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U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
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FORM 10-QSB/A
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended October 31, 1998
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Commission File Number: 0-18108
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FINET HOLDINGS CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE
(State or jurisdiction of
incorporation or organization)
505 Sansome Street, #1420
SAN FRANCSICSO, CA 94111
(Address of principal executive office)
94-3115180
(IRS Employer Identification Number)
(415) 263-5400
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant has (1) filed all reports
required to be filed by Section 13 or 15(d) of the Securities Act of 1934
during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
filing requirements within the past 90 days.
Yes _X_ No __
The number of shares outstanding of each of the issuer's classes of common
stock was 59,062,844 shares of common stock, par value $.01, as of January
8, 1999.
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<PAGE> 1
FINET HOLDINGS CORPORATION
INDEX
Item Description
Page
- ---- -------------------------------------------------------------------
- ----
PART I - FINANCIAL INFORMATION
1. Financial Statements
Unaudited Balance Sheet
October 31, 1998 ................................................
2
Unaudited Statements of Operations
Three Months Ended October 31, 1998 and 1997.....................
3
Six Months Ended October 31, 1998 and 1997.......................
4
Unaudited Statements of Cash Flow
Six Months Ended October 31, 1998 and 1997.......................
5
Notes to Unaudited Financial Statements............................
6
2. Management's Discussion and Analysis of Financial Condition
and Results of Operations........................................
12
PART II - OTHER INFORMATION
1. Legal Proceedings..................................................
19
2. Changes in Securities..............................................
19
4. Submission of Matters to a Vote of Security Holders................
19
5. Other Information..................................................
19
6. Exhibits and Reports on Form 8-K...................................
20
Signatures.........................................................
20
<PAGE> 2
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
FINET HOLDINGS CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(Dollars in thousands, except shares and per share amounts)
October 31,
1998
-------
ASSETS
Cash and cash equivalents $ 137
Mortgage loan servicing advances and other receivables 3,303
Mortgages held for sale, net of allowances of $1,132 119,593
Mortgage servicing rights (Note 3) 4,460
Furniture, fixtures and equipment, net of accumulated depreciation 2,323
of $3,361
Goodwill, net of amortization of $97 4,593
Other assets 2,808
-------
Total assets $ 137,217
=======
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Warehouse lines of credit (Note 4) 115,156
Notes payable and capitalized leases (Note 4) 3,904
3% Convertible subordinated debentures (Note 4 and Note 8)7,000
Accounts payable, accrued expenses and other liabilities10,713
-------
Total liabilities 136,773
-------
Commitments and contingencies (Note 5)
Stockholders' equity: (Note 6)
Preferred stock, $.01 par value, (100,000 shares authorized, 250 issued
and outstanding) -
Common stock, $.01 par value, (150,000,000 shares authorized, 33,485,000
shares outstanding) 335
Preferred Stock Discount (586)
Paid-in capital 18,711
Accumulated deficit (18,016)
----------
Total stockholders' equity 444
----------
Total liabilities and stockholders' equity $137,217
==========
The accompanying notes are an integral part of the consolidated financial
statements.
<PAGE> 3
FINET HOLDINGS CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
(Dollars and amounts in thousands - except per share amounts)
Three months ended
October 31,
---------------------
- --
1998 1997
--------- -------
- --
REVENUE
Warehouse interest income $2,154 882
Warehouse interest expense (2,228) (678)
--------- ---------
Net warehouse interest income (expense) (74) 204
Gain on sale of mortgage loans and servicing rights, net of
loan origination costs 2,747 1,413
Loan servicing fees 209 125
Retail broker fees 907 45
Other 102 58
--------- -------
- --
Total revenue 3,891 1,845
--------- -------
- --
EXPENSES
Compensation and related expenses 4,071 1,475
Occupancy and other office expenses 1,887 1,261
Other interest expense 1,245 -
Marketing expenses 511 236
Depreciation and amortization 359 163
Other operating expenses 649 521
--------- -------
- --
Total expenses 8,722 3,656
--------- -------
- --
Loss before income taxes (4,831) (1,811)
Income tax expense - (42)
--------- -------
- --
NET LOSS $ (4,831) $ (1,853)
=========
=========
Basic and diluted net loss per common share (Note 1)$ (.15)$
(.06)
=========
=========
Shares used in computing basic and diluted share data32,913 28,812
=========
=========
The accompanying notes are an integral part of the consolidated financial
statements.
<PAGE> 4
FINET HOLDINGS CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
(Dollars and amounts in thousands - except per share amounts)
Six months ended
October 31,
---------------------
- --
1998 1997
--------- -------
- --
REVENUE
Warehouse interest income $3,957 1,756
Warehouse interest expense (3,886) (1,420)
--------- ---------
Net warehouse interest income (expense) 71 336
Gain on sale of mortgage loans and servicing rights, net of
loan origination costs 6,817 4,011
Loan servicing fees 751 253
Retail broker fees 1,430 75
Other 196 163
--------- -------
- --
Total revenue 9,265 4,838
--------- -------
- --
EXPENSES
Compensation and related expenses 7,990 4,115
Occupancy and other office expenses 3,718 2,194
Other interest expense 2,243 -
Marketing expenses 1,011 501
Depreciation and amortization 679 296
Other operating expenses 1,003 643
--------- -------
- --
Total expenses 16,644 7,749
--------- -------
- --
Loss before income taxes
Income taxes and extraordinary gain, net of tax (7,379) (2,911)
Income tax expense - (45)
Extraordinary gain, net of tax - 3
--------- -------
- --
NET LOSS $ (7,379) $ (2,953)
=========
=========
Basic and diluted net loss per common share (Note 1)$ (.23)$
(.10)
=========
=========
Shares used in computing basic and diluted share data32,693 28,642
=========
=========
The accompanying notes are an integral part of the consolidated financial
statements.
<PAGE> 5
FINET HOLDINGS CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited, Dollars in thousands)
Six months ended
October 31,
1998 1997
-------- ------
- --
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (7,379) $ (2,953)
Adjustments to reconcile net loss to net cash used in operating
activities:
Depreciation and amortization 650 296
Amortization of mortgage servicing rights 919 -
Amortization of imputed interest on convertible debt and issuance costs
1,959 -
Write down of other assets and provision for losses(126) 261
Gain on sale of mortgage servicing rights (420) (47)
Deferred tax benefit (83) (113)
Changes in operating assets and liabilities:
(Increase) decrease in mortgage loans held for sale9,244 (17,119)
(Increase) decrease in originated mortgage servicing rights, net(312)
277
(Increase) decrease in mortgage loan servicing advances and other
receivables 4 (78)
(Increase) decrease in other assets 529 235
Increase (decrease) in accounts payable and accrued expenses(2,133)
456
Repossession of real estate (558) -
------- -----
- --
Net cash provided (used) by operating activities 2,294 (18,786)
------- -----
- --
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of mortgage servicing rights - (165)
Proceeds from sale of mortgage servicing rights 1,509 75
Purchase of furniture, fixtures and equipment (248) (189)
Acquisition of purchased technology and intangibles (481) -
Pre-acquisition advances to affiliates - (271)
Cash acquired in acquisition 185 -
Other 12 48
------- -----
- --
Net cash provided (used) by investing activities 977 (502)
------- -----
- --
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of common stock - 3,862
Proceeds from issuance of convertible debt 1,384 -
Proceeds from issuance of preferred stock 2,286 -
Proceeds from warrant exercise 197
23
Net increase (decrease) in warehouse borrowings (9,820) 16,472
Proceeds from advances on note payable and line of credit1,400 250
Repayment of note payable, capitalized leases and line of credit
(309) (295)
Other equity (450) -
------- -------
Net cash provided (used) by financing activities (5,312) 20,311
------- -----
- --
Net increase (decrease) in cash (2,041) 1,023
Cash at beginning of period 2,178 1,148
------- -----
- --
Cash at end of period $ 137 $ 2,171
=======
=======
Supplemental cash flow information (Note 7)
The accompanying notes are an integral part of the consolidated financial
statements.
<PAGE> 6
FINET HOLDINGS CORPORATION
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1. SIGNIFICANT ACCOUNTING POLICIES
DESCRIPTION OF BUSINESS
Finet Holdings Corporation ("Finet" or the "Company") is an electronic
commerce firm operating in one business segment, homeownership services.
Finet is engaged in wholesale and retail mortgage lending (as both a
mortgage banker and a mortgage broker) and the delivery of related real
estate sales and financing transaction settlement services.
The operations of the Company's principal lending subsidiaries include
Monument Mortgage, Inc. ("MMI"), a California mortgage banker specializing
in conforming prime loans, Coastal Federal Mortgage Company ("Coastal"), a
New Jersey sub-prime mortgage banker, and Mical Mortgage, Inc. ("Mical"), a
California mortgage banker specializing in FHA and VA loans. The Company's
operates throughout the 40 states in which the Company is currently
licensed. (See Note 8.)
The acquisition of Coastal on April 30, 1998 was accounted for as a pooling
of interests. Accordingly, the Company's results for the quarter and the
six months ended October 31, 1997 have been restated to include Coastal's
results of operations for that period.
BASIS OF PRESENTATION
The accompanying unaudited consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for
interim financial information and with the instructions to Form 10-QSB and
Regulation S-B. Accordingly, they do not include all the information and
footnotes required by generally accepted accounting principles for complete
financial statement presentation. In the opinion of management, all
adjustments, consisting of normal recurring accruals, considered necessary
for a fair presentation of the results for the interim period have been
included. Operating results for the six months ended October 31, 1998 are
not necessarily indicative of the results that may be expected for the
fiscal year ending April 30, 1999. This report should be read in
conjunction with the consolidated financial statements and footnotes
included in the annual report on Form 10-KSB for the fiscal year ended
April 30, 1998 of Finet Holdings Corporation.
The consolidated financial statements of the Company include the accounts
of all wholly owned subsidiaries. All significant inter-company balances
and transactions have been eliminated in consolidation. Certain
reclassifications of the 1997 amounts were made to conform to the 1998
presentation.
PER SHARE AMOUNTS
Basic EPS is determined by dividing net loss by the weighted average shares
outstanding during the period. Since the fully diluted loss per share for
the quarters ended October 31, 1998 and 1997, respectively, was anti-
dilutive, basic and diluted earnings per share are the same. The effects of
common stock equivalents have not been included because they would have
been anti-dilutive during the periods reported.
NOTE 2. ACQUISITIONS
On May 19, 1998 the Company acquired all the issued and outstanding shares
of Mical, a non-public mortgage banker with principal offices in San Diego,
California, in exchange for 432,000 shares of the Company's common stock
valued at $400,000. Upon resolution of specified contingencies, 120,000
additional common shares may be issued. As a result of the acquisition,
33,000 common shares were issued as a finders fee and 73,000 shares were
issued under a keep-well agreement with an existing shareholder.
Due to the financial requirements of Mical, certain transactions and
advances were made in anticipation of the acquisition. The acquisition has
been accounted for as a purchase, and Mical's financial position and
results of operations have been
<PAGE 7>
included in the Company's financial statements since that date. The excess
of the purchase price over the fair market value of the acquired net assets
($4.6 million at October 31, 1998) was recorded as goodwill and is being
amortized on a straight
line basis over 10 years. (See Footnote 8). The following condensed pro
forma statements of operations of the Company
for the six months ended October 31, 1998 and 1997 give effect to the
acquisition of Mical as though the transaction had occurred at the
beginning of the periods. (See Footnote 8).
(In thousands) PRO FORMA
6 Months Ending October 31,
1998 1997
----------- -----------
Revenue $ 13,866 $ 16,861
Expenses 22,264 17,789
----------- -----------
Net loss $ (8,398) $ (928)
=========== ===========
Loss per share $ (.26) (.03)
=========== ===========
On June 23, 1998 the Company acquired, from an individual, certain assets
which include an internet site, "interloan.com" ("Interloan") in exchange
for 100,000 shares of the Company's common stock. The Company also entered
into a binding term sheet agreement that will result in a three-year
employment agreement with that individual.
NOTE 3. MORTGAGE SERVICING RIGHTS
During the six months ended October 31, 1998, the activity in mortgage loan
servicing rights was as follows:
October 31,
(Dollar amounts in thousands) 1998
- ------------------------------ ---------
Mortgage Servicing Rights
Beginning balance $ 5,478
Additions 1,231
Sales (1,330)
Amortization/Payoff (919)
---------
Ending balance $ 4,460
=========
Servicing rights to mortgage loans with an unpaid principal balance of
approximately $515 million were pledged as collateral to lenders as of
October 31, 1998.
<PAGE 8>
NOTE 4. DEBT
The following table and comments present summary information regarding the
Company's debt as of October 31, 1998:
(In thousands)
Interest
Expires or
Facility Balance Rate Due
- ---------------------------------- -------------- -------------- ------
- -------------
REVOLVING
Warehouse lines of credit:
$35 million committed $ 44,085 LIBOR +
variable spread December 31,
1998
$24 million 8,362 Libor +2.5%
December 31, 1998
$60 million 62,709 NY Prime May 1,
1999
---------
115,156
OTHER DEBT AND CAPITAL LEASES:
Revolving line of credit:
$ 1 million committed 1,000 Prime + 0.625%
Requires payment to
zero 5
days per qtr
Servicing acquisition loan
$1,870 committed 1,800 Prime + 0.625%
November 15, 1998
Various notes 901 Various Due in
2000
Capitalized leases 203 3.5% to 11.5% Varies
to 2002
---------
$ 3,904
SUBORDINATED CONVERTIBLE DEBT: $ 7,000 3% Due March
18, 2001
The Company issued the third tranche of its 3% Subordinated Convertible
Debentures in May 1998 in the amount of $1,500,000, bringing the total
issue of 3% Subordinated Convertible Debentures to $7,000,000. The
debentures and accrued interest are convertible into the Company's common
stock at the lesser of $5.00 per share or 78% of the determined market
price prior to conversion. In connection with this issue the Company
recorded additional paid-in capital of $1,551,000 for the discount related
to imputed interest represented by the market discount conversion factor.
This discount is being amortized to interest expense over the period from
the date of issue to the date the debentures first become convertible.
Through October 31, 1998, the Company has amortized the entire discount to
interest expense. In addition, the company recorded $563,000 of expense
related to debt issuance costs. (See Note 8.)
COLLATERAL
Collateral for the debt obligations is a combination of mortgage loans held
for sale, receivables from sales of mortgage loans, servicing assets, other
assets of the Company, and Finet's corporate guarantee.
The collateral for the capitalized leases is the equipment thereby
financed.
DEBT COVENANTS
The Borrowing Agreements (Agreements) for the warehouse lines of credit,
the revolving line of credit and the note payable contain various financial
covenants including net worth computed in accordance with generally
accepted accounting principles, current ratio, and tangible net worth
leverage ratio requirements. Should an event of default occur, as defined
in the Agreements, outstanding principal and interest on the Company's
credit facilities are due on demand.
On August 25, 1998, Residential Funding Corporation ("RFC") notified the
Company that it was in default of its lending agreements. The Company did
not satisfy its July interest payment of $119,254, and the Company did not
meet its debt
service obligation on August 31, 1998 on its long-term note of $1.8
million. The Company was also in violation of certain financial covenants.
RFC is entitled to exercise certain rights and remedies under the loan
agreement, including the right to
<PAGE 9>
cease making advances to the Company, to accelerate obligations and to sue
on the notes and guarantees. RFC has not granted a waiver of these events
of default. However, RFC agreed to forbear from enforcing its remedies in
anticipation of additional equity investments the Company expected to
receive. All unpaid interest, fees and principal balances are
currently due. In the third quarter, the Company received additional
equity contributions, net of expenses, of $14.3 million. $2.0 million was
paid to RFC. The Company is continuing discussions with RFC to cure its
defaults. (See Note 8).
In October RFC increased the interest rates on the Company's borrowings to
4% in excess of the rates otherwise applicable. RFC also reduced the
total committed lines from $79 million to $59 million.
Notwithstanding its rights to remedies, RFC at its sole discretion has
continued to make advances to the Company, uninterrupted. RFC has also
allowed the warehouse line advances to exceed the committed amount. The
Company anticipates that it will cure its defaults with respect to its
borrowings with the additional equity investments received in the third
quarter. (See Note 8.)
There can be no assurance that the Company will cure its default under its
lending agreements. The Company is seeking additional borrowing
facilities. The inability to cure such default or obtain alternative
warehouse financing sources and working capital arrangements could result
in a major disruption to the Company's business, and the Company's business
relationships with its brokers, investors and borrowers could be seriously
damaged. There could be a material adverse impact on results of operations
and financial condition if the Company is unable to maintain its credit
facilities or obtain additional credit facilities.
NOTE 5. COMMITMENTS AND CONTINGENCIES
LEGAL PROCEEDINGS
On January 14, 1998, prior to the acquisition of Mical, a lawsuit was filed
against Mical in the United States District Court for the Middle District
of Georgia (the "Action"). The complaint alleges, among other things, that
in connection with residential mortgage loan closings, Mical made certain
payments to mortgage brokers in violation of the Real Estate Settlement
Procedures Act and induced mortgage brokers to breach their alleged
fiduciary duties to their customers. The plaintiffs seek unspecified
compensatory and punitive damages as to certain claims.
Management believes that its compensation programs to mortgage brokers
comply with applicable laws and with long standing industry practices, and
that it has meritorious defenses to the Action. Management has been advised
by counsel that the facts of the underlying transaction are not supportive
of a court order granting class certification. The Company intends to
defend vigorously against the Action and believes that the ultimate
resolution will not have a material adverse effect on the Company's results
of operations or consolidated financial position.
The Company and certain subsidiaries are defendants in various legal
proceedings involving matters generally incidental to their business.
Although it is difficult to predict the outcome of such cases, after
reviewing with counsel all such proceedings, management does not expect the
aggregate liability or loss, if any, resulting therefrom will have a
material adverse effect on the consolidated financial position or results
of operations of the Company and its subsidiaries.
MORTGAGE LOAN APPLICATIONS IN PROCESS
The Company has open short-term commitments to fund mortgage loan
applications in process subject to credit approval. Commitments to fund
loans are agreements to lend to a customer as long as there is no violation
of any condition established in the contract. Interest rate risk is
mitigated by the use of forward contracts to sell loans to investors.
LOAN SALE COMMITMENTS
The Company has entered into optional and mandatory forward commitments to
deliver mortgage loans of $61 million as of October 31, 1998.
<PAGE 10>
NOTE 6. STOCKHOLDERS' EQUITY
In May 1998, the Company issued 432,000 shares of common stock, valued at
$1,400,000, as consideration for the acquisition of Mical (See Note 2).
Upon resolution of specified contingencies, 120,000 additional common
shares may be issued. As a result of the acquisition, 33,000 common shares
were issued as a finders fee and 73,000 shares were issued under a keep-
well agreement with an existing shareholder.
In June 1998, the Company issued 25,000 common shares with the execution of
a binding term sheet agreement for the acquisition of Interloan (See Note
2). An additional 75,000 common shares remain to be issued under the
provisions of the term sheet.
In September 1998, the Company issued 250 shares of its $2.5 million Series
A Convertible Preferred Stock in a private placement generating $2.3
million of proceeds, net of expenses. The preferred shareholders are not
entitled to vote or to receive dividends. Upon any liquidation,
dissolution or winding up, the holders of the Preferred A are entitled to
receive a cash liquidated value (representing $10,000 per share plus 6%
interest), to the extent there are funds sufficient to pay, in preference
to all Common shareholders.
In connection with the Series A Preferred Share placement, the Company
issued Warrants to investors to purchase 250,000 shares of the Company`s
Common Stock at $1.00 per share. In November, an agreement was reached to
redeem all of the outstanding $2.5 million of Series A Convertible
Preferred Stock. (See Note 8)
In October 1998, the Company received $196,711 from an exercise of 262,281
warrants at seventy-five cents per share. The Company had reduced the
warrant exercise price from $1.50 per share to seventy-five cents per
share.
In October 1998, the Company entered into an agreement with a private
investor to issue 2.5 million shares of common stock at eighty cents per
share for proceeds of $2.0 million. In connection with the issuance, the
Company agreed to reduce the exercise price of 1.0 million Common Stock
Purchase Warrants owned by the investor from $5.00 to $1.00 per share.
(See Note 8).
NOTE 7. SUPPLEMENTAL CASH FLOW INFORMATION
The following table presents supplemental investing and financing
activities for the six month periods ended October 31, 1998 and 1997:
(Dollars in thousands) 1998 1997
------ -----
- -
Cash paid during the period for:
Interest on line of credit and other borrowings $ 3,779 $ 1,341
Income taxes 2 76
Non-cash investing and financing activities
Foreclosure of mortgage loans held for sale 149 374
Common stock issued for:
Expenses 155 123
Settlement of liabilities subject to compromise - 23
Settlement of accrued liabilities - 150
Purchase of intangible assets 481 808
Acquisition:
Cash acquired 185 -
Furniture and fixtures 506 -
Other assets 417 -
Accounts payable and accrued expenses 8,061 -
Debt 82,081 -
<PAGE 11>
NOTE 8. SUBSEQUENT EVENTS
Subsequent to October 31, the Company completed the transaction agreed to
in the second quarter to issue 2.5 million common shares at eighty cents
per share. In addition, per the agreement, an additional 1.0 million
shares were issued, bringing the total issuance to 3.5 million shares and
the price per share to fifty seven cents per share, as adjusted.
Also subsequent to October 31, the Company received $12.3 million cash
proceeds, net of expenses, from additional private placements of 21.9
million shares of common stock at sixty cents per share. The Company will
use $4.0 million of these proceeds to retire $1.5 million of its 3%
Convertible subordinated debentures and to redeem all of its $2.5 million
Series A Convertible Preferred Stock.
In November 1998, the Company reached agreement with its debenture holders
to convert $1.1 million of its total of $7.0 million, 3% Convertible
Subordinated Debentures into 2.2 million common shares at a conversion
price of fifty cents per share, to convert an additional $4.4 million of
debentures into 7,333,333 common shares at a conversion price of sixty
cents per share and to redeem, effective with the closing of the private
placement described below, the remaining $1.5 million of debentures at 100
percent of face value. The agreement also establishes that the Company
will redeem all of the outstanding $2.5 million of Series A Convertible
Preferred Stock at 100 percent of face value. The Company expects to
complete this redemption by the end of the current year. The Company also
agreed to issue 840,000, 5-year warrants, exercisable at $1.50 per share to
the Series A Convertible Preferred shareholders.
The Company is reviewing operations and quality and compliance procedures
of Mical Mortgage, Inc., acquired in May, 1998 to determine how best to
maximize shareholder value. The Company is consulting with lenders,
governmental regulatory agencies and loan investors, and has retained
outside consultants to assist in this review. In connection with this
review, the Company is assessing the future economic value of the goodwill
recorded in the purchase transaction along with the other assets of Mical.
On December 15, 1998, the Company's Board of Directors approved a
preliminary plan to restructure the operations of Mical. The Company
anticipates that the net charges to be incurred in implementing the plan
will be approximately $7 to $8 million. Substantially all of these charges
will be recognized in the third and fourth quarters when the plan is
implemented.
<PAGE> 12
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
FORWARD-LOOKING STATEMENTS
The following information should be read in conjunction with the condensed
consolidated financial statements and notes included in Item 1 of this
Quarterly Report, the financial statements and the notes thereto, and
Management's Discussion and Analysis of Financial Condition and Results of
Operations included in the Company's Annual Report on Form
10-KSB for the fiscal year ended April 30, 1998.
The Private Securities Litigation Reform Act of 1995 provides a "safe
harbor" for certain forward-looking statements. This Quarterly Report on
Form 10-QSB/A may contain forward-looking statements which reflect the
Company's current views with respect to future events and financial
performance. These forward-looking statements are subject to certain risks
and uncertainties, including those identified below, which could cause
actual results to differ materially from historical results or those
anticipated. The words "believe," "expect," "anticipate," "intend,"
"estimate," "should" and other expressions which indicate future events and
trends identify forward-looking statements. Readers are cautioned not to
place undue reliance on these forward-looking statements, which speak only
as of their dates. The Company undertakes no obligation to publicly update
or revise any forward-looking statements, whether as a result of new
information, future events or otherwise. The following factors could cause
actual results to differ materially from historical results or those
anticipated: (1) the level of demand for homeownership services, including
mortgage credit, which is affected by such external factors as the level of
interest rates, the strength of the various segments of the economy and
demographics of the Company's markets; (2) the direction of interest rates;
(3) the relationship between mortgage interest rates and the cost of funds;
(4)
federal and state regulation of the Company's operations; (5) the rate of
acceptance and growth of demand for on-line
homeownership transactions compared to traditional manual business
processes; and (6) competition within the residential real estate services
industry.
RESULTS OF OPERATIONS
The Company has a growing base of electronic commerce revenues, including:
(a) from mortgage financing and settlement services provided directly to
consumers by the Company's retail activities (including both loans funded
by the Company's lending unit as well as loans funded by other lenders);
(b) from loans funded for mortgage brokers by the Company's wholesale
lending activities; (c) from the sale of customer leads to other real
estate service providers; and (d) from providing Internet products and
services to realtors, loan brokers and consumers.
COMPARISON OF QUARTERS ENDED OCTOBER 31, 1998 AND 1997
The Company is currently expanding the scope of its electronic commerce
mortgage financing transaction services. The 1998 period includes costs
related to this plan. Revenues for the three months ended October 31, 1998
include the operations of Mical and Interloan, which were both acquired in
purchase accounting transactions in the first quarter of 1998. Both
periods include the results of the Company's Coastal unit, as it was
acquired in the prior fiscal year in a pooling transaction.
Revenues for the quarter ended October 31, 1998 increased $2.0 million,
from $1.9 million to $3.9 million over the 1997 quarter. $1.8 million of
the increase was attributable to the incremental revenues of the Company's
Mical unit. Excluding the incremental effect of Mical, revenues increased
$0.2 million or 12%. Increased retail broker fee income of $0.9 million
also contributed to the total increase of $2.0 million over the prior year.
However, revenue increases were offset by significant increases in
operating expenses, including compensation, occupancy, interest, and
certain non-recurring expenses related to the acquisitions of Coastal and
Mical. The Company incurred a net loss for the quarter of $4.8 million
compared to a $1.9 million loss for the quarter ended October 31, 1997.
Mical accounts for $0.8 million of this increased loss.
<PAGE> 13
Gain on sale of mortgage loans and servicing rights, net of loan
origination costs, increased primarily due to the gains recorded by Mical.
Gain on sale of mortgage loans also includes loan origination fee income.
In general, these fees are affected by numerous factors including the
volume and mix of loans produced and sold, loan pricing decisions, interest
rate volatility and the direction of interest rates.
Net warehouse interest income decreased $0.3 million. Warehouse interest
expense increased $1.6 million primarily due to the increase in average
warehouse borrowings related to the Company's increased loan volume.
Additionally, in October, the Company began paying a default interest rate
equal to 4% above otherwise applicable interest rates on a large portion of
its warehouse lines of credit. The Company expects net warehouse interest
income to be negative in the quarter ending January 31, 1999. The Company
expects to cure its default conditions and return to normal interest rates
during the fourth quarter of this fiscal year.
Loan servicing fee income increased $0.2 million over the prior year, as
the Company's loan servicing portfolio has a higher balance for the 1998
period as a result of assets purchased in December of 1997. However, the
Company's loan servicing portfolio balance is decreasing (the second
quarter of 1998 as compared to the first quarter of 1998) as borrowers
refinance to take advantage of decreasing borrowing rates. The Company
expects loan servicing fee income to continue to decrease for the balance
of the fiscal year.
Total loan volume in the Company's production units is summarized below.
(Dollar amounts in thousands) Three Months Ended October 31,
- ---------------------------------- ---------------------------
1998 1997
----------- ------------
Retail $ 87,287 $ 922
Wholesale Prime 308,350 71,467
Wholesale Sub-Prime 22,231 51,575
--------- ---------
Total Loan Volume $417,868 $123,964
======== =========
The factors which affect the relative volume of production among the
Company's units include the price competitiveness of each unit's product
offerings, the level of mortgage lending activity in each unit's market,
the success of each unit's sales and marketing efforts and the operational
level of loan processing efficiency achieved. The incremental volume of the
Company's Mical unit since its acquisition in the current fiscal year
contributed a $132 million increase over the 1997 quarter. The balance of
the increase, $162 million resulted primarily from increases in retail and
wholesale prime volume offset by a decline in wholesale sub-prime volumes.
The Company intends to increase its loan production volumes except in its
government (VA/FHA) offerings (included in wholesale prime). With respect
to sub-prime offerings, the Company intends to decrease those volumes in
the short term while reviewing its sub-prime operations, then increase them
as improvements in operations and profitability of those products are
achieved.
In connection with mortgage loan servicing activities, the Company
segregates escrow and custodial funds in a separate trust account and
excludes this balance of $12.1 million at October 31, 1998 and $16.0
million at April 30, 1998 from the Company's assets on the accompanying
balance sheet.
Retail broker fee revenue increased significantly, from $45,000 in the
second quarter of 1997 to $907,000 for the second quarter of 1998 quarter,
reflecting the Company's efforts to expand its presence in the retail
market.
Of the total $5.1 million increase in expenses in 1998 over the 1997
corresponding quarter, other interest expense increase accounted for $1.3
million due to interest associated with the Company's 3% convertible debt
and the amortization of debenture discount and debt issuance expenses. The
debt discount is now fully amortized.
<PAGE> 14
Compensation and related employee expenses increased $2.6 million. $1.6
million was incremental expense incurred at Mical and the balance reflects
the Company's strategy of expanding and enhancing its revenue base.
Occupancy and other office expenses increased $0.6 million as a result of
the incremental expenses incurred by Mical and efforts of the company to
expand its distribution network.
COMPARISON OF SIX MONTHS ENDED OCTOBER 31, 1998 AND 1997
Revenues for the six months ended October 31 increased from $4.8 million in
1997 to $9.3 million in 1998. Of this $4.5 million increase, the
incremental effect of Mical (acquired in May of 1998) accounted for $3.4
million. Excluding Mical, revenue attributable to the remainder of the
businesses increased $1.1 million or 23%. The Company incurred a net loss
for the period of $7.4 million compared to $3.0 million for the comparable
prior year period. Of the $4.4 million change, $1.5 million was the
incremental loss at Mical and the balance of the businesses incurred a $2.9
million or 100% increase in net loss. This increased loss resulted from
$4.0 million of increased expenses, excluding the effect of Mical. Other
interest expense increased $2.2 million, occupancy and compensation
increased $1.4 million and marketing expenses increased $.4 million.
Finet's business units, excluding Mical, recorded an increase of $1.1
million in overall revenues. This increase was due primarily to an
increase in retail broker fee income of $1.3 million and an increase in
loan servicing fee income of $.7 million, partially offset by a decrease of
$.6 million in gain on sale of mortgage loans and servicing rights and a
decrease in net warehouse interest income of $.3 million. Retail broker
fee income increased as a result of the company's start-up unit Interloan.
Net warehouse interest income decreased $0.2 million for the six month
period. Warehouse interest expense increased primarily due to increased
borrowings on the warehouse line necessary to support the increase in loan
volumes. Also, overall interest rates increased slightly year over year.
In October, the Company began incurring higher, default interest rates
equal to 4% above rates otherwise applicable on a large portion of its
warehouse lines of credit. As a result, the Company's year to date net
warehouse interest income will be negative for the nine months ending
January 31, 1999. The Company expects to cure its default conditions and
return to normal interest rates during the fourth quarter of this fiscal
year.
Total loan volume in the Company's production units is summarized below.
(Dollar amounts in thousands) Six Months Ended October 31,
- ---------------------------------- ---------------------------
1998 1997
----------- ------------
Retail $145,791 $ 5,618
Wholesale Prime 618,810 144,605
Wholesale Sub-Prime 54,390 85,260
--------- ---------
Total Loan Volume $818,991 $235,483
======== =========
The loan volume increase over the prior year period was due equally to the
added production of Mical and the Company's other units. Production in the
Company's retail and wholesale prime products increased significantly while
sub-prime loan volumes were down moderately.
Other interest expense, excluding the impact of Mical, increased $2.2
million over the comparable 1997 period due to the non-cash effect of the
amortization of the Company's debt discount associated with its 3%
Convertible Subordinated Debentures.
<PAGE> 15
Occupancy and other office expenses (excluding Mical) are up $1.4 million
for the current six-month period due to an increase in professional
services related and other expenses reflecting the Company's strategy of
expanding and enhancing its revenue base.
BUSINESS DEVELOPMENT ACTIVITIES
The Company's business development activities are focused on becoming the
leading electronic mortgage banker. This includes increasing the
electronic origination and fulfillment of prime conforming loans and
increasing other electronic commerce revenues from: (a) offering sub-prime
and government subsidized loans (b) selling additional homeowner related
products and services; (c) selling business leads to real estate service
providers; and (d) originating loans through Interloan.
Over the past several years, the Company has expanded its mortgage banking
operations through acquisitions and internal growth, but, believing the
growth of market acceptance and demand for on-line homeownership services
represents the greatest near term market opportunity, is now concentrating
on expanding its e-commerce origination and fulfillment capabilities in
these areas.
The Company is currently spending cash resources to support these business
development activities, as the revenues they are generating, though
increasing, are currently insufficient to cover start-up and operating
costs. All business units, except Mical, are expected to generate monthly
revenues sufficient to cover their respective operating expenses by the end
of the current fiscal year. During the second quarter and subsequently the
Company has received several equity contributions from private investors.
(See Note 6 and Note 8 to the consolidated financial statements.)
FINANCIAL CONDITION
Although Finet's revenue is growing, during its limited operating history
it has experienced operating losses and cash flow deficits. The Company has
relied on external sources of debt and equity financing to fund operations,
to service debt and to complete acquisitions and capital investments. The
Company's operating losses, net of capital contributions, have had an
adverse affect on the Company's financial position, causing stockholders'
equity to decrease from $3.4 million at April 30, 1998 to $0.4 million at
October 31, 1998.
In response to these operating trends, Finet has installed new leadership,
including a new chairman and chief executive officer. Management's charter
is to improve operations and to take full advantage of Finet's acquisitions
and technology capabilities, ultimately improving results from operations
and financial position. Improvement in the Company's financial condition
is dependent on its ability to successfully integrate and consolidate its
recent acquisitions, to improve operating processes and procedures, to cure
its warehouse lending defaults, and to manage interest expense by returning
to more favorable borrowing terms. The Company's financial condition is
further dependent on economic conditions such as the general health of the
economy and demand for homeownership related services. Management is
committed to the Company's future success; however, there can be no
assurance that the Company will attain future profitability.
Total assets increased from $101.4 million at April 30, 1998 to $137.2
million at October 31, 1998. This increase is due primarily to the
purchase accounting acquisition of Mical, partially offset by a decrease in
accounts receivable from sales of mortgage loans and servicing rights due
to increased efforts to sell loans. Warehouse borrowings decreased as
proceeds from loan sales were used to reduce the warehouses line of credit.
Liabilities increased from $98.1 million to $136.8 million, as the Company,
including Mical, increased its warehouse borrowings in support of increased
loan volumes.
LIQUIDITY AND CAPITAL RESOURCES
The nature of the mortgage lending business requires the Company to advance
cash on a daily basis to fund newly originated loans to its borrowing
customers. The majority of these funds are provided through conventional
mortgage warehouse lines of credit from Residential Funding Corporation
("RFC") and from other warehouse lenders. The Company
<PAGE> 16
uses cash from its operating activities to satisfy its obligations to RFC,
to fund ongoing expenses such as administration, to invest in product line
and geographic expansion, and to satisfy debt and other obligations as they
come due.
Although new operating revenue sources were developed during 1997 and 1998,
cash generated by operations has been insufficient to meet the Company's on
going requirements. Therefore, the Company has employed servicing-secured
credit facilities, private placements of debentures and common and
preferred stock issuances as additional resources to meet operating and
investing cash needs.
The Company was unable to make an interest payment of $119,255 in July, and
was unable to make a principal payment of $1.9 million due August 31, 1998
on a term loan. The lender has agreed to forbear from exercising its
rights and remedies of default in anticipation of the completion of a
private placement of common stock that has been agreed but has not closed.
See discussion under "Warehousing Facility with RFC". (See Notes 6 and
8.)
Operating Activities
- ---------------
In the six months ended October 31, 1998, the Company's operating
activities generated cash of $2.3 million compared to cash used by
operations of $18.8 million during the comparable 1997 period. The Company
increased its efforts to accelerate selling its loans, increasing operating
cashflow by $9.2 million.
If the Company remains in default under the warehouse credit arrangement
with RFC, warehouse interest expense will be significantly higher than
warehouse interest income earned on mortgage loans pending their sale and
will reduce cash resources.
Subsequent to October 31, 1998, the Company ceased originating loans at
Mical and will be selling the remaining loans during the coming quarters.
The cash generated from such sales will be used to repay the warehouse
borrowings secured by these loans. Therefore, these sales will not
increase cash resources. Use of cash for operating expenses at Mical are
expected to significantly exceed all other operating cash sources at Mical
as the Company winds down Mical's operations over the balance of the
current year.
The Company expects a decline in net revenues from the sale of mortgage
loans in the third quarter due to reduced loan production beginning at the
end of the second quarter which will continue through the third quarter.
Loan production was curtailed to reduce the balance of loans held for sale,
which would reduce warehouse line borrowings to the reduced warehouse line
commitments resulting from its default on its warehouse line of credit.
The Company has subsequently accelerated its sale of loans, reduced its
warehouse borrowings below the committed amounts and expects to increase
loan production during the fourth quarter.
Financing Activities
- ---------------
Cash used by financing activities was $5.1 million for the first six months
of 1997. The Company used the increased proceeds from loan sales to reduce
its warehouse balance. This decrease in cash was partially offset by an
increase in borrowings on the Company's servicing acquisition facility.
The Company received $1.4 million, the final tranche of its 3% Convertible
Debt private placement issue initiated in the prior year. In September
1998, the Company issued 250 shares of its $2.5 million Series A
Convertible Preferred Stock in a private placement generating $2.3 million
of proceeds, net of expenses. (See Note 6) In October 1998, the Company
received $196,711 resulting from an exercise of 262,281 warrants at seventy-
five cents per share. The Company had reduced the exercise price from
$1.50 per share to seventy-five cents per share.
In October 1998, the Company entered into an agreement with a private
investor to issue 2.5 million shares of common stock at eighty cents per
share for proceeds of $2.0 million. In connection with the issuance, the
Company agreed to reduce the exercise price of 1.0 million common stock
purchase warrants owned by the investor from $5.00 to $1.00 per share.
Subsequent to October 31, the Company completed this transaction, and,
pursuant to certain anti-dilution rights granted to the investor, the
Company issued an additional 1.0 million shares, bringing the total
issuance to 3.5 million shares and the
<PAGE> 17
adjusted price per share to fifty seven cents per share. Also subsequent
to October 31, 1998, the Company received $12.3 million cash proceeds, net
of expenses, from additional private placements of approximately 21.9
million shares of common stock at sixty cents per share. The Company will
use $4.0 million of these proceeds to retire $1.5 million of its 3%
Convertible subordinated debentures and to redeem all of its $2.5 million
Series A Convertible Preferred Stock. (See Note 8).
The Company expects that the proceeds from the sale of mortgage loans at
Mical will be less than the warehouse lines they are securing, creating a
net use of cash for the Company.
During the third quarter, the Company paid RFC $2.0 million of the $5.0
million RFC had requested to repay borrowings under a working capital line
of credit and a line of credit secured by servicing contracts. If RFC
continues to forbear on such amounts due, the Company believes that its
cash resources will be sufficient to finance the Company's minimum working
capital requirements through April 30, 1999. The Company is continuing to
pursue additional equity investments to cure its defaults on its warehouse
line with RFC, to fund capital expenditures, and to make investments in its
infrastructure. Failure to secure additional equity investments would have
a material, adverse effect on the Company's financial condition and results
of operations.
Investing Activities
- ---------------
Investing activities, consisting primarily of a reduction in the balance of
mortgage servicing rights through sales, provided cash of $1.5 million for
the six months ended October 31, 1998. The Company does not intend to
purchase additional mortgage servicing rights and is evaluating the sale of
its servicing rights portfolio. A sale, if consummated, would generate cash
for servicing debt and other obligations and for general operating
purposes.
The Company's capital expenditures totaled $248,000 for the six months
ended October 31, 1998. The Company expects its level of capital spending
for the rest of the fiscal year to increase somewhat to make information
systems investments in preparation of Y2K compliance.
SUBSEQUENT EVENTS
See Note 8 to the Consolidated Financial Statements.
POTENTIAL FOR NASDAQ DELISTING
There are several requirements for continued listing on the NASDAQ SmallCap
Market ("NASDAQ"), including a minimum stock price of $1.00 per share. If
the Company's common share price closes below $1.00 per share for 30
consecutive days, the Company may receive notification from NASDAQ that its
common stock will be delisted from the NASDAQ unless the stock closes at or
above $1.00 per share for at least 10 consecutive days during the 90 day
period following such notification.
Delisting from the NASDAQ Market and inclusion of the Company's common
stock on the OTC Bulletin Board or similar quotation medium could adversely
affect the liquidity and price of the stock and make it more difficult for
investors to obtain quotations or trade the stock.
The Company has received notice from NASDAQ that it has not met required
financial ratio criteria for continued listing on the NASDAQ. NASDAQ has
requesting that the Company complete and submit for its review, certain
periodic financial reporting. NASDAQ could initiate delisting procedures if
the Company fails to comply. Finet intends to comply with all special
financial reporting requests and ratio criteria as agreed with NASDAQ.
<PAGE> 18
YEAR 2000 COMPLIANCE
The Company has made and will continue to make investments to identify,
modify or replace any computer systems which are not Year 2000 (Y2K)
compliant and to address other issues associated with the change of the
millennium. These costs are expensed by the Company during the period in
which they are incurred. The financial impact to the Company of
implementing the systems changes necessary to become Y2K compliant is not
anticipated to be material to its financial position or results of
operations in any given year. However, the Company's expectations about
future costs associated with the Y2K are subject to uncertainties that
could cause the actual results to differ materially from the Company's
expectations. Factors that could influence the amount and timing of future
costs include the success of the Company in identifying systems and
programs that are not Y2K compliant, the nature and amount of programming
required to upgrade or replace each of the affected programs, the
availability, rate and magnitude of related labor and consulting costs and
the success of the Company's business partners, vendors and clients in
addressing the Y2K issue.
Company's state of readiness:
The Company, together with outside consultants it has engaged, has
formulated its overall plan to address the Y2K issue. The Company plans to
be substantially Y2K compliant by March 31, 1999, with the remaining effort
to be completed by June 30, 1999.
Steps taken to assure readiness by business partner, vendors, clients:
The Company, together with outside consultants it has engaged, has
formulated its overall plan to address the Y2K issue.
The Company:
(a) Has established a senior management steering committee.
(b) Is taking inventory of internally used hardware and software
as well as software developed for customers and peripheral
devices and equipment.
(c) Is identifying outside parties with whom the Company
interfaces electronically or operationally, such as business
partners, loan providers, customers, vendors and any others, to
1) confirm that their state of readiness will reduce any
financial or operational risk to the Company, and 2) understand
Finet's responsibility to its business partners.
(d) Is developing an external assessment process in order to
adequately assess the readiness of outside parties.
(e) Has determined the additional human resources necessary to
implement its overall plan.
(f) Has estimated the cost of compliance and determined it to be
reasonable but not material to the financial condition of the
Company or its results of operations.
(g) Is ensuring that new applications are Y2K compliant.
Risks of the company's Y2K issues:
The Company believes that given the hardware and software
replacement/modifications that it foresees, the risk of material financial
loss or operational disruption that might lead to financial loss is low to
medium. However, due to the nature of the mortgage banking industry there
is a significant number of outside third party interfaces that the Company
relies on for conducting business effectively. Their level of compliance
significantly influences the Company's level of risk of disruption to
operations which ultimately impacts the Company's results of operations
and financial condition.
The Company's contingency plans:
Finet is considering various contingency actions including alternative
vendors. The Y2K project planning calls for a fall back to manual
procedures if absolutely necessary, but the Company considers Y2K to be a
critical project and is addressing it as such.
<PAGE> 19
PART II - OTHER INFORMATION
Item 1. LEGAL PROCEEDINGS
The Company and certain subsidiaries are defendants in various legal
proceedings. After reviewing with counsel all such proceedings pending
against or involving the Company and its subsidiaries, management does not
expect the aggregate liability or loss, if any, resulting therefrom will
have a material adverse effect on the Company's results of operations or
consolidated financial position.
On May 19, 1998, the Company acquired 100% of the issued and outstanding
stock of Mical from its shareholders. Prior to said acquisition, on January
14, 1998, a lawsuit was filed against Mical in the United States District
Court for the Middle District of Georgia (the "Action"). The complaint
alleges, among other things, that in connection with residential mortgage
loan closings, Mical made certain payments to mortgage brokers in violation
of the Real Estate Settlement Procedures Act and induced mortgage brokers
to breach their alleged fiduciary duties to their customers. The plaintiffs
seek unspecified compensatory and punitive damages as to certain claims.
Mical's management believes that its compensation programs to mortgage
brokers comply with applicable laws and with long standing industry
practices, and that it has meritorious defenses to the Action. Management
has been advised by counsel that the facts of the underlying transaction
are not supportive of a court order granting class certification. The
Company intends to defend vigorously against the Action and believes that
the ultimate resolution will not have a material adverse effect on the
Company's results of operations or consolidated financial position.
Item 2. CHANGES IN SECURITIES
During the six months ended October 31, 1998, the Company issued a total of
1,480,000 shares of common stock, as follows: 432,000 shares for the
acquisition of Mical and 33,000 shares as a finders fee, 73,000 shares
under a keep well agreement, and 25,000 shares toward the acquisition of
Interloan. In addition, 263,000 common shares were issued in connection
with warrant exercises and 654,000 shares were issued in connection with
option exercises, employment-related issuances and other.
250 shares of Convertible Preferred Stock were issued in a private
placement. (See Note 6.)
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None
Item 5. OTHER INFORMATION
On November 24, 1998, the Company's annual meeting of shareholders was held
in San Francisco, California. Including proxies and one shareholder voting
in person, a quorum of 57% of the 33,033,105 shares eligible to vote on the
October 15, 1998 record date were represented at the meeting. All current
Directors were re-elected for an additional one-year term and the following
measures detailed and recommended by the Company's Board of Directors in
the proxy statement were approved by the indicated percentage of shares
voted:
Increase in authorized common shares to 150,000,000 99.3%
Ratification of issuance of Common Stock, Debentures, Preferred Stock
and Warrants: 77.0%
Ratification of the 1998 Stock Option Plan 99.4%
Ratification of the 1998 Stock Bonus Plan 99.5%
Ratification of the 1998 Non-Employee Director Stock Option Plan 99.5%
<PAGE> 20
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
EXHIBITS
EX-10.1 Warehouse security and credit agreement
EX-10.2 First amendment to warehousing credit and security agreement
EX-10.3 Second amendment to warehousing credit and security
agreement
EX-10.4 Third amendment to warehousing credit and security agreement
EX-10.5 Fourth amendment to warehousing credit and security
agreement
EX-10.6 Fifth amendment to warehousing credit and security agreement
EX-10.7 Sixth amendment to warehousing credit and security agreement
EX-10.8 Seventh amendment to warehousing credit and security
agreement
EX-10.9 Eighth amendment to warehousing credit and security
agreement
EX-10.10 Ninth amendment to warehousing credit and security agreement
EX-10.11 Tenth amendment to warehousing credit and security agreement
EX-10.12 Servicing acquisition promissory note
EX-10.13 Fannie Mae Approval
EX-10.14 Seller and servicer Approval
EX-10.15 Acknowledgement Agreement
EX-10.16 Gestation Agreement
EX-10.17 Series A Convertible Preferred Stock
EX-27 Financial Data Schedule
REPORTS ON FORM 8-K
REPORTS ON FORM 8-K
Date Item Description
- -------- ---- -----------------------------------------------------
12/7/98 2 Amendment of an 8-K previously filed, providing the required
financial statements and proforma
information related to the Company's acquisition of 100% of
the issued and outstanding stock of
Mical Mortgage, Inc.
01/05/99 5 Announcement of private placement of common shares and
results of operations for the period
ending October 31, 1998.
SIGNATURES
In accordance with the requirements of the Securities and Exchange Act, the
Registrant caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
FINET HOLDINGS CORPORATION
Date: January 14, 1998 /s/ Mark L. Korell
Mark L. Korell
(CEO and Principal Executive
Officer)
Date: January 14, 1998 /s/ Gary A. Palmer
Gary A. Palmer
(Principal Financial Officer)
WAREHOUSING CREDIT AND SECURITY AGREEMENT
(SINGLE-FAMILY MORTGAGE LOANS)
BETWEEN
MONUMENT MORTGAGE, INC., a California corporation
AND
RESIDENTIAL FUNDING CORPORATION,
a Delaware corporation
Dated as of March 22 , 1995
- ---------------------------------------------------------------------------
- ----
- ---------------------------------------------------------------------------
- ----
<PAGE>
TABLE OF CONTENTS
PAGE
1. DEFINITIONS
...............................................................1
1.1.Defined
Terms..........................................................1
1.2.Other Definitional
Provisions.........................................15
2. THE
CREDIT................................................................15
2.1.The Warehousing
Commitment............................................15
2.2.Procedures for Obtaining Warehousing
Advances.........................17
2.3.The Term Loan
Commitment..............................................19
2.4.Procedures for Obtaining Term Loan
Advances...........................19
2.5.The Working Capital
Commitment........................................21
2.6.Procedures for Obtaining Working Capital
Advances.....................21
2.7.Notes.................................................................2
2
2.8.Interest..............................................................2
2
2.9.Principal
Payments....................................................23
2.10.Expiration of
Commitments............................................26
2.11.Method of Making
Payments............................................27
2.12.Warehousing Commitment
Fee...........................................27
2.13.Working Capital Commitment
Fee.......................................27
2.13. Working Capital Maturity
Date.......................................28
2.14.Term Loan Commitment
Fee.............................................28
2.15.Warehousing
Fees.....................................................28
2.16.Miscellaneous
Charges................................................28
2.17.Interest
Limitation..................................................29
2.18.Increased Costs: Capital
Requirements................................29
3.
COLLATERAL................................................................3
0
3.1.Grant of Security
Interest............................................30
3.2.Release of Security Interest in
Collateral............................32
3.3.Delivery of Additional Collateral or Mandatory
Prepaymt...............33
3.4.Release of Warehousing
Collateral.....................................34
3.5.Collection and Servicing
Rights.......................................34
3.6.Return of Collateral at End of
Commitment.............................34
4. CONDITIONS
PRECEDENT......................................................35
4.1.Initial
Advance.......................................................35
4.2.Each
Advance..........................................................37
5. REPRESENTATIONS AND
WARRANTIES............................................38
5.1.Organization: Good Standing;
Subsidiaries.............................38
5.2.Authorization and
Enforceability......................................38
5.3.Approvals.............................................................3
9
5.4.Financial
Condition...................................................39
5.5.Litigation............................................................3
9
5.6.Compliance with
Laws..................................................40
5.7.Regulations G and
U...................................................40
5.8.Investment Company
Act................................................40
5.9.Payment of
Taxes......................................................40
5.10.Agreements...........................................................4
0
5.11.Title to
Properties..................................................41
5.12.ERISA................................................................4
1
5.13.Eligibility..........................................................4
1
5.14.Place of
Business....................................................42
5.15.Special Representations Concerning
Collateral........................42
5.16.Servicing............................................................4
4
5.17.Special Representations Concerning Pledged Servicing
Contracts.......44
5.18.Special Representations Concerning
Receivables.......................45
6. AFFIRMATIVE
COVENANTS.....................................................46
6.1.Payment of
Notes......................................................46
6.2.Financial Statements and Other
Reports................................46
6.3.Maintenance of Existence; Conduct of
Business.........................48
6.4.Compliance with Applicable
Laws.......................................48
6.5.Inspection of Properties and
Books....................................48
6.6.Notice................................................................4
9
6.7.Payment of Debt, Taxes,
etc...........................................49
6.8.Insurance.............................................................4
9
6.9.Closing
Instructions..................................................50
6.10.Subordination of Certain
Indebtedness................................50
6.11.Other Loan
Obligations...............................................50
6.12.Use of Proceeds of
Advances..........................................50
6.13.Special Affirmative Covenants Concerning
Collateral..................50
7. NEGATIVE
COVENANTS........................................................51
7.1.Contingent
Liabilities................................................52
7.2.Sale or Pledge of Servicing
Contracts.................................52
7.3.Merger; Sale of Assets;
Acquisitions..................................52
7.4.Deferral of Subordinated
Debt.........................................52
7.5.Loss of
Eligibility...................................................52
7.6.Current
Ratio.........................................................52
7.7.Debt to Adjusted Tangible Net Worth
Ratio.............................52
7.8.Minimum Tangible Net
Worth............................................52
7.9.Minimum Adjusted Tangible Net
Worth...................................52
7.10.Minimum Servicing
Portfolio..........................................52
7.11.Dividends............................................................5
3
7.12.Transactions with
Affiliates.........................................53
7.13.Acquisition of Recourse Servicing
Contracts..........................53
7.14.Special Negative Covenants Concerning
Collateral.....................53
8. DEFAULTS;
REMEDIES........................................................53
8.1.Events of
Default.....................................................53
8.2.Remedies..............................................................5
6
8.3.Application of
Proceeds...............................................59
8.4.Lender Appointed Attorney-in-
Fact.....................................60
8.5.Right of Set-
Off......................................................61
9.
NOTICES...................................................................6
1
10. REIMBURSEMENT OF EXPENSES;
INDEMNITY.....................................62
11. FINANCIAL
INFORMATION....................................................62
12.
MISCELLANEOUS............................................................63
12.1.Terms Binding Upon Successors Survival of
Representations............63
12.2.Assignment...........................................................6
3
12.3.Amendments...........................................................6
3
12.4.Governing
Law........................................................63
12.5.Participations.......................................................6
3
12.6.Relationship of the
Parties..........................................63
12.7.Severability.........................................................6
4
12.8.Operational
Reviews..................................................64
12.9.Consent to Credit
References.........................................64
12.10.Consent to
Jurisdiction.............................................64
12.11.Counterparts........................................................6
4
12.12.Entire
Agreement....................................................65
12.13.WAIVER OF JURY
TRIAL................................................65
<PAGE>
EXHIBITS
Exhibit A-1 Warehousing Promissory Note
Exhibit A-2 Sublimit Promissory Note
Exhibit A-3 Working Capital Promissory Note
Exhibit A-4 Term Loan Promissory Note
Exhibit B-1 Guaranty of James W. Noack
Exhibit B-2 Guaranty of James A. Umphryes
Exhibit C-SF Request for Advance Against Single Family
Mortgage
Loans
Exhibit C-TL Term Loan Advance Request
Exhibit C-WC Working Capital Advance Request
Exhibit D-SF Procedures and Documentation for Warehousing
Single Family Mortgage Loans
Exhibit D-TL Procedures and Documentation for Requesting
Term
Loan Advances
Exhibit E Schedule of Servicing Contracts
Exhibit F Subordination of Debt Agreement
Exhibit G Subsidiaries
Exhibit H Legal Opinion
Exhibit I-SF Officer's Certificate
Exhibit J Schedule of Existing Warehouse Lines
Exhibit K Funding Bank Agreement (Wire)
Exhibit L Commitment Summary Report
Exhibit M Bailee Pledge Agreement
<PAGE>
THIS WAREHOUSING CREDIT AND SECURITY AGREEMENT, dated as of March
22 ,
1995, between MONUMENT MORTGAGE, INC. , a California corporation
(the
"Company"), having its principal office at 3021 Citrus Circle, Suite 150,
Walnut
Creek, California 94598 and RESIDENTIAL FUNDING CORPORATION, a
Delaware
corporation (the "Lendern), having its principal office at 8400 Normandale
Lake
Blvd., Suite 600, Minneapolis, Minnesota 55437.
WHEREAS, the Company and the Lender desire to set forth herein the
terms
and conditions upon which the Lender shall provide warehouse financing,
related
working capital financing and term loan financing to the Company;
NOW, THEREFORE, the parties hereto hereby agree as follows:
1. DEFINITIONS .
1.1. Defined Terms. Capitalized terms defined below or elsewhere in
this
Agreement (including the Exhibits hereto) shall have the following
meanings:
"Acknowledgment Agreement" has the meaning set forth in Section
8.2(i)
hereof.
"Adjustable Rate Mortgage Loan" means a Single-family Mortgage
Loan
that bears interest at a fluctuating rate and that is eligible for
purchase
by an Investor.
"Adjusted Servicing Portfolio" means, for any Person, the
Servicing
Portfolio of such Person, but excluding the principal balance of
Mortgage
Loans included in the Servicing Portfolio at such date (a) which are
past
due for principal of interest for sixty (60) days or more, (b) with
respect
to which such Person is obligated to repurchase or indemnify the
holder of
the Mortgage Loans as a result of defaults on the Mortgage Loans
at any
time during the term of such Mortgage Loans, (c) for which the
Servicing
Contracts are not owned by such Person free and clear of all Liens
(other
than in favor of the Lender), or (d) which are serviced under
subservicing
arrangements.(1)
"Adjusted Tangible Net Worth" means with respect to any Person
at any
date, the Tangible Net Worth of such Person at such date plus the
product
obtained by multiplying one hundred basis points (0.01) times the
Adjusted
Servicing Portfolio.(1)
"Advance" means a disbursement by the Lender under the
Commitment
pursuant to Article 2 of this Agreement, including, without
limitation,
Ordinary Warehousing Advances, Wet Settlement Advances, Home
Equity
Advances, Nonconforming Advances, Second Mortgage Advances, Working
Capital
Advances, Term Loan Advances and readvances of funds previously
advanced to
the Company and repaid to the Lender.(1)
- ----------
(1) Replaced in Third Amendment (2/29/96) - Page 4.
"Advance Request" has the means a Warehousing Advance
Request, a
Working Capital Advance Request or a Term Loan Advance Request.
"Affiliate" has the meaning set forth in Rule 12b-2 of the
General
Rules and Regulations under the Exchange Act.
"Agreement" means this Warehousing Credit and Security
Agreement
(Single Family Mortgage Loans), either as originally executed or as
it may
from time to time be supplemented, modified or amended.
"Appraisal" means a certificate of independent certified
public
accountants or independent financial consultants selected by the
Company
and reasonably satisfactory to the Lender as to the Appraisal Value
of the
Servicing Contracts included in the Servicing Collateral, which
shall
evaluate such Servicing Contracts based upon reasonably
determined
categories of the Mortgage Loans contained therein and give effect
to any
subservicing agreement to which any such Mortgage Loan is or
will be
subject, which certificate shall be in form, substance and
detail
reasonably satisfactory to the Lender.
"Appraised Value" means, at any date of determination, with
respect to
the FMMA and FHLMC Servicing Contracts included in the
Servicing
Collateral, the fair market value of the Company's right to
service
Mortgage Loans pursuant to such Servicing Contracts, calculated
as a
percentage of the unpaid principal amount of each category of
Mortgage
Loans serviced pursuant thereto, as set forth in the most recent
Appraisal,
adjusted to account for changes in the Mortgage Loans serviced
pursuant to
such Servicing Contracts since the date of such Appraisal.
"Approved Custodian" means First Commonwealth Savings Bank, or
other
Person which is deemed acceptable to the Lender from time to time
in its
sole discretion.(1)
"Bailee Pledge Agreement" has the meaning set forth in Section
2.2(b)
hereof.
- ----------
(1) Replaced in Third Amendment (2/29/96) - Page 4.
"Base Rate" shall mean the highest prime rate quoted by The
First
National Bank of Chicago and most recently published by Knight-Ridder,
Inc.
on its MoneyCenter system. If the prime rate is not so quoted or
published
for any period, then during such period the term "Base Rate" shall
mean the
highest quoted prime rate most recently published in The Wall
Street
Journal in its regular column entitled "Money Rates."
"Business Day" means any day excluding Saturday or Sunday
and
excluding any day on which national banking associations are
closed for
business.
"Calendar Quarter" shall mean the three (3) month period
beginning on
any January l, April I, July 1 or October 1.
"Cash Collateral Account" means a demand deposit account
maintained at
the Funding Bank in the name of the Lender and designated for
receipt of
the proceeds of the sale or other disposition of the Collateral.
"Closing Date" means March 22, 1995.
"Collateral" has the meaning set forth in Section 3.1 hereof.
"Collateral Documents" has the meaning set forth in Section
2.2(a)
hereof.
"Collateral Value" means (a) with respect to any Mortgage Loan
as of
the date of determination, the lesser of (i) the amount of any Advance
made
against such Mortgage Loan under Section 2.1(c) hereof or (ii) the
Fair
Market Value of such Mortgage Loan; or (b) in the event Pledged-
Mortgages
have been exchanged for Pledged Securities, the aggregate Fair Market
Value
of the Mortgage Loans backing such Pledged Securities.(1)
"Commitment" means the Warehousing Commitment, the Working
Capital
Commitment or the Term Loan Commitment.
"Commitment Amount" added Third Amendment (2/29/96) pg. 2.
"Commitment Fee" means the Warehousing Commitment Fee, the
Working
Capital Commitment Fee or the Term Loan Commitment Fee.
"Committed Purchase Price" means for a Mortgage Loan the
product of
the Mortgage Note Amount multiplied by (a) the price (expressed
as a
percentage) as set forth in a Purchase Commitment for such Mortgage
Loan or
(b) in the event such Mortgage Loan is to be used to back a Mortgage-
backed
Security, the price (expressed as a percentage) as set forth in a
Purchase
Commitment for such Mortgage-backed Security.
"Company" has the meaning set forth in the first paragraph of
this
Agreement.
- ----------
(1) Replaced in Third Amendment (2/29/96) - Page 4.
"Conforming Mortgage Loan" means an FHA insured or VA
guaranteed
Mortgage Loan or a Conventional Mortgage Loan which is
underwritten in
accordance with FNMA/FHLMC underwriting standards, is eligible
for
inclusion in a FNMA or FHLMC Mortgage-backed Security and the
principal
amount of which-is less than or equal to the maximum amount
eligible for
purchase by FNMA or FHLMC.(1)
"Conventional Mortgage Loan" means a Mortgage Loan, other than
an FHA
insured or VA guaranteed Mortgage Loan.(2)
"Debt" means, with respect to any Person, at any date (a)
all
indebtedness or other obligations of such Person which, in accordance
with
GAAP, would be included in determining total liabilities as shown
on the
liabilities side of a balance sheet of such Person at such date;
and (b)
all indebtedness or other obligations of such Person for borrowed
money or
for the deferred purchase price of property-or services; provided
that for
purposes of this Agreement, there shall be excluded from Debt at any
date
loan loss reserves, Subordinated Debt not due within one year of such
date,
and deferred taxes arising from capitalized excess servicing fees.(1)
"Default" means the occurrence of any event or existence
of any
condition which, but for the giving of Notice, the lapse of time, or
both,
would constitute an Event of Default.
"Depository Benefit" shall mean the compensation received
by the
Lender, directly or indirectly, as a result of the Company's
maintenance of
Investable Balances with a Designated Bank.
"Designated Bank" means any bank(s) designated from time to
time by
the Lender to be a Designated Bank with whom the Lender has an
agreement
under which the Lender can receive a Depository Benefit.
"Eligible Balances" added in Third Amendment (2/24/96) pg. 2.
"Eligible Mortgage Pool" means a Mortgage Pool for which
(a) an
Approved Custodian has issued its initial certification (on the
basis of
which a Pledged Security is to be issued), (b) there exists a
Purchase
Commitment covering such Pledged Security, and (c) such Pledged
Security
will be delivered to the Lender.
- ----------
(1) Replaced in Fifth Amendment (12/12/96) - Page 3.
(2) Replaced in Third Amendment (2/29/96) - Page 5.
"ERISA" means the Employee Retirement Income Security Act of
1974 and
all rules and regulations promulgated thereunder, as amended from
time to
time and any successor statute.
"Event of Default" means any of the conditions or events set
forth in
Section 8.1 hereof.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended
from time to time, and any successor statute.
"Fair Market Value" means at any date with respect to-any
Mortgage
Loan covered by a valid Purchase Commitment, the Committed Purchase
Price,
or in the absence of a valid Purchase Commitment for a Mortgage Loan
or the
related Mortgage-backed Security (if such Mortgage Loan is to be
used to
back a Mortgage-backed Security), (a) in the case of Mortgage Loans
other
than Home Equity Loans and Mortgage-backed Securities backed by
Mortgage
Loans other than Home Equity Loans, the market price
(expressed as
Percentage of the outstanding principal balance) for thirty
(30) day
mandatory future delivery of such Mortgage Loan or Mortgage-backed
Security
published by Knight-Ridder, Inc. on its MoneyCenter system or, if
not so
published, the average bid price (expressed as a percentage of
the
outstanding principal) quoted in writing to the Lender as of
the
computation date by any two nationally recognized, dealers selected
by the
Lender who at the time are making a market in similar Mortgage
Loans or
Mortgage-backed Securities, and (b) in the case of Home Equity
Loans and
Mortgage-backed Securities backed by Home Equity Loans, the
average bid
price quoted in writing to the Lender as of the/computation date by
any two
nationally recognized dealers selected by the Lender whoosh the
time are
making a market in similar Mortgage Loans or Mortgage-backed
Securities
multiplied, in the case of Mortgage Loans, by the outstanding
principal
balance thereof and, in the case of Mortgage-backed Securities,
by the
product of the pool factor of such Mortgage-backed Security times the
face
amount of such Mortgage-backed Security.(1)
"FHA" means the Federal Housing Administration and any
successor
thereto.
"FHLMC" means the Federal Home Loan Mortgage Corporation
and any
successor thereto.
"FICA" means the Federal Insurance Contributions Act.
"FIRREA" means the Financial Institutions Reform, Recovery
and
Enforcement Act of 1989, as amended from time to time, and the
regulations
promulgated and rulings issued thereunder.
"First Mortgage" means a Mortgage which constitutes a first
Lien on
the property covered thereby.
- ----------
(1) Replaced in Fifth Amendment (12/12/96) - Page 3.
"First Mortgage Loan" means a Mortgage Loan secured by a
First
Mortgage.
"FNMA" means the Federal National Mortgage Association and
any
successor thereto.
"Funding Bank" means The First National Bank of Chicago or any
other
bank designated from time to time by the Lender.
"Funding Bank Agreement" means the letter agreement
substantially in
the fore of Exhibit K hereto.
"GAAP" means generally accepted accounting principles set forth
in the
opinions and pronouncements of the Accounting Principles Board
and the
American Institute of Certified Public Accountants and statements
and
pronouncements of the Financial Accounting Standards Board or in such
other
statements by such other entity as may be approved by a significant
segment
of the accounting profession, which are applicable to the
circumstances as
of the date of determination.
"Gestation Agreement" means an agreement under which the
Company
agrees to sell or finance (a) a Pledged Mortgage prior to the
date of
purchase by an Investor, or (b) a Mortgage Pool prior to the
date the
Mortgage-backed Security is issued.
"GNMA" means the Government National Mortgage Association
and any
successor thereto.
"Goal Line Commitment" means the letter agreement between the
Company
and the Lender, as in effect from time to time, providing the
Company's
participation in the Goal Line Program.(1)
"Goal Line Program" means the Lender's program for the
purchase of
Home Equity Loans, as described in the Goal Line Part of the
RESIDENTIAL
FUNDING SELLER GUIDE (as amended, supplemented or otherwise modified
from
time to time).(1)
"Guarantor" means JAMES W. NOACK, JAMES A. UMPHRYES and any
other
Person that hereafter guarantees all or any portion of the
Company's
Obligations. If more than one Person is named as Guarantor, the
term
"Guarantor" shall mean each of such Persons and all of them,
and the
obligations of such Persons shall be joint and several.
- ----------
(1) Replaced in Fifth Amendment (12/12/96 - Pave 5.
"Guaranty" means a guaranty of all or any portion of the
Company's
Obligations. If more than one Guaranty is executed and delivered
to the
Lender, the term "Guaranty. shall mean each of such' Guaranties And
all of
them.
"High LTV Mortgage Loan" added in Fifth Amendment (12/12/96) pg.
2.
"Home Equity Advances" means Advances made against Home Equity
Loans
that are subject to the Goal Line Commitment.1
"Home Equity Loan" means an open-ended revaluing line of credit
that
is a Single-family Mortgage Loan secured by either a First Mortgage
or a
Second Mortgage.(1)
"HUD 203K Mortgage Loan" added in Third Amendment (2/29/96) pg 2.
"HUD" means the Department of Housing and Urban Development
and any
successor thereto.
"Indemnified Liabilities" has the meaning set forth in
Article 10
hereof.
"Internal Revenue Code" means the Internal Revenue Code of
1986, or
any subsequent federal income tax law or laws, as any of the foregoing
have
been or may from time to time be amended.
"Investable Balances" means all funds of or maintained by the
Company
and its Subsidiaries in accounts at a Designated Bank, less
balances to
support float, activity charges, reserve requirements, Federal
Deposit
Insurance Corporation insurance premiums and such other reductions
as may
be imposed by governmental authorities from time to time.
"Investor" means FMMA, FHLMC or a financially responsible
private
institution which is deemed acceptable by the Lender from time to
time in
its sole discretion.
"Jumbo Mortgage Loan" means a Conventional Mortgage Loan having
at any
time an unpaid principal amount in excess of the maximum amount
eligible
for purchase by FNMA or FHLMC and which meets all eligibility
requirements
for purchase by an Investor.(13)
"Lender" has the meaning set forth in the first paragraph of
this
Agreement.
- ----------
(1) Replaced in Fifth Amendment (12/12/96) - Page 3.
"LIBOR" means, for each calendar week, the rate of interest per
annum
which is equal to the arithmetic mean of the U.S. Dollar London
Interbank
Offered Rates for one (1) month periods as of 11:00 a.m. London tine
on the
first Business Day of each week on which the London Interbank
market is
open, as published by Knight-Ridder, Inc. on its MoneyCenter system.
LIBOR
shall be rounded, if necessary, to the next higher one sixteenth
of one
percent (1/16%). If such U.S. dollar LIBOR rates are not so
offered or
published for any period, then during such period LIBOR shall
mean the
London Interbank Offered Rate for one (1) month periods published
on the
first Business Day of each week on which the London Interbank
market is
open, in the Wall Street Journal in its regular column entitled
"Money
Rates."
"Lien" means any lien, mortgage, deed of trust, pledge,
security
interest, charge or encumbrance of any kind (including any conditional
sale
or other title retention agreement, any lease in the nature thereof,
and
any agreement to give any security interest).
"Loan Documents" means this Agreement, the Notes, the Guaranty,
any
agreement of the Company relating to Subordinated Debt, and each
other
document, instrument or agreement executed by the Company in
connection
herewith or therewith, as any of the same may be amended, restated,
renewed
or replaced from time to time.
"Long-term Repurchase Advances" added in Third Amendment
(2/29/96)
pg.2.
"Margin Stock" has the meaning assigned to that term in
Regulations G
and U of the Board of Governors of the Federal Reserve System as in
effect
from time to time.
"Maturity Date" means, for any Advance, the Term Loan Maturity
Date,
the Warehousing Maturity Date or the Working Capital Maturity
Date, as
applicable.
"Miscellaneous Charges" added in Third Amendment (2/29/96) pg. 2.
"Mortgage" means a mortgage or deed of trust on improved
real
property. A Mortgage may be a First Mortgage or a Second Mortgage.
"Mortgage-backed Securities" means GNMA, FNMA or FHEMC securities
that
are backed by Mortgage Loans.
"Mortgage Loan" means any loan evidenced by a Mortgage Note. The
term
"Mortgage Loan" shall include First Mortgage Loans and Second
Mortgage
Loans unless the context otherwise requires.(1)
"Mortgage Note" means a promissory note secured by a Mortgage.
"Mortgage Note Amount" means, as of the date of determination,
the
then outstanding unpaid principal amount of a Mortgage Note
(whether or
not, in the case of a Mortgage Note evidencing a Home Equity
Loan, an
additional amount is available to be drawn thereunder).
- ----------
(1) Replaced in Third Amendment (2/29/96) - Page 5.
"Mortgage Pool" means a pool of one or more Pledged Mortgages
on the
basis of which there is to be issued a Mortgage-backed Security.
"Multiemployer Plan" means a "multiemployer plan" as
defined in
Section 4001(a)(3) of ERISA which it maintained for employees
of the
Company or a Subsidiary of the Company.
"Net Aggregate PHI Shortfall" means on any given date for
which a
regularly scheduled pass-through payment is required to be made
by the
Company to an Investor, the excess of all (i) principal and
interest
payments due the Investor in such payment over (ii) all principal
and
interest received for such monthly payment on the related Mortgage
Loans.
"Nonconforming Advances" means Advances made against
Nonconforming
Mortgage Loans subject to a Purchase Commitment.
"Nonconforming Mortgage Loan" means a First Mortgage Loan which
does
not conform to the eligibility requirements of FNMA or FHLMC with
respect
to the credit rating of the mortgagor, but which is underwritten
and
approved by an-Investor prior to funding, and which is to be sold
to the
Investor on a servicing-released basis.(1)
"Nonconforming Rate" means a floating rate of interest per annum
equal
to two and one-eighths percent (2-1/8%) over LIBOR. The Nonconforming
Rate
shall be adjusted on and as of the effective date of any change in
LIBOR.
The Lender's determination of the Nonconforming Rate as of any
date of
determination shall be conclusive and binding, absent manifest error.
"Notes" has the meaning set forth in Section 2.7 hereof.
"Notices" has the meaning set forth in Article 9 hereof.
"Obligations" means any and all indebtedness, obligations
and
liabilities of the Company to the Lender (whether now existing or
hereafter
arising, voluntary or involuntary, whether or not jointly owed with
others,
direct or indirect, absolute or contingent, liquidated or
unliquidated, and
whether or not from time to time decreased or extinguished and
later
increased, created or incurred), arising out of or related to the
Loan
Documents.
- ----------
(1) Replaced in Third Amendment (2/29/96) - Page 5.
"Officer's Certificate" means a certificate executed on behalf
of the
Company by its chief financial officer or its treasurer or by such
other
officer as may be designated herein and substantially in the
form of
Exhibit I-SF attached hereto.
"Operating Account" added in Third Amendment (2/29/96) pg 2.
"Ordinary Warehousing Advances". shall mean Warehousing Advances
other
than Home Equity Advances, Second Mortgage Advances and Non-
Conforming
Advances.(1)
"Ordinary Warehousing Rate" means a floating rate of interest
per
annum equal to one and five-eighths percent (1.625%) over LIBOR.
The
Ordinary Warehousing Rate shall be adjusted on and as of the effective
date
of any change in LIBOR. The Lender's determination of the
Ordinary
Warehousing Rate as of any date of determination shall be
conclusive and
binding, absent manifest error.
"Participant" has the meaning set forth in Section 12 hereof.
"Person" means and includes natural persons, corporations,
limited
partnerships, general partnerships, joint stock companies, joint
ventures,
associations, companies, trusts, banks, trust companies, land
trusts,
business trusts or other organizations, whether or not legal
entities, and
governments and agencies and political subdivisions thereof.
"Plans" has the meaning set forth in Section 5.12 hereof.
"Pledged Mortgages" has the meaning set forth in Section
3.1(a)
hereof.
"Pledged Securities" has the meaning set forth in Section
3.1(b)
hereof.
"Purchase Commitment" means a written commitment, in form
and
substance-satisfactory to the Lender, issued in favor of the Company
by an
Investor pursuant to which that Investor commits to purchase Mortgage
Loans
or Mortgage-backed Securities, including, with respect to Home
Equity
Loans, the Goal Line Commitment.(2)
"Receivables" has the meaning set forth in Section 3.1(g)
"Rejected Mortgage Loan" added in Third Amendment (2/29/96) pg.
2.
"Release Amount" has the meaning set forth in Section 3.2(g)
hereof.
"Repurchase Advance", "Repuchased Mortgage Loan", "Repurchase
Rate"
added in Third Amend. Pg. 3.
- ----------
(1) Replaced in Third Amendment (2/29/96) - Page 5.
(2) Replaced by Fifth Amendment (12/12/96) - Page 3.
"RFC" means Residential Funding Corporation, a Delaware
corporation,
and any successor thereto.
"RFC Mortgage Loan" added in Fifth Amendment (12/12/96) pg. 2.
"Second Mortgage" means a Mortgage which constitutes a second
Lien on
the property covered thereby.
"Second Mortgage Advances" means Advances made against Mortgage
Loans
that are secured by a Second Mortgage and that are subject to a
Purchase
Commitment, other than Home Equity Advances.
"Second Mortgage Loan" means a Mortgage Loan secured by a
Second
Mortgage.(1)
"Servicing Acquisition" means a transaction in which the
Company
acquires the right to service Mortgage Loans in bulk from one or
more
Persons, provided that not less than eighty percent (80%) of
the
outstanding principal balance of such Mortgage Loans are Single-
Family
Mortgage Loans.
"Servicing Collateral" means the Collateral described in
Sections
3.1(d) (subject to the proviso thereof), 3.1(e) and 3.1(f) hereof,
and all
Collateral described in Sections 3.1(h) and 3.1(i) and 3.1(j) hereof
that
constitutes proceeds of or is related to such Collateral.
"Servicing Collateral Value" means as of the date of
determination,
the lesser of: (a) seventy percent (70%) of the most recent Appraised
Value
of the FLEA and FHLMC Servicing Contracts included in the
Servicing
Collateral, or (b) one percent (1%) of the outstanding principal
balance of
the Mortgage Loans serviced pursuant to the FMMA and FHLMC
Servicing
Contracts included in the Servicing Collateral; Drovided, that for
purposes
of calculating the Servicing Collateral Value, the following Mortgage
Loans
shall be excluded: (i) Mortgage Loans excluded in calculating the
Adjusted
Servicing Portfolio, (ii) Mortgage Loans in respect of which the
Company
has commenced foreclosure proceedings, and (iii) Mortgage Loans in
respect
of which any obliger is the subject of a bankruptcy proceeding.
"Servicing Contract" means, with respect to any Person,
the
arrangement, whether or not in writing, pursuant to which such
Person has
the right to service Mortgage Loans.
"Servicing Portfolio" means, as to any Person, the unpaid
principal
balance of Mortgage Loans whose Servicing Contracts are owned by
such
Person.
- ----------
(1) Replaced in Third Amendment (2/26/96) - Page 5.
"Short-term Repuchase Advances" added in Third Amendment
(2/29/96)
page 3.
"Single-family Mortgage Loan" means a Mortgage Loan secured
by a
Mortgage covering improved real property containing one to four
family
residences.
"Statement Date" means the date of the most recent
financial
statements of the Company (and, if applicable, its Subsidiaries,
on a
consolidated basis) delivered to the Lender under the terms of
this
Agreement.
"Sublimit Promissory Note" means the promissory note
evidencing the
Company's Obligations with respect to Home Equity Advances.
Nonconforming
Advances and Second Mortgage Advances in the form of Exhibit A-2
attached
hereto.(1)
"Subordinated Debt" means all indebtedness of the Company,
for
borrowed money, which is, by its terms (which terms shall have
been
approved by the Lender), effectively subordinated in right of
payment to
all other present and future Obligations, and, solely for the
purpose of
Section 7.4 hereof, all indebtedness of the Company which is required
to be
subordinated by Section 4.1(b) or Section 6.10 hereof.
"Subsidiary" means any corporation, association or other
business
entity in which more than fifty percent (50~) of the total voting
power or
shares of stock entitled to vote in the election of directors,
managers or
trustees thereof is at the time owned or controlled,
directly or
indirectly, by any Person or one or more of the other Subsidiaries of
that
Person or a combination thereof.
"Tangible Net Worth" means with respect to any Person at any
date, the
excess of the total assets over portal liabilities of such Person on
such
date, each to be deterred in accordance with GAAP consistent with
those
applied in the preparation of the financial statements referred
to in
Section 4.1(a)(5) hereof, plus loan loss reserves, that
portion of
Subordinated Debt not due within one year of such date, and deferred
taxes
arising from capitalized excess servicing fees, provided that, for
purposes
at this Agreement, there shall be excluded from total assets
advances or
loans to shareholders, officers or Affiliates, investments in
Affiliates,
capitalized excess servicing fees, purchased servicing rights,
assets
pledged to secure any liabilities not intruded in the Debt of such
Person,
intangible assets and those other assets which would be deemed by HUD
to be
non-acceptable in calculating adjusted net worth in accordance
with its
requirements in effect as of such date, as such requirements
appertain the
"Audit Guide for Audit of Approved Non-Supervised Mortgagees" or
other
assets deemed unacceptable by the Lender in its sole discretion.(2)
- ----------
(1) Replaced in Third Amendment (2/29/96) - Page 5.
(2) Replaced in Third Amendment (2/29/96) Pages 5 & 6.
"Term Loan Advance" means a disbursement by the Lender under the
Term
Loan Commitment pursuant to Article 2 of this Agreement.
"Term Loan Advance Request" has the meaning set forth in
Section
2.4(a) hereof.
"Term Loan Commitment" has the meaning set forth in Section
2.3(a)
hereof.
"Term Loan Commitment Amount" added in Third Amend pg. 2.
"Term Loan Commitment Fee" means a fee payable by the
Company in
consideration of the Lender's issuance of its Term Loan Commitment.
The
amount of the Term Loan Commitment Fee is set forth in Section 2.14
hereof.
"Term Loan Commitment Termination Date" means the earlier of:
(a) the
close of business on March 22, 1996, as such date may be extended from
time
to time in writing by the Lender, in its sole discretion, and (b) the
date
the obligation of the Lender to make further Advances
hereunder is
terminated pursuant to Section 8.2 below.
"Term Loan Maturity Date" means the earlier of: (a) the
close of
business on March 22, 2000, as such date may be extended from time to
time
in writing by the Lender, in its sole discretion, and (b) the date the
Term
Loan Advances become due and payable pursuant to Section 8.2 below.
"Term Loan Promissory Note" means the promissory note
evidencing the
Company's Obligations with respect to Term Loan Advances in the
form of
Exhibit A-4 attached hereto.
"Term/Working Capital Rate" means a floating rate of interest
per
annum equal to five-eighths percent (.625%) per annum over the Base
Rate.
The Term/Working Capital Rate shall be adjusted on and as of the
effective
date of any change in the Base Rate. The Lender's determination
of the
Term/Working Capital Rate as of any date of determination
shall be
conclusive and binding, absent manifest error.
"Trust Receipt" means a trust receipt in a form approved
by and
pursuant to which the Lender may deliver any document relating
to the
Collateral to the Company for correction or completion.
"VA" means the U.S. Department of Veterans Affairs and any
successor
thereto.
"Warehousing Advances" shall mean a disbursement by the Lender
under
the Warehousing Commitment pursuant to Article 2 of this Agreement.
"Warehousing Advance Request" has the meaning set forth in
Section
2.2(a) hereof.
"Warehousing Collateral" means all of the Collateral other
than the
Receivables and the Servicing Collateral.
"Warehousing Commitment" has the meaning set forth in Section
2.1
hereof.
"Warehousing Commitment Amount" added in Third Amend pg 3.
"Warehousing Commitment Fee" means a fee payable by the
Company in
consideration of the Lender's issuance of the Warehousing Commitment.
The
amount of the Warehousing Commitment Fee is set forth in Section
2.12
hereof.
"Warehousing Fee" has the meaning set forth in Section 2.15
hereof.
"Warehousing Maturity Date" means the earlier of: (a) the
close of
business on December 31, 1995, as such date may be extended from
time to
time in writing by the Lender, in its sole discretion, and (b) the
date the
obligation of the Lender to make further Advances hereunder is
terminated
pursuant to Section 8.2 below.(1)
"Warehousing Promissory Note" means the promissory note
evidencing the
Company's Obligations with respect to Ordinary Warehousing Advances
in the
form of Exhibit A-1 attached hereto.
"Weighted Average Purchase Commitment Price" shall mean the
weighted
average of the Committed Purchase Prices of the unfilled
Purchase
Commitments (expressed as a percentage) for Mortgage
Loans or
Mortgage-backed Securities of the same type, interest rate and term.
"Wet Settlement Advance" means a Warehousing Advance by the
Lender
pursuant to Section 2.2(b) of this Agreement, in respect of the
closing or
settlement of a Single-family Mortgage Loan, based upon delivery
to the
Lender of the Bailee Pledge Agreement, pending subsequent delivery
of the
Collateral Documents as provided in Exhibit D-SF.
"Working Capital Advance" means a disbursement by the Lender
under the
Working Capital Commitment pursuant to Article 2 of this Agreement.
"Working Capital Advance Request" has the meaning set forth in
Section
2.6(a) hereof.
"Working Capital Commitment" has the meaning set forth in
Section
2.5(a) hereof.
- ----------
(1) Replaced in Third Amendment (2/29/96) - Page 6.
"Working Capital Commitment Amount" added in Third Amend pg. 3.
"Working Capital Commitment Fee" means a fee payable by the
Company in
consideration of the Lender's issuance of the Commitment. The amount
of the
Working Capital Commitment Fee is set forth in Section 2.13 hereof.
"Working Capital Maturity Date" means the earlier of: (a) the
close of
business on December 31, as such date may be extended from time to
time in
writing by the Lender, in its sole discretion, and (b) the date
the
obligation of the Lender to make further Advances hereunder is
terminated
pursuant to Section 8.2 below.(1)
"Working Capital Promissory Note" means the promissory note
evidencing
the Company's Obligations with respect to Working Capital Advances
in the
form of Exhibit A-3 attached hereto.
1.2. Other Definitional Provisions.
1.2(a) Accounting terms not otherwise defined herein shall
have the
meanings given the terms under GAAP.
1.2(b) Defined terms may be used in the singular or the plural,
as the
context requires.
1.2(c) All references to time of day shall mean the then
applicable
time in Chicago, Illinois, unless expressly provided to the contrary.
2. THE CREDIT
2.1. The Warehousing Commitment.
2.1(a) Subject to the terms and conditions of this Agreement
and
provided no Default or Event of Default has occurred and is
continuing, the
Lender agrees, from time to time during the period from the date
hereof to
and including the Warehousing Maturity Date, to make Warehousing
Advances
to the Company, provided the total aggregate principal amount
outstanding
at any one time of all such Warehousing Advances shall not exceed
Ten
Million Dollars ($10,000,000). The obligation of the Lender to
make
Warehousing Advances hereunder up to such limit is hereinafter
referred as
the "Warehousing Commitment." Within the Warehousing Commitment,
the
Company may, subject to the limitation set forth in Section 2.9(d),
borrow,
repay and reborrow. All Warehousing Advances under this Agreement
shall
constitute a single indebtedness, and all of the Collateral
shall be
security for the Warehousing Promissory Note and for the payment
and
performance of all the Obligations.(2)
- ----------
(1) Replaced in Third Amendment (2/29/96) - Page 6.
