;
(8) Indebtedness incurred pursuant to additional financing
secured by Construction Loans (as defined in the Facility II Agreement) of
the type which serve as Collateral for the Tranche D Facility (as defined
in the Facility II Agreement); 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 8(a) above,
and extensions, renewals, and refinancings of such Indebtedness.
(c) Consolidation and Merger; Change of Business. (i) Liquidate
--------------------------------------------
or dissolve or enter into any consolidation, merger; (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, 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.
(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,
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).
29
(e) Underwriting Policies. Materially change, without the prior
---------------------
written consent of the Administrative Agent, (i) its programs and procedures
with respect to the underwriting and purchase of Eligible A/B Mortgage Loans
which are described in the INMC Seller/Servicer Guide, or (ii) its programs and
procedures with respect to the underwriting and purchase of Construction-to-
Permanent Mortgage Loans.
(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).
(g) Indebtedness to Net Worth Ratio of CWM. Permit the ratio of
--------------------------------------
the consolidated Adjusted Total Indebtedness of CWM to the consolidated Book Net
Worth of CWM at any date (each as shown on the most recent consolidated
financial statements of CWM delivered to the Administrative Agent pursuant to
Paragraph 7(a)) to be more than XXXX: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 7(a)) to be less than the greater of (i) $XXXXXXXXXXX or
(ii) XXXXXX percent (XXX%) 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 INMC. Permit the Book Net Worth of
------------------------------
INMC at any date (as shown on the most recent financial statements of INMC
delivered to the Administrative Agent pursuant to Paragraph 7(a)) to be less
than $XXXXXXXXXXXX.
9. Events of Default. Upon the occurrence of any of the following
-----------------
events (an "Event of Default"):
(a) Companies shall fail to pay (or prepay pursuant to Paragraph
3(n) above) principal or interest on any Loan, or any fee payable to the
Administrative Agent for its own account or for the
30
benefit of the Lenders pursuant to Paragraph 3(t) above, when due; or
(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
(c) Either CWM, INMC or ILC shall fail to maintain its corporate
existence; or
(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
(e) There shall exist an "Event of Default" under, and as defined
in, the Facility II Agreement; or
(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 II 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
(g) (1) Either CWM, INMC 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, INMC 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, INMC or ILC any case, proceeding or other action seeking
issuance of a warrant of attach-
31
ment, 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, INMC or ILC shall take any action in furtherance of, or indicating its
consent to, approval of, or acquiescence in (other than in connection with a
final settlement), any of the acts set forth in clauses (1), (2) or (3) above;
or (5) any of CWM, INMC 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
(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;
(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.
32
THEN:
(1) Automatically upon the occurrence of an Event of Default
under Paragraph 9(g) above; and
(2) At the option of any Lender upon the occurrence of an
Event of Default under Paragraph 9(a) above; and
(3) In all other cases, at the option of the Majority
Lenders,
each Lender's obligation to make Loans hereunder shall terminate and the
principal balance of outstanding Loans and interest accrued but unpaid thereon
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.
10. The Administrative Agent.
------------------------
(a) Appointment. Each Lender irrevocably appoints the
-----------
Administrative Agent as the agent for such Lender under the Credit Documents and
to act as secured party, agent, bailee and custodian for the exclusive benefit
of the Lenders with respect to the Collateral, and each such Lender hereby
irrevocably authorizes the Administrative Agent as the agent for such Lender, to
take such action on its behalf under the provisions of the Credit Documents and
to exercise such 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 all of the Lenders, the Security
33
Agreement and the Custodial Agreement and to appoint Bankers Trust of
California, N.A. as the Collateral Agent to act on behalf of 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 Lenders to
release Collateral pursuant to the terms of the Security Agreement and the
Custodial Agreement. 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 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 Lenders
will do so ratably in accordance with their Percentage Shares, unless such cost
is related to an examination by a Lender under Paragraph 12 of the Security
Agreement, in which case all such costs will be borne by the examining Lender.
The Administrative Agent shall have no duties or responsibilities except those
expressly set forth therein, nor any fiduciary relationship with any Lender, and
no implied covenants, responsibilities, obligations or liabilities shall be read
into the Credit Documents or otherwise exist against the Administrative Agent.
(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 Agent shall not be responsible for the negligence or misconduct
of any agents or attorneys-in-fact selected by it with reasonable care.