(2) Replaced in Third Amendment 92/29/96) - Pages 6 & 7.
2.1(b) Warehousing Advances shall be used by the Company
solely for
the purpose of funding the acquisition or origination of Mortgage
Loans and
shall be made at the request of the Company, in the manner
hereinafter
provided in Section 2.2 hereof, against the pledge of such Mortgage
Loans
as Collateral therefor. The following limitations on the use of
Advances
shall be applicable:
(1) No Warehousing Advance shall be made against Mortgage
Loans
other than Single-family Mortgage Loans.
(2) Warehousing Advance shall be made against Mortgage
Loans
which are not covered by a Purchase Commitment, and no Home
Equity
Advance shall be made against Home Equity Loans which are not
eligible
for purchase under the Goal Line Commitment.(1)
(3) The aggregate amount of Wet Settlement Advances
outstanding
at any one time shall not exceed Three Million Five Hundred
Thousand
Dollars ($3,500,000).
(4) The aggregate amount of Nonconforming Advances
outstanding at
any one time shall not exceed Three Million Dollars ($3,000,000).
(5) The aggregate amount of Home Equity Advances and
Second
Mortgage Advances outstanding at any one time shall not exceed
Three
Million Dollars ($3,000,000).(2)
(6) No Warehousing Advance shall be made against any
Mortgage
Loan which was closed more than ninety (90) days prior to the
date of
the requested Advance.(3)
(7) and (8) Added in Third Amendment - Pg 7.
2.1(c) No Warehousing Advance shall exceed that following
amount
applicable to the type of Collateral at the time it is pledged:(4)
- ----------
(1) Replaced in Fifth Amendment (12/12/96) - Page 4.
(2) Replaced in Third Amendment (2/29/96) - Page 8.
(3) Replaced in Third Amendment (2/29/96) - Page 7.
(4) Replaced in Fifth Amendment (12/12/96) - Pg. 4-5.
(1) For a First Mortgage Loan pledged hereunder, other
than a
Nonconforming Mortgage Loan, ninety-nine percent (99%) of the
lesser
of (i) the Mortgage Note Amount, or (ii) the Weighted Average
Purchase
Commitment Price multiplied by the Mortgage Note Amount.
(2) For Nonconforming Mortgage Loan pledged
hereunder,
ninety-five percent (95%) of the lesser of (i) the Mortgage
Note
Amount, or (ii) Weighted Average Purchase Commitment Price
multiplied
by the Mortgage Note Amount.
(3) For a Home Equity Loan committed for purchase under a
Goal
Line Commitment pledged hereunder, one hundred percent (100%)
of the
lesser of (i) the Mortgage Note Amount, or (ii) the Weighted
Average
Purchase Commitment Price multiplied b Tithe Mortgage Note
Amount.
(4) For a Second Mortgage can pledged hereunder, other
than a
Home Equity Loan, ninety-eight percent (98%) of the lesser of
(i) the
Mortgage Note Amount, or (ii) the Weighted Average Purchase
Commitment
Price multiplied by the Mortgage Note Amount.
(5) Added in Third Amendment (2/24/96) - Pg 7 & 8.
2.2. Procedures for Obtaining Warehousing Advances.
2.2(a) The Company may obtain a Warehousing Advance hereunder,
subject
to the satisfaction of the conditions Earth in Sections 4.1 and 4.2
hereof,
upon compliance with the procedures set forth in this Section 2.2
and in
Exhibit D-SF attacked hereto and made a part hereof, including the
delivery
of all documents listed in Exhibit D-SF (the "Collateral Documents
") to
the Lender. Requests for Warehousing Advances shall be initiated
by the
Company by delivering to the Lender, no later than one (1)
Business Day
prior to any Business Day that the Company desires to borrow
hereunder, a
completed and signed request for a Warehousing Advance (a "Wares
sing
Advance Request") on the then current form approved by the Lender.
The
current form in use by the Lender is Exhibit C-SF, attached hereto and
made
a part hereof. The Lender shall have the right, on not less than
three (3)
Business Days' prior Notice to the Company, to modify any of said
Exhibits
to conform to current legal requirements or Lender practices, and,
as so
modified, said Exhibits shall be deemed a part hereof.(1)
- ----------
(1) Replaced in Third Amendment (2/29/96) - Page 8.
2.2(b) In the case of any Wet Settlement Advances, the Company
shall
follow the procedures and, at or prior to the Lender's making of
such Wet
Settlement Advance, shall deliver to the Lender the documents set
forth in
Exhibit D-SF hereto together with a completed and executed Bailee
Pledge
Agreement in the form of Exhibit M hereto. In the case of a Mortgage
Loan
financed through a Wet Settlement Advance, the Company shall
cause all
Collateral Documents to be delivered to Lender within five (5)
Business
Days after the day of the Wet Settlement Advance relating thereto.(1)
2.2(c) Before funding, the Lender shall have a reasonable time
(one
(1) Business Day under ordinary circumstances) to examine such
Advance
Request and the Collateral Documents to be delivered prior to
such
requested Advance, as set forth in the applicable Exhibit hereto,
and may
reject such of them as do not meet the requirements of this Agreement
or of
the related Purchase Commitment.
2.2(d) The Company shall hold in trust for the Lender, and the
Company
shall deliver to the Lender promptly upon request, or within one
hundred
twenty (120) days from the date an Advance was made against such
Pledged
Mortgage and the Pledged Mortgage is not being held by an Investor
for
purchase or has not been redeemed from pledge, the following:
(1) the
originals of the Collateral Documents for which copies are required
to be
delivered to the Lender pursuant to Exhibit D-SF,24 (2) the
original
lender's ALTA Policy of Title Insurance or an equivalent thereto,
and (3)
any other documents relating to a Pledged Mortgage which the
Lender may
request, including, without limitation, documentation evidencing
the FHA
Commitment to Insure or the VA Guaranty of any Pledged Mortgage
which is
either FHA insured or VA guaranteed, the appraisal, Private
Mortgage
Insurance Certificate, if applicable, the Regulation Z
Statement,
certificates of casualty or hazard insurance, credit information
on the
maker of each such Mortgage Note, a copy of a HUD-1 or
corresponding
purchase advice and other documents of all kinds which are
customarily
desired for inspection or transfer incidental to the purchase
of any
Mortgage Note by an Investor and any additional documents which
are
customarily executed by the seller of a Mortgage Note to an Investor.
2.2(e) To make a Warehousing Advance, the Lender shall
cause the
Funding Bank to credit an account of the Company with the Funding
Bank,
which account shall be under the exclusive control of the Lender,
upon
compliance by the Company with the terms this Agreement.(2)
2.2(f) If, pursuant to the authorization given by the Company
in the
Funding Bank Agreement, for the purpose of financing a Mortgage
Loan
against which the Lender has made a Warehousing Advance in accordance
with
a Warehousing Advance Request (i) the Lender debits the Company's
Operating
Account at the Funding Bank to the extent necessary to cover a wire
to be
initiated by the Lender, or (ii) the Lender directs the Funding
Bank to
honor a check drawn by the Company on its Check Disbursement Account
at the
Funding Bank, and such debit or direction results in an overdraft,
the
Lender may make an additional Warehousing Advance to fund such
overdraft.
- ----------
(1) See Insert in Third Amendment (2/29/96) - Page 9.
(2) Replaced in Third Amendment (2/29/96) - Page 9.
2.3. The Term Loan Commitment.
2.3(a) Subject to the terms and conditions of this Agreement
and
provided no Default or Event of Default has occurred and is
continuing, the
Lender agrees, from time to time during the period from the date
hereof to
and including the Term Loan Commitment Termination Date, to make Term
Loan
Advances to the Company, provided the total aggregate principal
amount
outstanding at any one time of all Term Loan Advances shall not
exceed One
Million Dollars ($1,000,000). The obligation of the Lender to make
Term
Loan Advances hereunder up to such limit is hereafter referred to
as the
"Term Loan Commitment." Within the Term Loan Commitment, the
Company may
borrower, repay and reborrow. All Term Loan Advances under this
Agreement
shall constitute a single indebtedness, and all of the Collateral
shall be
security for the Term Loan Promissory Note and for the payment
and
performance of all others Obligations.(1)
2.3(b) Term Loan Advances shall be used by the Company solely
for the
purposes of (i) in the case of the initial Term Loan Advance,
refinancing
an existing Term Loan to the Company from Coastal Banc Savings
Association,
and (ii) in the case of Subsequent Term Loan Advances, financing
Servicing
Acquisitions. Term Loan Advances shall be made at the request
of the
Company, in the manner hereinafter provided in Section 2.4(a)
hereof. The
following limitations on the Term Loan Advances shall be applicable:
(1) No Term Loan Advance shall be made if, after giving
effect
thereto, the aggregate outstanding principal balance of all Term
Loan
Advances and all Working Capital Advances would exceed the
Servicing
Collateral Value as of the date of such Term Loan Advance.
2.4. Procedures for Obtaining Term Loan Advances.
2.4(a) The Company may obtain a Term Loan Advance hereunder,
subject
to the satisfaction of the conditions set forth in Sections 4.1
and 4.2
hereof, upon compliance with the procedures set forth in this
Section 2.4
and in Exhibit D-TL attached hereto. Requests for Term Loan Advances
shall
be initiated by the Company delivering to the Lender, no later than
five
(5) Business Days prior to the Business Day on which the Company
desires to
borrow a Term Loan Advance hereunder (except in the case of the
initial
Term Loan Advance, which may be made on one (1) Business Day's
notice), (1)
a completed and signed request for a Term Loan Advance (a "Term
Loan
Advance Request n ) on the then current form approved by Lender.
The
current form in use by Lender is Exhibit C-TL attached hereto and
made a
part hereof. The Lender shall have the right, on not less than
three (3)
Business Days' prior Notice to the Company, to modify any of said
Exhibits
to conform to current legal requirements or Lender practices and,
as so
modified, said Exhibits shall be deemed a part hereof.
2.4(b) The Company shall deliver the following to the Lender
prior to
the date of such Term Loan Advance:
(1) (A) except in the case of the initial Term Loan Advance,
such
information with respect to such Servicing Contracts being
acquired in
the Servicing Acquisition to be financed and the Mortgage
Loans
serviced pursuant thereto as the Lender may reasonably request,
(B) if
required by the Lender, an Appraisal with respect to the
Servicing
Contracts to be acquired in such Servicing Acquisition and
(C)
evidence satisfactory to the Lender that FMMA and FHLMC has
each
entered into an Acknowledgment Agreement with respect to all
Servicing
Contracts to which it is a party and that GMMA has received
such
notice of the Lenders security interest in such Servicing
Contracts to
which it is a party as may be required thereunder or to perfect
such
security interest;
(2) a certificate of the president or chief financial
officer of
the Company, certifying that all representations and
warranties set
forth in Section 5 hereof, including, without limitation,
Section 5.4
hereof, are true and correct as though made on and as of the
date of
such Term Loan Advance; and
(3) in the case of the initial Term Loan Advance, a
letter of
direction from the Company directing the Lender to disburse
the
proceeds of such Term Loan Advance directly to Coastal Banc
Savings
Association, and evidence satisfactory to the Lender that such
Term
Loan Advance will be sufficient to pay the existing Coastal
Banc
Savings Association Term Loan in full and to cause Coastal
Banc
Savings Association to release its Lien on the Company's
Servicing
Contracts and related collateral, and (B) a letter of direction
from
the Company directing the Lender to disburse the proceeds of such
Term
Loan Advance directly to the seller(s) in the Servicing
Acquisition to
be financed and evidence satisfactory to the Lender that such
Term
Loan Advance, together with any other funds disbursed with
such
Advance to such seller(s), will be sufficient to effect the
transfer
to the Company of the Servicing Contracts to be acquired in
such
Servicing Acquisition, free and clear of all Liens (other
than the
Lender's security interest).
2.4(c) To make a Term Loan Advance, the Lender shall disburse
the
amount thereof in accordance with the letter of direction
delivered
pursuant to Section 2.4(b)(3) upon compliance by the Company
with the
terms. Of this Agreement.
- ----------
(1) Replaced in Third Amendment 92/29/96) - Page 9.
2.5. The Working Capital Commitment.
2.5(a) Subject to the terms and conditions of this Agreement
and
provided no Default or Event of Default has occurred and is
continuing, the
Lender agrees, from time to time during the period from the date
hereof to
and including the Working Capital Maturity Date, to make Working
Capital
Advances to the Company, provided the total aggregate principal
amount
outstanding at any one time of all such Advances shall not exceed
One
Million Dollars $1,000,000). The obligation of the Lender to make
Working
Capital Advances hereunder up to such limit, is hereinafter referred
to as
the "Working Capital Commitment". Within the Working Capital
Commitment,
the Company may borrow, repay and reborrow. All Working Capital
Advances
under this Agreement shall constitute a single indebtedness, and all
of the
Collateral shall be security for the Working Capital Promissory
Note and
for the payment and performance of all other Obligations.(1)
2.5(b) Working Capital Advances shall be used by the Company
solely
for the purpose of funding working capital needs of the Company,
including,
but not limited to, financing costs and expenses of
foreclosures of
Mortgage Loans serviced by the Company, funding regularly
scheduled
pass-through payments on Mortgage-backed Securities for which the
Company
has a Net Aggregate P&I Shortfall and financing of premium points
on "no
cost n refinances of Mortgage Loans. Working Capital Advances shall be
made
at the request of the Company, in the manner hereinafter
provided in
Section 2.6 hereof. The following limitations on the Working
Capital
Advances shall be applicable:
(1) No Working Capital Advance shall be made if, after
giving
effect thereto, the outstanding principal balance of all
Working
Capital Advances and all Term Loan Advances would exceed the
Servicing
Collateral Value as of the date of such Working Capital Advance.
2.6 Procedures for Obtaining Working Capital Advances.
2.6(a) The Company may obtain a Working Capital Advance
hereunder,
subject to the satisfaction of the conditions set forth in Sections
4.1 and
4.2 hereof, upon compliance with the procedures set forth in this
Section
2.6. Requests for Working Capital Advances shall be initiated
by the
Company delivering to the Lender, no later than two (2) Business Days
prior
to the Business Day on which the Company desires to borrow a
Working
Capital Advance hereunder, a completed and signed request for a
Working
Capital Advance (a "Working Capital Advance Request") on the then-
current
form approved by Lender. The current form in use by Lender is Exhibit
C-WC
attached hereto and made a part hereof. The Lender shall have the
right, on
not less than three (3) Business Days' prior Notice to the
Company, to
modify such Exhibit to conform to current legal requirements or
Lender
practices and, as so modified, said Exhibit shall be deemed a part
herof.
2.6(b) Before funding a Working Capital Advance, the Lender shall
have
a reasonable time (two (2) Business Days under ordinary
circumstances) to
examine such Working Capital Advance Request and the documents
to be
delivered prior to such requested Working Capital Advance, as set
forth in
the applicable Exhibit hereto, and may reject such of them as
are not
satisfactory to the Lender.
2.6(c) To make a Working Capital Advance, the Lender shall
cause the
Funding Bank to credit the Company's account with the Funding Bank
upon
compliance by the Company with the terms of this Agreement.
- ----------
(1) Replaced in Third Amendment (2/29/96) - Page 10
2.7. Notes. The Company's Obligations in respect of Ordinary
Warehousing
Warehousing Advances shall be evidenced by a Promissory Note of the
Company
substantially in the form of Exhibit A-1 attached hereto. The
Company's
Obligations in respect of Home Equity Advances, Second Mortgage
Advances and
Nonconforming Advances shall be evidenced by a Sublimit Promissory Note
of the
Company substantially in the form of Exhibit A-2 attached hereto. The
Company's
Obligations in respect of Working Capital Advances shall be evidenced
by a
Working Capital Promissory Note of the Company substantially in the
form of
Exhibit A-3 attached hereto. The Company's Obligations in respect of Term
Loan
Advances shall be evidenced by a Term Loan Promissory Note of the
Company
substantially in the forum of Exhibit A-4 attached hereto. Each note
shall be
dated as of the date hereof. The Warehousing Promissory Note, the
Sublimit
Promissory Note, the Working Capital Promissory Note and the Term
Loan
Promissory Note are collectively referred to as the "Notes". The
terms
"Warehousing Promissory Note," "Sublimit Promissory Note," "Working
Capital
Promissory Note," "Term Loan Promissory Note," "Note" or "Notes" shall
include
all extensions, renewals and modifications of the Notes and all
substitutions
therefor. All terms and provisions of the Notes are hereby
incorporated
herein.(1)
2.8. Interest.
2.8(a) Prior to the occurrence of an Event of Default and
acceleration
of the Obligations, the unpaid amount of each Ordinary Warehousing
Advance,
Home Equity Advance or Second Mortgage Advance shall bear interest,
from
the date of such Advance until paid in full, at the Ordinary
Warehousing
Rate.
2.8(b) Prior to the occurrence of an Event of Default and
acceleration
of the Obligations, the unpaid amount of each Nonconforming Advance
shall
bear interest, from the date of such Nonconforming Advance until
paid in
full, at the Nonconforming Rate.
2.8(c) Prior to the occurrence of an Event of Default and
acceleration
of the Obligations, the unpaid amount of each Working Capital
Advance and
each Term Loan Advance shall bear interest, from the date of such
Advance,
until paid in full, at the Term/Working Capital
2.8(d) New section added in Third Amendment (2/29/96) - Page 10.
- ----------
(1) Replaced in Third Amendment (2/29/96) - Page 10.
2.8(e) The Company shall be entitled to receive outstanding
Advances
hereunder, based once average daily aggregate Investable Balances
of the
Company maintained at a Designated Bank. The reduction shall be
determined
by the Lender each month, by applying an earnings credit to the
prior
month's Investable Balances. The earnings credit used by the
Lender to
compute the reduction shall be determined by the Lender in its
sole
discretion and in any event, the reduction shall not exceed the
Depository
Benefit.(1)
2.8(f) Interest shall be computed on the basis of a 360-day
year and
applied to the actual number of days elapsed in each interest
calculation
period and shall be payable monthly in arrears, on the first day of
each
month, commencing with the first month following the date of
this
Agreement, and on the applicable Maturity Date.(1)
2.8(g) If, for any reason, no interest is due on an Advance,
the
Company agrees to pay to the Lender an administrative fee equal to
one day
of interest on such Advance at the applicable rate of interest as in
effect
on the date of such Advance. Administrative and other fees shall be
due and
payable in the same manner as interest is due and payable
hereunder.(2)
2.8(h) Upon and after the occurrence and during the continuation
of an
Event of Default hereunder, the unpaid amount of each Advance shall
bear
interest, until paid in full, at a rate of interest (the "Default
Rate")
equal to four percent (4%) per annum over the applicable rate
provided in
Sections 2.4(a), 2.4(b) or 2.4(c) hereof or, if no rated is
applicable, the
highest rate then applicable to any outstanding Advance pursuant to
such
Sections.(3)
- ----------
(1) Sections Renumbered per Third Amendment (2/29/96) - Page 10.
(2) Renumbered section replaced in Third Amendment (2/29/96) - Pages 11 &
12.
(3) Replaced in Fifth Amendment (12/12/96) - Page 5.
2.9. Principal Payments.
2.9(a) The outstanding principal amount of all Warehousing
Advances
shall be payable in full on the Warehousing Maturity Date.
2.9(b) The outstanding principal amount of the Term Loan
Advances as
of the Term Loan Commitment Termination Date shall be
payable in
forty-eight (48) equal monthly installments, due on the first day of
each
month beginning on the first day of April, 1996. The remaining
principal
balance of the Term Loan Advances shall be payable on the Term
Loan
Maturity Date.(1)
2.9(c) The outstanding principal amount of all Working
Capital
Advances shall be payable in full on the Working Capital Maturity
Date.
2.9(d) The Company shall have the right to prepay the
outstanding
Advances in whole or in part, from time to time, without
premium or
penalty; provided, that no voluntary prepayment of Warehousing
Advances may
be made in an amount less than Five Hundred Thousand Dollars
($500,000).
2.9(e) All payments of outstanding Warehousing Advances
from the
proceeds of the sale or other disposition of Pledged Mortgages and
Pledged
Securities shall be paid directly by the Investor to the Cash
Collateral
Account to be applied against the Obligations.
2.9(f) The Company shall be obligated to pay to the Lender,
without
the necessity of prior demand or notice from the Lender, and the
Company
authorizes the Lender to cause the Funding Bank to charge the
Company's
account for, the amount of any outstanding Advance against a
specific
Pledged Mortgage, upon the earliest occurrence of any of the
following
events:
(1) One hundred twenty (120) days elapse from the date
of the
initial Warehousing Advance made by the Lender against such
Pledged
Mortgage, whether or not such Pledged Mortgage is included
in an
Eligible Mortgage Pool.
(2) Forty-five (45) days elapse from the date the
Pledged
Mortgage was delivered to an Investor for examination and
purchase,
without the purchase being made, or upon rejection of the
Pledged
Mortgage as unsatisfactory by an Investor.
(3) One (1) Business Day elapses from the date a wet
Settlement
Advance was made and the Pledged Mortgage which was to have
been
funded by such Wet Settlement Advance is not closed and funded.
(4) Seven (7) Business Days elapse from the date a Wet
Settlement
Advance was made without receipt by the Lender of all
Collateral
Documents relating to such Pledged Mortgage, or such
Collateral
Documents, upon examination by the Lender, are found not to
be in
compliance with the requirements of this Agreement or the
related
Purchase Commitment.(2)
- ----------
(1) Replaced in Third Amendment (2/29/96) - Page 12.
(2) Replaced in Third Amendment (2/29/96) - Page 12 & 13.
(5) Ten (10) Business Days elapse from the date a
Collateral
Document was delivered to the Company for correction or
completion
under a Trust Receipt, without being returned to the Lender.
(6) The Mortgage Loan is defaulted and remains in default
for a
period of thirty (30) days or more.(1)
(7) If the outstanding Advances against Pledged Mortgages
of a
specific Mortgage Loan type exceed the aggregate Purchase
Commitments
for such Mortgage Loan type.
(8) Payment of any Lien prior to a Second Mortgage
Loan is
delinquent, and remains delinquent for a period of sixty (60)
days or
more.
(9) Three (3) Business Days after the mandatory delivery
date of
the related Purchase Commitment and the specific Pledged
Mortgage was
not delivered under the Purchase Commitment prior to such
mandatory
delivery date, or the Purchase Commitment is terminated;
unless in
each case, such Pledged Mortgage is eligible for delivery
to an
Investor under a comparable Purchase Commitment acceptable
to the
Lender.
(10) Upon sale or other disposition of the Pledged Mortgage.
(11) If the Pledged Mortgage is included in a Mortgage
Pool,
then, if the Mortgage Pool is an Eligible Mortgage Pool, upon
sale of
the Mortgage-backed Security, or if the Mortgage Pool is
not an
Eligible Mortgage Pool, within two (2) Business Days after
delivery of
the Pledged Mortgages to the pool custodian.
2.9(f)(12) New section added in Third Amendmeent (2/29/96) -
Page 13.(2)
2.9(g) The outstanding amount of any Advance made pursuant to
Section
2.2(f) shall be payable in full within one (1) Business Day after the
date
of such Advance.
2.9(h) In addition to the payments required pursuant to
Section
2.9(f), the Company shall be obligated to pay to the Lender,
without the
necessity of prior demand or notice from the Lender, and the
Company
authorizes the Lender to cause the Funding Bank to charge the
Company's
account for, the following amounts in respect of outstanding
Advances in
the following circumstance:
(1) If at any time the aggregate outstanding principal
balance of
all Term Loan Advances and all Working Capital Advances
exceeds the
Servicing Portfolio Collateral Value, the Company shall prepay
either
the outstanding Term Loan Advances or the outstanding Working
Capital
Advances in the amount of such excess.
(2) If the principal amount of any Pledged Mortgage is
repaid in
whole or in part while a Warehousing Advance is outstanding
against
such Pledged Mortgage, the amount of such repayment, to be
applied to
such Advance.
(3) New section added in Third Amendment (2/24/96) - Page
14.
2.9(i) For a period of not less than five (5) consecutive days in
each
Calendar Quarter (provided, that no such five (5)-day period shall
begin
fewer than thirty-one (31) days after the end of the five (5)-day
period
for the preceding Calendar Quarter), there shall be no Working
Capital
Advances outstanding, and the Company shall make such prepayments
of the
Working Capital Advances, and shall refrain from requesting Working
Capital
Advances, as necessary to comply with the foregoing requirement.
2.9(j) All amounts prepaid on the Term Loan Advances after the
Term
Loan Commitment Termination Date shall be applied to the
installments
required pursuant to Section 2.9(b) in the inverse order of
their
maturities. Amounts paid or prepaid on the Term Loan Advances
after the
Term Loan Commitment Termination Date may not be reborrowed hereunder.
2.9(k) The Company shall give Notice to the Lender
(telephonically, to
be followed by written notice) of the Pledged Mortgages or
Pledged
Securities for which proceeds have been received. Upon receipt of
such
Notice the Advances against such Pledged Mortgages or Pledged
Securities
shall be repaid and such Pledged Mortgages or Pledged Securities
shall be
considered to have been redeemed from pledge. The Lender is
entitled to
rely upon the Company `e affirmation that deposits in the Cash
Collateral
Account represent payment from Investors for the purchase of
Pledged
Mortgages or Pledged Securities as specified by the Company. In the
event
that the payment from an Investor for the purchase of Pledged
Mortgages or
Pledged Securities is less than the outstanding Advances against
such
Pledged Mortgages or the Mortgage Loans backing Pledged Securities,
the
Lender is authorized to cause the Funding Bank to charge the
Company's
account for an amount equal to such deficiency. Provided no
Default or
Event of Default exists, the Lender shall return any excess payment
from an
Investor for Pledged Mortgages or Pledged Securities to the Company.
2.10. Expiration of Commitments. Unless extended or terminated
earlier as
permitted hereunder, the Warehousing Commitment shall expire of its own
term,
and without the necessity of action by the Lender, at the close of
business on
the Warehousing Maturity Date, the Term Loan Commitment shall expire of
its own
term, and without the necessity of action by the Lender, at the
close of
business on the Term Loan Commitment Termination Date and the Working
Capital
Commitment shall expire of its own term, and without the necessity of
action by
the Lender, at the close of business on the Working Capital Maturity Date.
- ----------
(1) Replaced in Third Amendment (2/29/96) - Page 13.
(2) Section 2.9(f)(14) added in Fifth Amendment (12/12/96) - Page 5.
2.11. Method of Making Payments. Except as otherwise specifically
provided
herein, all payments hereunder shall be made to the Lender not later
than the
close of Business on the date when due unless such date is a non-Business
Day,
in which case, such payment shall be due on the first Business Day
thereafter,
and shall be made in lawful money of the United States of America in
immediately
available funds transferred via wire to accounts designated by the Lender
from
time to time.(1)
2.12. Warehousing Commitment Fee. The Company agrees to pay to the
Lender a
Warehousing Commitment Fee in the amount of one-quarter percent (1/4%) per
annum
of the amount of the Warehousing Commitment which Warehousing Commitment
Fee may
be paid quarterly in advance and shall be computed on the basis of a
365-day
year and applied to the actual number of days elapsed in such Calendar
Quarter.
On the Closing Date, the Company shall pay the prorated portion of the
quarterly
Warehousing Commitment Fee due arch the dare of acceptance of the
Warehousing
Commitment to the last day of the current Calendar Quarter. Thereafter,
the
Company shall make quarterly payments of the Warehousing Commitment Fee
on the
first (1st) day of each Calendar Quarter. If the Warehousing Maturity
Date is
other than the last day of a Calendar Quarter, the Company shall
pay the
prorated portion of the quarterly Warehousing Commitment Fee due
from the
beginning of the then current Calendar Quarter to and including the
Warehousing
Maturity Date. The Company shall not be entitled to a reduction in the
amount of
the Warehousing Commitment Fee, in the event the amount of the
Warehousing
Commitment is reduced or in the event that the Warehousing
Commitment is
terminated prior to the Warehousing Maturity Date. If the Warehousing
Commitment
terminates prior to the Warehousing Maturity Date, the unpaid balance
of the
Warehousing Commitment Fee shall be due and payable in full on the date of
such
termination.
2.13. Working Capital Commitment Fee. The Company agrees to pay
to the
Lender a Working Capital Commitment Fee in the amount of one-fifth
percent
(1/5%) per annum of the amount of the Working Capital Commitment which
Working
Capital Commitment Fee may be paid quarterly in advance and shall be
computed on
the basis of a 365-day year and applied to the actual number of days
elapsed in
such Calendar Quarter. On the Closing Date, the Company shall pay the
prorated
portion of the quarterly Working Capital Commitment Fee due from the
Closing
Date to the last day of the current Calendar Quarter. Thereafter, the
Company
shall make quarterly payments of the Working Capital Commitment Fee on the
first
(1st) day of each Calendar Quarter. If the Working Capital Maturity
Date is
other than the last day of a Calendar Quarter, the Company shall
pay the
prorated portion of the quarterly Working Capital Commitment Fee due
from the
beginning of the then current Calendar Quarter to and including the
Working
Capital Maturity Date. The Company shall not be entitled to a reduction
in the
amount of the Working Capital Commitment Fee in the event the amount
of the
Working Capital Commitment is reduced or in the event that the Working
Capital
Commitment is terminated prior to its stated expiration date. If the
Working
Capital Commitment terminates prior to the Working Capital Maturity
Date, the
unpaid balance of the Working Capital Commitment Fee shall be due and
payable in
full on the date of such termination.
2.14. Term Loan Commitment Fee. The Company agrees to pay to the
Lender a
Term Loan Commitment Fee in the amount of one-fifth percent (1/5%) per
annum of
the amount of the Term Loan Commitment, which Term Loan Commitment Fee
may be
paid quarterly in advance and shall be computed on the basis of a 365-day
year
and applied to the actual number of days elapsed in such Calendar
Quarter. On
the Closing Date, the Company shall pay the prorated portion of the
quarterly
Term Loan Commitment Fee due from the Closing Date to the last day
of the
current Calendar Quarter. Thereafter, the Company shall make quarterly
payments
of the Term Loan Commitment Fee on the first (1st) day of each Calendar
Quarter.
If the Term Loan Commitment Termination Date is other than the last day
of a
Calendar Quarter, the Company shall pay the prorated portion of the
quarterly
Term Loan Commitment Fee due from the beginning of the then current
Calendar
Quarter to and including the Term Loan Commitment Termination Date. The
Company
shall not be entitled to a reduction in the amount of the Term Loan
Commitment
Fee, in the event the amount of the Term Loan Commitment is reduced or
in the
event that the Term Loan Commitment is terminated prior to its stated
expiration
date. If the Term Loan Commitment terminates prior to the Term Loan
Commitment
Termination Date, the unpaid balance of the Term Loan Commitment Fee
shall be
due and payable in full on the date of such termination.
2.15. Warehousing Fees. The Company agrees, at the time of each
Advance, to
pay to the Lender a Warehousing Fee in the amount of Twelve and 50/100
Dollars
($12.50) for each Mortgage Loan pledged as Collateral for such
Advance.
Warehousing Fees are due when incurred, but shall not be delinquent if
paid
within fifteen (15) days after receipt of an invoice or an account
analysis
statement from the Lender.
- ----------
(1) Replaced in Third Amendment (2/29/96) - Page 14.
2.16. Miscellaneous Charges. The Company agrees to reimburse the
Lender for
miscellaneous charges and expenses incurred by or on behalf of the
Lender in
connection with the handling and administration of Advances, and to
reimburse
the Lender for miscellaneous charges and expenses incurred by or on
behalf of
the Lender in connection with the handling and administration of the
Collateral.
For the purposes hereof, miscellaneous charges and expenses shall
include, but
not be limited to, charges for wire transfers, charges for security
delivery
fees, changes for overnight delivery of Collateral to Investors, and the
Funding
Bank's service charges. Miscellaneous charges are due when incurred, but
shall
not be delinquent if paid within fifteen (15) days after receipt of an
invoice
or an account analysis statement from the Lender.(1)
2.17. Interest Limitation. All agreements between the Company
and the
Lender are hereby expressly limited so that in no contingency or
event
whatsoever, whether by reason of acceleration of maturity of this
Agreement or
the Notes or otherwise, shall the amount paid or agreed to be paid to the
Lender
for the use, forbearance, loaning or- retention of the Advances secured by
this
Agreement exceed the maximum permissible under applicable law. If
from any
circumstances whatsoever, fulfillment of any provisions hereof or of the
Notes,
or any other document securing this Agreement at any time given shall
involve
transcending the limit of validity prescribed by law, then, the obligation
to be
fulfilled shall automatically be reduced to the limit of such validity,
and if
from any circumstances the Lender should ever receive as interest an
amount
which would exceed the highest lawful rate of interest, such amount which
would
be in excess of interest shall be applied to the reduction of the
principal
balance secured by the Notes and not to the payment of interest thereunder.
This
provision shall control every other provision of all agreements
between the
Company and Lender and shall also be binding upon and available
to any
subsequent holder of the Notes.
2.18. Increased Costs: Capital Requirements. In the event any
applicable
law, order, regulation or directive issued by any governmental or
monetary
authority, or any change therein or in the governmental or
judicial
interpretation or application thereof, or compliance by the Lender
with any
request or directive (whether or not having the force of law) by
any
governmental or monetary authority:
2.18(a) Does or shall subject the Lender to any tax of any
kind
whatsoever with respect to this Agreement or any Advances made
hereunder,
or change the basis of taxation on payments to the Lender of
principal,
fees, interest or any other amount payable hereunder (except for
change in
the rate of tax on the overall gross or net income of the Lender
by the
jurisdictions in which the Lender's principal office is located);
2.18(b) Does or shall impose, modify or hold applicable any
reserve,
capital requirement, special deposit, compulsory loan or
similar
requirement 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 the Lender which
are not
otherwise included in the determination of the interest rate as
calculated
hereunder;
and the result of any of the foregoing is to increase the cost to the
Lender of
making, renewing or maintaining any Advance or to reduce any amount
receivable
in respect thereof or to reduce the rate of return on the capital of the
Lender
or any Person controlling the Lender as it relates to credit facilities
in the
nature of that evidenced by this Agreement, then, in any such case, the
Company
shall promptly pay any additional amounts necessary to compensate the
Lender for
such additional cost or reduced amounts receivable or reduced rate of
return as
determined by the Lender with respect to this Agreement or Advances
made
hereunder. If the Lender becomes entitled to claim any additional
amounts
pursuant to this Section, it shall notify the Company of the event by
reason of
which it has become so entitled and the Company shall pay such amount
within
fifteen (15) days thereafter. A certificate as to any additional amount
payable
pursuant to the foregoing sentence containing the calculation
thereof in
reasonable detail submitted by the Lender to the Company shall be
conclusive in
the absence of manifest error. The obligations of the Company under this
Section
shall survive the payment of all other Obligations and the termination of
this
Agreement.
- ----------
(1) Replaced in Third Amendment (2/29/96) - Pages 14 & 15.
3. COLLATERAL.
3.1. Grant of Security Interest. As security for the payment of the
Notes
and for the performance of all of the Company's Obligations, the Company
hereby
assigns and transfers to the Lender all right, title and interest in and
to and
grants a security interest to the Lender in the following described
property
(the "Collateral"):
3.1(a) All Mortgage Loans, including all Mortgage Notes and
Mortgages
evidencing such Mortgage Loans, which from time to time are
delivered or
caused to be delivered to the Lender (including delivery to a third
party
on behalf of the Lender), come into the possession, custody or
control of
the Lender for the purpose of assignment or pledge or in respect of
which
an Advance has been made by the Lender hereunder, including
without
limitation all Mortgage Loans in respect of which Wet Settlement
Advances
have been made by the Lender (the "Pledged Mortgages").
3.1(b) All Mortgage-backed Securities which are from time to
time
created in whole or in part on the basis of the Pledged Mortgages
or are
delivered or caused to be delivered to, or are otherwise in the
possession
of the Lender its agent, bailee or custodian as assignee, or pledged
to the
Lender, or for such purpose are registered by book-entry in the name
of the
Lender (including delivery to or registration in the name of a third
party
on behalf of the Lender) hereunder or in respect of which from time to
time
an Advance has been made by the Lender hereunder (the
"Pledged
Securities").
3.1(c) All private mortgage insurance and all commitments
issued by
the FHA or VA to insure or guarantee any Mortgage Loans included
in the
Pledged Mortgages; all Purchase Commitments held by the Company
covering
the Pledged Mortgages or the Pledged Securities and all proceeds
resulting
from the sale thereof to Investors pursuant thereto; and all
personal
property, contract rights, servicing and servicing fees and income or
other
proceeds, amounts and payments payable to the Company as
compensation or
reimbursement, accounts and general intangibles of whatsoever kind
relating
to the Pledged Mortgages, the Pledged Securities, said FHA
commitments or
VA commitments and the Purchase Commitments, and all other
documents or
instruments relating to the Pledged Mortgages and the Pledged
Securities,
including, without limitation, any interest of the Company in any
fire,
casualty or hazard insurance policies and any awards made by any
public
body or decreed by any court of competent jurisdiction for a taking
or for
degradation of value in any eminent domain proceeding as the same
relate to
the Pledged Mortgages.
3.1(d) All Servicing Contracts now owned or hereafter
created or
acquired by the Company; provided, however, that such assignment
and
security interest with respect to any pledged Servicing Contracts with
FNMA
or FHLMC shall not take effect until the date on which an
Acknowledgment
Agreement covering such Servicing Contracts has been executed and
delivered
by the Company, the Lender and FMMA or FHLMC, as appropriate.
3.1(e) All rights of the Company to receive payments under
or by
virtue of the Servicing Contracts described in Section 3.1(d)
(without
giving effect to the proviso at the end thereof) and the
Acknowledgment
Agreements, whether as servicing fees, servicing income, damages,
amounts
payable upon the cancellation or termination of any such
Servicing
Contract, interests on the foregoing, or otherwise.
3.1(f) Any agreement pursuant to which any Servicing
Contract
described in Section 3.1(d) (without giving effect to the proviso
at the
end thereof) was acquired or is sold by the Company, and all
documents and
instruments executed or delivered in connection with any such
acquisition
or sale.
3.1(g) All accounts or general intangibles owned by the
Company
("Receivables") for the payment of money against (i) VA under a VA
guaranty
of, FHA or a private mortgage insurer under an FHA or private
insurer's
mortgage insurance policy insuring payment of, or any other Person
under
any other agreement (including a Servicing Contract) relating to,
all or
part of a defaulted Mortgage Loan repurchased by the Company
from an
investor or out of a pool of Mortgage Loans serviced by the Company,
(ii)
obligers and their accounts, FNMA, FHLMC, GNMA or any other investor
under
a Servicing Contract covering, or out of the proceeds of any sale
of or
foreclosure sale in respect of, any Mortgage Loan (A) repurchased
by the
Company out of a pool of Mortgage Loans serviced by the Company,
or (B)
being serviced by the Company, in either case, for the
reimbursement of
real estate taxes or assessments, or casualty or liability
insurance
premiums, paid by the Company in connection with Mortgage Loans, and
(iii)
obligers and their accounts, or FMMA, FHLMC, GNMA or any other
investor
under or in respect of any Mortgage Loans serviced by the Company
for
repayment of advances made by the Company to cover shortages in
principal
and interest payments.
3.l(h) All right, title and interest of the Company in and
to all
escrow accounts, documents, instruments, files, surveys,
certificates,
correspondence, appraisals, computer programs, tapes, discs,
cards,
accounting records (including all information, records, tapes,
data,
programs, discs and cards necessary or helpful in the
administration or
servicing of the Collateral) and other information and data of the
Company
relating to the Collateral.
3.1(i) All now existing or hereafter acquired cash delivered
to or
otherwise in the possession of the Lender or its agent, bailee or
custodian
or designated on the books and records of the Company as assigned
and
pledged to the Lender.
3.1(j) All cash and non-cash proceeds of the Collateral,
including all
dividends, distributions and other rights in connection with,
and all
additions to, modifications of and replacements for, the Collateral,
and
all products and proceeds of the Collateral, together with
whatever is
receivable or received when the Collateral or proceeds thereof are
sold,
collected, exchanged or otherwise disposed of, whether such
disposition is
voluntary or involuntary, including, without limitation, all
rights to
payment with respect to any cause of action affecting or relating
to the
Collateral or proceeds thereof.
The grant of the security interest under Sections 3.3(d) and 3.3(e)
above is
junior and subordinate to the rights of FNMA and FHLMC in and to amounts
payable
to FNMA and FHLMC under and with respect to said Servicing Contracts to
which
FNMA or FHLMC is a party and related agreements.
3.2. Release of Security Interest in Collateral.
3.2(a) Pledged Mortgages shall be released from the Lender's
security
interest only against payment to the Lender of the Release
Amount in
connection with such Pledged Mortgages.
3.2(b) If Pledged Mortgages are to be transferred to a pool
custodian
or to PHLMC or FMMA for inclusion in a Mortgage Pool, the Lender's
security
interest in such Pledged Mortgages shall be released only against
payment
to the Lender of the Release Amount in connection with such
Pledged
Mortgages. If the Lender's security interest in the Pledged
Mortgages
comprising the Mortgage Pool is not released prior to the issuance
of the
Mortgage-backed Security, then the Mortgage-backed Security, when
issued,
shall be a Pledged Security. The Lenders security interest shall
continue
in such Pledged Mortgages and the Pledged Security. The Lender
shall be
entitled to possession of such Pledged Security in the manner
provided
below.
3.2(c) If Pledged Mortgages are to be transferred to an
Approved
Custodian and are included in an Eligible Mortgage Pool, the
Lender's
security interest in the Pledged Mortgages comprising the Eligible
Mortgage
Pool shall be released upon the issuance of the Pledged Security.
The
Lender's security interest in such Pledged Security shall be released
only
against payment to the Lender of the Release Amount in connection
with the
Pledged Mortgages backing such Pledged Security. The Lender-
shall be
entitled to possession of such Pledged Security in the manner
provided
below.(1)
- ----------
(1) Replaced in Third Amendment (2/29/96) - Page 15.
3.2(d) The Lender shall have the exclusive right to the
possession of
the Pledged Securities or, if the Pledged Securities are not to be
issued
in certificated form or are to be issued in certificated form
and
registered exclusively with the name of, and held by, a clearing
agency or
its nominee, shall have the right to have the book entries for the
Pledged
Securities issued in the Lender's name or the name or names
of its
designees, and the Lender shall have the right to cause delivery
of the
Pledged Securities to be made to the Investor or the book
entries
registered in the name of the Investor or the Investor's designee
only
against payment therefor. The Company acknowledges that the
Lender may
enter into one or more standing arrangements with other
financial
institutions for the issuance of Pledged Securities in book entry
form in
the name of such other financial institutions, as agent or
financial
intermediary for the Lender, and the Company agrees upon request
of the
Lender, to execute and deliver to such other financial institutions
the
Company's written concurrence in any such standing arrangements.
3.2(e) Prior to the occurrence of an Event of Default, the
Company may
redeem a pledged Mortgage or Pledged Security from the Lender's
security
interest by notifying the Lender of its intention to redeem such
Pledged
Mortgage or Pledged Security from pledge and either (a) paying, or
causing
an Investor to pay, to the Lender, for application to prepayment
of the
principal balance of the Notes, the Release Amount in connection with
such
Pledged Mortgage or Pledged Security, or (b) delivering substitute
Pledged
Mortgages which, in addition to being acceptable to the Lender in its
sole
discretion wo;;. when included with the Collateral, result in a
Collateral
Value of all Pledged Mortgages and Pledged Securities held by the
Lender
which is at least equal to the aggregate outstanding
Warehousing
Advances.(1)
3.2(f) Following the occurrence of a Default or Event of Default,
the
Lender may, with no liability to the Company or any Person,
continue to
release its security interest in any Pledged Mortgage or Pledged
Security
against payment of the Release Amount in connection with such
Pledged
Mortgage or Pledged Security.
3.2(g) The Release Amount in connection with any Pledged
Mortgage
shall be (i) prior to the occurrence of an Event of Default, the
principal
amount of the Advances made against such Pledged Mortgage, and (ii)
from
and after the occurrence and during the continuance of an Event of
Default,
the Committed Purchase Price of such Pledged Mortgage or, if there
is no
Purchase Commitment therefor, the amount paid to the Lender
in a
commercially reasonable disposition thereof.
3.3. Delivery of Additional Collateral or Mandatory Prepayment. At any
time
that the aggregate Collateral Value of the Pledged Mortgages and
Pledged
Securities then pledged hereunder is less than the aggregate amount
of the
Warehousing Advances then outstanding hereunder, the Lender may request,
and the
Company shall within two (2) Business Days after Notice by the
Lender (a)
deliver to the Lender for pledge hereunder additional Mortgage Loans
and/or
cash, in aggregate amounts sufficient to cover the difference
between the
Collateral Value of the Pledged Mortgages and Pledged Securities pledged
and the
aggregate amount of Warehousing Advances outstanding hereunder, or (b)
repay the
Warehousing Advances in an amount sufficient to reduce the aggregate
balance
thereof outstanding to or below the Collateral Value of the Pledged
Mortgages
and Pledged Securities pledged hereunder.
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(1) Replaced in Third Amendment (2/29/96) - Page 15.
3.4. Release of Warehousing Collateral.
3.4(a) The Lender may deliver documents relating to the
Warehousing
Collateral to the Company for correction or completion pursuant to a
Trust
Receipt.
3.4(b) Prior to the occurrence of a Default or Event of Default,
upon
delivery by the Company to the Lender of shipping instructions
pursuant to
Exhibit D-SF, the Lender will transmit Pledged Mortgages or
Pledged
Securities and all related loan documents or pool documents
to the
applicable Investor, Approved Custodian or other party.
3.4(c) Upon receipt of Notice from the Company under Section
2.9(k)
hereof, and repayment of the Release Amount with respect to a
Pledged
Mortgage identified by the Company, any Collateral Documents
relating to
the redeemed Pledged Mortgage or Mortgage Loan backing a Pledged
Security
which have not been delivered to an Investor or Approved Custodian
shall be
released by the Lender to the Company.
3.5. Collection and Servicing Rights. So long as no Event of Default
shall
have occurred and be continuing, the Company shall be entitled to
service and
receive and collect directly all sums payable to the Company in respect
of the
Collateral other than proceeds of any Purchase Commitment or proceeds
of the
sale of any Collateral. Following the occurrence of any Event of Default,
the
Lender or its designee shall thereafter be entitled to service and
receive and
collect all sums payable to the Company in respect of the Collateral,
and in
such case (a) the Lender or its designee in its discretion may, in its own
name
or in the name of the Company or otherwise, demand, sue for, collect or
receive
any money or property at any time payable or receivable on account of
or in
exchange for any of the Collateral, but shall be under no obligation to
do so,
(b) the Company shall, if the Lender so requests, hold in trust for the
benefit
of the Lender and forthwith pay to the Lender at its office designated by
Notice
hereunder, all amounts thereafter received by the Company upon or in
respect of
any of the Collateral, advising the Lender as to the source of such funds,
and
(c) all amounts so received and collected by the Lender shall be held by
it as
part of the Collateral.
3.6. Return of Collateral at End of Commitment. If (a) the
Commitments
shall have expired or been terminated, and (b) no Advances, interest or
other
Obligations shall be outstanding and unpaid, the Lender shall deliver or
release
its security interest and shall deliver all Collateral in its possession
to the
Company at the Company's expense. The receipt of the Company for any
Collateral
released or delivered to the Company pursuant to any provision of this
Agreement
shall be a complete and full acauittance for the Collateral so returned,
and the
Lender shall thereafter be discharged from any liability or
responsibility
therefor.
4. CONDITIONS PRECEDENT.
4.1. Initial Advance. The obligation of the Lender to make the
initial
Advance under this Agreement is subject to the satisfaction, in the
sole
discretion of the Lender, on or before the date thereof of the
following
conditions precedent:
4.1(a) The Lender shall have received the following, all of which
must
be satisfactory in form and content to the Lender, in its sole
discretion:
(1) The Notes and this Agreement duly executed by the
Company.
(2) The Company's articles of incorporation as certified
by the
Secretary of State of the Company's incorporation, bylaws
certified by
the Company, and certificates of good standing dated no less
recently
than ninety (90) days prior to the date of this Agreement
and a
certification from the Franchise Tax Board of the State of
California
stating that the Company is in good standing with the
Franchise Tax
Board.
(3) An original resolution of the board of directors
of the
Company, certified as of the date of this Agreement by its
corporate
secretary, authorizing the execution, delivery and performance of
this
Agreement and the other Loan Documents, and all other
instruments or
documents to be delivered by the Company pursuant to this
Agreement.
(4) A certificate of the Company's corporate secretary as
to the
incumbency and authenticity of the signatures of the officers
of the
Company executing this Agreement and the other Loan Documents and
each
Advance Request and all other instruments or documents to be
delivered
pursuant hereto (the Lender being entitled to rely thereon until
a new
such certificate has been furnished to the Lender).
(5) Financial statements of the Company (and, if applicable,
its
Subsidiaries, on a consolidated basis) containing a balance
sheet as
of April 30, 1994, and related statements of income,
changes in
stockholders' equity and cash flows for the period ended on such
date,
all prepared in accordance with GAAP applied on a basis
consistent
with prior periods and audited by independent certified
public
accountants of recognized standing acceptable to the Lender.
(6) Financial statements of the Company (and, if applicable,
its
Subsidiaries, on a consolidated basis) containing a balance
sheet as
of January 31, 1995, related statements of income and
changes in
stockholders' equity for the period ended on such date
prepared in
accordance with GAAP applied on a basis consistent with the
Company's
most recent audited financial statements.
(7) The Guaranties, in the forms attached hereto as
Exhibit B-1
and Exhibit B-2, duly executed by each Guarantor.
(8) Financial statements of each Guarantor, signed by
such
Guarantor, dated as of December 31, 1994.
(9) A favorable written opinion of counsel to the Company
and the
Guarantors (or of separate counsel at the option of the
Company and
the Guarantors), dated as of the date of this Agreement
substantially
in the form of Exhibit H attached hereto, addressed to the
Lender.
(10) A tax, lien and judgment search of the appropriate
public
records for the Company and the Guarantors, including a
search of
Uniform Commercial Code financing statements, which search
shall not
have disclosed the existence of any prior Lien on the Collateral
other
than in favor of the Lender or as permitted hereunder.
(11) Copies of the certificates, documents or other
written
instruments which evidence the Company's eligibility
described in
Section 5.13 hereof, all in form and substance satisfactory
to the
Lender.
(12) Copies of the Company's errors and omissions
insurance
policy or mortgage impairment insurance policy and blanket
bond
coverage policy, or certificates in lieu of policies, all in
form and
content satisfactory to the Lender, showing compliance by the
Company
as of the date of this Agreement with the related
provisions of
Section 6.8 hereof.
(13) Executed financing statements in recordable form
covering
the Collateral and ready for filing in all jurisdictions
required by
the Lender.
(14) Receipt by the Lender of the Commitment Fees due on the
date
hereof.
(15) Evidence that all accounts necessary into which
Advances
will be funded have been established at the Funding Bank and
receipt
of a fully executed Funding Bank Agreement.
(16) A copy of acknowledgment agreements from each of
FNMA and
FHLMC in form and substance satisfactory to the Lender
acknowledging
the validity of the Lender's security interest in the portions
of the
Collateral that constitute FMMA and FHLMC Servicing Contracts.
(17) An Appraisal of the Servicing Contracts included
in the
Servicing Collateral as of December 31, 1994.
4.1(b) All directors, officers and shareholders of the Company,
all
Affiliates of the Company or of any Subsidiary of the Company,
and the
Guarantor, to whom or to any of whom the Company shall be indebted
as of
the date of this Agreement, shall have subordinated such
indebtedness to
the Obligations, by executing a Subordination of Debt Agreement,
in the
form of Exhibit F hereto; and the Lender shall have received an
executed
copy of any such Subordination of Debt Agreement, certified
by the
corporate secretary of the Company to be true and complete and in
full
force and effect as of the date of the Advance.
4.1(c) All Liens granted by the Company to any other Person on
any of
the Company's Servicing Contracts shall have been released, and the
Lender
shall have received satisfactory evidence thereof.
4.2. Each Advance. The obligation of the Lender to make the
initial and
each subsequent Advance under this Agreement is subject to the
satisfaction, in
the sole discretion of the Lender, as of the date of each such Advance,
of the
following additional conditions precedent:
4.2(a) The Company shall have delivered to the Lender the
Advance
Request, Collateral Documents, and documents relating to Wet
Settlement
Advances called for under, and shall have satisfied the procedures
set
forth in, Section 2.2, 2.4 or 2.6, as applicable hereof and the
applicable
Exhibits hereto described in the applicable Section, according to the
type
of Advance. All items delivered to the Lender shall be satisfactory
to the
Lender in form and content, and the Lender may reject such of them
as do
not meet the requirements of this Agreement or of the related
Purchase
Commitment.
4.2(b) The Lender shall have received evidence satisfactory to
it as
to the making and/or continuation of any cook entry or the due
filing and
recording in all appropriate offices of all financing statements and
other
instruments as may be necessary to perfect the security interest
of the
Lender in the Collateral under the Uniform Commercial Code of
Minnesota or
other applicable law. 4.2(c) The representations and warranties
of the
Company contained in Article 5 hereof shall be accurate and complete
in all
material respects as if made on and as of the date of each Advance.
4.2(d) The Company shall have performed all agreements to be
performed
by it hereunder, and after giving effect to the requested Advance,
there
shall exist no Default or Event of Default hereunder.
4.2(e) The Guarantors shall have performed all agreements
to be
performed by the Guarantors under the Guaranties.
4.2(f) The Company shall not have incurred any material
liabilities,
direct or contingent, other than in the ordinary course of its
business,
since the Statement Date.
4.2(g) The Lender shall have received from counsel for the
Company or
for the Guarantors or both, if requested by the Lender in its
sole
discretion, an updated opinion, in form and substance satisfactory
to the
Lender, addressed to the Lender and dated as of the date of such
Advance,
covering such of the matters as the Lender may reasonably request.
Delivery of an Advance Request by the Company shall be
deemed a
representation by the Company that all conditions set forth in this
Section 4.2
shall have been satisfied as of the date of such Advance
5. REPRESENTATIONS AND WARRANTIES.
The Company hereby represents and warrants to the Lender, as of the
date of
this Agreement and as of the date of each Advance Request and the making of
each
Advance, that:
5.1. Organization: Good Standing; Subsidiaries. The Company and
each
Subsidiary of the Company is a corporation duly organized, validly
existing and
in good standing under the laws of the jurisdiction of its incorporation,
has
the full legal power and authority to own its property and to carry
on its
business as currently conducted and is duly qualified as a foreign
corporation
to do business and is in good standing in each jurisdiction in which
the
transaction of its business makes such qualification necessary,
except in
jurisdictions, if any, where a failure to be in good standing has no
material
adverse effect on the business, operations, assets or financial condition
of the
Company or any such Subsidiary. For the purposes hereof, good standing
shall
include qualification for any and all licenses and payment of any and all
taxes
required in the jurisdiction of its incorporation and in each
jurisdiction in
which the Company transacts business. The Company has no Subsidiaries
except as
set forth on Exhibit G hereto. Exhibit G sets forth with respect to each
such
Subsidiary, its name, address, place of incorporation, each state in which
it is
qualified as a foreign corporation, and the percentage ownership of its
capital
stock by the Company.
5.2. Authorization and Enforceability. The Company has the
power and
authority to execute, deliver and perform this Agreement, the Notes
and all
other Loan Documents to which the Company is party and the making
of the
borrowings hereunder. The Guarantors have the legal capacity to execute,
deliver
and perform the Guaranties. The execution, delivery and performance
by the
Company of this Agreement, the Notes and all other Loan Documents to
which the
Company is a party and the making of the borrowings hereunder and
thereunder,
have been duly and validly authorized by all necessary corporate action
on the
part of the Company (none of which actions has been modified or rescinded,
and
all of which actions are in full force and effect) and do not and
will not
conflict with or violate any provision of law, of any judgments binding
upon the
Company, or of the articles of incorporation or by-laws of the Company,
conflict
with or result in a breach of or constitute a default or require any
consent
under, or result in the creation of any Lien upon any property or assets
of the
Company other than the Lien on the Collateral granted hereunder, or result
in or
require the acceleration of any indebtedness of the Company pursuant
to any
agreement, instrument or indenture to which the Company is a party or by
which
the Company or its property may be bound or affected. This Agreement, the
Notes
and all other Loan Documents contemplated hereby or thereby constitute
legal,
valid, and binding obligations of the Company or of the
Guarantors,
respectively, enforceable in accordance with their respective terms,
except as
limited by bankruptcy, insolvency or other such laws affecting the
enforcement
of creditors' rights.
5.3. Approvals. The execution and delivery of this Agreement, the
Notes and
all other Loan Documents and the performance of the Company's
obligations
hereunder and thereunder and the validity and enforceability hereof and
thereof
do not require any license, consent, approval or other action of any
state or
federal agency or governmental or regulatory authority other than those
which
have been obtained and remain in full force and effect.
5.4. Financial Condition. The balance sheet of the Company
(and, if
applicable, its Subsidiaries, on a consolidated basis) as at the Statement
Date,
and the related statements of income and changes in stockholders' equity
for the
fiscal period ended on the Statement Date, heretofore furnished to the
Lender,
fairly present the financial condition of the Company (and its
Subsidiaries) as
at the Statement Date and the results of its operations for the fiscal
period
ended on the Statement Date. The Company had, on the Statement Date, no
known
material liabilities, direct or indirect, fixed or contingent,
matured or
unmatured, or liabilities for taxes, long-term leases or unusual
forward or
long-term commitments not disclosed by, or reserved against in, said
balance
sheet and related statements, and at the present time there are no
material
unrealized or anticipated losses from any loans, advances or other
commitments
of the Company except as heretofore disclosed to the Lender in writing.
Said
financial statements were prepared in accordance with GAAP applied
on a
consistent basis throughout the periods involved. Since the Statement
Date,
there has been no material adverse change in the business, operations,
assets or
financial condition of the Company (and its Subsidiaries), nor is the
Company
aware of any state of facts which (with or without notice or lapse of
time or
both) would or could result in any such material adverse change.
5.5. Litigation. There are no actions, claims, suits or proceedings
pending
or, to the knowledge of the Company, threatened or reasonably
anticipated
against or affecting the Company or any Subsidiary of the Company in any
court
or before any arbitrator or before any government commission, board,
bureau or
other administrative agency which, if adversely determined, may
reasonably be
expected to result in any material and adverse change in the
business,
operations, assets or financial condition of the Company as a whole, or
which
would affect the validity or enforceability of this Agreement or the Notes.
5.6. Compliance with Laws. Neither the Company nor any Subsidiary
of the
Company is in violation of any provision of any law, or of any judgment,
award,
rule, regulation, order, decree, writ or injunction of any court or
public
regulatory body or authority which might have a material adverse effect
on the
business, operations, assets or financial condition of the Company as a
whole or
which would affect the validity or enforceability of this Agreement
or the
Notes.
5.7. Regulations G and U. The Company is not engaged principally, or
as one
of its important activities, in the business of extending credit for the
purpose
of purchasing or carrying Margin Stock, and no part of the proceeds
of any
Advances made hereunder will be used to purchase or carry any Margin Stock
or to
extend credit to others for the purpose of purchasing or carrying any
Margin
Stock.
5.8. Investment Company Act. The Company is not an "investment
company" or
controlled by an "investment company within the meaning of the
Investment
Company Act of 1940, as amended.
5.9. Payment of Taxes. The Company and each of its Subsidiaries has
filed
or caused to be filed all federal, state and local income, excise,
property and
other tax returns with respect to the operations of the Company
and its
Subsidiaries which are required to be filed, all such returns are
true and
correct, and the Company and each of its Subsidiaries has paid or caused
to be
paid all taxes as shown on such returns or on any assessment, to the extent
that
such taxes have become due, including, but not limited to, all FICA
payments and
withholding taxes, if appropriate. The amounts reserved, as a
liability for
income and other taxes payable, in the financial statements described in
Section
5.4 hereof are sufficient for payment of all unpaid federal, state and
local
income, excise, property and other taxes, whether or not disputed,
of the
Company and its Subsidiaries accrued for or applicable to the period and
on the
dates of such financial statements and all years and periods prior
thereto and
for which the Company and its Subsidiaries may be liable in its own right
or as
transferee of the assets of, or as successor to, any other Person.
5.10. Agreements. Neither the Company nor any Subsidiary of the
Company is
a party to any agreement, instrument or indenture or subject to any
restriction
materially and adversely affecting its business, operations, assets or
financial
condition, except as disclosed in the financial statements described in
Section
5.4 hereof. Neither the Company nor any Subsidiary of the Company is in
default
in the performance, observance or fulfillment of any of the
obligations,
covenants or conditions contained in any agreement, instrument, or
indenture
which default could have a material adverse effect on the business,
operations,
properties or financial condition of the Company as a whole. No holder
of any
indebtedness of the Company or of any of its Subsidiaries has given
notice of
any asserted default thereunder, and no liquidation or dissolution
of the
Company or of any of its Subsidiaries and no receivership,
insolvency,
bankruptcy, reorganization or other similar proceedings relative to the
Company
or of any of its Subsidiaries or any of its properties is pending, or
to the
knowledge of the Company, threatened.
5.11. Title to Properties. The Company and each Subsidiary of the
Company
has good, valid, insurable (in the case of real property) and marketable
title
to all of its properties and assets (whether real or personal,
tangible or
intangible) reflected on the financial statements described in
Section 5.4
hereof, except for such properties and assets as have been disposed of
since the
date of such financial statements as no longer used or useful in the
conduct of
its business or as have been disposed of in the ordinary course of
business, and
all such properties and assets are free and clear of all Liens
except as
disclosed in such financial statements.
5.12. ERISA. All plans ("Plans") of a type described in Section
3(3) of
ERISA in respect of which the Company or any Subsidiary of the Company
is an
"Employer," as defined in Section 3(5) of ERISA, are in substantial
compliance
with ERISA, and none of such Plans is insolvent or in reorganization,
has an
accumulated or waived funding deficiency within the meaning of Section
412 of
the Internal Revenue Code, and neither the Company nor any Subsidiary
of the
Company has incurred any material liability (including any material
contingent
liability) to or on account of any such Plan pursuant to Sections 4062,
4063,
4064, 4201 or 4204 of ERISA; and no proceedings have been
instituted to
terminate any such Plan, and no condition exists which presents a material
risk
to the Company or a Subsidiary of the Company of incurring a liability to
or on
account of any such Plan pursuant to any of the foregoing Sections of
ERISA. No
Plan or trust forming a part thereof has been terminated since
September 1,
1974.
5.13. Eligibility. The Company is approved and qualified and in
good
standing as a lender or seller/servicer, as set forth below, and
meets all
requirements applicable to its status as such:
5.13(a) FNMA approved seller/servicer of Mortgage Loans,
eligible to
originate, purchase, hold, sell, and service Mortgage Loans to be
sold to
FNMA.
5.13(b) FHLMC approved seller/servicer of Mortgage Loans,
eligible to
originate, purchase, hold, sell and service Mortgage Loans to be
sold to
FHLMC.
5.13(c) RFC approved seller/servicer of Mortgage Loans,
eligible to
originate, purchase, hold, sell and service Mortgage Loans to be
sold to
REC.
5.14. Place of Business. The principal place of business of the
Company is
3021 Citrus Circle, Suite 150, Walnut Creek, California 94598.
5.15. Special Representations Concerning Collateral. The Company
hereby
represents and warrants to the Lender, as of the date of this Agreement
and as
of the date of each Advance Request and the making of each Advance, that:
5.15(a) The Company is the legal and equitable owner and holder,
free
and clear of all Liens (other than Liens granted hereunder), of the
Pledged
Mortgages and the Pledged Securities. All Pledged Mortgages,
Pledged
Securities and Purchase Commitments have been duly authorized and
validly
issued to the Company, and all of the foregoing items of Collateral
comply
with all of the requirements of this Agreement, and have been and
will
continue to be validly pledged or assigned to the Lender, subject
to no
other Liens.
5.15(b) The Company has, and will continue to have, the full
right,
power and authority to pledge the Collateral pledged and to be
pledged by
it hereunder.
5.15(c) Any Mortgage Loan and any related document included
in the
Pledged Mortgages (1) has been duly executed and delivered by the
parties
thereto at a closing held not more than ninety (90) days prior to the
date
of the Advanced Request for such Mortgage Loan,1 (2) has been
made in
compliance with all requirements of the Real Estate Settlement
Procedures
Act, Equal Credit Opportunity Act, the federal Truth-In-Lending Act
and all
other applicable laws and regulations, (3) is and will continue to be
valid
and enforceable in accordance with its terms, without defense or
offset,
(4) has not been modified or amended except in writing, which
writing is
part of the Collateral Documents, nor any requirements thereof
waived, (5)
has been evaluated or appraised in accordance with Title XI of FIRREA,
and
(6) complies and will continue to comply with the terms of this
Agreement
and, if applicable, with the related Purchase Commitment held
by the
Company. Each Mortgage Loan other than a Home Equity Loan has been
fully
advanced in the face amount thereof, each and each First Mortgage
is a
first Lien on the premises described therein and each Second
Mortgage is
secured by a second Lien on the premises described therein, and has or
will
have a title insurance policy, in American Land Title Association
form or
equivalent thereof, from a recognized title insurance company,
insuring the
priority of the Lien of the Mortgage and meeting the usual
requirements of
Investors purchasing such Mortgage Loans.
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(1) Replaced in Third Amendment (2/29/96) - Page 15.
5.15(d) No default has occurred and is continuing for more than
thirty
(30) days under any Mortgage Loan included in the Pledged Mortgages
without
the Advance against such Pledged Mortgage having been repaid in
accordance
with Section 2.9(f)(6) hereof, provided, however, that with
respect to
Pledged Mortgages which have already been pledged as Collateral
hereunder,
if any defaut has occurred, the Company will promptly notify
the
Lender.(1)
5.15(e) The Company has complied and will continue to comply
with all
laws, rules and regulations in respect of the FHA insurance or VA
guaranty
of each Mortgage Loan included in the Pledged Mortgages designated
by the
Company as an FHA insured or VA guaranteed Mortgage Loan, and
such
insurance or guarantee is and will continue to be in full force and
effect.
All such FHA insured and VA guaranteed Mortgage Loans comply and
will
continue to comply in all respects with all applicable requirements
for
purchase under the FMMA standard form of selling contract for FHA
insured
and VA guaranteed loans and any supplement thereto then in effect.
5.15(f) All fire and casualty policies covering the
premises
encumbered by each Mortgage included in the Pledged Mortgages (1)
name and
will continue to name the Company and its successors and assigns
as the
insured under a standard mortgagee clause, (2) are and will continue
to be
in full force and effect, and (3) afford and will continue to
afford
insurance against fire and such other risks as are usually insured
against
in the broad form of extended coverage insurance from time to
time
available.
5.15(g) Pledged Mortgages secured by premises located in a
special
flood hazard area designated as such by the Secretary of HUD1 are and
shall
continue to be covered by special flood insurance under the National
Flood
Insurance Program.
5.15(h) Each FHA insured Mortgage Loan pledged hereunder
meets all
applicable governmental requirements for such insurance. Each
Pledged
Mortgage, against which an Advance is Wade on the basis of a
Purchase
Commitment, meets all requirements of such Purchase Commitment. The
Company
shall assure that Pledged Mortgages which are intended to be used
in the
formation of Mortgage-backed Securities shall comply or, prior
to the
formation of any such Mortgage-backed Security, shall comply
with the
requirements of the governmental instrumentality, department or
agency
guaranteeing such Mortgage-backed Security.
5.15(i) For Pledged Mortgages which will be used to back
GMMA
Mortgage-backed Securities, the Company has received from
GNMA a
Confirmation Notice or Confirmation Notices for Request
Additional
Commitment Authority and for Request Pool Numbers, and there
remains
available thereunder a commitment on the part of GNMA sufficient to
permit
the issuance of GNMA Mortgage-backed Securities in an amount at least
equal
to the amount of such Pledged Mortgages designated by the Company
as the
Mortgage Loans to be used to back such GMMA Mortgage-backed
Securities;
each such Confirmation Notice is in full force and effect; each of
such
Pledged Mortgages has been assigned by the Company to one of such
Pool
Numbers and a portion of the available GNMA Commitment has been
allocated
thereto by the Company, in an amount at least equal to such
Pledged
Mortgages; and each such assignment and allocation has been
reflected in
the books and records of the Company.
5.16. Servicing. Attached hereto as Exhibit E is a true and complete
list
of the Company's Servicing Portfolio. All of the Company's Servicing
Contracts
are in full force and effect and, except as otherwise indicated,
are
unencumbered by Liens. No default or event which, with notice or lapse of
time
or both, would become a default, exists under any such Servicing Contract.
5.17. Special Representations Concerning Pledged Servicing Contracts.
The
Company hereby represents and warrants to the Lenders, as of the date of
this
Agreement and as of the date of any Term Loan Advance Request or Working
Capital
Advance Request and the making of each Term Loan Advance or Working
Capital
Advance, that:
5.17(a) The Company is the legal and equitable owner and holder,
free
and clear of all Liens (other than Liens granted hereunder),
of the
Servicing Contracts pledged hereunder and, subject to the
limitations set
forth in Section 3.1(d), such Servicing Contracts will be validly
pledged
or assigned to the Lender, subject to no other Liens.
5.17(b) Subject to the limitations set forth in Section 3.1(d),
the
Company has, and will continue to have, the full right, power and
authority
to pledge the Servicing Contracts pledged and to be pledged
by it
hereunder.
5.17(c) All of the servicing rights under the Servicing
Contracts
pledged hereunder in which a security interest is granted hereby
constitute
direct servicing rights.
5.17(d) Each Servicing Contract pledged hereunder is in full
force and
effect, each Servicing Contract pledged hereunder is legal,
valid and
enforceable in accordance with its terms and no default or event
which,
with notice or lapse of time or both, would become a default, exists
under
any such Servicing Contract.
5.17(e) Each right to the payment of money under the
Servicing
Contracts pledged hereunder is genuine and enforceable in accordance
with
its terms against the parties obligated to pay the same (nObligorn),
except
as limited by bankruptcy, insolvency, moratorium or other similar
laws
affecting the enforcement of creditors' rights generally, which terms
have
not been modified or waived in any material respect or to any
material
extent.
5.17(f) To the best of the Company's knowledge, the amount
represented
by the Company to the Lenders as owing by an Obligor under each
Mortgage
Loan being serviced under a Servicing Contract pledged hereunder
is the
correct amount actually and unconditionally owing by such Obligor.
5.17(g) To the best of the Company's knowledge, no Obligor
has any
defense, set off, claim or counterclaim against the Company which
can be
asserted against the Lender or the Lenders, whether in any
proceeding to
enforce the Lenders rights in the related Mortgage Loan or otherwise.
5.17(h) The Company has not sold, assigned or otherwise
transferred
any rights associated with the Mortgage Loans being serviced
under a
Servicing Contract pledged hereunder, including, without limitation,
any
rights to place escrow deposits with respect thereto.
5.17(i) Except for the Acknowledgement Agreements, no consent
of any
Obligor or any other Person is required for the grant of the
security
interest provided herein by the Company in any of the Servicing
Collateral
including, without limitation, the Servicing Contracts pledged
hereunder,
or any computer software being utilized by the Company pursuant to
license,
lease or otherwise, other than consents which have been obtained, nor
will
any consent need to be obtained upon the occurrence of an Event of
Default
for the Lender to exercise its rights with respect to any of the Term
Loan
Collateral except as set forth in the Acknowledgment Agreements.
5.17(j) Each Mortgage Loan being serviced under a Servicing
Contract
pledged hereunder that is owned by FMMA or FHLMC or is included in a
FNMA
or FHLMC pool is covered by an Acknowledgment Agreement with such
agency in
form and substance satisfactory to the Lender.
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(1) Replaced in Third Amendment (2/29/96) - Page 16.
5.18. Special Representations Concerning Receivables. The Company
hereby
represents and warrants to the Lenders, as of the date of this Agreement
and as
of the date of each Working Capital Advance Request and the making of
each
Working Capital Advance that:
5.18(a) The Company is the legal and equitable owner and holder,
free
and clear of all Liens (other than Liens granted hereunder)
of the
Receivables, and the Receivables have been and will continue to be
subject
to a security interest in favor of the Lender, subject to no other
Liens.
5.18(b) The Company has, and will continue to have, the full
right,
power and authority to grant a security interest in the Receivables
to the
Lender.
5.18(c) Each Receivable is a valid, enforceable right to
retain
amounts received from obligers under Mortgage Loans serviced
by the
Company, or a valid, enforceable right to payment from FNMA, FHLMC,
GNMA,
VA, FHA or a private mortgage insurer, is currently due, and as to
which no
condition exists that will impair or materially delay payment thereof.
5.18(d) To the best of the Company's knowledge, with respect
to any
Receivables, the Mortgagor who is liable for payments that
will be
applicable to such Receivables, or FMMA, FHLMC, GNMA, FHA, VA
or the
private mortgage insurer, obligated thereon, has no defense, setoff,
claim
or counterclaim against the Company which can be asserted
against the
Lender or the Lenders, whether in any proceeding to enforce the
Lender's
security interest in such Receivable or otherwise.
5.18(e) Except for the Acknowledgment Agreements, to the
extent
required, no consent of any Person is required tothe grant of a
security
interest in the Receivables to the Lender, and no consent will need
to be
obtained upon the occurrence of an Event of Default for the
Lender to
exercise its rights with respect to any of the Receivables.
6. AFFIRMATIVE COVENANTS.
The Company hereby covenants and agrees that, so long as the
Commitment is
outstanding or there remain any Obligations to be paid or performed under
this
Agreement or under any other Loan Document, the Company shall:
6.1. Payment of Notes. Punctually pay or cause to be paid all
Obligations
payable hereunder and under the Notes in accordance with the terms
hereof and
thereof.
6.2. Financial Statements and Other Reports. Deliver to the Lender:
6.2(a) As soon as available and in any event within thirty (30)
days
after the end of each calendar month, statements of income and
changes in
stockholders' equity of the Company (and, if applicable, its
Subsidiaries,
on a consolidated basis) for the immediately preceding month and
for the
period from the beginning of the fiscal year to the end of such
calendar
month, and the related balance sheet as at the end of the
immediately
preceding month, all in reasonable detail and certified as to the
fairness
of presentation by the chief financial officer of the Company,
subject,
however, to year-end audit adjustments.
6.2(b) As soon as available and in any event within ninety (90)
days
after the close of each fiscal year, statements of income,
changes in
stockholders' equity and cash flows of the Company (and, if
applicable, its
Subsidiaries, on a consolidated basis) for such year, and the
related
balance sheet as at the end of such year (setting forth in comparative
form
the corresponding figures for the preceding fiscal year), all in
reasonable
detail and accompanied by an opinion in form and substance
satisfactory to
the Lender and prepared by an accounting firm reasonably
satisfactory to
the Lender, or other independent certified public accountants of
recognized
acceptable standing selected by the Company and to the Lender, as to
said
financial statements and a certificate signed by the chief
financial
officer of the Company stating that said financial statements
fairly
present the financial condition and results of operations of the
Company
(and, if applicable, its Subsidiaries) as at the end of, and for,
such
year.
6.2(c) Together with each delivery of (i) financial
statements
required in Section 6.2(a) for the months of July, October and
January, and
(ii) financial statements required in Section 6.2(b), an
Officer's
Certificate substantially in the form of Exhibit I-SF hereto: (1)
setting
forth in reasonable detail all calculations necessary to show
that the
Company is in compliance with the requirements of Sections 7.6, 7.7,
7.8,
7.9, 7.10, 7.11 and 7.12 hereof as of the end of such quarter or year
(or,
if the Company is not in compliance, showing the extent of non-
compliance
and specifying the period of non-compliance and what actions the
Company
has taken, is taking or proposes to take with respect thereto);
(2)
certifying that the Company was, as of the end of the period, in
compliance
and in good standing with applicable HUD, GNMA, or Investor net
worth
requirements; and (3) stating that the signers have reviewed the
terms of
this Agreement and have made, or caused to be made under their
supervision,
a review in reasonable detail of the transactions and conditions
of the
Company (and, if applicable, its Subsidiaries) during the accounting
period
covered by such financial statements and that such review has not
disclosed
the existence during or at the end of such accounting period, and
that the
signers do not have knowledge of the existence as of the date
of the
Officer's Certificate, of any Default or Event of Default, or
if any
Default or Event of Default existed or exists, specifying the
nature and
period of the existence thereof and what action the Company has
taken, is
taking and proposes to take with respect thereto.
6.2(d) As soon as available and in any event within ninety (90)
days
after the close of each fiscal year of the Company, current
financial
statements of each Guarantor, signed by such Guarantor, dated not more
than
ninety (90) days prior to the date of required delivery to the
Lender
hereunder.
6.2(e) Weekly or more frequently as the Lender may from time to
time
request, a commitment summary and pipeline report substantially in the
form
of Exhibit L (the "Commitment Summary Report a) dated as of the
close of
business on the last Business Day of each week and provided to the
Lender
by facsimile by 10:00 a.m. on the next succeeding Business Day
of the
following week, and the signed original thereof shall be sent to the
Lender
by first class mail on such next succeeding Business Day.
6.2(f) As soon as available and in any event within fifteen (15)
days
after the end of each calendar month, a consolidated report (the
"Servicing
Portfolio Report") as of the end of the calendar month detailing, as
to all
Mortgage Loans the servicing rights to which are owned by the
Company
(specified by investor type, recourse and non-recourse)
regardless of
whether such Mortgage Loans are Pledged Mortgages and which report
shall
indicate Mortgage Loans which (A) are current and in good standing,
(B) are
more than 30, 60 or 90 days past due, respectively, (C) are, for
Mortgage
Loans serviced with recourse, more than three hundred sixty (360) days
past
due, (D) are the subject of pending bankruptcy or foreclosure
proceedings,
or (E) have been converted (through foreclosure or other
proceedings in
lieu thereof) by the Company into real estate owned by the Company.
6.2(g) Reports in respect of the Pledged Mortgages and
Pledged
Securities and Servicing Collateral, in such detail and at such
times as
the Lender in its discretion may reasonably request at any time or
from
time to time.
6.2(h) Copies of all regular or periodic financial and other
reports,
if any, which the Company shall file with the Securities and
Exchange
Commission or any governmental agency successor thereto, copies
of any
audits completed by GNMA, FMMA or FHLMC and copies of the Mortgage
Bankers'
Financial Reporting Forms (FHLMC Form 1055/FNMA Form 1002)
which the
Company shall have filed with FMMA or FHLMC.
6.2(i) From time to time, with reasonable promptness, such
further
information regarding the business, operations, properties or
financial
condition of the Company as the Lender may reasonably request.
6.2(j) Semi-annually, or more frequently as the Lender may from
time
to time request, an Appraisal.
6.3. Maintenance of Existence; Conduct of Business. Preserve and
maintain
its corporate existence in good standing and all of its rights,
privileges,
licenses and franchises necessary or desirable in the normal conduct
of its
business, including, without limitation, its eligibility as
lender,
seller/servicer and issuer described under Section 5.13 hereof;
conduct its
business in an orderly and efficient manner; maintain a net worth of
acceptable
assets as required by FHA, GMMA, FNMA or FHLMC at any and all times
for
maintaining the Company's status as a FHA, FNMA, FHLMC approved
mortgagee or
GMMA issuer; and make no change in the nature or character of its
business or
engage in any business in which it was not engaged on the date of
this
Agreement.
6.4. Compliance with Applicable Laws. Comply with the requirements
of all
applicable laws, rules, regulations and orders of any governmental
authority, a
breach of which could materially adversely affect its business,
operations,
assets, or financial condition, except where contested in good faith
and by
appropriate proceedings.
6.5. Inspection of Properties and Books. Permit authorized
representatives
of the Lender or any Participant to discuss the business, operations,
assets and
financial condition of the Company and its Subsidiaries with its
officers and
employees and to examine its books of account and make copies or
extracts
thereof, all at such reasonable times as the Lender or any Participant
may
request. The Company will provide its accountants with a copy of this
Agreement
promptly after the execution hereof and will instruct its accountants to
answer
candidly any and all questions that the officers of the Lender
or any
Participant or any authorized representatives of the Lender or any
Participant
may address to them in reference to the financial condition or affairs
of the
Company and its Subsidiaries. The Company may have its
representatives in
attendance at any meetings between the officers or other representatives
of the
Lender or any Participant and the Company accountants held in accordance
with
this authorization.
6.6. Notice. Give prompt written notice to the Lender of (a) any
action,
suit or proceeding instituted by or against the Company or any of
its
Subsidiaries in any federal or state court or before any commission or
other
regulatory body (federal, state or local, domestic or foreign) which
action,
suit or proceeding has at issue in excess of One Hundred Thousand
Dollars
($100,000), or any such proceedings threatened against the Company or any
of its
Subsidiaries in a writing containing the details thereof, (b) the
filing,
recording or assessment of any federal, state or local tax Lien
against the
Company, or any of its assets or any of its Subsidiaries, (c) the
occurrence of
any Event of Default hereunder or the occurrence of any Default and
continuation
thereof for five (5) days, (d) the suspension, revocation or termination
of the
Company's eligibility, in any respect, as approved lender,
seller/servicer or
issuer as described under Section 5.13 hereof, (e) the transfer,
loss or
termination of any Servicing Contract to which the Company is a party, or
which
is held for the benefit of the Company, and the reason for such transfer,
loss
or termination, if known to the Company, and (f) any other action,
event or
condition of any nature which may lead to or result in a material adverse
effect
upon the business, operations, assets, or financial condition of the
Company and
its Subsidiaries or which, with or without notice or lapse of time or
both,
would constitute a default under any other agreement, instrument or
indenture to
which the Company or any of its Subsidiaries is a party or to which the
Company
or any of its Subsidiaries, its properties, or assets may be subject.
6.7. Payment of Debt, Taxes, etc. Pay and perform all obligations
and
indebtedness of the Company, and cause to be paid and performed all
obligations
and indebtedness of its Subsidiaries, promptly and in accordance with the
terms
thereof and pay and discharge or cause to be paid and discharged
promptly all
taxes, assessments and governmental charges or levies imposed upon the
Company
or its Subsidiaries or upon their respective income, receipts or
properties
before the same shall become past due, as well as all lawful claims for
labor,
materials and supplies or otherwise which, if unpaid, might become a
Lien or
charge upon such properties or any part thereof; provided, however,
that the
Company and its Subsidiaries shall not be required to pay taxes,
assessments or
governmental charges or levies or claims for labor, materials or
supplies for
which the Company or its Subsidiaries shall have obtained an adequate
bond or
adequate insurance or which are being contested in good faith and by
proper
proceedings which are being reasonably and diligently pursued and for
which
proper reserves have been created.
6.8. Insurance. Maintain (a) errors and omissions insurance or
mortgage
impairment insurance and blanket bond coverage, with such companies and in
such
amounts as satisfy prevailing FMMA, FHLMC and GNMA requirements applicable
to a
qualified mortgage originating institution, and (b) liability insurance and
fire
and other hazard insurance on its properties, with responsible
insurance
companies approved by the Lender, in such amounts and against such risks
as is
customarily carried by similar businesses operating in the same vicinity;
and
(c) within thirty (30) days after Notice from the Lender, obtain such
additional
insurance as the Lender shall reasonably require, all at the sole expense
of the
Company. Copies of such policies shall be furnished to the Lender without
charge
upon request of the Lender.
6.9. Closing Instructions. Indemnify and hold the Lender harmless
from and
against any loss, including reasonable attorneys, fees and costs,
attributable
to the failure of a title insurance company, agent or approved
attorney to
comply with the disbursement or instruction letter or letters of the
Company
relating to any Mortgage Loan.
6.10. Subordination of Certain Indebtedness. Cause any indebtedness
of the
Company, incurred after the date of this Agreement, to any shareholder,
director
or officer of the Company, or to any Affiliate of the Company or
of any
Subsidiary of the Company, or to any Guarantor, to be subordinated
to all
Obligations by the execution of a Subordination of Debt Agreement in the
form of
Exhibit J hereto and deliver to the Lender an executed copy of said
Agreement,
certified by the corporate secretary of the Company to be true and
complete and
in full force and effect.
6.11. Other Loan Obligations. Perform all material obligations
under the
terms of each loan agreement, note, mortgage, security agreement or
debt
instrument by which the Company is bound or to which any of its
property in
subject, and promptly notify the Lender in writing of a declared default
under
or the termination, cancellation, reduction or nonrenewal of any of its
other
lines of credit or agreements with any other lender. Exhibit J hereto is a
true
and complete list of all such lines of credit or agreements as of the
date
hereof and the Company hereby agrees to give the Lender at least thirty
(30)
days Notice before entering into any additional lines of credit or
agreements.
6.12. Use of Proceeds of Advances. Use the proceeds of each Advance
solely
for the purposes set forth in Section 2 1(b), Section 2.3(b) or Section
2.5(b)
above, as applicable.
6.13. Special Affirmative Covenants Concerning Collateral.
6.13(a) Warrant and defend the right, title and interest of the
Lender
in and to the Collateral against the claims and demands of all
Persons
whomsoever.
6.13(b) Service or cause to be serviced all Mortgage
Loans in
accordance with the standard requirements of the issuers of
Purchase
Commitments covering the same, the Servicing Contracts covering the
same
and all applicable FHA and VA requirements, including without
limitation
taking all actions necessary to enforce the obligations of the
obligers
under such Mortgage Loans. The Company shall service or cause
to be
serviced all Mortgage Loans backing Pledged Securities in accordance
with
applicable governmental requirements and requirements of
issuers of
Purchase Commitments covering the same. The Company shall hold all
escrow
funds collected in respect of Pledged Mortgages, Mortgage Loans
backing
Pledged Securities and Mortgage Loans serviced pursuant to
Servicing
Contracts in trust, without commingling the same with non-custodial
funds,
and apply the same for the purposes for which such funds were
collected.
6.13(c) Execute and deliver to the Lender such Uniform Commercial
Code
financing statements with respect to the Collateral as the
Lender may
request. The Company shall also execute and deliver to the Lender
such
further instruments of sale, pledge or assignment or transfer, and
such
powers of attorney, as required by the Lender, and shall do and
perform all
matters and things necessary or desirable to be done or observed,
for the
purpose of effectively creating, maintaining and preserving the
security
and benefits intended to be afforded the Lender under this Agreement.
The
Lender shall have all the rights and remedies of a secured party
under the
Uniform Commercial Code of Minnesota, or any other applicable
law, in
addition to all rights provided for herein.
6.13(d) Notify the Lender within two (2) Business Days of any
default
under, or of the termination of, any Purchase Commitment relating
to any
Pledged Mortgage, Eligible Mortgage Pool or Pledged Security.