(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 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 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
34
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) 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 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 to such
action.
(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. 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) or it shall first be
indemnified to its satisfaction by the Lenders against any and all liability and
expense which may be incurred by it by reason of taking or continuing to take
any action (other than liability and expense arising out of the Administrative
Agent's gross negligence or
35
willful misconduct). 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) 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.
(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 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 default". In the event that the Administrative
Agent receives such a notice, the Administrative Agent shall give notice thereof
to the Lenders and the Collateral Agent.
(f) Non-Reliance on Administrative Agent and Other Lenders. Each
------------------------------------------------------
Lender 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 Lender. Each Lender represents to the
Administrative Agent that it has, independently and without reliance upon the
Administrative Agent or any other Lender 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 also represents that it will, independently and without reliance
upon the Administrative Agent or any other Lender, 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
36
furnished to the Lenders by the Administrative Agent hereunder, the
Administrative Agent shall not have any duty or responsibility to provide any
Lender 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.
(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 from and against any and all claims, obligations,
penalties, actions, suits, judgments, reasonable costs and disbursements,
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 agree to indemnify and hold harmless the Administrative Agent in its
capacity as such ratably in accordance with their Percentage 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. The indemnification obligations of the Companies and Lenders
under this Paragraph 10(g) shall survive termination of this Agreement and
payment in full of the Obligations.
(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
37
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.
(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, 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 10(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.
10(j) Authority to Execute Security Agreement. The Lenders hereby
---------------------------------------
authorize Administrative Agent to execute the Security Agreement in its capacity
as agent for each of the Lenders on behalf of the Lenders, and the Lenders
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, and the authority of the Collateral Agent to administer the
Collateral pursuant to the terms thereof. The Lenders hereby agree to be bound
by all provisions of the Security Agreement which may be applicable to the
Lenders, including without limitation any indemnification provisions running
from the Lenders or any of them to the Collateral Agent contained therein.
10(k) Authority to Execute Custodial Agreement. The Lenders hereby
----------------------------------------
authorize Administrative Agent to execute the Custodial Agreement in its
capacity as agent for each of the Lenders on behalf of the Lenders, and the
Lenders specifically consent to
38
the terms thereof, including without limitation the authority of the Collateral
Agent to administer the Collateral pursuant to the terms thereof. The Lenders
hereby agree to be bound by all provisions of the Custodial Agreement which may
be applicable to the Lenders, including without limitation any indemnification
provisions running from the Lenders or any of them to the Collateral Agent or
the Administrative Agent contained therein.
10(l) Sharing of Set-Offs. If any Lender (a "benefitted Lender")
-------------------
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) in a greater proportion than any such
payment to and collateral received by any other Lender, if any, in respect of
such other Lender's portion of the Obligations, or interest thereon, such
benefitted Lender shall purchase for cash from the other Lenders such portion of
each such other Lender's Obligations, or shall provide such other Lenders with
the benefits of such collateral, or the proceeds thereof, as shall be necessary
to cause such benefitted Lender to share the excess payment or benefits of such
collateral or proceeds ratably with each of the Lenders; provided, however, that
if all or any portion of such excess payment or benefits is thereafter recovered
from such benefitted Lender, such purchase shall be rescinded, and the purchase
price and benefits returned, to the extent of such recovery but without
interest. The Companies agree that each Lender so purchasing a portion of
another 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 were the direct holder of such portion.
11. Miscellaneous Provisions.
------------------------
(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. 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, its
successors and assigns, and shall be binding upon the Companies, their
successors and assigns.
(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 11(i) hereof. Except as
set forth in the preceding
39
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 3(c),
3(d), 3(f), 3(g), 10(g) or 10(l) above or this Paragraph 11(b);
(2) Waive or amend the definition of Eligible A/B Mortgage
Loan, Unit Collateral Value, Tranche A Borrowing Base, Tranche B
Borrowing Base, Collateral Value of the Tranche A Borrowing Base, or
Collateral Value of the Tranche B Borrowing Base;
(3) Reduce the principal of, or rate of interest on, the
Loans or reduce any fees payable hereunder or extend the required
payment dates of any of the Obligations;
(4) Except as expressly provided for hereunder, modify the
Aggregate Tranche A Credit Limit or the Aggregate Tranche B Credit
Limit;
(5) Modify any Lender's Maximum Commitment;
(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 shall, unless agreed to in writing by the
affected Agent, modify the rights or duties of such Agent. It is expressly
agreed and understood that the failure by the required Lenders to elect to
accelerate amounts outstanding hereunder 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.