6.13(e) Promptly comply in all respects with the terms and
conditions
of all Purchase Commitments, and all extensions, renewals and
modifications
or substitutions thereof or thereto. The Company will cause to be
delivered
to the Investor the Pledged Mortgages and Pledged Securities to be
sold
under each Purchase Commitment not later than the mandatory delivery
date
thereof.
6.13(f) Maintain, at its principal office or in a regional
office
approved by the Lender, or in the office of a computer service
bureau
engaged by the Company and approved by the Lender, and, upon request,
make
available to the Lender the originals, or copies in any case
where the
originals have been delivered to the Lender or to an Investor,
of its
Mortgage Notes and Mortgages included in Pledged Mortgages, Mortgage-
backed
Securities delivered to the Lender as Pledged Securities,
Purchase
Commitments, Servicing Contracts and all related Mortgage Loan
documents
and instruments, and all files, surveys, certificates,
correspondence,
appraisals, computer programs, tapes, discs, cards, accounting
records and
other information and data relating to the Collateral.
7. NEGATIVE COVENANTS.
The Company hereby covenants and agrees that, so long as the
Commitment is
outstanding or there remain any Obligations to be paid or performed, the
Company
shall not, either directly or indirectly, without the prior written
consent of
the Lender:
7.1. Contingent Liabilities. Assume, guarantee, endorse, or
otherwise
become contingently liable for the obligation of any Person
except by
endorsement of negotiable instruments for deposit or collection in the
ordinary
course of business.
7.2. Sale or Pledge of Servicing Contracts. Sell, pledge or
grant a
security interest in any existing or future Servicing Contracts of the
Company
other than to the Lender, except as otherwise expressly permitted in
this
Agreement, or omit to take any action required to keep all such
Servicing
Contracts in full force and effect, provided, however, that if no
Default or
Event of Default has occurred and is continuing, servicing on
individual
Mortgage Loans may be sold concurrently with and incidental to the sale of
such
Mortgage Loans (with servicing released) in the ordinary course of the
Company's
business.
7.3. Merger; Sale of Assets; Acquisitions. Liquidate, dissolve,
consolidate
or merge or sell any substantial part of its assets, or acquire any
substantial
part of the assets of another.
7.4. Deferral of Subordinated Debt. Pay in advance of the stated
maturity
thereof any Subordinated Debt of the Company or, if a Default or
Event of
Default hereunder shall have occurred, make any payment of any kind
thereafter
on such Subordinated Debt until all Obligations have been paid and
performed in
full and any applicable preference period has expired.
7.5. Loss of Eligibility. Take any action that would cause the
Company to
lose all or any part of its status as an eligible lender, seller/servicer
and
issuer as described under Section 5.13 hereof.
7.6. Current Ratio. Permit the ratio of current assets to
current
liabilities of the Company and its Subsidiaries, determined on a
consolidated
basis in accordance with GAAP, at any time to exceed 1.01 to 1.
7.7. Debt to Adjusted Tangible Net Worth Ratio. Permit the ratio of
Debt to
Adjusted Tangible Net Worth of the Company (and its Subsidiaries,
on a
consolidated basis) at any time to exceed 10 to 1.
7.8. Minimum Tangible Net Worth. Permit Tangible Net Worth of the
Company
(and its Subsidiaries, on a consolidated basis) at any time to be less-
than One
Million Dollars ($1,000,000).(1)
7.9. Minimum Adjusted Tangible Net Worth. Permit Adjusted
Tangible net
Worth of the Company (and its Subsidiaries, on a consolidated basis) at any
time
to be less than Three Million Five Hundred Thousand Dollars
($3,500,000).(1)
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(1) Replaced in Third Amendment (2/29/96) - Page 16.
7.10. Minimum Servicing Portfolio. Permit the Adjusted Servicing
Portfolio
of the Company to be less than Two Hundred Fifty Million
Dollars
($250,000,000).(1)
7.11. Dividends. For each fiscal year, declare or pay dividends in
excess
of twenty-five percent (25%) of the Company's net after-tax income earned
in any
fiscal year. Any Dividends declared in respect of the net income of the
Company
in any fiscal year must be paid by the end of the second quarter of the
next
succeeding fiscal year.
7.12. Transactions with Affiliates. Directly or indirectly (at
make any
loan, advance, extension of credit or capital contribution to any
of its
Affiliates, (b) transfer, sell, pledge, assign or otherwise dispose of
any of
its assets to or on behalf of such Affiliates, (c) merge or consolidate
with or
purchase or acquire assets from such Affiliates, or (d) transfer,
pledge, or
assign or otherwise pay management fees to or on behalf of such Affiliates.
7.13. Acquisition of Recourse Servicing Contracts. Acquire
Servicing
Contracts under which the Company is obligated to repurchase or
indemnify the
holder of the Mortgage Loans as a result of defaults on the Mortgage
Loans at
any time during the term of such Mortgage Loans.
7.14. Special Negative Covenants Concerning Collateral.
7.14(a) The Company shall not amend or modify, or waive any
of the
terms and conditions of, or settle or compromise any claim in
respect of,
any Pledged Mortgages or Pledged Securities.
7.14(b) The Company shall not sell, assign, transfer or
otherwise
dispose of, or grant any option with respect to, or pledge or
otherwise
encumber (except pursuant to this Agreement or as permitted herein)
any of
the Collateral or any interest therein.
7.14(c) The Company shall not make any compromise,
adjustment or
settlement in respect of any of the Collateral or accept other than
cash in
payment or liquidation of the Collateral.
8. DEFAULTS; REMEDIES.
8.1. Events of Default. The occurrence of any of the following
conditions
or events shall be an event of default ("Event of Default"):
8.1(a) Failure to pay the principal of any Advance when due,
whether
at stated maturity, by acceleration, or otherwise; or failure to
pay any
installment of interest on any Advance or any other amount due under
this
Agreement within ten (10) days after the due date; or failure to
pay,
within any applicable grace period, the principal or interest on any
other
indebtedness of the Company due the Lender; or
8.1(b) Failure of the Company or any of its Subsidiaries to
pay, or
any default in the payment of any principal or interest on, any
other
indebtedness or in the payment of any contingent obligation
within any
period of grace provided; or breach or default with respect to any
other
material term of any other indebtedness or of any loan agreement,
mortgage,
indenture or other agreement relating thereto, if the effect of
such
failure, default or breach is to cause, or to permit the holder or
holders
thereof (or a trustee on behalf of such holder or holders) to
cause,
indebtedness of the Company or its Subsidiaries in the aggregate
amount of
Fifty Thousand Dollars ($50,000) or more to become or be declared due
prior
to its stated maturity (upon the giving or receiving of notice,
lapse of
time, both, or otherwise); or
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(1) Replaced by Fourth Amendment (6/11/96) - Page 2
8.1(c) Failure of the Company to perform or comply with any
term or
condition applicable to it contained in Sections 6.3, 6.12 and 6.13
or in
any Section of Article 7 of this Agreement; or
8.l(d) Any of the Company's representations or warranties
made or
deemed made herein or in any other Loan Document, or in any
statement or
certificate at any time given by the Company in writing pursuant
hereto or
thereto shall be inaccurate or incomplete in any material respect
on the
date as of which made or deemed made; or(1)
8.1(e) The Company shall default in the performance of or
compliance
with any term contained in this Agreement or any other Loan Document
other
than those referred to above in Subsections 8.1(a), 8.1(c) or
8.1(d) and
such default shall not have been remedied or waived within thirty (30)
days
after the earliest of (i) receipt by the Company of Notice from the
Lender
of such default, (ii) receipt by the Lender of Notice from the
Company of
such default, or (iii) the date the Company should have notified the
Lender
of such default pursuant to Section 6.6(c); or(2)
8.1(f) (1) A court having jurisdiction shall enter a decree or
order
for relief in respect of the Company, any Subsidiary of the Company
or any
Guarantor in an involuntary case under any applicable
bankruptcy,
insolvency or other similar law in respect of the Company, any
Subsidiary
of the Company or any Guarantor now or hereafter in effect, which
decree or
order is not stayed; or a filing of a voluntary case under any
applicable
bankruptcy, insolvency or other similar law in respect of the
Company, any
Subsidiary of the Company or any Guarantor has occurred; or any
other
similar relief shall be granted under any applicable federal or state
law;
or (2) the filing of an involuntary case in respect of the Company,
any
Subsidiary of the Company or any Guarantor under any applicable
bankruptcy,
insolvency or other similar law; or a decree or order of a court
having
jurisdiction for the appointment of a receiver, liquidator,
sequestrator,
trustee, custodian or other officer having similar powers over the
Company,
any Subsidiary of the Company or of any Guarantor, or over all
or a
substantial part of their respective property, shall have been
entered; or
the involuntary appointment of an interim receiver, trustee or
other
custodian of the Company, any Subsidiary of the Company or any
Guarantor
for all or a substantial part of their respective property; or the
issuance
of a warrant of attachment, execution or similar process against
any
substantial part of the property of the Company, any Subsidiary
of the
Company or any Guarantor, and the continuance of any such
events in
Subsection (2) above for sixty (60) days unless dismissed, bonded
off or
discharged; or
8.1(g) The Company, any Subsidiary of the Company or any
Guarantor
shall have an order for relief entered with respect to it or
commence a
voluntary case under any applicable bankruptcy, insolvency or other
similar
law now or hereafter in effect, or shall consent to the entry of an
order
for relief in an involuntary case under any such law, or shall
consent to
the appointment of or taking possession by a receiver, trustee or
other
custodian for all or a substantial part of its property; the making
by the
Company, any Subsidiary of the Company or any Guarantor of any
assignment
for the benefit of creditors; or the inability or failure of the
Company,
any Subsidiary of the Company or any Guarantor, or the admission
by the
Company, any Subsidiary of the Company or any Guarantor in writing
of its
inability, to pay its debts as such debts become due; or
8.1(h) Failure of the Company to perform any contractual
obligations
which it may have to repurchase Mortgage Loans, if such obligations
in the
aggregate exceed One Million Dollars ($l,000,000); or
8.1(i) Any money judgment, writ or warrant of attachment, or
similar
process involving in any case an amount in excess of Twenty-Five
Thousand
Dollars ($25,000) shall be entered or filed against the Company or
any of
its Subsidiaries or any of their respective assets and shall
remain
undischarged, unvacated, unhanded or unstayed for a period of thirty
(30)
days or in any event later than five (5) days prior to the date
of any
proposed sale thereunder; or
8.1(j) Any order, judgment or decree shall be entered against
the
Company decreeing the dissolution or split up of the Company and such
order
shall remain undischarged or unstayed for a period in excess of twenty
(20)
days; or
8.1(k) Any Plan maintained by the Company or any of its
Subsidiaries
shall be terminated within the meaning of Title IV of ERISA or a
trustee
shall be appointed by an appropriate United States district
court to
administer any Plan, or the Pension Benefit Guaranty Corporation
(or any
successor thereto) shall institute proceedings to terminate any Plan
or to
appoint a trustee to administer any Plan if as of the date thereof
the
Company's liability or any such Subsidiary's liability (after giving
effect
to the tax consequences thereof) to the Pension Benefit
Guaranty
Corporation (or any successor thereto) for unfunded guaranteed
vested
benefits under the Plan exceeds the then current value of
assets
accumulated in such Plan by more than Twenty-Five Thousand
Dollars
($25,000) (or in the case of a termination involving the Company or
any of
its Subsidiaries as a Substantial employers (as defined in
Section
4001(a)(2) of ERISA) the withdrawing employer's proportionate share of
such
excess shall exceed such amount); or
8.1(l) The Company or any of its Subsidiaries as employer
under a
Multiemployer Plan shall have made a complete or partial withdrawal
from
such Multiemployer Plan and the plan sponsor of such Multiemployer
Plan
shall have notified such withdrawing employer that such employer
has
incurred a withdrawal liability in an annual amount exceeding Twenty-
Five
Thousand Dollars ($25,000); or
8.1(m) The Company or any Guarantor shall purport to disavow
its
obligations hereunder or under any Guaranty, as the case may be, or
shall
contest the validity or enforceability hereof or of any Guaranty;
or the
Lender's security interest on any portion of the Collateral shall
become
unenforceable or otherwise impaired; provided that, subject to the
Lender's
approval, no Event of Default shall occur as a result of such
impairment if
all Advances made against any such Collateral shall be paid in full
within
ten (10) days of the date of such impairment; or
8.1(n) James W. Noack and James A. Umphryes shall cease
owning,
directly or indirectly, all of the capital stock of the Company; or
8.1(o) There shall be a material adverse change in the
financial
condition, business or operations of the Company.
8.2. Remedies.
8.2(a) Upon the occurrence of any Event of Default
described in
Sections 8.1(f) or 8.1(g), the Commitments shall be terminated
and the
unpaid principal amount of and accrued interest on the Notes and all
other
Obligations shall automatically become due and payable,
without
presentment, demand or other requirements of any kind, all of
which are
hereby expressly waived by the Company.
8.2(b) Upon the occurrence of any Event of Default, other than
those
described in Sections 8.1(f) and 8.1(g), the Lender may, by Notice
to the
Company, terminate the Commitments and/or declare all Obligations
to be
immediately due and payable, whereupon the same shall forthwith
become due
and payable, together with all accrued interest thereon, and the
obligation
of the Lender to make any Advances shall thereupon terminate.
8.2(c) Upon the occurrence of any Event of Default, the
Lender may
also do any of the following:
(1) Foreclose upon or otherwise enforce its security
interest in
and Lien on the Collateral to secure all payments and
performance of
the Obligations in any manner permitted by law or provided
for
hereunder.
(2) Notify all obligers in respect of Collateral
that the
Collateral has been assigned to the Lender and that all
payments
thereon are to be made directly to the Lender or such other
party an
may be designated by the Lender; settle, compromise, or
release, in
whole or in part, any amounts owing on the Collateral, any
such
obligor or any Investor or any portion of the Collateral, on
terms
acceptable to the Lender; enforce payment and prosecute any
action or
proceeding with respect to any and all Collateral; and where any
such
Collateral is in default, foreclose on and enforce security
interests
in such Collateral by any available judicial procedure or
without
judicial process and sell property acquired as a result of any
such
foreclosure.
(3) Act, or contract with a third party to act, as
servicer or
subservicer of each item of Collateral requiring servicing and
perform
all obligations required in connection with Servicing
Contracts and
Purchase Commitments, such third party's fees to be paid
by the
Company.
(4) Require the Company to assemble the Collateral and/or
books
and records relating thereto and make such available to the
Lender at
a place to be designated by the Lender.
(5) Enter onto property where any Collateral or books and
records
relating thereto are located and take possession thereof
with or
without judicial process.
(6) Prior to the disposition of the Collateral, prepare
it for
disposition in any manner and to the extent the Lender
deems
appropriate.
(7) Exercise all rights and remedies of a secured creditor
under
the Uniform Commercial Code of Minnesota or other applicable
law,
including, but not limited to, selling or otherwise disposing
of the
Collateral, or any part thereof, at one or more public or
private
sales, whether or not such Collateral is present at the place of
sale,
for cash or credit or future delivery, on such teems and in
such
manner as the Lender may determine, including, without
limitation,
sale pursuant to any applicable Purchase Commitment. If
notice is
required under such applicable law, the Lender will give the
Company
not less than ten (10) days' notice of any such public sale or
of the
date after which any private sale may be held. The Company agrees
that
ten (10) days, notice shall be reasonable notice. The Lender
may,
without notice or publication, adjourn any public or private
sale or
cause the same to be adjourned from time to time by
announcement at
the time and place fixed for the sale, and such sale may be
made at
any time or place to which the same may be so adjourned. In
case of
any sale of all or any part of the Collateral on credit or for
future
delivery, the Collateral so sold may be retained by the Lender
until
the selling price is paid by the purchaser thereof, but the
Lender
shall not incur any liability in case of the failure of such
purchaser
to take up and pay for the Collateral so sold and, in case of any
such
failure, such Collateral may again be sold upon like notice.
The
Lender may, however, instead of exercising the power of sale
herein
conferred upon it, proceed by a suit or suits at law or in
equity to
collect all amounts due upon the Collateral or to foreclose the
pledge
of and sell the Collateral or any portion thereof under a
judgment or
decree of a court or courts of competent jurisdiction, or both.
(8) Proceed against the Company on the Notes or against
the
Guarantor under the Guaranty or both.
8.2(d) The Lender shall incur no liability as a result of the
sale or
other disposition of the Collateral, or any part thereof, at any
public or
private sale or disposition. The Company hereby waives (to the
extent
permitted by law) any claims it may have against the Lender
arising by
reason of the fact that the price at which the Collateral may have
been
sold at such private sale was less than the price which might have
been
obtained at a public sale or was less than the aggregate amount
of the
outstanding Advances and the unpaid interest accrued thereon, even
if the
Lender accepts the first offer received and does not offer the
Collateral
to more than one offeree. Any sale of Collateral pursuant to the terms
of a
Purchase Commitment shall be deemed to have been made in a
commercially
reasonable manner.
8.2(e) The Company acknowledges that Mortgage Loans
and
Mortgage-backed Securities are collateral of a type which is
customarily
sold on a recognized market. The Company waives any right it may
have to
prior notice of the sale of any Pledged Mortgage or Pledged Security.
8.2(f) The Company specifically waives and releases (to the
extent
permitted by law) any equity or right of redemption, all
rights of
redemption, stay or appraisal which the Company has or may have
under any
rule of law or statute now existing or hereafter adopted, and any r
ght to
require the Lender to (1) proceed against any Person, (2) proceed
against
or exhaust any of the Collateral or pursue its rights and
remedies as
against the Collateral in any particular order, or (3) pursue any
other
remedy in its power. The Lender shall not be required to take any
steps
necessary to preserve any rights of the Company against
holders of
mortgages prior in lien to the Lien of any Mortgage included
in the
Collateral or to preserve rights against prior parties.
8.2(g) The Lender may, but shall not be obligated to, advance any
sums
or do any act or thing necessary to uphold and enforce the
Lien and
priority of, or the security intended to be afforded by, any
Mortgage
included in the Collateral, including, without limitation,
payment of
delinquent taxes or assessments and insurance premiums. All
advances,
charges, costs and expenses, including reasonable attorneys'
fees and
disbursements, incurred or paid by the Lender in exercising any
right,
power or remedy conferred by this Agreement, or in the enforcement
hereof,
together with interest thereon, at the Default Rate, from the
time of
payment until repaid, shall become a part of the principal
balance
outstanding hereunder and under the Notes.
8.2(h) No failure on the part of the Lender to exercise, and no
delay
in exercising, any right, power or remedy provided hereunder, at law
or in
equity shall operate as a waiver thereof; nor shall any single or
partial
exercise by the Lender of any right, power or remedy provided
hereunder, at
law or in equity preclude any other or further exercise thereof
or the
exercise of any other right, power or remedy. Without intending to
limit
the foregoing, all defenses based on the statute of limitations are
hereby
waived by the Company to the extent permitted by law. The remedies
herein
provided are cumulative and are not exclusive of any remedies
provided at
law or in equity.
8.2(i) The Company acknowledges that the Company and the Credit
Agent
have entered into, and may from time to time hereafter enter
into,
agreements ("Acknowledgment Agreements") with FNMA, FHLMC or any
other
Investor in order to obtain the consent of FMMA, FHLMC or any
other
Investor to the assignment of and security interest granted
in the
Servicing Contracts pursuant to Section 3 hereof, as the same
may be
amended from time to time. The Company further acknowledges
that the
Acknowledgment Agreements may contain certain provisions
concerning the
enforcement by the Credit Agent of the security interest of the
Secured
Parties in the Servicing Contracts subject thereto. The Company,
agrees
that the disposition of its rights in any Servicing Contract
pursuant to
the terms of the applicable Acknowledgment Agreement shall be
deemed
commercially reasonable within the meaning of Section 9-504(3)
of the
Uniform Commercial Code of Minnesota. The Company hereby waives any
claims
it might otherwise have against the Credit Agent or the Credit Agent
or any
Lender as a result of the Credit Agent's compliance with the terms
of any
Acknowledgment Agreement.
8.3. Application of Proceeds. The proceeds of any sale,
disposition or
other enforcement of the Lender's security interest in all or any part
of the
Collateral shall be applied by the Lender:
First, to the payment of the costs and expenses of such
sale or
enforcement, including reasonable compensation to the Lenders agents
and
counsel, and all expenses, liabilities and advances made or incurred by
or on
behalf of the Lender in connection therewith;
Second, with respect to the Warehousing Collateral, to the
payment of
interest accrued and unpaid on the Warehousing Promissory Note, with
respect to
the Receivables, to the payment of interest accrued and unpaid on the
Working
Capital Promissory Note, and with respect to the Servicing Collateral,
to the
payment of interest accrued and unpaid on the Term Loan Promissory Note
and,
thereafter, the Working Capital Promissory Note;
Third, with respect to the Warehousing Collateral, to the
payment of
amounts other than principal and interest due under the Warehousing
Promissory
Note or under this Agreement and related to the Warehousing
Commitment or
Warehousing Advances, with respect to the Receivables, to the payment of
amounts
other than principal and interest due under the Working Capital Promissory
Note
or under this Agreement and related to the Working Capital Commitment or
Working
Capital Advances, and with respect to the Servicing Collateral, to the
payment
of any amounts other than principal and interest due under the Term
Loan
Promissory Note or under this Agreement and related to the Term Loan
Commitment
or Term Loan Advances and, thereafter, amounts other than principal and
interest
due under the Working Capital Promissory Note or this Agreement and
related to
the Working Capital Advances or the Working Capital Commitment;
Fourth, with respect to the Warehousing Collateral, to the payment
of the
outstanding principal balance of the Warehousing Promissory Note, with
respect
to the Receivables, to the payment of the outstanding principal balance
of the
Working Capital Promissory Note, and with respect to the Servicing
Collateral,
to the payment of the outstanding principal balance of the Term Loan
Promissory
Note and, thereafter, the outstanding principal balance of the Working
Capital
Promissory Note;
Fifth, to the remaining Obligations of the Company, first to interest,
then
to other amounts (as described in clause Third above), then to principal;
and
Finally, to the payment to the Company, or to its successors or
assigns, or
as a court of competent jurisdiction may direct, of any surplus then
remaining
from such proceeds.
If the proceeds of any such sale, disposition or other enforcement
are
insufficient to cover the costs and expenses of such sale, as aforesaid,
and the
payment in full of all Obligations, the Company shall remain liable
for any
deficiency.
8.4. Lender Appointed Attorney-in-Fact. The Lender is hereby
appointed the
attorney-in-fact of the Company, with full power of substitution,
for the
purpose of carrying out the provisions hereof and taking any
action and
executing any instruments which the Lender may deem necessary or
advisable to
accomplish the purposes hereof, which appointment as attorney-in-
fact is
irrevocable and coupled with an interest. Without limiting the generality
of the
foregoing, the Lender shall have the right and power to give notices
of its
security interest in the Collateral to any Person, either in the name
of the
Company or in its own name, to endorse all Pledged Mortgages or
Pledged
Securities payable to the order of the Company, to change or cause to be
changed
the book-entry registration or name of subscriber or Investor on any
Pledged
Security, or to receive, endorse and collect all checks made payable
to the
order of the Company representing any payment on account of the principal
of or
interest on, or the proceeds of sale of, any of the Pledged Mortgages or
Pledged
Securities and to give full discharge for the same.
8.5. Right of Set-Off. If the Company shall default in the payment
of the
Notes, any interest accrued thereon, or any other sums which may become
payable
hereunder when due, or in the performance of any of its other
obligations or
liabilities under this Agreement, the Lender shall have the right, at any
time
and from time to time, without notice, to set-off and to appropriate or
apply
any and all property or indebtedness of any kind at any time held or
owing by
the Lender to or for the credit or the account of the Company against
and on
account of the Obligations of the Company under the Notes and this
Agreement,
irrespective of whether or not the Lender shall have made any demand
hereunder
and whether or not said Obligations shall have matured.
9. NOTICES.
All notices, demands, consents, requests and other communications
required
or permitted to be given or made hereunder (collectively, Notices')
shall,
except as otherwise expressly provided hereunder, be in writing and
shall be
delivered in person or telecopied or mailed, first class or
delivered by
overnight courier, return receipt requested, postage prepaid, addressed
to the
respective parties hereto at their respective addresses hereinafter set
forth
or, as to any such party, at such other address as may be designated by it
in a
Notice to the other. All Notices shall be conclusively deemed to have
been
properly given or made when duly delivered, in person, by telecopy
or by
overnight courier, or if mailed on the third Business Day after being
deposited
in the mails, addressed as follows:
if to the Company: Monument Mortgage, Inc.
3021 Citrus Circle, Suite 150
Walnut Creek, California 94598
Attention: Paul R. Garrigues, CFO
Telecopier No.: (510) 938-6129
if to the Lender: Residential Funding Corporation
1646 North California Blvd.
Suite 400
Walnut Creek, CA 94596
Attention: Graham Shipman, Vice
President
Telecopier No.: (510) 935-6424
with a copy to: Residential Funding Corporation
8400 Normandale Lake Boulevard
Suite 600
Minneapolis, Minnesota 55437
Attention: Sandra L. Cakes, Esq.
Telecopier No.: (612) 832-7190
10. REIMBURSEMENT OF EXPENSES; INDEMNITY.
The Company shall: (a) pay a documentation production fee of Three
Thousand
Five Hundred Dollars ($3,500) and all out-of-pocket costs and expenses
of the
Lender, including, without limitation, reasonable fees and
disbursements of
counsel (including allocated costs of internal counsel), in connection
with the
preparation, negotiation, documentation, amendment, enforcement
and
administration of this Agreement, the Notes, and other Loan Documents
and the
making and repayment of the Advances and the payment of interest thereon;
(b)
indemnify, pay, and hold harmless the Lender and any holder of the Notes
from
and against, any and all present and future stamp, documentary and other
similar
taxes with respect to the foregoing matters and save the Lender and the
holder
or holders of the Notes harmless from and against any and all liabilities
with
respect to or resulting from any delay or omission to pay such taxes;
(c)
indemnify, pay and hold harmless the Lender and any of its officers,
directors,
employees or agents and any subsequent holder of the Notes (collectively
called
the "Indemnitees") from and against any and all liabilities,
obligations,
losses, damages, penalties, judgments, suits, costs, expenses and
disbursements
of any kind or nature whatsoever (including without limitation, the
reasonable
fees and disbursements of counsel of the Indemnitees (including allocated
costs
of internal counsel) in connection with any investigative,
administrative or
judicial proceeding, whether or not such Indemnitees shall be designated a
party
thereto) which may be imposed upon, incurred by or asserted against
such
Indemnitees in any manner relating to or arising out of this Agreement,
the
Notes, or any other Loan Document or any of the transactions contemplated
hereby
or thereby (the n Indemnified Liabilitiesn); provided, however, that the
Company
shall have no obligation hereunder with respect to Indemnified
Liabilities
arising from the gross negligence or willful misconduct of any such
Indemnitees.
To the extent that the undertaking to indemnify, pay and hold harm' ess
as set
forth in the preceding sentence may be unenforceable because it is
violative of
any law or public policy, the Company shall contribute the maximum portion
which
it is permitted to pay and satisfy under applicable law, to the
payment and
satisfaction of all Indemnified Liabilities incurred by the Indemnitees
or any
of them. The agreement of the Company contained in this Subsection (c)
shall
survive the expiration or termination of this Agreement and the payment in
full
of the Notes. Attorneys' fees and disbursements incurred in enforcing,
or on
appeal from, a judgment pursuant hereto shall be recoverable separately
from and
in addition to any other amount included in such judgment, and this
clause is
intended to be severable from the other provisions of this Agreement
and to
survive and not be merged into such judgment.
11. FINANCIAL INFORMATION.
All financial statements and reports furnished to the Lender
hereunder
shall be prepared in accordance with GAAP, applied on a basis consistent
with
that applied in preparing the financial statements as at the end of and
for the
last fiscal year ended (except to the extent otherwise required to
conform to
good accounting practice).
12. MISCELLANEOUS.
12.1. Terms Binding Upon Successors Survival of Representations. The
terms
and provisions of this Agreement shall be binding upon and inure to the
benefit
of the parties hereto and their respective successors and assigns.
All
representations, warranties, covenants and agreements herein contained
on the
part of the Company shall survive the making of any Advance and the
execution of
the Notes, and shall be effective so long as the Commitment is
outstanding
hereunder or there remain any Obligations to be paid or performed.
12.2. Assignment. This Agreement may not be assigned by the Company.
This
Agreement and the Notes, along with the Lenders security interest in any
or all
of the Collateral, may, at any time, be transferred or assigned, in whole
or in
part, by the Lender, and any assignee thereof may enforce this Agreement,
the
Notes and such security interest.
12.3. Amendments. Except as otherwise provided in this Agreement,
this
Agreement may not be amended, modified or supplemented unless such
amendment,
modification or supplement is set forth in a writing signed by the
parties
hereto.
12.4. Governing Law. This Agreement and the other Loan Documents
shall be
governed by the laws of the State of Minnesota, without reference
to its
principles of conflicts of laws.
12.5. Participations. The Lender may at any time sell, assign or
grant
participations in, or otherwise transfer to any other Person (a
"Participant"),
all or part of the Obligations. Without limitation of the exclusive right
of the
Lender to collect and enforce such Obligations, the Company agrees that
each
disposition will give rise to a debtor-creditor relationship of the
Company to
the Participant, and the Company authorizes each Participant, upon
the
occurrence of an Event of Default, to proceed directly by right of
setoff,
bankers lien, or otherwise, against any assets of the Company which may
be in
the hands of such Participant. The Company authorizes the Lender to
disclose to
any prospective Participant and any Participant any and all information
in the
Lenders possession concerning the Company, this Agreement and the
Collateral.
12.6. Relationship of the Parties. This Agreement provides for the
making
of Advances by the Lender, in its capacity as a lender, to the Company,
in its
capacity as a borrower, and for the payment of interest, repayment of
principal
by the Company to the Lender, and for the payment of certain fees by the
Company
to the Lender. The relationship between the Lender and the Company is
limited to
that of creditor/secured party, on the one hand, and debtor, on the other
hand.
The provisions herein for compliance with financial covenants and
delivery of
financial statements are intended solely for the benefit of the
Lender to
protect its interests as lender in assuring payments of interest and
repayment
of principal and payment of certain fees, and nothing contained in
this
Agreement shall be construed as permitting or obligating the Lender to act
as a
financial or business advisor or consultant to the Company, as
permitting or
obligating the Lender to control the Company or to conduct the
Company's
operations, as creating any fiduciary obligation on the part of the
Lender to
the Company, or as creating any joint venture, agency, or other
relationship
between the parties hereto other than as explicitly and specifically
stated in
this Agreement. The Company acknowledges that it has had the
opportunity to
obtain the advice of experienced counsel of its own choosing in connection
with
the negotiation and execution of this Agreement and to obtain the advice of
such
counsel with respect to all matters contained herein. The Company
further
acknowledges that it is experienced with respect to financial and credit
matters
and has made its own independent decisions to apply to the Lender for
credit and
to execute and deliver this Agreement.
12.7. Severability. If any provision of this Agreement shall be
declared to
be illegal or unenforceable in any respect, such illegal or
unenforceable
provision shall be and become absolutely null and void and of no force
and
effect as though such provision were not in fact set forth herein, but all
other
covenants, terms, conditions and provisions hereof shall nevertheless
continue
to be valid and enforceable.
12.8. Operational Reviews. From time to time upon request, the
Company
shall permit the Lender or its representative access to its premises
and
records, for the purpose of conducting a review of the Company's
general
mortgage business methods, policies, and procedures, auditing loan
files and
reviewing financial and operational aspects of the Company's business.
12.9. Consent to Credit References. The Company hereby consents
to the
disclosure of information regarding the Company and its relationships
with the
Lender to Persons making credit inquiries to the Lender. This
consent is
revocable by the Company at any time upon Notice to the Lender as
provided in
Section 9 hereof.
12.10. Consent to Jurisdiction. The Company hereby agrees that any
action
or proceeding under the Loan Documents, the Notes or any document
delivered
pursuant hereto may be commenced against it in any court of
competent
jurisdiction within the State of Minnesota, by service of process
upon the
Company by first class registered or certified mail, return receipt
requested,
addressed to the Company at its address last known to the Lender. The
Company
agrees that any such suit, action or proceeding arising out of or
relating to
this Agreement or any other such document may be instituted in the
Hennepin
County State District Court or in the United States District Court
for the
District of Minnesota at the option of the Lender; and the Company hereby
waives
any objection to the jurisdiction or venue of any such court with respect
to, or
the convenience of any court as a forum for, any such suit,
action or
proceeding. Nothing herein shall affect the right of the Lender to
accomplish
service of process in any other manner permitted by law or to commence
legal
proceedings or otherwise proceed against the Company in any other
jurisdiction
or court.
12.11. Counterparts. This Agreement may be executed in any
number of
counterparts, each of which shall be deemed an original, but all
Such
counterparts shall together constitute but one and the same instrument.
12.12. Entire Agreement. This Agreement, the Notes and the other
Loan
Documents represent the final agreement among the parties hereto and
thereto
with respect to the subject matter hereof and thereof, and may
not be
contradicted by evidence of prior or contemporaneous oral agreements among
such
parties. There are no oral agreements among the parties with respect
to the
subject matter hereof and thereof.
12.13. WAIVER OF JURY TRIAL. THE COMPANY AND THE LENDER EACH
HEREBY (a)
COVENANTS AND AGREES NOT TO ELECT A TRIAL BY JURY OF ANY ISSUE TRIABLE OF
RIGHT
BY A JURY, AND (b) WAIVES ANY RIGHT TO TRIAL BY JURY FULLY TO THE EXTENT
THAT
ANY SUCH RIGHT SHALL NOW OR HEREAFTER EXIST. THIS WAIVER OF RIGHT TO
TRIAL BY
JURY IS SEPARATELY GIVEN, KNOWINGLY AND VOLUNTARILY, BY THE COMPANY
AND THE
LENDER, AND THIS WAIVER IS INTENDED TO ENCOMPASS INDIVIDUALLY EACH
INSTANCE AND
EACH ISSUE AS TO WHICH THE RIGHT OF A JURY TRIAL WOULD OTHERWISE ACCRUE.
THE
LENDER AND THE COMPANY IS EACH HEREBY AUTHORIZED AND REQUESTED TO SUBMIT
THIS
AGREEMENT TO ANY COURT HAVING JURISDICTION OVER THE SUBJECT MATTER
AND THE
PARTIES HERETO, SO AS TO SERVE AS CONCLUSIVE EVIDENCE OF THE FOREGOING
WAIVER OF
THE RIGHT TO JURY TRIAL. FURTHER, THE COMPANY AND THE LENDER EACH
HEREBY
CERTIFIES THAT NO REPRESENTATIVE OR AGENT OF THE OTHER PARTY, INCLUDING
THE
OTHER PARTY'S COUNSEL, HAS REPRESENTED, EXPRESSLY OR OTHERWISE, TO ANY
OF ITS
REPRESENTATIVES OR AGENTS THAT THE OTHER PARTY WILL NOT SEEK TO ENFORCE
THIS
WAIVER OF RIGHT TO JURY TRIAL PROVISION.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be
duly executed as of the date first above written.
MONUMENT MORTGAGE, INC.,
a California corporation
By:
-----------------------------------------
Its: Senior Vice President/CFO
RESIDENTIAL FUNDING CORPORATION,
a Delaware corporation
By:
----------------------------------------
Its: Vice President
STATE OF California )
) ss
COUNTY OF Contra Costa )
On March 22, 1995, before me, a Notary Public, personally appeared
Paul
Garrigues, the Senior Vice President/CFO of MONUMENT MORTGAGE,
INC., a
California corporation, personally known to me (or proved to me on the
basis of
satisfactory evidence) to be the person whose name is subscribed to the
within
instrument and acknowledged to me that he/she executed the same in
his/her
authorized capacity, and that by his/her signature on the instrument the
person,
or the entity upon behalf of which the person acted, executed the
instrument.
WITNESS my hand and official seal.
---------------------------------------
Notary Public
My Commission Expires:
(SEAL)
STATE OF California )
) ss
COUNTY OF Contra Costa )
On April 19, 1995, before me, a Notary Public, personally
appeared D.
Graham Shipman, the Vice President of RESIDENTIAL FUNDING
CORPORATION, a
California corporation, personally known to me (or proved to me on the
basis of
satisfactory evidence) to be the person whose name is subscribed to the
within
instrument and acknowledged to me that he/she executed the same in
his/her
authorized capacity, and that by his/her signature on the instrument the
person,
or the entity upon behalf of which the person acted, executed the
instrument.
WITNESS my hand and official seal.
---------------------------------------
Notary Public
My Commission Expires:
(SEAL)
<PAGE>
EXHIBIT "A"
ARTICLES OF INCORPORATION
<PAGE>
EXHIBIT "B"
BY- LAWS
<PAGE>
EXHIBIT "C"
CERTIFICATES OF GOOD STANDING
<PAGE>
EXHIBIT "D"
CERTIFICATE OF THE FRANCHISE TAX BOARD
<PAGE>
EXHIBIT "E"
CERTIFICATE AS TO INCUMBENCY
TO: RESIDENTIAL FUNDING CORPORATION
I hereby certify to you that I am the duly elected and qualified
Secretary
of MONUMENT MORTGAGE, INC., a California corporation ("Company") and
that, as
such, I am authorized to execute this Certificate on behalf of the
Company. I
further certify that the persons named below are duly elected,
qualified and
acting officers of the Company, holding on the date hereof the respective
titles
set forth opposite their respective names, and that the respective
signatures
get forth opposite their names are their true and genuine signatures:
Name Title Signature
James A. Umphryes Executive Vice Pres. -------------------
- ----
James W. Noack President -------------------
- ----
Paul Garrigues Chief Financial Officer -------------------
- ----
Sr. Vice Pres.
Lee Decker Sr. Vice Pres. -------------------
- ----
Robert Kamm Sr. Vice Pres. -------------------
- ----
Jenny Pusich Secretary -------------------
- ----
Julieann Woodley Asst. Sec. -------------------
- ----
Deshon Chambers Asst. Sec. -------------------
- ----
Jill Lewis Asst. Sec. -------------------
- ----
Jennifer R. Huntley Asst. Sec. -------------------
- ----
Regina E. Kimura Asst. Sec. -------------------
- ----
Abigail A. Bally Asst. Sec. -------------------
- ----
You may conclusively rely on this Certificate until formally advised
by a
like Certificate of any changes herein.
IN WITNESS WHEREOF, I have hereunto executed this Certificate on
this 3rd
day of April, 1995.
-----------------------------------------
Secretary
<PAGE>
EXHIBIT A-
1(1)
WAREHOUSING PROMISSORY NOTE
$10,000,000 Date: March __, 1995
FOR VALUE RECEIVED, the undersigned, MONUMENT MORTGAGE, INC., a
California
corporation, (herein called the "Company , hereby promises to pay to the
order
of RESIDENTIAL FUNDING CORPORATION, a Delaware corporation (the
Blenders or,
together with its successors and assigns, the Holders) whose principal
place ok
business is 8400 Normandale Lake Blvd., Suite 600, Minneapolis, Minnesota
55437,
or at such other place as the Holder may designate from time to time,
the
principal sum of Ten Million Dollars ($10,000,000) or so much thereof as
may be
outstanding from time to time pursuant to the Warehousing Credit and
Security
Agreement described below, and to pay interest on said principal sum or
such
part thereof as shall remain unpaid from time to time, from the date of
each
Advance until repaid in full, and all other fees and charges due
under the
Agreement, at the rate and at the times set forth in the Agreement. All
payments
hereunder shall be made in lawful money of the United States and in
immediately
available funds.
This Note is given to evidence an actual warehouse facility in the
above
amount and is the Warehousing Promissory Note referred to in that
certain
Warehousing Credit and Security Agreement (the "Agreement") dated the
date
hereof between the Company and the Lender, as the same may be
amended or
supplemented from time to time, and is entitled to the benefits
thereof.
Reference is hereby made to the Agreement (which is incorporated
herein by
reference as fully and with the same effect as if set forth herein at
length)
for a description of the Collateral, a statement of the covenants
and
agreements, a statement of the rights and remedies and securities
afforded
thereby and other matters contained therein. Capitalized terms used
herein,
unless otherwise defined herein, shall have the meanings given them
in the
Agreement.
This Note may be prepaid in whole or in part at any time without
premium or
penalty.
Should this Note be placed in the hands of attorneys for collection,
the
Company agrees to pay, in addition to principal and interest, fees and
charges
due under the Agreement, any and all costs of collecting this Note,
including
reasonable attorneys' fees and expenses.
The Company hereby waives demand, notice, protest and presentment.
- ----------
(1) Replaced by Exhibit A-1, Third Amendment (2/29/96)
This Note shall be construed and enforced in accordance with the
laws of
the State of Minnesota, without reference to ids principles of conflicts of
law.
IN WITNESS WHEREOF, the Company has executed this Note as of the
day and
year first above written.
MONUMENT MORTGAGE, INC.,
a California corporation
By:
-----------------------------------------
Its:
-----------------------------------------
STATE OF California )
) ss
COUNTY OF Contra Costa )
On ______________________, before me, a Notary Public, personally
appeared
__________________, the ________________________ of MONUMENT MORTGAGE,
INC., a
California corporation, personally known to me (or proved to me on the
basis of
satisfactory evidence) to be the person whose name is subscribed to the
within
instrument and acknowledged to me that he/she executed the same in
his/her
authorized capacity, and that by his/her signature on the instrument the
person,
or the entity upon behalf of which the person acted, executed the
instrument.
WITNESS my hand and official seal.
----------------------------------------
- -
Notary Public
My Commission Expires:
(SEAL)
<PAGE>
EXHIBIT A-2(1)
SUBLIMIT PROMISSORY NOTE
$6,000,000 Date: March ____,
1995
FOR VALUE RECEIVED, the undersigned, MONUMENT MORTGAGE, INC., a
California
corporation, (herein called the "Compaq), hereby promises to pay to the
order of
RESIDENTIAL FUNDING CORPORATION, a Delaware corporation (the "Lender"
or,
together with Arts successors and assigns, the "Holder") whose
principal
place/of business in 8400 Normandale Lake Blvd., Suite 600,
Minneapolis,
Minnesota 55437, or at such other place as the Holder may designate from
time to
time, the principal sum of Six Million Dollars ($6,000,000) or so much
thereof
as may be outstanding from time/to time pursuant to the Warehousing
Credit and
Security Agreement/described below, and to pay interest on said principal
sum or
such part thereof as shall remain unpaid from time to time, from the
date of
each Advance until repaid in full, and all other fees find charges due
under the
Agreement, at the rate and at the times set forth in the Agreement. All
payments
hereunder shall be made id lawful money of the United States and in
immediately
available funds.
This Note is given to evidence An actual warehouse facility in the
above
amount and is the Sublimit Promissory Note referred to in that
certain
Warehousing Credit and Security Agreement (the Agreement n ) dated the
date
hereof between the Company and the Lender, as the same may be
amended or
supplemented from time to time, and is entitled to the benefits
thereof.
Reference is hereby made to the Agreement (which/is incorporated
herein by
reference as fully and with the same effect as if set forth herein at
length)
for a description of the Collateral, a statement of the covenants
and
agreements, a statement of the rights and remedies and securities
afforded
thereby and other matters contained therein. Capitalized terms used
herein,
unless otherwise defined herein, shall have the meanings given them
in the
Agreement.
This Note may be prepaid in whole or in part at any time without
premium or
penalty.
Should this Note be placed in the hands of attorneys for collection,
the
Company agrees to pay, in addition to principal and interest, fees and
charges
due under the Agreement, any and all costs of collecting this Note,
including
reasonable attorneys' fees and expenses.
The Company hereby waives demand, notice, protest and presentment.
- ----------
(1) Replaced by Third Amendment (2/29/96) - Exhibit A-2.
This Note shall be construed and enforced in accordance wi the laws
of the
State of Minnesota, without reference to Arts principles of conflicts of
law.
IN WITNESS WHEREOF, the Company has executed this Node as of the
day and
year first above written.
MONUMENT MORTGAGE, INC.,
a California corporation
By:
-------------------------------------------
- -
Its:
-------------------------------------------
- -
STATE OF California )
) ss
COUNTY OF Contra Costa )
On , before me, a Notary Public, personally appeared , the of
MONUMENT
MORTGAGE, INC., a California corporation, personally known to me (or
proved to
me on the basis of satisfactory evidence) to be the person whose
name is
subscribed to the within instrument and acknowledged to me that he/she
executed
the same in his/her authorized capacity, and that by his/her signature
on the
instrument the person, or the entity upon behalf of which the person
acted,
executed the instrument.
WITNESS my hand and official seal.
--------------------------------------------
Notary Public
My Commission Expires:
(SEAL)
<PAGE>
EXHIBIT A-
3(1)
WORKING CAPITAL PROMISSORY NOTE
$1,000,000 Date: March ___,
1995
FOR VALUE RECEIVED, the undersigned, MONUMENT MORTGAGE, INC., a
California
corporation, (herein called the Company), hereby promises to pay to the
order of
RESIDENTIAL FUNDING CORPORATION, a Delaware corporation (the Blenders
or,
together with its successors and assigns, the "Holder") whose principal
placer
of business is 8400 Normandale Lake Blvd., Suite 600, Minneapolis,
Minnesota
55437, or at such other place as the Holder may Designate from time to
time, the
principal sum of One Million Dollars ($1,000,000) or so much thereof as
may be
outstanding from time to time pursuant to the Warehousing Credit and
Security
Agreement described below, and to pay interest on said principal sum or
such
part thereof as shall remain unpaid from time to time, from the date of
each
Advance until repaid in full, and all other fees, and charges due
under the
Agreement, at the rate and at the times set forth in the Agreement. All
payments
hereunder shall be made in lawful money of the United States and in
immediately
available funds.
This Note is given to evidence an actual working capital facility
in the
above amount and is the Working Capital Promissory Note referred to in
that
certain Warehousing Credit and Security Agreement (the Agreement n )
dated the
date hereof between the Company and the Lender, as the same may be
amended or
supplemented from time to time, and isle entitled to the benefits
thereof.
Reference is hereby made to the Agreement (which is incorporated
herein by
reference as fully and with the same effect as if set forth herein at
length)
for a description of the Collateral, a statement of the covenants
and
agreements, a statement of the rights and remedies and securities
afforded
thereby and other matters contained therein. Capitalized terms used
herein,
unless otherwise defined herein, shall have the meanings given them
in the
Agreement.
This Note may be prepaid in whole or in part at any time without
premium or
penalty.
Should this Note be placed in the hands of attorneys for collection,
the
Company agrees to pay, in addition to principal and interest, fees and
charges
due under the Agreement, any and all costs of collecting this Note,
including
reasonable attorneys' fees and expenses.
The Company hereby waives demand, notice, protest and presentment.
- ----------
(1) Replaced by Third Amendment (2/29/96) - Exhibit A-3.
This Note shall be construed and enforced in accordance with the
laws of
the State of Minnesota, without reference to its principles of conflicts of
law.
IN WITNESS WHEREOF, the Company has executed this Note as of the
day and
year first above written.
MONUMENT MORTGAGE, INC.,
a California corporation
By:
----------------------------------------
Its:
----------------------------------------
STATE OF California )
) ss
COUNTY OF Contra Costa )
On _________________, before me, a Notary Public, personally
appeared
______________________ , the of _____________________ MONUMENT MORTGAGE,
INC., a
California corporation, personally known to me (or proved to me on the
basis of
satisfactory evidence) to be the person whose name is subscribed to the
within
instrument and acknowledged to me that he/she executed the same in
his/her
authorized capacity, and that by his/her signature on the instrument the
person,
or the entity upon behalf of which the person acted, executed the
instrument.
WITNESS my hand and official seal.
----------------------------------------
Notary Public
My Commission Expires
(SEAL)
<PAGE>
EXHIBIT A-4
TERM LOAN PROMISSORY NOTE
$1,000,000 Date: March ___,
1995
FOR VALUE RECEIVED, the undersigned, MONUMENT MORTGAGE, INC., a
California
corporation, (herein called the "Company"), hereby promises to pay to the
order
of RESIDENTIAL FUNDING CORPORATION, a Delaware corporation (the
"Lender" or,
together with its successors and assigns, the "Holder") whose principal
place of
business is 8400 Normandale Lake Blvd., Suite 600, Minneapolis, Minnesota
55437,
or at such other place as the Holder may designate from time to time,
the
principal sum of One Million Dollars ($1,000,000) or so much thereof as
may be
outstanding from time to time pursuant to the Warehousing Credit and
Security
Agreement described below, and to pay interest on said principal sum or
such
part thereof as shall remain unpaid from time to time, from the date of
each
Advance until repaid in full, and all other fees and charges due
under the
Agreement, at the rate and at the times set forth in the Agreement. All
payments
hereunder shall be made in lawful money of the United States and in
immediately
available funds.
This Note is given to evidence an actual term loan facility in the
above
amount and is the Working Capital Promissory Note referred to in that
certain
Warehousing Credit and Security Agreement (the "Agreement") dated the
date
hereof between the Company and the Lender, as the same may be
amended or
supplemented from time to time, and is entitled to the benefits
thereof.
Reference is hereby made to the Agreement (which is incorporated
herein by
reference as fully and with the same effect as if set forth herein at
length)
for a description of the Collateral, a statement of the covenants
and
agreements, a statement of the rights and remedies and securities
afforded
thereby and other matters contained therein. Capitalized terms used
herein,
unless otherwise defined herein, shall have the meanings given them
in the
Agreement.
This Note may be prepaid in whole or in part at any time without
premium or
penalty.
Should this Note be placed in the hands of attorneys for collection,
the
Company agrees to pay, in addition to principal and interest, fees and
charges
due under the Agreement, any and all costs of collecting this Note,
including
reasonable attorneys' fees and expenses.
The Company hereby waives demand, notice, protest and presentment.
This Note shall be construed and enforced in accordance with the
laws of
the State of Minnesota, without reference to its principles of conflicts of
law.
IN WITLESS WHEREOF, the Company has executed this Note as of the
day and
year first above written.
MONUMENT MORTGAGE, INC.,
a California corporation
By:
-----------------------------------------
Its:
-----------------------------------------
STATE OF California )
) ss
COUNTY OF Contra Costa )
On ___________________, before me, a Notary Public, personally
appeared
___________________________, the __________________of MONUMENT MORTGAGE,
INC., a
California corporation, personally known to me (or proved to me on the
basis of
satisfactory evidence) to be the person whose name is subscribed to the
within
instrument and acknowledged to me that he/she executed the same in
his/her
authorized capacity, and that by his/her signature on the instrument the
person,
or the entity upon behalf of which the person acted, executed the
instrument.
WITNESS my hand and official seal.
----------------------------------------
- --
Notary Public
My Commission Expires:
(SEAL)
<PAGE>
EXHIBIT B-1
GUARANTY
THIS GUARANTY, made and entered into as of 02nd day of Larch 1995, by
JAMES
W. NOACK (the "Guarantors), to RESIDENTIAL FUNDING CORPORATION, a
Delaware
corporation (the "Lenders), having its principal office at 8400 Normandale
Lake
Blvd., Suite 600, Minneapolis, Minnesota 55437.
RECITALS
A. MONUMENT MORTGAGE, INC., a California corporation (the
"Company"), and
the Lender have agreed that the Lender will extend (i) a
warehouse
facility in the principal amount of Ten Million Dollars
($10,000,000),
(ii) a term loan facility in the principal amount of One
Million
Dollars ($1,000,000), and (iii) a working capital facility
in the
principal amount of One Million Dollars ($1,000,000), to the
Company
(collectively, the "Loans), to finance the making and
purchasing of
Mortgage Loans.
B. The Loan is evidenced by a Warehousing Promissory Note, a
Working
Capital Promissory Note and a Term Loan Promissory Note dated of
even
date herewith from the Company to the Lender, as the same
may be
amended, supplemented or otherwise modified from time to
time,
including any other instruments executed and delivered in
renewal,
extension, rearrangement or otherwise in replacement of
such
Promissory Notes (the "Notes") and by a Warehousing Credit
and
Security Agreement of even date herewith, as the same may be
amended,
supplemented or otherwise modified from time to time,
including any
other instruments executed and delivered in renewal,
extension,
rearrangement or otherwise in replacement of such agreement
(the
"Agreement").
C. The Guarantor is a shareholder and the Executive Vice President
of the
Company and will derive benefit from the Loan.
D. As a condition to making the Loan, the Lender has required
that the
Guarantor execute and deliver this Guaranty. In order to
induce the
Lender to make Warehousing Advances, Term Loan Advances and
Working
Capital Advances under the Agreement, and to accept the Notes
and the
Agreement, the Guarantor has agreed to give this Guaranty.
E. The Lender has refused to make Warehousing Advances, Working
Capital
Advances and Term Loan Advances under the Agreement unless
this
Guaranty is executed by the Guarantor and delivered to Lender.
AGREEMENT
NOW, THEREFORE, in consideration of the recitals and other
good and
valuable consideration, the receipt and sufficiency of which is
hereby
acknowledged, the Guarantor hereby covenants and agrees with the
Lender as
follows:
1. Unless otherwise defined herein, all capitalized terms used herein
shall
have the meanings ascribed to such terms in the Agreement.
2. The Guarantor hereby irrevocably, unconditionally and
absolutely
guarantees to the Lender the due and prompt payment, and not just
the
collectibility, of the principal of, and interest, fees and late charges
and all
other indebtedness, if any, on the Notes when due, whether at
maturity, by
acceleration or otherwise all at the times and places and at the rates
described
in, and otherwise according to the terms of the Notes and the Agreement,
whether
now existing or hereafter created or arising.
3. The Guarantor further hereby irrevocably, unconditionally and
absolutely
guarantees to the Lender the due and prompt performance by the Company
of all
duties, agreements and obligations of the Company contained in the Notes
and the
Agreement, and the due and prompt payment of all costs and expenses
incurred,
including, without limitation, attorneys' fees, court costs and all
other
litigation expenses (including but not limited to expert witness fees,
exhibit
preparation, and courier, postage, communication and document copying
expenses),
in enforcing the payment and performance of the Notes and the Agreement and
this
Guaranty (the payment and performance of the items set forth in Paragraphs
2 and
3 of this Guaranty are collectively referred to as the "Guaranteed Debt").
4. For the purposes of this Guaranty and notwithstanding anything
to the
contrary contained herein or in any of the Loan Documents, the
Guarantor's
liability for payment of the Guaranteed Debt shall be limited to the sum
of (a)
Five Million Dollars ($5,000,000), (b) interest on such amount from the
date
demanded until the date paid at the highest rate applicable to any
of the
Guaranteed Obligations under the Agreement, and (c) all costs and
expenses
incurred by the Lender (including reasonable attorneys' fees) in enforcing
this
Guaranty, which amount may be comprised of any portion of the Guaranteed
Debt,
to be determined at the sole discretion of the Lender.
5. In the event the Company shall at any time fail to pay the
Lender any
principal of or interest on or other sums constituting any Guaranteed Debt
when
due, whether by acceleration or otherwise, the Guarantor promises to pay
such
amount to the Lender forthwith, together with all collection costs and
expenses,
including, without limitation, attorneys' fees, court costs and all
other
litigation expenses (including but not limited to expert witness fees,
exhibit
preparation, and courier, postage, communication and document
copying
expresses). Any sum required to be paid by the Guarantor to the Lender
pursuant
to this Guaranty shall bear interest from the date such sum becomes due
until
paid at a per annum rate equal to the Default Rate.
6. The Guarantor hereby authorizes the Lender, following the
occurrence of
an Event of Default, without notice or demand, to apply any property,
balances,
credits, accounts or moneys of the Guarantor then in the possession of
Lender,
or standing to the credit of the Guarantor, to the payment of such
Guaranteed
Debt.
7. The Guarantor does hereby (a) agree to any modifications of any
terms or
conditions of any Guaranteed Debt and/or to any extensions or renewals of
time
of payment or performance by the Company; (b) agree that it shall
not be
necessary for the Lender to resort to legal remedies against the Company
before
proceeding hereunder, nor to take any action against any other Person
obligated
(an "Obligor") for payment or performance of the Guaranteed Debt or
against any
collateral for the Guaranteed Debt before proceeding against the Guarantor;
(c)
agree that no release of the Company or any other guarantor or Obligor,
or of
any collateral for the Guaranteed Debt, whether by operation of law or
by any
act of the Lender, with or without notice to the Guarantor, shall
release the
Guarantor; and (d) waive notice of demand, dishonor, notice of
dishonor,
protest, and notice of protest and waive, to the extent permitted by
law, all
benefit of valuation, appraisement, and exemptions under the laws of the
State
of Minnesota or any other state or territory of the United States.
8. The obligations of the Guarantor hereunder shall be primary,
absolute
and unconditional, and shall remain in full force and effect without
regard to,
and shall not be impaired or affected by: (a) the genuineness,
validity,
regularity or enforceability of, or any amendment or change in the
Agreement or
the Notes, or any change in or extension of the manner, place or
terms of
payment of, all or any portion of the Guaranteed Debt; (b) the taking or
failure
to take any action to enforce the Agreement or the Notes, or the
exercise or
failure to exercise any remedy, power or privilege contained
therein or
available at law or otherwise, or the waiver by the Lender of any
provisions of
the Agreement or the Notes; (c) any impairment, modification, change,
release or
limitation in any manner of the liability of the Company or its
estate in
bankruptcy, or of any remedy for the enforcement of the Company's
liability,
resulting from the operation of any present or future provision
of the
bankruptcy laws or any other statute or regulation, or the
dissolution,
bankruptcy, insolvency, or reorganization of the Company; (d) the
merger or
consolidation of the Company, or any sale or transfer by the Company of
all or
part of its assets or property; (e) any claim the Guarantor may have
against any
other Obligor, including any claim of contribution; (f) the release, in
whole or
in part, of any other guarantor (if more than one), the Company or any
other
Obligor; (g) any other action or circumstance which (with or without
notice to
or knowledge of the Guarantor) may or might in any manner or to any extent
vary
the risks of the Guarantor hereunder or otherwise constitute a
legal or
equitable discharge or defense, it being understood and agreed by the
Guarantor
that the obligations under this Guaranty shall not be discharged except
by the
full payment and performance of the Guaranteed Debt.
9. The Lender shall have the right to determine how, when and
what
application of payments and credits, if any, whether derived from the
Company or
from any other source, shall be made on the Guaranteed Debt and any
other
indebtedness owed by the Company and/or any other Obligor to the Lender.
10. The obligations of the Guarantor hereunder shall continue
to be
effective, or be automatically reinstated, as the case may be, if at any
time
the performance or the payment, as the case may be, in whole or in part,
of any
of the Guaranteed Debt is rescinded or must otherwise be restored or
returned by
the Lender (as a preference, fraudulent conveyance or otherwise)
upon the
insolvency, bankruptcy, dissolution, liquidation or reorganization of
the
Company, the Guarantor or any other person or upon or as a result
of the
appointment of a custodian, receiver, trustee or other officer with
similar
powers with respect to the Company, the Guarantor or any other person,
or any
substantial part of its property, or otherwise, all as though such
payments had
not been made. If an Event of Default shall at any time have occurred
and be
continuing or shall exist and declaration of default or acceleration
under or
with respect to this Guaranty or any Guaranteed Debt shall at such
time be
prevented by reason of the pendency against the Guarantor or the Company
or any
other Person of a case or proceeding under a bankruptcy or insolvency
law, the
Guarantor agrees that, for purposes of this Guaranty and its
obligations
hereunder, this Guaranty and such obligations shall be deemed to have
been
declared in default or accelerated with the same effect as if this
Guaranty and
such obligations had been declared in default and accelerated in accordance
with
their respective terms and the Guarantor shall forthwith perform or pay,
as the
case may be, as required hereunder in accordance with the terms
hereunder
without further notice or demand.
11. The Guarantor hereby irrevocably waives any claim or other rights
that
he may now or hereafter acquire against the Company that arises
from the
existence, payment, performance or enforcement of the Guarantors
obligations
hereunder, including any right of subrogation, reimbursement,
exoneration or
indemnification, any right to participate in any claim or remedy of the
Lender
against the Company or any collateral that the Lender now has or
hereafter
acquires, whether or not such claim, remedy or right arises in equity or
under
contract, statute or common law, including the right to take or receive
from the
Company directly or indirectly, in cash or other property or by set-off
or in
any manner, payment or security on account of such claim or other rights,
until
the Guaranteed Debt shall have been paid and performed in full. If any
amount
shall be paid to the Guarantor in violation of the preceding sentence,
such
amount shall be deemed to have been paid to the Guarantor for the
benefit of,
and held in trust for, the Lender and shall forthwith be paid to the
Lender to
be credited and applied to the Guaranteed Debt, whether matured or
unmatured.
The Guarantor hereby specifically acknowledges that any subrogation rights
which
he may have against the Company or any collateral that the Lender now
has or
hereafter acquires may be destroyed by a nonjudicial foreclosure of
the
collateral. This may give the Guarantor a defense to a deficiency
judgment
against the Guarantor. The Guarantor hereby irrevocably waives such
defense. The
Guarantor acknowledges that he will receive direct and indirect benefits
from
the arrangements contemplated by the Agreement and the Notes and
that the
waivers set forth in this Section are knowingly made in contemplation of
such
benefits.
12. The Guarantor waives any and all benefits available to
sureties and
creditors which might otherwise be available to the Guarantor under
Section
2809, 2810, 2819, 2822, 2839, 2845, 2849, 2850, 2899 and 3433 of the
California
Civil Code, as amended or recodified from time to time, and the benefit
of any
statute of limitations affecting the liability of the Guarantor hereunder
or the
enforcement hereof, including, without limitation any rights arising
under
Section 359.5 of the California Code of Civil Procedure, as
amended or
recodified from time to time. Additionally, the Guarantor waives the
right to
require the Lender to comply with the provisions of Section 9504
of the
California Commercial Code, as amended or recodified from time to time.
13. No postponement or delay on the part of the Lender in the
enforcement
of any right hereunder shall constitute a waiver of such right and all
rights of
the Lender hereunder shall be cumulative and not alternative and shall
be in
addition to any other rights granted to the Lender in any other agreement
or by
law.
14. If any provision hereof shall be or shall be declared to be
illegal or
unenforceable in any respect, such illegal or unenforceable provision
shall be
and become absolutely null and void and of no force and effect as though
such
provision were not in fact set forth herein, but all other covenants,
terms,
conditions and provisions hereof shall nevertheless continue to be
valid and
enforceable and this Guaranty shall be so construed.
15. This Guaranty shall be governed in all respects by the laws
of the
State of Minnesota, other than its principles of conflicts of law, and
shall be
binding upon and shall inure to the benefit of the parties hereto and
their
respective heirs, executors, administrators, personal
representatives,
successors and assigns.
16. The Guarantor hereby agrees that any action or proceeding under
this
Guaranty may be commenced against the Guarantor in any court of
competent
jurisdiction within the State of Minnesota, by service of process
upon the
Guarantor by first class registered or certified mail, return receipt
requested,
addressed to the Guarantor at the Guarantor's address last known to the
Lender.
The Guarantor agrees that any such suit, action or proceeding arising out
of or
relating to this Guaranty may be instituted in the District Court of
Hennepin
County, Minnesota or in the United States District Court for the
District of
Minnesota, at the option of the Lender; and the Guarantor hereby
waives any
objection to the jurisdiction or venue of any such court with respect to,
or the
convenience of any such court as a forum for, any such suit,
action or
proceeding. Nothing herein shall affect the right of the Lender to
accomplish
service of process in any other manner permitted by law or to commence
legal
proceedings or otherwise proceed against the Guarantor in any other
jurisdiction
or court.
17. The Guarantor hereby represents and warrants to the Lender as
follows:
(a) Financial Statements. All financial statements and data
which
have heretofore been given to the Lender with respect
to the
Guarantor fairly and accurately represent the financial
condition
of the Guarantor as of the date hereof, and, since the
date
thereof, there has been no material adverse change
in the
financial condition of the Guarantor. The Guarantor
shall
promptly deliver to the Lender, or to the Company in time
for the
Company to deliver the same to the Lender, all
financial
statements of the Guarantor required by the Agreement.
(b) Address. The address of the Guarantor as specified below is
true
and correct and until the Lender shall have actually
received a
written notice specifying a change of address and
specifically
requesting that notices be issued to such changed address,
the
Lender may rely on the address stated as being accurate.
(c) No Default. The Guarantor is not in default with respect
to any
order, writ, injunction, decree or demand of any court or
other
governmental authority, in the payment of any material
debt for
borrowed money or under any material agreement
evidencing or
securing any such debt.
(d) Solvent. The Guarantor is now solvent, and no
bankruptcy or
insolvency proceedings are pending or to the best of
the
Guarantor's knowledge contemplated by or against the
Guarantor.
(e) Relationship to the Company. The value of the
consideration
received and to be received by the Guarantor is reasonably
worth
at least as much as the liability and obligation of the
Guarantor
incurred or arising under this Guaranty. The Guarantor
has had
full and complete access to the Agreement and the Notes
and all
other loan documents relating to the Obligations and
the
Guaranteed Debt, has reviewed them and is fully aware
of the
meaning and effect of their contents. The Guarantor is
fully
informed of all circumstances which bear upon the
risks of
executing this Guaranty and which a diligent inquiry
would
reveal. The Guarantor has adequate means to obtain
from the
Company on a continuing basis information concerning
the
Company's financial condition, and is not depending on the
Lender
to provide such information, now or in the future. The
Guarantor
agrees that the Lender shall not have any obligation to
advise or
notify the Guarantor or to provide the Guarantor with any
data or
information. The execution and delivery of this Guaranty
is not
given in consideration of (and the Lender has not in
any way
implied that the execution of this Guaranty is
given in
consideration of) the Lenders making, extending or
modifying any
loan to the Guarantor or to any other financial
accommodation to
or for the Guarantor.
(f) Litigation. There is not now pending against or affecting
the
Guarantor, nor to the knowledge of the Guarantor is
there
threatened, any action, suit or proceeding at law or in
equity or
by or before any administrative agency that, if
adversely
determined, would materially impair or affect the
financial
condition of the Guarantor.
(g) Taxes. The Guarantor has filed all federal, state,
provincial,
county, municipal and other income tax returns required to
have
been filed by the Guarantor and has paid all taxes that
have
become due pursuant to such returns or pursuant to
any
assessments received by the Guarantor, and the Guarantor
does not
know of any basis for any material additional assessment
against
it in respect of such taxes.
18. The promises and agreements herein and in any other guaranties
of the
Agreement and the Notes shall be construed to be and are hereby declared
to be
joint and several in each and every particular and shall be fully binding
upon
and enforceable against any or all of such parties or persons
guaranteeing the
Agreement and the Notes herein or in a separate guaranty, and neither the
death
nor the release of any person or party to this Guaranty or any other
guaranties
of the Agreement and the Notes shall affect or release the joint and
several
liability of any other person or party to this Guaranty or any other
guaranties
of the Agreement and the Notes.
19. No amendment or waiver of any provision of this Guaranty nor
consent to
any departure by the Guarantor therefrom shall in any event be effective
unless
the same shall be in writing and signed by the Lender, and then such
waiver or
consent shall be effective only in the specific instance and for the
specific
purpose for which given. Nor notice to or demand on the Guarantor shall
in any
case entitle it to any other or further notice or demand in similar or
other
circumstances.
20. All notices that may be required or otherwise provided
for or
contemplated under the terms of this Guaranty for any party to serve
upon or
give to any other shall, whether or not so state, be in writing, and if
not so
in writing shall not be deemed to have been given, and be either
personally
served, sent by reputable overnight courier service, or sent with return
receipt
requested by registered or certified mail with postage (including
registration
or certification charges) prepaid, sent to the following address:
(a) If to the Guarantor, addressed to the address
indicated
immediately following the Guarantors signature; and
(b) If to the Lender, addressed to the Lender at its address at
1646
North California Blvd., Suite 400, Walnut Creek, California
94596,
Attention: Graham Shipman.
Such addresses may be changed from time to time by written notice to the
other
parties given in the same manner. Any matter so served upon or sent
to the
Guarantor or the Lender in the manner aforesaid shall be deemed
sufficiently
given for all purposes hereunder (i) upon personal delivery, if
personally
delivered, (ii) on the date following delivery to the courier service, if
sent
by courier service, (iii) upon electronic confirmation of receipt, if
sent by
telecopier, and (iv) on the date three (3) days following the date the
same was
deposited in a United States Post Office, if sent by registered or
certified
mail, except that notices of changes of address shall not be effective
until
actual receipt.
21. Any indebtedness of the Company now or hereafter held by the
Guarantor
is hereby subordinated to the indebtedness of the Company to the Lender,
and
such indebtedness of the Company to the Guarantor shall, if the
Lender so
requests, be collected, enforced and received by the Guarantor as
trustee for
the Lender and be paid over to the Lender on account of the indebtedness
of the
Company to the Lender, but without reducing or limiting in any
manner the
liability of the Guarantor under the other provisions of the Guaranty.
The
Guarantor acknowledges that, with respect to the indebtedness
guaranteed
hereunder, the Guarantor has irrevocably waived all rights to
subrogation,
reimbursement, and/or indemnification against the Company.
22. This Guaranty is intended as a final expression of this
agreement of
guaranty and is intended also as a complete and exclusive statement of the
terms
of this agreement. No course of prior dealings between the Guarantor
and the
Lender, no usage of the trade, and no parole or extrinsic evidence
of any
nature, shall be used or be relevant to supplement, explain,
contradict or
modify the terms and/or provisions of this Guaranty.
23. Time is of the essence hereof.
24. THE GUARANTOR, BY HIS EXECUTION AND DELIVERY HEREOF, AND THE
LENDER, BY
ITS ACCEPTANCE HEREOF, HEREBY (i) COVENANTS AND AGREES NOT TO ELECT A
TRIAL BY
JURY OF ANY ISSUE TRIABLE OF RIGHT BY A JURY, AND (ii) WAIVES ANY RIGHT TO
TRIAL
BY JURY FULLY TO THE EXTENT THAT ANY SUCH RIGHT SHALL NOW OR HEREAFTER
EXIST.
THIS WAIVER OF RIGHT TO TRIAL BY JURY IS SEPARATELY GIVEN, KNOWINGLY
AND
VOLUNTARILY, BY THE GUARANTOR AND BY THE LENDER, AND THIS WAIVER IS
INTENDED TO
ENCOMPASS INDIVIDUALLY EACH INSTANCE AND EACH ISSUE AS TO WHICH THE RIGHT
OF A
JURY TRIAL WOULD OTHERWISE ACCRUE. THE LENDER IS HEREBY AUTHORIZED AND
REQUESTED
TO SUBMIT THIS WAIVER TO ANY COURT HAVING JURISDICTION OVER THE SUBJECT
MATTER
AND THE PARTIES HERETO, SO AS TO SERVE AS CONCLUSIVE EVIDENCE OF THE
FOREGOING
WAIVER OF THE RIGHT TO TRY TRIAL. FURTHER, THE GUARANTOR HEREBY CERTIFIES
THAT
NO REPRESENTATIVE OR AGENT OF THE LENDER, INCLUDING THE LENDER'S COUNSEL,
HAS
REPRESENTED, EXPRESSLY OR OTHERWISE, TO THE GUARANTOR OR HIS
REPRESENTATIVES OR
AGENTS THAT THE LENDER WILL NOT SEEK TO ENFORCE THIS WAIVER OF RIGHT TO
JURY
TRIAL PROVISION.
25. This Guaranty shall constitute the entire agreement of the
Guarantor
with respect to the subject matter hereof, and no agreement or
understanding
entered into prior to the date hereof with respect to the subject matter
hereof
shall be binding upon the Guarantor unless expressed herein.
IN WITNESS WHEREOF, the Guarantor has executed this Guaranty
with the
intent to be legally bound as of the date first above written.
------------------------------------
- --
JAMES W. NOACK
Address:
------------------------------
- ---
-----------------------------------
- ---
Telephone No.:
-------------------------
- ---
Telecopier No.:
-------------------------
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STATE OF California )
) ss
COUNTY OF Contra Costa )
On ___________________, before me, a Notary Public, personally
appeared
JAMES W. NOACK, personally known to me (or proved to me on the
basis of
satisfactory evidence) to be the person whose name is subscribed to the
within
instrument and acknowledged to me that he/she executed the same in
his/her
authorized capacity, and that by his/her signature on the instrument the
person,
or the entity upon behalf of which the person acted, executed the
instrument.
WITNESS my hand and official seal.
-----------------------------------
- ---
Notary Public
My Commission Expires:
(SEAL)
<PAGE>
EXHIBIT B-2
GUARANTY
THIS GUARANTY, made and entered into an of 22nd day of March 1995, by
JAMES
A. UMPHRYES (the "Guarantor"), to RESIDENTIAL FUNDING CORPORATION, a
Delaware
corporation (the "Lender"), having its principal office at 8400 Normandale
Lake
Blvd., Suite 600, Minneapolis, Minnesota 55437.
RECITALS
A. MONUMENT MORTGAGE, INC., a California corporation
(the
aCompany.), and the Lender have agreed that the Lender
will
extend (i) a warehouse facility in the principal amount
of Ten
Million Dollars ($10,000,000), (ii) a term loan facility
in the
principal amount of One Million Dollars ($1,000,000), and
(iii) a
working capital facility in the principal amount of One
Million
Dollars ($1,000,000), to the Company (collectively, the
"Loan"),
to finance the making and purchasing of Mortgage Loans.
B. The Loan is evidenced by a Warehousing Promissory Note, a
Working
Capital Promissory Note and a Term Loan Promissory Note
dated of
even date herewith from the Company to the Lender, as the
same
may be amended, supplemented or otherwise modified from
time to
time, including any other instruments executed and
delivered in
renewal, extension, rearrangement or otherwise in
replacement of
such Promissory Notes (the "Notesn) and by a Warehousing
Credit
and Security Agreement of even date herewith, as the same
may be
amended, supplemented or otherwise modified from time to
time,
including any other instruments executed and
delivered in
renewal, extension, rearrangement or otherwise in
replacement of
such agreement (the "Agreement") .
C. The Guarantor is a shareholder and the Executive Vice
President
of the Company and will derive benefit from the Loan.
D. As a condition to making the Loan, the Lender has required
that
the Guarantor execute and deliver this Guaranty. In
order to
induce the Lender to make Warehousing Advances, Term
Loan
Advances and Working Capital Advances under the Agreement,
and to
accept the Notes and the Agreement, the Guarantor has
agreed to
give this Guaranty.
E. The Lender has refused to make Warehousing Advances,
Working
Capital Advances and Term Loan Advances under the
Agreement
unless this Guaranty is executed by the Guarantor and
delivered
to Lender.
[PAGES 2 & 3 ARE MISSING FROM HARD COPY]
of its assets or property; (e) any claim the Guarantor may have
against any
other Obligor, including any claim of contribution; (f) the release, in
whole or
in part, of any other guarantor (if more than one), the Company or any
other
Obligor; (g) any other action or circumstance which (with or without
notice to
or knowledge of the Guarantor) may or might in any manner or to any extent
vary
the risks of the Guarantor hereunder or otherwise constitute a
legal or
equitable discharge or defense, it being understood and agreed by the
Guarantor
that the obligations under this Guaranty shall not be discharged except
by the
full payment and performance of the Guaranteed Debt.
9. The Lender shall have the right to determine how, when and
what
application of payments and credits, if any, whether derived from the
Company or
from any other source, shall be made on the Guaranteed Debt and any
other
indebtedness owed by the Company and/or any other Obligor to the Lender.
10. The obligations of the Guarantor hereunder shall continue
to be
effective, or be automatically reinstated, as the case may be, if at any
time
the performance or the payment, as the case may be, in whole or in part,
of any
of the Guaranteed Debt is rescinded or must otherwise be restored or
returned by
the Lender (an a preference, fraudulent conveyance or otherwise)
upon the
insolvency, bankruptcy, dissolution, liquidation or reorganization of
the
Company, the Guarantor or any other person or upon or as a result
of the
appointment of a custodian, receiver, trustee or other officer with
similar
powers with respect to the Company, the Guarantor or any other person,
or any
substantial part of its property, or otherwise, all as though such
payments had
not been made. If an Event of Default shall at any time have occurred
and be
continuing or shall exist and declaration of default or acceleration
under or
with respect to this Guaranty or any Guaranteed Debt shall at such
time be
prevented by reason of the pendency against the Guarantor or the Company
or any
other Person of a case or proceeding under a bankruptcy or insolvency
law, the
Guarantor agrees that, for purposes of this Guaranty and its
obligations
hereunder, this Guaranty and such obligations shall be deemed to have
been
declared in default or accelerated with the same effect as if this
Guaranty and
such obligations had been declared in default and accelerated in accordance
with
their respective terms and the Guarantor shall forthwith perform or pay,
as the
case may be, as required hereunder in accordance with the terms
hereunder
without further notice or demand.
11. The Guarantor hereby irrevocably waives any claim or other rights
that
he may now or hereafter acquire against the Company that arises
from the
existence, payment, performance or enforcement of the Guarantors
obligations
hereunder, including any right of subrogation, reimbursement,
exoneration or
indemnification, any right to participate in any claim or remedy of the
Lender
against the Company or any collateral that the Lender now has or
hereafter
acquires, whether or not such claim, remedy or right arises in equity or
under
contract, statute or common lad, including the right to take or receive
from the
Company directly or indirectly, in cash or other property or by set-off
or in
any manner, payment or security on account of such claim or other rights,
until
the Guaranteed Debt shall have been paid and performed in full. If any
amount
shall be paid to the Guarantor in violation of the preceding sentence,
such
amount shall be deemed to have been paid to the Guarantor for the
benefit of,
and held in trust for, the Lender and shall forthwith be paid to the
Lender to
be credited and applied to the Guaranteed Debt, whether matured or
unmatured.
The Guarantor hereby specifically acknowledges that any subrogation rights
which
he may have against the Company or any collateral that the Lender now
has or
hereafter acquires may be destroyed by a nonjudicial foreclosure of
the
collateral. This may give the Guarantor a defense to a deficiency
judgment
against the Guarantor. The Guarantor hereby irrevocably waives such
defense. The
Guarantor acknowledges that he will receive direct and indirect benefits
from
the arrangements contemplated by the Agreement and the Notes and
that the
waivers set forth in this Section are knowingly made in contemplation of
such
benefits.
12. The Guarantor waives any and all benefits available to
sureties and
creditors which might otherwise be available to the Guarantor under
Section
2809, 2810, 2819, 2822, 2839, 2845, 2849, 2850, 2899 and 3433 of the
California
Civil Code, as amended or remodified from time to time, and the benefit
of any
statute of limitations affecting the liability of the Guarantor hereunder
or the
enforcement hereof, including, without limitation any rights arising
under
Section 359.5 of the California Code of Civil Procedure, as
amended or
recodified from time to time. Additionally, the Guarantor waives the
right to
require the Lender to comply with the provisions of Section 9504
of the
California Commercial Code, as amended or recodified from time to time.
13. No postponement or delay on the part of the Lender in the
enforcement
of any right hereunder shall constitute a waiver of such right and all
rights of
the Lender hereunder shall be cumulative and not alternative and shall
be in
addition to any other rights granted to the Lender in any other agreement
or by
law.
14. If any provision hereof shall be or shall be declared to be
illegal or
unenforceable in any respect, such illegal or unenforceable provision
shall be
and become absolutely null and void and of no force and effect as though
such
provision were not in fact set forth herein, but all other covenants,
terms,
conditions and provisions hereof shall nevertheless continue to be
valid and
enforceable and this Guaranty shall be so construed.
15. This Guaranty shall be governed in all respects by the laws
of the
State of Minnesota, other than its principles of conflicts of law, and
shall be
binding upon and shall inure to the benefit of the parties hereto and
their
respective heirs, executors, administrators, personal
representatives,
successors and assigns.
16. The Guarantor hereby agrees that any action or proceeding under
this
Guaranty may be commenced against the Guarantor in any court of
competent
jurisdiction within the State of Minnesota, by service of process
upon the
Guarantor by first class registered or certified mail, return receipt
requested,
addressed to the Guarantor at the Guarantor's address last known to the
Lender.
The Guarantor agrees that any such suit, action or proceeding arising out
of or
relating to this Guaranty may be instituted in the District Court of
Hennepin
County, Minnesota or in the United States District Court for the
District of
Minnesota, at the option of the Lender; and the Guarantor hereby
waives any
objection to the jurisdiction or venue of any such court with respect to,
or the
convenience of any such court as a forum for, any such suit,
action or
proceeding. Nothing herein shall affect the right of the Lender to
accomplish
service of process in any other manner permitted by law or to commence
legal
proceedings or otherwise proceed against the Guarantor in any other
jurisdiction
or court.
17. The Guarantor hereby represents and warrants to the Lender as
follows:
(a) Financial Statements. All financial statements and data
which
have heretofore been given to the Lender with respect
to the
Guarantor fairly and accurately represent the financial
condition
of the Guarantor as of the date hereof, and, since the
date
thereof, there has been no material adverse change
in the
financial condition of the Guarantor. The Guarantor
shall
promptly deliver to the Lender, or to the Company in time
for the
Company to deliver the same to the Lender, all
financial
statements of the Guarantor required by the Agreement.
(b) Address. The address of the Guarantor as specified below is
true
and correct and until the Lender shall have actually
received a
written notice specifying a change of address and
specifically
requesting that notices be issued to such changed address,
the
Lender may rely on the address stated as being accurate.
(c) No Default. The Guarantor is not in default with respect
to any
order, writ, injunction, decree or demand of any court or
other
governmental authority, in the payment of any material
debt for
borrowed money or under any material agreement
evidencing or
securing any such debt.
(d) Solvent. The Guarantor is now solvent, and no
bankruptcy or
insolvency proceedings are pending or to the best of
the
Guarantor's knowledge contemplated by or against the
Guarantor.
(e) Relationship to the Company. The value of the
consideration
received and to be received by the Guarantor is reasonably
worth
at least as much as the liability and obligation of the
Guarantor
incurred or arising under this Guaranty. The Guarantor
has had
full and complete access to the Agreement and the Notes
and all
other loan documents relating to the Obligations and
the
Guaranteed Debt, has reviewed them and is fully aware
of the
meaning and effect of their contents. The Guarantor is
fully
informed of all circumstances which bear upon the
risks of
executing this Guaranty and which a diligent inquiry
would
reveal. The Guarantor has adequate means to obtain
from the
Company on a continuing basis information concerning
the
Company's financial condition, and is not depending on the
Lender
to provide such information, now or in the future. The
Guarantor
agrees that the Lender shall not have any obligation to
advise or
notify the Guarantor or to provide the Guarantor with any
data or
information. The execution and delivery of this Guaranty
is not
given in consideration of (and the Lender has not in
any way
implied that the execution of this Guaranty is
given in
consideration of) the Lender's making, extending or
modifying any
loan to the Guarantor or to any other financial
accommodation to
or for the Guarantor.
(f) Litigation. There is not now pending against or affecting
the
Guarantor, nor to the knowledge of the Guarantor is
there
threatened, any action, suit or proceeding at law or in
equity or
by or before any administrative agency that, if
adversely
determined, would materially impair or affect the
financial
condition of the Guarantor.
(g) Taxes. The Guarantor has filed all federal, state,
provincial,
county, municipal and other income tax returns required to
have
been filed by the Guarantor and has paid all taxes that
have
become due pursuant to such returns or pursuant to
any
assessments received by the Guarantor, and the Guarantor
does not
know of any basis for any material additional assessment
against
it in respect of such taxes.
18. The promises and agreements herein and in any other guaranties
of the
Agreement and the Notes shall be construed to be and are hereby declared
to be
joint and several in each and every particular and shall be fully binding
upon
and enforceable against any or all of such parties or persons
guaranteeing the
Agreement and the Notes herein or in a separate guaranty, and neither the
death
nor the release of any person or party to this Guaranty or any other
guaranties
of the Agreement and the Notes shall affect or release the joint and
several
liability of any other person or party to this Guaranty or any other
guaranties
of the Agreement and the Notes.
19. No amendment or waiver of any provision of this Guaranty nor
consent to
any departure by the Guarantor therefrom shall in any event be effective
unless
the same shall be in writing and signed by the Lender, and then such
waiver or
consent shall be effective only in the specific instance and for the
specific
purpose for which given. Nor notice to or demand on the Guarantor shall
in any
case entitle it to any other or further notice or demand in similar or
other
circumstances.
20. All notices that may be required or otherwise provided
for or
contemplated under the terms of this Guaranty for any party to serve
upon or
give to any other shall, whether or not so state, be in writing, and if
not so
in writing shall not be deemed to have been given, and be either
personally
served, sent by reputable overnight courier service, or sent with return
receipt
requested by registered or certified mail with postage (including
registration
or certification charges) prepaid, sent to the following address:
(a) If to the Guarantor, addressed to the address
indicated
immediately following the Guarantors signature; and
(b) If to the Lender, addressed to the Lender at its address at
1646
North California Blvd., Suite 400, Walnut Creek,
California
94596, Attention: Graham Shipman.
Such addresses may be changed from time to time by written notice to the
other
parties given in the same manner. Any matter so served upon or sent
to the
Guarantor or the Lender in the manner aforesaid shall be deemed
sufficiently
given for all purposes hereunder (i) upon personal delivery, if
personally
delivered, (ii) on the date following delivery to the courier service, if
sent
by courier service, (iii) upon electronic confirmation of receipt, if
sent by
telecopier, and (iv) on the date three (3) days following the date the
same was
deposited in a United States Post Office, if sent by registered or
certified
mail, except that notices of changes of address shall not be effective
until
actual receipt.
21. Any indebtedness of the Company now or hereafter held by the
Guarantor
is hereby subordinated to the indebtedness of the Company to the Lender,
and
such indebtedness of the Company to the Guarantor shall, if the
Lender no
requests, be collected, enforced and received by the Guarantor as
trustee for
the Lender and be paid over to the Lender on account of the indebtedness
of the
Company to the Lender, but without reducing or limiting in any
manner the
liability of the Guarantor under the other provisions of the Guaranty.
The
Guarantor acknowledges that, with respect to the indebtedness
guaranteed
hereunder, the Guarantor has irrevocably waived all rights to
subrogation,
reimbursement, and/or indemnification against the Company.
22. This Guaranty is intended as a final expression of this
agreement of
guaranty and is intended also as a complete and exclusive statement of the
terms
of this agreement. No course of prior dealings between the Guarantor
and the
Lender, no usage of the trade, and no parole or extrinsic evidence
of any
nature, shall be used or be relevant to supplement, explain,
contradict or
modify the terms and/or provisions of this Guaranty.
23. Time is of the essence hereof.
24. THE GUARANTOR, BY HIS EXECUTION AND DELIVERY HEREOF, AND THE
LENDER, BY
ITS ACCEPTANCE HEREOF, HEREBY (i) COVENANTS AND AGREES NOT TO ELECT A
TRIAL BY
JURY OF ANY ISSUE TRIABLE OF RIGHT BY A JURY, AND (ii) WAIVES ANY RIGHT TO
TRIAL
BY JURY FULLY TO THE EXTENT THAT ANY SUCH RIGHT SHALL NOW OR HEREAFTER
EXIST.
THIS WAIVER OF RIGHT TO TRIAL BY JURY IS SEPARATELY GIVEN, KNOWINGLY
AND
VOLUNTARILY, BY THE GUARANTOR AND BY THE LENDER, AND THIS WAIVER IS
INTENDED TO
ENCOMPASS INDIVIDUALLY EACH INSTANCE AND EACH ISSUE AS TO WHICH THE RIGHT
OF A
JURY TRIAL WOULD OTHERWISE ACCRUE. THE LENDER IS HEREBY AUTHORIZED AND
REQUESTED
TO SUBMIT THIS WAIVER TO ANY COURT HAVING JURISDICTION OVER THE SUBJECT
MATTER
AND THE PARTIES HERETO, SO AS TO SERVE AS CONCLUSIVE EVIDENCE OF THE
FOREGOING
WAIVER OF THE RIGHT TO JURY TRIAL. FURTHER, THE GUARANTOR HEREBY CERTIFIES
THAT
NO REPRESENTATIVE OR AGENT OF THE LENDER, INCLUDING THE LENDER`S COUNSEL,
HAS
REPRESENTED, EXPRESSLY OR OTHERWISE, TO THE GUARANTOR OR HIS
REPRESENTATIVES OR
AGENTS THAT THE LENDER WILL NOT SEEK TO ENFORCE THIS WAIVER OF RIGHT TO
JURY
TRIAL PROVISION.
25. This Guaranty shall constitute the entire agreement of the
Guarantor
with respect to the subject matter hereof, and no agreement or
understanding
entered into prior to the date hereof with respect to the subject matter
hereof
shall be binding upon the Guarantor unless expressed herein.
IN WITNESS WHEREOF, the Guarantor has executed this Guaranty
with the
intent to be legally bound as of the date first above written.
----------------------------------------
- --
JAMES A. UMPHRYES
Address:
-----------------------------------
- --
----------------------------------------
- --
Telephone No.:
-------------------------
- --
Telecopier No.:
-------------------------
- --
STATE OF California )
) ss
COUNTY OF Contra Costa )
On __________________, 1995, before me, a Notary Public,
personally
appeared JAMES A. UMPHRYES, personally known to me (or proved to me on the
basis
of satisfactory evidence) to be the person whose name is subscribed
to the
within instrument and acknowledged to me that he executed the same
in his
authorized capacity, and that by his signature on the instrument the
person, or
the entity upon behalf of which the person acted, executed the instrument.
WITNESS my hand and official seal.
----------------------------------------
- --
Notary Public
My Commission Expires:
(SEAL)
<PAGE>
EXHIBIT C-
SF(1)
Mortgage Company: MONUMENT MORTGAGE, INC.
Mortgagor: Loan Number:
------------------------- -------------------------
- --
-------------------------
Reviewed By:
-------------------------
- --
Address: Warehouse Date:
--------------------------- -------------------------
- --
--------------------------- Effective Date:
-------------------------
- --
Foreclosure Date:
-------------------------
- --
Status: Rejected Loan Type: Conforming
---------- ---------------------
- ---
Received Nonconforming Alternet
----------- ------- ---
- ---
Repurchased VA FHA
----------- ----------- -------------
- ---
Wet Settlement Fixed Term
--------- ------------ -------------
- ---
3rd Party ARM Type
------------ -------------
- --
Originated Balloon Type
--------- ----------- -------------
- --
Mortgage Note Amount: Interest Rate:
--------------- ---------------------
- --
Mortgage Note Date: Requested Warehouse Amt:
--------------- ------------
- --
METHOD OF ADVANCE
( ) Wire Transfer
Amount of Wire: Date of Wire:
Credit Acct. No.. Credit Acct. Name:
ABA No.: Bank Name:
City & State:
Account to Debit:
Ref: Advise: Phone:
REQUIRED DOCUMENTATION
Attached please find the following documents in connection with the
above
request (Please check attached documents below):
Right
( ) Original and one copy of Mortgage Note
( ) Certified copy of Mortgage
( ) *Copy of Investor Purchase Commitment(or satisfactory evidence
thereof)
( ) *Copy of D -1 Settlement Statement or equivalent
(Home Equity Loans and Title I Mortgage Loans only)
( ) *HUD 203(K) Maximum Mortgage Worksheet (203(k) Mortgage Loans
only)
- ----------
[FN]
(1) Replaced in Third Amendment (2/29/96), Exhibit C-SF.
</FN>
Left
( ) *Request for Advance (original and one (1) copy)
( ) *Copy of settlement or funding check (if applicable)
( ) Recordable assignment of Mortgage
( ) Certified copies of interim assignments of Mortgage (if
applicable)
( ) *Bailee Pledge Agreement (only required for Wet Settlement
Advance)
Please Note: Items designated with the "*" are required prior to
a Wet
Settlement Advance.
Authorized Signature:
- --------------------------------
- ---------------------------------------------------------------------------
- ----
FOR RFC INTERNAL USE ONLY
Repetitive Code: Date:
Wire Initiator's Initials: Wire Verifier's Initials:
- ---------------------------------------------------------------------------
- ----
<PAGE>
EXHIBIT
C-TL
TERM LOAN ADVANCE REQUEST
Date: , 19___
Reference is made to that certain Warehousing Credit and Security
Agreement
between MONUMENT MORTGAGE, INC., a California corporation (the "Company"),
and
RESIDENTIAL FUNDING CORPORATION, a Delaware corporation (the "Lenders),
dated as
of March , 1995 (as the same may be amended, modified, supplemented,
renewed or
restated from time to time, the "Agreement"). All capitalized terms used
herein
and all Section numbers given herein refer to those terms and Sections set
forth
in the Agreement. This Term Loan Advance Request is submitted to the
Lender
pursuant to Section 2.4(a) of the Agreement.
The undersigned hereby requests a Term Loan Advance in the
aggregate
principal amount of $ to be ------------------------ made on ,
19___.
- -------------------
The aggregate outstanding principal balances of the Mortgage Loans
serviced
pursuant to FNMA and FHLMC Servicing Contracts included in the
Servicing
Collateral as of the date hereof is $ . The Servicing Collateral Value as
of the
date hereof is $ . The Company represents and warrants that it has no
reason to
believe that such amounts are incorrect. The aggregate principal amounts
of the
Term Loan Advances and the Working Capital Advances outstanding after
giving
effect to the Term Loan Advance requested hereby will not exceed the
Servicing
Collateral Value. The aggregate principal amount of all Term Loan Advances
made
under the Agreement, after giving effect to the Term Loan Advance
requested
hereby will not exceed the Term Loan Commitment.
The representations and warranties of the Company set forth in Section
5 of
the Agreement are true and correct in all material respects on and as
of the
date hereof as if made on and as of such date.
No Event of Default has occurred and is continuing.
Since the Statement Date, there has been no material adverse change
in the
business, financial condition or results of operation of the Company
and its
Subsidiaries, taken as a whole.
MONUMENT MORTGAGE, INC.,
a Colorado corporation
By:
-----------------------------------------
Its:
-----------------------------------------
Title:
-----------------------------------------
<PAGE>
EXHIBIT C-
WC
WORKING CAPITAL ADVANCE REQUEST
Date:
Reference is made to that certain Warehousing Credit and Security
Agreement
between MONUMENT MORTGAGE, INC., a California corporation (the
"Company") and
RESIDENTIAL FUNDING CORPORATION, a Delaware corporation (the "Lender"),
dated as
of March ___, 1995 (as the same may be amended, modified, supplemented,
renewed
or restated from time to time, the "Agreement"). All capitalized terms
used
herein and all Section numbers given herein refer to those terms and
Sections
set forth in the Agreement. This Working Capital Advance Request is
submitted to
the Lender pursuant to Section 2.6(a) of the Agreement.
The undersigned hereby requests a Working Capital Advance in the
aggregate
principal amount of $_________________ to be made on _______________,
199__.
The aggregate outstanding principal balances of the Mortgage Loans
serviced
pursuant to PNMA and FHLMC Servicing Contracts included in the
Servicing
Collateral as of the date hereof is $________________. The Servicing
Collateral
Value as of the date hereof is $________________. The Company represents
and
warrants that it has no reason to believe that such amounts are incorrect.
The
aggregate principal amounts of the Working Capital Advances and the
Working
Capital Advances outstanding after giving effect to the Term Loan
Advance
requested hereby will not exceed the Servicing Collateral Value. The
aggregate
principal amount of all Working Capital Advances made under the Agreement,
after
giving effect to the Working Capital Advance requested hereby will not
exceed
the Working Capital Commitment.
The representations and warranties of the Company set forth in Section
5 of
the Agreement are true and correct in all material respects on and as
of the
date hereof as if made on and as of such date.
No Event of Default has occurred and is continuing.
Since the Statement Date, there has been no material adverse change
in the
business, financial condition or results of operation of the Company
and its
Subsidiaries, taken as a whole.
MONUMENT MORTGAGE, INC.,
a Colorado corporation
By:
----------------------------------
Its:
----------------------------------
<PAGE>
EXHIBIT D-
SF(1)
PROCEDURES AND DOCUMENTATION FOR WAREHOUSING
SINGLE-FAMILY MORTGAGE LOANS
The following procedures and documentation requireme is must be
observed in
all respects by the Company. All documented must be satisfactory to the
Lender
in its sole discretion. Terms used below, which are not otherwise defined,
shall
have the meanings given them in the Agreement. The HUD, FNMA and FHLMC
form
numbers referred to herein are for convenience only and the Company
shall use
the equivalent forms required at the time of delivery of the Mortgage
Loans or
Mortgage-backed Securities. All Requests for Advance and Collateral
Documents,
should be submitted to the Lender in a top tabbed, legal size manila
file
folder, hole-punched and acco-fastened in the order specified in the
Request for
Advance. Each folder should be labelled with the mortgagor name(s), Company
loan
number and Company name. If a Wet Settlement Advance is being requested,
the
Request for Advance and required Collateral Documents should be
submitted in
accordance with the above instructions. The remaining Collateral
Documents
should be submitted with a cover letter identifying the mortgagor
name(s) and
Company loan number.
I. Prior to making a Wet Settle Cant Advance, the Lender must
receive the
following:
(1) Estimate of the amount of the requested Advance one (1)
Business Day
prior to such Advance.
(2) Copy of settlement or funding check issued to the
escrow/title
company, if applicable.
(3) Original Request for Advance against Single-Family Mortgage
Loan,
(Exhibit C-SF) and one (l) copy of same.
(4) Copy of the Purchase Commitment or satisfactory evidence thereof.
(5) Bailee Pledge Agreement (Exhibit M).
(6) A copy of the HUD-1 Settlement Statement or equivalent (Homer
Equity
Mortgage Loans and Title I Mortgage Loans only).
The following must be received by the Lender within five (5) Business
Days of
the date of the Wet Settlement Advance:
- ----------
(1) Replaced in Third Amendment (2/29/96), Exhibit D-SF.
(7) Original signed Mortgage Note, endorsed by the Company in , blank
with
corresponding interim endorsements, if applicable, and one
copy of
same.
(8) Copy of the Mortgage certified true by the escrow/title company.
(9) Copies of all interim assignments of the Mortgage certified
true by
the escrow/title company (recorded or sent for recordation).
Mortgage
Note must bear corresponding endorsements.
(10) An assignment of the Mortgage to the Lender in recordable
form but
unrecorded.
II. Prior to the making of an Advance (other than a but Settlement
Advance),
the Lender must receive all of the Collateral Documents listed in
Section I
above.
III. The Lender exclusively shall deliver the Mortgage Notes and other
original
Collateral Documents evidencing Pledged Mortgages or Pledged
Securities and
related pool documents to the Investor or pool custodian, unless
otherwise
agreed in writing.
A. The following procedures are to be followed for deliveries of
Pledged
Mortgages:
No later than one (1) Business Day prior to the requested shipment
date and
no later than one (1) Business Day prior to the expiration date of the
purchase
Commitment, the Lender must receive the following:
(1) Signed shipping instructions for the delivery of the Pledged
Mortgages
including the following:
(a) Name and address of the office of the Investor to which the
lean
documents are to be shipped, the desired shipping date
and the
preferred method of delivery;
(b) Instructions for endorsement of the Mortgage Note;
(c) Names of mortgagor(s), Mortgage Note Amounts of Pledged
Mortgages
to be shipped and the Company's loan number; and
(d) Commitment number and expiration date of the Purchase
Commitment.
(2) For deliveries of Pledged Mortgages to FMMA for cash purchase,
the
following additional documents are required:
(a) Copy of Loan Schedule (FNMA Form 1068 or 1069) showing
the
Lender's designated FNMA payee code as / recipient of the
loan
purchase proceeds.
(3) For deliveries of Pledged Mortgages to FHLMC for cash purchase,
the
following additional documents are required:
(a) Original completed Warehouse Lender Release of Security
Interest
(FHLMC Form 996) to be executed by the Lender, designating
the
Lender as the Warehouse Lender and showing the Cash
Collateral
Account designated by the Lender as the receiving
account for
loan purchase proceeds.
(b) Copy of Wire Transfer Authorization for Al Cash
Warehouse
Delivery (FHLMC Form 987), designating the Lender as
the
Warehouse Lender and shoring the Cash Collateral
Account
designated by the Lender as the receiving account for
loan
purchase proceeds.
B. In the event Pledged Mortgages are delivered to a pool custodian,
other
than an Approved Custodian, payment of the related Advance is
required
within two (2) Business Days of shipment.
The following procedures are to be followed for deliveries of Pledged
Mortgages
to Approved Custodian:
No later than one (1) Business Day prior to the requested shipment date
and no
later than one (1) Business Day prior to required delivery date to the
Approved
Custodian, the lender must receive the following:
(1) Signed shipping instructions for the delivery of the Pledged
Mortgages
to the approved Custodian including the following:
(a) Name and address/of the office of the Approved Custodian to
which
the loan documents are to be shipped, the desired shipping
date
and the preferred method of delivery;
(b) Instructions for endorsement of the Mortgage Note;
(c) Names of Mortgagor and Mortgage Note Amounts of Pledged
Mortgages
to be shipped; and
(d) Commitment number and expiration date of the Purchase
Commitment
for the Pledged Securities.
(2) For FNMA Mortgage-backed Securities issuance, the following
additional
documents are required:
(a) Copy of Schedule of Mortgages (FNMA Form 2005 or 2025).
(b) Copy of Delivery Schedule (FNMA Form 2014), instructing
FNMA to
issue the Mortgage-backed Securities in the name of the
Company
with the Lender as pledges and to deliver the Mortgage-
backed
Securities to the Lender's custody account at Chemical
Bank NY
(CHEMICAL NYC/GEOCUST/MR9229490) and bearing the
following
instructions: "These instructions may not be changed
without the
prior written consent of Residential Funding Corporation,
Preston
A. Lyvers, Vice President or Michele Troughton, Assistant
Vice
President."
(3) For FHLMC Mortgage-backed Securities issuance, the
following
additional documents are required:
(a) Copy of Settlement Information and Delivery Authorization
(FHLMC
Form 939), designating ,the Lender as the Warehouse
Lender and
instructing FHLMC to deliver the Mortgage-backed
Securities to
the Lender's custody account at Chemical Tank NY
(CHEMICAL
NYC/GEOCUST/MR9229490).
(b) Original Warehouse Lender Release of Security Interest
(FHLMC
Form 996) to be executed by the Lender, designating the
Lender as
the Warehouse Lender and instructing FHLMC to deliver
the
Mortgage-backed Securities to the Lender's custody
account at
Chemical Bank NY (CHEMICAL NYC/GEOCUST/MR9229490).
(4) For GNMA Mortgage-backed Securities issuance, the following
additional
documents are required:
(a) Signed original Schedule of Mortgages (HUD Form 11706).
(b) Signed original Schedule of Subscribers (HUD Form
11705)
instructing GNMA to issue the Mortgage-backed Securities
in the
name of the Company and designating Chemical Bank as
Agent for
the Lender as the subscriber, using the following
language:
CHEMICAL BANK AS AGENT FOR RESIDENTIAL FUNDING
CORPORATION SEG
ACCT MANUF/CUST/MR9229490). The following instructions must
also
be included on the form: "These instructions may not be
changed
without the prior written consent of Residential
Funding
Corporation, Preston A. Lyvers, Vice President or
Michele
Troughton, Assistant Vice President."
(c) Completed original Release of Security Interest (HUD Form
11711A)
to be executed by the Lender.
(5) No later than two (2) Business Days prior to the Settlement
Date for
the Mortgage-backed Securities, the Lender must receive
signed
Securities Delivery Instructions form attached hereto as Schedule
I.
Upon instruction by the Company, the Lender will complete the
endorsement
of the Mortgage Note and make arrangements for the delivery of the
original
Collateral Documents evidencing Pledged Mortgages or Pledged
Securities and
related original pool documents with the appropriate bailee letter
to the
Investor, Approved Custodian, or other pool custodian. Upon
receipt of
Mortgage-backed Securities, the Lender will cause such Mortgage-
backed
Securities, to be delivered to the Investor which issued the
Purchase
Commitment. Mortgage-backed Securities will be released to the Investor
only
upon payment of the purchase proceeds to the Lender. Cash proceeds of
sales of
Pledged Mortgages and Pledged Securities shall be applied to related
Advances
outstanding under the Commitment. Provided no Default exists, the Lender
shall
return any excess proceeds of the sale of Mortgage Loans or Mortgage-
backed
Securities to the Company, unless otherwise instructed in writing.
<PAGE>
EXHIBIT
D-TL
PROCEDURES AND DOCUMENTATION FOR RATING
TERM LOAN DEVICES
The following procedures and documentation requirements must be
observed in
all respects by the Company. All documents must be satisfactory to the
Lender in
its sole discretion. Terms used below, which are not otherwise defined,
shall
have the meanings given them in the Warehousing Credit and Security
Agreement,
as amended, modified or renewed from time to time.
At least five (5) days prior to the date of the requested Advance, the
Lender
must receive the following:
(1) An original Term Loan Advance Request (Exhibit C-TL) signed
by an
authorized officer of the Company.
(2) A summary of the Servicing Contracts to be acquired as follows:
(a) By investor:
(i) Unpaid Principal Balance
(ii) Weighted Average Coupon
(iii) Weighted Average Servicing Fee
(iv) 60 days or more delinquency rate
(v) Foreclosure Rate
(vi) Bankruptcy Rate
(b) Total Geographic Breakdown
(3) A post acquisition pro forma profile of the Company's
Servicing
Portfolio as follows:
(a) By investor:
(i) Unpaid Principal Balance
(ii) Weighted Average Coupon
(iii) Weighted Average Servicing Fee
(iv) 60 days or more delinquency rate
(v) Foreclosure Rate
(vi) Bankruptcy Rate
(b) Total Geographic Breakdown
(4) Copies of the final, executed agreements, documents and
instruments
pursuant to which such Servicing Acquisition will occur
(the
"Acquisition Documents").
(5) Any consents to its security interest in the Acquisition
Documents,
the rights of the company thereunder and the Servicing Contracts
to be
acquired that the Lender, in its discretion, deems
necessary or
appropriate.
(6) Such UCC Financing statements or amendments as the Lender, in its
sole
discretion, may request to perfect or continue the perfection
of its
security interest.
(7) Evidence satisfactory to the Lender that the Company has
received all
consents from and provided all notices to FNMA, FHLMC, GMMA and
other
governmental agencies required for the Company to assume the
Servicing
Contracts to be acquired and to continue its business after
such
Servicing Acquisition.
(8) Such UCC, tax lien and judgment searches in the appropriate
public
records for the seller(s) in such Servicing Acquisition, which
shall
not have disclosed the existence of any prior Lien on the
Servicing
Contracts to be acquired by the Company.
(9) A letter of direction from the Company to the Lender, directing
the
Lender to disburse the proceeds of such Term Loan Advances
and
additional funds to be in the possession of the Funding Bank
directly
to the seller(s) in such Servicing Acquisition, and
evidence
satisfactory to the Lenders that such Term Loan Advances and any
such
additional funds will be sufficient to pay the purchase price in
such
Servicing Acquisition in full.
(10) Such further documents, instruments, opinions, certificates
and
evidence as the Lender may reasonably request.
FIRST AMENDMENT TO
WAREHOUSING CREDIT AND SECURITY AGREEMENT
THIS FIRST AMENDMENT TO WAREHOUSING CREDIT AND SECURITY AGREEMENT
(this
"Amendment") is entered into as of this 27th day of July, 1995 by and
between
MONUMENT MORTGAGE, INC., a California corporation (the "Company")
and
RESIDENTIAL FUNDING CORPORATION, a Delaware corporation (the "Lender").
WHEREAS, the Company and the Lender have entered into a single
family
revolving warehouse facility and term loan facility as evidenced
by a
Warehousing Credit and Security Agreement dated as of March 22, 1995,
as the
same may have been amended or supplemented (the "Agreement") and by
certain
Notes as described in the Agreement; and
WHEREAS, the Company has requested the Lender amend certain
terms of
the Agreement, and the Lender has agreed to such amend subject to the
terms and
conditions of this Amendment.
NOW, THEREFORE, for and in consideration of the foregoing and
of the
mutual covenants, agreements and conditions hereinafter set forth and for
other
good and valuable consideration, the receipt and sufficiency of which are
hereby
acknowledged, the parties hereto hereby agree as follows:
1. All capitalized terms used herein and not otherwise defined shall
have
their respective meanings set forth in the Agreement.
2. Section 1.1 of the Agreement shall be amended by adding the
following
definitions:
"Excess Working Capital Collateral Value" means as of the
date
of determination, the Working Capital Collateral Value
minus the
outstanding principal balance of all Working Capital Advances.
"Term Loan Collateral Value" means as of the
date of
determination, the lesser of: (a) seventy percent (70%) of the
most
recent Appraised Value of the FNMA Servicing Contracts included
in the
Servicing Collateral, or (b) one percent (1%) of the
outstanding
principal balance of the Mortgage Loans serviced pursuant to
FNMA
Servicing Contracts included in the Servicing Collateral;
provided,
that for purposes of calculating the Term Loan Collateral Value,
the
following Mortgage Loans shall be excluded: (i) Mortgage Loans
excluded
in calculating the Adjusted Servicing Portfolio, (ii) Mortgage
Loans in
respect of which the Company has commenced foreclosure
proceedings, and
(iii) Mortgage Loans in respect of which any obligor is the
subject of
a bankruptcy proceeding.
"Working Capital Collateral Value" means as of the
date of
determination, the lesser of: (a) seventy percent (70%) of the
most
recent Appraised Value of the FHLMC Servicing Contracts included
in the
Servicing Collateral, or (b) one percent (1%) of the
outstanding
principal balance of the Mortgage Loans serviced pursuant to
FHLMC
Servicing Contracts included in the Servicing Collateral;
provided,
that for purposes of calculating the Working Capital Collateral
Value,
the following Mortgage Loans shall be excluded: (i) Mortgage
Loans
excluded in calculating the Adjusted Servicing Portfolio, (ii)
Mortgage
Loans in respect of which the Company has commenced
foreclosure
proceedings, and (iii) Mortgage Loans in respect of which any
obliger
is the subject of a bankruptcy proceeding.
3. Section 2.3(b)(1) of the Agreement shall be deleted in its
entirety and
the following shall be substituted in lieu thereof:
(1) No Term Loan Advance shall be made if,
after
giving effect thereto, the aggregate outstanding
principal
balance of all Term Loan Advances would exceed the Term
Loan
Collateral Value plus the Excess Working Capital
Collateral
Value as of the date of such Term Loan Advance.
4. Section 2.5(b)(1) of the Agreement shall be deleted in its
entirety and
the following shall be substituted in lieu thereof:
(1) No Working Capital Advance shall be
made if,
after giving effect thereto, (1) the outstanding
principal
balance of all Working Capital Advances would
exceed the
Working Capital Collateral Value, or (2) the
outstanding
principal balance of all Term Loan Advances would
exceed the
Term Loan Collateral Value plus the Excess Working
Capital
Collateral Value, in each case, as of the date of such
Working
Capital Advance.
5. Section 2.9(h)(1) of the Agreement shall be deleted in its
entirety and
the following shall be substituted in lieu thereof:
(1) If at any time (1) the aggregate
outstanding
principal balance of all Term Loan Advances is greater
than
the Term Loan Collateral Value plus the Excess Working
Capital
Value, or (2) the aggregate outstanding principal
balance of
all Working Capital Advances is greater than the
Working
Capital Collateral Value, the Company shall prepay
the
outstanding Term Loan Advances or the outstanding
Working
Capital Advances, as required to eliminate such excess.
6. This Amendment shall become effective on the date ("Effective
Date") on
which, the Company shall deliver to the Lender (a) an executed original of
this
Amendment; and (b) a Two Hundred Fifty Dollar ($250) document production
fee.
7. The Company represents, warrants and agrees that (a) there
exists no
Default or Event of Default under the Loan Documents, (b) the Loan
Documents
continue to be the legal, valid and binding agreements and obligations
of the
Company enforceable in accordance with their terms, as modified herein,
(c) the
Lender is not in default under any of the Loan Documents and the Company
has no
offset or defense to its performance or obligations under any of the
Loan
Documents, (d) the representations contained in the Loan Documents remain
true
and accurate in all respects, and (e) there has been no material adverse
change
in the financial condition of the Company from the date of the Agreement
to the
date of this Amendment.
8. Except as hereby expressly modified, the Agreement shall
otherwise be
unchanged and shall remain in full force and effect, and the Company
ratifies
and reaffirms all of its obligations thereunder.
9. This Amendment may be executed in any number of counterparts and
by the
different parties hereto on separate counterparts, each of which
when so
executed and delivered shall be an original, but all of which shall
together
constitute one and the same instrument.
IN WITNESS WHEREOF, the Company and the Lender have caused this
Amendment
to be duly executed on their behalf by their duly authorized officers as
of the
day and year above written.
MONUMENT MORTGAGE, INC.,
a California corporation
By:____________________________________
Its: Senior Vice President/CFO
RESIDENTIAL FUNDING CORPORATION,
a Delaware corporation
By:____________________________________
Its: Vice President
<PAGE>
STATE OF California )
) ss
COUNTY OF Contra Costa )
On August 7, 1995, before me, a Notary Public, personally appeared
Paul
Garrigues, the Senior Vice President/CFO of MONUMENT MORTGAGE,
INC., a
California corporation, personally known to me (or proved to me on the
basis of
satisfactory evidence) to be the person whose name is subscribed to the
within
instrument and acknowledged to me that he/she executed the same in
his/her
authorized capacity, and that by his/her signature on the instrument the
person,
or the entity upon behalf of which the person acted, executed the
instrument.
WITNESS my hand and official seal.
Notary Public_____________________________
My Commission Expires:____________________
(SEAL)
STATE OF California )
) ss
COUNTY OF Contra Costa )
On July 27, 1995, before me, a Notary Public, personally
appeared D.
Graham Shipman, the Vice President of RESIDENTIAL FUNDING
CORPORATION, a
California corporation, personally known to me (or proved to me on the
basis of
satisfactory evidence) to be the person whose name is subscribed to the
within
instrument and acknowledged to me that he/she executed the same in
his/her
authorized capacity, and that by his/her signature on the instrument the
person,
or the entity upon behalf of which the person acted, executed the
instrument.
WITNESS my hand and official seal.
Notary Public___________________________
My Commission Expires:__________________
(SEAL)
<PAGE>
CONSENT OF GUARANTORS
The undersigned, being the Guarantors under their respective
Guaranty
dated as of March 22, 1995, hereby consent to the foregoing Amendment
and the
transactions contemplated thereby and hereby modify and reaffirm
their
obligations under their respective Guaranty so as to include within the
term
"Guaranteed Debt" the indebtedness, obligations and liabilities of the
Company
under this Amendment and the Notes. The Guarantors hereby reaffirm that
their
obligations under their respective Guaranty are separate and distinct
from the
Company's obligations to Lender, and that their obligations under
their
respective Guaranty are in full force and effect, and each hereby
waives and
agrees not to assert any anti-deficiency protections or other rights
as a
defense to their obligations under their respective Guaranty, all as more
fully
set forth in each Guaranty, the terms of each of which are incorporated
herein
as if fully set forth herein.
Each Guarantor further agrees, upon Lender's request, to
execute for
the benefit of Lender an additional guaranty in form and content
acceptable to
Lender and conforming to their respective Guaranty in connection
with the
foregoing Amendment.
This Consent of Guarantors may be executed in any
number of
counterparts, and by the parties hereto in separate counterparts, each of
which,
when so executed, shall be an original, but all such counterparts shall
together
constitute one and the same instrument.
GUARANTORS:
____________________________________
JAMES W. NOACK
____________________________________
JAMES A. UMPHRYES
<PAGE>
STATE OF California )
) ss
COUNTY OF Contra Costa )
On August 7, 1995, before me, a Notary Public, personally
appeared
JAMES W. NOACK, personally known to me (or proved to me on the
basis of
satisfactory evidence) to be the person whose name is subscribed to the
within
instrument and acknowledged to me that he/she executed the same in
his/her
authorized capacity, and that by his/her signature on the instrument the
person,
or the entity upon behalf of which the person acted, executed the
instrument.
WITNESS my hand and official seal.
Notary Public_________________________
My Commission Expires:________________
(SEAL)
STATE OF California )
) ss
COUNTY OF Contra Costa )
On July 27, 1995, before me, a Notary Public, personally appeared
JAMES
A. UMPHRYES, personally known to me (or proved to me on the
basis of
satisfactory evidence) to be the person whose name is subscribed to the
within
instrument and acknowledged to me that he/she executed the same in
his/her
authorized capacity, and that by his/her signature on the instrument the
person,
or the entity upon behalf of which the person acted, executed the
instrument.
WITNESS my hand and official seal.
Notary Public________________________
My Commission Expires:_______________
(SEAL)
<PAGE>
CERTIFICATE
OF
SECRETARY OF
MONUMENT MORTGAGE, INC.
I, the undersigned, hereby certify that I am the Secretary of
MONUMENT
MORTGAGE, INC., a California corporation (the "Company"), and have
knowledge of
the matters contained in this Certificate and hereby certify that:
1. The Company is a corporation duly organized, validly
existing
and in good standing under the laws of the State of
California
and has complied with all certifications, filings
and
requirements necessary to continue as a corporation
in the
State of California and for each state where the
Company is
transacting business as a foreign corporation.
2. In connection with the single family revolving
warehouse
facility and term loan facility made to the
Company by
RESIDENTIAL FUNDING CORPORATION, a Delaware corporation
(the
"Lender") pursuant to the terms of a Warehousing
Credit and
Security Agreement dated as of March 22, 1995, as the
same may
have been amended or supplemented (the "Agreement"),
the
Company has the valid power and authority to execute
and
deliver to the Lender the First Amendment to
Warehousing
Credit and Security Agreement.
3. The resolutions attached to this Certificate as Exhibit A
were
duly adopted by either: (a) by unanimous written action
of the
Board of Directors of the Company; or (b) at a meeting
of the
Board of Directors of the Company held on the 20th
day of
June, 1995, at which meeting a quorum was present. I
am the
keeper of the Minute Book of the Company and said
resolutions
have been entered therein, have not been altered,
amended,
repealed or rescinded, and are now in full force and
effect.
4. There have been no amendments to the Articles of
Incorporation
or bylaws of the Company since the date of the most
recent
certified copies thereof delivered to the Lender.
IN WITNESS WHEREOF, I have hereunto Set my hand and the seal of
this
corporation this 7th day of August, 1995.
________________________________
Secretary
<PAGE>
EXHIBIT A
RESOLUTIONS OF BOARD OF DIRECTORS
WHEREAS, MONUMENT MORTGAGE, INC., a California corporation
(the
"Company"), has entered into a single family revolving warehouse facility
with a
present commitment amount of Ten Million Dollars ($10,000,000) and a term
loan
facility with a present commitment amount of One Million Dollars
($1,000,000)
with RESIDENTIAL FUNDING CORPORATION, a Delaware corporation (the
"Lender"), as
evidenced by a Warehousing Promissory Note in the principal amount
of Ten
Million Dollars ($10,000,000), a Sublimit Promissory Note in the
principal
amount of Six Million Dollars ($6,000,000), a Working Capital Promissory
Note in
the principal amount of One Million Dollars ($1,000,000), and a Term
Loan
Promissory Note in the principal amount of One Million Dollars
($1,000,000),
each dated as of March 22, 1995, and by a Warehousing Credit and
Security
Agreement dated as of March 22, 1995, as the same may have been
amended or
supplemented (the "Agreement"); and
WHEREAS, the Company proposes to amend certain terms of Agreement;
and
WHEREAS, to evidence such amendment of the Agreement, the
Company
proposes to execute and deliver a First Amendment to Warehousing
Credit and
Security Agreement (the "Amendment"), a copy of which has been presented
to the
Board of Directors of this Company; and
WHEREAS, the Board of Directors of this Company have determined
that it
will be in the best interests of this Company for the Company to
amend the
Agreement.
RESOLVED, that these resolutions are enacted by the Board of
Directors
of this Company on their behalf and on behalf of the Company.
FURTHER RESOLVED, that the Company shall amend the Agreement
to be
evidenced by the Amendment.
FURTHER RESOLVED, that the Amendment in the form presented to the
Board
of Directors of this Company is hereby approved and a copy thereof is
filed in
the records of this Company with these Resolutions.
FURTHER RESOLVED, that any One (insert minimum number required to
sign)
of the following officers of the Company: Chief Financial Officer,
Executive
Vice President, or President (list titles of officers authorized), shall
be and
are authorized, empowered anal directed in the name of and on behalf of
this
Company, to execute, acknowledge and deliver the Amendment in the form
approved
by the Board of Directors of this Company as aforesaid, with such
changes
therein as may be acceptable to such officers, as conclusively
evidenced by
their execution thereof.
FURTHER RESOLVED, that such officers shall be and are
hereby
authorized, empowered and directed to do and perform each and every
act and
execute any and all documents and instruments in the name of this Company
as may
be necessary or desirable to enable this Company to amend the Agreement
and to
carry out the purport and intent of the foregoing Resolutions.
SECOND AMENDMENT TO
WAREHOUSING CREDIT AND SECURITY AGREEMENT
THIS SECOND AMENDMENT TO WAREHOUSING CREDIT AND SECURITY AGREEMENT
(this
"Amendment") is entered into as of this 15th day of December, 1995,
by and
between MONUMENT MORTGAGE, INC., a California corporation (the
"Company") and
RESIDENTIAL FUNDING CORPORATION, a Delaware corporation (the "Lender").
WHEREAS, the Company and the Lender have entered into a Single-Family
revolving warehouse facility with a present Commitment Amount of Ten
Million
Dollars ($10,000,000), to finance the origination and acquisition of
Mortgage
Loans as evidenced by a Warehousing Promissory Note in the principal sum
of Ten
Million Dollars ($10,000,000), dated as of March 22, 1995, a Sublimit
Promissory
Note in the principal sum of Six Million Dollars ($6,000,000), dated as of
March
22, 1995, a Working Capital Promissory Note in the principal sum of One
Million
Dollars ($1,000,000), dated as of March 22, 1995, and a Term Loan
Promissory
Note in the principal sum of One Million Dollars ($1,000,000), dated as of
March
22, 1995, (the "Notes"), and by a Warehousing Credit and Security
Agreement
dated as of March 22, 1995, as the same may have been amended or
supplemented
(the "Agreement"); and
WHEREAS, the Company has requested the Lender to extend the
period for
which the Commitment under the Agreement has been made, and the
Lender has
agreed to such extension subject to the terms and conditions of this
Amendment.
NOW, THEREFORE, for and in consideration of the foregoing and of the
mutual
covenants, agreements and conditions hereinafter set forth and for other
good
and valuable consideration, the receipt and sufficiency of which are
hereby
acknowledged, the parties hereto hereby agree as follows:
1. All capitalized terms used herein and not otherwise defined shall
have
their respective meanings set forth in the Agreement.
2. The Effective Date of this Amendment shall be December 31, 1995,
the
date on which the Company has complied with all the terms and conditions of
this
Amendment.
3. The definitions of Warehousing Maturity Date and Working
Capital
Maturity Date in section 1.1 of the Agreement shall be amended by
inserting the
date "January 31, 1996" in place of "December 31, 1995" wherever it
appears in
such definitions.
4. The Company shall deliver to the Lender (a) an executed original of
this
Amendment; and (b) a $250 Document Production Fee.
5. The Company represents, warrants and agrees that (a) there
exists no
Default or Event of Default under the Loan Documents, (b) the Loan
Documents
continue to be the legal, valid and binding agreements and obligations
of the
Company enforceable in accordance with their terms, as modified herein,
(c) the
Lender is not in default under any of the Loan Documents and the Company
has no
offset or defense to its performance or obligations under any of the
Loan
Documents, (d) the representations contained in the Loan Documents remain
true
and accurate in all respects, and (e) there has been no material adverse
change
in the financial condition of the Company from the date of the Agreement
to the
date of this Amendment.
6. Except as hereby expressly modified, the Agreement shall
otherwise be
unchanged and shall remain in full force and effect, and the Company
ratifies
and reaffirms all of its obligations thereunder.
7. This Amendment may be executed in any number of counterparts and by
the
different parties hereto on separate counterparts, each of which
when so
executed and delivered shall be an original, but all of which shall
together
constitute one and the same instrument.
IN WITNESS WHEREOF, the Company and the Lender have caused this
Amendment
to be duly executed on their behalf by their duly authorized officers as
of the
day and year above written.
MONUMENT MORTGAGE, INC.,
a California corporation
By:________________________________
Its: Senior Vice President/CFO
RESIDENTIAL FUNDING CORPORATION,
a Delaware corporation
By:________________________________
Its: Director
<PAGE>
STATE OF California )
) ss
COUNTY OF Contra Costa )
On August 7, 1995, before me, a Notary Public, personally appeared
Paul
Garrigues, the Senior Vice President/CFO of MONUMENT MORTGAGE,
INC., a
California corporation, personally known to me (or proved to me on the
basis of
satisfactory evidence) to be the person whose name is subscribed to the
within
instrument and acknowledged to me that he/she executed the same in
his/her
authorized capacity, and that by his/her signature on the instrument the
person,
or the entity upon behalf of which the person acted, executed the
instrument.
WITNESS my hand and official seal.
Notary Public__________________________
My Commission Expires:_________________
(SEAL)
STATE OF California )
) ss
COUNTY OF Contra Costa )
On July 27, 1995, before me, a Notary Public, personally
appeared D.
Graham Shipman, the Director of RESIDENTIAL FUNDING CORPORATION, a
California
corporation, personally known to me (or proved to me on the
basis of
satisfactory evidence) to be the person whose name is subscribed to the
within
instrument and acknowledged to me that he/she executed the same in
his/her
authorized capacity, and that by his/her signature on the instrument the
person,
or the entity upon behalf of which the person acted, executed the
instrument.
WITNESS my hand and official seal.
Notary Public_________________________
My Commission Expires:________________
(SEAL)
<PAGE>
CONSENT OF GUARANTORS
The undersigned, being the Guarantors under their respective
Guaranty
dated as of March 22, 1995, hereby consent to the foregoing Amendment
and the
transactions contemplated thereby and hereby modify and reaffirm
their
obligations under their respective Guaranty so as to include within the
term
"Guaranteed Debt" the indebtedness, obligations and liabilities of the
Company
under this Amendment. The Guarantors hereby reaffirm that their
obligations
under their respective Guaranty are separate and distinct from the
Company's
obligations to Lender, and that their obligations under their
respective
Guaranty are in full force and effect, and each hereby waives and agrees
not to
assert any anti-deficiency protections or other rights as a defense to
their
obligations under their respective Guaranty, all as more fully set forth in
each
Guaranty, the terms of each of which are incorporated herein as if
fully set
forth herein.
The Guarantors hereby irrevocably waive any claim or other rights
that
they may now or hereafter acquire against the Company that arises
from the
existence, payment, performance or enforcement of the Guarantor's
obligations
under the Guaranty, including any right of subrogation,
reimbursement,
exoneration or indemnification, any right to participate in any claim or
remedy
of the Lender against the Company or any collateral that the Lender now
has or
hereafter acquires, whether or not such claim, remedy or right arises in
equity
or under contract, statute or common law, including the right to take or
receive
from the Company directly or indirectly, in cash or other property or by
set-off
or in any manner, payment or security on account of such claim or other
rights.
If any amount shall be paid to the Guarantors in violation of the
preceding
sentence and the Guaranteed Debt shall not have been paid and performed in
full,
such amount shall be deemed to have been paid to the Guarantors for the
benefit
of, and held in trust for, the Lender and shall forthwith be paid to the
Lender
to be credited and applied to the Guaranteed Debt, whether matured or
unmatured.
Each Guarantor further agrees, upon Lender's request, to
execute for
the benefit of Lender an additional guaranty in form and content
acceptable to
Lender and conforming to their respective Guaranty in connection
with the
foregoing Amendment.
This Consent of Guarantors may be executed in any
number of
counterparts, and by the parties hereto in separate counterparts, each of
which,
when so executed, shall be an original, but all such counterparts shall
together
constitute one and the same instrument.
GUARANTORS:
___________________________________
JAMES W. NOACK
___________________________________
JAMES A. UMPHRYES
<PAGE>
STATE OF California )
) ss
COUNTY OF Contra Costa )
On August 7, 1995, before me, a Notary Public, personally
appeared
JAMES W. NOACK, personally known to me (or proved to me on the
basis of
satisfactory evidence) to be the person whose name is subscribed to the
within
instrument and acknowledged to me that he/she executed the same in
his/her
authorized capacity, and that by his/her signature on the instrument the
person,
or the entity upon behalf of which the person acted, executed the
instrument.
WITNESS my hand and official seal.
Notary Public____________________________
My Commission Expires:___________________
(SEAL)
STATE OF California )
) ss
COUNTY OF Contra Costa )
On July 27, 1995, before me, a Notary Public, personally appeared
JAMES
A. UMPHRYES, personally known to me (or proved to me on the
basis of
satisfactory evidence) to be the person whose name is subscribed to the
within
instrument and acknowledged to me that he/she executed the same in
his/her
authorized capacity, and that by his/her signature on the instrument the
person,
or the entity upon behalf of which the person acted, executed the
instrument.
WITNESS my hand and official seal.
Notary Public___________________________
My Commission Expires:__________________
(SEAL)
<PAGE>
CERTIFICATE
OF
SECRETARY OF
MONUMENT MORTGAGE, INC.
I, the undersigned, hereby certify that I am the Secretary of
MONUMENT
MORTGAGE, INC., a California corporation (the "Company"), and have
knowledge of
the matters contained in this Certificate and hereby certify that:
1. The Company is a corporation duly organized, validly existing
and in
good standing under the laws of the State of California and has complied
with
all certifications, filings and requirements necessary to continue
as a
corporation in the State of California and for each state where the
Company is
transacting business as a foreign corporation.
2. In connection with the Single-Family revolving warehouse facility
made
to the Company by RESIDENTIAL FUNDING CORPORATION, a Delaware corporation
(the
"Lender") pursuant to the terms of a Warehousing Credit and Security
Agreement
dated as of March 22, 1995, as the same may have been amended or
supplemented
(the "Agreement"), the Company has the valid power and authority to
execute and
deliver to the Lender the Second Amendment to Warehousing Credit and
Security
Agreement.
3. The resolutions attached to this Certificate as Exhibit A were
duly
adopted by either: (a) by unanimous written action of the Board of
Directors of
the Company; or (b) at a meeting of the Board of Directors of the Company
held
on the 8th day of December, 1995, at which meeting a quorum was present.
I am
the keeper of the Minute Book of the Company and said resolutions have
been
entered therein, have not been altered, amended, repealed or rescinded,
and are
now in full force and effect.
4. There have been no amendments to the Articles of Incorporation or
Bylaws
of the Company since the date of the most recent certified copies
thereof
delivered to the Lender.
IN WITNESS WHEREOF, I have hereunto set my hand and the seal of
this
corporation this 19th day of December , 1995.
______________________________
Secretary
<PAGE>
EXHIBIT A
RESOLUTIONS OF BOARD OF DIRECTORS
WHEREAS, MONUMENT MORTGAGE, INC., a California corporation (the
"Company"),
has entered into a Single-Family revolving warehouse facility
(the
"Commitment"), with a present commitment amount of Ten Million
Dollars
($10,000,000) (the "Commitment Amount"), with RESIDENTIAL FUNDING
CORPORATION, a
Delaware corporation (the "Lender"), as evidenced by a Warehousing
Promissory
Note in the principal sum of Ten Million Dollars ($10,000,000), dated
as of
March 22, 1995, a Sublimit Promissory Note in the principal sum of Six
Million
Dollars ($6,000,000), dated as of March 22, 1995, a Working Capital
Promissory
Note in the principal sum of One Million Dollars ($1,000,000), dated as of
March
22, 1995, and a Term Loan Promissory Note in the principal sum of One
Million
Dollars ($1,000,000), dated as of March 22, 1995, and by a Warehousing
Credit
and Security Agreement dated as of March 22, 1995, as the same may have
been
amended or supplemented (the "Agreement"); and
WHEREAS, the Company proposes to extend the period for which the
Commitment
has been made;
WHEREAS, to evidence such extension of the Commitment, the Company
proposes
to execute and deliver a Second Amendment to Warehousing Credit and
Security
Agreement (the "Amendment"), a copy of which has been presented to the
Board of
Directors of this Company; and
WHEREAS, the Board of Directors of this Company have determined
that it
will be in the best interests of this Company for the Company to
extend the
Commitment.
RESOLVED, that these resolutions are enacted by the Board of
Directors of
this Company on their behalf and on behalf of the Company.
FURTHER RESOLVED, that the Company shall amend the Commitment to be
evidenced by the Amendment.
FURTHER RESOLVED, that the Amendment in the form presented to the
Board of
Directors of this Company is hereby approved and a copy thereof is filed
in the
records of this Company with these Resolutions.
FURTHER RESOLVED, that any One (insert minimum number required to
sign) of
the following officers of the Company: President, Executive Vice
President,
Senior Vice President, Assistant Vice President, Secretary, Vice
President,
Assistant Sec. (list titles of officers authorized, do not list
individual
names), shal1 be and are authorized, empowered and directed in the name
of and
on behalf of this Company, to execute, acknowledge and deliver the
Amendment in
the form approved by the Board of Directors of this Company as aforesaid,
with
such changes therein as may be acceptable to such officers, as
conclusively
evidenced by their execution thereof.
FURTHER RESOLVED, that the Company hereby authorizes the Lender to
accept
the Company's bailee pledge agreements, advance requests, shipping
requests,
wire transfer instructions and security delivery instructions transmitted
to the
Lender via facsimile or electronic transmission, and that said documents,
when
transmitted by facsimile or electronic transmission, shall have the same
force
and effect as the originals.
FURTHER RESOLVED, that such officers shall be and are hereby
authorized,
empowered and directed to do and perform each and every act and execute
any and
all documents and instruments in the name of this Company as may be
necessary or
desirable to enable this Company to amend the Commitment and to carry
out the
purport and intent of the foregoing Resolutions.
THIRD AMENDMENT TO
WAREHOUSING CREDIT AND SECURITY AGREEMENT
THIS THIRD AMENDMENT TO WAREHOUSING CREDIT AND SECURITY
AGREEMENT
(this "Amendment") is entered into as of this 29th day of February 1996,
by and
between MONUMENT MORTGAGE, INC., a California corporation (the
"Company") and
RESIDENTIAL FUNDING CORPORATION, a Delaware corporation (the "Lender").
WHEREAS, the Company and the Lender have entered into a single
family
revolving warehouse facility with a present Warehousing Commitment Amount
of Ten
Million Dollars ($10,000,000), to finance the origination and
acquisition of
Mortgage Loans as evidenced by a Warehousing Promissory Note in the
principal
sum of Ten Million Dollars ($10,000,000), dated as of March 22, 1995, a
Sublimit
Promissory Note in the principal sum of Six Million Dollars ($6,000,000),
dated
as of March 22, 1995, and by a Warehousing Credit and Security Agreement
dated
as of March 22, 1995, as the same may have been amended or supplemented
(the
"Agreement");
WHEREAS, the Company and the Lender have entered into a term
loan
facility with a present Term Loan Commitment Amount of One Million
Dollars
($1,000,000) ("Term Loan Commitment"), as evidenced by a Term Loan
Promissory
Note in the principal amount of One Million Dollars ($1,000,000), dated
as of
March 22, 1995 (the "Term Note") and the Agreement;
WHEREAS, the Company and the Lender have also entered into a
working
capital facility with a present Working Capital Commitment Amount of One
Million
Dollars ($1,000,000) (reworking Capital Commitment"), as evidenced by a
Working
Capital Promissory Note in the principal sum of One Million
Dollars
($1,000,000), dated as of March 22, 1995 (the "Working Capital Note"),
and the
Agreement (the Warehousing Promissory Note, the Sublimit Promissory
Note, the
Term Loan Promissory Note and the Working Capital Promissory Note
shall
collectively be referred to as the "Notes");
WHEREAS, the Company has requested the Lender to extend the
period for
which the Commitments under the Agreement have been made and to amend
certain
other terms of the Agreement and the Lender has agreed to such extension
and
amendment of the Agreement subject to the terms and conditions of
this
Amendment;
NOW, THEREFORE, for and in consideration of the foregoing and of
the
mutual covenants, agreements and conditions hereinafter set forth and for
other
good and valuable consideration, the receipt and sufficiency of which are
hereby
acknowledged, the parties hereto hereby agree as follows:
1. All capitalized terms used herein and not otherwise defined
shall
hand their- respective meanings set forth in the Agreement.
2. The effective date ("Effective Date") of this Amendment
shall be
March 1, 1996 , the date on which the Company has complied with all the
terms
and conditions of this Amendment.
3. Section 1.1 of the Agreement shall be amended by adding
the
following definitions in the appropriate alphabetical order:
"Commitment Amount" means the Warehousing Commitment
Amount, the
Term Loan Commitment Amount or the Working Capital Commitment Amount.
"Eligible Balances" means all funds of or maintained
by the
Company and its Subsidiaries in accounts at a Designated Bank, less
balances to
support fees, interest or other amounts that would otherwise be payable
to the
Designated Bank, float, reserve requirements, Federal Deposit
Insurance
Corporation insurance premiums and such other reductions as may be
imposed by
governmental authorities from time to time.
"HUD 203(K) Mortgage Loan" means an FHA insured Mortgage
Loan
secured by a First Mortgage, of which a portion will be used for the
purpose of
rehabilitating and/or repairing the related single family property, and
which
satisfies the definition of "rehabilitation loan" under 24 C.F.R.
Section
203.50(a).
"Miscellaneous Charges" has the meaning set forth in Section
2.16
hereof.
"Operating Account" means a demand deposit account
maintained at
the Funding Bank in the name of the Company and designated for
funding the
discount portion of each Advance and for returning any excess payment
from an
Investor for a Pledged Mortgage or Pledged Security.
"Rejected Mortgage Loan" means a Mortgage Loan which
was
warehoused by the Lender under the terms of this Agreement and
committed for
purchase under a Purchase Commitment, but which has been rejected for
purchase
by an Investor, or for inclusion in a Mortgage Pool by the pool
custodian and
with respect to which there is a correctible deficiency and which does not
have
a colorable claim of fraud made by any Person involved in the
origination,
servicing or sale of such Mortgage Loan.
"Repurchase Advance" means an Advance made against a
Repurchased
Mortgage Loan or a Rejected Mortgage Loan. The Lender shall pre-approve
each
Repurchase Advance.
"Repurchased Mortgage Loan" means a Mortgage Loan which has
been
repurchased from an investor or a Mortgage Pool pursuant to a
Servicing
Contract, are in the process of foreclosure, with respect to which there
is a
correctible deficiency and does not have a colorable claim of fraud made
by any
Person involved in the origination, servicing or sale of such Mortgage
Loan.
"Repurchase Rate" means a floating rate of interest
equal to
three and one-half percent (3.5%) per annum over LIBOR. The Repurchase
Rate
shall be adjusted on and as of the effective date of each weekly
change in
LIBOR. The Lender's determination of the Repurchase Rate as of any
date of
determination shall be conclusive and binding, absent manifest error.
"Term Loan Commitment Amount" means One Million
Dollars
($l,000,000).
"Warehousing Commitment Amount" means Ten Million
Dollars
($10,000,000).
"Working Capital Commitment Amount" means One Million
Dollars
($1,000,000).
"Miscellaneous Charges" has the meaning set forth in Section
2.16
hereof.
"Title I Mortgage Loan" means an FHA co-insured Mortgage
Loan
secured by a Mortgage which is underwritten in accordance with HUD
underwriting
standards for the Title I Property Improvement Program as set forth in and
which
is reported for insurance under the Mortgage Insurance Program
authorized and
administered under Title I of the National Housing Act of 1934, as
amended and
the regulations promulgated thereunder.
4. Section 1.1 of the Agreement shall be amended to delete
the
definitions of "Adjusted Servicing Portfolio", "Adjusted Tangible Net
Worth",
"Advance," "Approved Custodian," "Conforming Value," "Conforming Mortgage
Loan,"
"Conventional Mortgage Loan", "Investable Balances", "Jumbo Mortgage
Loan",
"Mortgage Loan," "Nonconforming Mortgage Loan," "Ordinary Warehousing
Advances,"
"Second Mortgage Loan" and "Tangible Net Worth" in their entirety,
replacing
them with the following definitions:
"Adjusted Servicing Portfolio" means, for any Person,
the
Servicing Portfolio of such Person, but excluding the
principal
balance of Mortgage Loans included in the Servicing Portfolio at
such
date (a) which are past due for principal or interest for sixty
(60)
days or more, (b) with respect to which such Person is
obligated to
repurchase or indemnify the holder of the Mortgage Loans as a
result
of defaults on the Mortgage Loans at any time during the term of
such
Mortgage Loans, (c) for which the Servicing Contracts are not
owned by
such Person free and clear of all Liens (other than in favor
of the
Lender), or (d) which are serviced by the Company for others
under
subservicing arrangements.
"Advance" means a disbursement by the Lender under
the
Commitment pursuant to Article 2 of this Agreement, including,
without
limitation, Ordinary Warehousing Advances, Wet Settlement
Advances,
Home Equity Advances, Nonconforming Advance, Second Mortgage
Advances,
Repurchase Advances, Working Capital Advances, Term Loan
Advances and
readvances of funds previously advanced to the Company and
repaid to
the Lender.
"Approved Custodian" means a pool custodian or other
Person
which is deemed acceptable to the Lender from time to time in its
sole
discretion to hold a Mortgage Loan for inclusion in a Mortgage
Pool or
to hold a Mortgage Loan as agent for an Investor who has
issued a
Purchase Commitment for such Mortgage Loan.
"Conforming Mortgage Loan" means a First Mortgage Loan
which
is either (a) an FHA insured (other than a Title I Mortgage
Loan or
HUD 203(K) Mortgage Loan) or VA guaranteed Mortgage Loan or
(b) a
Conventional Mortgage Loan which is underwritten
substantially in
accordance with FNMA or FHLMC underwriting standards, and
the
principal amount of which is less than or equal to the maximum
amount
eligible for purchase by FNMA or FHLMC.
"Conventional Mortgage Loan" means a First Mortgage
Loan,
other than an FHA insured or VA guaranteed Mortgage Loan, or a
Home
Equity Loan.
"Jumbo Mortgage Loan" means a Conventional Mortgage
Loan
which is underwritten substantially in accordance with FNMA or
FHLMC
underwriting standards, but the principal amount of which is in
excess
of the maximum amount eligible for purchase by FNMA or FHLMC,
and
which meets all eligibility requirements for purchase by an
Investor.
"Mortgage Loan" means any loan evidenced by a Mortgage
Note
and secured by a Mortgage. The term "Mortgage Loan" shall
include
First Mortgage Loans and Second Mortgage Loans unless the
context
otherwise requires.
"Ordinary Warehousing Advances" means Warehousing
Advances
other than Home Equity Advances, Second Mortgage
Advances,
Nonconforming Advances and Repurchase Advances.
"Sublimit Promissory Note" means the promissory
note
evidencing the Company's Obligations with respect to Home
Equity
Advances, Second Mortgage Advances and Repurchase Advances in the
form
of Exhibit A-2 attached hereto.
"Tangible Net Worth" means with respect to any Person
at any
date, the excess of the total assets over total liabilities of
such
Person on such date, each to be determined in accordance with
GAAP
consistent with those applied in the preparation of the
financial
statements referred to in Section 4.1(a)(5) hereof, plus loan
loss
reserves and that portion of Subordinated Debt not due within one
year
of such date, provided that, for purposes of this Agreement,
there
shall be excluded from total assets advances or loans to
shareholders,
officers or Affiliates, investments in Affiliates, assets
pledged to
secure any liabilities not included in the Debt of such
Person,
intangible assets, those other assets which would be deemed by
HUD to
be non-acceptable in calculating adjusted net worth in accordance
with
its requirements in effect as of such date, as such
requirements
appear in the "Audit Guide for Audit of Approved Non-
Supervised
Mortgagees" and other assets deemed unacceptable by the Lender
in its
sole discretion.
"Title I Mortgage Loan" means an FHA co-insured
Mortgage
Loan secured by a Mortgage which is underwritten in accordance
with
HUD underwriting standards for the Title I Property
Improvement
Program as set forth in and which is reported for insurance
under the
Mortgage Insurance Program authorized and administered under
Title I
of the National Housing Act of 1934, as amended and the
regulations
promulgated thereunder.
"Warehousing Maturity Date" shall mend the earlier
of: (a)
the close of business on December 31, 1997, as such date
may be
extended from time to time in writing by the Lender, in its
sole
discretion, on which date the Warehousing Commitment shall
expire of
its own term, and without the necessity of action by the Lender,
and
(b) the date the obligation of the Lender to make further
Warehousing
Advances hereunder is terminated pursuant to Section 8.2 below.
"Working Capital Maturity Date" shall mean the
earlier of:
(a) the close of business on December 31, 1997, as such date
may be
extended from time to time in writing by the Lender, in its
sole
discretion, on which date the Working Capital Commitment shall
expire
of its own term, and without the necessity of action by the
Lender,
and (b) the date the obligation of the Lender to make further
Working
Capital Advances hereunder is terminated pursuant to
Section 8.2
below.
5. All references in the Agreement to "Investable Balances"
shall
hereby be amended to refer to "Eligible Balances."
6. Section 2.1(a) of the Agreement is hereby deleted in its
entirety
and the following section is substituted in lieu thereof:
2.1(a) Subject to the terms and conditions of this
Agreement
and provided no Default or Event of Default has occurred
and is
continuing, the Lender agrees from time to time during the period
from
the Closing Date, to, but not including, the Warehousing Maturity
Date,
to make Warehousing Advances to the Company, provided the
total
aggregate principal amount outstanding at any one time of all
such
Warehousing Advances shall not exceed the Warehousing
Commitment
Amount. The obligation of the Lender to make Warehouse
Advances
hereunder up to the Warehousing Comitment Amount, is
hereinafter
referred to as the "Warehousing Commitment." Within the
Warehousing
Commitment, the Company may borrow, repay and reborrow. All
Warehousing
Advances under this Agreement shall constitute a single
indebtedness,
and all of the Collateral shall be security for the
Warehousing
Promissory Note and the Sublimit Promissory Note and for
the
performance of all the Obligations.
7. Section 2.1(b)(6) of the Agreement shall be deleted in its
entirety
and the following shall be substituted in lieu thereof:
(6) No Advance shall be made against a Mortgage Loan,
other
than a Repurchased Mortgage Loan or a Rejected Mortgage Loan,
which was
closed more than ninety (90) days prior the date of the
requested
Advance.
8. Section 2.1(b) of the Agreement is hereby amended to
add the
following sections immediately after Section 2.1(b)(6):
(8) The aggregate amount of Repurchase Advances
outstanding at
any one time shall not exceed Two Million Dollars ($2,000,000).
9. Section 2.1(c) of the Agreement is hereby amended to
add the
following section immediately after Section 2.1(c)(4):
10. Sections 2.2(a) and (b) of the Agreement shall be deleted in
their
entirety and the following shall be substituted in lieu thereof:
2.2(a) The Company may obtain an Warehousing
Advance
hereunder, subject to the satisfaction of the conditions set
forth in
Sections 4.1 and 4.3 hereof, upon compliance with the
procedures set
forth in this Section 2.2 and in Exhibit D-SF with respect
to all
Warehousing Advances, other than Repurchase Advances, and Exhibit
D-REP
with respect to Repurchase Advances, attached hereto and made a
part
hereof including the delivery of all documents listed in Exhibit
D-SF
(the "Collateral Documents") to the Lender. Requests for
Warehousing
Advances shall be initiated by the Company by delivering to the
Lender,
no later than one (1) Business Day prior to any Business Day
that the
Company desires to borrow hereunder, a completed and signed
request for
an Advance (a "Warehousing Advance Request") on the then current
form
approved by the Lender. The current forms in use by the
Lender are
Exhibit C-SF for all Warehousing Advances, other than
Repurchase
Advances, and Exhibit C-REP for Repurchase Advances, attached
hereto
and made a part hereof. The Lender shall have the right, on not
less
than three (3) Business Days' prior Notice to the Company, to
modify
any of said Exhibits to conform to current legal requirements or
Lender
practices, and, as so modified, said Exhibits shall be deemed a
part
hereof.
2.2(b) In the case of a Wet Settlement Advance, the
Company
shall follow the procedures and, at or prior to the Lender's
making of
such Wet Settlement Advance, shall deliver to the Lender the
documents
set forth in Exhibit D-SF and Exhibit D-REP hereto together
with a
completed and executed Bailee Pledge Agreement in the form of
Exhibit M
hereto. In the case of a Mortgage Loan financed through a
Wet
Settlement Advance, the Company shall cause all Collateral
Documents
required to be delivered to the Lender pursuant to Exhibit D-SF
within
five (5) Business Days after the date of the Wet Settlement
Advance
relating thereto and the Company shall cause all Collateral
Documents
required to be delivered to the Lender pursuant to Exhibit D-REP
with
twenty (20) days after the dates of the Wet Settlement Advance
relating
thereto.
11. Section 2.2(d) of the Agreement shall be amended by
adding the
words "or Exhibit D-REP" after the words "Exhibit D-SF" where they
appear
therein.
12. Section 2.2(e) of the Agreement shall be deleted in its
entirety
and the following shall be substituted in lieu thereof:
2.2(e) To make a Warehousing Advance, the Lender shall
cause
the Funding Bank to credit an account of the Company with the
Funding
Bank, which account shall be under the exclusive control of the
Lender,
upon compliance by the Company with the terms of this Agreement.
The
Lender shall determine in its sole discretion the method by
which a
Warehousing Advance is made.
13. Section 2.3(a) of the Agreement shall be deleted in its
entirety
and the following shall be substituted in lieu thereof:
2.3(a) Subject to the terms and conditions of this
Agreement
and provided no Default or Event of Default has occurred
and is
continuing, the Lender agrees from time to time during the period
from
the Closing Date, to, but not including, the Term Loan
Commitment
Termination Date, to make Term Loan Advances to the Company,
provided
the total aggregate principal amount outstanding at any one time
of all
such Term Loan Advances shall not exceed the Term Loan
Commitment
Amount. The obligation of the Lender to make Term Loan
Advances
hereunder up to the Term Loan Commitment Amount and prior to the
Term
Loan Commitment Termination Date, is hereinafter referred to
as the
"Term Loan Commitment." Within the Term Loan Commitment, the
Company
may borrow, repay and reborrow. All Term Loan Advances under
this
Agreement shall constitute a single indebtedness, and all
of the
Collateral shall be security for the Term Loan Promissory Note
and for
the performance of all the Obligations.
14. Section 2.5(a) of the Agreement shall be deleted in its
entirety
and the following shall be substituted in lieu thereof:
2.5(a) Subject to the terms and conditions of this
Agreement
and provided no Default or Event of Default has occurred
and is
continuing, the Lender agrees from time to time during the period
from
the Closing Date, to, but not including, the Working Capital
Maturity
Date, to make Working Capital Advances to the Company,
provided the
total aggregate principal amount outstanding at any one time
of all
such Working Capital Advances shall not exceed the Working
Capital
Commitment Amount. The obligation of the Lender to make Working
Capital
Advances hereunder up to the Working Capital Commitment
Amount, is
hereinafter referred to as the "Working Capital Commitment."
Within the
Working Capital Commitment, the Company may borrow, repay and
reborrow.
All Working Capital Advances under this Agreement shall
constitute a
single indebtedness, and all of the Collateral shall be
security for
the Working Capital Promissory Note and for the performance of
all the
Obligations.
15. Section 2.7 of the Agreement shall be deleted in its entirety
and
the following shall be substituted in lieu thereof:
2.7 Notes. The Company's Obligations in respect of
Ordinary
Warehousing Advances and Nonconforming Advances shall be evidenced
by a
Warehousing Promissory Note of the Company substantially in the
form of
Exhibit A-1 attached hereto. The Company's Obligations in
respect of
Home Equity Advances, Second Mortgage Advances and Repurchase
Advances
shall be evidenced by a Sublimit Promissory Note of the
Company
substantially in the form of Exhibit A-2 attached hereto. The
Company's
Obligations in respect of Working Capital Advances shall be
evidenced
by a Working Capital Promissory Note of the Company
substantially in
the form of Exhibit A-3 attached hereto. The Company's
Obligations in
respect of Term Loan Advances shall be evidenced by a Term
Loan
Promissory Note of the Company substantially in the form of
Exhibit A-4
attached hereto. Each note shall be dated as of the date hereof.
The
Warehousing Promissory Note, the Sublimit Promissory Note, the
Working
Capital Promissory Note and the Term Loan Promissory Note
are
collectively referred to as the "Notes". The terms
"Warehousing
Promissory Note," "Sublimit Promissory Note," "Working
Capital
Promissory Note," "Term Loan Promissory Note," "Note" or "Notes"
shall
include all extensions, renewals and modifications of the Notes
and all
substitutions therefor. All terms and provisions of the
Notes are
hereby incorporated herein.
16. Sections 2.8(d), (e), (f), and (g) of the Agreement
shall be
renumbered as Sections 2.8(e), (f), (g) and (h) and the following shall be
added
as Section 2.8(d):
2.8(d) Prior to the occurrence of an Event of Default,
the
unpaid amount of each Repurchase Advance shall bear interest,
from the
date of such Advance until paid in full, at the Repurchase Rate.
17. Section 9.8(e) of the Agreement (as renumbered pursuant
to the
provisions of Section 16 of this Amendment) shall be deleted in their
entirety
and the following shall be substituted in lieu thereof:
2.8(e) The Company shall be entitled to receive
certain
benefits based on the average monthly Eligible Balances of the
Company
maintained at a Designated Bank.
For the purposes hereof, all Advances shall be
called the
Inapplicable Advances". After the end of each calendar month,
the
Lender will calculate the interest due for the applicable
month, by
electing a portion ("Balance Funded Portion") of the
Applicable
Advances which is equal to the lesser of (a) the Applicable
Advances
outstanding during such month or (b) the average amount of
Eligible
Balances on deposit with a Designated Bank during such month.
The
Balance Funded Portion of the Applicable Advances shall bear
interest
at a balance funded rate of two percent (2.00%).
The Balance Funded Portion of the Applicable
Advances
outstanding for a month shall be determined by (a) first,
deducting the
average amount of Repurchase Advances outstanding for a month
from the
average amount of Eligible Balances during such month, but only
to the
extent of the average amount of Eligible Balances, (b) second,
to the
extent Eligible Balances remain for such month, deducting the
average
amount of Nonconforming Advances outstanding for a month
from the
remaining average amount of Eligible Balances during such month,
but
only to the extent of the remaining average amount of Eligible
Balances
and (c) third, to the extent Eligible Balances remain for such
month,
deducting the average aggregate amount of Ordinary
Warehousing
Advances, Home Equity Advances and Second Mortgage Advances
outstanding
for a month from the remaining average amount of Eligible
Balances
during such month, but only to the extent of the remaining
average
amount of Eligible Balances.
If, for any month, a portion of the average amount of
Eligible
Balances remains ("Remainder") after the Balance Funded
Portion has
been deducted, the Lender shall provide a benefit in the form
of an
"Earnings Credit" on the Remainder portion of the Eligible
Balances
maintained in time deposit accounts with the Designated Bank,
and the
Lender shall provide a benefit in the form of an "Earnings
Allowance"
on the Remainder portion of the Eligible Balances maintained in
demand
deposit accounts with the Designated Bank. Any Earnings Allowance
shall
be used first and any Earnings Credit shall be used second as a
credit
against accrued Miscellaneous Charges and fees, including
but not
limited to Commitment Fees and Warehousing Fees, and may be
used, at
the Lender's option, to reduce accrued interest. Any Earnings
Allowance
not used during the month in which the benefit was received
shall be
accumulated for use and must be used during the calendar year in
which
the benefit was received. Any Earnings Credit not used during the
month
in which the benefit was received shall be used to provide a
cash
benefit to the Company.
The Lender's determination of the Balance Funded
Portion,
the Earnings Credit and the Earnings Allowance for any month
shall be
determined by the Lender in its sole discretion and
shall be
conclusive and binding absent manifest error. In no event
shall the
benefit received by the Company exceed the Depository Benefit.
Either party hereto may terminate the benefits provided
for in
this Section, effective immediately upon Notice to the other
party, if
the terminating party shall have determined (which determination
shall
be conclusive and binding absent manifest error) at any time
that any
applicable law, rule, regulation, order or decree or any
interpretation
or administration thereof by any governmental authority charged
with
the interpretation or administration thereof, or compliance by
such
party with any request or directive (whether or not having the
force of
law) of any such authority, shall make it unlawful or impossible
for
such party to continue to offer or receive the benefits provided
for in
this Section.
18. Section 2.9(b) of the Agreement shall be deleted in its
entirety
and the following shall be substituted in lieu thereof:
2.9(b) The outstanding principal amount of the Term
Loan
Advances as of the Term Loan Commitment Termination Date
shall be
payable in forty-eight (48) equal monthly installments, due
on the
twenty-second (22nd) day of each month beginning on the twenty-
second
(22nd) day of April 1996. Any remaining principal balance of the
Term
Loan Advances shall be payable on the Term Loan Maturity Date.
19. Sections 2.9(f)(4) and (6) of the Agreement shall be
deleted in
their entirety and the following shall be substituted in lieu thereof:
(4) Seven (7) Business Days elapse from the
date a
Wet Settlement Advance was made without receipt by the
Lender
of all Collateral Documents relating to such Pledged
Mortgage,
or such Collateral Documents, upon examination by the
Lender,
are found not to be in compliance with the
requirements of
this Agreement or the related Purchase Commitment;
provided,
however, if the Wet Settlement Advance was made
against a
Repurchased Mortgage Loan, twenty (20) days elapse
from the
date of such Advance without receipt by the Lender
of all
Collateral Documents relating to such Pledged
Mortgage, or
such Collateral Documents, upon examination by the
Lender, are
found not to be in compliance with the requirements of
this
Agreement.
(6) On the date on which a Pledged
Mortgage is
determined to have been originated based on untrue,
incomplete
or inaccurate information, whether or not the Company
had
knowledge of such misrepresentation or incorrect
information,
or the Pledged Mortgage is defaulted and has
remained in
default for a period of thirty (30) days or more.
20. Section 2.9(f) of the Agreement shall be amended to add
the
following sections immediately after Section 2.9(f)(11):
(13) One (1) Business Day immediately
preceding the
date scheduled for the foreclosure or trustee sale
of the
premises securing a Rejected Mortgage Loan or
Repurchased
Mortgage Loan.
21. Section. 2.9(h) shall be amended to add the following
section
immediately after Section 2.9(h)(2):
22. Section 2.11 of the Agreement shall be deleted in its
entirety and
the following shall be substituted in lieu thereof:
2.11 Method of Making Payments.
2.11(a) Except as otherwise specifically provided
herein, all
payments hereunder shall be made to the Lender not later than the
close
of business on the date when due unless such date is a non-
Business
Day, in which case, such payment shall be due on the first
Business Day
thereafter, and shall be made in lawful money of the United
States of
America in immediately available funds transferred via wire to
accounts
designated by the Lender from time to time.
2.11(b) Upon an Event of Default, and without the
necessity of
prior demand or notice from the Lender, the Company authorizes
the
Lender to cause the Funding Bank to charge the Company's
account for
any Obligations due and owing the Lender.
23. Section 2.16 of the Agreement shall be deleted in its entirety
and
the following shall be substituted in lieu thereof:
24. Sections 3.2(c) and (e) of the Agreement shall be deleted in
their
entirety and the following shall be substituted in lieu thereof:
3.2(c) If Pledged Mortgages are to be transferred
to an
Approved Custodian and are included in an Eligible Mortgage
Pool, the
Lenders security interest in the Pledged Mortgages comprising
the
Eligible Mortgage Pool shall be released upon the issuance
of the
Mortgage-backed Security, which shall be a Pledged Security.
The
Lender's security interest in such Pledged Security shall be
released
only against payment to the Lender of the Release Amount in
connection
with the Pledged Mortgages backing such Pledged Security. The
Lender
shall be entitled to possession of such Pledged Security in the
manner
provided below.
3.2(e) Prior to the occurrence of an Event of Default,
the
Company may redeem a Pledged Mortgage or Pledged Security
from the
Lender's security interest by notifying the Lender of its
intention to
redeem such Pledged Mortgage or Pledged Security from pledge and
either
(a) paying, or causing an Investor to pay, to the Lender,
for
application to prepayment of the principal balance of the Notes,
the
Release Amount in connection with such Pledged Mortgage or
Pledged
Security, or (b) delivering substitute Collateral which, in
addition to
being acceptable to the Lender in its sole discretion will,
when
included with the Collateral, result in a Collateral Value
of all
Collateral held by the Lender which is at least equal to the
aggregate
outstanding Warehousing Advances.
25. Section 5.15(c)(1) of the Agreement shall be deleted in
its
entirety and the following shall be substituted in lieu thereof:
(1) other than a Repurchased Mortgage Loan
or a
Rejected Mortgage Loan, has been duly executed and
delivered
by the parties thereto at a closing held not more than
ninety
(90) days prior to the date of the Advance Request for
such
Mortgage Loan,
26. Section 5.15(d) of the Agreement shall be deleted in its
entirety
and the following shall be substituted in lieu thereof:
5.15(d) Except as set forth in the loan history
of any
Rejected Mortgage Loan or Repurchaed Mortgage Loan, no
default has
occurred and is continuing for more than thirty (30) days
under any
Mortgage Loan included in the Pledged Mortgages without the
Advance
against such Pledged Mortgage having been repaid in accordance
with
Section 2.9(f)(6) hereof, provided, however, that with
respect to
Pledged Mortgages which have already been pledged as
Collateral
hereunder, if any default has occurred, the Company will
promptly
notify the Lender.
27. Section 5.15(g) of the Agreement shall be amended to
delete the
words "Secretary of HUD" and replace them with the words "Director
of the
Federal Emergency Management Agency" where they appear therein.
28. Sections 7.8 and 7.9 of the Agreement shall be deleted in
their
entirety and the following shall be substituted in lieu thereof:
7.8 Minimum Tangible Net Worth. Permit Tangible Net
Worth of
the Company (and its Subsidiaries, on a consolidated basis) at any
time
to be less than One Million Five Hundred Thousand Dollars
($1,500,000).
29. Sections 8.2(d) and (e) of the Agreement shall be deleted in
their
entirety and the following shall be substituted in lieu thereof:
8.2(d) The Lender shall incur no liability as a result
of the
sale or other disposition of the Collateral, or any part
thereof, at
any public or private sale or disposition. The Company hereby
waives
(to the extent permitted by law) any claims it may have against
the
Lender arising by reason of the fact that the price at which
the
Collateral may have been sold at such private sale was less
than the
price which might have been obtained at a public sale or was less
than
the aggregate amount of the outstanding Advances and the
unpaid
interest accrued thereon, even if the Lender accepts the first
offer
received and does not offer the Collateral to more than one
offeree.
Any sale of Collateral pursuant to the terms of a Purchase
Commitment,
or any other disposition of Collateral arranged by the Company,
whether
before or after the occurrence of an Event of Default, shall be
deemed
to have been made in a commercially reasonable manner.
8.2(e) The Company acknowledges that Mortgage Loans
and
Mortgage-backed Securities are collateral of a type
which is
customarily sold on a recognized market. The Company waives any
right
it may have to prior notice of the sale of any Pledged
Mortgage or
Pledged Security, and agrees that the Lender may purchase any
Pledged
Mortgages or Pledged Securities at a private sale of such
Collateral.
30. Exhibits A-1, A-2 and A-3 to the Agreement are hereby
deleted in
their entirety and replaced with the new Exhibits A-1, A-2 and A-3
attached to
this Amendment. All references in the Agreement to Exhibits A-1, A-2
and A-3
shall be deemed to refer to the new Exhibits A-1, A-2 and A-3.
31. Exhibits C-SF and D-SF to the Agreement are hereby deleted in
their
entirety and replaced with the new Exhibits C-SF and D-SF attached to
this
Amendment. All references in the Agreement to Exhibits C-SF and D-SF
shall be
deemed to refer to the new Exhibits C-SF and D-SF.
32. Exhibits C-REP and D-REP are hereby added to the Agreement
in the
forms of Exhibits C-REP and D-REP attached to this Amendment.
33. Exhibit I-SF to the Agreement is deleted in its entirety
and
replaced with the new Exhibit I-SF attached to this Amendment. All
references in
this Amendment and the Agreement to Exhibit I-SF shall be deemed to refer
to the
new Exhibit I-SF.
34. Upon execution of this Amendment, the Company agrees to pay
to the
Lender the pro rata Commitment Fee on the portion of the Commitment
Amount for
the time period from the Effective Date to and including March 31, 1996.
35. The Warehousing Promissory Note is amended and restated
in its
entirety as set forth in the First Amended and Restated Warehousing
Promissory
Note, in the form of Exhibit A-1 attached to this Amendment. All
references in
this Amendment and in the Agreement to the Warehousing Promissory Note
shall be
deemed to refer to the First Amended and Restated Warehousing Promissory
Note
delivered in connection with this Amendment.
36. The Sublimit Promissory Note is amended and restated
in its
entirety as set forth in the First Amended and Restated Sublimit
Promissory
Note, in the form of Exhibit A-2 attached to this Amendment. All
references in
this Amendment and in the Agreement to the Warehousing Promissory Note
shall be
deemed to refer to the First mender and Restated Sublimit Promissory
Note
delivered in connection with this Amendment.
37. The Working Capital Promissory Note is amended and restated
in its
entirety as set forth in the First Amended and Restated Working
Capital
Promissory Note, in the form of Exhibit A-3 attached to this Amendment.
All
references in this Amendment and in the Agreement to the Working
Capital
Promissory Note shall be deemed to refer to the First Amended and
Restated
Working Capital Promissory Note delivered in connection with this
Amendment.
38. The Company shall deliver to the Lender (a) an executed
original of
this Amendment; (b) an executed original of the First Amended and
Restated
Warehousing Promissory Note; (c) an executed original of the First
Amended and
Restated Sublimit Promissory Note; (d) an executed original of the First
Amended
and Restated Working Capital Promissory Note; (e) a current certified tax,
lien
and judgment search of the appropriate public records for the Company
and the
Guarantors, including a search of Uniform Commercial Code financing
statements,
which search shall not have disclosed the existence of any prior Lien
on the
Collateral other than in favor of the Lender or as permitted hereunder;
(f)
current Certificates of Good Standing of the Company; (g) current
insurance
information; (h) the Commitment Fee for the month of March 1996; and (i)
a Two
Hundred Fifty Dollar ($250) document production fee.
39. The Company represents, warrants and agrees that (a) there
exists
no Default or Event of Default under the Loan Documents, (b) the Loan
Documents
continue to be the legal, valid and binding agreements and obligations
of the
Company enforceable in accordance with their terms, as modified herein,
(c) the
Lender is not in default under any of the Loan Documents and the Company
has no
offset or defense to its performance or obligations under any of the
Loan
Documents, (d) the representations contained in the Loan Documents remain
true
and accurate in all respects, and (e) there has been no material adverse
change
in the financial condition of the Company from the date of the Agreement
to the
date of this Amendment.
40. Except as hereby expressly modified, the Agreement shall
otherwise
be unchanged and shall remain in full force and effect, and the Company
ratifies
and reaffirms all of its obligations thereunder.
41. This Amendment may be executed in any number of counterparts
and by
the different parties hereto on separate counterparts, each of which
when so
executed and delivered shall be an original, but all of which shall
together
constitute one and the same instrument.
42. Governing Law. This Amendment shall be governed by the laws
of the
State of Minnesota, without reference to its principles of conflicts of
laws.
IN WITNESS WHEREOF, the Company and the Lender have caused
this
Amendment to be duly executed on their behalf by their duly authorized
officers
as of the day and year above written.
MONUMENT MORTGAGE, INC.,
a California corporation
By:____________________________________
Paul R. Garrigues
Its: Senior Vice President/CFO
RESIDENTIAL FUNDING CORPORATION,
a Delaware corporation
By:____________________________________
Its: Director
STATE OF California )
) ss
COUNTY OF Contra Costa )
On March 8, 1996, before me, a Notary Public, personally appeared
Paul
Garrigues, the Senior Vice President/CFO of MONUMENT MORTGAGE,
INC., a
California corporation, personally known to me (or proved to me on the
basis of
satisfactory evidence) to be the person whose name is subscribed to the
within
instrument and acknowledged to me that he/she executed the same in
his/her
authorized capacity, and that by his/her signature on the instrument the
person,
or the entity upon behalf of which the person acted, executed the
instrument.
WITNESS my hand and official seal.
Notary Public____________________________
My Commission Expires:___________________
(SEAL)
STATE OF California )
) ss
COUNTY OF Contra Costa )
On March 13, 1996, before me, a Notary Public, personally
appeared D.
Graham Shipman, the Director of RESIDENTIAL FUNDING CORPORATION, a
California
corporation, personally known to me (or proved to me on the
basis of
satisfactory evidence) to be the person whose name is subscribed to the
within
instrument and acknowledged to me that he/she executed the same in
his/her
authorized capacity, and that by his/her signature on the instrument the
person,
or the entity upon behalf of which the person acted, executed the
instrument.
WITNESS my hand and official seal.
Notary Public__________________________
My Commission Expires:_________________
(SEAL)
CONSENT OF GUARANTORS
The undersigned, being a Guarantor under their respective
Guaranty
dated as of March 22, 1995, hereby consent to the foregoing Amendment
and the
transactions contemplated thereby and hereby modify and reaffirm
their
obligations under their respective Guaranty so as to include within the
term
"Guaranteed Debt" the indebtedness, obligations and liabilities of the
Company
under this Amendment and the Notes. Each Guarantor hereby reaffirms that
their
obligations under their respective Guaranty are separate and distinct
from the
Company's obligations to the Lender, and that their obligations under
their
respective Guaranty are in full force and effect, and each hereby
waives and
agrees not to assert any anti-deficiency protections or other rights
as a
defense to their obligations under their respective Guaranty, all as more
fully
set forth in such Guaranty, the terms of each of which are incorporated
herein
as if fully set forth herein.
The Guarantors hereby irrevocably waive any claim or other rights
that
they may now or hereafter acquire against the Company that arises
from the
existence, payment, performance or enforcement of the Guarantor's
obligations
under the Guaranty, including any right of subrogation,.
reimbursement,
exoneration or indemnification, any right to participate in any claim or
remedy
of the Lender against the Company or any collateral that the Lender now
has or
hereafter acquires, whether or not such claim, remedy or right arises in
equity
or under contract, statute or common law, including the right to take or
receive
from the Company directly or indirectly, in cash or other property or by
set-off
or in any manner, payment or security on account of such claim or other
rights.
If any amount shall be paid to the Guarantors in violation of the
preceding
sentence and the Guaranteed Debt shall not have been paid and performed in
full,
such amount shall be deemed to have been paid to the Guarantors for the
benefit
of, and held in trust for, the Lender and shall forthwith be paid to the
Lender
to be credited and applied to the Guaranteed Debt, whether matured or
unmatured.
Each Guarantor further agrees, upon Lender's request, to
execute for
the benefit of Lender an additional guaranty in form and content
acceptable to
Lender and conforming to their respective Guaranty in connection
with the
foregoing Amendment.
This Consent of Guarantors may be executed in any
number of
counterparts, and by the parties hereto in separate counterparts, each of
which,
when so executed, shall be an original, but all such counterparts shall
together
constitute one and the same instrument.
GUARANTORS:
__________________________________
JAMES W. NOACK
__________________________________
JAMES A. UMPHRYES
STATE OF California )
) ss
COUNTY OF Contra Costa )
On March 8, 1996, before me, a Notary Public, personally appeared
JAMES
W. NOACK, personally known to me (or proved to me on the basis of
satisfactory
evidence) to be the person whose name is subscribed to the within
instrument and
acknowledged to me that he/she executed the same in his/her authorized
capacity,
and that by his/her signature on the instrument the person, or the entity
upon
behalf of which the person acted, executed the instrument.
WITNESS my hand and official seal.
Notary Public____________________________
My Commission Expires:___________________
(SEAL)
STATE OF California )
) ss
COUNTY OF Contra Costa )
On March 8, 1996, before me, a Notary Public, personally appeared
JAMES
A. UMPHRYES, personally known to me (or proved to me on the
basis of
satisfactory evidence) to be the person whose name is subscribed to the
within
instrument and acknowledged to me that he/she executed the same in
his/her
authorized capacity, and that by his/her signature on the instrument the
person,
or the entity upon behalf of which the person acted, executed the
instrument.
WITNESS my hand and official seal.
Notary Public__________________________
My Commission Expires:_________________
(SEAL)
GUARANTORS:
<PAGE>
EXHIBIT C-REP
REQUEST FOR ADVANCE REJECTED OR REPURCHASED MORTGAGE LOAN
Mortgage Company: MONUMENT MORTGAGE, INC.