40
(c) Cumulative Rights; No Waiver. The rights, powers and
----------------------------
remedies of the Administrative Agent, the Collateral Agent, 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 and the Lenders relating hereto, at
law, in equity or otherwise. Any delay or failure by the Administrative Agent,
the Collateral Agent or the Lenders to exercise any right, power or remedy shall
not constitute a waiver thereof by the Administrative Agent, the Collateral
Agent and the Lenders, and no single or partial exercise by the Administrative
Agent, the Collateral Agent, 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.
(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.
(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.
(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.
(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
41
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 AGENTS AND THE LENDERS ENTERING INTO THE CREDIT DOCUMENTS.
(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 11(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 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 11(b)(3), 11(b)(7) and 11(b)(8) above or any vote to
amend Paragraph 11(b).
(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 the accepting Lender or other accepting party shall be a
financial institution with capital of at least $100,000,000; 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 party receiving the assignment to reflect such assign-
42
ment, (ii) the Administrative Agent will deliver an updated Commitment Schedule
to the Companies 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,
and (iv) if the party receiving the assignment is not currently a party to the
Agreement, the Companies will deliver a Note to such party.
(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 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, and (iv)
the Companies will deliver a Note to such party.
(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.
11(l) Adjustment of Borrowing Base. 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
43
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 "Non-conforming Collateral Amount") (it being understood that
for the purposes of this Paragraph 11(l), the terms "Collateral Value of the
Tranche D Borrowing Base," "Collateral Value of the Tranche E Borrowing Base,"
"Collateral Value of the Tranche F Borrowing Base," "Construction Loan,"
"Servicing Loan" and "Foreclosure/Repurchase Loan" shall have the meanings given
such terms in the Facility II Agreement) exceeds $XXXXXXXXXX, the Administrative
Agent, after consultation with the Companies, shall make such adjustments to the
Tranche A Borrowing Base and the Tranche B Borrowing Base, and shall remove
Collateral from the computation of some or all of such Borrowing Bases, as may
be necessary to cause the Non-Conforming Collateral Amount to be less than or
equal to $XXXXXXXXXX.
12. Definitions. For purposes of this Agreement, the terms set forth
-----------
below shall have the following meanings:
"Addendum" shall mean the 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.
44
"Agent" shall have the meaning given such term in Paragraph 10(a)
-----
above.
"Aggregate Facility Commitment" shall mean, at any time, the sum of
-----------------------------
the Lenders' Maximum Commitments at such time, which sum shall not exceed
$150,000,000 at any time.
"Aggregate Tranche A Credit Limit" shall mean, at any time,
--------------------------------
XXXXXXXXXXX percent (XXX%) of the Aggregate Facility Commitment at such time.
"Aggregate Tranche B Credit Limit" shall mean, at any time,
--------------------------------
XXXXXXXXXXX percent (XXX%) 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 necessary, 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,
-----------------
XXXXXXXXXXXXXXXXX percent (XXX%); and (ii) with respect to any Tranche B Loan,
XXXXXXXXXXXXXXXXX percent (XXX%).
"Approved Investor" shall mean any Person pre-approved in writing
-----------------
(which pre-approval may be limited in dollar amounts by type and 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 such Administrative Agent in its reasonable business judgement (such
45
revocation to be effective on the tenth Business Day following notice thereof
given to the Companies in writing). (It being agreed that Administrative Agent
will promptly notify the Lenders in writing of any additional Approved Investor
or any previous Approved Investor for which approval has been revoked.)
"Approved Repo Lender" shall mean any Approved Investor or any other
--------------------
entity pre-approved in writing 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 tenth
Business Day following notice thereof given to the Companies in writing). (It
being agreed that Administrative Agent will promptly notify the Lenders in
writing of any additional Approved Repo Lender or any previous Approved Repo
Lender for which approval has been revoked.)
"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 Schedule" shall mean a schedule prepared by Collateral
-----------------------
Agent and certified to by the Companies in the form of that set forth as Exhibit
-------
F-1 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 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.