Mortgagor:__________________ Loan Number:_______________________
__________________ Reviewed By:_______________________
Address: __________________ Warehouse Date:____________________
__________________ Effective Date:____________________
Foreclosure Date:__________________
Status: Rejected_________ Loan Type: Conforming____________________
Received_________ Nonconforming_____Alternet____
Repurchased______ VA_____________FHA____________
Wet Settlement Fixed__________Term___________
3rd Party ARM____________Type___________
Originated_____ Balloon________Type___________
Mortgage Note Amount:________ Interest Rate:_____________________
Mortgage Note Date:__________ Requested Warehouse Amt:___________
METHOD OF ADVANCE
( ) Wire Transfer
Amount of Wire:___________ Date of Wire:__________________
Credit Acct. No.__________ Credit Acct. Name:_____________
ABA No.:__________________ Bank Name:_____________________
City & State:
Account to Debit:_________
Ref:_____________ Advise:__________ Phone:________________
REQUIRED DOCUMENTATION
Attached please find the following documents in connection with the
above
request (Please check attached documents below):
Right
( ) *Copy of Mortgage Note (Repurchased Mortgage Loan only)
( ) Original Mortgage Note and one copy of Mortgage Note
( ) Original or certified copy of recorded Mortgage
( ) Original ALTA Mortgagee's Policy of Title Insurance or equivalent
( ) Original VA Loan Guaranty Certificate Commitment
or FHA Mortgage Insurance Certificate (if any),
or copy of PHI Certificate (Conventional Loans, if applicable)
Left
( ) *Request for Advance (original and one (1) copy)
( ) Recordable assignment of Mortgage
( ) Certified copies of interim assignments of Mortgage (if
applicable)
( ) *Bailed Pledge Agreement
( ) *Investor repurchase demand letter (Repurchased Mortgage Loans
only)
( ) *Summary of Mortgage Loan documentation or Investor problems,
expected
cure period and current payment history.
Please Note: Items designated with the "*" are required prior to a Wet
Settlement Advance which is applicable to Repurchased Mortgage Loans only.
Authorized Signature:
____________________________
_______________________________________________________________
[ ]
[ FOR RFC INTERNAL USE ONLY ]
[ ]
[Repetitive Code:________________ Date:____________________ ]
[ ]
[Wire Initiator's Initials:______ Wire Verifier's Initials:___ ]
[_______________________________________________________________]
<PAGE>
EXHIBIT C-SF
Mortgage Company: MONUMENT MORTGAGE, INC.
Mortgagor:____________________ Loan Number:___________________________
____________________ Reviewed By:___________________________
Address: ____________________ Warehouse Date:________________________
____________________ Effective Date:________________________
Foreclosure Date:______________________
Status: Rejected___________ Loan Type: Conforming____________________
Received___________ Nonconforming_____Alternet____
Repurchased________ VA___________FHA______________
Wet Settlement_____ Fixed________Term_____________
3rd Party ARM__________Type_____________
Originated____ Balloon______Type_____________
Mortgage Note Amount:______ Interest Rate:________________
Mortgage Note Date:________ Requested Warehouse Amt:______
METHOD OF ADVANCE
( ) Wire Transfer
Amount of Wire:___________ Date of Wire:_____________________
Credit Acct. No.__________ Credit Acct. Name:________________
ABA No.:__________________ Bank Name:________________________
City & State:
Account to Debit:_________
Ref:___________ Advise:______________ Phone:_______________
REQUIRED DOCUMENTATION
Attached please find the following documents in connection with the
above
request (Please check attached documents below):
Right
( ) Original and one copy of Mortgage Note
( ) Certified copy of Mortgage
( ) *Copy of Investor Purchase Commitment(or satisfactory evidence
thereof)
( ) *Copy of D -1 Settlement Statement or equivalent
(Home Equity Loans and Title I Mortgage Loans only)
( ) *HUD 203(K) Maximum Mortgage Worksheet (203(k) Mortgage Loans
only)
Left
( ) *Request for Advance (original and one (1) copy)
( ) *Copy of settlement or funding check (if applicable)
( ) Recordable assignment of Mortgage
( ) Certified copies of interim assignments of Mortgage (if
applicable)
( ) *Bailee Pledge Agreement (only required for Wet Settlement
Advance)
Please Note: Items designated with the "*" are required prior to a Wet
Settlement Advance.
Authorized Signature:
_____________________________
___________________________________________________________
[ FOR RFC INTERNAL USE ONLY ]
[ ]
[ Repetitive Code:_____________ Date:_______________________]
[ ]
[ Wire Initiator's Initials:___ Wire Verifier's Initials:___]
[___________________________________________________________]
<PAGE>
EXHIBIT D-REP
PROCEDURES AND DOCUMENTATION FOR WAREHOUSING
REJECTED OR REPURCHASED MORTGAGE LOANS
The following procedures and documentation requirements must be
observed in
all respects by the Company. All documents must be satisfactory to the
Lender in
its sole discretion. Terms used below, which are not otherwise defined,
shall
have the meanings given them in the Agreement. The HUD, FNMA and FHLMC
form
numbers referred to herein are for convenience only and the Company
shall use
the equivalent forms required at the time of delivery of the Mortgage
Loans or
Mortgage-backed Securities. All Requests for Advance (Exhibit C-REP)
and
Collateral Documents, should be submitted to the Lender in a top tabbed,
legal
size manila file folder, hole-punched and acco-fastened in the order
specified
in the Request for Advance (Exhibit C-REP). Each folder should be labelled
with
the mortgagor name(s), Company loan number and Company name. If a Wet
Settlement
Advance is being requested, the Request for Advance (Exhibit C-REP) and
required
Collateral Documents should be submitted in accordance with the
above
instructions. The remaining Collateral Documents should be submitted
with a
cover letter identifying the mortgagor name(s) and Company loan number.
I. Prior to making a Wet Settlement Advance against a Repurchased Mortgage
Loan,
the Lender must receive the following:
(1) Estimate of the amount of the requested Repurchase Advance
one (1)
Business Day prior to such Repurchase Advance.
(2) Original Request for Advance against Rejected or Repurchased
Mortgage
Loans (Exhibit C-REP) and one (1) copy of same.
(3) Copy of Mortgage Note (Repurchased Mortgage Loan only).
(4) Bailee Pledge Agreement (Exhibit M).
(5) Investor repurchase demand letter (Repurchased Mortgage Loan
only).
(6) Summary of Mortgage Loan documentation or Investor problems,
expected
cure period, and current payment history.
The following must be received by the Lender within twenty (20) days
of the
date of the Wet Settlement Advance:
(7) Original signed Mortgage Note, endorsed by the Company in blank
with
corresponding interim endorsements, if, applicable, and one
copy of
same.
(8) Original or certified true (by recorder's office) copy of
the
Mortgage.
(9) Original or certified true (by recorder's officer) copies
of all
interim assignments of the Mortgage. (If an interim assignment
has not
been recorded or sent for recordation, such original
interim
assignment). Mortgage Note must bear corresponding endorsements.
(10) An assignment of the Mortgage to the Lender in recordable
form but
unrecorded.
(11) Original ALTA Mortgagee's Policy of Title Insurance or
equivalent
thereto.
(12) Original VA Loan Guaranty Certificate, FHA Mortgage
Insurance
Certificate, or copy of Private Mortgage Insurance
Certificate
(Conventional Loans, if applicable).
II. Prior to the making of a Repurchase Advance (other than a Wet
Settlement
Advance against a Repurchased Mortgage Loan), the Lender must receive
all
of the Collateral Documents listed in Section I above.
III. The Lender exclusively shall deliver the Mortgage Notes and other
original
Collateral Document evidencing Pledged Mortgages or Pledged
Securities and
related pool documents to the Investor, pool custodian or attorneys
conducting foreclosure sales, unless otherwise agreed in writing.
A. The following procedures are to be followed for deliveries of Pledged
Mortgages:
No later than one (1) Business Day prior to the requested shipment
date and
no later than one (1) Business Day prior to the expiration date
of the
Purchase Commitment, the Lender must receive the following:
(1) Signed shipping instructions for the delivery of the Pledged
Mortgages
including the following:
(a) Name and address of the office of the Investor to which the
loan
documents are to be shipped, the desired shipping date
and the
preferred method of delivery;
(b) Instructions for endorsement of the Mortgage Note;
(c) Names of mortgagor(s), Mortgage Note Amounts of Pledged
Mortgages
to be shipped and the Company's loan number; and
(d) Commitment number and expiration date of the Purchase
Commitment.
(2) For deliveries of Pledged Mortgages to FNMA for cash purchase,
the
following additional documents are required:
(a) Copy of Loan Schedule (FNMA Form 1068 or 1069) showing
the
Lender's designated FNMA payee code as recipient of the
loan
purchase proceeds.
(3) For deliveries of Pledged Mortgages to FHLMC for cash purchase,
the
following additional documents are required:
(a) Original completed Warehouse Lender Release of Security
Interest
(FHLMC Form 996) to be executed by the Lender, designating
the
Lender as the Warehouse Lender and showing the Cash
Collateral
Account designated by the Lender as the receiving
account for
loan purchase proceeds.
(b) Copy of Wire Transfer Authorization for a Cash Warehouse
Delivery
(FHLMC Form 987), designating the Lender as the Warehouse
Lender
and showing the Cash Collateral Account designated by the
Lender
as the receiving account for loan purchase proceeds.
B. In the event Pledged Mortgages are delivered to a pool custodian,
other
than an Approved Custodian, payment of the related Advance is
required
within two (2) Business Days of shipment.
The following procedures are to be followed for deliveries of
Pledged
Mortgages to Approved Custodians:
No later than one (1) Business Day prior to the requested shipment
date and
no later than one (1) Business Day prior to required delivery date
to the
Approved Custodian, the Lender must receive the following:
(1) Signed shipping instructions for the delivery of the Pledged
Mortgages
to the Approved Custodian including the following:
(a) Name and address of the office of the Approved Custodian to
which
the loan documents are to be shipped, the desired shipping
date
and the preferred method of delivery;
(b) Instructions for endorsement of the Mortgage Note;
(c) Names of mortgagor(s) and Mortgage Note Amounts of
Pledged
Mortgages to be shipped and the Company's loan number; and
(d) Commitment number and expiration date of the Purchase
Commitment
for the Pledged Securities.
(2) For FMMA Mortgage-backed Securities issuance, the following
additional
documents are required:
(a) Copy of Schedule of Mortgages (FNMA Form 2005 or 2025).
(b) Copy of Delivery Schedule (FNMA Form 2014), instructing
FNMA to
issue the Mortgage-backed Securities in the name of the
Company
with the Lender as pledges and to deliver the Mortgage-
backed
Securities to the Lender's custody account at Chemical
Bank NY
(CHEMICAL NYC/GEOCUST/MR9229490) and bearing the
following
instructions: "These instructions may not be changed
without the
prior written consent of Residential Funding Corporation,
Preston
A. Lyvers, Director or Michele Troughton, Director."
(3) For FHLMC Mortgage-backed Securities issuance, the
following
additional documents are required:
(a) Copy of Settlement Information and Delivery Authorization
(FHLMC
Form 939), designating the Lender as the Warehouse
Lender and
instructing FHLMC to deliver the Mortgage-backed
Securities to
the Lender's custody account at Chemical Bank NY
(CHEMICAL
NYC/GEOCUST/MR9229490).
(b) Original Warehouse Lender Release of Security Interest
(FHLMC
Form 996) to be executed by the Lender, designating the
Lender as
the Warehouse Lender and instructing FHLMC to deliver
the
Mortgage-backed Securities to the Lender's custody
account at
Chemical Bank NY (CHEMICAL NYC/GEOCUST/MR9229490).
(4) For GNMA Mortgage-backed Securities issuance, the following
additional
documents are required:
(a) Signed original Schedule of Mortgages (HUD Form 11706).
(b) Signed original Schedule of Subscribers (HUD Form
11705)
instructing GNMA to issue the Mortgage-backed Securities
in the
name of the Company and designating Chemical Bank as
Agent for
the Lender as the subscriber, using the following
language:
CHEMICAL BANK AS AGENT FOR RESIDENTIAL FUNDING
CORPORATION SEG
ACCT MANUF/CUST/MR9229490). The following instructions must
also
be included on the form: "These instructions may not be
changed
without the prior written consent of Residential
Funding
Corporation, Preston A. Lyvers, Director or Michele
Troughton,
Director."
(c) Completed original Release of Security Interest (HUD Form
11711A)
to be executed by the Lender.
(5) No later than two (2) Business Days prior to the Settlement
Date for
the Mortgage-backed Securities, the Lender must receive
signed
Securities Delivery Instructions form attached hereto as Schedule
I.
C. The following procedures are to be followed for deliveries of
Pledged
Mortgages to attorneys conducting a foreclosure sale:
No later than one (1) Business Day prior to the requested shipment
date and
no later than one (1) Business Day prior to required delivery date
to the
Attorney conducting the foreclosure sale, the Lender must receive
signed
shipping instructions for the delivery of the Pledged Mortgages
including
the following:
(1) Name and address of the office of the attorney to which the
Collateral
Documents are to be shipped, the desired shipping date and
the
preferred method of delivery;
(2) Names of Mortgagor and Mortgage Note Amounts of Pledged
Mortgages to
be shipped; and
(3) Confirmation that the attorney will execute and return the
bailee
letter (acknowledged instructions from the Company to do so).
Upon instruction by the Company, the Lender will complete the
endorsement
of the Mortgage Note and make arrangements for the delivery of the
original
Collateral Documents evidencing Pledged Mortgages or Pledged
Securities and
related original pool documents with the appropriate bailee letter
to the
Investor, Approved Custodian, other pool custodian or attorney
conducting a
foreclosure sale. Upon receipt of Mortgage-backed Securities, the
Lender
will cause such Mortgage-backed Securities to be delivered to the
Investor
which issued the Purchase Commitment. Mortgage-backed Securities
will be
released to the Investor only upon payment of the purchase proceeds
to the
Lender. Cash proceeds of sales of Pledged Mortgages and Pledged
Securities
shall be applied to related Repurchase Advances outstanding
under the
Commitment. Provided no Default exists, the Lender shall return any
excess
proceeds of the sale of Mortgage Loans or Mortgage-backed Securities
to the
Company, unless otherwise instructed in writing.
<PAGE>
SCHEDULE I
RESIDENTIAL FUNDING CORPORATION
WAREHOUSING LENDING DIVISION
Security Delivery Instructions
INSTRUCTIONS MUST BE RECEIVED TWO (2) BUSINESS DAYS IN ADVANCE OF
PICK-UP/DELIVERY
BOOK-ENTRY DATE:_____________ SETTLEMENT DATE:_______________________
ISSUER:______________________ SECURITY: $____________________________
NO. OF CERTIFICATES:_________ 1)_____________________________________
2)_____________________________________
3)_____________________________________
CUSIP #________________
Pool #_________________ MI#________ Coupon Rate:______________________
Issue Date:(M/D/Y)__________________ Maturity Date: (M/D/Y)____________
POOL TYPE (circle one):
GNMA: GNMA I GNMA II
FHLMC: FIXED ARM DISCOUNT NOTE
FNMA: FIXED ARM DISCOUNT NOTE DEBENTURES REMIC
- -----------------------------------------------------------------------
DELIVER TO:_______________________ ( ) Versus Payment
_______________________ DVP AMT. $__________________________
_______________________ ( ) Free Delivery
DELIVER TO:_______________________ ( ) Versus Payment
_______________________ DVP AMT. $_________________________
_______________________ ( ) Free Delivery
DELIVER TO:_______________________ ( ) Versus Payment
_______________________ DVP AMT. $__________________________
_______________________ ( ) Free Delivery
- -----------------------------------------------------------------------
AUTHORIZED SIGNATURE:__________________________________________________
TITLE:_________________________________________________________________
<PAGE>
EXHIBIT D-SF
PROCEDURES AND DOCUMENTATION FOR WAREHOUSING
SINGLE FAMILY MORTGAGE LOANS
The following procedures and documentation requirements
must be
observed in all respects by the Company. All documents must be
satisfactory to
the Lender in its sole discretion. Terms used below, which are not
otherwise
defined, shall have the meanings given them in the Agreement. The HUD,
FNMA and
FHLMC form numbers referred to herein are for convenience only and the
Company
shall use the equivalent forms required at the time of delivery of the
Mortgage
Loans or Mortgage-backed Securities. All Requests for Advance and
Collateral
Documents, should be submitted to the Lender in a top tabbed, legal size
manila
file folder, hole-punched and acco-fastened in the order specified
in the
Request for Advance. Each folder should be labelled with the mortgagor
name(s),
Company loan number and Company name. If a Wet Settlement Advance is
being
requested, the Request for Advance and required Collateral Documents
should be
submitted in accordance with the above instructions. The remaining
Collateral
Documents should be submitted with a cover letter identifying the mortgagor
name
(A) and Company loan number.
I. Prior to making a Wet Settlement Advance, the Lender must receive the
following:
(1) Estimate of the amount of the requested Advance one (1)
Business Day
prior to such Advance.
(2) Copy of settlement or funding check issued to the
escrow/title
company, if applicable.
(3) Original Request for Advance against Single Family Mortgage
Loans
(Exhibit C-SF) and one (1) copy of same.
(4) Copy of the Purchase Commitment or satisfactory evidence thereof.
(5) Bailee Pledge Agreement (only required for Wet Settlement
Advance)
(Exhibit M).
(6) A copy of the HUD-1 Settlement Statement or equivalent (Home
Equity
Mortgage Loans and Title I Mortgage Loans only).
(7) A copy of HUD 203(K) Maximum Mortgage Worksheet (203(k) Mortgage
Loans
only).
The following must be received by the Lender within five (5) Business
Days
of the date of the Wet Settlement Advance:
(8) Original signed Mortgage Note, endorsed by the Company in blank
with
corresponding interim endorsements, if applicable, and one
copy of
same.
(9) Copy of the Mortgage certified true by the escrow/title company.
(10) Copies of all interim assignments of the Mortgage certified
true by
the escrow/title company (recorded or sent for recordation).
Mortgage
Note must bear corresponding endorsements.
(11) An assignment of the Mortgage to the Lender in recordable
form but
unrecorded.
II. Prior to the making of an Advance (other than a Wet Settlement
Advance),
the Lender must receive all of the Collateral Documents listed in
Section I
above.
III. The Lender exclusively shall deliver the Mortgage Notes and other
original
Collateral Documents evidencing Pledged Mortgages or Pledged
Securities and
related pool documents to the Investor or pool custodian, unless
otherwise
agreed in writing.
A. The following procedures are to be followed for deliveries of
Pledged
Mortgages:
No later than one (1) Business Day prior to the requested shipment
date and
no later than one (1) Business Day prior to the expiration date
of the
Purchase Commitment, the Lender must receive the following:
(1) Signed shipping instructions for the delivery of the Pledged
Mortgages including the following:
(a) Name and address of the office of the Investor to which the
loan
documents are to be shipped, the desired shipping date
and the
preferred method of delivery;
(b) Instructions for endorsement of the Mortgage Note;
(c) Names of mortgagor(s), Mortgage Note Amounts of Pledged
Mortgages
to be shipped and the Company's loan number; and
(d) Commitment number and expiration date of the Purchase
Commitment.
(2) For deliveries of Pledged Mortgages to FNMA for cash purchase,
the
following additional documents are required:
(a) Copy of Loan Schedule (FNMA Form 106B or 1069) showing
the
Lender's designated FNMA payee code as recipient of the
loan
purchase proceeds.
(3) For deliveries of Pledged Mortgages to FHLMC for cash purchase,
the
following additional documents are required:
(a) Original completed Warehouse Lender Release of Security
Interest
(FHLMC Form 996) to be executed by the Lender, designating
the
Lender as the Warehouse Lender and showing the Cash
Collateral
Account designated by the Lender as the receiving
account for
loan purchase proceeds.
(b) Copy of Wire Transfer Authorization for a Cash Warehouse
Delivery
(FHLMC Form 987), designating the Lender as the Warehouse
Lender
and showing the Cash Collateral Account designated by the
Lender
as the receiving account for loan purchase proceeds.
B. In the event ledged Mortgages are delivered to a pool custodian,
other
than an Approved Custodian, payment of the related Advance is
required
within two (2) Business Days of shipment.
The following procedures are to be followed for deliveries of
Pledged
Mortgages to Approved Custodians:
No later than one (1) Business Day prior to the requested shipment
date
and no later than one (1) Business Day prior to required delivery
date
to the Approved Custodian, the Lender must receive the following:
(1) Signed shipping instructions for the delivery of the Pledged
Mortgages
to the Approved Custodian including the following:
(a) Name and address of the office of the Approved Custodian to
which
the loan documents are to be shipped, the desired shipping
date
and the preferred method of delivery;
(b) Instructions for endorsement of the Mortgage Note;
(c) Names of mortgagor(s) and Mortgage Note Amounts of
Pledged
Mortgages to be shipped and the Company's loan number; and
(d) Commitment number and expiration date of the Purchase
Commitment
for the Pledged Securities. For FNMA Mortgage-backed
Securities
issuance, the following additional documents are required:
(a)
Copy of Schedule of Mortgages (FNMA Form 2005 or 2025).
(e) Copy of Delivery Schedule (ANNA Form 2014), instructing
FNMA to
issue the Mortgage-backed Securities in the name of the
Company
with the Lender as pledges and to deliver the Mortgage-
backed
Securities to the Lender's custody account a t Chemical
Bank NY
(CHEMICAL NYC/GEOCUST/MR9229490) and bearing the
following
instructions: "These instructions may not be changed
without the
prior written consent of Residential Funding Corporation,
Preston
A. Lyvers, Vice President or Michele Troughton, Assistant
Vice
President."
(2) For FLHMC Mortgage-backed Securities issuance, the lowing
additional
documents are required:
(a) Copy of Settlement Information and Delivery Authorization
(FHLMC
Form 939), designating the Lender as the Warehouse
Lender and
instructing FHLMC to deliver the Mortgage-backed
Securities to
the Lender's custody account at Chemical Bank NY
(CHEMICAL
NYC/GEOCUST/MR9229490)
(b) Original Warehouse Lender Release of Security Interest
(FHLMC
Form 996) to be executed by the Lender, designating the
Lender as
the Warehouse Lender and instructing FHLMC to deliver
the
Mortgage-backed Securities to the Lender's custody
account at
Chemical Bank NY (CHEMICAL NYC/GEOCUST/MR9229490).
(3) For GNMA Mortgage-backed Securities issuance, the following
additional
documents are required:
(a) Signed original Schedule of Mortgages (HUD Form 11706).
(b) Signed original Schedule of Subscribers (HUD Form
11705)
instructing GNMA to issue the Mortgage-backed Securities
in the
name of the Company and designating Chemical Bank as
Agent for
the Lender as the subscriber, using the following
language:
CHEMICAL BANK AS AGENT FOR RESIDENTIAL FUNDING
CORPORATION SEG
ACCT MANUF/CUST/MR9229490). The following instructions must
also
be included on the form: "These instructions may not be
changed
without the prior written consent of Residential
Funding
Corporation, Preston A. Lyvers, Vice President or
Michele
Troughton, Assistant Vice President."
(c) Completed original Release of Security Interest (lIUD
Form
11711A) to be executed by the Lender.
(5) No later than two (2) Business Days prior to the Settlement
Date for
the Mortgage-backed Securities, the Lender must receive
signed
Securities Delivery Instructions form attached hereto as Schedule
I.
Upon instruction by the Company, the Lender will complete the endorsement
of the
Mortgage Note and make arrangements for the delivery of the original
Collateral
Documents evidencing Pledged Mortgages or Pledged Securities and
related
original pool documents with the appropriate bailee letter to the
Investor,
Approved Custodian, or other pool custodian. Upon receipt of Mortgage-
backed
Securities, the Lender will cause such Mortgage-backed Securities
to be
delivered to the Investor which issued the Purchase Commitment. Mortgage-
backed
Securities will be released to the Investor only upon payment of the
purchase
proceeds to the Lender. Cash proceeds of sales of Pledged Mortgages and
Pledged
Securities shall be applied to related Advances outstanding under
the
Commitment. Provided no Default exists, the Lender shall return any
excess
proceeds of the sale of Mortgage Loans or Mortgage-backed Securities
to the
Company, unless otherwise instructed in writing.
<PAGE>
SCHEDULE I
RESIDENTIAL FUNDING CORPORATION
WAREHOUSING LENDING DIVISION
Security Delivery Instructions
INSTRUCTIONS MUST BE RECEIVED TWO (2) BUSINESS DAYS IN ADVANCE OF
PICK-UP/DELIVERY
BOOK-ENTRY DATE:_____________ SETTLEMENT DATE:_______________________
ISSUER:______________________ SECURITY: $____________________________
NO. OF CERTIFICATES:_________ 1)_____________________________________
2)_____________________________________
3)_____________________________________
CUSIP #________________
Pool #_________________ MI#________ Coupon Rate:______________________
Issue Date:(M/D/Y)__________________ Maturity Date: (M/D/Y)____________
POOL TYPE (circle one):
GNMA: GNMA I GNMA II
FHLMC: FIXED ARM DISCOUNT NOTE
FNMA: FIXED ARM DISCOUNT NOTE DEBENTURES REMIC
- -----------------------------------------------------------------------
DELIVER TO:_______________________ ( ) Versus Payment
_______________________ DVP AMT. $__________________________
_______________________ ( ) Free Delivery
DELIVER TO:_______________________ ( ) Versus Payment
_______________________ DVP AMT. $__________________________
_______________________ ( ) Free Delivery
DELIVER TO:_______________________ ( ) Versus Payment
_______________________ DVP AMT. $__________________________
_______________________ ( ) Free Delivery
- -----------------------------------------------------------------------
AUTHORIZED SIGNATURE:__________________________________________________
TITLE:_________________________________________________________________
<PAGE>
EXHIBIT A-1
FIRST AMENDED AND RESTATED WAREHOUSING PROMISSORY NOTE
$10,000,000 Date: February 25,
1996
FOR VALUE RECEIVED, the undersigned, MONUMENT MORTGAGE,
INC., a
California corporation, (herein called the "Company"), hereby promises to
pay to
the order of RESIDENTIAL FUNDING CORPORATION, a Delaware corporation
(the
"Lender" or, together with its successors and assigns, the "Holder')
whose
principal place of business is 8400 Normandale Lake Blvd., Suite
600,
Minneapolis, Minnesota 55437, or at such other place as the Holder may
designate
from time to time, the principal sum of Ten Million Dollars ($10,000,000)
or so
much thereof as may be outstanding from time to time pursuant to the
Warehousing
Credit and Security Agreement described below, and to pay interest on
said
principal sum or such part thereof as shall remain unpaid from time to
time,
from the date of each Advance until repaid in full, and all other
fees and
charges due under the Agreement, at the rate and at the times set forth
in the
Agreement. All payments hereunder shall be made in lawful money of the
United
States and in immediately available funds.
This Note is given to evidence an actual warehouse facility
in the
above amount and is the Warehousing Promissory Note referred to in that
certain
Warehousing Credit and Security Agreement (the "Agreement") dated
March 22,
1995, between the Company and the Lender, as the same may be
amended or
supplemented from time to time, and is entitled to the benefits
thereof.
Reference is hereby made to the Agreement (which is incorporated
herein by
reference as fully and with the same effect as if set forth herein at
length)
for a description of the Collateral, a statement of the covenants
and
agreements, a statement of the rights and remedies and securities
afforded
thereby and other matters contained therein. Capitalized terms used
herein,
unless otherwise defined herein, shall have the meanings given them
in the
Agreement.
This Note is given in replacement for, and not in satisfaction of,
that
certain Warehousing Promissory Note dated March 22, 1995, and issued
by the
Company to evidence its obligations under the Agreement (the "Existing
Note").
All amounts owed by the Company under the Existing Note (including,
without
limitation, the unpaid principal thereunder, interest accrued thereon and
fees
accrued under the Agreement, whether or not yet due and owing) as of the
date
hereof, shall be owed hereunder.
This Note may be prepaid in whole or in part at any time
without
premium or penalty.
Should this Note be placed in the hands of attorneys for
collection,
the Company agrees to pay, in addition to principal and interest,
fees and
charges due under the Agreement, any and all costs of collecting this
Note,
including reasonable attorneys' fees and expenses.
The Company hereby waives demand, notice, protest and presentment.
This Note shall be construed and enforced in accordance with the
laws
of the State of Minnesota, without reference to its principles of
conflicts of
law.
IN WITNESS WHEREOF, the Company has executed this Note as of
the day
and year first above written.
MONUMENT MORTGAGE, INC.,
a California corporation
By:_______________________________________
Its:______________________________________
STATE OF )
) ss
COUNTY OF )
On , 1996, before me, a Notary Public, personally appeared ,
the of
MONUMENT MORTGAGE, INC., a California corporation, personally known to
me (or
proved to me on the basis of satisfactory evidence) to be the person whose
name
is subscribed to the within instrument and acknowledged to me that
he/she
executed the same in his/her authorized capacity, and that by his/her
signature
on the instrument the person, or the entity upon behalf of which the
person
acted, executed the instrument.
WITNESS my hand and official seal.
Notary Public__________________________
My Commission Expires:_________________
(SEAL)
<PAGE>
EXHIBIT A-2
FIRST AMENDED AND RESTATED SUBLIMIT PROMISSORY NOTE
$5,000,000 Date: February 29,
1996
FOR VALUE RECEIVED, the undersigned, MONUMENT MORTGAGE,
INC., a
California corporation, (herein called the "Company"), hereby promises to
pay to
the order of RESIDENTIAL FUNDING CORPORATION, a Delaware corporation
(the
"Lender' or, together with its successors and assigns, the "Holder')
whose
principal place of business is 8400 Normandale Lake Blvd., Suite
600,
Minneapolis, Minnesota 55437, or at such other place as the Holder may
designate
from time to time, the principal sum of Five Million Dollars ($5,000,000)
or so
much thereof as may be outstanding from time to time pursuant to the
Warehousing
Credit and Security Agreement described below, and to pay interest on
said
principal sum or such part thereof as shall remain unpaid from time to
time,
from the date of each Advance until repaid in full, and all other
fees and
charges due under the Agreement, at the rate and at the times set forth
in the
Agreement. All payments hereunder shall be made in lawful money of the
United
States and in immediately available funds.
This Note is given to evidence an actual warehouse facility
in the
above amount and is the Sublimit Promissory Note referred to in that
certain
Warehousing Credit and Security Agreement (the "Agreement") dated
March 22,
1995, between the Company and the Lender, as the same may be
amended or
supplemented from time to time, and is entitled to the benefits
thereof.
Reference is hereby made to the Agreement (which is incorporated
herein by
reference as fully and with the same effect as if set forth herein at
length)
for a description of the Collateral, a statement of the covenants
and
agreements, a statement of the rights and remedies and securities
afforded
thereby and other matters contained therein. Capitalized terms used
herein,
unless otherwise defined herein, shall have the meanings given them
in the
Agreement.
This Note is given in replacement for, and not in satisfaction of,
that
certain Sublimit Promissory Note dated March 22, 1995, and issued by the
Company
to evidence its obligations under the Agreement (the "Existing Note').
All
amounts owed by the Company under the Existing Note (including,
without
limitation, the unpaid principal thereunder, interest accrued thereon and
fees
accrued under the Agreement, whether or not yet due and owing) as of the
date
hereof, shall be owed hereunder.
This Note may be prepaid in whole or in part at any time
without
premium or penalty.
Should this Note be placed in the hands of attorneys for
collection,
the Company agrees to pay, in addition to principal and interest,
fees and
charges due under the Agreement, any and all costs of collecting this
Note,
including reasonable attorneys' fees and expenses.
The Company hereby waives demand, notice, protest and presentment.
This Note shall be construed and enforced in accordance with the
laws
of the State of Minnesota, without reference to its principles of
conflicts of
law.
IN WITNESS WHEREOF, the Company has executed this Note as of
the day
and year first above written.
MONUMENT MORTGAGE, INC.,
a California corporation
By:_____________________________________
Its:____________________________________
STATE OF )
) ss
COUNTY OF )
On , 1996, before me, a Notary Public, personally appeared ,
the of
MONUMENT MORTGAGE, INC., a California corporation, personally known to
me (or
proved to me on the basis of satisfactory evidence) to be the person whose
name
is subscribed to the within instrument and acknowledged to me that
he/she
executed the same in his/her authorized capacity, and that by his/her
signature
on the instrument the person, or the entity upon behalf of which the
person
acted, executed the instrument.
WITNESS my hand and official seal.
Notary
Public____________________________
My Commission
Expires:___________________
(SEAL)
<PAGE>
EXHIBIT A-3
FIRST AMENDED AND RESTATED WORKING CAPITAL PROMISSORY NOTE
$1,000,000 Date: February 29,
1996
FOR VALUE RECEIVED, the undersigned, MONUMENT MORTGAGE,
INC., a
California corporation, (herein called the "Company"), hereby promises to
pay to
the order of RESIDENTIAL FUNDING CORPORATION, a Delaware corporation
(the
Blenders' or, together with its successors and assigns, the "Holder")
whose
principal place of business is 8400 Normandale Lake Blvd., Suite
600,
Minneapolis, Minnesota 55437, or at such other place as the Holder may
designate
from time to time, the principal sum of One Million Dollars ($1,000,000)
or so
much thereof as may be outstanding from time to time pursuant to the
Warehousing
Credit and Security Agreement described below, and to pay interest on
said
principal sum or such part thereof as shall remain unpaid from time to
time,
from the date of each Advance until repaid in full, and all other
fees and
charges due under the Agreement, at the rate and at the times set forth
in the
Agreement. All payments hereunder shall be made in lawful money of the
United
States and in immediately available funds.
This Note is given to evidence an actual working capital
facility in
the above amount and is the Working Capital Promissory Note referred to in
that
certain Warehousing Credit and Security Agreement (the "Agreement") dated
March
22, 1995, between the Company and the Lender, as the same may be
amended or
supplemented from time to time, and is entitled to the benefits
thereof.
Reference is hereby made to the Agreement (which is incorporated
herein by
reference as fully and with the same effect as if set forth herein at
length)
for a description of the Collateral, a statement of the covenants
and
agreements, a statement of the rights and remedies and securities
afforded
thereby and other matters contained therein. Capitalized terms used
herein,
unless otherwise defined herein, shall have the meanings given them
in the
Agreement.
This Note is given in replacement for, and not in satisfaction of,
that
certain Working Capital Promissory Note dated March 22, 1995, and issued
by the
Company to evidence its obligations under the Agreement (the "Existing
Note").
All amounts owed by the Company under the Existing Note (including,
without
limitation, the unpaid principal thereunder, interest accrued thereon and
fees
accrued under the Agreement, whether or not yet due and owing) as of the
date
hereof, shall be owed hereunder.
This Note may be prepaid in whole or in part at any time
without
premium or penalty.
Should this Note be placed in the hands of attorneys for
collection,
the Company agrees to pay, in addition to principal and interest,
fees and
charges due under the Agreement, any and all costs of collecting this
Note,
including reasonable attorneys' fees and expenses.
The Company hereby waives demand, notice, protest and presentment.
This Note shall be construed and enforced in accordance with the
laws
of the State of Minnesota, without reference to its principles of
conflicts of
law.
IN WITNESS WHEREOF, the Company has executed this Note as of
the day
and year first above written.
MONUMENT MORTGAGE, INC.,
a California corporation
By:__________________________________
Its:_________________________________
STATE OF )
) ss
COUNTY OF )
On , 1996, before me, a Notary Public, personally appeared ,
the of
MONUMENT MORTGAGE, INC., a California corporation, personally known to
me (or
proved to me on the basis of satisfactory evidence) to be the person whose
name
is subscribed to the within instrument and acknowledged to me that
he/she
executed the same in his/her authorized capacity, and that by his/her
signature
on the instrument the person, or the entity upon behalf of which the
person
acted, executed the instrument.
WITNESS my hand and official seal.
Notary Public_________________________
My Commission Expires:________________
(SEAL)
<PAGE>
TERM LOAN PROMISSORY NOTE
$1,000,000 Date: March 22, 1995
FOR VALUE RECEIVED, the undersigned, MONUMENT MORTGAGE,
INC., a
California corporation, (herein called the "Company"), hereby promises to
pay to
the order of RESIDENTIAL FUNDING CORPORATION, a Delaware corporation
(the
Menders or, together with its successors and assigns, the "Holder")
whose
principal place of business is 8400 Normandale Lake Blvd., Suite
600,
Minneapolis, Minnesota 55437, or at such other place as the Holder may
designate
from time to time, the principal sum of One Million Dollars ($1,000,000)
or so
much thereof as may be outstanding from time to time pursuant to the
Warehousing
Credit and Security Agreement described below, and to pay interest on
said
principal sum or such part thereof as shall remain unpaid from time to
time,
from the date of each Advance until repaid in full, and all other
fees and
charges due under the Agreement, at the rate and at the times set forth
in the
Agreement. All payments hereunder shall be made in lawful money of the
United
States and in immediately available funds
This Note is given to evidence an actual term loan facility
in the
above amount and is the Working Capital Promissory Note referred to in
that
certain Warehousing Credit and Security Agreement (the "Agreement")
dated the
date hereof between the Company and the Lender, as the same may be
amended or
supplemented from time to time, and is entitled to the benefits
thereof.
Reference is hereby made to the Agreement (which is incorporated
herein by
reference as fully and with the same effect as if set forth herein at
length)
for a description of the Collateral, a statement of the covenant"
and
agreements, a statement of the rights and remedies and securities
afforded
thereby and other matters contained therein. Capitalized terms used
herein,
unless otherwise defined herein, shall have the meanings given them
in the
Agreement.
This Note may be prepaid in whole or in part at any time
without
premium or penalty.
Should this Note be placed in the hands of attorneys for
collection,
the Company agrees to pay, in addition to principal and interest,
fees and
charges due under the Agreement, any and all costs of collecting this
Note,
including reasonable attorneys' fees and expenses.
The Company hereby waives demand, notice, protest and presentment.
This Note shall be construed and enforced in accordance with the
laws
of the State of Minnesota, without reference to its principles of
conflicts of
law.
IN WITNESS WHEREOF, the Company has executed this Note as of
the day
and year first above written.
MONUMENT MORTGAGE, INC.,
a California corporation
By:___________________________________
Its: Senior V.P. / CFO
STATE OF )
) ss
COUNTY OF )
On March 22, 1995, 1996, before me, a Notary Public,
personally
appeared {ai; Garrogies, the Sr. V.P. / CFO of MONUMENT MORTGAGE,
INC., a
California corporation, personally known to me (or proved to me on the
basis of
satisfactory evidence) to be the person whose name is subscribed to the
within
instrument and acknowledged to me that he/she executed the same in
his/her
authorized capacity, and that by his/her signature on the instrument the
person,
or the entity upon behalf of which the person acted, executed the
instrument.
WITNESS my hand and official seal.
Notary Public__________________________
My Commission Expires:________________
(SEAL)
<PAGE>
EXHIBIT I-SF
OFFICER'S CERTIFICATE
Reference is made to that certain Warehousing Credit and
Security
Agreement (Single Family Mortgage Loans) between MONUMENT
MORTGAGE,
INC., a California corporation (the "Company") and RESIDENTIAL
FUNDING
CORPORATION, a Delaware corporation (the "Lender"), dated as of
March
22, 1995 (as the same may be amended, modified, supplemented,
renewed
or restated from time to time, the "Agreement"). All capitalized
terms
used herein and all Section numbers given herein refer to those
terms
and Sections set forth in the Agreement. This Officer's
Certificate is
submitted to the Lender pursuant to Section 6.2(d) of the
Agreement.
The undersigned hereby certifies to the Lender that as of the
close of
business on , 19__ ("Statement Date",) and with respect to the Company
and its
Subsidiaries on a consolidated basis:
1. As illustrated in the attached calculations supporting this
Officers
Certificate, the Company met the covenants set forth in Sections
7.6,
7.7, 7.8, 7.9, 7.10, 7.11 and 7.12, or if the Company did not
meet any
of such covenants, a detailed explanation is attached setting
forth
the nature and period of the existence of the Default and the
action
the Company has taken, is taking, and proposes to take with
respect
thereto.
2. No Servicing Contracts have been sold or pledged by the Company
except
as permitted under the terms of the Agreement.
3. No recourse Servicing Contracts have been acquired by the
Company.
4. No payments in advance of the scheduled maturity date have been
made
with respect to any Subordinated Debt. The Company has
incurred no
Debt required to be subordinated pursuant to Section 6.10.
5. The Company was in compliance with the applicable HUD,
GNMA or
Investor net worth requirements, and in good standing with VA,
HUD,
GNMA and each Investor.
6. I have reviewed the terms of the Agreement and have made, or
caused to
be made under my supervision, a review in reasonable detail
of the
transactions and conditions of the Company (and, if applicable,
its
Subsidiaries) and such review has not disclosed the existence,
and I
have no knowledge of the existence, of any Default or
Event of
Default, or if any Default or Event of Default existed or
exists, a
detailed explanation is attached specifying the nature and
period of
the existence of the Default and the action the Company has
taken, is
taking and proposes to take with respect thereto.
7. Pursuant to Section 6.2 of the Agreement, enclosed are the
financial
statements of the Company as of the Statement Date. The
financial
statements for the period ending on the Statement Date fairly
present
the financial condition and results of opel^acions of the
Company
(ana, if applicable, its Subsidiaries) as at the Statement Date.
Dated:___________________
MONUMENT MORTGAGE, INC.,
a California corporation
By:_______________________________
Its:______________________________
<PAGE>
CALCULATIONS SUPPORTING OFFICER'S CERTIFICATE
Company Name: MONUMENT MORTGAGE, INC. and its Subsidiaries
Statement Date:____________________
All financial calculations set forth herein are as of the Statement Date.
I. TANGIBLE NET WORTH
A. Tangible Net Worth of the Company is:
Excess of total assets over total liabilities: $____________
Plus: Loan loss reserves: $____________
Plus: Subordinated Debt not due within
one year of the Statement Date
(or any portion thereof): $____________
Minus: Advances to owners, officers or
Affiliates: $____________
Minus: Investments in Affiliates: $____________
Minus: Assets pledged to secure liabilities
not included in Debt: $____________
Minus: Intangible assets: $____________
Minus: Any other HUD nonacceptable assets: $____________
Minus: Other assets unacceptable to the
Lender: $____________
TANGIBLE NET WORTH $________________
B. Requirements of Section 7.8 of the Agreement:
MINIMUM TANGIBLE NET WORTH OF $1,500,000.
C. Covenant Satisfied:___________ Covenant Not
Satisfied:____________
II. ADJUSTED TANGIBLE NET WORTH
A. Adjusted Tangible Net Worth of the Company is:
Tangible Net Worth (from IA above)
$_____________
Minus: Capitalized excess servicing fees
$_____________
Minus: Capitalized excess servicing rights
$_____________
Plus: Deferred taxes arising from
capitalized excess servicing fees:
$_____________
Plus: 1% of Adjusted Servicing Portfolio
(from IIIA below):
$_____________
ADJUSTED TANGIBLE NET WORTH
$__________________
B. Requirements of Section 7.9 of the Agreement:
MINIMUM ADJUSTED TANGIBLE NET WORTH OF $4,500,000.
C. Covenant Satisfied:___________ Covenant Not
Satisfied:____________
III. ADJUSTED SERVICING PORTFOLIO
A. Adjusted Servicing Portfolio of the Company is:
Servicing Portfolio owned by the Company is:
$_____________
Minus: The unpaid principal balance of
Mortgage Loans:
$_____________
Past due 60 days or more:
$_____________
Sold with recourse:
$_____________
For which the Servicing Contracts
are pledged:
$_____________
Serviced by Company for others under
subservicing arrangements:
$_____________
ADJUSTED SERVICING PORTFOLIO
$__________________
B. Requirements of Section 7.10 of the Agreement:
ADJUSTED SERVICING PORTFOLIO OF $250,000,000.
C. Covenant Satisfied:______ Covenant Not Satisfied:________
IV. DEBT OF THE COMPANY
Total liabilities
$_____________
Minus: Loan loss reserves:
$_____________
Minus: Subordinated Debt not due within one year
of the Statement Date (or any portion
thereof):
$_____________
Minus: Deferred taxes arising from
capitalized excess servicing fees:
$_____________
DEBT
$_________________
V. RATIO OF DEBT TO ADJUSTED TANGIBLE NET WORTH
A. The ratio of Debt to Adjusted Tangible Net Worth (IV to
II.A) is: ______ to 1
B. Requirements of Section 7.7 of the Agreement:
The ratio of Debt to Adjusted Tangible Net Worth shall not
exceed 15 to 1.
C. Covenant Satisfied:_______ Covenant Not Satisfied:__________
VI. DIVIDENDS
A. The dividends declared or paid by the Company during the current
fiscal
year was: $__________
B. Requirements of Section 7.11 of the Agreement:
No dividends shall be declared or paid in excess of
twenty-five percent (25%) of the Company's net after-tax income.
C. Covenant Satisfied:_________ Covenant Not Satisfied:__________
VII. CURRENT RATIO OF THE COMPANY
A. Consolidated current assets of the Company: $__________
B. Consolidated current liabilities of the Company: $__________
C. Consolidated current ratio (VII.A to VII.B) is: _____ to 1.0
D. Requirements of Section 7.6 of the Agreement:
The ratio of consolidated current assets to consolidated
current liabilities shall not be less than 1.01 to 1.
E. Covenant Satisfied:________ Covenant Not Satisfied:__________
VIII. TRANSACTIONS WITH AFFILIATES
A. Loans, advances, and extensions of credit made by the Company to
its
Affiliates total: $__________
B. Capital contributions made by the Company to its Affiliates
total: $__________
C. Management fees paid to Affiliates during the current
fiscal year total: $__________
D. Requirements of Section 7.12 of the Agreement:
1. No loans, advances or extensions of credit shall be made
by the
Company to Affiliates.
Covenant Satisfied:_______ Covenant Not Satisfied:_______
2. No capital contributions shall be made by the Company
to any
Affiliate.
Covenant Satisfied:_______ Covenant Not Satisfied:_________
3. No Management fees shall be paid by the Company to
Affiliates.
Covenant Satisfied:_______ Covenant Not Satisfied:_________
<PAGE>
FIRST AMENDED AND RESTATED WAREHOUSING PROMISSORY NOTE
$10,000,000 Date: February 29,
1996
FOR VALUE RECEIVED, the undersigned, MONUMENT MORTGAGE,
INC., a
California corporation, (herein called the "Company"), hereby promises to
pay to
the order of RESIDENTIAL FUNDING CORPORATION, a Delaware corporation
(the
"Lender" or, together with its successors and assigns, the "Holder")
whose
principal place of business is 8400 Normandale Lake Blvd., Suite
600,
Minneapolis, Minnesota 55437, or at such other place as the Holder may
designate
from time to time, the principal sum of Ten Million Dollars ($10,000,000)
or so
much thereof as may be outstanding from time to time pursuant to the
Warehousing
Credit and Security Agreement described below, and to pay interest on
said
principal sum or such part thereof as shall remain unpaid from time to
time,
from the date of each Advance until repaid in full, and all other
fees and
charges due under the Agreement, at the rate and at the times set forth
in the
Agreement. All payments hereunder shall be made in lawful money of the
United
States and in immediately available funds.
This Note is given to evidence an actual warehouse facility
in the
above amount and is the Warehousing Promissory Note referred to in that
certain
Warehousing Credit and Security Agreement (the "Agreement") dated
March 22,
1995, between the Company and the Lender, as the same may be
amended or
supplemented from time to time, and is entitled to the benefits
thereof.
Reference is hereby made to the Agreement (which is incorporated
herein by
reference as fully and with the same effect as if set forth herein at
length)
for a description of the Collateral, a statement of the covenants
and
agreements, a statement of the rights and remedies and securities
afforded
thereby and other matters contained therein. Capitalized terms used
herein,
unless otherwise defined herein, shall have the meanings given them
in the
Agreement.
This Note is given in replacement for, and not in satisfaction of,
that
certain Warehousing Promissory Note dated March 22, 1995, and issued
by the
Company to evidence its obligations under the Agreement (the "Existing
Note").
All amounts owed by the Company under the Existing Note (including,
without
limitation, the unpaid principal thereunder, interest accrued thereon and
fees
accrued under the Agreement, whether or not yet due and owing) as of the
date
hereof, shall be owed hereunder.
This Note may be prepaid in whole or in part at any time
without
premium or penalty.
Should this Note be placed in the hands of attorneys for
collection,
the Company agrees to pay, in addition to principal and interest,
fees and
charges due under the Agreement, any and all costs of collecting this
Note,
including reasonable attorneys' fees and expenses.
The Company hereby waives demand, notice, protest and presentment.
This Note shall be construed and enforced in accordance with the
laws
of the State of Minnesota, without reference to its principles of
conflicts of
law.
IN WITNESS WHEREOF, the Company has executed this Note as of
the day
and year first above written.
MONUMENT MORTGAGE, INC.,
a California corporation
By:_____________________________
Paul R. Garrigues
Its: Senior VP / Chief Financial
Officer
STATE OF )
) ss
COUNTY OF )
On March 8, 1996, before me, a Notary Public, personally appeared
Paul
R. Garrigues, the Senior VP CFO of MONUMENT MORTGAGE, INC., a
California
corporation, personally known to me (or proved to me on the
basis of
satisfactory evidence) to be the person whose name is subscribed to the
within
instrument and acknowledged to me that he/she executed the same in
his/her
authorized capacity, and that by his/her signature on the instrument the
person,
or the entity upon behalf of which the person acted, executed the
instrument.
WITNESS my hand and official seal.
Notary Public____________________
My Commission Expires:___________
(SEAL)
<PAGE>
FIRST AMENDED AND RESTATED SUBLIMIT PROMISSORY NOTE
$5,000,000 Date: February 29,
1996
FOR VALUE RECEIVED, the undersigned, MONUMENT MORTGAGE,
INC., a
California corporation, (herein called the "Company"), hereby promises to
pay to
the order of RESIDENTIAL FUNDING CORPORATION, a Delaware corporation
(the
"Lender" or, together with its successors and assigns, the "Holder")
whose
principal place of business is 8400 Normandale Lake Blvd., Suite
600,
Minneapolis, Minnesota 55437, or at such other place as the Holder may
designate
from time to time, the principal sum of Five Million Dollars ($5,000,000)
or so
much thereof as may be outstanding from time to time pursuant to the
Warehousing
Credit and Security Agreement described below, and to pay interest on
said
principal sum or such part thereof as shall remain unpaid from time to
time,
from the date of each Advance until repaid in full, and all other
fees and
charges due under the Agreement, at the rate and at the times set forth
in the
Agreement. All payments hereunder shall be made in lawful money of the
United
States and in immediately available funds.
This Note is given to evidence an actual warehouse facility
in the
above amount and is the Sublimit Promissory Note referred to in that
certain
Warehousing Credit and Security Agreement (the "Agreement") dated
March 22,
1995, between the Company and the Lender, as the same may be
amended or
supplemented from time to time, and is entitled to the benefits
thereof.
Reference is hereby made to the Agreement (which is incorporated
herein by
reference as fully and with the same effect as if set forth herein at
length)
for a description of the Collateral, a statement of the covenants
and
agreements, a statement of the rights and remedies and securities
afforded
thereby and other matters contained therein. Capitalized terms used
herein,
unless otherwise defined herein, shall have the meanings given them
in the
Agreement.
This Note is given in replacement for, and not in satisfaction of,
that
certain Sublimit Promissory Note dated March 22, 1995, and issued by the
Company
to evidence its obligations under the Agreement (the "Existing Note').
All
amounts owed by the Company under the Existing Note (including,
without
limitation, the unpaid principal thereunder, interest accrued thereon and
fees
accrued under the Agreement, whether or not yet due and owing) as of the
date
hereof, shall be owed hereunder.
This Note may be prepaid in whole or in part at any time
without
premium or penalty.
Should this Note be placed in the hands of attorneys for
collection,
the Company agrees to pay, in addition to principal and interest,
fees and
charges due under the Agreement, any and all costs of collecting this
Note,
including reasonable attorneys' fees and expenses.
The company hereby waives demand, notice, protest and presentment.
This Note shall be construed and enforced in accordance with-the
laws
of the State of Minnesota, without reference to its principles of
conflicts of
law.
IN WITNESS WHEREOF, the Company has executed this Note as of
the day
and year first above written.
MONUMENT MORTGAGE, INC.,
a California corporation
By:_____________________________
Paul R. Garrigues
Its: Senior VP / Chief Financial
Officer
STATE OF )
) ss
COUNTY OF )
On March 8, 1996, before me, a Notary Public, personally appeared
Paul
R. Garrigues, the Senior VP CFO of MONUMENT MORTGAGE, INC., a
California
corporation, personally known to me (or proved to me on the
basis of
satisfactory evidence) to be the person whose name is subscribed to the
within
instrument and acknowledged to me that he/she executed the same in
his/her
authorized capacity, and that by his/her signature on the instrument the
person,
or the entity upon behalf of which the person acted, executed the
instrument.
WITNESS my hand and official seal.
Notary Public______________________
My Commission Expires:_____________
(SEAL)
<PAGE>
FIRST AMENDED AND RESTATED WORKING CAPITAL PROMISSORY NOTE
$1,000,000 Date: February 29,
1996
FOR VALUE RECEIVED, the undersigned, MONUMENT MORTGAGE,
INC., a
California corporation, (herein called the "Company"), hereby promises to
pay to
the order of RESIDENTIAL FUNDING CORPORATION, a Delaware corporation
(the
"Lender" or, together with its successors and assigns, the "Holder")
whose
principal place of business is 8400 Normandale Lake Blvd., Suite
600,
Minneapolis, Minnesota 55437, or at such other place as the Holder may
designate
from time to time, the principal sum of One Million Dollars ($1,000,000)
or so
much thereof as may be outstanding from time to time pursuant to the
Warehousing
Credit and Security Agreement described below, and to pay interest on
said
principal sum or such part thereof as shall remain unpaid from time to
time,
from the date of each Advance until repaid in full, and all other
fees and
charges due under the Agreement, at the rate and at the times set forth
in the
Agreement. All payments hereunder shall be made in lawful money of the
United
States and in immediately available funds.
This Note is given to evidence an actual working capital
facility in
the above amount and is the Working Capital Promissory Note referred to in
that
certain Warehousing Credit and Security Agreement (the "Agreement") dated
March
22, 1995, between the Company and the Lender, as the same may be
amended or
supplemented from time to time, and is entitled to the benefits
thereof.
Reference is hereby made to the Agreement (which is incorporated
herein by
reference as fully and with the same effect as if set forth herein at
length)
for a description of the Collateral, a statement of the covenants
and
agreements, a statement of the rights and remedies and securities
afforded
thereby and other matters contained therein. Capitalized terms used
herein,
unless otherwise defined herein, shall have the meanings given them
in the
Agreement.
This Note is given in replacement for, and not in satisfaction of,
that
certain Working Capital Promissory Note dated March 22, 1995, and issued
by the
Company to evidence its obligations under the Agreement (the "Existing
Note").
All amounts owed by the Company under the Existing Note (including,
without
limitation, the unpaid principal thereunder, interest accrued thereon and
fees
accrued under the Agreement, whether or not yet due and owing) as of the
date
hereof, shall be owed hereunder.
This Note may be prepaid in whole or in part at any time
without
premium or penalty.
Should this Note be placed in the hands of attorneys for
collection,
the Company agrees to pay, in addition to principal and interest,
fees and
charges due under the Agreement, any and all costs of collecting this
Note,
including reasonable attorneys' fees and expenses.
The Company hereby waives demand, notice, protest and presentment.
This Note shall be construed and enforced in accordance with the
laws
of the State of Minnesota, without reference to its principles of
conflicts of
law.
IN WITNESS WHEREOF, the Company has executed this Note as of
the day
and year first above written.
MONUMENT MORTGAGE, INC.,
a California corporation
By:______________________________
Paul R. Garrigues
Its: Senior VP / Chief Financial
Officer
STATE OF )
) ss
COUNTY OF )
On March 8, 1996, before me, a Notary Public, personally appeared
Paul
R. Garrigues, the Senior VP CFO of MONUMENT MORTGAGE, INC., a
California
corporation, personally known to me (or proved to me on the
basis of
satisfactory evidence) to be the person whose name is subscribed to the
within
instrument and acknowledged to me that he/she executed the same in
his/her
authorized capacity, and that by his/her signature on the instrument the
person,
or the entity upon behalf of which the person acted, executed the
instrument.
WITNESS my hand and official seal.
Notary Public____________________
My Commission Expires:___________
(SEAL)
<PAGE>
CERTIFICATE
OF
SECRETARY OF
MONUMENT MORTGAGE. INC.
I, the undersigned, hereby certify that I am the Secretary of
MONUMENT
MORTGAGE, INC., a California corporation (the "Company"), and have
knowledge of
the matters contained in this Certificate and hereby certify that:
1. The Company is a corporation duly organized, validly existing
and in
good standing under the laws of the State of California
and has
complied with all certifications, filings and requirements
necessary
to continue as a corporation in the State of California and for
each
state where the Company is transacting business as a
foreign
corporation.
2. In connection with the single family revolving warehouse facility
made
to the Company by RESIDENTIAL FUNDING CORPORATION, a
Delaware
corporation (the "Lender") pursuant to the terms of a
Warehousing
Credit and Security Agreement dated as of March 22, 1995, as the
same
may have been amended or supplemented (the "Warehousing
Agreement"),
the Company has the valid power and authority to execute and
deliver
to the Lender the Third Amendment to Warehousing Credit and
Security
Agreement, and the First Amended and Restated Warehousing
Promissory
Note, First Amended and Restated Sublimit Promissory Note and
First
Amended and Restated Working Capital Promissory Note.
3. The Certificate of Incumbency delivered in connection with
the
Agreement is hereby deleted in its entirety and replaced with
the new
Certificate of Incumbency attached to this Certificate of
Secretary as
Exhibit B.
4. The resolutions attached to this Certificate as Exhibit A were
duly
adopted by either: (a) by unanimous written action of the
Board of
Directors of the Company; or (b) at a meeting of the
Board of
Directors of the Company held on the 8th day of February,
1996, at
which meeting a quorum was present. I am the keeper of the Minute
Book
of the Company and said resolutions have been entered therein,
have
not been altered, amended, repealed or rescinded, and are now in
full
force and effect.
5. There have been no amendments to the Articles of
Incorporation or
Bylaws of the Company since the date of the most recent
certified
copies thereof delivered to the Lender.
IN WITNESS WHEREOF, I have hereunto set my hand and the seal Of
this
corporation this 8th day of March, 1996.
_______________________________
Secretary
<PAGE>
EXHIBIT A
RESOLUTIONS OF BOARD OF DIRECTORS
WHEREAS, MONUMENT MORTGAGE, INC., a California corporation
(the
"Company"), has entered into a single family revolving warehouse facility
(the
"Warehousing Commitment"), with a present commandment amour.. of Ten
Millie:-!
Dollars ($10,000,000) (the "Warehousing Commitment Amount"), with
RESIDENTIAL
FUNDING CORPORATION, a Delaware corporation (the "Lender"), as evidenced
by a
Warehousing Promissory Note in the principal sum of Ten Million
Dollars
($10,000,000), dated as of March 22, 1995, a Sublimit Promissory Note
in the
principal sum of Six Million Dollars ($6,000,000), dated as of March 22,
1995,
and by a Warehousing Credit and Security Agreement dated as of March 22,
1995,
as the same may have been amended or supplemented (the "Agreement"); and
WHEREAS, the Company and the Lender have entered into a term
loan
facility with a present Term Loan Commitment Amount of One Million
Dollars
($1,000,000) ("Term Loan Commitment"), as evidenced by a Term Loan
Promissory
Note in the principal amount of One Million Dollars ($1,000,000), dated
as of
March 22, 1995 (the "Term Note") and the Agreement;
WHEREAS, the Company and the Lender have also entered into a
working
capital facility with a present Working Capital Commitment Amount of One
Million
Dollars ($1,000,000) ("Working Capital Commitment"), as evidenced by a
Working
Capital Promissory Note in the principal sum of One Million
Dollars
($1,000,000), dated as of March 22, 1995 (the "`Working Capital Note"),
and the
Agreement (the Warehousing Promissory Note, the Sublimit Promissory
Note, the
Term Loan Promissory Note and the Working Capital Promissory Note
shall
collectively be referred to as the "Notes");
WHEREAS, the Company proposes to extend the period for which
certain of
the Commitments under the Agreement have been made and amend certain other
terms
of the Agreement; and
WHEREAS, to evidence the extension of such Commitments and
amendment of
the Agreement, the Company proposes to execute and deliver a Third
Amendment to
Warehousing Credit and Security Agreement (the "Amendment"), a First
Amended and
Restated Warehousing Promissory Note, a First Amended and Restated
Sublimit
Promissory Note and a First Amended and Restated Working Capital Promissory
Note
(all such amended and restated notes, the `"Amended Notes"), copies of
which
have been presented to the Board of Directors of this Company; and
WHEREAS, the Board of Directors of this Company have determined
that it
will be in the best interests of this Company for the Company to
extend the
Commitment and amend the Agreement.
RESOLVED, that these resolutions are enacted by the Board of
Directors
of this Company on their behalf and on behalf of the Company.
FURTHER RESOLVED, that the Company shall extend the Commitments
and
amend the Agreement to be evidenced by the Amendment and the Amended Notes.
FURTHER RESOLVED, that the Amendment and Amended Notes in the
forms
presented to the Board of Directors of this Company are hereby
approved and
copies thereof are Bled in the records of this Company with these
Resolutions.
FURTHER RESOLVED, that any one (insert minimum number required to
sign)
of the following officers of the Company: President, Executive Vice
President,
Senior Vice President, Assistant Vice President, Secretary. or
Assistant
Secretary (list titles of officers authorized, do not list individual
names),
shall be and are authorized, empowered and directed in the name of and on
behalf
of this Company, to execute, acknowledge and deliver the Amendment
and the
Amended Notes in the forms approved by the Board of Directors of this
Company as
aforesaid, with such changes therein as may be acceptable to such
officers, as
conclusively evidenced by their execution thereof.
FURTHER RESOLVED, that any one (insert minimum number required to
sign)
of the following officers of the Company: President Executive Vice
President,
Senior Vice President, Assistant Vice President, Secretary. or
Assistant
Secretary Or Vice President (list titles of racers authorized, do not
list
individual names), shall be and are authorized, empowered and directed
in the
name of and on behalf of the Company, to execute, acknowledge and
deliver any
bailee pledge agreements, advance requests, shipping requests, wire
transfer
instructions, assignments, security delivery instructions and trust
receipts and
to endorse notes in the name of the Company, in any form prescribed
by the
Lender.
FURTHER RESOLVED, that the Company hereby authorizes the
Lender to
accept the Company's bailee pledge agreements, advance requests,
shipping
requests, wire transfer instructions and security delivery
instructions
transmitted to the Lender via facsimile or electronic transmission, and
that
said documents, when transmitted by facsimile or electronic transmission,
shall
have the same force and erect as the originals.
FURTHER RESOLVED, that such officers shall be and are
hereby
authorized, empowered and directed to do and perform each and every
act and
execute any and all documents and instruments in the name of this Company
as may
be necessary or desirable to enable this Company to amend the Commitment
and to
carry out the purport and intent of the foregoing Resolutions.
<PAGE>
EXHIBIT "B"
CERTIFICATE AS TO INCUMBENCY
TO: RESIDENTIAL FUNDING CORPORATION
I hereby certify to you that I am the duly elected and
qualified
Secretary of MONUMENT MORTGAGE, INC., a California corporation (e
Company.) and
that, as such, I am authorized to execute this Certificate on behalf
of the
Company. I further certify that the persons named below are duly
elected,
qualified and acting officers of the Company, holding on the date
hereof the
respective titles set forth opposite their respective names, and
that the
respective signatures get forth opposite their names are their true and
genuine
signatures:
Name Title Signature
James A. Umphryes Executive Vice Pres.
__________________________
James W. Noack President
__________________________
Paul Garrigues Chief Financial Officer
__________________________
Sr. Vice Pres.
Lee Decker Sr. Vice Pres.
__________________________
Robert Kamm Sr. Vice Pres.
__________________________
Jennv Pusich Secretary
__________________________
Deshon Chambers Asst. Sec.
__________________________
Jill Lewis Asst. Sec.
__________________________
Regina E. Kimura Asst. Sec.
__________________________
Abigail A. Bally Asst. Sec.
__________________________
Katey Carroll Vice President
__________________________
You may conclusively rely on this Certificate until formally
advised by
a like Certificate of any changes herein.
IN WITNESS WHEREOF, I have hereunto executed this Certificate on
this
8th day of March, 1996.
_________________________________
Secretary
<PAGE>
Residential Funding Corporation
1646 North California Boulevard
Suite 400
Walnut Creek. CA 94596
510-935-0614
February 29, 1996
Monument Mortgage, Inc.
3021 Citrus Circle #150
Walnut Creek, California 94598
Attention: Paul R. Garrigues, SVP/CFO
Re: Gestation Warehousing Credit and Security Agreement (Shipped
Mortgage
Loans) dated March 22, 1995 (the "Gestation Agreement"), by and
between
MONUMENT MORTGAGE, INC., a California corporation (the "Company"),
and
RESIDENTIAL FUNDING CORPORATION, a Delaware corporation (the
"Lender"),
as the same may be or has been amended or supplemented.
Gentlemen:
Reference is hereby made to the Gestation Agreement. The
capitalized
terms used herein shall have the same meaning defined in the Gestation
Agreement
unless otherwise defined herein.
The Company has requested the Lender to increase the maximum
amount of
the Advances that may be outstanding at any time under the Agreement
from Ten
Million Dollars ($10,000,000) to Twenty-Five Million Dollars
($25,000,000).
Accordingly, enclosed please find a First Amended and Restated Promissory
Note
in the amount of Twenty-Five Million Dollars ($25,000,000) in favor
of the
Lender to be executed by the Company (the "Promissory Note"). The
increase
described above does not limit the Lender's discretion to make or not to
make
Advances, as set forth in the Gestation Agreement.
This increase shall be effective on the earliest day upon
which the
Company has delivered to the Lender an executed copy of the enclosed
Promissory
Note, together with a copy of this letter acknowledged and accepted
by the
Company.
Very truly yours,
RESIDENTIAL FUNDING CORPORATION,
a Delaware corporation
By:_________________________________
Its: Director
ACCEPTED AND AGREED TO THIS
29th DAY OF FEBRUARY 1996:
MONUMENT MORTGAGE, INC.,
a California Corporation
By:______________________________
Paul R. Garrigues
Its: Senior VP / Chief Financial Officer
<PAGE>
FIRST AMENDED AND RESTATED PROMISSORY NOTE
$25,000,000 Date: February 29, 1996
FOR VALUE RECEIVED, the undersigned, MONUMENT MORTGAGE,
INC., a
California corporation, (herein called the "Company"), hereby promises to
pay to
the order of RESIDENTIAL FUNDING CORPORATION, a Delaware corporation
(the
"Lender" or, together with its successors and assigns, the "Holder")
whose
principal place of business is 8400 Normandale Lake Blvd., Suite
600,
Minneapolis, Minnesota 55437, or at such other place as the Holder may
designate
from time to time, the principal sum of Twenty-Five Million
Dollars
($25,000,000) or so much thereof as may be outstanding from time to
time
pursuant to the Warehousing Credit and Security Agreement described
below, and
to pay interest on said principal sum or such part thereof as shall
remain
unpaid from time to time, from the date of each Advance until repaid in
full,
and all other fees and charges due under the Agreement, at the rate and
at the
times set forth in the Agreement. All payments hereunder shall be made in
lawful
money of the United States and in immediately available funds.
This Note is given to evidence an actual gestation warehouse
facility
in the above amount and is the Note referred to in that certain
Gestation
Warehousing Credit and Security Agreement (Shipped Mortgage Loans)
(the
"Agreement") dated March 22, 1995, between the Company and the Lender,
as the
same may be amended or supplemented from time to time, and is entitled
to the
benefits thereof. Reference is hereby made to the Agreement
(which is
incorporated herein by reference as fully and with the same effect as
if set
forth herein at length) for a description of the Collateral, a statement
of the
covenants and agreements, a statement of the rights and remedies and
securities
afforded thereby and other matters contained therein. Capitalized terms
used
herein, unless otherwise defined herein, shall have the meanings given
them in
the Agreement.
This Note is given in replacement for, and not in satisfaction of,
that
certain Promissory Note dated March 23, 1995, and issued by the
Company to
evidence its obligations under the Agreement (the "Existing Note"). All
amounts
owed by the Company under the Existing Note (including, without
limitation, the
unpaid principal thereunder, interest accrued thereon and fees accrued
under the
Agreement' whether or not yet due and owing) as of the date hereof,
shall be
owed hereunder.
This Note may be prepaid in whole or in part at any time
without
premium or penalty.
Should this Note be placed in the hands of attorneys for
collection,
the Company agrees to pay, in addition to principal and interest,
fees and
charges due under the Agreement, any and all costs of collecting this
Note,
including reasonable attorneys, fees and expenses.
The Company hereby waives demand, notice, protest and presentment.
This Note shall be construed and enforced in accordance with the
laws
of the State of Minnesota, without reference to its principles of
conflicts of
law.
IN WITNESS WHEREOF, the Company has executed this Note as of
the day
and year first above written.
MONUMENT MORTGAGE, INC.,
a California corporation
By:
Paul R. Garrigues
Its: Senior VP / Chief Financial
Officer
STATE OF )
) ss
COUNTY OF )
On March 8, 1996, before me, a Notary Public, personally appeared
Paul
R. Garrigues, the Senior VP CFO of MONUMENT MORTGAGE, INC., a
California
corporation, personally known to me (or proved to me on the
basis of
satisfactory evidence) to be the person whose name is subscribed to the
within
instrument and acknowledged to me that he/she executed the same in
his/her
authorized capacity, and that by his/her signature on the instrument the
person,
or the entity upon behalf of which the person acted, executed the
instrument.
WITNESS my hand and official seal.
Notary Public_____________________
My Commission Expires:____________
(SEAL)
Residential Funding Corporation1646 North California BoulevardSuite
400Walnut Creek. CA 94596 510-935-0614
February 29, 1996
Monument Mortgage, Inc.
3021 Citrus Circle #150
Walnut Creek, California 94598
Attention: Paul R. Garrigues, SVP/CFO
Re: Gestation Warehousing Credit and Security Agreement (Shipped
Mortgage
Loans) dated March 22, 1995 (the "Gestation Agreement"), by and
between
MONUMENT MORTGAGE, INC., a California corporation (the "Company"),
and
RESIDENTIAL FUNDING CORPORATION, a Delaware corporation (the
"Lender"),
as the same may be or has been amended or supplemented.
Gentlemen:
Reference is hereby made to the Gestation Agreement. The capitalized
terms
used herein shall have the same meaning defined in the Gestation
Agreement
unless otherwise defined herein.
The Company has requested the Lender to increase the maximum amount
of the
Advances that may be outstanding at any time under the Agreement
from Ten
Million Dollars ($10,000,000) to Twenty-Five Million Dollars
($25,000,000).
Accordingly, enclosed please find a First Amended and Restated Promissory
Note
in the amount of Twenty-Five Million Dollars ($25,000,000) in favor
of the
Lender to be executed by the Company (the "Promissory Note"). The
increase
described above does not limit the Lender's discretion to make or not to
make
Advances, as set forth in the Gestation Agreement.
This increase shall be effective on the earliest day upon which the
Company
has delivered to the Lender an executed copy of the enclosed Promissory
Note,
together with a copy of this letter acknowledged and accepted by the
Company.
Very truly yours,
RESIDENTIAL.FUNDING
CQRPORATION,
a Delaware corporation
By:
------------------------------
- ---
Its: Director
ACCEPTED AND AGREED TO THIS
29th DAY OF FEBRUARY 1996:
MONUMENT MORTGAGE, INC.,
a California corporation
By:
------------------------------------
Paul R. Garrigues
Its: Senior VP / Chief Financial Officer
<PAGE>
FIRST AMENDED AND RESTATED PROMISSORY NOTE
Date: February 29, 1996
$25,000,000
FOR VALUE RECEIVED, the undersigned, MONUMENT MORTGAGE, INC., a
California
corporation, (herein called the "Company"), hereby promises to pay to the
order
of RESIDENTIAL FUNDING CORPORATION, a Delaware corporation (the
"Lender" or,
together with its successors and assigns, the "Holder") whose principal
place of
business is 8400 Normandale Lake Blvd., Suite 600, Minneapolis, Minnesota
55437,
or at such other place as the Holder may designate from time to time,
the
principal sum of Twenty-Five Million Dollars ($25,000,000) or so much
thereof as
may be outstanding from time to time pursuant to the Warehousing
Credit and
Security Agreement described below, and to pay interest on said principal
sum or
such part thereof as shall remain unpaid from time to time, from the
date of
each Advance until repaid in full, and all other fees and charges due
under the
Agreement, at the rate and at the times set forth in the Agreement. All
payments
hereunder shall be made in lawful money of the United States and in
immediately
available funds.
This Note is given to evidence an actual gestation warehouse
facility in
the above amount and is the Note referred to in that certain
Gestation
Warehousing Credit and Security Agreement (Shipped Mortgage Loans)
(the
"Agreement") dated March 22, 1995, between the Company and the Lender,
as the
same may be amended or supplemented from time to time, and is entitled
to the
benefits thereof. Reference is hereby made to the Agreement
(which is
incorporated herein by reference as fully and with the same effect as
if set
forth herein at length) for a description of the Collateral, a statement
of the
covenants and agreements, a statement of the rights and remedies and
securities
afforded thereby and other matters contained therein. Capitalized terms
used
herein, unless otherwise defined herein, shall have the meanings given
them in
the Agreement.
This Note is given in replacement for, and not in satisfaction of,
that
certain Promissory Note dated March 23, 1995, and issued by the
Company to
evidence its obligations under the Agreement (the "Existing Note"). All
amounts
owed by the Company under the Existing Note (including, without
limitation, the
unpaid principal thereunder, interest accrued thereon and fees accrued
under the
Agreement, whether or not yet due and owing) as of the date hereof,
shall be
owed hereunder.
This Note may be prepaid in whole or in part at any time without
premium or
penalty.
Should this Note be placed in the hands of attorneys for collection,
the
Company agrees to pay, in addition to principal and interest, fees and
charges
due under the Agreement, any and all costs of collecting this Note,
including
reasonable attorneys' fees and expenses.
The Company hereby waives demand, notice, protest and presentment.
This Note shall be construed and enforced in accordance with the
laws of
the State of Minnesota, without reference to its principles of conflicts of
law.
IN WITNESS WHEREOF, the Company has executed this Note as of the
day and
year first above written.
MONUMENT MORTGAGE, INC.,
a California corporation
By:
-----------------------------------
- ---
Paul R. Garrigues
Its: Senior VP/Chief Financial
Officer
STATE OF California )
) ss
COUNTY OF Contra Costa )
On March 8 , 1996, before me, a Notary Public personally appeared
Paul R.
Garrigues , the Senior VP CFO of MONUMENT MORTGAGE, INC., a
California
corporation, personally known to me (or proved to me on the
basis of
satisfactory evidence) to be the person whose name is subscribed to the
within
instrument and acknowledged to me that he/she executed the same in
his/her
authorized capacity, and that by his/her signature on the instrument the
person,
or the entity upon behalf of which the person acted, executed the
instrument.
WITNESS my hand and official seal.
--------------------------------
- ----
Notary Public
My Commission Expires:
----------------
- ---
(SEAL)
FOURTH AMENDMENT TO
WAREHOUSING CREDIT AND SECURITY AGREEMENT
THIS FOURTH AMENDMENT TO WAREHOUSING CREDIT AND SECURITY AGREEMENT
(this "Amendment") is entered into as of this 11th day of June 1996,
by and
between MONUMENT MORTGAGE, INC., a California corporation (the
"Company") and
RESIDENTIAL FUNDING CORPORATION, a Delaware corporation (the "Lender").
WHEREAS, the Company and the Lender have entered into a single
family
revolving warehouse facility with a present Warehousing Commitment Amount
of Ten
Million Dollars ($10,000,000), to finance the origination and
acquisition of
Mortgage Loans as evidenced by a Warehousing Promissory Note in the
principal
sum of Ten Million Dollars ($10,000,000), dated as of March 22, 1995, a
Sublimit
Promissory Note in the principal sum of Six Million Dollars ($6,000,000),
dated
as of March 22, 1995, and by a Warehousing Credit and Security Agreement
dated
as of March 22, 1995, as the same may have been amended or supplemented
(the
"Agreement");
WHEREAS, the Company and the Lender have entered into a term loan
facility
with a present Term Loan Commitment Amount of One Million Dollars
($1,000,000)
("Term Loan Commitment"), as evidenced by a Term Loan Promissory Note
in the
principal amount of One Million Dollars ($1,000,000), dated as of March 22,
1995
(the "Term Note") and the Agreement;
WHEREAS, the Company and the Lender have also entered into a
working
capital facility with a present Working Capital Commitment Amount of One
Million
Dollars ($1,000,000) ("Working Capital Commitment"), as evidenced by a
Working
Capital Promissory Note in the principal sum of One Million
Dollars
($1,000,000), dated as of March 22, 1995 (the "Working Capital Note"),
and the
Agreement (the Warehousing Promissory Note, the Sublimit Promissory
Note, the
Term Loan Promissory Note and the Working Capital Promissory Note
shall
collectively be referred to as the "Notes");
WHEREAS, the Company has requested the Lender to waive the Default
caused
by the Company's failure to comply with the Minimum Servicing
Portfolio
requirement of the Agreement and to amend certain terms of the Agreement
and the
Lender has agreed to such amendment of the Agreement subject to the
terms and
conditions of this Amendment;
NOW, THEREFORE, for and in consideration of the foregoing and of the
mutual
covenants, agreements and conditions hereinafter set forth and for other
good
and valuable consideration, the receipt and sufficiency of which are
hereby
acknowledged, the parties hereto hereby agree as follows:
1. All capitalized terms used herein and not otherwise defined shall
have
their respective meanings set forth in the Agreement.
2. The effective date ("Effective Date") of this Amendment shall be
June
11, 1996 , the date on which the Company has complied with all the
terms and
conditions of this Amendment.
3. Section 7.10 of the Agreement shall be deleted in its entirety
and the
following shall be substituted in lieu thereof:
7.10 Minimum Servicing Portfolio. Permit the
Adjusted
Servicing Portfolio of the Company to be less than Two Million
Dollars
($200,000,000).
4. The Company shall deliver to the Lender (a) an executed original of
this
Amendment; (b) an executed Certificate of Secretary with corporate
resolutions;
(c) an executed original of the Waiver Letter; and (d) a Two Hundred
Fifty
Dollar ($250) document production fee.
5. The Company represents, warrants and agrees that (a) there
exists no
Default or Event of Default under the Loan Documents, (b) the Loan
Documents
continue to be the legal, valid and binding agreements and obligations
of the
Company enforceable in accordance with their terms, as modified herein,
(c) the
Lender is not in default under any of the Loan Documents and the Company
has no
offset or defense to its performance or obligations under any of the
Loan
Documents, (d) the representations contained in the Loan Documents remain
true
and accurate in all respects, and (e) there has been no material adverse
change
in the financial condition of the Company from the date of the Agreement
to the
date of this Amendment.
6. Except as hereby expressly modified, the Agreement shall
otherwise be
unchanged and shall remain in full force and effect, and the Company
ratifies
and reaffirms all of its obligations thereunder.
7. This Amendment may be executed in any number of counterparts and
by the
different parties hereto on separate counterparts, each of which
when so
executed and delivered shall be an original, but all of which shall
together
constitute one and the same instrument.
8. This Amendment shall be governed by the laws of the State of
Minnesota,
without reference to its principles of conflicts of laws.
IN WITNESS WHEREOF, the Company and the Lender have caused this
Amendment
to be duly executed on their behalf by their duly authorized officers as
of the
day and year above written.
MONUMENT MORTGAGE, INC.,
a California corporation
By:
-----------------------------------
- -
Its: Senior VP / CFO
RESIDENTIAL FUNDING CORPORATION,
a Delaware corporation
By
-------------------------------------
- --
Its:
-------------------------------------
- --
STATE OF California )
) ss
COUNTY OF Contra Costa )
On July 19, 1996, before me, a Notary Public, personally appeared
Paul
Garrigues, the Senior VP/CFO of MONUMENT MORTGAGE, INC., a
California
corporation, personally known to me (or proved to me on the
basis of
satisfactory evidence) to be the person whose name is subscribed to the
within
instrument and acknowledged to me that he/she executed the same in
his/her
authorized capacity, and that by his/her signature on the instrument the
person,
or the entity upon behalf of which the person acted, executed the
instrument.
WITNESS my hand and official seal.
-------------------------------------
- --
Notary Public
My Commission
Expires:_________________
(SEAL)
STATE OF California )
) ss
COUNTY OF Contra Costa )
On July 26, 1996, before me, a Notary Public, personally appeared D.
Graham
Shipman, the Director of RESIDENTIAL FUNDING CORPORATION, a
California
corporation, personally known to me (or proved to me on the
basis of
satisfactory evidence) to be the person whose name is subscribed to the
within
instrument and acknowledged to me that he/she executed the same in
his/her
authorized capacity, and that by his/her signature on the instrument the
person,
or the entity upon behalf of which the person acted, executed the
instrument.
WITNESS my hand and official seal.
-------------------------------------
- --
Notary Public
My Commission
Expires:_________________
(SEAL)
CONSENT OF GUARANTORS
The undersigned, being a Guarantor under their respective Guaranty
dated as
of March 22, 1995, hereby consent to the foregoing Amendment and
the
transactions contemplated thereby and hereby modify and reaffirm
their
obligations under their respective Guaranty so as to include within the
term
"Guaranteed Debt" the indebtedness, obligations and liabilities of the
Company
under this Amendment and the Notes. Each Guarantor hereby reaffirms that
their
obligations under their respective Guaranty are separate and distinct
from the
Company's obligations to the Lender, and that their obligations under
their
respective Guaranty are in full force and effect, and each hereby
waives and
agrees not to assert any anti-deficiency protections or other rights
as a
defense to their obligations under their respective Guaranty, all as more
fully
set forth in such Guaranty, the terms of each of which are incorporated
herein
as if fully set forth herein.
The Guarantors hereby irrevocably waive any claim or other rights that
they
may now or hereafter acquire against the Company that arises from the
existence,
payment, performance or enforcement of the Guarantor's obligations
under the
Guaranty, including any right of subrogation, reimbursement,
exoneration or
indemnification, any right to participate in any claim or remedy of the
Lender
against the Company or any collateral that the Lender now has or
hereafter
acquires, whether or not such claim, remedy or right arises in equity or
under
contract, statute or common law, including the right to take or receive
from the
Company directly or indirectly, in cash or other property or by set-off
or in
any manner, payment or security on account of such claim or other rights.
If any
amount shall be paid to the Guarantors in violation of the preceding
sentence
and the Guaranteed Debt shall not have been paid and performed in full,
such
amount shall be deemed to have been paid to the Guarantors for the
benefit of,
and held in trust for, the Lender and shall forthwith be paid to the
Lender to
be credited and applied to the Guaranteed Debt, whether matured or
unmatured.
Each Guarantor further agrees, upon Lender's request, to execute
for the
benefit of Lender an additional guaranty in form and content
acceptable to
Lender and conforming to their respective Guaranty in connection
with the
foregoing Amendment.
This Consent of Guarantors may be executed in any number of
counterparts,
and by the parties hereto in separate counterparts, each of which,
when so
executed, shall be an original, but all such counterparts shall
together
constitute one and the same instrument.
GUARANTORS:
------------------------------------------
- -
JAMES W. NOACK
------------------------------------------
- -
JAMES A. UMPHRYES
STATE OF California )
) ss
COUNTY OF Contra Costa )
On July 19, 1996, before me, a Notary Public, personally appeared
JAMES W.
NOACK, personally known to me (or proved to me on the basis of
satisfactory
evidence) to be the person whose name is subscribed to the within
instrument and
acknowledged to me that he executed the same in his authorized capacity,
and
that by his signature on the instrument the person, or the entity upon
behalf of
which the person acted, executed the instrument.
WITNESS my hand and official seal.
-------------------------------------
- --
Notary Public
My Commission
Expires:_________________
(SEAL)
STATE OF California )
) ss
COUNTY OF Contra Costa )
On July 19, 1996, before me, a Notary Public, personally appeared
JAMES A.
HUMPHRYES, personally known to me (or proved to me on the basis of
satisfactory
evidence) to be the person whose name is subscribed to the within
instrument and
acknowledged to me that he executed the same in his authorized capacity,
and
that by his signature on the instrument the person, or the entity upon
behalf of
which the person acted, executed the instrument.
WITNESS my hand and official seal.
-------------------------------------
- --
Notary Public
My Commission
Expires:_________________
(SEAL)
<PAGE>
CERTIFICATE
OF
SECRETARY OF
MONUMENT MORTGAGE, INC.
I, the undersigned, hereby certify that I am the Secretary of
MONUMENT
MORTGAGE, INC., a California corporation (the "Company"), and have
knowledge of
the matters contained in this Certificate and hereby certify that:
1. The Company is a corporation duly organized, validly existing
and in
good standing under the laws of the State of California
and has
complied with all certifications, filings and requirements
necessary
to continue as a corporation in the State of California and for
each
state where the Company is transacting business as a
foreign
corporation.
2. In connection with the single family revolving warehouse facility
made
to the Company by RESIDENTIAL FUNDING CORPORATION, a
Delaware
corporation (the "Lender") pursuant to the terms of a
Warehousing
Credit and Security Agreement dated as of March 22, 1995, as the
same
may have been amended or supplemented (the "Warehousing
Agreement"),
the Company has the valid power and authority to execute and
deliver
to the Lender the Fourth Amendment to Warehousing Credit and
Security
Agreement.
3. The resolutions attached to this Certificate as Exhibit A were
duly
adopted by either: (a) by unanimous written action of the
Board of
Directors of the Company; or (b) at a meeting of the
Board of
Directors of the Company held on the 23rd day of May , 1996, at
which
meeting a quorum was present. I am the keeper of the Minute
Book of
the Company and said resolutions have been entered therein,
have not
been altered, amended, repealed or rescinded, and are now in
full
force and effect.
4. There have been no amendments to the Articles of
Incorporation or
Bylaws of the Company since the date of the most recent
certified
copies thereof delivered to the Lender.
IN WITNESS WHEREOF, I have hereunto set my hand and the seal of
this
corporation this 27th day of June, 1996.
----------------------------------------
- --
Secretary
<PAGE>
EXHIBIT A
RESOLUTIONS OF BOARD OF DIRECTORS
WHEREAS, MONUMENT MORTGAGE, INC., a California corporation (the
"Company"),
has entered into a single family revolving warehouse facility (the
"Warehousing
Commitment"), with a present commitment amount of Ten Million
Dollars
($10,000,000) (the "Warehousing Commitment Amount"), with RESIDENTIAL
FUNDING
CORPORATION, a Delaware corporation (the "Lender"), as evidenced
by a
Warehousing Promissory Note in the principal sum of Ten Million
Dollars
($10,000,000), dated as of March 22, 1995, a Sublimit Promissory Note
in the
principal sum of Six Million Dollars ($6,000,000), dated as of March 22,
1995,
and by a Warehousing Credit and Security Agreement dated as of March 22,
1995,
as the same may have been amended or supplemented (the "Agreement"); and
WHEREAS, the Company and the Lender have entered into a term loan
facility
with a present Term Loan Commitment Amount of One Million Dollars
($1,000,000)
("Term Loan Commitment"), as evidenced by a Term Loan Promissory Note
in the
principal amount of One Million Dollars ($1,000,000), dated as of March 22,
1995
(the "Term Note") and the Agreement;
WHEREAS, the Company and the Lender have also entered into a
working
capital facility with a present Working Capital Commitment Amount of One
Million
Dollars ($1,000,000) ("Working Capital Commitment"), as evidenced by a
Working
Capital Promissory Note in the principal sum of One Million
Dollars
($1,000,000), dated as of March 22, 1995 (the "Working Capital Note"),
and the
Agreement (the Warehousing Promissory Note, the Sublimit Promissory
Note, the
Term Loan Promissory Note and the Working Capital Promissory Note
shall
collectively be referred to as the "Notes");
WHEREAS, the Company proposes to amend certain terms of the Agreement;
and
WHEREAS, to evidence the amendment of the Agreement, the Company
proposes
to execute and deliver a Fourth Amendment to Warehousing Credit and
Security
Agreement (the "Amendment"), a copy of which has been presented to the
Board of
Directors of this Company; and
WHEREAS, the Board of Directors of this Company have determined
that it
will be in the best interests of this Company for the Company to
amend the
Agreement.
RESOLVED, that these resolutions are enacted by the Board of
Directors of
this Company on their behalf and on behalf of the Company.
FURTHER RESOLVED, that the Company shall amend the Agreement
to be
evidenced by the Amendment.
FURTHER RESOLVED, that the Amendment in the form presented to the
Board
of Directors of this Company is hereby approved and a copy thereof is
filed in
the records of this Company with these Resolutions.
FURTHER RESOLVED, that any one (insert minimum number required to
sign) of
the following officers of the Company: President, Executive Vice
President,
Senior Vice President (list titles of officers authorized, do not
list
individual names), shall be and are authorized, empowered and directed
in the
name of and on behalf of this Company, to execute, acknowledge and
deliver the
Amendment in the form approved by the Board of Directors of this
Company as
aforesaid, with such changes therein as may be acceptable to such
officers, as
conclusively evidenced by their execution thereof.
FURTHER RESOLVED, that such officers shall be and are hereby
authorized,
empowered and directed to do and perform each and every act and execute
any and
all documents and instruments in the name of this Company as may be
necessary or
desirable to enable this Company to amend the Commitments and to carry
out the
purport and intent of the foregoing Resolutions.
FIFTH AMENDMENT TO
WAREHOUSING CREDIT AND SECURITY AGREEMENT
THIS FIFTH AMENDMENT TO WAREHOUSING CREDIT AND SECURITY AGREEMENT
(this
"Amendment") is entered into as of this 12th day of December 1996,
by and
between MONUMENT MORTGAGE, INC., a California corporation (the
"Company") and
RESIDENTIAL FUNDING CORPORATION, a Delaware corporation (the "Lender").
WHEREAS, the Company and the Lender have entered into a single
family
revolving warehouse facility with a present Warehousing Commitment Amount
of Ten
Million Dollars ($10,000,000), to finance the origination and
acquisition of
Mortgage Loans as evidenced by a First Amended and Restated
Warehousing
Promissory Note in the principal sum of Ten Million Dollars ($10,000,000),
dated
as of February 29, 1996, a First Amended and Restated Sublimit Promissory
Note
in the principal sum of Five Million Dollars ($5,000,000), dated as of
February
29, 1996, and by a Warehousing Credit and Security Agreement dated as of
March
22, 1995, as the same may have been amended or supplemented (the
"Agreement");
WHEREAS, the Company and the Lender have entered into a term loan
facility
with a present Term Loan Commitment Amount of One Million Dollars
($1,000,000),
as evidenced by a Term Loan Promissory Note in the principal amount
of One
Million Dollars ($1,000,000), dated as of March 22, 1995 (the "Term Loan
Note"),
and the Agreement;
WHEREAS, the Company and the Lender have also entered into a
working
capital facility with a present Working Capital Commitment Amount of One
Million
Dollars ($1,000,000), as evidenced by a First Amended and Restated
Working
Capital Promissory Note in the principal sum of One Million
Dollars
($1,000,000), dated as of February 29, 1996 (the "Working Capital Note"),
and
the Agreement (the Warehousing Promissory Note, the Sublimit Promissory
Note,
the Term Loan Promissory Note and the Working Capital Promissory Note
shall
collectively be referred to as the "Notes");
WHEREAS, the Company has requested the Lender to extend the
period for
which the Warehousing Commitment and the Working Capital Commitment
under the
Agreement have been made and to amend certain other terms of the Agreement,
and
the Lender has agreed to such extension and amendment subject to the
terms and
conditions of this Amendment;
NOW, THEREFORE, for and in consideration of the foregoing and of the
mutual
covenants, agreements and conditions hereinafter set forth and for other
good
and valuable consideration, the receipt and sufficiency of which are
hereby
acknowledged, the parties hereto hereby agree as follows:
1. All capitalized terms used herein and not otherwise defined shall
have
their respective meanings set forth in the Agreement.
2. The effective date ("Effective Date") of this Amendment shall be
, the
date on which the Company has complied with all the terms and conditions of
this
Amendment.
3. Section 1.1 of the Agreement shall be amended by adding the
following
definitions in the appropriate alphabetical order:
"High LTV Mortgage Loan" means a First Mortgage Loan or a
Second
Mortgage Loan, other than a Title I Mortgage Loan, which has a ratio
of the
principal balance of the Mortgage Loan at origination plus, in the
case of
a Second Mortgage Loan, the outstanding principal balance of the
First
Mortgage Loan against the related improved real property, to the
appraised
value of the related improved real property, which exceeds one
hundred
percent (100%).
"RFC Mortgage Loan" means a Mortgage Loan covered by a
Purchase
Commitment issued by RFC.
4. Section 1.1 of the Agreement shall be amended to delete the
definitions
of "Adjusted Tangible Net Worth," "Collateral Value," "Debt," Affair
Market
Value," "Home Equity Advance," "Home Equity Loan," "Nonconforming
Mortgage
Loan," "Purchase Commitment" and "Second Mortgage Loan" in their
entirety,
replacing them with the following definitions:
"Adjusted Tangible Net Worth" means with respect to any Person
at any
date, the Tangible Net Worth of such Person at such date,
excluding
capitalized excess servicing fees and capitalized servicing rights,
plus
one percent (1%) of the Adjusted Servicing Portfolio, and Plus
deferred
taxes arising from capitalized excess servicing fees and
capitalized
servicing rights.
"Collateral Value" means (a) with respect to any Mortgage Loan
as of
the date of determination, the lesser of (i) the amount of any Advance
made
against such Mortgage Loan under Section 2.1(c) hereof; or (ii) the
Fair
Market Value of such Mortgage Loan; or (b) in the event Pledged
Mortgages
have been exchanged for Pledged Securities, the Fair Market Value of
such
Pledged Securities; or (c) with respect to cash, the amount of such
cash.
"Debt" means, with respect to any Person, at any date (a)
all
indebtedness or other obligations of such Person which, in accordance
with
GAAP, would be included in determining total liabilities as shown
on the
liabilities side of a balance sheet of such Person at such date;
and (b)
all indebtedness or other obligations of such Person for borrowed
money or
for the deferred purchase price of property or services; provided
that for
purposes of this Agreement, there shall be excluded from Debt at any
date
loan loss reserves, Subordinated Debt not due within one year of such
date,
and deferred taxes arising from capitalized excess servicing
fees and
capitalized servicing rights.
"Fair Market Value" means at any time for a Mortgage Loan
or the
related Mortgage-backed Security (if such Mortgage Loan is to be
used to
back a Mortgage-backed Security), (a) if such Mortgage Loan or the
related
Mortgage-backed Security is covered by a Purchase Commitment, the
Committed
Purchase Price, or (b) otherwise, the market price for such Mortgage
Loan
or Mortgage-backed Security, determined by the Lender based on market
data
for similar Mortgage Loans or Mortgage-backed Securities and such
other
criteria as the Lender deems appropriate.
"Home Equity Advance" means an Advance made against a Home
Equity
Loan.
"Home Equity Loan" means an open-ended revolving line of credit
that
is a Mortgage Loan secured by either a First Mortgage or a Second
Mortgage,
which is not a High LTV Mortgage Loan.
"Nonconforming Mortgage Loan" means a Conventional Mortgage Loan
which
is not a Conforming Mortgage Loan or a Jumbo Mortgage Loan, which
has a
credit risk rating B- or better (determined using the
underwriting
standards of the Investor to which such Mortgage Loan is to be sold
under a
Purchase Commitment, provided such underwriting standards comply
with
industry standards in the sole judgment of the Lender), and
which is
underwritten and approved for purchase by an Investor prior to
funding if
its original principal amount exceeds Six Hundred Thousand
Dollars
($600,000).
"Purchase Commitment" means a written commitment, in form
and
substance satisfactory to the Lender, issued in favor of the Company
by an
Investor pursuant to which that Investor commits to purchase Mortgage
Loans
or Mortgage-backed Securities.
"Second Mortgage Loan" means a closed-end Mortgage Loan secured
by a
Second Mortgage, which is not a Title I Mortgage Loan or a High
LTV
Mortgage Loan.
5. The definitions of "Goal Line Commitment," "Goal Line
Program,"
"Long-term Repurchase Advances" and "Short-term Repurchase Advances" in
Section
1.1 of the Agreement shall be deleted in their entirety.
6. The definitions of "Warehousing Maturity Date" and "Working
Capital
Maturity Date" in Section 1.1 of the Agreement shall be amended by
inserting the
date "December 31, 1997" in place of "December 31, 1996" wherever it
appears in
such definitions.
7. Sections 2.1(b)(2), (5) and (7) of the Agreement are hereby
deleted in
their entirety and the following are substituted in lieu thereof:
(2) No Advance, other than a Repurchase Advance, shall be made
against
a Mortgage Loan which is not covered by a Purchase Commitment,
and no
Advance shall be made against a Home Equity Loan which is not
an RFC
Mortgage Loan.
(5) The aggregate amount of Second Mortgage Advances
outstanding at
any one time shall not exceed Three Million Dollars ($3,000,000).
(7) No Advance shall be made against a High LTV Mortgage Loan,
a HUD
203(K) Mortgage Loan or a Title I Mortgage Loan.
8. Section 2.1(c) of the Agreement shall be deleted in its entirety
and the
following shall be substituted in lieu thereof:
2.1(c) No Warehousing Advance shall exceed the following
amount
applicable to the type of Collateral at the time it is pledged:
(1) For a Conforming Mortgage Loan or a Jumbo Mortgage
Loan
pledged hereunder, other than an RFC Mortgage Loan, ninety-
nine
percent (99%) of the lesser of (i) the Mortgage Note Amount or
(ii)
the Weighted Average Purchase Commitment Price multiplied
by the
Mortgage Note Amount.
(2) For a Nonconforming Mortgage Loan pledged hereunder,
other
than an RFC Mortgage Loan, ninety-five percent (95%) of the
lesser of
(i) the Mortgage Note Amount or (ii) the Weighted Average
Purchase
Commitment Price multiplied by the Mortgage Note Amount.
(3) For a Second Mortgage Loan pledged hereunder, other
than an
RFC Mortgage Loan, ninety-five percent (95%) of the lesser of
(i) the
Mortgage Note Amount, or (ii) the Weighted Average Purchase
Commitment
Price multiplied by the Mortgage Note Amount.
(4) For an RFC Mortgage Loan pledged hereunder, one
hundred
percent (100%) of the lesser of (i) the Mortgage Note Amount or
(ii)
the Weighted Average Purchase Commitment Price multiplied
by the
Mortgage Note Amount.
(5) For a Rejected Mortgage Loan or a Repurchased Mortgage
Loan
pledged hereunder, ninety percent (90%) of the Mortgage Note
Amount.
9. Section 2.8(h) of the Agreement shall be deleted in its entirety
and the
following shall be substituted in lieu thereof:
2.8(h) Upon demand of the Lender and upon Notice to the Company,
after
the occurrence and during the continuation of an Event of Default,
the
unpaid amount of each Advance shall bear interest until paid in full
at a
per annum rate of interest (the "Default Rate") equal to four percent
(4%)
in excess of the rate of interest otherwise applicable to such
Advance
pursuant to any other subsection of this Section 2.8 or, if no
rate is
applicable, the highest rate then applicable to any outstanding
Advances.
10. Section 2.9(f)(12) of the Agreement shall be deleted in its
entirety
and the following shall be substituted in lieu thereof:
(12) Three hundred sixty-five (365) days elapse from the
date of
the initial Advance made by the Lender against a Repurchased
Mortgage
Loan or a Rejected Mortgage Loan.
11. Section 2.9(f) of the Agreement shall be further amended to
add the
following section immediately after Section 2.9(f)(13):
(14) For any Pledged Mortgage secured by a Second Mortgage,
one
hundred twenty (120) days elapse from the date of the initial
Advance
made by the Lender against such Pledged Mortgage or payment
of any
Lien prior to such Pledged Mortgage is delinquent, and
remains
delinquent for a period of sixty (60) days or more.
12. Section 2.9(h)(3) of the Agreement shall be deleted in its
entirety and
the following shall be substituted in lieu thereof:
(3) On the fifteenth (15) day of each month occurring more
than
sixty (60) days after the date a Repurchase Advance is made,
unless
the Repurchased Mortgage Loan or the Rejected Mortgage Loan
against
which such Repurchase Advance was made is included in an
Eligible
Mortgage Pool, the Company shall reduce the outstanding
Advance
against such Mortgage Loan by five percent (5%) of the original
face
amount of the Mortgage Note evidencing such Repurchased Mortgage
Loan
or the Rejected Mortgage Loan.
13. Section 2.16 of the Agreement shall be deleted in its entirety
and the
following shall be substituted in lieu thereof:
2.16 Miscellaneous Charges. The Company agrees to reimburse the
Lender
for miscellaneous charges and expenses (collectively,
"Miscellaneous
Charges") incurred by or on behalf of the Lender in connection
with the
handling and administration of Advances, and to reimburse the
Lender for
Miscellaneous Charges incurred by or on behalf of the Lender in
connection
with the handling and administration of the Collateral. For the
purposes
hereof, Miscellaneous Charges shall include, but not be limited to,
charges
for wire transfers, check processing charges, charges for security
delivery
fees, charges for overnight delivery of Collateral to Investors,
Funding
Bank's service charges and Designated Bank's service charges.
Miscellaneous
Charges are due when incurred, but shall not be delinquent if paid
within
fifteen (15) days after receipt of an invoice or an account
analysis
statement from the Lender.
14. Section 7.9 of the Agreement shall be deleted in its entirety
and the
following shall be substituted in lieu thereof:
7.9 Minimum Adjusted Tangible Net Worth. Permit Adjusted
Tangible Net
Worth of the Company (and its Subsidiaries, on a consolidated basis)
at any
time to be less than Three Million Five Hundred Thousand
Dollars
($3,500,000).
15. The Lender hereby agrees to waive its default rights with
respect to
the failure of the Company to comply with the Minimum Adjusted Tangible
Net
Worth requirement of the Agreement as of August 31, 1996, and each
date
thereafter through but excluding the Effective Date. This waiver applies
only to
the specific instance described herein. It is not a waiver of any
subsequent
breach of the same provision of the Agreement, nor is it a waiver of any
breach
of any other provision of the Agreement. Notwithstanding the foregoing,
the
Lender reserves all of the rights, powers and remedies presently
available to
the Lender under the Agreement, the Notes and the Guaranties, including
the
right to cease making Advances to the Company and the right to accelerate
any of
the indebtedness owing under the Agreement, if any other default occurs
under
the Agreement.
16. The Sublimit Promissory Note is amended and restated in its
entirety as
set forth in the Second Amended and Restated Sublimit Promissory Note,
in the
form of Exhibit A-2 attached to this Amendment. All references in this
Amendment
and in the Agreement to the Sublimit Promissory Note shall be deemed to
refer to
the Second Amended and Restated Sublimit Promissory Note delivered in
connection
with this Amendment.
17. Exhibits C-SF, D-REP and D-SF to the Agreement are hereby
deleted in
their entirety and replaced with the new Exhibits C-SF, D-REP and D-SF
attached
to this Amendment. All references in the Agreement to Exhibits C-SF, D-
REP and
D-SF shall be deemed to refer to the new Exhibits C-SF, D-REP and D-SF.
18. Exhibit I-SF to the Agreement is deleted in its entirety and
replaced
with the new Exhibit I-SF attached to this Amendment. All references in
this
Amendment and the Agreement to Exhibit I-SF shall be deemed to refer to
the new
Exhibit I-SF.
19. The Company shall deliver to the Lender (a) an executed
original of
this Amendment; (b) an executed original of the Second Amended and
Restated
Sublimit Promissory Note; (c) an executed Certificate of Secretary
with
corporate resolutions; (d) a current certified tax, lien and judgment
search of
the appropriate public records for the Company and the Guarantor,
including a
search of Uniform Commercial Code financing statements, which search
shall not
have disclosed the existence of any prior Lien on the Collateral other
than in
favor of the Lender or as permitted hereunder; (e) current Certificates of
Good
Standing of the Company; (f) current insurance information; and (g)
a Two
Hundred Fifty Dollar($250) document production fee.
20. The Company represents, warrants and agrees that (a) there
exists no
Default or Event of Default under the Loan Documents, (b) the Loan
Documents
continue to be the legal, valid and binding agreements and obligations
of the
Company enforceable in accordance with their terms, as modified herein,
(c) the
Lender is not in default under any of the Loan Documents and the Company
has no
offset or defense to its performance or obligations under any of the
Loan
Documents, (d) the representations contained in the Loan Documents remain
true
and accurate in all respects, and (e) there has been no material adverse
change
in the financial condition of the Company from the date of the Agreement
to the
date of this Amendment.
21. Except as hereby expressly modified, the Agreement shall
otherwise be
unchanged and shall remain in full force and effect, and the Company
ratifies
and reaffirms all of its obligations thereunder.
22. This Amendment may be executed in any number of counterparts and
by the
different parties hereto on separate counterparts, each of which
when so
executed and delivered shall be an original, but all of which shall
together
constitute one and the same instrument.
IN WITNESS WHEREOF, the Company and the Lender have caused this
Amendment
to be duly executed on their behalf by their duly authorized officers as
of the
day and year above written.
MONUMENT MORTGAGE, INC.,
a California corporation
By:
-------------------------------------------
Its: Senior Vice President/CFO
RESIDENTIAL FUNDING CORPORATION,
a Delaware corporation
By:
-------------------------------------------
- -
D. GRAHAM SHIPMAN
Its: Director
STATE OF California )
) ss
COUNTY OF Contra Costa )
On December 30, 1996, before me, a Notary Public, personally appeared
Paul
Garrigues, the Senior Vice President/CFO of MONUMENT MORTGAGE,
INC., a
California corporation, personally known to me (or proved to me on the
basis of
satisfactory evidence) to be the person whose name is subscribed to the
within
instrument and acknowledged to me that he/she executed the same in
his/her
authorized capacity, and that by his/her signature on the instrument the
person,
or the entity upon behalf of which the person acted, executed the
instrument.
WITNESS my hand and official seal.
-----------------------------------
- ---
Notary Public
My Commission
Expires:________________
(SEAL)
STATE OF California )
) ss
COUNTY OF Contra Costa )
On January 8, 1997, before me, a Notary Public, personally
appeared D.
Graham Shipman, the Director of RESIDENTIAL FUNDING CORPORATION, a
California
corporation, personally known to me (or proved to me on the
basis of
satisfactory evidence) to be the person whose name is subscribed to the
within
instrument and acknowledged to me that he/she executed the same in
his/her
authorized capacity, and that by his/her signature on the instrument the
person,
or the entity upon behalf of which the person acted, executed the
instrument.
WITNESS my hand and official seal.
-----------------------------------
- ---
Notary Public
My Commission
Expires:________________
(SEAL)
<PAGE>
CONSENT OF GUARANTORS
The undersigned, being the Guarantors under their respective Guaranty
dated
as of March 22, 1996, hereby consent to the foregoing Amendment
and the
transactions contemplated thereby and hereby modify and reaffirm
their
obligations under their respective Guaranty so as to include within the
term
"Guaranteed Debt" the indebtedness, obligations and liabilities of the
Company
under this Amendment and the Notes. The Guarantors hereby reaffirm that
their
obligations under their respective Guaranty are separate and distinct
from the
Company's obligations to Lender, and that their obligations under
their
respective Guaranty are in full force and effect, and each hereby
waives and
agrees not to assert any anti-deficiency protections or other rights
as a
defense to their obligations under their respective Guaranty, all as more
fully
set forth in each Guaranty, the terms of each of which are incorporated
herein
as if fully set forth herein.
Each Guarantor further agrees, upon Lender's request, to execute
for the
benefit of Lender an additional guaranty in form and content
acceptable to
Lender and conforming to their respective Guaranty in connection
with the
foregoing Amendment.
This Consent of Guarantors may be executed in any number of
counterparts,
and by the parties hereto in separate counterparts, each of which,
when so
executed, shall be an original, but all such counterparts shall
together
constitute one and the same instrument.
GUARANTORS:
----------------------------------------
JAMES W. NOACK
---------------------------------------
JAMES A. UMPHRYES
STATE OF California )
) ss
COUNTY OF Contra Costa )
On December 30, 1996, before me, a Notary Public, personally appeared
JAMES
W. NOACK, personally known to me (or proved to me on the basis of
satisfactory
evidence) to be the person whose name is subscribed to the within
instrument and
acknowledged to me that he/she executed the same in his/her authorized
capacity,
and that by his/her signature on the instrument the person, or the entity
upon
behalf of which the person acted, executed the instrument.
WITNESS my hand and official seal.
----------------------------------------
Notary Public
My Commission Expires:__________________
(SEAL)
STATE OF California )
) ss
COUNTY OF Contra Costa )
On December 30, 1996, before me, a Notary Public, personally appeared
JAMES
A. UMPHRYES, personally known to me (or proved to me on the
basis of
satisfactory evidence) to be the person whose name is subscribed to the
within
instrument and acknowledged to me that he/she executed the same in
his/her
authorized capacity, and that by his/her signature on the instrument the
person,
or the entity upon behalf of which the person acted, executed the
instrument.
WITNESS my hand and official seal.
----------------------------------------
- --
Notary Public
My Commission
Expires:____________________
(SEAL)
<PAGE>
EXHIBIT A-2
SECOND AMENDED AND RESTATED SUBLIMIT PROMISSORY NOTE
$10,000,000 Date: December 12,
1996
FOR VALUE RECEIVED, the undersigned, MONUMENT MORTGAGE, INC., a
California
corporation (herein called the "Company"), hereby promises to pay to the
order
of RESIDENTIAL FUNDING CORPORATION, a Delaware corporation (the
"Lender" or,
together with its successors and assigns, the "Holder") whose principal
place of
business is 8400 Normandale Lake Blvd., Suite 600, Minneapolis, Minnesota
55437,
or at such other place as the Holder may designate from time to time,
the
principal sum of Ten Million Dollars ($10,000,000) or so much thereof as
may be
outstanding from time to time pursuant to the Warehousing Credit and
Security
Agreement described below, and to pay interest on said principal sum or
such
part thereof as shall remain unpaid from time to time, from the date of
each
Advance until repaid in full, and all other fees and charges due
under the
Agreement, at the rate and at the times set forth in the Agreement. All
payments
hereunder shall be made in lawful money of the United States and in
immediately
available funds.
This Note is given to evidence an actual warehouse facility in the
above
amount and is the Sublimit Promissory Note referred to in that
certain
Warehousing Credit and Security Agreement (the "Agreement") dated
March 22,
1995, between the Company and the Lender, as the same may be
amended or
supplemented from time to time, and is entitled to the benefits
thereof.
Reference is hereby made to the Agreement (which is incorporated
herein by
reference as fully and with the same effect as if set forth herein at
length)
for a description of the Collateral, a statement of the covenants
and
agreements, a statement of the rights and remedies and securities
afforded
thereby and other matters contained therein. Capitalized terms used
herein,
unless otherwise defined herein, shall have the meanings given them
in the
Agreement.
This Note is given in replacement for, and not in satisfaction of,
that
certain First Amended and Restated Sublimit Promissory Note dated
February 29,
1996, and issued by the Company to evidence its Obligations under the
Agreement
(the "Existing Note"). All amounts owed by the Company under the Existing
Note
(including, without limitation, the unpaid principal thereunder,
interest
accrued thereon and fees accrued under the Agreement, whether or not yet
due and
owing) as of the date hereof, shall be owed hereunder.
This Note may be prepaid in whole or in part at any time without
premium or
penalty.
Should this Note be placed in the hands of attorneys for collection,
the
Company agrees to pay, in addition to principal and interest, fees and
charges
due under the Agreement, any and all costs of collecting this Note,
including
reasonable attorneys' fees and expenses.
The Company hereby waives demand, notice, protest and presentment.
This Note shall be construed and enforced in accordance with the
laws of
the State of Minnesota, without reference to its principles of conflicts of
law.
IN WITNESS WHEREOF, the Company has executed this Note as of the
day and
year first above written.
MONUMENT MORTGAGE, INC.,
a California corporation
By:
-------------------------------------
Its:
-------------------------------------
STATE OF California )
) ss
COUNTY OF Contra Costa )
On ____________________, before me, a Notary Public, personally
appeared
_____________________, the ___________________ of MONUMENT MORTGAGE,
INC., a
California corporation, personally known to me (or proved to me on the
basis of
satisfactory evidence) to be the person whose name is subscribed to the
within
instrument and acknowledged to me that he/she executed the same in
his/her
authorized capacity, and that by his/her signature on the instrument the
person,
or the entity upon behalf of which the person acted, executed the
instrument.
WITNESS my hand and official seal.
-----------------------------------------
Notary Public
My Commission Expires:___________________
(SEAL)
<PAGE>
EXHIBIT
I-SF
OFFICER'S CERTIFICATE
Reference is made to that certain Warehousing Credit and Security
Agreement
(Single Family Mortgage Loans) between MONUMENT MORTGAGE, INC., a
California
corporation (the "Company") and RESIDENTIAL FUNDING CORPORATION, a
Delaware
corporation (the "Lender"), dated as of March 22, 1995 (as the same
may be
amended, modified, supplemented, renewed or restated from time to time,
the
"Agreement"). All capitalized terms used herein and all Section numbers
given
herein refer to those terms and Sections set forth in the Agreement.
This
Officer's Certificate is submitted to the Lender pursuant to Section
6.2(c) of
the Agreement.
The undersigned hereby certifies to the Lender that as of the close of
business on , 19____ ("Statement Date",) and with respect to the Company
and its
Subsidiaries on a consolidated basis:
1. As illustrated in the attached calculations supporting this
Officer's
Certificate, the Company met the covenants set forth in Sections
7.6,
7.7, 7.8, 7.9, 7.10, 7.11 and 7.12, or if the Company did not
meet any
of such covenants, a detailed explanation is attached setting
forth
the nature and period of the existence of the Default and the
action
the Company has taken, is taking, and proposes to take with
respect
thereto.
2. No Servicing Contracts have been sold or pledged by the Company
except
as permitted under the terms of the Agreement.
3. No recourse Servicing Contracts have been acquired by the
Company.
4. No payments in advance of the scheduled maturity date have been
made
with respect to any Subordinated Debt. The Company has
incurred no
Debt required to be subordinated pursuant to Section 6.10.
5. The Company was in compliance with the applicable HUD,
GNMA or
Investor net worth requirements, and in good standing with VA,
HUD,
GNMA and each Investor.
6. I have reviewed the terms of the Agreement and have made, or
caused to
be made under my supervision, a review in reasonable detail
of the
transactions and conditions of the Company (and, if applicable,
its
Subsidiaries) and such review has not disclosed the existence,
and I
have no knowledge of the existence, of any Default or
Event of
Default, or if any Default or Event of Default existed or
exists, a
detailed explanation is attached specifying the nature and
period of
the existence of the Default and the action the Company has
taken, is
taking and proposes to take with respect thereto.
7. Pursuant to Section 6.2 of the Agreement, enclosed are the
financial
statements of the Company as of the Statement Date. The
financial
statements for the period ending on the Statement Date fairly
present
the financial condition and results of operations of the Company
(and,
if applicable, its Subsidiaries) as at the Statement Date.
Dated:
-------------------
MONUMENT MORTGAGE, INC.,
a California corporation
By:
-----------------------------------------
Its:
-----------------------------------------
<PAGE>
CERTIFICATE
OF
SECRETARY OF
MONUMENT MORTGAGE. INC.
I, the undersigned, hereby certify that I am the Secretary of
MONUMENT
MORTGAGE, INC., a California corporation (the "Company" ), and have
knowledge of
the matters contained in this Certificate and hereby certify that:
1. The Company is a corporation duly organized, validly existing
and in
good standing under the laws of the State of California
and has
complied with all certifications, filings and requirements
necessary
to continue as a corporation in the State of California and for
each
state where the Company is transacting business as a
foreign
corporation.
2. In connection with the single family revolving warehouse facility
made
to the Company by RESIDENTIAL FUNDING CORPORATION, a
Delaware
corporation (the "Lender" ) pursuant to the terms of a
Warehousing
Credit and Security Agreement dated as of March 22, 1995, as the
same
may have been amended or supplemented ( the "Agreement"), the
Company
has the valid power and authority to execute and deliver to the
Lender
the Fifth Amendment to Warehousing Credit and Security
Agreement and
the Second Amended and Restated Sublimit Promissory Note.
3. The resolutions attached to this Certificate as Exhibit A were
duly
adopted by either: (a) by unanimous written action of the
Board of
Directors of the Company; or (b) at a meeting of the
Board of
Directors of the Company held on the 9th day of Dece,ber.
1996, at
which meeting a quorum was present. I am the keeper of the Minute
Book
of the Company and said resolutions have been entered therein,
have
not been altered, amended, repealed or rescinded, and are now in
full
force and effect.
4. Any Certificates of Incumbency delivered in connection
with the
Agreement are hereby deleted in their entirety and replaced
with the
new Certificate of Incumbency attached to this
Certificate of
Secretary as Exhibit B.
5. There have been no amendments to the Articles of
Incorporation or
Bylaws of the Company since the date of the most recent
certified
copies thereof delivered to the Lender.
IN WITNESS WHEREOF, I have hereunto set my hand and the seal of
this
corporation this 30th day of December, 1996.
----------------------------------------
- -
Secretary
<PAGE>
EXHIBIT A
RESOLUTIONS OF BOARD OF DIRECTORS
WHEREAS, MONUMENT MORTGAGE INC., a California corporation (the
"Company"),
has entered into a single family revolving warehouse facility (the
"Warehousing
Commitment"), with a present commitment amount of Ten Million
Dollars
($10,000,000) (the `"Warehousing Commitment Amount"), with RESIDENTIAL
FUNDING
CORPORATION, a Delaware corporation (the "Lender"), as evidenced by a
First
Amended and Restated Warehousing Promissory Note in the principal sum
of Ten
Million Dollars ($10,000,000), dated as of February 29, 1996, a First
Amended
and Restated Sublimit Promissory Note in the principal sum of Five
Million
Dollars ($5,000,000), dated as of February 29, 1996, and by a Warehousing
Credit
and Security Agreement dated as of March 22, 1995, as the same may have
been
amended or supplemented (the "Agreement"); and
WHEREAS, the Company and the Lender have entered into a term loan
facility
with a present Term Loan Commitment Amount of One Million Dollars
($1,000,000),
as evidenced by a Term Loan Promissory Note in the principal amount
of One
Million Dollars ($1,000,000), dated as of March 22, 1995, and the
Agreement;
WHEREAS, the Company and the Lender have also entered into a
working
capital facility with a present Working Capital Commitment Amount of One
Million
Dollars ($1,000,000) (the "Working Capital Commitment"), as evidenced by a
First
Amended and Restated Working Capital Promissory Note in the principal sum
of One
Million Dollars ($1,000,000), dated as of February 29, 1996, and the
Agreement;
WHEREAS, the Company proposes to extend the period for which
the
Warehousing Commitment and the Working Capital Commitment under the
Agreement
have been made and to amend certain other terms of the Agreement; and
WHEREAS, to evidence such extension and amendment, the Company
proposes to
execute and deliver a Fifth Amendment to Warehousing Credit and
Security
Agreement (the "Amendment"), and a Second Amended and Restated
Sublimit
Promissory Note ("Amended Note"), copies of which have been presented
to the
Board of Directors of this Company; and
WHEREAS, the Board of Directors of this Company has determined that it
will
be in the best interests of this Company for the Company to extend
the
Warehousing Commitment and the Working Capital Commitment and to amend
certain
terms of the Agreement.
WHEREAS, the Board of Directors of the Company has determined that it
will
be in the best interests of the Company to restate the authority of
certain
officers and employees to execute and deliver documents in connection
with the
Loan.
RESOLVED, that these resolutions are enacted by the Board of
Directors of
this Company on its behalf and on behalf of the Company.
FURTHER RESOLVED, that the Company shall extend the Warehousing
Commitment
and Working Capital Commitment and to amend the Agreement to be evidenced
by the
Amendment and the Amended Note.
FURTHER RESOLVED, that the Amendment and Amended Note in the
forms
presented to the Board of Directors of this Company are hereby
approved and
copies thereof are Pled records of this Company with these Resolutions.
FURTHER RESOLVED, that any one (insert minimum number required to
sign) of
the following titles or positions of officers of the Company: President,
Vice
President, Executive Vice President, Secretary, Assistant Vice President,
Senior
Vice President (list titles/positions of officers authorized, do not
list
individual names), shall be and are authorized, empowered and directed
in the
name of and on behalf of this Company, to execute, acknowledge and
deliver the
Amendment and the Amended Note in the forms approved by the Board of
Directors
of this Company as aforesaid, with such changes therein as may be
acceptable to
such officers, as conclusively evidenced by their execution thereof.
FURTHER RESOLVED, that any one (insert minimum number required to
sign) of
the following titles or positions of officers and employees of the
Company:
President, Executive Vice President, Senior Vice President, Assistant
Vice
President, Secretary, Assistant Seccretary, or Vice President
(list
titles/positions of officers and employees authorized, do not list
individual
names), shall be and are authorized, empowered and directed in the name
of and
on behalf of the Company, to execute, acknowledge and deliver any bailee
pledge
agreements, advance requests, shipping requests, wire transfer
instructions,
assignments, security delivery instructions and trust receipts and to
endorse
notes in the name of the Company, in any form prescribed by the Lender.
FURTHER RESOLVED, that such officers and employees shall be and are
hereby
authorized, empowered and directed to do and perform each and every
act and
execute any and all documents and instruments in the name of this Company
as may
be necessary or desirable to enable this Company to amend the Commitment
and to
carry out the purport and intent of the foregoing Resolutions.
<PAGE>
EXHIBIT "B"
CERTIFICATE AS TO INCUMBENCY
TO: RESIDENTIAL FUNDING CORPORATION
I hereby certify to you that I am the duly elected and qualified
Secretary
of MONUMENT MORTGAGE, INC., a California corporation ("Company") and
that, as
such, I am authorized to execute this Certificate on behalf of the
Company. I
further certify that the persons named below are duly elected,
qualified and
acting officers of the Company, holding on the date hereof the respective
titles
set forth opposite their respective names, and that the respective
signatures
get forth opposite their names are their true and genuine signatures:
Name Title Signature
James A. Umphryes Executive Vice Pres. ----------------------
- ----
James W. Noack President ----------------------
- ----
Paul Garrigues Chief Financial Officer ----------------------
- ----
Sr. Vice Pres.
Lee Decker Sr. Vice Pres. ----------------------
- ----
Jenny Pusich Secretary ----------------------
- ----
Jill Lewis Asst. Sec. ----------------------
- ----
Regina E. Kimura Asst. Sec. ----------------------
- ----
Phyllis E. Bogart Asst. Sec. ----------------------
- ----
Katey Carroll Vice President ----------------------
- ----
Elly Little Asst. Sec. ----------------------
- ----
Jennifer Aldrete Vice President ----------------------
- ----
This Certificate replaces any existing Certificates of Incumbency.
You may
conclusively rely on this Certificate until formally advised by a
like
Certificate of any changes herein.
IN WITNESS WHEREOF, I have hereunto executed this Certificate on this
30th
day of December, 1996.
-------------------------------------
- -
Secretary
<PAGE>
SECOND AMENDED AND RESTATED SUBLIMIT PROMISSORY NOTE
$10,000,000 Date: December 12,
1996
FOR VALUE RECEIVED, the undersigned, MONUMENT MORTGAGE, INC., a
California
corporation (herein called the "Company"), hereby promises to pay to the
order
of RESIDENTIAL FUNDING CORPORATION, a Delaware corporation (the
"Lender" or,
together with its successors and assigns, the "Holder") whose principal
place of
business is 8400 Normandale Lake Blvd., Suite 600, Minneapolis, Minnesota
55437,
or at such other place as the Holder may designate from time to time,
the
principal sum of Ten Million Dollars ($10,000,000) or so much thereof as
may be
outstanding from time to time pursuant to the Warehousing Credit and
Security
Agreement described below, and to pay interest on said principal sum or
such
part thereof as shall remain unpaid from time to time, from the date of
each
Advance until repaid in full, and all other fees and charges due
under the
Agreement, at the rate and at the times set forth in the Agreement. All
payments
hereunder shall be made in lawful money of the United States and in
immediately
available funds.
This Note is given to evidence an actual warehouse facility in the
above
amount and is the Sublimit Promissory Note referred to in that
certain
Warehousing Credit and Security Agreement (the "Agreement") dated
March 22,
1995, between the Company and the Lender, as the same may be
amended or
supplemented from time to time, and is entitled to the benefits
thereof.
Reference is hereby made to the Agreement (which is incorporated
herein by
reference as fully and with the same effect as if set forth herein at
length)
for a description of the Collateral, a statement of the covenants
and
agreements, a statement of the rights and remedies and securities
afforded
thereby and other matters contained therein. Capitalized terms used
herein,
unless otherwise defined herein, shall have the meanings given them
in the
Agreement.
This Note is given in replacement for, and not in satisfaction of,
that
certain First Amended and Restated Sublimit Promissory Note dated
February 29,
1996, and issued by the Company to evidence its Obligations under the
Agreement
(the "Existing Note"). All amounts owed by the Company under the Existing
Note
(including, without limitation, the unpaid principal thereunder,
interest
accrued thereon and fees accrued under the Agreement, whether or not yet
due and
owing) as of the date hereof, shall be owed hereunder.
This Note may be prepaid in whole or in part at any time without
premium or
penalty.
Should this Note be placed in the hands of attorney. for collection,
the
Company agrees to pay, in addition to principal and interest, fees and
charges
due under the Agreement, any and all costs of collecting this Note,
including
reasonable attorneys' fees and expenses.
The Company hereby waives demand, notice, protest and presentment.
This Note shall be construed and enforced in accordance with the
laws of
the State of Minnesota, without reference to its principles of conflicts of
law.
IN WITNESS WHEREOF, the Company has executed this Note as of the
day and
year first above written.
MONUMENT MORTGAGE, INC.,
a California corporation
By:
----------------------------------------
- -
Its: Senior VP / CFO
STATE OF California )
) ss
COUNTY OF Contra Costa )
On December 30, 1996, before me, a Notary Public, personally appeared
Paul
Garrigues, the CFO-SVP of MONUMENT MORTGAGE, INC., a California
corporation,
personally known to me (or proved to me on the basis of satisfactory
evidence)
to be the person whose name is subscribed to the within instrument
and
acknowledged to me that he/she executed the same in his/her authorized
capacity,
and that by his/her signature on the instrument the person, or the entity
upon
behalf of which the person acted, executed the instrument.
WITNESS my hand and official seal.
----------------------------------------
- -
Notary Public
My Commission
Expires:___________________
(SEAL)
SIXTH AMENDMENT TO
WAREHOUSING CREDIT AND SECURITY AGREEMENT
THIS SIXTH AMENDMENT TO WAREHOUSING CREDIT AND SECURITY AGREEMENT
(this
"Amendment") is entered into as of this 23rd day of July 1997, by and
between
MONUMENT MORTGAGE, INC., a California corporation (the "Company")
and
RESIDENTIAL FUNDING CORPORATION, a Delaware corporation (the "Lender").
WHEREAS, the Company and the Lender have entered into a single
family
revolving warehouse facility with a present Warehousing Commitment Amount
of Ten
Million Dollars ($10,000,000), to finance the origination and
acquisition of
Mortgage Loans as evidenced by a First Amended and Restated
Warehousing
Promissory Note in the principal sum of Ten Million Dollars ($10,000,000),
dated
as of February 29, 1996, a First Amended and Restated Sublimit Promissory
Note
in the principal sum of Five Million Dollars ($5,000,000),. dated as of
February
29, 1996, and by a Warehousing Credit and Security Agreement dated as of
March
22, 1995, as the same may have been amended or supplemented (the
"Agreement");
WHEREAS, the Company and the Lender have entered into a term loan
facility,
as evidenced by a Term Loan Promissory Note in the principal amount
of One
Million Dollars ($1,000,000), dated as of March 22, 1995 (the "Term Loan
Note"),
and the Agreement;
WHEREAS, the Company and the Lender have also entered into a
working
capital facility with a present Working Capital Commitment Amount of One
Million
Dollars ($1,000,000), as evidenced by a First Amended and Restated
Working
Capital Promissory Note in the principal sum of One Million
Dollars
($1,000,000), dated as of February 29, 1996 (the "Working Capital Note"),
and
the Agreement (the Warehousing Promissory Note, the Sublimit Promissory
Note,
the Term Loan Promissory Note and the Working Capital Promissory Note
shall
collectively be referred to as the "Notes");
WHEREAS, the Company has requested the Lender to waive certain
covenant
defaults under the Agreement and to amend certain other terms of the
Agreement,
and the Lender has agreed to such waivers and amendment of the Agreement
subject
to the terms and conditions of this Amendment;
NOW, THEREFORE, for and in consideration of the foregoing and of the
mutual
covenants, agreements and conditions hereinafter set forth and for other
good
and valuable consideration, the receipt and sufficiency of which are
hereby
acknowledged, the parties hereto hereby agree as follows:
1. All capitalized terms used herein and not otherwise defined shall
have
their respective meanings set forth in the agreement.
2. The effective date ("Effective Date") of this Amendment shall be
April
30, 1997, provided the Company has complied with all the terms and
conditions of
this Amendment.
3. Section 1.1 of the Agreement shall be amended by adding the
following
definition:
"Parent" shall mean Finet Holdings Corporation, a Delaware
corporation.
4. The definitions of "Warehousing Maturity Date" and "Working
Capital
Maturity Date" in Section 1.1 of the Agreement shall be amended by
inserting the
date "August 31, 1997" in place of "December 31, 1997" wherever it
appears in
such definitions.
5. Section 7.10 of the Agreement shall be deleted in its entirety
and the
following shall be substituted in lieu thereof:
7.10 Minimum Servicing Portfolio. Permit the Adjusted Servicing
Portfolio of the Company to be less than One Million Dollars
($100,000,000).
6. Section 8.1(n) of the Agreement shall be deleted in its entirety
and the
following shall be substituted in lieu thereof:
8.1(n) The Parent shall cease owning, directly or indirectly, all
of the
capital stock of the Company; or
7. On December 31, 1996, the Company merged with Finet
Corporation, a
wholly-owned subsidiary of Finet Holdings Corporation. This merger
violated
Section 7.3 of the Agreement, and thus constituted an Event of Default
under
Section 8.1(c) of the Agreement. In connection with that merger, James W.
Noack
and James A. Umphryes ceased owning, directly or indirectly, all of the
capital
stock of the Company. Accordingly, upon the occurrence of such merger an
Event
of Default also occurred under Section 8.1(n) of the Agreement. The
Lender
hereby agrees to waive its default rights with respect to the Company's
failure
to comply with the requirements of Section 7.3 and 8.1(c) of the
Agreement. In
addition, the Lender also agrees to waive its default rights with respect
to the
failure of the Company to comply with the following requirements
of the
Agreement:
a. The Minimum Tangible Net Worth requirement in Section 7.8
of the
Agreement for the period from January 31, 1997 to and including
April
30, 1997.
b. The Minimum Adjusted Tangible Net Worth requirement in
Section 7.9
of the Agreement for the period from January 31, 1997 to and
including
April 30, 1997.
c. The Minimum Servicing Portfolio requirement in Section 7.10
of the
Agreement for the period from January 31, 1997, to and
including the
Effective Date hereof.
The above waivers apply only to the specific instances described herein.
Nothing
in this Amendment shall constitute a waiver of any subsequent breach
of the
provisions of the Agreement described above, or a waiver of any breach
of any
other provision of the Agreement. The Lender reserves all of the rights,
powers
and remedies presently available to the Lender under the Agreement, the
Notes
and the Guaranties, including the right to cease making Advances to the
Company
and the right to accelerate any of the indebtedness owing under the
Agreement,
if any other default occurs under the Agreement.
8. Please be advised that unless the Agreement is renewed or extended,
all
Obligations shall be due and payable on the Maturity Date. The Lender's
waiver
of certain Defaults under the Agreement is not to be construed as a
promise of
renewal or extension.
9. Upon the Effective Date, each of the Guaranties of JAMES W.
NOACK and
JAMES A. UMPHYRES, dated March 22, 1995, shall be released and of no
further
force and effect and the Guarantors shall have no further liability
thereunder.
10. Exhibit I-SF to the Agreement is deleted in its entirety and
replaced
with the new Exhibit I-SF attached to this Amendment. All references in
this
Amendment and the Agreement to Exhibit I-SF shall be deemed to refer to
the new
Exhibit I-SF.
11. The Company shall deliver to the Lender (a) an executed
original of
this Amendment; (b) the executed Guaranty in the form of Exhibit B
hereto,
executed by the parent; (c) an executed Certificate of Secretary of the
Parent
with copies of its articles of incorporation, bylaws and good
standing
certificates, an incumbency certificate and corporate resolutions;
(d) an
executed Certificate of Secretary with corporate resolutions; and (e)
a One
Thousand Five Hundred Dollar ($1,500) document production fee.
12. The Company represents, warrants and agrees that (a) there
exists no
Default or Event of Default under the Loan Documents, except as
specified in
this Amendment; (b) the Loan Documents continue to be the legal,
valid and
binding agreements and obligations of the Company enforceable in accordance
with
their terms, as modified herein, (c) the Lender is not in default under
any of
the Loan Documents and the Company has no offset or defense to its
performance
or obligations under any of the Loan Documents, (d) the
representations
contained in the Loan Documents remain true and accurate in all respects,
and
(e) there has been no material adverse change in the financial condition
of the
Company from the date of the Agreement to the date of this Amendment.
13. Except as hereby expressly modified, the Agreement shall
otherwise be
unchanged and shall remain in full force and effect, and the Company
ratifies
and reaffirms all of its obligations thereunder.
14. This Amendment may be executed in any nurturer of counterparts
and by
the different parties hereto on separate counterparts, each of which
when so
executed and delivered shall be an original, but all of which shall
together
constitute one and the same instrument.
IN WITNESS WHEREOF, the Company and the Lender have caused this
Amendment
to be duly executed on their behalf by their duly authorized officers as
of the
day and year above written.
MONUMENT MORTGAGE, INC.,
a California corporation
By:
Its: Senior Vice President/CFO
RESIDENTIAL FUNDING CORPORATION,
a Delaware corporation
By:
Its:
STATE OF California )
) ss
COUNTY OF Contra Costa )
On August 14, 1997, before me, a Notary Public, personally
appeared
Paul Garrigues, the Senior Vice President/CFO of MONUMENT MORTGAGE,
INC., a
California corporation, personally known to me (or proved to me on the
basis of
satisfactory evidence) to be the person whose name is subscribed to the
within
instrument and acknowledged to me that he/she executed the same in
his/her
authorized capacity, and that by his/her signature on the instrument the
person,
or the entity upon behalf of which the person acted, executed the
instrument.
WITNESS my hand and official seal.
Notary Public
My Commission Expires:
(SEAL)
STATE OF California )
) ss
COUNTY OF Contra Costa )
On , before me, a Notary Public, personally appeared , the
Director of
RESIDENTIAL FUNDING CORPORATION, a California corporation, personally
known to
me (or proved to me on the basis of satisfactory evidence) to be the
person
whose name is subscribed to the within instrument and acknowledged to me
that
he/she executed the same in his/her authorized capacity, and that by
his/her
signature on the instrument the person, or the entity upon behalf of
which the
person acted, executed the instrument.
WITNESS my hand and official seal.
Notary Public
My Commission Expires:
(SEAL)
<PAGE>
EXHIBIT I-SF
OFFICER'S CERTIFICATE
Reference is made to that certain Warehousing Credit and Security
Agreement
(Single Family Mortgage Loans) between MONUMENT MORTGAGE, INC., a
California
corporation (the "Company"), and RESIDENTIAL FUNDING CORPORATION, a
Delaware
corporation (the "Lender"), dated as of March 22, 1995 (as the same
may be
amended, modified, supplemented, renewed or restated from time to time,
the
"Agreement"). All capitalized terms used herein and all Section numbers
given
herein refer to those terms and Sections set forth in the Agreement.
This
Officer's Certificate is submitted to the Lender pursuant to Section
6.2(c) of
the Agreement.
The undersigned hereby certifies to the Lender that as of the
close of
business on , 19____ ("Statement Date",) and with respect to the Company
and its
Subsidiaries on a consolidated basis:
1. As illustrated in the attached calculations supporting this
Officer's
Certificate, the Company met the covenants set forth in Sections 7.6,
7.7,
7.8, 7.9, 7.10, 7.11 and 7.12, or if the Company did not meet any of
such
covenants, a detailed explanation is attached setting forth the
nature and
period of the existence of the Default and the action the Company
has
taken, is taking, and proposes to take with respect thereto.
2. No Servicing Contracts have been sold or pledged by the Company
except as
permitted under the terms of the Agreement.
3. No recourse Servicing Contracts have been acquired by the Company.
4. No payments in advance of the scheduled maturity date have been made
with
respect to any Subordinated Debt. The Company has incurred no Debt
required
to be subordinated pursuant to Section 6.10.
5. The Company was in compliance with the applicable HUD, GNMA or
Investor net
worth requirements, and in good standing with VA, HUD, GNMA and
each
Investor.
6. I have reviewed the terms of the Agreement and have made, or caused
to be
made under my supervision, a review in reasonable detail of
the
transactions and conditions of the Company (and, if applicable,
its
Subsidiaries) and such review has not disclosed the existence, and I
have
no knowledge of the existence, of any Default or Event of Default,
or if
any Default or Event of Default existed or exists, a detailed
explanation
is attached specifying the nature and period of the ex:istence
of the
Default and the action the Company has taken, is taking and
proposes to
take with respect thereto.
7. Pursuant to Section 6.2 of the Agreement, enclosed are the
financial
statements of the Company as of the Statement Date. The
financial
statements for the period ending on the Statement Date fairly
Present the
financial condition and results of operations of the Company
(and, if
applicable, its Subsidiaries) as at the Statement Date.
Dated:
MONUMENT MORTGAGE, INC.,
a California corporation
By:
Its:
<PAGE>
CALCULATIONS SUPPORTING OFFICER'S CERTIFICATE
Company Name: MONUMENT MORTGAGE, INC. and its Subsidiaries
Statement Date:
All financial calculations set forth herein are as of the Statement Date.
I. TANGIBLE NET WORTH
A. Tangible Net Worth of the Company is:
Excess of total assets over total liabilities:
$________________
Plus: Loan loss reserves:
$________________
Plus: Subordinated Debt not due within
one year of the Statement Date
(or any portion thereof):
$________________
Minus: Advances to owners, officers or
Affiliates:
$________________
Minus: Investments in Affiliates:
$________________
Minus: Assets pledged to secure liabilities
not included in Debt:
$________________
Minus: Intangible assets:
$________________
Minus: Any other HUD nonacceptable assets:
$________________
Minus: Other assets unacceptable to the
Lender:
$________________
TANGIBLE NET WORTH
$___________________
B. Requirements of Section 7.8 of the Agreement:
MINIMUM TANGIBLE NET WORTH OF $1,500,000.
C. Covenant Satisfied:________ Covenant Not Satisfied:_________
II. ADJUSTED TANGIBLE NET WORTH
A. Adjusted Tangible Net Worth of the Company is:
Tangible Net Worth (from IA above)
$_______________
Minus: Capitalized excess servicing fees
$_______________
Minus: Capitalized excess servicing rights
$_______________
Plus: Deferred taxes arising from
capitalized excess servicing fees:
$_______________
Plus: 1% of Adjusted Servicing Portfolio
(from IIIA below):
$_______________
ADJUSTED TANGIBLE NET WORTH
$____________________
B. Requirements of Section 7.9 of the Agreement:
MINIMUM ADJUSTED TANGIBLE NET WORTH OF $4,500,000.
C. Covenant Satisfied:______ Covenant Not Satisfied:______
III. ADJUSTED SERVICING PORTFOLIO
A. Adjusted Servicing Portfolio of the Company is:
Servicing Portfolio owned by the Company is:
$_______________
Minus: The unpaid principal balance of
Mortgage Loans:
$_______________
Past due 60 days or more:
$_______________
Sold with recourse:
$_______________
For which the Servicing Contracts
are pledged:
$_______________
Serviced by Company for others under
subservicing arrangements:
$_______________
ADJUSTED SERVICING PORTFOLIO
$____________________
B. Requirements of Section 7.10 of the Agreement:
ADJUSTED SERVICING PORTFOLIO OF $250,000,000.
C. Covenant Satisfied:______ Covenant Not Satisfied:______
IV. DEBT OF THE COMPANY
Total liabilities
$_______________
Minus: Loan loss reserves:
$_______________
Minus: Subordinated Debt not due within one year
of the Statement Date (or any portion
thereof):
$_______________
Minus: Deferred taxes arising from
capitalized excess servicing fees:
$_______________
DEBT
$____________________
V. RATIO OF DEBT TO ADJUSTED TANGIBLE NET WORTH
A. The ratio of Debt to Adjusted Tangible Net Worth (IV to
II.A) is: _____ to 1
B. Requirements of Section 7.7 of the Agreement:
The ratio of Debt to Adjusted Tangible Net Worth shall not
exceed 15
to 1.
C. Covenant Satisfied:_____ Covenant Not Satisfied:______
VI. DIVIDENDS
A. The dividends declared or paid by the Company during the
current
fiscal year was:
$________________
B. Requirements of Section 7.11 of the Agreement:
No dividends shall be declared or paid in excess of twenty-five
percent (25%) of the Company's net after-tax income.
C. Covenant Satisfied:______ Covenant Not Satisfied:______
VII. CURRENT RATIO OF THE COMPANY
A. Consolidated current assets of the Company:
$________________
B. Consolidated current liabilities of the Company:
$________________
C. Consolidated current ratio (VII.A to VII.B) is: ____ to 1.0
D. Requirements of Section 7.6 of the Agreement:
The ratio of consolidated current assets to consolidated
current
liabilities shall not be less than 1.01 to 1.
E. Covenant Satisfied:_____ Covenant Not Satisfied:_____
VIII. TRANSACTIONS WITH AFFILIATES
A. Loans, advances, and extensions of credit made by the Company
to its
Affiliates total:
$________________
B. Capital contributions made by the Company to its Affiliates
total:
$________________
C. Management fees paid to Affiliates during the current
fiscal year total:
$________________
D. Requirements of Section 7.12 of the Agreement:
1. No loans, advances or extensions of credit shall be made by
the Company to Affiliates.
Covenant Satisfied:_____ Covenant Not Satisfied:_____
2. No capital contributions shall be made by the Company to any
Affiliate.
Covenant Satisfied:_____ Covenant Not Satisfied:_____
3. No Management fees shall be paid by the Company to
Affiliates.
Covenant Satisfied:_____ Covenant Not Satisfied:_____
<PAGE>
EXHIBIT B
GUARANTY
THIS GUARANTY, made and entered into as of this 23rd day of July,
1997, by
FILET HOLDINGS CORPORATION, a Delaware corporation (the
"Guarantor"), to
RESIDENTIAL FUNDING CORPORATION, a Delaware corporation (the "Lender"),
having
its principal office at 8400 Normandale Lake Blvd., Suite 600,
Minneapolis,
Minnesota 55437. RECITALS
A. The Lender has extended to MONUMENT MORTGAGE, INC., a
California
corporation ("Company"): (a) a warehouse line of credit in the
present
principal amount of Ten Million Dollars ($10,000,000); (b) a term
loan
facility in the original principal amount of One Million
Dollars
($1,000,000); and (c) a working capital facility in the
present
principal amount of One Million Dollars ($1,000,000)
(collectively,
the "Loan") to finance the making and purchasing of Mortgage
Loans.
B. The Loan is evidenced by a First Amended and Restated
Warehousing
Promissory Note dated February 29, 1996, a First Amended and
Sublimit
Promissory Note dated February 29, 1996, a Term Loan Promissory
Note
dated March 22, 1995, and a Working Capital Promissory Note
dated
February 29, 1996, from the Company to the Lender, as the same
may be
amended, supplemented or otherwise modified from time to
time,
including any other instruments executed and delivered in
renewal,
extension, rearrangement or otherwise in replacement of
such
Promissory Notes (collectively, the "Notes") and by a
Warehousing
Credit and Security Agreement dated March 22, 1995, as the same
may be
amended, supplemented or otherwise modified from time to
time,
including any other instruments executed and delivered in
renewal,
extension, rearrangement or otherwise in replacement of such
agreement
(the "Agreement").
C. The Guarantor is the Parent of the Company and will derive
benefit
from the Loan.
D. In order to educe the Lender to accept the Notes and the
Agreement,
and as additional security for Advances under the Agreement,
the
Guarantor has agreed to give this Guaranty.
E. The Lender has refused to make Advances under the Agreement
unless
this Guaranty is executed by the Guarantor and delivered to
Lender.
[MISSING PAGES 2 AND 3]
and/or the subordination of the payment of the Guaranteed Debt or
any
part thereof to the payment of any other debts or claims which
may at
any time be due and owing to the Lender and/or any other Person;
or
(h) any other action or circumstance which (with or without
notice to
or knowledge of the Guarantor) may or might in any manner or
to any
extent vary the risks of the Guarantor hereunder or
otherwise
constitute a legal or equitable discharge or defense, it
being
understood and agreed by the Guarantor that the obligations under
this
Guaranty shall not be discharged except by the full payment
and
performance of the Guaranteed Debt.
8. The Lender shall have the right to determine how, when and
what
application of payments and credits, if any, whether derived from the
Company or
from any other source, shall be made on the Guaranteed Debt and any
other
indebtedness owed by the Company and/or any other Obligor to the Lender.
The
Lender shall be under no obligation to marshal any assets in favor
of the
Guarantor or in payment of all or any part of the Guaranteed Debt.
9. The obligations of the Guarantor hereunder shall continue
to be
effective, or be automatically reinstated, as the case may be, if at any
time
the performance or the payment, as the case may be, in whole or in part,
of any
of the Guaranteed Debt is rescinded or must otherwise be restored or
returned by
the Lender (as a preference, fraudulent conveyance or otherwise)
upon the
insolvency, bankruptcy, dissolution, liquidation or reorganization of
the
Company, the Guarantor or any other person or upon or as a result
of the
appointment of a custodian, receiver, trustee or other officer with
similar
powers with respect to the Company, the Guarantor or any other person,
or any
substantial part of its property, or otherwise, all as though such
payments had
not been made. If an Event of Default shall at any time have occurred
and be
continuing or shall exist and declaration of default or acceleration
under or
with respect to this Guaranty or any Guaranteed Debt shall at such
time be
prevented by reason of the pendency against the Guarantor or the Company
or any
other Person of a case or proceeding under a bankruptcy or insolvency
law, the
Guarantor agrees that, for purposes of this Guaranty and its
obligations
hereunder, this Guaranty and such obligations shall be deemed to have
been
declared in default or accelerated with the same effect as if this
Guaranty and
such obligations had been declared in default and accelerated in accordance
with
their respective terms and the Guarantor shall forthwith perform or pay,
as the
case may be, as required hereunder in accordance with the terms
hereunder
without further notice or demand.
10. The Guarantor hereby irrevocably waives any claim or other rights
that
the Guarantor may now or hereafter acquire against the Company that arises
from
the existence, payment, performance or enforcement of the
Guarantor's
obligations hereunder, including any right of subrogation,
reimbursement,
exoneration, contribution or indemnification, any right to participate
in any
claim or remedy of the Lender against the Company or any collateral
that the
Lender now has or hereafter acquires, whether or not such claim, remedy or
right
arises in equity or under contract, statute or common law, right to
take or
receive from the Company directly in cash or other property or by set-off
or in
any manner, payment or security on account of such claim or other rights.
If any
amount shall be paid to the Guarantor in violation of the preceding
sentence and
the Guaranteed Debt shall not have been paid and performed in full, such
amount
shall be deemed to have been paid to the Guarantor for the benefit of, and
held
in trust for, the Lender and shall forthwith be paid to the Lender
to be
credited and applied to the Guaranteed Debt, whether matured or
unmatured.
Notwithstanding the blanket waiver of subrogation rights as set forth
above, the
Guarantor hereby specifically acknowledges that any subrogation rights
which the
Guarantor may have against the Company or any collateral that the Lender
now has
or hereafter acquires may be destroyed by a nonjudicial foreclosure
of the
collateral. Without limiting the foregoing, the Guarantor waives all
rights and
defenses arising out of an election of remedies by the Lender, even though
that
election of remedies, such as a nonjudicial foreclosure with respect to
security
for any Guaranteed Debt, has destroyed the Guarantor's rights of
subrogation and
reimbursement against the Company by the operation of Section 580d
of the
California Code of Civil Procedure or otherwise. The Guarantor acknowledges
that
the Guarantor will receive direct and indirect benefits from the
arrangements
contemplated by the Agreement and the Notes and that the waivers set
forth in
this Section are knowingly made in contemplation of such benefits.
11. The Guarantor waives any and all rights, benefits and
defenses
available to sureties and creditors which might otherwise be available
to the
Guarantor under Sections 2787 to 2855 inclusive, 2899 and 3433 of the
California
Civil Code, as amended or recodified from time to time, and the benefit
of any
statute of limitations affecting the liability of the Guarantor hereunder
or the
enforcement hereof, including, without limitation any rights arising
under
Section 359.5 of the California Code of Civil Procedure. Additionally,
the
Guarantor waives the right to require the Lender to comply with the
provisions
of Section 9504 of the California Commercial Code, as amended or remodified
from
time to time. The Guarantor also waives all rights and defenses
that the
Guarantor may have because any Guaranteed Debt is secured by real property.
This
means, among other things: (1) the Lender may collect from the Guarantor
without
first foreclosing on any real or personal property collateral pledged
by the
Company or any other Obligor; (2) if the Lender forecloses on any real
property
collateral pledged by the Company or any other Obligor: (a) the amount
of the
Guaranteed Debt may be reduced only by the price for which that
collateral is
sold at the foreclosure sale, even if the collateral is worth more than the
sale
price; and (b) the Lender may collect from the Guarantor even if the
Lender, by
foreclosing on the real property collateral, has destroyed any right
the
Guarantor may have to collect from the Company. This is an unconditional
and
irrevocable waiver of any rights and defenses the Guarantor may have
because the
Guaranteed Debt is secured by real property. These rights and defenses
include,
but are not limited to, any rights or defenses based upon Section 580a,
580b,
580d, or 726 of the California Code of Civil Procedure.
12. No postponement or delay on the part of the Lender in the
enforcement
of any right hereunder shall constitute a waiver of such right and all
rights of
the Lender hereunder shall be cumulative and not alternative and shall
be in
addition to any other rights granted to the Lender in any other agreement
or by
law.
13. If any provision hereof shall be or shall be declared to be
illegal or
unenforceable in any respect, such illegal or unenforceable provision
shall be
and become absolutely null and void and of no force and effect as though
such
provision were not in fact set forth herein, but all other covenants,
terms,
conditions and provisions hereof shall nevertheless continue to be
valid and
enforceable and this Guaranty shall be so construed.
14. This Guaranty shall be governed in all respects by the laws
of the
State of Minnesota, other than its principles of conflicts of law, and
shall be
binding upon and shall inure to the benefit of the parties hereto and
their
respective heirs, executors, administrators, personal
representatives,
successors and assigns.
15. The Guarantor hereby agrees that any action or proceeding under
this
Guaranty may be commenced against the Guarantor in any court of
competent
jurisdiction within the State of Minnesota, by service of process
upon the
Guarantor by first class registered or certified mail, return receipt
requested,
addressed to the Guarantor at the Guarantor's address last known to the
Lender.
The Guarantor agrees that any such suit, action or proceeding arising out
of or
relating to this Guaranty may be instituted in the District Court of
Hennepin
County, Minnesota or in the United States District Court for the
District of
Minnesota, at the option of the Lender; and the Guarantor hereby
waives any
objection to the jurisdiction or venue of any such court with respect to,
or the
convenience of any such court as a forum for, any such suit,
action or
proceeding. Nothing herein shall affect the right of the Lender to
accomplish
service of process in any other manner permitted by law or to commence
legal
proceedings or otherwise proceed against the Guarantor in any other
jurisdiction
or court.
16. The Guarantor hereby represents and warrants to the Lender as
follows:
(a) Organization and Qualification. The Guarantor is a corporation
duly
organized, validly existing and in good standing under the laws
of its
jurisdiction of incorporation. The Guarantor is duly qualified
to do
business as a foreign corporation and in good standing in
all
jurisdictions in which the ownership of its properties or the
nature
of its activities, or both, makes such qualification necessary.
(b) Authority and Authorization. The Guarantor has full corporate
power
and authority to execute, deliver and carry out the provisions of
this
Guaranty and to perform its obligations hereunder, and all such
action
has been duly and validly authorized by all necessary
corporate
proceedings on its part.
(c) Financial Statements. All financial statements and data which
have
heretofore been given to the Lender with respect to the
Guarantor
fairly and accurately represent. the financial condition
of the
Guarantor as of the date hereof, and, since the date thereof,
there
has been no material adverse change in the financial condition
of the
Guarantor. The Guarantor shall promptly deliver to the Lender,
or to
the Company in time for the Company to deliver the same to the
Lender,
all financial statements and tax returns of the Guarantor
required by
the Agreement.
(d) Address. The address of the Guarantor as specified below is
true and
correct and until the Lender shall have actually received a
written
notice specifying a charge of address and specifically requesting
that
notices be issued to such changed address, the Lender may rely
on the
address stated as being accurate.
(e) No Default. The Guarantor is not in default with respect to any
order,
writ, injunction, decree or demand of any court or other
governmental
authority, in the payment of any material debt for borrowed
money or
under any material agreement evidencing or securing any such
debt.
(f) Solvent. The Guarantor is now solvent, and no bankruptcy or
insolvency
proceedings are pending or to the best of the Guarantor's
knowledge
contemplated by or against the Guarantor.
(g) Relationship to the Company. The value of the consideration
received
and to be received by the Guarantor is reasonably worth at
least as
much as the liability and obligation of the Guarantor
incurred or
arising under this Guaranty. The Guarantor has had full and
complete
access to the Agreement and the Notes and all other- loan
documents
relating to the Obligations and the Guaranteed Debt, has reviewed
them
and is fully aware of the meaning and effect of their contents.
The
Guarantor is fully informed of all circumstances which bear
upon the
risks of executing this Guaranty and which a diligent inquiry
would
reveal. The Guarantor has adequate means to obtain from the
Company on
a continuing basis information concerning the Company's
financial
condition, and is not depending on the Lender to provide
such
information, now or in the future. The Guarantor agrees
that the
Lender shall not have any obligation to advise or notify the
Guarantor
or to provide the Guarantor with any data or information.
The
execution and delivery of this Guaranty is not given in
consideration
of (and the Lender has not in any way implied that the
execution of
this Guaranty is given in consideration of) the Lender's
making,
extending or modifying any loan to the Guarantor or to any
other
financial accommodation to or for the Guarantor.
(h) Litigation. There is not now pending against or affecting
the
Guarantor, nor to the knowledge of the Guarantor is there
threatened,
any action, suit or proceeding at law or in equity or by or
before any
administrative agency that, if adversely determined, would
materially
impair or affect the financial condition of the Guarantor.
(i) Taxes. The Guarantor has filed all federal, state, provincial,
county,
municipal and other income tax returns required to have been
filed by
the Guarantor and has paid all taxes that have become due
pursuant to
such returns or pursuant to any assessments received by the
Guarantor,
and the Guarantor does not know of any basis for any
material
additional assessment against it in respect of such taxes.
17. Neither the death nor the release of any person or party to
this
Guaranty or any other guaranties of the Agreement and the Notes shall
affect or
release the liability of the Guarantor. The obligations of the
Guarantor
hereunder shall be in addition to any obligations of the Guarantor
under any
other guaranties of the Guaranteed Debt and/or any obligations of the
Company or
any other Persons heretofore given or hereafter to be given to the Lender,
and
this Guaranty shall not affect or invalidate any such other guaranties.
The
liability of the Guarantor to the Lender shall at all times be deemed to
be the
aggregate liability of the Guarantor under the terms of this Guaranty and
of any
other guaranties heretofore or hereafter given by the Guarantor to the
Lender.
18. No amendment or waiver of any provision of this Guaranty nor
consent to
any departure by the Guarantor therefrom shall in any event be effective
unless
the same shall be in writing and signed by the Lender, and then such
waiver or
consent shall be effective only in the specific instance and for the
specific
purpose for which given. Nor Notice to or demand on the Guarantor shall
in any
case entitle it to any other or further notice or demand in similar or
other
circumstances.
19. All notices that may be required o- otherwise provided
for or
contemplate under the terms of this Guaranty for any party to serve upon or
give
to any other shall, whether or not so state, be in writing, and if not
so in
writing shall not be deemed to have been given, and be either personally
served,
sent by reputable overnight courier service, or sent with return
receipt
requested by registered or certified mail with postage (including
registration
or certification charges) prepaid, sent to the following address:
(a) If to the Guarantor, addressed to the address indicated
immediately
following the Guarantor's signature;
(b) If to the Lender, addressed to the Lender at its address at 1646
North
California Blvd., Suite 400, Walnut Creek, California
94596,
Attention: Graham Shipman, Director.
Such addresses may be changed from time to time by written notice to the
other
parties given in the same manner. Any matter so served upon or sent
to the
Guarantor or the Lender in the manner aforesaid shall be deemed
sufficiently
given for all purposes hereunder (i) upon personal delivery, if
personally
delivered, (ii) on the date following delivery to the courier service, if
sent
by courier service, (iii) upon electronic confirmation of receipt, if
sent by
telecopier, and (iv) on the date of receipt as noted on the return
receipt, if
sent by registered or certified mail, except that notices of changes of
address
shall not be effective until actual receipt.
20. Any indebtedness of the Company now or hereafter held by the
Guarantor
is hereby subordinated to the indebtedness of the Company to the Lender,
and
such indebtedness of the Company to the Guarantor shall, if the
Lender so
requests, be collected, enforced and received by the Guarantor as
trustee for
the Lender and be paid over to the Lender on account of the indebtedness
of the
Company to the Lender, but without reducing or limiting in any
manner the
liability of the Guarantor under the other provisions of the Guaranty.
The
Guarantor acknowledges that, with respect to the indebtedness
guaranteed
hereunder, the Guarantor has irrevocably waived all rights to
subrogation,
reimbursement, and/or indemnification against the Company.
21. This Guaranty is intended as a final expression of this
agreement of
guaranty and is intended also as a complete and exclusive statement of the
terms
of this agreement. No agreement or understanding entered into prior to the
date
hereof with respect to the subject matter hereof shall be binding
upon the
Guarantor unless expressed herein. No course of prior dealings
between the
Guarantor and the Lender, no usage or the trade, and no parole or
extrinsic
evidence of any nature, shall be used or be relevant to supplement,
explain,
contradict or modify the terms and/or provisions of this Guaranty.
22. Time is of the essence hereof.
23. THE GUARANTOR, BY ITS EXECUTION AND DELIVERY HEREOF, AND THE
LENDER, BY
ITS ACCEPTANCE HEREOF, HEREBY (i) COVENANTS AND AGREES NOT TO ELECT A
TRIAL BY
JURY OF ANY ISSUE TRIABLE OF RIGHT BY A JURY, AND (ii) WAIVES ANY RIGHT TO
TRIAL
BY JURY FULLY TO THE EXTENT THAT ANY SUCH RIGHT SHALL NOW OR HEREAFTER
EXIST.
THIS WAIVER OF RIGHT TO TRIAL BY JURY IS SEPARATELY GIVEN, KNOWINGLY
AND
VOLUNTARILY, BY THE GUARANTOR AND BY THE LENDER, AND THIS WAIVER IS
INTENDED TO
ENCOMPASS INDIVIDUALLY EACH INSTANCE AND EACH ISSUE AS TO WHICH THE RIGHT
OF A
JURY TRIAL WOULD OTHERWISE ACCRUE. THE LENDER IS HEREBY AUTHORIZED AND
REQUESTED
TO SUBMIT THIS WAIVER TO ANY COURT HAVING JURISDICTION OVER THE SUBJECT
MATTER
AND THE PARTIES HERETO, SO AS TO SERVE AS CONCLUSIVE EVIDENCE OF THE
FOREGOING
WAIVER OF THE RIGHT TO JURY TRIAL. FURTHER, THE GUARANTOR HEREBY CERTIFIES
THAT
NO REPRESENTATIVE OR AGENT OF THE LENDER, INCLUDING THE LENDER'S COUNSEL,
HAS
REPRESENTED, EXPRESSLY OR OTHERWISE, TO THE GUARANTOR OR ITS
REPRESENTATIVES OR
AGENTS THAT THE LENDER WILL NOT SEEK TO ENFORCE THIS WAIVER OF RIGHT TO
JURY
TRIAL PROVISION.
IN WITNESS WHEREOF, the Guarantor has executed this Guaranty
with the
intent to be legally bound as of the date first above written.
FINET HOLDINGS CORPORATION,
a Delaware corporation
By:______________________________
Its:_____________________________
Address:_________________________
Telephone No.:___________________
Telecopier No.___________________
STATE OF California )
) ss
COUNTY OF Contra Costa )
On , before me, a Notary Public, personally appeared , the of
MONUMENT
MORTGAGE, INC., a California corporation, personally known to me (or
proved to
me on the basis of satisfactory evidence) to be the person whose
name is
subscribed to the within instrument and acknowledged to me that he/she
executed
the same in his/her authorized capacity, and that by his/her signature
on the
instrument the person, or the entity upon behalf of which the person
acted,
executed the instrument.
WITNESS my hand and official seal.
Notary Public
My Commission Expires:
(SEAL)
<PAGE>
CERTIFICATE
OF
SECRETARY OF
MONUMENT MORTGAGE. INC.
I, the undersigned, hereby certify that I am the Secretary of
MONUMENT
MORTGAGE, INC. , a California corporation (the "Company" ), and have
knowledge
of the matters contained in this Certificate and hereby certify that:
1. The Company is a corporation duly organized, validly existing
and in
good standing under the laws of the State of California
and has
complied with all certifications, filings and requirements
necessary
to continue as a corporation in the State of California and for
each
state where the Company is transacting business as a
foreign
corporation.
2. In connection with the single family revolving warehouse facility
made
to the Company by RESIDENTIAL FUNDING CORPORATION, a
Delaware
corporation (the "Lender" ) pursuant to the terms of a
Warehousing
Credit and Security Agreement dated as of March 22, 1995, as the
same
may have been amended or supplemented (the "Agreement"), the
Company
has the valid power and authority to execute and deliver to the
Lender
the Sixth Amendment to Warehousing Credit and Security Agreement.
3. The resolutions attached to this Certificate as Exhibit A were
duly
adopted by either: (a) by unanimous written action of the
Board of
Directors of the Company; or (b) at a meeting of the
Board of
Directors of the Company held on the day of _____, , 19___, at
which
meeting a quorum was present. I am the keeper of the Minute
Book of
the Company and said resolutions have been entered therein,
have not
been altered, amended, repealed or rescinded, and are now in
full
force and effect .
4. There have been no amendments to the Articles of
Incorporation or
Bylaws of the Company since the date of the most recent
certified
copies thereof delivered to the Lender.
IN WITNESS WHEREOF, I have hereunto set my hand and the seal of this
corporation this 14th day of August, 1997.
________________________________
Secretary
<PAGE>
EXHIBIT A
RESOLUTIONS OF BOARD OF DIRECTORS
WHEREAS, MONUMENT MORTGAGE, INC., a California corporation (the
"Company"),
has entered into a single family revolving warehouse facility (the
"Warehousing
Commitment"), with a present commitment amount of Ten Million
Dollars
($10,000,000) (the `"Warehousing Commitment Amount"), with RESIDENTIAL
FUNDING
CORPORATION, a Delaware corporation (the "Lender"), as evidenced by a
First
Amended and Restated Warehousing Promissory Note in the principal sum
of Ten
Million Dollars ($10,000,000), dated as of February 29, 1996, a First
Amended
and Restated Sublimit Promissory Note in the principal sum of Five
Million
Dollars ($5,000,000), dated as of February 29, 1996, and by a Warehousing
Credit
and Security Agreement dated as of March 22, 1995, as the same may have
been
amended or supplemented (the "Agreement"); and
WHEREAS, the Company and the Lender have entered into a term loan
facility
with a present Term Loan Commitment Amount of One Million Dollars
($1,000,000),
as evidenced by a Term Loan Promissory Note in the principal amount
of One
Million Dollars $1,000,000), dated as of March 2-, 1995, and the Agreement;
WHEREAS, the Company and the Lender have also entered into a
working
capital facility with a present Working Capital Commitment Amount of One
Million
Dollars ($1,000,000) (the "Working Capital Commitment"), as evidenced by a
First
Amended and Restated Working Capital Promissory Note in the principal sum
of One
Million Dollars ($1,000,000), dated as of February 29, 1996, and the
Agreement;
WHEREAS, the Company has requested the Lender to waive certain
covenant
defaults under the Agreement and to amend certain other terms of the
Agreement;
and
WHEREAS, to evidence such amendment of the Agreement, the Company
proposes
to execute and deliver a Sixth Amendment to Warehousing Credit and
Security
Agreement (the "Amendment"), a copy of which has been presented to the
Board of
Directors of this Company; and
WHEREAS, the Board of Directors of this Company has determined that it
will
be in the best interests of this Company for the Company to amend the
Agreement.
RESOLVED, that these resolutions are enacted by the Board of
Directors of
this Company on its behalf and on behalf of the Company.
FURTHER RESOLVED, that the Company shall amend the Agreement
to be
evidenced by the Amendment.
FURTHER RESOLVED, that the Amendment in the form presented to the
Board of
Directors of this Company are hereby approved and copies thereof are
filed in
the records of this Company with these Resolutions.
FURTHER RESOLVED, that any One (insert minimum number required to
sign) of
the following rifles or positions of offers of the Company: President.
Executive
Vice President, Senior Vice President, Assistant Vice President,
Secretary, or
Assistant Secretary (list titles/positions of officers authorized, do not
list
individual names), shall be and are authorized, empowered and directed
in the
name of and on behalf of this Company, to execute, acknowledge and
deliver the
Amendment in the form approved by the Board of Directors of this
Company as
aforesaid, with such changes therein as may be acceptable to such
officers, as
conclusively evidenced by their execution thereof.
FURTHER RESOLVED, that such Oscars and employees shall be and are
hereby
authorized, empowered and directed to do and perform each and every
act and
execute any and all documents and instruments in the name of this Company
as may
be necessary or desirable to enable this Company to amend the Commitment
and to
carry out the purport and intent of the foregoing Resolutions.
<PAGE>
GUARANTY
THIS GUARANTY, made and entered into as of this 23rd day of July,
1997, by
FINET HOLDINGS CORPORATION, a Delaware corporation (the
"Guarantor"), to
RESIDENTIAL FUNDING CORPORATION, a Delaware corporation (the "Lender"),
having
its principal office at 8400 Normandale Lake Blvd., Suite 600,
Minneapolis,
Minnesota 55437.
RECITALS
A. The Lender has extended to MONUMENT MORTGAGE, INC., a
California
corporation ("Company"): (a) a warehouse line of credit in the
present
principal amount of Ten Million Dollars ($10,000,000); (b) a term
loan
facility in the original principal amount of One Million
Dollars
($1,000,000); and (c) a working capital facility in the
present
principal amount of One Million Dollars ($1,000,000)
(collectively,
the "Loan") to finance the making and purchasing of Mortgage
Loans.
B. The Loan is evidenced by a First Amended and Restated
Warehousing
Promissory Note dated February 29, 1996, a First Amended and
Sublimit
Promissory Note dated February 29, 1996, a Term Loan Promissory
Note
dated March 22, 1995, and a Working Capital Promissory Note
dated
February 29, 1996, from the Company to the Lender, as the same
may be
amended, supplemented or otherwise modified from time to
time,
including any other instruments executed and delivered in
renewal,
extension, rearrangement or otherwise in replacement of
such
Promissory Notes (collectively, the "Notes ") and by a
Warehousing
Credit and Security Agreement dated March 22, 1995, as the same
may be
amended, supplemented or otherwise modified from time to
time,
including any other instruments executed and delivered in
renewal,
extension, rearrangement or otherwise in replacement of such
agreement
(the "Agreement").
C. The Guarantor is the Parent of the Company and will derive
benefit
from the Loan.
D. In order to induce the Lender to accept the Notes and the
Agreement,
and as additional security for Advances under the Agreement,
the
Guarantor has agreed to give this Guaranty.
E. The Lender has refused to make Advances under the Agreement
unless
this Guaranty is executed by the Guarantor and delivered to
Lender.
<PAGE>
AGREEMENT
NOW, THEREFORE, in consideration of the recitals and other
good and
valuable consideration, the receipt and sufficiency or which is
hereby
acknowledged, the Guarantor hereby covenants and agrees with the
Lender as
follows:
1. Unless otherwise defined herein, all capitalized terms used herein
shall
have the meanings ascribed to such terms in the Agreement.
2. The Guarantor hereby irrevocably, unconditionally and
absolutely
guarantees to the Lender the due and prompt payment, and not just
the
collectibility, of the principal of, and interest, fees and late charges
and all
other indebtedness, if any, on the Notes when due, whether at
maturity, by
acceleration or otherwise all at the times and places and at the rates
described
in, and otherwise according to the terms of the Notes and the Agreement,
whether
now existing or hereafter created or arising.
3. The Guarantor further hereby irrevocably, unconditionally and
absolutely
guarantees to the Lender the due and prompt performance by the Company
of all
duties, agreements and obligations of the Company contained in the Notes
and the
Agreement, and the due and prompt payment of all costs and expenses
incurred,
including, without limitation, attorneys' fees, court costs and all
other
litigation expenses (including but not limited to expert witness fees,
exhibit
preparation, and courier, postage, communication and document copying
expenses),
in enforcing the payment and performance of the Notes and the Agreement and
this
Guaranty (the payment and performance of the items set forth in Paragraphs
2 and
3 of this Guaranty are collectively referred to as the "Guaranteed Debt").
4. In the event the Company shall at any time fail to pay the
Lender any
principal of or interest on or other sums constituting any Guaranteed Debt
when
due, whether by acceleration or otherwise, the Guarantor promises to pay
such
amount to the Lender forthwith, together with all collection costs and
expenses,
including, without limitation, attorneys' fees, court costs and all
other
litigation expenses (including but not limited to expert witness fees,
exhibit
preparation, and courier, postage, communication and document copying
expenses).
Any sum required to be paid by the Guarantor to the Lender pursuant to
this
Guaranty shall bear interest from the date such sum becomes due until paid
at a
per annum rate equal to the Default Rate.
5. The Guarantor hereby authorizes the Lender, following the
occurrence of
an Event of Default, without notice or demand, to apply any property,
balances,
credits, accounts or moneys of the Guarantor then in the possession of
Lender,
or standing to the credit of the Guarantor, to the extent of such
Guaranteed
Debt.
6. The Guarantor does hereby (a) agree to any modifications of any
terms or
conditions of any Guaranteed Debt and/or to any extensions or renewals of
time
of payment or performance by the Company; (by that it shall nor be
necessary for
the Lender Lo resort to legal remedies against the Company before
proceeding
hereunder, nor to take any action against any other Person obligated
(an
"Obligor") for payment or performance of the Guaranteed Debt or
against any
collateral for the Guaranteed Debt before proceeding against the Guarantor;
(c)
agree that no release of the Company or any other guarantor or Obligor,
and no
release, exchange or nonperfection of any collateral for the Guaranteed
Debt,
whether by operation of law or by any act or failure to act by the Lender,
with
or without notice to the Guarantor, shall release the Guarantor; (d)
waive
presentment, demand, notice of demand, dishonor, notice of dishonor,
protest,
and notice of protest and any other notice with respect to any Guaranteed
Debt
and this Guaranty, and promptness in commencing suit against any party
thereto
or liable thereon and/or in giving any notice to or making any claim or
demand
hereunder upon the Guarantor; (e) waive any defense arising by reason
of any
disability or other defense of the Company for payment of the Guaranteed
Debt or
any part thereof or by reason of the cessation from any cause whatsoever
of the
liability of the Company therefor other than full payment of the
Guaranteed
Debt; or (f) waive, to the extent permitted by law, all benefit of
valuation,
appraisement, and exemptions under the laws of the State of Minnesota
or any
other state or territory of the United States.
7. The obligations of the Guarantor hereunder shall be primary,
absolute
and unconditional, and shall remain in full force and effect without
regard to,
and shall not be impaired or affected by: (a) the genuineness,
validity,
regularity or enforceability of, or any amendment or change in the
Agreement or
the Notes, or any change in or extension of the manner, place or
terms of
payment of, all or any portion of the Guaranteed Debt; (b) the taking or
failure
to take any action to enforce the Agreement or the Notes, or the
exercise or
failure to exercise any remedy, power or privilege contained
therein or
available at law or otherwise, or the waiver by the Lender of any
provisions of
the Agreement or the Notes; (c) any impairment, modification, change,
release or
limitation in any manner of the liability of the Company or its
estate in
bankruptcy, or of any remedy for the enforcement of the Company's
liability,
resulting from the operation of any present or future provision
of the
bankruptcy laws or any other statute or regulation, or the
dissolution,
bankruptcy, insolvency, or reorganization of the Company; (d) the
merger or
consolidation of the Company, or any sale or transfer by the Company of
all or
part of its assets or property; (e) any claim the Guarantor may have
against any
other Obligor, including any claim of contribution; (f) the release, in
whole or
in part, of any other guarantor (if more than one), the Company or any
other
Obligor; (g) any settlement or compromise with any Obligor with respect
to any
Guaranteed Debt and/or the subordination of the payment of the Guaranteed
Debt
or any part thereof to the payment of any other debts or claims which may
at any
time be due and owing to the Lender and/or any other Person; or (h) any
other
action or circumstance which (with or without notice to or knowledge
of the
Guarantor) may or might in any manner or to any extent vary the risks
of the
Guarantor hereunder or otherwise constitute a legal or equitable
discharge or
defense, it being understood and agreed by the Guarantor that the
obligations
under this Guaranty shall not be discharged except by the full payment and
performance of the Guaranteed Debt.