46
"Code" shall mean the Internal Revenue Code of 1986, as amended.
----
"Collateral" shall mean the "A/B Collateral," as 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 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), provided, however, that in no event will the
-------- -------
Collateral Value of the Tranche A Borrowing Base exceed the aggregate amount of
Take-Out Commitments and Hedging Arrangements covering the Eligible A/B Mortgage
Loans contained in the Tranche A Borrowing Base at such time (which amount shall
be subject to adjustment as provided in Paragraph 11(l) above).
"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 11(l) above).
"Commitment Schedule" shall mean a schedule in the form provided by
-------------------
the Administrative Agent, with the initial Commitment Schedule being set forth
as Schedule I-1 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-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
47
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 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 or a
-------------------
Tranche B Corporate Rate Loan, as applicable.
"Corporate Rate Loans" shall mean, collectively, Tranche A Corporate
--------------------
Rate Loans and Tranche B Corporate Rate 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 4(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.
---
48
"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 represent
and warrant to the Administrative Agent and the Lenders at and as of the date of
such computation):
(a) Said Mortgage Loan is a binding and valid obligation of the
Obligor thereon, in full force and effect and enforceable in accordance with its
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.
(b) 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.
(c) 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.
(d) 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 XXXX percent (XX%) 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).
49
(e) Said Mortgage Loan contains the entire agreement of the
parties thereto with respect to the subject matter thereof, has not been
modified or amended in any material respect and is free of concessions or
understandings with the Obligor thereon of any kind not expressed in writing
therein.
(f) Said Mortgage Loan 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 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.
(g) 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.
(h) 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.
(i) 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.
(j) 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
50
Mortgage Loan or the use, enjoyment, value or marketability of the related
Property; and (4) Liens subordinate in priority to the Lien in favor of the
Companies; provided, however, that the Property may be subject to one (1) Lien
-------- -------
prior to the Lien in favor of the Companies.
(k) 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.
(l) 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 II Agreement).
---
(m) 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 II
---
Agreement).
51
(n) The improvements on the Property were not constructed with
the proceeds of the Mortgage Loan and consist of 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) XXXXXXX percent (XX%) of the
Aggregate Tranche B Credit Limit, or (ii) XXXXX percent (XX%) 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).
(o) 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 XXXXXX percent (XX%) of the aggregate outstanding
principal amount of all Tranche A Loans and Tranche B Loans at such time.
(p) 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.
(q) INTENTIONALLY OMITTED.
(r) 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
52
would cause such Mortgage Loan to be unsuitable for purchase at a price
customarily obtainable for Mortgage Loans meeting the requirements set forth in
the INMC Seller/Servicer Guide or inclusion in a pool containing other Mortgage
Loans generally conforming to the requirements set forth in the INMC
Seller/Servicer Guide.
(s) 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.
(t) 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); and
(u) Said Mortgage Loan has been underwritten and purchased
pursuant to the programs and procedures set forth in the INMC 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 in the next collateral report provided to
the Lenders 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 discussed in the second proviso to the definition
of "Construction Loan" (or, if any such Construction Loan is nonconforming
solely
53
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 $XXXXXXXXXXXXX (it being understood that for the purpose of this
proviso, (A) the terms "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 II Agreement, and (B) the terms "Collateral Value of the Tranche D
Borrowing Base," "Collateral Value of the Tranche E Borrowing Base," "Collateral
Value of the Tranche F Borrowing Base," "Construction Loans," "Servicing Loans,"
and "Foreclosure/Repurchase Loans" shall have the meanings given to such terms
in the Facility II 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
XXXXXX percent (XX%) of the Aggregate Tranche A Credit Limit (it being
understood that for the purposes of this provision, the terms "Aggregate Tranche
A Credit Limit," "Tranche A Borrowing Base," "Tranche B Borrowing Base,"
"Tranche A Loans" and "Tranche B Loan" shall mean both such terms as defined
----
herein and such terms as defined in the Facility II 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).
54
"Eurodollar Loan" shall mean a Tranche A Eurodollar Loan or a Tranche
---------------
B Eurodollar Loan, as applicable.
"Eurodollar Loans" shall mean, collectively, Tranche A Eurodollar
----------------
Loans and Tranche B 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 of the Telerate Systems
Incorporated screen service as of 11:00 a.m. (London time) one Eurodollar
Business Day 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 9
----------------
above.