8. The Lender shall have the right to determine how, when and
what
application of payments and credits, if any, whether derived from the
Company or
from any other source, shall be made on the Guaranteed Debt and any
other
indebtedness owed by the Company and/or any other Obligor to the Lender.
The
Lender shall be under no obligation to marshal any assets in favor
of the
Guarantor or in payment of all or any part of the Guaranteed Debt.
9. The obligations of the Guarantor hereunder shall continue
to be
effective, or be automatically reinstated, as the case may be, if at any
time
the performance or the payment, as the case may be, in whole or in part,
of any
of the Guaranteed Debt is rescinded or must otherwise be restored or
returned by
the Lender (as a preference, fraudulent conveyance or otherwise)
upon the
insolvency, bankruptcy, dissolution, liquidation or reorganization of
the
Company, the Guarantor or any other person or upon or as a result
of the
appointment of a custodian, receiver, trustee or other officer with
similar
powers with respect to the Company, the Guarantor or any other person,
or any
substantial part of its property, or otherwise, all as though such
payments had
not been made. If an Event of Default shall at any time have occurred
and be
continuing or shall exist and declaration of default or acceleration
under or
with respect to this Guaranty or any Guaranteed Debt shall at such
time be
prevented by reason of the pendency against the Guarantor or the Company
or any
other Person of a case or proceeding under a bankruptcy or insolvency law,
the
Guarantor agrees that, for purposes of this Guaranty and its
obligations
hereunder, this Guaranty and such obligations shall be deemed to have
been
declared in default or accelerated with the same effect as if this
Guaranty and
such obligations had been declared in default and accelerated in accordance
with
their respective terms and the Guarantor shall forthwith perform or pay,
as the
case may be, as required hereunder in accordance with the terms
hereunder
without further notice or demand.
10. The Guarantor hereby irrevocably waives any claim or other rights
tha.
the Guarantor may now or hereafter acquire against the Company that arises
from
the existence, payment, performance or enforcement of the
Guarantor's
obligations hereunder, including any right of subrogation,
reimbursement,
exoneration contribution, indemnification, any right to participate in any
claim
or remedy of the Lender against the Company or any collateral that the
Lender
now has or hereafter acquires, whether or not such claim, remedy or right
arises
in equity or under contract, statute or common law, including the right to
take
or receive from the Company directly or indirectly, in cash or other
property or
by set-off or in any manner, payment or security on account of such
claim or
other rights. If any amount shall be paid to the Guarantor in violation
of the
preceding sentence and the Guaranteed Debt shall not have been
paid and
performed in full, such amount shall be deemed to have been paid
to the
Guarantor for the benefit of, and held in trust for, the Lender and
shall
forthwith be paid to the Lender to be credited and applied to the
Guaranteed
Debt, whether matured or unmatured. Notwithstanding the blanket
waiver of
subrogation rights as set forth above, the Guarantor hereby
specifically
acknowledges that any subrogation rights which the Guarantor may have
against
the Company or any collateral that the Lender now has or hereafter
acquires may
be destroyed by a nonjudicial foreclosure of the collateral. Without
limiting
the foregoing, the Guarantor waives all rights and defenses arising out
of an
election of remedies by the Lender, even though that election of remedies,
such
as a nonjudicial foreclosure with respect to security for any Guaranteed
Debt,
has destroyed the Guarantor's rights of subrogation and reimbursement
against
the Company by the operation of Section 580d of the California Code of
Civil
Procedure or otherwise. The Guarantor acknowledges that the Guarantor
will
receive direct and indirect benefits from the arrangements contemplated
by the
Agreement and the Notes and that the waivers set forth in this Section
are
knowingly made in contemplation of such benefits.
11. The Guarantor waives any and all rights, benefits and
defenses
available to sureties and creditors which might otherwise be available
to the
Guarantor under Sections 2787 to 2855 inclusive, 2899 and 3433 of the
California
Civil Code, as amended or remodified from time to time, and the benefit
of any
statute of limitations affecting the liability of the Guarantor hereunder
or the
enforcement hereof, including, without limitation any rights arising
under
Section 3s9.5 of the California Code of Civil Procedure. Additionally,
the
Guarantor waives the right to require the Lender to comply with the
provisions
of Section 9504 of the California Commercial Code, as amended or recodified
from
time to time. The Guarantor also waives all rights and defenses
that the
Guarantor may have because any Guaranteed Debt is secured by real property.
This
means, among other things: (1) the Lender may collect from the Guarantor
without
first foreclosing on any real or personal property collateral pledged
by the
Company or any other Obligor; (2) if the Lender forecloses on any real
property
collateral pledged by the Company or any other Obligor: (a) the amount
of the
Guaranteed Debt may be reduced only by the price for which that
collateral is
sold at the foreclosure sale, even if the collateral is worth more than the
sale
price; and (b) the Lender may collect from the Guarantor even if the
Lender, by
foreclosing on the real property collateral, has destroyed any right
the
Guarantor may have to collect from the Company. This is an unconditional
and
irrevocable waiver of any rights and defenses the Guarantor may have
because the
Guaranteed Debt is secured by real property. These rights and defenses
include,
but are not limited to, any rights or defenses based upon Section 580a,
580b,
580d, or 726 of the California Code of Civil Procedure.
12. No postponement or delay on the part of the Lender in the
enforcement
of any right hereunder shall constitute a waiver of such right and all
rights of
the Lender hereunder shall be cumulative and not alternative and shall
be in
addition to any other rights granted to the Lender in any other agreement
or by
law.
13. If any provision hereof shall be or shall be declared to be
illegal or
unenforceable in any respect, such illegal or unenforceable provision
shall be
and become absolutely null and void and of no force and effect as though
such
provision were not in fact set forth herein, but all other covenants,
terms,
conditions and provisions hereof shall nevertheless continue to be
valid and
enforceable and this Guaranty shall be so construed.
14. This Guaranty shall be governed in all respects by the laws
of the
State of Minnesota, other than its principles of conflicts of law, and
shall be
binding upon and shall inure to the benefit of the parties hereto and
their
respective heirs, executors, administrators, personal
representatives,
successors and assigns.
15. The Guarantor hereby agrees that any action or proceeding under
this
Guaranty may be commenced against the Guarantor in any court of
competent
jurisdiction within the State of Minnesota, by service of process
upon the
Guarantor by first class registered or certified mail, return receipt
requested,
addressed to the Guarantor at the Guarantor's address last known to the
Lender.
The Guarantor agrees that any such suit, action or proceeding arising out
of or
relating to this Guaranty may be instituted in the District Court of
Hennepin
County, Minnesota or in the United States District Court for the
District of
Minnesota, at the option of the Lender; and the Guarantor hereby
waives any
objection to the jurisdiction or venue of any such court with respect to,
or the
convenience of any such court as a forum for, any such suit,
action or
proceeding. Nothing herein shall affect the right of the Lender to
accomplish
service of process in any other manner permitted by law or to commence
legal
proceedings or otherwise proceed against the Guarantor in any other
jurisdiction
or court.
16. The Guarantor hereby represents and warrants to the Lender as
follows:
(a) Organization and Qualification. The Guarantor is a
corporation
duly organized, validly existing and in good standing
under the
laws of its jurisdiction of incorporation. the Guarantor is
duly
qualified to do business as a foreign corporation and in
good
standing in all jurisdictions In which the ownership
of its
properties or the nature of its activities, or both, makes
such
qualification necessary.
(b) Authority and Authorization. The Guarantor has full
corporate
power and authority to execute, deliver and carry
out the
provisions of this Guaranty and to perform its
obligations
hereunder, and all such action has been duly and
validly
authorized by all necessary corporate proceedings on its
part.
(c) Financial Statements. All financial statements and data
which
have heretofore been given to the Lender with respect
to the
Guarantor fairly and accurately represent the financial
condition
of the Guarantor as of the date hereof, and, since the
date
thereof, there has been no material adverse change
in the
financial condition of the Guarantor. The Guarantor
shall
promptly deliver to the Lender, or to the Company in time
for the
Company to deliver the same to the Lender, all
financial
statements and tax returns of the Guarantor required
by the
Agreement.
(d) Address. The address of the Guarantor as specified below is
true
and correct and until the Lender shall have actually
received a
written notice specifying a change of address and
specifically
requesting that notices be issued to such changed address,
the
Lender may rely on the address stated as being accurate.
(e) No Default. The Guarantor is not in default with respect
to any
order, writ, injunction, decree or demand of any court or
other
governmental authority, in the payment of any material
debt for
borrowed money or under any material agreement
evidencing or
securing any such debt.
(f) Solvent. The Guarantor is now solvent, and no
bankruptcy or
insolvency proceedings are pending or to the best of
the
Guarantor's knowledge contemplated by or against the
Guarantor.
(g) Relationship to the Company. The value of the
consideration
received and to be received by the Guarantor is reasonably
worth
at least as much as the liability and obligation of the
Guarantor
incurred or arising under this Guaranty. The Guarantor
has had
full and complete access to the Agreement and the Notes
and all
other loan documents relating to the Obligations and
the
Guaranteed Debt, has reviewed them and is fully aware
of the
meanings and effect of their contents. The Guarantor is
fully
informed or all circumstances which bear upon the
risks of
executing this Guaranty and which a diligent inquiry
would
reveal. The Guarantor has adequate means to obtain
from the
Company on a continuing basis information concerning
the
Company's financial condition, and is not depending on the
Lender
to provide such information, now or in the future. The
Guarantor
agrees that the Lender shall not have any obligation to
advise or
notify the Guarantor or to provide the Guarantor with any
data or
information. The execution and delivery of this Guaranty
is not
given in consideration of (and the Lender has not in
any way
implied that the execution of this Guaranty is
given in
consideration of) the Lender's making, extending or
modifying any
loan to the Guarantor or to any other financial
accommodation to
or for the Guarantor.
(h) Litigation. There is not now pending against or affecting
the
Guarantor, nor to the knowledge of the Guarantor is
there
threatened, any action, suit or proceeding at law or in
equity or
by or before any administrative agency that, if
adversely
determined, would materially impair or affect the
financial
condition of the Guarantor.
(i) Taxes. The Guarantor has filed all federal, state,
provincial,
county, municipal and other income tax returns required to
have
been filed by the Guarantor and has paid all taxes that
have
become due pursuant to such returns or pursuant to
any
assessments received by the Guarantor, and the Guarantor
does not
know of any basis for any material additional assessment
against
it in respect of such taxes.
17. Neither the death nor the release of any person or party to
this
Guaranty or any other guaranties of the Agreement and the Notes shall
affect or
release the liability of the Guarantor. The obligations of the
Guarantor
hereunder shall be in addition to any obligations of the Guarantor
under any
other guaranties of the Guaranteed Debt and/or any obligations of the
Company or
any other Persons heretofore given or hereafter to be given to the Lender,
and
this Guaranty shall not affect or invalidate any such other guaranties.
The
liability of the Guarantor to the Lender shall at all times be deemed to
be the
aggregate liability of the Guarantor under the terms of this Guaranty and
of any
other guaranties heretofore or hereafter given by the Guarantor to the
Lender.
18. No amendment or waiver of any provision of this Guaranty nor
consent to
any departure by the Guarantor therefrom shall in any event be effective
unless
the same shall be in writing and signed by the Lender, and then such
waiver or
consent shall be effective only in the specific instance and for the
specific
purpose for which given. Nor notice no or demand on the Guarantor shall
in any
case entitle it to any other or further notice or demand in similar or
other
circumstances.
19. All notices that may be required or otherwise provided
for or
contemplated under the terms of this Guaranty for any party to serve
upon or
give to any other shall, whether or not so state, be in writing, and if
not so
in writing shall not be deemed to have been given, and be either
personally
served, sent by reputable overnight courier service, or sent with return
receipt
requested by registered or certified mail with postage (including
registration
or certification charges) prepaid, sent to the following address:
(a) If to the Guarantor, addressed to the address
indicated
immediately following the Guarantor's signature;
(b) If to the Lender, addressed to the Lender at its address at
1646
North California Blvd., Suite 400, Walnut Creek,
California
94596, Attention: Graham Shipman, Director.
Such addresses may be changed from time to time by written notice to the
other
parties given in the same manner. Any matter so served upon or sent
to the
Guarantor or the Lender in the manner aforesaid shall be deemed
sufficiently
given for all purposes hereunder (i) upon personal delivery, if
personally
delivered, (ii) on the date following delivery to the courier service, if
sent
by courier service, (iii) upon electronic confirmation of receipt, if
sent by
telecopier, and (iv) on the date of receipt as noted on the return
receipt, if
sent by registered or certified mail, except that notices of changes of
address
shall not be effective until actual receipt.
20. Any indebtedness of the Company now or hereafter held by the
Guarantor
is hereby subordinated to the indebtedness of the Company to the Lender,
and
such indebtedness of the Company to the Guarantor shall, if the
Lender so
requests, be collected, enforced and received by the Guarantor as
trustee for
the Lender and be paid over to the Lender on account of tne indebtedness
of the
Company to the Lender, but without reducing or limiting in any
manner the
liability of the Guarantor under the other provisions of the Guaranty.
The
Guarantor acknowledges that, with respect to the indebtedness
guaranteed
hereunder, the Guarantor has irrevocably waived all rights to
subrogation,
reimbursement, and/or indemnification against tee Company.
21. This Guaranty is intended as a final expression of this agreement
of guaranty and is intended also as a complete and exclusive statement
of the
terms of this agreement. No agreement or understanding entered into Prior
to the
date hereof with respect to the subject matter hereof shall be binding
upon the
Guarantor unless expressed herein. No course or prior dealings
between the
Guarantor and the Lender, no usage of the trade, and no parole or
extrinsic
evidence of any nature, shall be used or be relevant to supplement,
explain,
contradict or modify the terms and/or provisions of this Guaranty.
22. Time is of the essence hereof.
23. THE GUARANTOR, BY ITS EXECUTION AND DELIVERY HEREOF, AND THE
LENDER, BY
ITS ACCEPTANCE HEREOF, HEREBY (i) COVENANTS AND AGREES NOT TO ELECT A
TRIAL BY
JURY OF ANY ISSUE TRIABLE OF RIGHT BY A JURY, AND (ii) WAIVES ANY RIGHT TO
TRIAL
BY JURY FULLY TO THE EXTENT THAT ANY SUCH RIGHT SHALL NOW OR HEREAFTER
EXIST.
THIS WAIVER OF RIGHT TO TRIAL BY JURY IS SEPARATELY GIVEN, KNOWINGLY
AND
VOLUNTARILY, BY THE GUARANTOR AND BY THE LENDER, AND THIS WAIVER IS
INTENDED TO
ENCOMPASS INDIVIDUALLY EACH INSTANCE AND EACH ISSUE AS TO WHICH THE RIGHT
OF A
JURY TRIAL WOULD OTHERWISE ACCRUE. THE LENDER IS HEREBY AUTHORIZED AND
REQUESTED
TO SUBMIT THIS WAIVER TO ANY COURT HAVING JURISDICTION OVER THE SUBJECT
MATTER
AND THE PARTIES HERETO, SO AS TO SERVE AS CONCLUSIVE EVIDENCE OF THE
FOREGOING
WAIVER OF THE RIGHT TO JURY TRIAL. FURTHER, THE GUARANTOR HEREBY CERTIFIES
THAT
NO REPRESENTATIVE OR AGENT OF THE LENDER, INCLUDING THE LENDER'S COUNSEL,
HAS
REPRESENTED, EXPRESSLY OR OTHERWISE, TO THE GUARANTOR OR ITS
REPRESENTATIVES OR
AGENTS THAT THE LENDER WILL NOT SEEK TO ENFORCE THIS WAIVER OF RIGHT TO
JURY
TRIAL PROVISION.
FINET HOLDINGS CORPORATION,
a Delaware corporation
By:__________________________________
Its: President
Address: 3021 Citrus Circle, Suite 150
Walnut Creed, CA 94598
Telephone No.: (510) 988-6555
Telecopier No. (510) 934-1296
STATE OF California )
) ss
COUNTY OF Contra Costa )
On August 14, 1997, before me, a Notary Public, personally
appeared Jan
Hoeffel, the President of FINET HOLDINGS CORPORATION, a California
corporation,
personally known to me (or proved to me on the basis of satisfactory
evidence)
to be the person whose name is subscribed to the within instrument
and
acknowledged to me that he/she executed the same in his/her authorized
capacity,
and that by his/her signature on the instrument the person, or the entity
upon
behalf of which the person acted, executed the instrument.
WITNESS my hand and official seal.
Notary Public
My Commission Expires:
(SEAL)
<PAGE>
CERTIFICATE OF SECRETARY
OF
FINET HOLDINGS CORPORATION
I, the undersigned, hereby certify that I am the Secretary of
FINET
HOLDINGS CORPORATION, a Delaware corporation (hereinafter referred to
as the
"Corporation" ), and have knowledge of the matters contained in this
Certificate
and hereby certify that:
1. The Articles of Incorporation of the Corporation attached to
this
Certificate as Exhibit "A", the Bylaws of the Corporation
attached to
this Certificate as Exhibit "B", and the Certificate of Good
Standing
of the Corporation attached to this Certificate as Exhibit
"C" are
true and correct copies of the current Articles of
Incorporation,
Bylaws, and Certificate of Good Standing of the Corporation,
have not
been altered, modified or amended and are still in full
force and
effect.
2. The Corporation is a corporation duly organized, validly
existing and
in good standing under the laws of the State of Delaware
and has
complied with all certifications, filings and requirements
necessary
to continue as a corporation in the State of Delaware. The
Corporation
is duly qualified to do business as a foreign corporation and
is in
good standing in all jurisdictions where the ownership of its
property
or the conduct of its business makes such qualification
necessary.
3. The Corporation is the sole shareholder of MONUMENT MORTGAGE,
INC., a
California corporation (hereinafter referred to as the
"Company"). In
connection with a Ten Million Dollar ($10,000,000) single
family
revolving warehouse facility, a One Million Dollar ($1,000,000)
term
loan facility and a One Million Dollar ($1,000,000) working
capital
facility (collectively, the "Loan") being made to the
Company by
RESIDENTIAL FUNDING CORPORATION, a Delaware corporation
(the
"Lender"), the Corporation has the valid power and
authority to
execute and deliver to the Lender, a Guaranty (hereinafter
referred to
as the "Guaranty") of the Loan as required by the Lender
pursuant to
the terms of that certain Warehousing Credit and Security
Agreement
(Single-Family Mortgage Loans) dated March 22, 1995
(hereinafter
referred to as the "Agreement").
4. Jan Hoeffel, the President, has the requisite authority on
behalf of
the Corporation to execute and deliver to the Lender the
Guaranty as
required by the Lender pursuant to the Agreement.
5. The guaranteeing of the Loan by the Corporation, and the
execution,
acknowledgment and delivery of the Guaranty required by the
Lender
pursuant to the Agreement and the compliance by the Corporation
with
the terms thereof, do not and will not violate,
contravene, or
constitute or result in a default under any provision of law,
the
Articles of Incorporation or By-Laws of the Corporation,
or any
agreement with the shareholders of the Corporation, any
creditors of
the Corporation, or any mortgage, indenture or other
agreement to
which the Corporation or its properties are subject.
6. The names of the officers of the Corporation authorized to act
under
the resolutions attached hereto and their official signatures
are as
shown on the Certificate of Incumbency attached hereto as Exhibit
"D".
7. The resolutions attached to this Certificate as Exhibit "E" were
duly
adopted either: (a) by unanimous written action of the
Board of
Directors of the Corporation; or (b) at a meeting of the
Board of
Directors of the Corporation held on the 28th day of August,
1997, at
which meeting a quorum was present. I am the keeper of the Minute
Book
of the Corporation and said resolutions have been entered
therein,
have not been altered, amended, repealed or rescinded, and are
now in
full force and effect.
IN WITNESS WHEREOF, I have hereunto set my hand and the seal
of the
Corporation as of this 18 day of August, 1997.
______________________________
Secretary
[SEAL]
<PAGE>
EXHIBIT "A"
ARTICLES OF INCORPORATION
<PAGE>
EXHIBIT "B"
BY-LAWS
<PAGE>
EXHIBIT "C"
CERTIFICATE OF GOOD STANDING
<PAGE>
EXHIBIT "D"
CERTIFICATE AS TO INCUMBENCY
TO: RESIDENTIAL FUNDING CORPORATION
I hereby certify to you that I am the duly elected and qualified
Secretary
of FINET HOLDINGS CORPORATION, a Delaware corporation (the "Corporation"),
and
that, as such, I am authorized to execute this Certificate on behalf
of the
Corporation. I further certify that the persons named below are duly
elected,
qualified and acting officers of the Corporation, holding on the date
hereof the
respective titles set forth opposite their respective names, and
that the
respective signatures set forth opposite their names are their true and
genuine
signatures:
Name Title Signature
L. Daniel Rawitch C.E.O.
________________________
Jan Hoeffel President, Secretary
________________________
You may conclusively rely on this Certificate until formally advised
by a
like Certificate of any changes herein.
IN WITNESS WHEREOF, I have hereunto executed this Certificate on this
18th day of August, 1997.
_________________________________
Secretary
<PAGE>
EXHIBIT "E"
FINET HOLDINGS CORPORATION
RESOLUTIONS OF BOARD OF DIRECTORS
WHEREAS, FINET HOLDINGS CORPORATION, a Delaware corporation
(hereinafter
referred to as the "Corporation"), is the sole shareholder of MONUMENT
MORTGAGE,
INC., a California corporation (hereinafter referred to as the "Company);
and
WHEREAS, the Company has requested the Lender to waive certain
covenant
defaults under the Agreement and to amend certain other terms of the
Agreement;
and
WHEREAS, to evidence such amendment of the Agreement, the Company
proposes
to execute and deliver a Sixth Amendment to Warehousing Credit and
Security
Agreement, a copy of which has been presented to the Board of Directors of
this
Company; and
WHEREAS, the Board of Directors of the Corporation have determined
that it
will be in the best interests of the Corporation for the Company to
amend the
Agreement.
WHEREAS, in order to induce the Lender to amend the Agreement,
the
Corporation proposes to execute and deliver a Guaranty (hereinafter
referred to
as the "Guaranty"), a copy of which has been presented to the Board of
Directors
of this Corporation; and
RESOLVED, that these resolutions are enacted by the Board of
Directors of
this Corporation on its behalf and on behalf of the Corporation.
FURTHER RESOLVED, that the Guaranty in the form presented to the
Board of
Directors of this Corporation is hereby approved and a copy thereof is
filed in
the records of this Corporation with these Resolutions.
FURTHER RESOLVED, that any One (insert minimum number required to
sign) of
the following positions or titles of officers of the Corporation:
President.
Senior Vice President, Senior Vice President, Secretary or Vice President
(list
titles/positions of officers authorized, do not list individual name-),
shall be
and are authorized, empowered and directed in the name of and on behalf
of the
Corporation, to execute, acknowledge and deliver the Guaranty in the
form
approved by the Board of Directors of the Corporation as aforesaid, with
such
changes therein as may be acceptable to such officers, as conclusively
evidenced
by their execution thereof.
FURTHER RESOLVED, that these Resolutions shall remain in full force
and
erect and the Lender shall be fully protected in acting thereon until
written
notice of their change or revocation has been duly given to and received
by the
Lender, and the Lender is authorized to accept, and the Secretary
of the
Corporation shall from time to time provide, signed certificates
of the
Secretary setting forth any change of names of officers and other
persons
authorized to act hereunder on behalf of the Corporation, which
certificates
shall become a part of these Resolutions.
SEVENTH AMENDMENT TO
WAREHOUSING CREDIT AND SECURITY AGREEMENT
THIS SEVENTH AMENDMENT TO WAREHOUSING CREDIT AND SECURITY AGREEMENT
(this "Amendment") is entered into as of this 14th day of November 1997,
by and
between MONUMENT MORTGAGE, INC., a California corporation (the
"Company") and
RESIDENTIAL FUNDING CORPORATION, a Delaware corporation (the "Lender").
WHEREAS, the Company and the Lender have entered into a single
family
revolving warehouse facility with a present Warehousing Commitment Amount
of Ten
Million Dollars ($10,000,000), to finance the origination and
acquisition of
Mortgage Loans as evidenced by a First Amended and Restated
Warehousing
Promissory Note in the principal sum of Ten Million Dollars ($10,000,000),
dated
February 29, 1996, (the "Warehousing Promissory Note") and by a
Warehousing
Credit and Security Agreement dated March 22, 1995, as the same may have
been
amended or supplemented (the "Agreement");
WHEREAS, the Company and the Lender have entered into a term loan
facility, as evidenced by a Term Loan Promissory Note in the principal
amount of
One Million Dollars ($1,000,000), dated as of March 22, 1995 (the "Term
Loan
Note"), and the Agreement;
WHEREAS, the Company and the Lender have also entered into a
working
capital facility with a present Working Capital Commitment Amount of One
Million
Dollars ($1,000,000), as evidenced by a First Amended and Restated
Working
Capital Promissory Note in the principal sum of One Million
Dollars
($1,000,000), dated as of February 29, 1996 (the "`Working Capital Note"),
and
the Agreement (the Warehousing Promissory Note, the Term Loan Promissory
Note
and the Working Capital Promissory Note shall collectively be referred to
as the
"Notes");
WHEREAS, the Company has requested the Lender to extend the
period for
which the Warehousing Commitment and Working Capital Commitment
under the
Agreement have been made and to amend certain other terms -of the
Agreement and
the Lender has agreed to such extension and amendment of the Agreement
subject
to the terms and conditions of this Amendment;
NOW, THEREFORE, for and in consideration of the foregoing and of the
mutual
covenants, agreements and conditions hereinafter set forth and for other
good
and valuable consideration, the receipt and sufficiency of which are
hereby
acknowledged, the parties hereto hereby agree as follows: .
1. All capitalized terms used herein and not otherwise defined shall
have
their respective meanings set forth in the Agreement.
2. The effective date ("Effective Date") of this Amendment shall be
November 14, 1997, the date on which the Company has complied with all the
terms
and conditions of this Amendment.
3. Section 1.1 of the Agreement shall be amended by adding the
following
definitions in the appropriate alphabetical order:
"Credit Score" means the process by which the mortgagors
overall
consumer credit is represented by a single numeric credit score as
provided
by an acceptable credit repository.
"Designated Bank Charges" means any fees, interest or other
charges
that would otherwise be payable to a Designated Bank, including
Federal
Deposit Insurance Corporation insurance premiums, service charges and
such
other charges as may be imposed by governmental authorities from
time to
time.
"Long-term Repurchase Advance" means an Advance made
against
Repurchased Mortgage Loans or Rejected Mortgage Loans with respect to
which
the Lender determines that the related deficiency cannot be readily
cured
by the Company within sixty (60) days. The Lender shall determine
whether a
Repurchase Advance is a Long-term Repurchase Advance pursuant to
Section
2.1(c)(5).
"Manufactured Home" means a structure that is built on a
permanent
chassis (steel frame) with the wheel assembly necessary for
transportation
in one or more sections to a permanent site or semi-permanent
site and
which has been built in compliance with the National Manufactured
Housing
Construction and Safety Standards established by HUD.
"Short-term Repurchase Advance" means an Advance made
against
Repurchased Mortgage Loans or Rejected Mortgage Loans with respect to
which
the Lender determines that the related deficiency can be readily
cured by
the Company within sixty (60) days. The Lender shall determine
whether a
Repurchase Advance is a Short-term Repurchase Advance pursuant to
Section
2.1(c)(5).
"Wire Disbursement Account" means a demand deposit account
maintained
at the Funding Bank in the name of the Lender for the clearing of
wire
transfers requested by the Company to fund the closing of
Pledged
Mortgages.
4. Section 1.1 of the Agreement shall be amended to delete the
definitions
of "Conventional Mortgage Loan," "Eligible Balances," "High LTV Mortgage
Loan,"
"Home Equity Loan," "`Maturity Date," "Mortgage," "Mortgage Note Amount'.
and
"Warehousing Promissory Note" in their entirety, replacing them
with the
following definitions:
"Conventional Mortgage Loan" means a closed-end First Mortgage
Loan
other than an FHA insured Mortgage Loan, a VA guaranteed Mortgage Loan
or a
High LTV Mortgage Loan.
"Eligible Balances" means all funds of or maintained by the
Company
and its Subsidiaries in accounts at a Designated Bank, less
balances to
support float, reserve requirements, and such other reductions as
may be
imposed by governmental authorities from time to time.
"High LTV Mortgage Loan" means a Mortgage Loan made to a
mortgagor,
with a Credit Score of 630 or better, of which the sum of the
maximum
amount available to be borrowed thereunder (whether or not borrowed)
at the
time of origination plus the Mortgage Note Amounts of all other
Mortgage
Loans secured by the related improved real property exceeds one
hundred
percent (100%) and is less than or equal to one hundred twenty-five
percent
(125%) of the appraised value of such related improved real property.
"Home Equity Loan" means an open-ended revolving line of credit
that
is a Mortgage Loan secured by either a First Mortgage or a Second
Mortgage,
which is not a High LTV Mortgage Loan or a Title I Mortgage Loan.
"Maturity Date" shall mean the earlier of: (a) the close of
business
on December 31, 1998 as such date may be extended from time to
time in
writing by the Lender, in its sole discretion, on which date
the
Warehousing Commitment and Working Capital Commitment shall expire of
their
own term, and without the necessity of action by the Lender, and
(b) the
date the Advances become due and payable pursuant to Section 8.2
below.
"Mortgage" means a mortgage or deed of trust on improved real
property
(including, without limitation, real property to which a Manufactured
Home
has been affixed in a manner such that the Lien of a mortgage or
deed of
trust would attach to such manufactured home under applicable real
property
law). A Mortgage may be a First Mortgage or a Second Mortgage.
"Mortgage Note Amount" means, as of the date of determination,
the
then outstanding unpaid principal amount of a Mortgage Note (whether
or not
an additional amount is available to be drawn thereunder).
"Nonconforming Rate" means a floating rate of interest per annum
equal
to two and one-quarter percent (2.251) over LIBOR. The Nonconforming
Rate
shall be adjusted on and as of the effective date of any change in
LIBOR.
The Lender's determination of the Nonconforming Rate as of any
date of
determination shall be conclusive and binding, absent manifest error.
"Ordinary Warehousing Rate" means a floating rate of interest
per
annum equal to two percent (2.00%) over LIBOR. The Ordinary
Warehousing
Rate shall be adjusted on and as of the effective date of any
change in
LIBOR. The Lenders determination of the Ordinary Warehousing Rate as
of any
date of determination shall be conclusive and binding, absent
manifest
error.
"Warehousing Promissory Note" means the promissory note
evidencing the
Company's Obligations with respect to Ordinary Warehousing
Advances,
Nonconforming Advances, Home Equity Advances, Second Mortgage
Advances and
Repurchase Advances.
5. The definition of "Sublimit Promissory Note" in Section 1.1
of the
Agreement shall be deleted in its entirety.
6. Section 2.1(b)(4) of the Agreement is hereby deleted in its
entirety and
the following section is substituted in lieu thereof:
(4) The aggregate amount of Nonconforming Advances outstanding
at any
one time shall not exceed Five Million Dollars ($5,000,000).
7. Section 2.1(c)(5) of the Agreement is hereby deleted in its
entirety and
the following section is substituted in lieu thereof:
(5) For a Mortgage Loan pledged to secure a Repurchase Advance,
(i) if
the Lender determines (which determination shall in all events be
binding)
that the deficiency which caused such Mortgage Loan to become a
Repurchased
Mortgage Loan or Rejected Mortgage Loan can be readily cured by the
Company
so as to permit the Mortgage Loan to be sold within sixty (60) days,
ninety
percent (90%) of the Mortgage Note Amount, and (ii) in all other
cases,
sixty percent (60%) of the Mortgage Note Amount.
8. Section 2.2(e) of the Agreement shall be deleted in its entirety
and the
following shall be substituted in lieu thereof:
2.2(e) To make an Warehousing Advance, the Lender shall
cause the
Funding Bank to credit the Wire Disbursement Account upon compliance
by the
Company with the terms of the Loan Documents. The Lender shall
determine in
its sole discretion the method by which Advances and other
amounts on
deposit in the Wire Disbursement Account are disbursed by the Funding
Bank
to or for the account of the Company.
9. Section 2.7 of the Agreement shall be deleted in its entirety
and the
following shall be substituted in lieu thereof:
2.7 Notes. The Company's Obligations in respect of
Ordinary
Warehousing Advances, Nonconforming Advances, Home Equity Advances,
Second
Mortgage Advances and Repurchase Advances shall be evidenced
by a
Warehousing Promissory Note of the Company substantially in the
form of
Exhibit A-1 attached to the Third Amendment of the Agreement. The
Company's
Obligations in respect of Working Capital Advances shall be evidenced
by a
Working Capital Promissory Note of the Company substantially in the
form of
Exhibit A-3 attached to the Third Amendment of the Agreement. The
Company's
Obligations in respect of Term Loan Advances shall be evidenced by a
Term
Loan Promissory Note of the Company substantially in the form of
Exhibit
A-4 attached to the Agreement. Each note shall be dated as of the
date
hereof. The Warehousing Promissory Note, the Working Capital
Promissory
Note and the Term Loan Promissory Note are collectively referred to
as the
"Notes". The terms "Warehousing Promissory Note," "Working
Capital
Promissory Note," "Term Loan Promissory Note," "Note" or "Notes"
shall
include all extensions, renewals and modifications of the Notes
and all
substitutions therefor. All terms and provisions of the Notes are
hereby
incorporated herein.
10. Section 2.8 of the Agreement shall be deleted in their entirety
and the
following shall be substituted in lieu thereof:
2.8. Interest.
2.8(a) Except as otherwise provided in Section 2.8(h)
hereof, the
unpaid amount of each Ordinary Warehousing Advance, Home
Equity
Advance or Second Mortgage Advance shall bear interest, from the
date
of such Advance until paid in full, at the Ordinary Warehousing
Rate.
2.8(b) Except as otherwise provided in Section 2.8(h)
hereof, the
unpaid amount of each Nonconforming Advance shall bear interest,
from
the date of such Nonconforming Advance until paid in Full,
at the
Nonconforming Rate.
2.8(c) Except as otherwise provided in Section 2.8(h)
hereof, the
unpaid amount of each Working Capital Advance and each Term
Loan
Advance shall bear interest, from the date of such Advance, until
paid
in full, at the Term/Working Capital Rate.
2.8(d) Except as otherwise provided in Section 2.8(h)
hereof, the
unpaid amount of each Repurchase Advance shall bear interest,
from the
date of such Advance until paid in full, at the Repurchase Rate.
2.8(e) The Company shall be entitled to receive certain
benefits
based on the average monthly Eligible Balances of the
Company
maintained at a Designated Bank.
For the purposes hereof, all Advances shall be called
the
"Applicable Advances". After the end of each calendar month,
the
Lender will calculate the interest due for the applicable
month, by
electing a portion ("Balance Funded Portion") of the
Applicable
Advances which is equal to the lesser of (a) the Applicable
Advances
outstanding during such month or (b) the average amount of
Eligible
Balances on deposit with a Designated Bank during such month.
The
Balance Funded Portion of the Applicable Advances shall bear
interest
at a balance funded rate of two percent (2.00%).
The Balance Funded Portion of the Applicable Advances
outstanding
for a month shall be determined by (a) first, deducting the
average
amount of Repurchase Advances outstanding for a month from the
average
amount of Eligible Balances during such month, but only to the
extent
of the average amount of Eligible Balances, (b) second, to the
extent
Eligible Balances remain for such month, deducting the average
amount
of Nonconforming Advances outstanding for a month from the
remaining
average amount of Eligible Balances during such month, but only
to the
extent of the remaining average amount of Eligible Balances
and (c)
third, to the extent Eligible Balances remain for such
month,
deducting the average aggregate amount of Ordinary
Warehousing
Advances, Home Equity Advances and Second Mortgage
Advances
outstanding for a month from the remaining average amount of
Eligible
Balances during such month, but only to the extent of the
remaining
average amount of Eligible Balances.
If, for any month, a portion of the average amount of
Eligible
Balances remains (Remainder) after the Balance Funded
Portion has
been deducted, the Lender shall provide a benefit in the form
of an
"Earnings Credit" on the Remainder portion of the Eligible
Balances
maintained in time deposit accounts with the Designated Bank,
and the
Lender shall provide a benefit in the form of an "Earnings
Allowance"
on the Remainder portion of the Eligible Balances maintained in
demand
deposit accounts with the Designated Bank. Any Earnings
Allowance
shall be used first and any Earnings Credit shall be used second
as a
credit against accrued Miscellaneous Charges and fees, including,
but
not limited to Commitment Fees and Warehousing Fees, and may be
used,
at the Lender's option, to reduce accrued interest. Any
Earnings
Allowance not used during the month in which the benefit was
received
shall be accumulated for use and must be used within six (6)
months of
the month in which the benefit was received. Any Earnings
Credit not
used during the month in which the benefit was received shall be
used
to provide a cash benefit to the Company.
The Lender's determination of the Balance Funded Portion,
the
Earnings Credit and the Earnings Allowance for any month
shall be
determined by the Lender in its sole discretion and
shall be
conclusive and binding absent manifest error. In no event
shall the
benefit received by the Company exceed the Depository Benefit.
Either party hereto may terminate the benefits provided
for in
this Section, effective immediately upon Notice to the other
party, if
the terminating party shall have determined (which determination
shall
be conclusive and binding absent manifest error) at any time
that any
applicable law, rule, regulation, order or decree or
any
interpretation or administration thereof by any governmental
authority
charged with the interpretation or administration thereof,
or
compliance by such party with any request or directive (whether
or not
having the force of law) of any such authority, shall make it
unlawful
or impossible for such party to continue to offer or receive
the
benefits provided for in this Section.
2.8(f) Interest shall be computed on the basis of a 360-day
year
and applied to the actual number of days elapsed in each
interest
calculation period and shall be payable monthly in arrears,
on the
first day of each month, commencing with the first month
following the
date of this Agreement, and on the applicable Maturity Date.
2.8(g) If, for any reason, no interest is due on an Advance,
the
Company agrees to pay to the Lender an administrative fee equal
to one
day of interest on such Advance at the applicable rate of
interest as
in effect on the date of such Advance. Administrative and other
fees
shall be due and payable in the same manner as interest is
due and
payable hereunder.
2.8(h) Upon demand of the Lender and upon Notice to the
Company,
after the occurrence and during the continuation of an
Event of
Default, the unpaid amount of each Advance shall bear interest
until
paid in full at a per annum rate of interest (the "Default
Rate")
equal to four percent (4%) in excess of the rate of interest
otherwise
applicable to such Advance pursuant to any other subsection of
this
Section 2.8 or, if no rate is applicable, the highest rate
then
applicable to any outstanding Advances.
11. Sections 2.9(f)(1), (2) and (12) of the Agreement shall be deleted
in
their entirety and the following shall be substituted in lieu thereof:
(1) For a Pledged Mortgage with respect to which a
shorter or
longer period is not prescribed elsewhere in this Section
2.5(d), one
hundred twenty (120) days elapse from the date of the initial
Advance
made by the Lender against such Pledged Mortgage, whether or not
such
Pledged Mortgage is included in an Eligible Mortgage Pool.
(2) Forty-five (45) days elapse from the date the
Pledged
Mortgage was delivered to an Investor or an Approved Custodian
for
examination and purchase or inclusion in an Eligible Mortgage
Pool,
without the purchase being made or the Eligible Mortgage Pool
being
initially certified, or upon rejection of the Pledged
Mortgage as
unsatisfactory by an Investor or an Approved Custodian.
(12) In the case of (i) a Long-term Repurchase Advance,
one
hundred eighty (180) days elapse from the date of the initial
Advance,
and (ii) a Short-term Repurchase Advance, sixty (60) days elapse
from
the date of the initial Advance, whether or not the Pledged
Mortgage
is included in an Eligible Mortgage Pool; provided, however,
that a
Short-term Repurchase Advance may be converted into a Long-
term
Repurchase Advance, and may remain outstanding for an
additional one
hundred twenty (120) days, upon the following condition: on the
date a
Short-term Repurchase Advance made against a Pledged
Mortgage is
redesignated as a Long-term Mortgage Advance ("Conversion
Date"), the
Company shall reduce the outstanding amount of such
Advance to
forty-five percent (45%) of the Mortgage Note Amount of such
Pledged
Mortgage.
12. Section 2.9(h)(3) of the Agreement shall be deleted in its
entirety and
the following shall be substituted in lieu thereof:
(3) On the fifteenth (15) day of each month occurring
after the
date a Long-term Repurchase Advance is made, unless the
Repurchased
Mortgage Loan or the Rejected Mortgage Loan against which
such
Long-term Repurchase Advance was made is included in an
Eligible
Mortgage Pool, the Company shall reduce the outstanding
Advance
against such Mortgage Loan by five percent (5%) of the original
face
amount of the Mortgage Note evidencing such Repurchased Mortgage
Loan
or the Rejected Mortgage Loan.
13. Section 3.2(d) of the Agreement shall be deleted in its
entirety and
the following shall be substituted in lieu thereof:
3.2(d) The Lender shall have the exclusive right to
the
possession of the Pledged Securities or, if the Pledged
Securities are
issued in book-entry form or issued in certificated form and
delivered
to a clearing corporation (as such term is defined in the
Uniform
Commercial Code of Minnesota) or its nominee, the Lender shall
have
the right to have the Pledged Securities registered in the name
of a
securities intermediary (as such term is defined in the
Uniform
Commercial Code of Minnesota) in an account containing only
customer
securities for the account of the Lender, and the Lender shall
have
the right to cause delivery of the Pledged Securities to be
made to
the Investor or the book entries registered in the name
of the
Investor or the Investor's designee only against payment
therefor. The
Company acknowledges that the Lender may enter into one or
more
standing arrangements with other financial institutions for
the
issuance of Pledged Securities in book entry form in the name of
such
other financial institutions, as agent or securities
intermediary for
the Lender, and the Company agrees upon request of the
Lender, to
execute and deliver to such other financial institutions the
Company's
written concurrence in any such standing arrangements.
14. Section 5.15 of the Agreement is hereby amended to add the
following
section immediately after Section 5.15(i):
5.15(j) Each Pledged Mortgage secured by real property to
which a
Manufactured Home is affixed will create a valid Lien on
such
manufactured Home that will have priority over ai.y other Lien on
such
Manufactured Home, whether or not arising under applicable
real
property law.
15. Upon execution of this Amendment, the Company agrees to pay
to the
Lender the pro rata Warehousing Commitment Fee on the Warehousing
Commitment
Amount, the pro rata Working Capital Commitment Fee on the Working
Capital
Commitment Amount, and the pro rata Term Loan Commitment Fee on the
outstanding
principal balance of the Term Loan Advances for the time period
from the
November 15, 1997, to and including December 31, 1997.
16. Upon execution and delivery of this Amendment, all obligations
owed by
the Company under the First Amended and Restated Sublimit Promissory Note,
dated
as of February 29, 1996, (including, without limitation, the unpaid
principal
thereunder, interest accrued thereon and fees accrued under the
Agreement,
whether or not yet due and owing) as of the date hereof, shall be owed
under the
First Amended and Restated Warehousing Promissory Note which shall be
deemed to
replace the Sublimit Promissory Note.
17. Exhibits C-SF and K to the Agreement are hereby deleted in
their
entirety and replaced with the new Exhibits C-SF and K attached to
this
Amendment. All references in the Agreement to Exhibits C-SF and K
shall be
deemed to refer to the new Exhibits C-SF and K.
18. The Company shall deliver to the Lender (a) an executed
original of
this Amendment; (b) an executed Certificate of Secretary with
corporate
resolutions; (c) a current certified tax, lien and judgment search
of the
appropriate public records for the Company and the Guarantor, including a
search
of Uniform Commercial Code financing statements, which search shall not
have
disclosed the existence of any prior Lien on the Collateral other than in
favor
of the Lender or as permitted hereunder; (d) current Certificates of
Good
Standing of the Company; (e) current insurance information; (f) the
Commitment
Fees described in paragraph 14 above; and (g) a Two Hundred Fifty Dollar
($250)
document production fee.
19. The Company represents, warrants and agrees that (a) there
exists no
Default or Event of Default under the Loan Documents, (b) the Loan
Documents
continue to be the legal, valid and binding agreements and obligations
of the
Company enforceable in accordance with their terms, as modified herein,
(c) the
Lender is not in default under any of the Loan Documents and the Company
has no
offset or defense to its performance or obligations under any of the
Loan
Documents, (d) the representations contained in the Loan Documents remain
true
and accurate in all respects, and (e) there has been no material adverse
change
in the financial condition of the Company from the date of the Agreement
to the
date of this Amendment.
20. Except as hereby expressly modified, the Agreement shall
otherwise be
unchanged and shall remain in full force and effect, and the Company
ratifies
and reaffirms all of its obligations thereunder.
21. This Amendment may be executed in any number of counterparts and
by the
different parties hereto on separate counterparts, each of which
when so
executed and delivered shall be an original, but all of which shall
together
constitute one and the same instrument.
IN WITNESS WHEREOF, the Company and the Lender have caused this
Amendment
to be duly executed on their behalf by their duly authorized officers as
of the
day and year above written.
MONUMENT MORTGAGE, INC.,
a California corporation
By:____________________________
Its: Senior Vice President/CFO
RESIDENTIAL FUNDING CORPORATION,
a Delaware corporation
By:____________________________
Its:___________________________
STATE OF California )
) ss
COUNTY OF Contra Costa )
On November 17, 1997, before me, a Notary Public, personally
appeared
Paul Garrigues, the Senior Vice President of MONUMENT MORTGAGE,
INC., a
California corporation, personally known to me (or proved to me on the
basis of
satisfactory evidence) to be the person whose name is subscribed to the
within
instrument and acknowledged to me that he/she executed the same in
his/her
authorized capacity, and that by his/her signature on the instrument the
person,
or the entity upon behalf of which the person acted, executed the
instrument.
WITNESS my hand and official seal.
Notary Public
My Commission Expires:
(SEAL)
STATE OF California )
) ss
COUNTY OF Contra Costa )
On November 18, 1997, before me, a Notary Public, personally
appeared
D. Graham Shipman, the Director of RESIDENTIAL FUNDING CORPORATION, a
California
corporation, personally known to me (or proved to me on the
basis of
satisfactory evidence) to be the person whose name is subscribed to the
within
instrument and acknowledged to me that he/she executed the same in
his/her
authorized capacity, and that by his/her signature on the instrument the
person,
or the entity upon behalf of which the person acted, executed the
instrument.
WITNESS my hand and official seal.
Notary Public
My Commission Expires:
(SEAL)
CONSENT OF GUARANTOR
The undersigned, being the Guarantor under the Guaranty dated as of
July
23, 1997, hereby consents to the foregoing Amendment and the
transactions
contemplated thereby and hereby modifies and reaffirms his obligations
under his
Guaranty so as to include within the term "Guaranteed Debt" the
indebtedness,
obligations and liabilities of the Company under this Amendment. The
Guarantor
hereby reaffirms that his obligations under his Guaranty are
separate and
distinct from the Companies obligations to Lender, and that his
obligations
under the Guaranty are in full force and effect, and hereby waives and
agrees
not to assert any anti-deficiency protections or other rights as a
defense to
his obligations under the Guaranty, all as more fully set forth in the
Guaranty,
the terms of which are incorporated herein as if fully set forth herein.
The Guarantor further agrees, upon Lender's request, to execute
for the
benefit of Lender an additional guaranty in form and content
acceptable to
Lender and conforming to the Guaranty in connection with the
foregoing
Amendment.
FINET HOLDINGS CORPORATION,
a Delaware corporation
By:_______________________________
Its: President
STATE OF California )
) ss
COUNTY OF Contra Costa )
On November 17, 1997, before me, a Notary Public, personally
appeared
Jan Hoeffel, the President of FINET HOLDINGS CORPORATION, a
California
corporation, personally known to me (or proved to me on the
basis of
satisfactory evidence) to be the person whose name is subscribed to the
within
instrument and acknowledged to me that he/she executed the same in
his/her
authorized capacity, and that by his/her signature on the instrument the
person,
or the entity upon behalf of which the person acted, executed the
instrument.
WITNESS my hand and official seal.
Notary Public
My Commission Expires:
(SEAL)
<PAGE>
CERTIFICATE
OF
SECRETARY OF
MONUMENT MORTGAGE, INC.
I, the undersigned, hereby certify that I am the Secretary of
MONUMENT
MORTGAGE, INC., a California corporation (the `"Company"), and have
knowledge of
the matters contained in this Certificate and hereby certify that:
1. The Company is a corporation duly organized, validly existing
and in
good standing under the laws of the State of California
and has
complied with all certifications, filings and requirements
necessary
to continue as a corporation in the State of California and for
each
state where the Company is transacting business as a
foreign
corporation.
2. In connection with the single family revolving warehouse facility
made
to the Company by RESIDENTIAL FUNDING CORPORATION, a
Delaware
corporation (the "Lender") pursuant to the terms of a
Warehousing
Credit and Security Agreement dated as of March 22, 1995, as the
same
may have been amended or supplemented (the `"Warehousing
Agreement"),
the Company has the valid power and authority to execute and
deliver
to the Lender the Seventh Amendment to Warehousing Credit and
Security
Agreement.
3. In connection with the gestation facility made to the Company
by the
Lender pursuant to the terms of a Gestation Warehousing
Credit and
Security Agreement dated as of March 23, 1995, as the same may
have
been amended or supplemented (the "Gestation Agreement"), the
Company
has the valid power and authority to execute and deliver to the
Lender
the First Amendment to Gestation Warehousing Credit and
Security
Agreement (the terms Warehousing Agreement and Gestation
Agreement
shall be referred to as the "Agreements").
4. The resolutions attached to this Certificate as Exhibit A were
duly
adopted by either: (a) by unanimous written action of the
Board of
Directors of the Company; or (b) at a meeting of the
Board of
Directors of the Company held on the _____ day of , 19___, at
which
meeting a quorum was present. I am the keeper of the Minute
Book of
the Company and said resolutions have been entered therein,
have not
been altered, amended, repealed or rescinded, and are now in
full
force and effect.
5. Any Certificates of Incumbency delivered in connection
with the
Agreements are hereby deleted in their entirety and replaced
with the
new Certificate of Incumbency attached to this
Certificate of
Secretary as Exhibit B.
6. There have been no amendments to the Articles of
Incorporation or
Bylaws of the Company since the date of the most recent
certified
copies thereof delivered to the Lender.
IN WITNESS WHEREOF, I have hereunto set my hand and the seal of
this
corporation this 14th day of November, 1997.
___________________________
Secretary
<PAGE>
EXHIBIT A
RESOLUTION OF BOARD OF DIRECTORS
WHEREAS, MONUMENT MORTGAGE, INC., a California corporation (the
"Company"),
has entered into a single family revolving warehouse facility (the
`Warehousing
Commitment"), with a present commitment amount of Ten Million
Dollars
($10,000,000) (the "Warehousing Commitment Amount"), with RESIDENTIAL
FUNDING
CORPORATION, a Delaware corporation (the "Lender"), as evidenced by a
First
Amended and Restated Warehousing Promissory Note in the principal sum
of Ten
Million Dollars ($10,000,000), dated as of February 29, 1996, and
by a
Warehousing Credit and Security Agreement (the "Warehousing Agreement")
dated as
of March 22, 1995, as the same may have been amended or supplemented; and
WHEREAS, the Company and the Lender have entered into a term loan
facility
with a present outstanding principal balance of Six Hundred Twenty-Five
Thousand
Dollars ($625,000), as evidenced by a Term Loan Promissory Note in the
principal
amount of One Million Dollars ($1,000,000), dated as of March 22, 1995,
and the
Warehousing Agreement;
WHEREAS, the Company and the Lender have also entered into a
working
capital facility with a present Working Capital Commitment Amount of One
Million
Dollars ($1,000,000) (the "Working Capital Commitment"), as evidenced by a
First
Amended and Restated Working Capital Promissory Note in the principal sum
of One
Million Dollars ($1,000,000), dated as of February 29, 1996, and the
Warehousing
Agreement;
WHEREAS, the Company and the Lender have entered into a
discretionary
gestation facility, as evidenced by a First Amended and Restated Promissory
Note
in the principal amount of Twenty-Five Million Dollars ($25,000,000),
dated as
of February 29, 1996, and a Gestation Warehousing Credit and Security
Agreement
(the "Gestation Agreement") dated as of March 23, 1995 (the terms
Warehousing
Agreement and Gestation Agreement shall be referred to as the
"Agreements");
WHEREAS, the Company proposes to extend the period for which
the
Warehousing Commitment and the Working Capital Commitment under the
Warehousing
Agreement have been made and amend certain terms of the Agreements; and
WHEREAS, to evidence such extension and amendment of the Agreements,
the
Company proposes to execute and deliver a Seventh Amendment to
Warehousing
Agreement and a First Amendment to the Gestation Agreement (the
"Amendments"),
copies of which have been presented to the Board of Directors of this
Company;
and
WHEREAS, the Board of Directors of this Company has determined that it
will
be in the best interests of this Company for the Company to extend
the
Warehousing commitment and Working Capital Commitment and amend the
Agreements.
WHEREAS, the Board of Directors of the Company has determined that it
will
be in the best interests of the Company to restate the authority of
certain
officers and employees to execute and deliver documents in connection
with the
Loan.
RESOLVED, that these resolutions are enacted by the Board of
Directors of
this Company on its behalf and on behalf of the Company.
FURTHER RESOLVED, that the Company shall extend the Warehousing
Commitment
and Working Capital Commitment and amend the Agreements to be evidenced
by the
Amendments.
FURTHER RESOLVED, that the Amendments in the forms presented to the
Board
of Directors of this Company are hereby approved and copies thereof are
filed in
the records of this Company with these Resolutions.
FURTHER RESOLVED, that any One (insert minimum number required to
sign) of
the following titles or positions of officers of the Company: President,
Chief
Financial Officer Senior Vice President (list titles/positions of
officers
authorized, do not list individual names), shall be and are
authorized,
empowered and directed in the name of and on behalf of this Company, to
execute,
acknowledge and deliver the Amendments in the forms approved by the
Board of
Directors of this Company as aforesaid, with such changes therein as
may be
acceptable to such officers, as conclusively evidenced by their
execution
thereof.
FURTHER RESOLVED, that any One (insert minimum number required to
sign) of
the following titles or positions of officers and employees of the
Company:
President, Chief Financial Officer, Secretary, Senior Vice President,
Vice
President. Assistant Vice President, Assistant Secretary (list
titles/positions
of officers and employees authorized, do not list individual names),
shall be
and are authorized, empowered and directed in the name of and on behalf
of the
Company, to execute, acknowledge and deliver any bailee pledge
agreements,
advance requests, shipping requests, wire transfer instructions,
assignments,
security delivery instructions and trust receipts and to endorse notes
in the
name of the Company, in any form prescribed by the Lender.
FURTHER RESOLVED, that such officers and employees shall be and are
hereby
authorized, empowered and directed to do and perform each and every
act and
execute any and all documents and instruments in the name of this Company
as may
be necessary or desirable to enable this Company to amend the Commitments
and to
carry out the purport and intent of the foregoing Resolutions.
<PAGE>
EXHIBIT "B"
CERTIFICATE AS TO INCUMBENCY
TO: RESIDENTIAL FUNDING CORPORATION
I hereby certify to you that I am the duly elected and qualified
Secretary
of MONUMENT MORTGAGE, INC., a California corporation ("Company") and
that, as
such, I am authorized to execute this Certificate on behalf of the
Company. I
further certify that the persons named below are duly elected,
qualified and
acting officers of the Company, holding on the date hereof the respective
titles
set forth opposite their respective names, and that the respective
signatures
get forth opposite their names are their true and genuine signatures:
Name Title Signature
James W. Noack President ________________________
Paul Garrigues Sr. Vice Pres. ________________________
Lee Decker Sr. Vice Pres. ________________________
George P. Winkel Chief Financial Officer ________________________
Katey Carroll Vice President ________________________
Jill Lewis Assistant Vice Pres. ________________________
Paige Lane Secretary ________________________
Jennifer Aldrete Assistant Secretary ________________________
Phyllis E. Bogart Assistant Secretary ________________________
Kathleen M. Hall Assistant Secretary ________________________
Linda Johnson Assistant Secretary ________________________
Rita Kelley Assistant Secretary ________________________
Regina E. Kimura Assistant Secretary ________________________
Elly Little Assistant Secretary ________________________
Helen Smith Assistant Secretary ________________________
This Certificate replaces any existing Certificates of Incumbency.
You may
conclusively rely on this Certificate until formally advised by a
like
Certificate of any changes herein.
IN WITNESS WHEREOF, I have hereunto executed this Certificate on this
14th
day of November, 1997.
_____________________________
Secretary
<PAGE>
FIRST AMENDMENT TO
GESTATION WAREHOUSING CREDIT AND SECURITY AGREEMENT
(SHIPPED MORTGAGE LOANS)
THIS FIRST AMENDMENT TO GESTATION WAREHOUSING CREDIT AND SECURITY
AGREEMENT
(SHIPPED MORTGAGE LOANS) (this "Amendment") is entered into as of this
17th day
of November 1997, by and between MONUMENT MORTGAGE, INC., a
California
corporation (the "Company") and RESIDENTIAL FUNDING CORPORATION, a
Delaware
corporation (the "Lender").
WHEREAS, the Company and the Lender have entered into a gestation
warehouse
facility pursuant to which the Lender may, in its sole discretion, make
Loans in
an amount not to exceed in the aggregate Twenty-Five Million
Dollars
($25,000,000), to finance Mortgage Loans which have been shipped to an
Investor
for purchase, as evidenced by a Promissory Note in the principal
sum of
Twenty-Five Million Dollars ($25,000,000), dated as of February 29, 1996
(the
"Note"), and by a Gestation Warehousing Credit and Security Agreement
(Shipped
Mortgage Loans) dated as of March 23, 1995, as the same may have been
amended or
supplemented (the "Gestation Agreement"); and
WHEREAS, in connection with an extension of the Existing
Warehousing
Agreement (as defined in the Gestation Agreement) requested by the
Company, the
Lender has requested an increase in the interest rate, and the
Company has
agreed to such increase subject to the terms and conditions of this
Amendment.
NOW, THEREFORE, for and in consideration of the foregoing and of the
mutual
covenants, agreements and conditions hereinafter set forth and for other
good
and valuable consideration, the receipt and sufficiency of which are
hereby
acknowledged, the parties hereto hereby agree as follows:
1. All capitalized terms used herein and not otherwise defined shall
have
their respective meanings set forth in the Gestation Agreement.
2. Section 1.1 of the Gestation Agreement shall be amended to
delete the
definition of "Floating Rate" in its entirety, replacing it with the
following
definition:
"Floating Rate" means a floating rate of interest which is
equal to
1.25% per annum over LIBOR. The Floating Rate will be adjusted as
of the
effective date of each change in LIBOR. .
3. As a condition precedent to the effectiveness of this Amendment,
the
Company shall deliver to the Lender an executed original of this Amendment.
4. The Company represents, warrants and agrees that (a) there
exists no
Default or Event of Default under the Loan Documents, (b) the Loan
Documents
continue to be the legal, valid and binding agreements and obligations
of the
Company enforceable in accordance with their terms, as modified herein,
(c) the
Lender is not in default under any of the Loan Documents and the Company
has no
offset or defense to its performance or obligations under any of the
Loan
Documents, (d) the representations contained in the Loan Documents remain
true
and accurate in all respects, and (e) there has been no material adverse
change
in the financial condition of the Company from the date of the
Gestation
Agreement to the date of this Amendment.
5. Except as hereby expressly modified, the Gestation Agreement
shall
otherwise be unchanged and shall remain in full force and effect,
and the
Company ratifies and reaffirms all of its obligations thereunder.
6. This Amendment may be executed in any number of counterparts and
by the
different parties hereto on separate counterparts, each of which
when so
executed and delivered shall be an original, but all of which shall
together
constitute one and the same instrument.
IN WITNESS WHEREOF, the Company and the Lender have caused this
Amendment
to be duly executed on their behalf by their duly authorized officers as
of the
day and year above written.
MONUMENT MORTGAGE, INC.,
a California corporation
By:______________________________
Its: Senior Vice President/CFO
RESIDENTIAL FUNDING CORPORATION,
a Delaware corporation
By:______________________________
D. GRAHAM SHIPMAN
Its: Director
<PAGE>
STATE OF California )
) ss
COUNTY OF Contra Costa )
On November 17, 1997, before me, a Notary Public, personally
appeared
Paul Garrigues, the Senior Vice President of MONUMENT MORTGAGE,
INC., a
California corporation, personally known to me (or proved to me on the
basis of
satisfactory evidence) to be the person whose name is subscribed to the
within
instrument and acknowledged to me that he/she executed the same in
his/her
authorized capacity, and that by his/her signature on the instrument the
person,
or the entity upon behalf of which the person acted, executed the
instrument.
WITNESS my hand and official seal.
Notary Public
My Commission Expires:
(SEAL)
STATE OF California )
) ss
COUNTY OF Contra Costa )
On November 18, 1997, before me, a Notary Public, personally
appeared
D. Graham Shipman, the Vice President of RESIDENTIAL FUNDING
CORPORATION, a
California corporation, personally known to me (or proved to me on the
basis of
satisfactory evidence) to be the person whose name is subscribed to the
within
instrument and acknowledged to me that he/she executed the same in
his/her
authorized capacity, and that by his/her signature on the instrument the
person,
or the entity upon behalf of which the person acted, executed the
instrument.
WITNESS my hand and official seal.
Notary Public
My Commission Expires:
(SEAL)
EIGHTH AMENDMENT TO
WAREHOUSING CREDIT AND SECURITY AGREEMENT
THIS EIGHTH AMENDMENT TO WAREHOUSING CREDIT AND SECURITY AGREEMENT
(this
"Amendment") is entered into as of this 20th day of February 1998,
by and
between MONUMENT MORTGAGE, INC., a California corporation (the
"Company") and
RESIDENTIAL FUNDING CORPORATION, a Delaware corporation (the "Lenders).
WHEREAS, the Company and the Lender have entered into a single
family
revolving warehouse facility with a present Warehousing Commitment Amount
of Ten
Million Dollars ($10,000,000), to finance the origination and
acquisition of
Mortgage Loans as evidenced by a First Amended and Restated
Warehousing
Promissory Note in the principal sum of Ten Million Dollars ($10,000,000),
dated
February 29, 1996, (the "Warehousing Promissory Note"), and by a
Warehousing
Credit and Security Agreement dated March 22, 1995, as the same may have
been
amended or supplemented (the "Warehousing Agreement");
WHEREAS, the Company and the Lender have entered into a term loan
facility,
as evidenced by a Term Loan Promissory Note in the principal amount
of One
Million Dollars ($1,000,000), dated as of March 22, 1995 (the "Term Loan
Note"),
and the Warehousing Agreement;
WHEREAS, the Company and the Lender have also entered into a
working
capital facility with a present Working Capital Commitment Amount of One
Million
Dollars ($1,000,000), as evidenced by a First Amended and Restated
Working
Capital Promissory Note in the principal sum of One Million
Dollars
($1,000,000), dated as of February 29, 1996 (the "Working Capital Note"),
and
the Warehousing Agreement; and
WHEREAS, the Company has requested the Lender to increase the
Warehousing
Commitment Amount and to amend certain terms of the Warehousing
Agreement and
the Lender has agreed to such increase of the Warehousing Commitment
Amount and
amendment of the Warehousing Agreement subject to the terms and
conditions of
this Amendment;
NOW, THEREFORE, for and in consideration of the foregoing and of the
mutual
covenants, agreements and conditions hereinafter set forth and for other
good
and valuable consideration, the receipt and sufficiency of which are
hereby
acknowledged, the parties hereto hereby agree as follows:
1. All capitalized terms used herein and not otherwise defined shall
have
their respective meanings set forth in the Warehousing Agreement.
2. The effective date ("Effective Date") of this Amendment
shall be
February 23, 1998, the date on which the Company has complied with all the
terms
and conditions of this Amendment.
3. All references to "Knight-Ridder, Inc." shall hereby be amended to
refer
to "Bridge Information Services."
4. Section 1.1 of the Warehousing Agreement shall be amended to
delete the
definitions of "Warehousing Commitment Amount," "Warehousing Maturity
Date" and
"Working Capital Maturity Date" in its entirety, replacing it with the
following
definition:
"Warehousing Commitment Amount" means Ten Million
Dollars
$10,000,00). Notwithstanding the foregoing, during the period
from the
Effective Date to and including August 31, 1998 the Commitment
Amount
shall be temporarily increased to Fifty-Five Million
Dollars
$55,000,000). On the first Business Day following the expiration
of the
temporary increase of the Commitment Amount, the Company shall
repay to
the Lender the amount by which the outstanding Advances
exceed the
Commitment Amount.
"Warehousing Maturity Date" means the earlier of:
(a) the
close of business on December 31, 1998, as such date may be
extended
from time to time in writing by the Lender, in its sole
discretion, and
(b) the date the obligation of the Lender to make further
Advances
hereunder is terminated pursuant to Section 8.2 below.
"Working Capital Maturity Date" means the earlier of:
(a) the
close of business on December 31, 1998, as such date may be
extended
from time to time in writing by the Lender, in its sole
discretion, and
(b) the date the obligation of the Lender to make further
Advances
hereunder is terminated pursuant to Section 8.2 below.
5. Section 2.9 of the Warehousing Agreement shall be deleted
in its
entirety and the following shall be substituted in lieu thereof:
2.9 Principal Payments.
2.9(a) The outstanding principal amount of all
Warehousing
Advances shall be payable in full on the Warehousing Maturity
Date.
2.9(b) The outstanding principal amount of the Term
Loan
Advances as of the Term Loan Commitment Termination Date
shall be
payable in forty-eight (48) equal monthly installments, due
on the
twenty-second (22nd) day of each month beginning on the twenty-
second
(22nd) day of April 1996. Any remaining principal balance of the
Term
Loan Advances shall be payable on the Term Loan Maturity Date.
2.9(c) The outstanding principal amount of all working
Capital
Advances shall be payable in full on the working Capital Maturity
Date.
2.9(d) The Company shall have the right to prepay
the
outstanding Advances in whole or in part, from time to time,
without
premium or penalty; provided, that no voluntary
prepayment of
Warehousing Advances may be made in an amount less than Five
Hundred
Thousand Dollars ($500,000).
2.9(e) All payments of outstanding Warehousing Advances
from
the proceeds of the sale or other disposition of Pledged
Mortgages and
Pledged Securities shall be paid directly by the Investor to the
Cash
Collateral Account to be applied against the Obligations.
2.9(f) The Company shall pay the Lender, without the
necessity
of prior demand or notice from the Lender, and the Company
authorizes
the Lender to cause the Funding Bank to charge the Company's
account
for, the amount of any outstanding Advance against a specific
Pledged
Mortgage, upon the earliest occurrence of any of the following
events:
(1) Ten (10) Business Days elapse from the
date a
Collateral Document was delivered to the Company for
correction
or completion under a Trust Receipt, without being
returned to
the Lender.
(2) On the date on which a Pledged
Mortgage is
determined to have been originated based on untrue,
incomplete or
inaccurate information, whether or not the Company had
knowledge
of such misrepresentation or incorrect information, or
the
Pledged Mortgage is defaulted and has remained in default
for a
period of thirty (30) days or more.
(3) If the outstanding Advances against
Pledged
Mortgages of a specific Mortgage Loan type exceed the
aggregate
Purchase Commitments for such Mortgage Loan type.
(4) Payment of any Lien prior to a Second
Mortgage
Loan is delinquent, and remains delinquent for a period of
sixty
(60) days or more.
(5) Upon sale or other disposition of the
Pledged
Mortgage.
(6) If the Pledged Mortgage is included
in. a
Mortgage Pool, then, if the Mortgage Pool is an Eligible
Mortgage
Pool, upon sale of the Mortgage-backed Security, or
if the
Mortgage Pool is not an Eligible Mortgage Pool, within
two (2)
Business Days after delivery of the Pledged Mortgages to the
pool
custodian.
(7) One (1) Business Day immediately
preceding the
date scheduled for the foreclosure or trustee sale
of the
premises securing a Rejected Mortgage Loan or
Repurchased
Mortgage Loan.
(8) On the date on which the Company knows,
or has
reason to know, or receives notice from the Lender, that
one or
more of the representations and warranties set forth in
Section
5.15 were inaccurate or incomplete in any material respect
on any
date when made or deemed made.
2.9(g) Upon Notice to the Company by the Lender, the
Company
shall pay to the Lender, and the Company authorizes the Lender to
cause
the Funding Bank to charge the Lender's account for, the amount
of any
outstanding Advance against a specific Pledged Mortgage
upon the
earliest occurrence of any of the following events:
(1) For a Pledged Mortgage with respect to
which a
shorter or longer period is not prescribed elsewhere in
this
Section 2.5(d), one hundred twenty (120) days elapse
from the
date of the initial Advance made by the Lender against
such
Pledged Mortgage, whether or not such Pledged
Mortgage is
included in an Eligible Mortgage Pool.
(2) Forty-five (45) days elapse from the
date the
Pledged Mortgage was delivered to an Investor or an
Approved
Custodian for examination and purchase or inclusion
in an
Eligible Mortgage Pool, without the purchase being made
or the
Eligible Mortgage Pool being initially certified, or
upon
rejection of the Pledged Mortgage as unsatisfactory
by an
Investor or an Approved Custodian.
(3) One (1) Business Day elapses from the
date a
Wet Settlement Advance was made and the Pledged Mortgage
which
was to have been funded by such Wet Settlement Advance
is not
closed and funded.
(4) Seven (7) Business Days elapse from the
date a
Wet Settlement Advance was made without receipt by the
Lender of
all Collateral Documents relating to such Pledged
Mortgage, or
such Collateral Documents, upon examination by the Lender,
are
found not to be in compliance with the requirements of
this
Agreement or the related Purchase Commitment; provided,
however,
if the Wet Settlement Advance was made against a
Repurchased
Mortgage Loan, twenty (20) days elapse from the date of
such
Advance without receipt by the Lender of all Collateral
Documents
relating to such Pledged Mortgage, or such Collateral
Documents,
upon examination by the Lender, are found not to be in
compliance
with the requirements of this Agreement.
(5) In the case of (i) a Long-term
Repurchase
Advance, one hundred eighty (180) days elapse from the
date of
the initial Advance, and (ii) a Short-term Repurchase
Advance,
sixty (60) days elapse from the date of the initial
Advance,
whether or not the Pledged Mortgage is included in an
Eligible
Mortgage Pool; provided, however, that a Short-term
Repurchase
Advance may be converted into a Long-term Repurchase
Advance, and
may remain outstanding for an additional one hundred twenty
(120)
days, upon the following condition: on the date a Short-
term
Repurchase Advance made against a Pledged Mortgage
is
redesignated as a Long-term Mortgage Advance ("Conversion
Date"),
the Company shall reduce the outstanding amount of such
Advance
to forty-five percent (45%) of the Mortgage Note Amount of
such
Pledged Mortgage.
(6) Three (3) Business Days after the
mandatory
delivery date of the related Purchase Commitment and the
specific
Pledged Mortgage was not delivered under the Purchase
Commitment
prior to such mandatory delivery date, or the Purchase
Commitment
is terminated; unless in each case, such Pledged
Mortgage is
eligible for delivery to an Investor under a comparable
Purchase
Commitment acceptable to the Lender.
2.9(h) The outstanding amount of any Advance made
pursuant to
Section 2.2(f) shall be payable in full within one (1) Business
Day
after the date of such Advance.
2.9(i) In addition to the payments required
pursuant to
Sections 2.9(f) and 2.9(g), the Company shall be obligated to
pay to
the Lender, without the necessity of prio- demand or notice
from the
Lender, and the Company authorizes the Lender to cause the Funding
Bank
to charge the Company's account for, the following amounts in
respect
of outstanding Advances in the following circumstance:
(1) If at any time (1) the aggregate
outstanding
principal balance of all Term Loan Advances is greater
than the
Term Loan Collateral Value plus the Excess Working Capital
Value,
or (2) the aggregate outstanding principal balance of all
Working
Capital Advances is greater than the Working Capital
Collateral
Value, the Company shall prepay the outstanding Term
Loan
Advances or the outstanding Working Capital Advances, as
required
to eliminate such excess.
(2) If the principal amount of any
Pledged
Mortgage is prepaid in whole or in part while a
Warehousing
Advance is outstanding against such Pledged Mortgage, the
amount
of such prepayment, to be applied to such Advance.
(3) On the fifteenth (15) day of each
month
occurring after the date a Long-term Repurchase Advance is
made,
unless the Repurchased Mortgage Loan or the Rejected
Mortgage
Loan against which such Long-term Repurchase Advance was
made is
included in an Eligible Mortgage Pool, the Company shall
reduce
the outstanding Advance against such Mortgage Loan by
five
percent (5%) of the original face amount of the Mortgage
Note
evidencing such Repurchased Mortgage Loan or the
Rejected
Mortgage Loan.
2.9(j) For a period of not less than five (5) consecutive
days
in each Calendar Quarter (provided, that no such five (5)-day
period
shall begin fewer than thirty-one (31) days after the end of the
five
(5)-day period for the preceding Calendar Quarter), there shall
be no
Working Capital Advances outstanding, and the Company shall make
such
prepayments of the Working Capital Advances, and shall refrain
from
requesting Working Capital Advances, as necessary to comply
with the
foregoing requirement.
2.9(k) All amounts prepaid on the Term Loan Advances
after the
Term Loan Advances after the Term Loan Commitment Termination
Date
shall be applied to the installments required pursuant to
Section
2.9(b) in the inverse order of their maturities. Amounts
paid or
prepaid on the Term Loan Advances after the Term Loan
Commitment
Termination Date may not be reborrowed hereunder.
2.9(l) The Company shall give Notice to the
Lender
(telephonically, to be followed by written notice) of the
Pledged
Mortgages or Pledged Securities for which proceeds have been
received.
Upon receipt of such Notice the Advances against such Pledged
Mortgages
or Pledged Securities shall be repaid and such Pledged
Mortgages or
Pledged Securities shall be considered to have been redeemed
from
pledge. The Lender is entitled to rely upon the Company's
affirmation
that deposits in the Cash Collateral Account represent payment
from
Investors for the purchase of Pledged Mortgages or Pledged
Securities
as specified by the Company. In the event that the payment
from an
Investor for the purchase of Pledged Mortgages or Pledged
Securities is
less than the outstanding Advances against such Pledged
Mortgages or
the Mortgage Loans backing Pledged Securities, the Lender is
authorized
to cause the Funding Bank to charge the Company's account for an
amount
equal to such deficiency. Provided no Default or Event of
Default
exists, the Lender shall return any excess payment from an
Investor for
Pledged Mortgages or Pledged Securities to the Company.
6. Upon execution of this Amendment, the Company agrees to pay
to the
Lender the pro rata Commitment Fee on the increase portion of the
Commitment
Amount for the time period from the Effective Date to and including
March 31,
1998.
7. Exhibit A-1 to the Warehousing Agreement is deleted in its
entirety and
Exhibit A-1 attached to this Amendment is substituted in lieu thereof. The
First
Amended and Restated Warehousing Promissory Note is amended and restated
in as
set forth in the Second Amended and Restated Promissory Note, in the
form of
Exhibit A-1 attached to this Amendment. All references in this Amendment
and in
the Warehousing Agreement to the Warehousing Promissory Note shall be
deemed to
refer to the Second Amended and Restated Warehousing Promissory Note
delivered
in connection with this Amendment.
8. The Company shall deliver to the Lender (a) an executed original of
this
Amendment; (b) an executed original of the Second Amended and
Restated
Warehousing Promissory Note; (c) an executed Certificate of Secretary
with
corporate resolutions; (d) the Warehousing Commitment Fee on the
increase
portion of the Commitment Amount; and (e) a Two Hundred Fifty Dollar
($250)
document production fee.
9. The Company represents, warrants and agrees that (a) there
exists no
Default or Event of Default under the Loan Documents, (b) the Loan
Documents
continue to be the legal, valid and binding agreements and obligations
of the
Company enforceable in accordance with their terms, as modified herein,
(c) the
Lender is not in default under any of the Loan Documents and the Company
has no
offset or defense to its performance or obligations under any of the
Loan
Documents, (d) the representations contained in the Loan Documents remain
true
and accurate in all respects, and (e) there has been no material adverse
change
in the financial condition of the Company from the date of the
Warehousing
Agreement to the date of this Amendment.
10. Except as hereby expressly modified, the Warehousing Agreement
shall
otherwise be unchanged and shall remain in full force and effect, and the
Company ratifies and reaffirms all of its obligations thereunder.
11. This Amendment may be executed in any number of counterparts and
by the
different parties hereto on separate counterparts, each of which
when so
executed and delivered shall be an original, but all of which shall
together
constitute one and the same instrument.
IN WITNESS WHEREOF, the Company and the Lender have caused this
Amendment
to be duly executed on their behalf by their duly authorized officers as
of the
day and year above written.
MONUMENT MORTGAGE, INC.,
a California corporation
By:_________________________________
Its: Senior Vice President
RESIDENTIAL FUNDING CORPORATION,
a Delaware corporation
By:_________________________________
Its:________________________________
STATE OF California )
) ss
COUNTY OF Contra Costa )
On February 27, 1998, before me, a Notary Public, personally
appeared
Paul Garrigues, the Senior Vice President of MONUMENT MORTGAGE,
INC., a
California corporation, personally known to me (or proved to me on the
basis of
satisfactory evidence) to be the person whose name is subscribed to the
within
instrument and acknowledged to me that he/she executed the same in
his/her
authorized capacity, and that by his/her signature on the instrument the
person,
or the entity upon behalf of which the person acted, executed the
instrument.
WITNESS my hand and official seal.
Notary Public
My Commission Expires:
(SEAL)
STATE OF California )
) ss
COUNTY OF Contra Costa )
On , before me, a Notary Public, personally appeared ,
the of
RESIDENTIAL FUNDING CORPORATION, a California corporation, personally
known to
me (or proved to me on the basis of satisfactory
evidence) to be the person whose name is subscribed to the within
instrument and
acknowledged to me that he/she executed the same in his/her authorized
capacity,
and that by his/her signature on the instrument the person, or the entity
upon
behalf of which the person acted, executed the instrument.
WITNESS my hand and official seal.
Notary Public
My Commission Expires:
(SEAL)
<PAGE>
CONSENT OF GUARANTOR
The undersigned, being the Guarantor under the Guaranty dated as of
July
23, 1997, hereby consents to the foregoing Amendment and the
transactions
contemplated thereby and hereby modifies and reaffirms his obligations
under his
Guaranty so as to include within the term "Guaranteed Debt" the
indebtedness,
obligations and liabilities of the Company under this Amendment and the
Second
Amended and Restated Warehousing Promissory Note. The Guarantor hereby
reaffirms
that his obligations under his Guaranty are separate and distinct
from the
Company's obligations to Lender, and that his obligations under the
Guaranty are
in full force and effect, and hereby waives and agrees not to
assert any
anti-deficiency protections or other rights as a defense to his
obligations
under the Guaranty, all as more fully set forth in the Guaranty, the
terms of
which are incorporated herein as if fully set forth herein.
The Guarantor further agrees, upon Lender's request, to execute
for the
benefit of Lender an additional guaranty in form and content
acceptable to
Lender and conforming to the Guaranty in connection with the
foregoing
Amendment.
GUARANTOR:
__________________________________
FINET HOLDINGS CORPORATION
STATE OF California )
) ss
COUNTY OF Contra Costa )
On February 27, 1998, before me, a Notary Public, personally
appeared
George Winkel, the CFO of FINET HOLDINGS CORPORATION, personally known to
me (or
proved to me on the basis of satisfactory evidence) to be the person whose
name
is subscribed to the within instrument and acknowledged to me that
he/she
executed the same in his/her authorized capacity, and that by his/her
signature
on the instrument the person, or the entity upon behalf of which the
person
acted, executed the instrument.
WITNESS my hand and official seal.
Notary Public
My Commission Expires:
(SEAL)
<PAGE>
EXHIBIT A-1
SECOND AMENDED AND RESTATED WAREHOUSING PROMISSORY NOTE
$55,000,000 Date: February __,
1998
FOR VALUE RECEIVED, the undersigned, MONUMENT MORTGAGE,
INC., a
California corporation, (herein called the "Company"), hereby
promises to
pay to the order of RESIDENTIAL FUNDING CORPORATION, a Delaware corporation
(the
"Lender" or, together with its successors and assigns, the "Holder")
whose
principal place of business is 8400 Normandale Lake Blvd., Suite
600,
Minneapolis, Minnesota 55437, or at such other place as the Holder may
designate
from time to time, the principal sum of Fifty-Five Million Dollars
($55,000,000)
or so much thereof as may be outstanding from time to time pursuant
to the
Warehousing Credit and Security Agreement described below, and to pay
interest
on said principal sum or such part thereof as shall remain unpaid from
time to
time, from the date of each Advance until repaid in full, and all other
fees and
charges due under the Warehousing Agreement, at the rate and at the
times set
forth in the Warehousing Agreement. All payments hereunder shall be
made in
lawful money of the United States and in immediately available funds.
This Note is given to evidence an actual warehouse facility in the
above
amount and is the Note referred to in that certain Warehousing Credit
and
Security Agreement (the "Warehousing Agreement") dated March 22, 1995,
between
the Company and the Lender, as the same may be amended or supplemented from
time
to time, and is entitled to the benefits thereof. Reference is hereby
made to
the Warehousing Agreement (which is incorporated herein by reference as
fully
and with the same effect as if set forth herein at length) for a
description of
the Collateral, a statement of the covenants and agreements, a statement
of the
rights and remedies and securities afforded thereby and other matters
contained
therein. Capitalized terms used herein, unless otherwise defined herein,
shall
have the meanings given them in the Warehousing Agreement.
This Note is given in replacement for, and not in satisfaction of,
that
certain First Amended and Restated Warehousing Promissory Note dated
February
29, 1996, and issued by the Company to evidence its Obligations
under the
Warehousing Agreement (the "Existing Note"). All amounts owed by the
Company
under the Existing Note (including, without limitation, the unpaid
principal
thereunder, interest accrued thereon and fees accrued under the
Warehousing
Agreement, whether or not yet due and owing) as of the date hereof,
shall be
owed hereunder.
This Note may be prepaid in whole or in part at any time without
premium or
penalty.
Should this Note be placed in the hands of attorneys for collection,
the
Company agrees to pay, in addition to principal and interest, fees and
charges
due under the Warehousing Agreement, any and all costs of collecting this
Note,
including reasonable attorneys' fees and expenses.
The Company hereby waives demand, notice, protest and presentment.
This Note shall be construed and enforced in accordance with the
laws of
the State of Minnesota, without reference to its principles of conflicts of
law.
IN WITNESS WHEREOF, the Company has executed this Note as of the
day and
year first above written.
MONUMENT MORTGAGE, INC.,
a California corporation
By:_______________________________
Its:______________________________
STATE OF California )
) ss
COUNTY OF Contra Costa )
On , before me, a Notary Public, personally appeared , the of
MONUMENT
MORTGAGE, INC., a California corporation, personally known to me (or
proved to
me on the basis of satisfactory evidence)
to be the person whose name is subscribed to the within instrument
and
acknowledged to me that he/she executed the same in his/her authorized
capacity,
and that by his/her signature on the instrument the person, or the entity
upon
behalf of which the person acted, executed the instrument.
WITNESS my hand and official seal.
Notary Public
My Commission Expires:
(SEAL)
<PAGE>
SECOND AMENDED AND RESTATED WAREHOUSING PROMISSORY NOTE
$55,000,000 Date: February _ ,
1998
FOR VALUE RECEIVED, the undersigned, MONUMENT MORTGAGE, INC., a
California
corporation, (herein called the "Company"), hereby promises to pay to the
order
of RESIDENTIAL FUNDING CORPORATION, a Delaware corporation (the
"Lender" or,
together with its successors and assigns, the "Holder") whose principal
place of
business is 8400 Normandale Lake Blvd., Suite 600, Minneapolis, Minnesota
55437,
or at such other place as the Holder may designate from time to time,
the
principal sum of Fifty-Five Million Dollars ($55,000,000) or so much
thereof as
may be outstanding from time to time pursuant to the Warehousing
Credit and
Security Agreement described below, and to pay interest on said principal
sum or
such part thereof as shall remain unpaid from time to time, from the
date of
each Advance until repaid in full, and all other fees and charges due
under the
Warehousing Agreement, at the rate and at the times set forth in the
Warehousing
Agreement. All payments hereunder shall be made in lawful money of the
United
States and in immediately available funds.
This Note is given to evidence an actual warehouse facility in the
above
amount and is the Note referred to in that certain Warehousing Credit
and
Security Agreement (the "Warehousing Agreement") dated March 22, 1995,
between
the Company and the Lender, as the same may be amended or supplemented from
time
to time, and is entitled to the benefits thereof. Reference is hereby
made to
the Warehousing Agreement (which is incorporated herein by reference as
fully
and with the same effect as if set forth herein at length) for a
description of
the Collateral, a statement of the covenants and agreements, a statement
of the
rights and remedies and securities afforded thereby and other matters
contained
therein. Capitalized terms used herein, unless otherwise defined herein,
shall
have the meanings given them in the Warehousing Agreement.
This Note is given in replacement for, and not in satisfaction of,
that
certain First Amended and Restated Warehousing Promissory Note dated
February
29, 1996, and issued by the Company to evidence its Obligations
under the
Warehousing Agreement (the "Existing Note"). All amounts owed by the
Company
under the Existing Note principal thereunder, under the Warehousing as
of the
date hereof, (including, without limitation, the unpaid interest accrued
thereon
and fees accrued Agreement, whether or not yet due and owing) shall be owed
hereunder.
This Note may be prepaid in whole or in part at any time without
premium or
penalty.
Should this Note be placed in the hands of attorneys for collection,
the
Company agrees to pay, in addition to principal and interest, fees and
charges
due under the Warehousing Agreement, any and all costs of collecting this
Note,
including reasonable attorneys' fees and expenses.
The Company hereby waives demand, notice, protest and presentment.
This Note shall be construed and enforced in accordance with the
laws of
the State of Minnesota, without reference to its principles of conflicts of
law.
IN WITNESS WHEREOF, the Company has executed this Note as of the
day and
year first above written.