"Facility II Agreement" shall mean that certain Facility II Credit
---------------------
Agreement among the Companies, the Lenders and the Administrative Agent
providing for the extension of certain two-year 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 determined on a
reasonable basis by the Administrative Agent with reference to the average of
bids therefor 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.
55
"Funding Account" shall mean, collectively, Account No. XXXXXXXXXXXXX,
---------------
Account No. XXXXXXXXXXXXX, Accounting No. XXXXXXXXXXXXX, Account No.
XXXXXXXXXXXXX, Account No. XXXXXXXXXXXXX and Account No. XXXXXXXXXXXXX, 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.
"INMC" shall mean Independent National Mortgage Corporation, a
----
Delaware corporation.
"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
56
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.
"Lender" shall have the meaning given such term in the introductory
------
paragraph hereof.
"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.
"Loan" shall mean a Tranche A Loan or a Tranche B Loan, as applicable.
----
"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.
"Loans" shall mean, collectively, Tranche A Loans and Tranche B Loans.
-----
"Majority Lenders" shall mean the Lenders holding not less than fifty-
----------------
one percent (51%) of the Repayment Shares.
"Maturity Date" shall mean the earlier of: (a) May 29, 1996 as such
-------------
date may be extended from time to time in writing by one hundred percent (100%)
of the Lenders, in their sole discretion and (b) the date the Lenders terminate
their obligation to make further Loans hereunder pursuant to Paragraph 9 above.
57
"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-1 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 3(k)
-----
above.
"Obligations" shall mean any and all debts, obligations and
-----------
liabilities of the Companies to the Administrative Agent, the Collateral Agent
or the Lenders (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 Credit Documents.
"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
-----------
11(h) above.
58
"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.
"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.
"REIT" shall mean have the meaning given to such term in the Code.
----
59
"Repayment Share" shall mean with respect to each Lender the ratio
---------------
expressed as a percentage that (i) the aggregate outstanding Loans held by each
Lender bears to (ii) the aggregate outstanding Loans held by all Lenders.
"Reportable Event" shall mean a reportable event as defined in Title
----------------
IV of ERISA, except actions of general applicability by the Secretary of Labor
under Section 110 of ERISA.
"Required Documents" shall mean, with respect to any Loan, 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.
"Security Agreement" shall have the meaning given such term in
------------------
Paragraph 4(a) above, as the same may be amended, extended or replaced from time
to time.
"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 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.
--------------
"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
60
(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 INMC pursuant to the programs and procedures
described in the INMC 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.
"Tranche A Corporate Rate Loans" shall mean Tranche A Loans at such
------------------------------
time as they are bearing interest at the Applicable Corporate Rate or at a rate
specified pursuant to Paragraph 3(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 INMC pursuant to the programs and procedures
described in the INMC 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 3(u) hereof.
61
"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.
"Unit Collateral Value" shall mean,
---------------------
(v) with respect to each Eligible A/B Mortgage Loan included in
the Tranche A Borrowing Base; XXXXXXXXXXXX percent (XX%) 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.
(w) with respect to each Eligible A/B Mortgage Loan included in
the Tranche B Borrowing Base:
(1) if such Eligible A/B Mortgage Loan is sixty (60) days
delinquent or less, XXXXXXXXXXX percent (XX%) of the lesser of: (1)
the unpaid principal amount thereof at the time the 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.
(2) if such Eligible A/B Mortgage Loan is more than sixty
(60) days delinquent, XXXXXX percent (XX%) of the lesser of: (1) the
unpaid principal amount thereof at the time the 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.
"Warehouse-Related MBS" shall have the meaning given to such term in
---------------------
the Security Agreement.
62
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________________________________
Name______________________________
Title_____________________________
INDEPENDENT NATIONAL MORTGAGE
CORPORATION, a Delaware
corporation
By________________________________
Name______________________________
Title_____________________________
INDEPENDENT LENDING CORPORATION
a Delaware corporation
By________________________________
Name______________________________
Title_____________________________
FIRST UNION NATIONAL BANK OF NORTH CAROLINA, a
national banking association, as Administrative Agent
and a Lender
By________________________________
Name______________________________
Title_____________________________
63