MONUMENT MORTGAGE, INC.,
a California corporation
By:____________________________
Its: Senior Vice President
STATE OF California )
) ss
COUNTY OF Contra Costa )
On February 27, 1998, before me, a Notary Public, personally
appeared
Paul Garrigues, the Senior Vice President of MONUMENT MORTGAGE,
INC., a
California corporation, personally known to me (or proved to me on the
basis of
satisfactory evidence) to be the person whose name is subscribed to the
within
instrument and acknowledged to me that he/she executed the same in
his/her
authorized capacity, and that by his/her signature on the instrument the
person,
or the entity upon behalf of which the person acted, executed the
instrument.
WITNESS my hand and official seal.
Notary Public
My Commission Expires:
(SEAL)
<PAGE>
CERTIFICATE
OF
SECRETARY OF
MONUMENT MORTGAGE, INC.
I, the undersigned, hereby certify that I am the Secretary of
MONUMENT
MORTGAGE, INC., a California corporation (the "Company"), and have
knowledge of
the matters contained in this Certificate and hereby certify that:
1. The Company is a corporation duly organized, validly existing
and in
good standing under the laws of the State of California
and has
complied with all certifications, filings and requirements
necessary
to continue as a corporation in the State of California and for
each
state where the Company is transacting business as a
foreign
corporation.
2. In connection with the single family revolving warehouse facility
made
to the Company by RESIDENTIAL FUNDING CORPORATION, a
Delaware
corporation (the "Lender" ) pursuant to the terms of a
Warehousing
Credit and Security Agreement dated as of March 22, 1995, as the
same
may have been amended or supplemented ( the "Agreement"), the
Company
has the val id power and authority to execute and deliver
to the
Lender the Eighth Amendment to Warehousing Credit and
Security
Agreement and the Second Amended and Restated Warehousing
Promissory
Note.
3. The resolutions attached to this Certificate as Exhibit A were
duly
adopted by either: (a) by unanimous written action of the
Board of
Directors of the Company; or (b) at a meeting of the
Board of
Directors of the Company held on the _____ day of , 19___, at
which
meeting a quorum was present. I am the keeper of the Minute
Book of
the Company and said resolutions have been entered therein,
have not
been altered, amended, repealed or rescinded, and are now in
full
force and effect .
4. There have been no amendments to the Articles of
Incorporation or
bylaws of the Company since the date of the most recent
certified
copies thereof delivered to the Lender .
IN WITNESS WHEREOF, I have hereunto set my hand and the seal of
this
corporation this 27th day of February, 1998.
___________________________
Secretary
<PAGE>
EXHIBIT A
RESOLUTIONS OF BOARD OF DIRECTORS
WHEREAS, MONUMENT MORTGAGE, INC.; a California corporation (the
"Company"),
has entered into a single family revolving warehouse Facility with a
present
commitment amount of Ten Million Dollars ($10,000,000) (the
"Warehousing
Commitment Amount") with RESIDENTIAL FUNDING CORPORATION, a Delaware
corporation
(the "Lender"), as evidenced by a First Amended and Restated
Warehousing
Promissory Note in the principal sum of Ten Million Dollars ($10,000,000),
dated
as of February 29, 1996, and by a Warehousing Credit and Security
Agreement,
dated as of March 22, 1995, as the same may have been amended or
supplemented
(the "Warehousing Agreement"); and
WHEREAS, the Company and the Lender have entered into a term loan
facility
with a present Term Loan Commitment Amount of One Million Dollars
($1,000,000),
as evidenced by a Term Loan Promissory Note in the principal amount
of One
Million Dollars ($1,000,000), dated as of March 22, 1995, and the
Warehousing
Agreement;
WHEREAS, the Company and the Lender have also entered into a
working
capital facility with a present Working Capital Commitment Amount of One
Million
Dollars ($1,000,000) (the "Working Capital Commitment"), as evidenced by a
First
Amended and Restated Working Capital Promissory Note in the principal sum
of One
Million Dollars ($1,000,000), dated as of February 29, 1996, and the
Warehousing
Agreement;
WHEREAS, the Company proposes to temporarily increase the
Warehousing
Commitment Amount and amend certain terms of the Warehousing Agreement; and
WHEREAS, to evidence such increase of the Warehousing Commitment
Amount and
amendment of the Warehousing Agreement, the Company proposes to
execute and
deliver an Eighth Amendment to Warehousing Credit and Security Agreement
(the
"Amendment"), and a Second Amended and Restated Warehousing Promissory
Note
("Amended Note"), copies of which have been presented to the Board of
Directors
of this Company; and
WHEREAS, the Board of Directors of this Company has determined that it
will
be in the best interests of this Company for the Company to increase
the
Commitment Amount and amend the Warehousing Agreement.
RESOLVED, that these resolutions are enacted by the Board of
Directors of
this Company on its behalf and on behalf of the Company.
FURTHER RESOLVED, that the Company shall amend the Warehousing
Agreement to
be evidenced by the Amendment and the Amended Note.
FURTHER RESOLVED, that the Amendment and Amended Note in the
forms
presented to the Board of Directors of this Company are hereby
approved and
copies thereof are filed in the records of this Company with these
Resolutions.
FURTHER RESOLVED, that any One (insert minimum number required to
sign) of
the following titles or positions of officers of the Company: President,
Chief
Financial Officer, Senior Vice President (list titles/positions of
officers
authorized, do not list individual names), shall be and are
authorized,
empowered and directed in the name of and on behalf of this Company, to
execute,
acknowledge and deliver the Amendment and the Amended Note in the forms
approved
by the Board of Directors of this Company as aforesaid, with such
changes
therein as may be acceptable to such officers, as conclusively
evidenced by
their execution thereof.
FURTHER RESOLVED, that such officers shall be and are hereby
authorized,
empowered and directed to do and perform each and every act and execute
any and
all documents and instruments in the name of this Company as may be
necessary or
desirable to enable this Company to amend the Warehousing Agreement and to
carry
out the purport and intent of the foregoing Resolutions.
NINTH AMENDMENT TO
WAREHOUSING CREDIT AND SECURITY AGREEMENT
THIS NINTH AMENDMENT TO WAREHOUSING CREDIT AND SECURITY AGREEMENT
(this
"Amendment") is entered into as of this 5th day of March 1998, by and
between
MONUMENT MORTGAGE, INC., a California corporation (the "Company")
and
RESIDENTIAL FUNDING CORPORATION, a Delaware corporation (the "Lender").
WHEREAS, the Company and the Lender have entered into a single
family
revolving warehouse facility with a present Warehousing Commitment Amount
of Ten
Million Dollars ($10,000,000), temporarily increased to Fifty-Five
Million
Dollars ($55,000,000), to finance the origination and acquisition of
Mortgage
Loans as evidenced by a Second Amended and Restated Warehousing Promissory
Note
in the principal sum of Fifty-Five Million Dollars ($55,000,000), dated
February
23, 1998, (the "Warehousing Promissory Note"), and by a Warehousing
Credit and
Security Agreement dated March 22, 1995, a" the same may have been
amended or
supplemented (the "Warehousing Agreement");
WHEREAS, the Company and the Lender have entered into a term loan
facility,
as evidenced by a Term Loan Promissory Note in the principal amount
of One
Million Dollars ($1,000,000), dated as of March 22, 1995 (the "Term Loan
Note"),
and the Warehousing Agreement;
WHEREAS, the Company and the Lender have also entered into a
working
capital facility with a present Working Capital Commitment Amount of One
Million
Dollars ($1,000,000), as evidenced by a First Amended and Restated
Working
Capital Promissory Note in the principal sum of One Million
Dollars
($1,000,000), dated as of February 29, 1996 (the "Working Capital Note"),
and
the Warehousing Agreement; and
WHEREAS, the Company has requested the Lender to increase the
Wet
Settlement sublimit of the Warehousing Agreement and the Lender has
agreed to
such increase of the Wet Settlement sublimit of the Warehousing
Agreement
subject to the terms and conditions of this Amendment;
NOW, THEREFORE, for and in consideration of the foregoing and of the
mutual
covenants, agreements and conditions hereinafter set forth and for other
good
and valuable consideration, the receipt and sufficiency of which are
hereby
acknowledged, the parties hereto hereby agree as follows:
1. All capitalized terms used herein and not otherwise defined shall
have
their respective meanings set forth in the Warehousing Agreement.
2. The effective date ("Effective Date") of this Amendment shall be
March
2, 1998, the date on which the Company has complied with all the
terms and
conditions of this Amendment.
3. Section 2.1(b)(3) of the Agreement is hereby deleted in its
entirety and
the following section is substituted in lieu thereof:
(3) The aggregate amount of Wet Settlement
Advances
outstanding at any one time shall not exceed twenty-five percent
(251)
of the Commitment Amount.
4. The Company shall deliver to the Lender (a) an executed original of
this
Amendment and (b) an executed Certificate of Secretary with
corporate
resolutions.
5. The Company represents, warrants and agrees that (a) there
exists no
Default or Event of Default under the Loan Documents, (b) the Loan
Documents
continue to be the legal, valid and binding agreements and obligations
of the
Company enforceable in accordance with their terms, as modified herein,
(c) the
Lender is not in default under any of the Loan Documents and the Company
has no
offset or defense to its performance or obligations under any of the
Loan
Documents, (d) the representations contained in the Loan Documents remain
true
and accurate in all respects, and (e) there has been no material adverse
change
in the financial condition of the Company from the date of the
Warehousing
Agreement to the date of this Amendment.
6. Except as hereby expressly modified, the Warehousing Agreement
shall
otherwise be unchanged and shall remain in full force and effect,
and the
Company ratifies and reaffirms all of its obligations thereunder.
7. This Amendment may be executed in any number of counterparts and
by the
different parties hereto on separate counterparts, each of which
when so
executed and delivered shall be an original, but all of which shall
together
constitute one and the same instrument.
IN WITNESS WHEREOF, the Company and the Lender have caused this
Amendment
to be duly executed on their behalf by their duly authorized officers as
of the
day and year above written.
MONUMENT MORTGAGE, INC.,
a California corporation
By:_______________________________
Its: President
RESIDENTIAL FUNDING CORPORATION,
a Delaware corporation
By:_______________________________
D. GRAHAM SHIPMAN
Its: Director
STATE OF California )
) ss
COUNTY OF Contra Costa )
On April 13, 1998, before me, a Notary Public, personally
appeared
James W. Noack, the President of MONUMENT MORTGAGE, INC., a
California
corporation, personally known to me (or proved to me on the
basis of
satisfactory evidence) to be the person whose name is subscribed to the
within
instrument and acknowledged to me that he/she executed the same in
his/her
authorized capacity, and that by his/her signature on the instrument the
person,
or the entity upon behalf of which the person acted, executed the
instrument.
WITNESS my hand and official seal.
Notary Public
My Commission Expires:
(SEAL)
STATE OF California )
) ss
COUNTY OF Contra Costa )
On April 19, 1995, before me, a Notary Public, personally
appeared D.
Graham Shipman, the Director of RESIDENTIAL FUNDING CORPORATION, a
California
corporation, personally known to me (or proved to me on the
basis of
satisfactory evidence) to be the person whose name is subscribed to the
within
instrument and acknowledged to me that he/she executed the same in
his/her
authorized capacity, and that by his/her signature on the instrument the
person,
or the entity upon behalf of which the person acted, executed the
instrument.
WITNESS my hand and official seal.
Notary Public
My Commission Expires:
(SEAL)
<PAGE>
CONSENT OF GUARANTOR
The undersigned, being the Guarantor under the Guaranty dated as of
July
23, 1997, hereby consents to the foregoing Amendment and the
transactions
contemplated thereby and hereby modifies and reaffirms his obligations
under his
Guaranty so as to include within the term "Guaranteed Debt" the
indebtedness,
obligations and liabilities of the Company under this Amendment. The
Guarantor
hereby reaffirms that his obligations under his Guaranty are
separate and
distinct from the Company's obligations to Lender, and that his
obligations
under the Guaranty are in full force and effect, and hereby waives and
agrees
not to assert any anti-deficiency protections or other rights as a
defense to
his obligations under the Guaranty, all as more fully set forth in the
Guaranty,
the terms of which are incorporated herein as if fully met forth herein.
The Guarantor further agrees, upon Lender's request, to execute
for the
benefit of Lender an additional guaranty in form and content
acceptable to
Lender and conforming to the Guaranty in connection with the
foregoing
Amendment.
GUARANTOR:
____________________________
FINET HOLDINGS CORPORATION
STATE OF California )
) ss
COUNTY OF Contra Costa )
On April 13, 1998, before me, a Notary Public, personally
appeared Jan
Hoeffel, the President of FINET HOLDINGS CORPORATION, personally known to
me (or
proved to me on the basis of satisfactory evidence) to be the person whose
name
is subscribed to the within instrument and acknowledged to me that
he/she
executed the same in his/her authorized capacity, and that by his/her
signature
on the instrument the person, or the entity upon behalf of which the
person
acted, executed the instrument.
WITNESS my hand and official seal.
Notary Public
My Commission Expires:
(SEAL)
<PAGE>
CERTIFICATE
OF
SECRETARY OF
MONUMENT MORTGAGE, INC.
I, the undersigned, hereby certify that I am the Secretary of
MONUMENT
MORTGAGE, INC., a California corporation (the "Company), and have
knowledge of
the matters contained in this Certificate and hereby certify that:
1. The Company is a corporation duly organized, validly existing
and in
good standing under the laws of the State of California
and has
complied with all certifications, filings and requirements
necessary
to continue as a corporation in the State of California and for
each
state where the Company is transacting business as a
foreign
corporation.
2. In connection with the single family revolving warehouse facility
made
to the Company by RESIDENTIAL FUNDING CORPORATION, a
Delaware
corporation (the "Lender") pursuant to the terms of a
Warehousing
Credit and Security Agreement dated as of March 22, 1995, as the
same
may have been amended or supplemented (the "Agreement"), the
Company
has the valid power and authority to execute and deliver to the
Lender
the Ninth Amendment to Warehousing Credit and Security Agreement.
3. The resolutions attached to this Certificate as Exhibit A were
duly
adopted by either: (a) by unanimous written action of the
Board of
Directors of the Company; or (b) at a meeting of the
Board of
Directors of the Company held on the _____ day of , 19__, at
which
meeting a quorum was present. I am the keeper of the Minute
Book of
the Company and said resolutions have been entered therein,
have not
been altered, amended, repealed or rescinded, and are now in
full
force and effect.
4. There have been no amendments to the Articles of
Incorporation or
bylaws of the Company since the date of the most recent
certified
copies thereof delivered to the Lender.
IN WITNESS WHEREOF, I have hereunto set my hand and the seal of
this
corporation this 10th day of April, 1998.
__________________________
Secretary
<PAGE>
EXHIBIT A
RESOLUTIONS OF BOARD OF DIRECTORS
WHEREAS, MONUMENT MORTGAGE, INC., a California corporation (the
"Company"),
has entered into a single family revolving warehouse facility with a
present
commitment amount of Ten Million Dollars ($10,000,000), temporarily
increased to
Fifty-Five Million Dollars ($55,000,000) (the "Warehousing Commitment
Amounts)
with RESIDENTIAL FUNDING CORPORATION, a Delaware corporation (the
"Lender"), as
evidenced by a Second Amended and Restated Warehousing Promissory Note
in the
principal sum of Fifty-Five Million Dollars ($55,000,000), dated as of
February
23, 1998, and by a Warehousing Credit and Security Agreement, dated as of
March
22, 1995, as the same may have been amended or supplemented (the
"Warehousing
Agreement"); and
WHEREAS, the Company and the Lender have entered into a term loan
facility
with a present Term Loan Commitment Amount of One Million Dollars
($1,000,000),
as evidenced by a Term Loan Promissory Note in the principal amount
of One
Million Dollars ($1,000,000), dated as of March 22, 1995, and the
Warehousing
Agreement;
WHEREAS, the Company and the Lender have also entered into a
working
capital facility with a present Working Capital Commitment Amount of One
Million
Dollars ($1,000,000) (the "Working Capital Commitment"), as evidenced by a
First
Amended and Restated Working Capital Promissory Note in the principal sum
of One
Million Dollars ($1,000,000), dated as of February 29, 1996, and the
Warehousing
Agreement;
WHEREAS, the Company proposes to increase the Wet Settlement
sublimit of
the Warehousing Agreement; and
WHEREAS, to evidence such increase of the Wet Settlement sublimit
of the
Warehousing Agreement, the Company proposes to execute and deliver a
Ninth
Amendment to Warehousing Credit and Security Agreement (the "Amendment"), a
copy
of which has been presented to the Board of Directors of this Company; and
WHEREAS, the Board of Directors of this Company has determined that it
will
be in the best interests of this Company for the Company to increase
the Wet
Settlement sublimit of the Agreement.
RESOLVED, that these resolutions are enacted by the Board of
Directors of
this Company on its behalf and on behalf of the Company.
FURTHER RESOLVED, that the Company shall amend the Warehousing
Agreement to
be evidenced by the Amendment.
FURTHER RESOLVED, that the Amendment in the form presented to the
Board of
Directors of this Company are hereby approved and copies thereof are Bled
in the
records of this Company with these Resolutions.
FURTHER RESOLVED, that any One (insert minimum number required to
sign) of
the following titles or positions of officers of the Company: President,
Chief
Financial Officer, Senior Vice President (list titles/positions of
officers
authorized, do not list individual names), shall be and are
authorized,
empowered and directed in the name of and on behalf of this Company, to
execute,
acknowledge and deliver the Amendment in the form approved by the
Board of
Directors of this Company as aforesaid, with such changes therein as
may be
acceptable to such officers, as conclusively evidenced by their
execution
thereof.
FURTHER RESOLVED, that such officers shall be and are hereby
authorized,
empowered and directed to do and perform each and every act and execute
any and
all documents and instruments in the name of this Company as may be
necessary or
desirable to enable this Company to amend the Warehousing Agreement and to
carry
out the purport and intent of the foregoing Resolutions.
TENTH AMENDMENT TO
WAREHOUSING CREDIT AND SECURITY AGREEMENT
THIS TENTH AMENDMENT TO WAREHOUSING CREDIT AND SECURITY AGREEMENT
(this
"Amendment") is entered into as of this 15th day of April, 1998 by and
between
MONUMENT MORTGAGE, INC., a California corporation (the "Company")
and
RESIDENTIAL FUNDING CORPORATION, a Delaware corporation (the "Lender").
WHEREAS, the Company and the Lender have entered into a single
family
revolving warehouse facility with a present Warehousing Commitment Amount
of Ten
Million Dollars ($10,000,000), temporarily increased to Fifty-Five
Million
Dollars ($55,000,000), to finance the origination and acquisition of
Mortgage
Loans as evidenced by a Second Amended and Restated Warehousing Promissory
Note
in the principal sum of Fifty-Five Million Dollars ($55,000,000), dated
February
23, 1998, (the "Warehousing Promissory Note"), and by a Warehousing
Credit and
Security Agreement dated March 22, 1995, as the same may have been
amended or
supplemented (the "Warehousing Agreement");
WHEREAS, the Company and the Lender have entered into a term loan
facility,
as evidenced by a Term Loan Promissory Note in the principal amount
of One
Million Dollars ($1,000,000), dated as of March 22, 1995 (the "Term Loan
Note"),
and the Warehousing Agreement;
WHEREAS, the Company and the Lender have also entered into a
working
capital facility with a present Working Capital Commitment Amount of One
Million
Dollars ($1,000,000), as evidenced by a First Amended and Restated
Working
Capital Promissory Note in the principal sum of One Million
Dollars
($1,000,000), dated as of February 29, 1996 (the "Working Capital Note"),
and
the Warehousing Agreement; and
WHEREAS, the Company has requested the Lender to amend the
Agreement to
allow for a special servicing acquisition facility, and the Lender has
agreed to
such amendment of the Agreement subject to the terms and conditions of
this
Amendment;
NOW, THEREFORE, for and in consideration of the foregoing and of the
mutual
covenants, agreements and conditions hereinafter set forth and for other
good
and valuable consideration, the receipt and sufficiency of which are
hereby
acknowledged, the parties hereto hereby agree as follows:
1. All capitalized terms used herein and not otherwise defined shall
have
their respective meanings set forth in the Agreement.
2. The effective date ("Effective Date") of this Amendment shall be
April
22, 1998.
3. Section 1.1 of the Agreement shall be amended by adding the
following
definitions in the appropriate alphabetical order:
"Acquisition Cost" means, with respect to any
Special
Servicing Contract on any date of determination, the percentage
of the
outstanding principal balance of the Mortgage Loans serviced
thereunder
used in calculating the purchase price in the Special
Servicing
Acquisition in which such Special Servicing Contract was
purchased
multiplied by the outstanding principal balance of such Mortgage
Loans
as of the date of determination.
"Check Disbursement Account" means a demand deposit
account
maintained at the Funding Bank in the name of the Company and
under the
control of the Lender for the clearing of checks written by the
Company
to fund Advances.
"Servicing Acquisition Advance" means a disbursement
by the
Lender under the Servicing Acquisition Commitment pursuant to
Article 2
of this Agreement.
"Servicing Acquisition Advance Request" has the meaning
set
forth in Section 2.15(a) hereof.
"Servicing Acquisition Collateral Value" means, as of the
date
of determination, with respect to all of the Special
Servicing
Contracts included in the Servicing Collateral or the Special
Servicing
Contracts being acquired in any Special Servicing
Acquisition, as
applicable, the lesser of (a) fifty percent (50%) of the
Acquisition
Cost of such Special Servicing Contracts or (b) one percent (1%)
of the
outstanding principal balance of the Mortgage Loans serviced
pursuant
to such Special Servicing Contracts; provided, that for
purposes of
calculating the Servicing Acquisition Collateral Value, the
following
Mortgage Loans shall be excluded: (i) Mortgage Loans
excluded in
calculating the Adjusted Servicing Portfolio, (ii) Mortgage
Loans in
respect of which the Company has commenced foreclosure
proceedings, and
(iii) Mortgage Loans in respect of which any obligor is the
subject of
a bankruptcy proceeding.
"Servicing Acquisition Commitment" has the meaning set
forth
in Section 2.14 hereof.
"Servicing Acquisition Commitment Amount" means an amount
up
to One Million Eight Hundred Seventy Thousand Dollars
($1,870,000).
"Servicing Acquisition Commitment Fee" means a fee
payable by
the Company in consideration of the Lenders issuance of the
Servicing
Acquisition Commitment and making of the Servicing
Acquisition
Advances. The amount of the Servicing Acquisition Commitment
Fee, if
any, is set forth in Section 2.17 hereof.
"Servicing Acquisition Maturity Date" means the
earlier of:
(a) the close of business on August 31, 1998, and (b) the
date the
Servicing Acquisition Advances become due and payable
pursuant to
Section 8.2 below.
"Servicing Acquisition Promissory Note" means the
promissory
note evidencing the Company's Obligations with respect to
Servicing
Acquisition Advances in the form of Exhibit A-5 attached hereto.
"Servicing Acquisition Rate" means a floating rate of
interest
equal to five-eighths percent (5/8%) per annum over the Base
Rate. The
Servicing Acquisition Rate shall be adjusted on and as of the
effective
date of each weekly change in the Base Rate. The Lender's
determination
of the Servicing Acquisition Rate as of any date of determination
shall
be conclusive and binding, absent manifest error.
"Special Servicing Acquisition" means a transaction in
which
the Company acquires Special Servicing Contracts in bulk from
one or
more Persons.
"Special Servicing Contracts" means FNMA and FHLMC
Servicing
Contracts covering Single Family Mortgage Loans with a balloon
feature
acquired in a Special Servicing Acquisition.
"Special Servicing Purchase Agreement" means any
agreement
pursuant to which the Company makes any Special Servicing
Acquisition.
"Wire Disbursement Account" means a demand deposit
account
maintained at the Funding Bank in the name of the Lender
for the
clearing of wire transfers requested by the Company to fund
Advances.
4. Section 1.1 of the Agreement is amended to delete the
definitions of
"Advance," "Operating Account," "Term Loan Collateral Value" and
"Working
Capital Collateral Value" in their entirety, replacing them with the
following
definitions:
"Advance" means a disbursement by the Lender under
the
Commitment pursuant to Article 2 of this Agreement, including,
without
limitation, Ordinary Warehousing Advances, Wet Settlement
Advances,
Home Equity Advances, Nonconforming Advances, Second Mortgage
Advances,
Repurchase Advances, Term Loan Advances, Service Acquisition
Advances,
Working Capital Advances, and readvances of funds previously
advanced
to the Company and repaid to the Lender.
"Operating Account" means a demand deposit account
maintained
at the Funding Bank in the name of the Company and designated
for
funding that portion of each Mortgage Loan not funded by an
Advance
made against such Mortgage Loan and for returning any excess
payment
from an Investor for a Pledged Mortgage or Pledged Security.
"Term Loan Collateral Value" means as of the
date of
determination, the lesser of: (a) seventy percent (70%) of the
most
recent Appraised Value of the FNMA Servicing Contracts that
are not
Special Servicing Contracts included in the Servicing
Collateral, or
(b) one percent (1%) of the outstanding principal balance
of the
Mortgage Loans serviced pursuant to FNMA Servicing Contracts
that are
not Special Servicing Contracts included in the Servicing
Collateral;
Provided, that for purposes of calculating the Term Loan
Collateral
Value, the following Mortgage Loans shall be excluded: (i)
Mortgage
Loans excluded in calculating the Adjusted Servicing Portfolio,
(ii)
Mortgage Loans in respect of which the Company has
commenced
foreclosure proceedings, and (iii) Mortgage Loans in respect of
which
any obligor is the subject of a bankruptcy proceeding.
"Working Capital Collateral Value" means as of the
date of
determination, the lesser of: (a) seventy percent (70%) of the
most
recent Appraised Value of the FHLMC Servicing Contracts that
are not
Special Servicing Contracts included in the Servicing
Collateral, or
(b) one percent (1%) of the outstanding principal balance
of the
Mortgage Loans serviced pursuant to FHLMC Servicing Contracts
that are
not Special Servicing Contracts included in the Servicing
Collateral;
provided, that for purposes of calculating the Working
Capital
Collateral Value, the following Mortgage Loans shall be excluded:
(i)
Mortgage Loans excluded in calculating the Adjusted
Servicing
Portfolio, (ii) Mortgage Loans in respect of which the Company
has
commenced foreclosure proceedings, and (iii) Mortgage Loans in
respect
of which any obliger is the subject of a bankruptcy proceeding.
5. Section 2.2(d) of the Agreement is deleted in its entirety
and the
following is substituted in lieu thereof:
2.2(d) The Company shall hold in trust for the Lender,
and the
Company shall deliver to the Lender promptly upon request, or
if the
recorded Collateral Documents have not yet been returned
from the
recording office, immediately upon receipt by the Company of
such
recorded Collateral Documents, and the Pledged Mortgage is not
being
held by an Investor for purchase or has not been redeemed from
pledge,
the following: (1) the originals of the Collateral Documents for
which
copies are required to be delivered to the Lender pursuant to
Exhibit
D-SF or Exhibit D-REP, (2) the original lender's ALTA Policy of
Title
Insurance or an equivalent thereto, and (3) any other
documents
relating to a Pledged Mortgage which the Lender may request,
including,
without limitation, documentation evidencing the FHA
Commitment to
Insure or the VA Guaranty of any Pledged Mortgage which is
either FHA
insured or VA guaranteed, the appraisal, Private Mortgage
Insurance
Certificate, if applicable, the Regulation Z Statement,
certificates of
casualty or hazard insurance, credit information on the maker of
each
such Mortgage Note, a copy of a HUD-1 or corresponding purchase
advice
and other documents of all kinds which are customarily
desired for
inspection or transfer incidental to the purchase of any Mortgage
Note
by an Investor and any additional documents which are
customarily
executed by the seller of a Mortgage Note to an Investor.
6. Section 2.6(c) of the Agreement is deleted in its entirety
and the
following is substituted in lieu thereof:
2.6(c) To make a Working Capital Advance, the Lender
shall
cause the Funding Bank to credit the Company's Operating Account
with
the Funding Bank upon compliance by the Company with the terms of
this
Agreement.
7. Section 2.7 of the Agreement is deleted in its entirety and
the
following is substituted in lieu thereof:
2.7 Notes. The Company's Obligations in respect of
Ordinary
Warehousing Advances, Nonconforming Advances, Home Equity
Advances,
Second Mortgage Advances and Repurchase Advances shall be
evidenced by
a Warehousing Promissory Note of the Company substantially in the
form
of Exhibit A-1 attached to the Ninth Amendment to this Agreement.
The
Company's Obligations in respect of Working Capital Advances
shall be
evidenced by a Working Capital Promissory Note of the
Company
substantially in the form of Exhibit A-3 attached to the
Third
Amendment to this Agreement. The Company's Obligations in
respect of
Term Loan Advances shall be evidenced by a Term Loan Promissory
Note of
the Company substantially in the form of Exhibit A-4 attached
to the
Agreement. The Company's Obligations in respect of
Servicing
Acquisition Advances shall be evidenced by a Servicing
Acquisition
Promissory Note of the Company substantially in the form of
Exhibit A-5
attached to the Tenth Amendment to this Agreement. The
Warehousing
Promissory Note, the Working Capital Promissory Note, the Term
Loan
Promissory Note and the Servicing Acquisition Promissory
Note are
collectively referred to as the "Notes". The terms
"Warehousing
Promissory Note," "Working Capital Promissory Note," "Term
Loan
Promissory Note," "Servicing Acquisition Note," "Note" or "Notes"
shall
include all extensions, renewals and modifications of the Notes
and all
substitutions therefor. All terms and provisions of the
Notes are
hereby incorporated herein.
8. Sections 2.8(e), (f), (g) and (h) of the Agreement are
renumbered as
Sections 2.8(f), (g), (h) and (i) and the following is added as Section
2.8(e):
2.8(e) Prior to the occurrence of an Event of Default,
the
unpaid amount of each Servicing Acquisition Advance shall
bear
interest, from the date of such Advance, until paid in full,
at the
Servicing Acquisition Rate.
9. Section 2.8(i) of the Agreement shall be deleted in its entirety
and the
following shall be substituted in lieu thereof:
2.8(i) Upon Notice to the Company, after the occurrence
and
during the continuation of an Event of Default, the unpaid
amount of
each Advance shall bear interest until paid in full at a per annum
rate
of interest (the "Default Rate") equal to four percent (4%) in
excess
of the rate of interest otherwise applicable to such Advance
pursuant
to any other subsection of this Section 2.8 or, if no
rate is
applicable, the highest rate then applicable to any
outstanding
Advances.
10. Sections 2.s(d), (e), (I), (g), (h), (i), (j), (k) and (1)
of the
Agreement are renumbered as Sections 2.9(e), (f), (g), (h), (i), (j),
(k), (1)
and (m) and the following is added as Section 2.9(d):
2.9(d) The outstanding principal amount of all
Servicing
Acquisition Advances shall be payable in full on the
Servicing
Acquisition Maturity Date.
11. Section 2.9(h) of the Agreement is deleted in its entirety
and the
following is substituted in lieu thereof:
2.9(h) Upon Notice to the Company by the Lender, the
Company
shall pay to the Lender, and the Company authorizes the Lender to
cause
the Funding Bank to charge the Company's Operating Account
for, the
amount of any outstanding Advance against a specific Pledged
Mortgage
upon the earliest occurrence of any of the following events:
12. Sections 2.9(j) and 2.9(j)(1) of the Agreement are deleted in
their
entirety and the following are substituted in lieu thereof:
2.9(j) In addition to the payments required
pursuant to
Sections 2.9(g) and 2.9(h), the Company shall be obligated to
pay to
the Lender, without the necessity of prior demand or notice
from the
Lender, and the Company authorizes the Lender to cause the Funding
Bank
to charge the Company's Operating Account for, the following
amounts in
respect of outstanding Advances in the following circumstances:
(1) If at any time (1) the aggregate
outstanding
principal balance of all Term Loan Advances is greater
than
the Term Loan Collateral Value plus the Excess Working
Capital
Value, (2) the aggregate outstanding principal balance
of all
Working Capital Advances is greater than the Working
Capital
Collateral Value, or (3) the aggregate outstanding
principal
balance of all Servicing Acquisition Advances is greater
than
the Servicing Acquisition Collateral Value, the Company
shall
prepay the outstanding Term Loan Advances, the
outstanding
Working Capital Advances or the outstanding
Servicing
Acquisition Advances, as required to eliminate such
excess.
13. Section 2.9(m) of the Agreement is deleted in its entirety
and the
following is substituted in lieu thereof: 2.9(m) The Company shall give
Notice
to the Lender (telephonically, to be followed by written notice) of the
Pledged
Mortgages or Pledged Securities for which proceeds have been received.
Upon
receipt of such Notice the Advances against such Pledged Mortgages or
Pledged
Securities shall be repaid and such Pledged Mortgages or Pledged
Securities
shall be considered to have been redeemed from pledge. The Lender is
entitled to
rely upon the Company's affirmation that deposits in the Cash Collateral
Account
represent payment from Investors for the purchase of Pledged
Mortgages or
Pledged Securities as specified by the Company. In the event that the
payment
from an Investor for the purchase of Pledged Mortgages or Pledged
Securities is
less than the outstanding Advances against such Pledged Mortgages
or the
Mortgage Loans backing Pledged Securities, the Lender is authorized to
cause the
Funding Bank to charge the Company's Operating Account for an amount
equal to
such deficiency. Provided no Default or Event of Default exists, the
Lender
shall return any excess payment from an Investor for Pledged
Mortgages or
Pledged Securities to the Company.
14. Section 2.10 of the Agreement is deleted in its entirety
and the
following is substituted in lieu thereof:
2.10 Expiration of Commitments. Unless extended or
terminated
earlier as permitted hereunder, the Warehousing Commitment shall
expire
of its own term, and without the necessity of action by the
Lender, at
the close of business on the Warehousing Maturity Date, the Term
Loan
Commitment shall expire of its own term, and without the
necessity of
action by the Lender, at the close of business on the Term
Loan
Commitment Termination Date, the Working Capital Commitment
shall
expire of its own term, and without the necessity of action
by the
Lender, at the close of business on the Working Capital Maturity
Date,
and the Servicing Acquisition Commitment shall expire of its own
term,
and without the necessity of action by the Lender, at the
close of
business on the Servicing Acquisition Maturity Date.
15. Article 2 of the Agreement is amended by renumbering Sections
2.16,
2.17 and 2.18 as Sections 2.19, 2,20 and 2.21 and adding the following
Sections
2.16, 2.17 and 2.18 immediately after Section 2.15:
2.16 Servicing Acquisition Loan Commitment.
2.16(a) Subject to the terms and conditions of this
Agreement
and provided no Default or Event of Default has occurred
and is
continuing, the Lender agrees, from time to time during the period
from
April 15, 1998, to and including the Servicing Acquisition
Maturity
Date to make Servicing Acquisition Advances to the Company,
provided
the aggregate principal amount of all such Servicing
Acquisition
Advances shall not exceed the Servicing Acquisition Commitment
Amount.
The obligation of the Lender to make Servicing Acquisition
Advances
hereunder up to such limit is hereinafter referred to as the
"Servicing
Acquisition Loan Commitment." All Servicing Acquisition Advances
under
this Agreement shall constitute a single indebtedness, and
the
Collateral shall be security for the Servicing Acquisition
Promissory
Note and for the payment and performance of all other Obligations.
2.16(b) Servicing Acquisition Advances shall be used
by the
Company solely for the purposes of financing Special
Servicing
Acquisitions. Servicing Acquisition Advances shall be made
at the
request of the Company, in the manner hereinafter provided in
Section
2.17 hereof.
2.16(c) No Servicing Acquisition Advance shall
exceed the
lesser of Servicing Acquisition Collateral Value of the
Special
Servicing Contracts being acquired in such Special
Servicing
Acquisition.
2.17 Procedures for Obtaining Servicing Acquisition Advances.
2.17(a) The Company may obtain a Servicing Acquisition
Advance
hereunder, subject to the satisfaction of the conditions set
forth in
Section 4.2 hereof, upon compliance with the procedures set
forth in
this Section. Requests for Servicing Acquisition Advances
shall be
initiated by the Company delivering to the Lender, no later than
five
(5) Business Days prior to the Business Day on which the
Company
desires to borrow a Servicing Acquisition Advance
hereunder, a
completed and signed request for a Servicing Acquisition
Advance (a
"Servicing Acquisition Advance Request") on the then-current
form
approved by Lender. The current form in use by Lender is Exhibit
C-SA
attached hereto and made a part hereof. The Lender shall
have the
right, on not less than three (3) Business Days' prior Notice
to the
Company, to modify such Exhibit to conform to current
legal
requirements or Lender practices and, as so modified, said
Exhibit
shall be deemed a part hereof.
2.17(b) The Company shall deliver the following to the
Lender
five (5) Business Days prior to the date of each Servicing
Acquisition
Advance:
(1) Such information with respect to
Servicing
Contracts being acquired in the Servicing Acquisition
to be
financed and the Mortgage Loans serviced pursuant
thereto as
the Lender may reasonably request;
(2) A certificate of the president or chief
financial
officer of the Company, certifying that all
representations
and warranties set forth in Section 5 hereof,
including,
without limitation, Section 5.4 hereof, are true and
correct
as though made on and as of the date of each
Servicing
Acquisition Advance; and
(3) A search of the Uniform Commercial Code
financing
statements in the appropriate public records for the
seller in
such Special Servicing Acquisition which shall not
have
disclosed the existence of any Lien on the Special
Servicing
Contracts being acquired.
(4) A letter of direction from the Company
directing
the Lender to disburse the proceed" of such
Servicing
Acquisition Advance directly to the seller(s) in the
Special
Servicing Acquisition to be financed and evidence
satisfactory
to the Lender that such Servicing Acquisition
Advance,
together with any other funds disbursed with such
Advance to
such seller(s), will be sufficient to effect the
transfer to
the Company of the Special Servicing Contracts to be
acquired
in such Special Servicing Acquisition, free and clear
of all
Liens (other than the Lender's security interest).
(5) Such further documents, instruments,
opinions,
certificates and evidence as the Lender may request.
2.17(c) Before funding the Servicing Acquisition
Advance, the
Lender shall have five (5) Business Days to examine the
documents
delivered to it hereunder in connection with the sale of the
Servicing
Collateral, and may reject such of them as are not
satisfactory to
Lender in its sole discretion.
2.17(d) To make a Servicing Acquisition Advance, the
Lender
shall disburse the amount thereof in accordance with the
letter of
direction delivered pursuant to Section 2.17(b)(4) upon
compliance by
the Company with the terms of this Agreement.
2.18 Servicing Acquisition Commitment Fees. The Company
agrees
to pay to the Lender a Servicing Acquisition Commitment Fee
in an
amount equal to one-fifth percent (0.20~) per annum of the
Servicing
Acquisition Commitment Amount. On the Effective Date of the
Tenth
Amendment hereto, the Company shall pay the prorated portion
of the
quarterly Servicing Acquisition Commitment Fee due from such
Effective
Date to June 30, 1998. Thereafter, the Servicing Acquisition
Commitment
Fee shall be payable quarterly in advance, beginning on July 1,
1998,
and on the first day of each Calendar Quarter thereafter. The
Company
shall not be entitled to a reduction in the amount of the
Servicing
Acquisition Commitment Fee in the event the Servicing
Acquisition
Commitment Amount is reduced or in the event that the
Servicing
Acquisition Commitment is terminated at the request of the
Company or
the Servicing Acquisition Advances are prepaid by the Company or
become
due and payable pursuant to Section 8.2 below. If the
Servicing
Acquisition Commitment terminates at the request of the Company
or the
Servicing Acquisition Advances are prepaid by the Company or
become due
and payable pursuant to Section 8.2 below, the unpaid balance
of the
Servicing Acquisition Commitment Fee shall be due and payable in
full
on the date of such termination.
16. Section 2.19 of the Agreement shall be deleted in its entirety
and the
following shall be substituted in lieu thereof:
2.19 Miscellaneous Charges. The Company agrees to
reimburse
the Lender for miscellaneous charges and expenses
(collectively,
"Miscellaneous Charges") incurred by or on behalf of the
Lender in
connection with the handling and administration of Advances,
and to
reimburse the Lender for Miscellaneous Charges incurred by or on
behalf
of the Lender in connection with the handling and administration
of the
Collateral. For the purposes hereof, Miscellaneous Charges
shall
include, but not be limited to, charges for wire transfers,
check
processing charges, charges for security delivery fees,
charges for
overnight delivery of Collateral to Investors, Funding Bank's
service
charges and Designated Bank Charges. Miscellaneous Charges are due
when
incurred, but shall not be delinquent if paid within fifteen (15)
days
after receipt of an invoice or an account analysis statement
from the
Lender.
17. Section 3.2(d) of the Agreement shall be deleted in its
entirety and
the following shall be substituted in lieu thereof:
3.2(d) The Lender shall have the exclusive right
to the
possession of the Pledged Securities or, if the Pledged
Securities are
issued in book-entry form or issued in certificated form and
delivered
to a clearing corporation (as such term is defined in the
Uniform
Commercial Code of Minnesota) or its nominee, the Lender shall
have the
right to have the Pledged Securities registered in the name
of a
securities intermediary (as such term is defined in the
Uniform
Commercial Code of Minnesota) in an account containing only
customer
securities and credited to an account of the Lender. The Lender
shall
have the right to cause delivery of the Pledged Securities to be
made
to the Investor or the Pledged Securities credited to the
account of
the Investor or the Investor's designee only against payment
therefor.
The Company acknowledges that the Lender may enter into one or
more
standing arrangements with other financial institutions with
respect to
Pledged Securities issued in book entry form or issued in
certificated
form and delivered to a clearing corporation, pursuant to which
such
Pledged Securities are registered in the name of such
financial
institution, as agent or securities intermediary for the Lender,
and
the Company agrees upon request of the Lender to execute and
deliver to
such other financial institutions the Company's written
concurrence in
any such standing arrangements.
18. Section 9 of the Agreement shall be amended to delete the
telecopier
number of the Lender set forth therein and substitute telecopier number
"(925)
935-6424" in lieu thereof and all references in the Agreement to the
telecopier
number of the Lender shall be deemed to refer to the new telecopier number.
19. Upon execution of this Amendment, the Company agrees to pay
to the
Lender the pro rata Servicing Acquisition Commitment Fee for the time
period
from the Effective Date to and including June 30, 1998.
20. The Servicing Acquisition Promissory Note is hereby added
to the
Agreement, in the form of Exhibit A-5 attached to thin Amendment.
21. Exhibit C-SA attached to this Amendment is hereby added
to the
Agreement.
22. The Company shall deliver to the Lender (a) an executed
original of
this Amendment; (b) an executed original of the Servicing Acquisition
Promissory
Note; (c) an executed Certificate of Secretary with corporate resolutions;
(d)
the Servicing Acquisition Commitment Fee for the period from the Effective
Date
hereof through June 30, 1998, and (e) a Seven Hundred Fifty Dollar
($750)
document production fee.
23. The Company represents, warrants and agrees that (a) there
exists no
Default or Event of Default under the Loan Documents, (b) the Loan
Documents
continue to be the legal, valid and binding agreements and obligations
of the
Company enforceable in accordance with their terms, as modified herein,
(c) the
Lender is not in default under any of the Loan Documents and the Company
has no
offset or defense to its performance or obligations under any of the
Loan
Documents, (d) the representations contained in the Loan Documents remain
true
and accurate in all respects, and (e) there has been no material adverse
change
in the financial condition of the Company from the date of the Agreement
to the
date of this Amendment.
24. Except as hereby expressly modified, the Agreement shall
otherwise be
unchanged and shall remain in full force and effect, and the Company
ratifies
and reaffirms all of its obligations thereunder.
25. This Amendment may be executed in any number of counterparts and
by the
different parties hereto on separate counterparts, each of which
when so
executed and delivered shall be an original, but all of which
together
constitute one and the same instrument.
IN WITNESS WHEREOF, the Company and the Lender have caused this
Amendment
to be duly executed on their behalf by their duly authorized officers as of
the
day and year above written.
MONUMENT MORTGAGE, INC.,
a California corporation
By:______________________________
Its: President
RESIDENTIAL FUNDING CORPORATION,
a Delaware corporation
By:______________________________
D. GRAHAM SHIPMAN
Its: Director
STATE OF California )
) ss
COUNTY OF Contra Costa )
On April 22, 1995, before me, a Notary Public, personally
appeared
James W. Noack, the President of MONUMENT MORTGAGE, INC., a
California
corporation, personally known to me (or proved to me on the
basis of
satisfactory evidence) to be the person whose name is subscribed to the
within
instrument and acknowledged to me that he/she executed the same in
his/her
authorized capacity, and that by his/her signature on the instrument the
person,
or the entity upon behalf of which the person acted, executed the
instrument.
WITNESS my hand and official seal.
Notary Public
My Commission Expires:
(SEAL)
STATE OF California )
) ss
COUNTY OF Contra Costa )
On April 23, 1995, before me, a Notary Public, personally
appeared D.
Graham Shipman, the Director of RESIDENTIAL FUNDING CORPORATION, a
California
corporation, personally known to me (or proved to me on the
basis of
satisfactory evidence) to be the person whose name is subscribed to the
within
instrument and acknowledged to me that he/she executed the same in
his/her
authorized capacity, and that by his/her signature on the instrument the
person,
or the entity upon behalf of which the person acted, executed the
instrument.
WITNESS my hand and official seal.
Notary Public
My Commission Expires:
(SEAL)
<PAGE>
CONSENT OF GUARANTOR
The undersigned, being the Guarantor under the Guaranty dated as of
July
23, 1997, hereby consents to the foregoing Amendment and the
transactions
contemplated thereby and hereby modifies and reaffirms his obligations
under his
Guaranty so as to include within the term "Guaranteed Debt" the
indebtedness,
obligations and liabilities of the Company under this Amendment. The
Guarantor
hereby reaffirms that his obligations under his Guaranty are
separate and
distinct from the Company's obligations to Lender, and that his
obligations
under the Guaranty are in full force and effect, and hereby waives and
agrees
not to assert any anti-deficiency protections or other rights as a
defense to
his obligations under the Guaranty, all as more fully set forth in the
Guaranty,
the terms of which are incorporated herein as if fully met forth herein.
The Guarantor further agrees, upon Lender's request, to execute
for the
benefit of Lender an additional guaranty in form and content
acceptable to
Lender and conforming to the Guaranty in connection with the
foregoing
Amendment.
FINET HOLDINGS CORPORATION
a Delaware corporation
GUARANTOR:
By:______________________________
Its: President
STATE OF California )
) ss
COUNTY OF Contra Costa )
On April 22, 1998, before me, a Notary Public, personally
appeared Jan
Hoeffel, the President of FINET HOLDINGS CORPORATION, a Delaware
corporation,
personally known to me (or proved to me on the basis of satisfactory
evidence)
to be the person whose name is subscribed to the within instrument
and
acknowledged to me that he/she executed the same in his/her authorized
capacity,
and that by his/her signature on the instrument the person, or the entity
upon
behalf of which the person acted, executed the instrument.
WITNESS my hand and official seal.
Notary Public
My Commission Expires:
(SEAL)
SERVICING ACQUISITION PROMISSORY NOTE
Date: April 15, 1998
$1,870,000
FOR VALUE RECEIVED, the undersigned, MONUMENT MORTGAGE, INC., a
California
corporation, (herein called the "Company"), hereby promises to pay to the
order
of RESIDENTIAL FUNDING CORPORATION, a Delaware corporation (the
"Lender" or,
together with its successors and assigns, the "Holder") whose principal
place of
business is 8400 Normandale Lake Blvd., Suite 600, Minneapolis, Minnesota
55437,
or at such other place as the Holder may designate from time to time,
the
principal sum of One Million Eight Hundred Seventy Thousand Dollars
($1,870,000)
or so much thereof as may be outstanding from time to time pursuant
to the
Warehousing Credit and Security Agreement described below, and to pay
interest
on said principal sum or such part thereof a" "hall remain unpaid from
time to
time, from the date of each Advance until repaid in full, and all other
fees and
charges due under the Agreement, at the rate and at the times set forth
in the
Agreement. All payments hereunder shall be made in lawful money of the
United
States and in immediately available funds.
This Note is given to evidence an actual credit facility in the
above
amount and is the Servicing Acquisition Note referred to in that
certain
Warehousing Credit and Security Agreement (the "Agreement") dated
March 22,
1995, between the Company and the Lender, as the same may be
amended or
supplemented from time to time, and is entitled to the benefits
thereof.
Reference is hereby made to the Agreement (which is incorporated
herein by
reference as fully and with the same effect as if set forth herein at
length)
for a description of the Collateral, a statement of the covenants
and
agreements, a statement of the rights and remedies and securities
afforded
thereby and other matters contained therein. Capitalized terms used
herein,
unless otherwise defined herein, shall have the meanings given them
in the
Agreement.
This Note may be prepaid in whole or in part at any time without
premium or
penalty.
Should this Note be placed in the hands of attorneys for collection,
the
Company agrees to pay, in addition to principal and interest, fees and
charges
due under the Agreement, any and all costs of collecting this Note,
including
reasonable attorneys' fees and expenses.
The Company hereby waives demand, notice, protest and presentment.
This Note shall be construed and enforced in accordance with the
laws of
the State of Minnesota, without reference to its principles of conflicts of
law.
IN WITNESS WHEREOF, the Company has executed this Note as of the
day and
year first above written.
MONUMENT MORTGAGE, INC.,
a California corporation
By:______________________________
Its: President
STATE OF California )
) ss
COUNTY OF Contra Costa )
On April 22, 1998, before me, a Notary Public, personally
appeared
James W. Noack, the President of MONUMENT MORTGAGE, INC., a
California
corporation, personally known to me (or proved to me on the
basis of
satisfactory evidence) to be the person whose name is subscribed to the
within
instrument and acknowledged to me that he/she executed the same in
his/her
authorized capacity, and that by his/her signature on the instrument the
person,
or the entity upon behalf of which the person acted, executed the
instrument.
WITNESS my hand and official seal.
Notary Public
My Commission Expires:
(SEAL)
<PAGE>
CERTIFICATE
OF
SECRETARY OF
MONUMENT MORTGAGE, INC.
I, the undersigned, hereby certify that I am the Secretary of
MONUMENT
MORTGAGE, INC., a California corporation (the "Company" ), and have
knowledge of
the matters contained in this Certificate and hereby certify that:
1. The Company is a corporation duly organized, validly existing
and in
good standing under the laws of the State of California
and has
complied with all certifications, filings and requirements
necessary
to continue as a corporation in the State of California and for
each
state where the Company is transacting business as a
foreign
corporation.
2. In connection with the single family revolving warehouse facility
made
to the Company by RESIDENTIAL FUNDING CORPORATION, a
Delaware
corporation (the "Lender") pursuant to the terms of a
Warehousing
Credit and Security Agreement dated as of March 22, 1995, as the
same
may have been amended or supplemented (the "Agreement" ), the
Company
has the valid power and authority to execute and deliver to the
Lender
the Tenth Amendment to Warehousing Credit and Security
Agreement and
the Servicing Acquisition Promissory Note .
3. The resolutions attached to this Certificate as Exhibit A were
duly
adopted by either: (a) by unanimous written action of the
Board of
Directors of the Company; or (b) at a meeting of the
Board of
Directors of the Company held on the _____ day of , 19__, at
which
meeting a quorum was present. I am the keeper of the Minute
Book of
the Company and said resolutions have been entered therein,
have not
been altered, amended, repealed or rescinded, and are now in
full f
orce and effect .
4. There have been no amendments to the Articles of
Incorporation or
bylaws of the Company since the date of the most recent
certified
copies thereof delivered to the Lender.
IN WITNESS WHEREOF, I have hereunto set my hand and the seal of
this
corporation this 22nd day of April, 1998
_________________________
Secretary
<PAGE>
EXHIBIT A
RESOLUTIONS OF BOARD OF DIRECTORS
WHEREAS, MONUMENT MORTGAGE, INC., a California corporation (the
"Company"),
has entered into a single family revolving warehouse facility with a
present
commitment amount of Ten Million Dollars ($10,000,000), temporarily
increased to
Fifty-Five Million Dollars'($55,000,000) (the "Warehousing Commitment
Amount"),
with RESIDENTIAL FUNDING CORPORATION, a Delaware corporation (the
"Lender"), as
evidenced by a Second Amended and Restated Warehousing Promissory Note
in the
principal sum of Fifty-Five Million Dollars ($55,000,000), dated as of
February
23, 1998, and by a Warehousing Credit and Security Agreement, dated as of
March
22, 1995, as the same may have been amended or supplemented (the
"Warehousing
Agreement"); and
WHEREAS, the Company and the Lender have entered into a term loan
facility,
as evidenced by a Term Loan Promissory Note in the principal amount
of One
Million Dollars ($1,000,000), dated as of March 22, 1995, and the
Warehousing
Agreement;
WHEREAS, the Company and the Lender have also entered into a
working
capital facility with a present Working Capital Commitment Amount of One
Million
Dollars ($1,000,000) (the "Working Capital Commitment"), as evidenced by a
First
Amended and Restated Working Capital Promissory Note in the principal sum
of One
Million Dollars ($1,000,000), dated as of February 29, 1996, and the
Warehousing
Agreement;
WHEREAS, the Company proposes to add a servicing acquisition
facility to
the Warehousing Agreement; and
WHEREAS, to evidence such addition to the Warehousing Agreement,
the
Company proposes to execute and deliver a Tenth Amendment to Warehousing
Credit
and Security Agreement (the "Amendment") and a Servicing Acquisition
Promissory
Note dated as of April 15, 1998 ("Note"), copies of which have been
presented to
the Board of Directors of this Company; and
WHEREAS, the Board of Directors of this Company has determined that it
will
be in the best interests of this Company for the Company to amend
the
Warehousing Agreement.
RESOLVED, that these resolutions are enacted by the Board of
Directors of
this Company on its behalf and on behalf of the Company.
FURTHER RESOLVED, that the Company shall amend the Warehousing
Agreement to
be evidenced by the Amendment and the Note.
FURTHER RESOLVED, that the Amendment and the Note in the forms
presented to
the Board of Directors of this Company are hereby approved and copies
thereof
are filed in the records of this Company with these Resolutions.
FURTHER RESOLVED, that any One (insert minimum number required to
sign) of
the following titles or positions of officers of the Company: President,
Chief
Financial Officer, Senior Vice President (list titles/positions of
officers
authorized, do not list individual names), shall be and are
authorized,
empowered and directed in the name of and on behalf of this Company, to
execute,
acknowledge and deliver the Amendment in the form approved by the
Board of
Directors of this Company as aforesaid, with such changes therein as
may be
acceptable to such officers, as conclusively evidenced by their
execution
thereof.
FURTHER RESOLVED, that such officers shall be and are hereby
authorized,
empowered and directed to do and perform each and every act and execute
any and
all documents and instruments in the name of this Company as may be
necessary or
desirable to enable this Company to amend the Warehousing Agreement and to
carry
out the purport and intent of the foregoing Resolutions.
<PAGE>
EXHIBIT A-5
SERVICING ACQUISITION PROMISSORY NOTE
Date: April 15, 1998 $1,870,000
FOR VALUE RECEIVED, the undersigned, MONUMENT MORTGAGE, INC., a
California
corporation, (herein called the "Company"), hereby promises to pay to the
order
of RESIDENTIAL FUNDING CORPORATION, a Delaware corporation (the
"Lender" or,
together with its successors and assigns, the "Holder") whose principal
place of
business is 8400 Normandale Lake Blvd., Suite 600, Minneapolis, Minnesota
55437,
or at such other place as the Holder may designate from time to time,
the
principal sum of One Million Eight Hundred Seventy Thousand Dollars
($1,870,000)
or so much thereof as may be outstanding from time to time pursuant
to the
Warehousing Credit and Security Agreement described below, and to pay
interest
on said principal sum or such part thereof as shall remain unpaid from
time to
time, from the date of each Advance until repaid in full, and all other
fees and
charges due under the Agreement, at the rate and at the times set forth
in the
Agreement. All payments hereunder shall be made in lawful money of the
United
States and in immediately available funds.
This Note is given to evidence an actual credit facility in the
above
amount and is the Servicing Acquisition Note referred to in that
certain
Warehousing Credit and Security Agreement (the "Agreement") dated
March 22,
1995, between the Company and the Lender, as the same may be
amended or
supplemented from time to time, and is entitled to the benefits
thereof.
Reference is hereby made to the Agreement (which is incorporated
herein by
reference as fully and with the same effect as if set forth herein at
length)
for a description of the Collateral, a statement of the covenants
and
agreements, a statement of the rights and remedies and securities
afforded
thereby and other matters contained therein. Capitalized terms used
herein,
unless otherwise defined herein, shall have the meanings given them
in the
Agreement.
This Note may be prepaid in whole or in part at any time without
premium or
penalty.
Should this Note be placed in the hands of attorneys for collection,
the
Company agrees to pay, in addition to principal and interest, fees and
charges
due under the Agreement, any and all costs of collecting this Note,
including
reasonable attorneys' fees and expenses.
The Company hereby waives demand, notice, protest and presentment.
This Note shall be construed and enforced in accordance with the
laws of
the State of Minnesota, without reference to its principles of conflicts of
law.
IN WITNESS WHEREOF, the Company has executed this Note as of the
day and
year first above written.
MONUMENT MORTGAGE, INC.,
a California corporation
By:_____________________________
Its:____________________________
STATE OF California )
) ss
COUNTY OF Contra Costa )
On , before me, a Notary Public, personally appeared , the of
MONUMENT
MORTGAGE, INC., a California corporation, personally known to me (or
proved to
me on the basis of satisfactory evidence) to be the person whose
name is
subscribed to the within instrument and acknowledged to me that he/she
executed
the same in his/her authorized capacity, and that by his/her signature
on the
instrument the person, or the entity upon behalf of which the person
acted,
executed the instrument.
WITNESS my hand and official seal.
Notary Public
My Commission Expires:
(SEAL)
<PAGE>
EXHIBIT C-SA
SERVICING ACQUISITION ADVANCE REQUEST
Date:_______________, 1998
Reference is made to that certain Warehousing Credit and Security
Agreement
between MONUMENT MORTGAGE, INC., a California corporation (the "Company"),
and
RESIDENTIAL FUNDING CORPORATION, a Delaware corporation (the "Lender"),
dated as
of March 22, 1995 (as the same may be amended, modified, supplemented,
renewed
or restated from time to time, the "Agreement"). All capitalized terms
used
herein and all Section numbers given herein refer to those terms and
Sections
set forth in the Agreement. This Servicing Acquisition Loan Advance
Request is
submitted to the Lender pursuant to Section 2.17(a) of the Agreement.
The undersigned hereby requests a Servicing Acquisition Advance
in the
principal amount of $_______ to be made on _______________, 1998. After
giving
effect to such Servicing Acquisition Advance, the aggregate
outstanding
principal amount of all Servicing Acquisition Advances will be $_________.
The aggregate outstanding principal balances of the Mortgage Loans
serviced
pursuant to Special Servicing Contracts to be acquired in the Special
Servicing
Acquisition to be financed with the requested Servicing Acquisition
Advance is
$______________. The aggregate outstanding principal balance of the
Mortgage
Loans serviced pursuant to Special Servicing Contracts included in the
Servicing
Collateral as of the date hereof is $_____________. The Servicing
Acquisition
Collateral Value of the Special Servicing Contracts being acquired
in the
Special Servicing Acquisition to be financed with the requested
Servicing
Acquisition Advance is $_______ . The Servicing Acquisition Collateral
Value of
all Special Servicing Contracts included in the Servicing Collateral
after
giving effect to such Special Servicing Acquisition will be $__________.
The
Company represents and warrants that it has no reason to believe that
such
amounts are incorrect. The aggregate principal amount of all
Servicing
Acquisition Advances made under the Agreement, after giving effect
to the
Servicing Acquisition Advance requested hereby, will not exceed the
Servicing
Acquisition Commitment or any other limitation set forth in the Agreement.
The representations and warranties of the Company set forth in Section
5 of
the Agreement are true and correct in all material respects on and as
of the
date hereof as if made on and as of such date.
No Event of Default has occurred and is continuing.
Since the Statement Date, there has been no material adverse change
in the
business, financial condition or results of operation of the Company
and its
Subsidiaries, taken as a whole.
MONUMENT MORTGAGE, INC.,
a California corporation
By:____________________________
Its:___________________________
Title:_________________________
EXHIBIT E
SCHEDULE OF SERVICING PORTFOLIO
UNPAID PRINCIPAL BALANCE OF LOANS SERVICED AS OF
DATE OF THIS AGREEMENT
INVESTOR NAME
(to be completed by Company)
<PAGE>
SCHEDULE OF SERVICING PORTFOLIO
UNPAID PRINCIPAL BALANCE OF LOANS SERVICED AS
OF
DATE OF THIS AGREEMENT
INVESTOR NAME
SEE ATTACHED SCHEDULE
<PAGE>
PORTFOLIO BALANCE
PREPARED BY: RITA KELLEY
PREPARED DATE: 04/05/95
MONTH OF: Mar-95
<TABLE>
<CAPTION>
Portfolio Loan Warehouse Loan FNMA
Loan FHLMC Loan GE Capital Loan INMC Loan Diff.
Loan
Prin. Bal. CT Prin. Bal. CT Prin.
Bal. CT Prin. Bal. CT Prin. Bal. CT Prin. Bal. CT
Prin. CT
Bal.
<S> <C> <C> <C> <C> <C>
<C> <C> <C> <C> <C> <C> <C> <C>
<C>
Beginning Balance 503,279,001.67 3,562 1,741,935.62 13
115,569,662.29 824 377,409,972.76 2,700 8,092,431.00 24
465,000.00 1 0.00 0
Principal Reduction (1,030,974.80) (554.54)
(262,742.97) (758,172.34) (8,136.18) (268.77)
0.00 0
Deferred Interest
0.00 0.00 0
New Loans 9,777,400.00 77 7,815,298.86 56
323,000.00 4 418,700.00 6 1,220,401.14
11 (0.00) 0
Payoffs (1,693,790.52) (12)
(158,398.45) (1) (1,535,392.07) (11)
0.00 0
Service Released (4,862,650.00) (35) (4,862,650.00) (35)
0.00 0
Reo From FHLMC &
0.00 0
Repub.
Unfund/Refund Adj.
0.00 0
---------------- -------- ------------- ------- ------
- --------- ------ -------------- ------- ------------ ----- ------------ ---
- --- -------- -------
Ending Balance 505,469,086.35 3,592 4,694,029.94 34
115,471,520.87 827 375,534,108.35 2,695 8,084,294.82 24
8,084,294.82 12 (0.00) 0
---------------- -------- ------------- ------- ------
- --------- ------ -------------- ------- ------------ ----- ------------ ---
- --- -------- -------
S280 Ending Bal. (505,469,086.35) (3,592)
---------------- --------
Difference (0.00) 0
--
- ------------------------
Proof
505,469,086.35
(505,469,086.35)
--
- ------------------------
0.00
--
- ------------------------
INVESTOR DELINQUENT STATUS
Prin Bal Loan CT.
30 DAYS 3,323,338.65 25
60 DAYS 1,070,207.52 7
90 DAYS 998,645.40 6
FORECLOSURE 2,114,318.51 15
--------------------- ------------
TOTAL 7,506,510.08 53
</TABLE>
<PAGE>
DELINQUENT LOAN STATUS
MONTH: Mar-95
PREPARED DATE: 04/05/95
<TABLE>
<CAPTION>
- --------------------------- ------------------------ ----------------------
- --- ------------------------ ------------------------- --------------------
- ---- -------------------------
INVESTOR
NAME 30 60
90 120 REO
TOTAL
LOAN CT
- --------------------------- ------------------------ ----------------------
- --- ------------------------ ------------------------- --------------------
- ---- -------------------------
<S> <C> <C>
<C> <C> <C>
<C>
FHMC 3,323,338.65 1,070,207.52
998,645.40 2,114,318.51
7,506,510.08
25 7
6 15
53
REO
0.00
0
MMI
0.00
0
FNMA
0.00
0
GE CPTL
0.00
0
INMC
0.00
0
TOTAL 3,323,338.65 1,070,207.52
998,645.40 2,114,318.51 0.00
7,506,510.08
25 7
6 15 0
53
----
- -----------------------
PROOF
----
- -----------------------
7,506,510.08
----
- -----------------------
53
----
- -----------------------
<PAGE>
EXHIBIT "F"
MONUMENT MORTGAGE. INC.
RESOLUTIONS OF BOARD Of DIRECTORS
WHEREAS, MONUMENT MORTGAGE, INC., a California corporation (the
"Company"),
proposes to borrow from RESIDENTIAL FUNDING CORPORATION, a Delaware
corporation
(the "Lender"), a Ten Million Dollars ($10,000,000) single family
revolving
warehouse facility, a One Million Dollar ($1,000,000) working capital
facility
and a One Million Dollar ($1,000,000) term loan facility (collectively,
the
Sloane); and
WHEREAS, to evidence the Loan, the Company proposes to execute and
deliver
the following instruments, each dated as of March 22nd, 1995 unless
otherwise
indicated (herein collectively referred to as the "Loan Documents"):
(a) A Warehousing Promissory Note in the principal sum of Ten
Million
Dollars ($10,000,000) payable to the order of Lender;
(b) A Sublimit Promissory Note in the principal sum of Six Million
Dollars
($6,000,000) payable to the order of Lender;
(c) A Working Capital Promissory Note in the principal sum of One
Million
Dollars ($1,000,000) payable to the order of Lender;
(d) A Term Loan Promissory Note in the principal sum of One
Million
Dollars ($1,000,000) payable to the order of Lender;
(e) A Warehousing Credit and Security Agreement evidencing the
Loan and
creating a security interest in the Collateral defined
therein in
favor of the Lender;
(f) Undated Financing Statements perfecting a security
interest in
collateral, tangible and intangible;
copies of which have been presented to the Board of Directors of the
Company; and
WHEREAS, the Board of Directors of the Company have determined that it
will
be in the best interests of the Company for the Company to borrow the Loan.
RESOLVED, that these resolutions are enacted by the Board of
Directors of
the Company on their behalf and on behalf of the Company.
FURTHER RESOLVED, that the Company shall borrow the Loan to be
evidenced
and secured by the Loan Document.
FURTHER RESOLVED, that the Loan Documents in the form presented
to the
Board of Directors of the Company are hereby approved and copies
thereof are
filed in the records of the Company with these Resolutions.
FURTHER RESOLVED, that any ONE of the following officers of the
Company:
President Executive Vice Pres. Chief Financial Officer shall be and
are
authorized, empowered and directed in the name of and on behalf of the
Company,
to execute, acknowledge and deliver the Loan Documents, and each of them,
in the
form approved by the Board of Directors of the Company as aforesaid, with
such
changes therein as may be acceptable to such officers, as conclusively
evidenced
by their execution thereof.
FURTHER RESOLVED, that any TWO (insert minimum number required to
sign) of
the following officers of the Company: President. Executive Vice Pres.,
Chief
Financial Officer, Secretary, Senior Vice President shall be and are
authorized,
empowered and directed in the name of and on behalf of the Company, to
execute,
acknowledge and deliver any Term Loan Advance Requests, Working Capital
Advance
Requests, any other advance requests, and wire transfer instructions in the
name
of the Company, in any form prescribed by the Lender.
FURTHER RESOLVED, that any ONE of the following officers of the
Company:
President. Executive Vice President. Senior Vice President, Cheif
Financial
Officer, Secretary, Asst. Secretary, Assistant Vice President shall be
and are
authorized, empowered and directed in the name of and on behalf of the
Company
to execute, acknowledge and deliver shipping requests, assignments,
security
delivery instructions and trust receipts and to endorse notes in the name
of the
Company, in any form prescribed by the Lender.
FURTHER RESOLVED, that these Resolutions shall remain in full
force and
effect and the Lender shall be fully protected in acting thereon until
written
notice of their change or revocation has been duly given to and received
by the
Lender, and the Lender is authorized to accept, and the Secretary of the
Company
shall from time to time provide, signed certificates of the Secretary
setting
forth any change of names of officers and other persons authorized
to act
hereunder on behalf of the Company, which certificates shall become a
part of
these Resolutions.
<PAGE>
CERTIFICATE OF SECRETARY
OF
MONUMENT MORTGAGE. INC.
I, the undersigned, hereby certify that I am the Secretary of
MONUMENT
MORTGAGE, INC., a California corporation (the "Company"), and have
knowledge of
the matters contained in this Certificate and hereby certify that:
1. The Articles of Incorporation of the Company attached to
this
Certificate as Exhibit "A", the By-Laws of the Company
attached to
this Certificate as Exhibit "B", the Certificates of Good
Standing of
the Company attached to this Certificate as Exhibit "C"
and the
Certificate of the Franchise Tax Board of the State of
California for
the Company attached to this Certificate as Exhibit "D" are
true and
correct copies of the current Articles of Incorporation, By-
Laws,
Certificates of Good Standing and Certificate of the
Franchise Tax
Board of the State of California of the Company, have not
been
altered, modified or amended and are still in full force and
effect.
2. The Company is a corporation duly organized, validly existing
and in
good standing under the laws of the State of California
(the
jurisdiction where it is incorporated) and has complied
with all
certifications, filings and requirements necessary to continue
as a
corporation in the State of California and is qualified to do
business
as a foreign corporation and in good standing in all
jurisdictions
where the conduct of its business makes such qualification
necessary.
3. In connection with a Ten Million Dollar ($10,000,000) single
family
revolving warehouse facility, a One Million Dollar
($1,000,000)
working capital facility and a One Million Dollar ($1,000,000)
term
loan facility made to the Company by RESIDENTIAL FUNDING
CORPORATION,
a Delaware corporation (the "Lender"), the Company hen the valid
power
and authority to execute and deliver to the Lender the
Promissory
Notes, the Warehousing Credit and Security Agreement and such
other
security documents as required by the Lender.
4. The names of the officers of the Company and any other
persons
authorized to act under the resolutions attached hereto and
their
official signatures are as shown on the Certificate of
Incumbency
attached hereto as Exhibit "E".
5. The resolutions attached to this Certificate as Exhibit "F" were
duly
adopted either: (a) by unanimous written action of the
Board of
Directors of the Company; or (b) at a meeting of the
Board of
Directors of the Company held on the 3rd day of April, 1995, at
which
meeting a quorum was present. I am the keeper of the Minute
Book of
the Company and said resolutions have been entered therein,
have not
been altered, amended, repealed or rescinded, and are now in
full
force and effect.
IN WITNESS WHEREOF, I have hereunto set my hand and the seal of the
Company
as of this 3rd day of April 1995.
---------------------------------------
Secretary
[SEAL]
<PAGE>
EXHIBIT F
RESIDENTIAL FUNDING CORPORATION
SUBORDINATION OF DEBT AGREEMENT
To: Residential Funding Corporation
8400 Normandale Lake Blvd., Suite 600
Minneapolis, Minnesota 55437
(hereinafter referred to as the "Lenders)
The undersigned (hereinafter referred to as the "Creditors),
creditor of
MONUMENT MORTGAGE, INC., a California corporation (hereinafter referred
to as
the "Company"), desires that the Lender extend or continue to extend
such
financial accommodations to the Company as the Company may require and
as the
Lender may deem proper. For the purpose of inducing the Lender to
grant,
continue or renew such financial accommodations, and in consideration
thereof,
the Creditor agrees as follows:
1. That at the present time the Company is indebted to the Creditor
in the
principal amounts set forth below:
PRINCIPAL AMOUNT
TYPE OF FACILITY OF DEBT FROM THE
OR LOAN COMPANY
- -------------------------------- -----------------------------------
- ----
- -------------------------------- -----------------------------------
- ----
- -------------------------------- -----------------------------------
- ----
- -------------------------------- -----------------------------------
- ----
- -------------------------------- -----------------------------------
- ----
(Notes, if any, are to be delivered to the Lender)
2. That all claims of the Creditor against the Company now or
hereafter
existing are and shall be at all times subject and subordinate to
any and
all claims now or hereafter which the Lender may have against the
Company
(and all extensions, renewals, modifications, replacements
and
substitutions of or for the same), for so long as any such claim or
claims
of the Lender shall exist.
3. That the Creditor shall not (a) except to the extent expressly
permitted in
Section 4 hereof, receive payment of or collect, in whole or in
part, or
sue upon, any claim or claims now or hereafter existing which the
Creditor
may hold against the Company; (b) sell, assign, transfer,
pledge,
hypothecate or encumber such claim or claims except subject
expressly to
this Agreement, (c) enforce any lien the Creditor may now or in the
future
have on any debt owing by the Company to the Creditor; and/or (d)
join in
any petition in bankruptcy, assignment for the benefit of
creditors or
creditors' agreement, except as directed by the Lender, so long
as any
claim of the Lender against the Company, or commitment of the
Lender to
extend credit to the Company, is in existence.
4. So long as no event described in clauses (a) through (d) of Section 6
below
(a "Liquidation Event") shall have occurred and no default shall
have
occurred in payment or performance of any obligation of the Company
to the
Lender, regularly scheduled payments of interest and principal
on the
claims of the Creditor may be made as and when the same become
due and
payable (it being understood that no prepayment shall be made of
such
claims and no modification or acceleration, for default or
otherwise, of
such maturity dates shall be permitted). After the occurrence
of a
Liquidation Event or of default in payment or performance of any
obligation
of the Company to the Lender, no interest and no principal payments
on the
claims of the Creditor shall be made without the prior written
consent of
the Lender. The subordination of claims of the Creditor hereunder
shall
remain in effect so long as there shall be outstanding any
obligation of
the Company to the Lender (for this purpose, the Company shall be
deemed
obligated to the Lender so long as the Lender shall have outstanding
any
commitment to make any loan to the Company, whether or not any such
loan
shall have been made or advanced).
5. In the event that any Creditor receives a payment from the
Company in
violation of the terms of this Agreement, such Creditor (a) shall hold
such
money in trust for the benefit of Lender, (b) shall segregate such
payment
from (and shall not commingle such payment with any of) the other
funds of
such Creditor, and (c) shall forthwith remit such payment to Lender
in the
exact form received (but with any necessary endorsement).
6. In case of (a) any assignment by the Company for the benefit of
creditors,
(b) any bankruptcy proceedings instituted by or against the Company,
(c)
the appointment of any receiver for the Company's business or
assets, or
(d) any dissolution or winding up of the affairs of the Company,
the
Company and any assignee, trustee in bankruptcy, receiver, or other
person
or persons in charge, are hereby directed to pay to the Lender the
full
amount of the Lender's claim against the Company before making any
payment
of principal or interest to the Creditor and the Creditor hereby
sells,
transfers, sets over and assigns to the Lender all claims the
Creditor may
now or hereafter have against the Company and in any security
therefor, and
the proceeds thereof, and all rights to any payments, dividends or
other
distributions arising therefrom. If the Creditor does not file a
proper
claim or proof of debt in the form required in such proceeding
prior to
thirty (30) days before the expiration of the time to file such
claim in
such proceedings, then the Lender has the right (but no obligation)
to do
so and is hereby authorized to file an appropriate claim or claims
for and
on behalf of the Creditor.
7. For violation of this Agreement, the Creditor shall be liable to the
Lender
for all loss and damage sustained by reason of such breach, and
upon any
such violation, the Lender may accelerate the maturity of its
claims
against the Company, at the Lender's option.
8. The Creditor will, at any time and from time to time, promptly
execute and
deliver all further instruments and documents, and take all further
action,
that may be reasonably necessary in order to protect any right or
interest
granted hereby or to enable the Lender to exercise and enforce its
rights
and remedies hereunder.
9. The Creditor will not amend, extend or in any way modify the terms
of its
claims against the Company, as such terms exist as of the date of
this
Agreement, without the prior written consent of the Lender. The
Creditor
agrees to provide to the Lender, upon the occurrence thereof, notice
of the
existence of any event of default (however defined or described)
under any
document or agreement relating to its claims against the Company,
or any
condition, act or event, which with the giving of notice or the
passage of
time or both would constitute an event of default (however
defined or
described) thereunder.
10. All rights and interest of the Lender hereunder, and all agreements
and
obligations of the Creditor hereunder, shall remain in full
force and
effect irrespective of:
(a) any sale, assignment, pledge, encumbrance or other disposition
of the
claims of the Lender against the Company (the "Senior Claimer)
and/or
any document or instrument executed in connection therewith;
(b) any change in the time, manner or place of payment of, or in any
other
terms of, all or any of the Senior Claims, or any refinancing
thereof,
or any other amendment, modification, extension or renewal
of or
waiver of or any consent to departure from any document or
instrument
relating thereto, including, without limitation, changes in the
terms
of the repayment of loan proceeds, modifications,
extensions or
renewals of payment dates, changes in interest rate or the
advancement
of additional funds by the Lender in its discretion; or
(c) any exchange, release or nonperfection of any collateral,
or any
release or amendment or waiver of or consent to departure
from any
guaranty, for all or any of the Senior Claims.
11. This Agreement shall continue to be effective or be reinstated, as the
case
may be, if at any time any payment or performance of all or any
portion of
the Senior Claims is rescinded or must otherwise be returned by the
Lender
or any other party to the documents relating thereto upon the
insolvency,
bankruptcy or reorganization of any such party or otherwise, all as
though
such payment had not been made.
12. The Creditor hereby waives promptness, diligence, notice of
acceptance and
any other notice with respect to this Agreement and any requirement
that
the Lender protect, secure, perfect or insure any security interest or
lien
or any property subject thereto or exhaust any right or take any
action
against the Creditor or any other person or entity or any collateral.
13. No failure on the part of the Lender to exercise, and no
delay in
exercising, any right hereunder shall operate as a waiver thereof,
nor
shall any single or partial exercise of any right hereunder
preclude any
other or further exercise thereof or the exercise of any other
right. The
remedies herein provided are cumulative and not exclusive of any
remedies
provided by law.
14. No amendment or waiver of any provision of this Agreement nor
consent to
any departure by the Creditor therefrom shall in any event be
effective
unless the same shall be in writing and signed by the Lender, and then
such
waiver or consent shall be effective only in the specific instance
and for
the specific purpose for which given.
15. The Creditor agrees to pay upon demand, to the Lender the amount of
any and
all expenses, including the reasonable fees and expenses of its
counsel and
all court costs and other reasonable litigation expenses, including
but not
limited to expert witness fees, document copying expenses,
exhibit
preparation costs, and courier, postage and communication expenses,
which
the Lender may incur in connection with the exercise or enforcement
of any
of its rights or interest hereunder.
16. All notices, request and demands that may be required or otherwise
provided
for or contemplated under the terms of this Agreement shall, whether
or not
so stated, be in writing, and shall be given by any of the following
means:
(a) personal delivery; (b) reputable overnight courier service;
or (c)
registered or certified first class mail, return receipt requested.
Any
notice, request or demand son; pursuant to clause (a) above shall be
deemed
received upon personal delivery, and if sent pursuant to clause (b)
shall
be deemed received on the next business day following delivery
to the
courier service, and if sent pursuant to clause (c) shall be
deemed
received three (3) days following deposit in the mail.
The addresses for notices are as follows
If to the Creditor, addressed to:
----------------------------------
----------------------------------
----------------------------------
If to the Lender, addressed to :
Residential Funding Corporation
1646 North California Blvd. Suite 400
Walnut Creek, CA 94596
Attention: Graham Shipman, Vice President
Telecopier No.: (510) 935-6424
Such addresses may be changed by written notice to the other parties
given in
the manner provided above.
17. This Agreement shall be governed in all respects by the laws
of the
State of Minnesota and shall be binding upon and shall inure to the
benefit of
the Creditor, the Lender and the Company, and their respective heirs,
executors,
administrators, personal representatives, successors and assigns. This
Agreement
and any claim or claims of the Lender pursuant hereto may be assigned
by the
Lender, in whole or in part, at any time, without notice to the Creditor
or the
Company.
-----------------------------------
- -
(Creditor)
<PAGE>
[THE FOLLOWING ACKNOWLEDGEMENT IS TO BE USED FOR A CORPORATION.]
STATE OF )
) ss
COUNTY OF )
On ______________, 1995, before me, a Notary Public, personally
appeared
____________________, the _______________of _________________, personally
known
to me for proved to me on the basis of satisfactory evidence) to be the
person
whose name is subscribed to the within instrument and acknowledged to me
that
he/she executed the same in his/her authorized capacity, and that by
his/her
signature on the instrument the person, or the entity upon behalf of
which the
person acted, executed the instrument.
WITNESS my hand and official seal.
-----------------------------------
- ---
Notary Public
My Commission Expires:
(SEAL)
[THE FOLLOWING ACKNOWLEDGEMENT IS TO BE USED FOR AN INDIVIDUAL.]
STATE OF )
) ss
COUNTY OF )
The foregoing instrument was acknowledged before me this _____ day
of ,
19__, by ------------------ ------------------------------------------ .
-----------------------------------
- ---
Notary Public
My Commission Expires
<PAGE>
ACCEPTANCE OF SUBORDINATION OF DEBT
AGREEMENT BY THE COMPANY
The Company named in the Subordination of Debt Agreement set
forth
hereinbefore, hereby (i) represents and warrants to the Lender that
it is
presently indebted to the Creditor executing said Subordination of
Debt
Agreement in the aggregate principal amount of ---------------- Dollars
($ );
and (ii) accepts and consents to the Subordination of Debt Agreement, and
agrees
to be bound by all of the provisions thereof and to recognize all
priorities and
other rights granted thereby to RESIDENTIAL FUNDING CORPORATION, a
Delaware
corporation, its successors and assigns, and to perform in accordance
therewith.
MONUMENT MORTGAGE, INC.,
a California corporation
By:
------------------------------------------
Its:
------------------------------------------
Dated:
</TABLE>
<PAGE>
April 23, 1992
Mr. James A. Umphryes
Executive Vice President
Monument Mortgage, Inc.
1850 Mt. Diablo Blvd. Suite 650
Walnut Creek, CA 94596
Dear Mr. Umphryes:
We are pleased to inform you that Monument Mortgage Inc. is now an
approved
Fannie Mae lender for first mortgages. An executed copy of the Mortgage
Selling
and Servicing Contract is enclosed for your records.
The following Lender Identification Number has been assigned to your
firm for
use in your dealings with Fannie Mae.
Lender Identification Number: 22328-000-5
If you need additional information on our programs, contact Scottie
Riddell of
our Lender Administration Department or Sandy Stocker of our
Marketing
Department.
Our staff welcomes you as a participant in our programs and looks forward
to a
pleasant relationship with your firm.
Sincerely,
Laddie A. Schmidtbauer
Vice President
Quality Control/Operations
Western Regional Office
BS: jd
February 27, 1992
Mr. James A. Umphryes
Executive Vice President
MONUMENT MORTGAGE, INC.
1850 Mt. Diablo Blvd., Suite 650
Walnut Creek, California 94S96
Dear Jim:
We are pleased to inform you that Monument Mortgage, Inc., has been
approved as
a Residential Funding Corporation Seller and Servicer.
Each time you obtain a commitment from Residential Funding, you
automatically
warrant that Monument Mortgage, Inc., is in compliance with all the terms
of the
Seller and Servicer Contracts and Guides.
This Seller and Servicer approval is contingent upon the following:
1. Receipt of E & O and Fidelity insurance binders.
2. Receipt of USAP Letter for the period ending 12/31/91.
Duplicate copies of Seller/Servicer Contracts, as well as the
Corporate
Resolution are enclosed for your completion and signature, along with a
Contact
Information List, and the Wire Transfer Authorization form (RFC Form
1670).
Please complete and sign all forms and return them to me by not later than
March
20. 1992. Commitments issued by Residential Funding will be governed by
these
Contracts and the Residential Funding Seller and Servicer Guides. Upon
receipt
of duplicate executed contracts, forms and the information shown above,
Monument
Mortgage, Inc., will be assigned a Residential Funding ID number and may
begin
transacting business.
Residential Funding is committed to providing competitive programs and
pricing,
efficient loan delivery options, and personalized customer service.
Please
contact me or Alexandra Zabel, your Marketing Representative, at any
time for
assistance or to discuss our product offerings.
Sincerely,
Joel Carpenter
Vice President
Regional Manager
JC:lsz
Enclosures
cc: Pat Nicholas - RFC
Ron Whealdon - RFC
<PAGE>
EVIDENCE OF INSURANCE FOR MORTGAGE BANKERS BOND
BANKERS INSURANCE SERVICE CORP. IN CALIFORNIA d/b/a B.I.S.C. INSURANCE
SERVICES
123 NORTH WACKER DRIVE, CHICAGO, ILLINOIS 60606
We, the undersigned Insurance Brokers, hereby verify that the MORTGAGE
BANKERS
BOND (revised to 7/1/88) described in this Evidence of Insurance
(which
insurance is referred to herein as the "Bond") is in force at this date
with
certain Underwriters at Lloyd's, London, and/or certain other Underwriters
(such
Underwriters being hereinafter called "Insurers").
Assured - Name: Monument Mortgage, Inc.
- Address: 3021 Citrus Circle. Suite 150
Walnut Creek, CA 94598
DESCRIPTION OF INSURANCE
MORTGAGE BANKERS BOND # 0C943 CERTIFICATE # 94-407-0173
BOND PERIOD: 7/31/94 to 7/31/97
AGGREGATE LIMIT OF INDEMNITY UNDER INSURING CLAUSES 1-8 AND 10,
INCLUDING EMPLOYEE DISHONESTY: $1,200,000
DEDUCTIBLE FOR EMPLOYEE DISHONESTY: $50, 000 each loss
AGGREGATE LIMIT OF INDEMNITY FOR CLAUSES 9 AND 11 (IF PURCHASED)
ERRORS & OMISSIONS: $1,200,000
DEDUCTIBLE FOR ERRORS & OMISSIONS: $15, 000 each loss
MODIFICATIONS OR EXCESS POLICY LIMITS:
This document is furnished as a matter of information only. The issuance of
this
document does not make the person or organization to whom it is
issued an
additional Assured, nor does it provide any rights to such
person or
organization or modify in any manner the Bond between the Assured
and the
Insurers. Any amendment, change or extension of such contract can
only be
effected by specific endorsement attached thereto.
It should be noted that the total Indemnity of the insurers for any and all
loss
or losses is limited to the amount remaining available for the payment of
claims
pursuant to the terms and conditions of the Bond irrespective of the
total
amount of such loss or losses.
The Bond contains separate Aggregate Limits of Indemnity. Any payments
made
under the Bond concerning either Aggregate Limit of Indemnity shall reduce
that
Aggregate Limit of Indemnity remaining available for the payment of any
loss or
losses.
Should the Bond be cancelled, terminated or the Aggregate Limit of
Indemnity
reduced for any reason other than payment of loss during the Bond period in
such
manner as to affect this document, we, the undersigned, will endeavor to
give
thirty (30) days written notice to the holder of this document, but
failure to
give such notice shall impose no obligation of any kind upon the
undersigned or
upon the Insurers.
Dated: October 12, 1994
By:
BANKERS INSURANCE SERVICE
<PAGE>
FEDERAL HOME LOAN MORTGAGE CORPORATION
SECURITY INTEREST INFORMATION
(Complete and submit this form with the Acknowledgement
Agreement. All Information set forth below is for the use of
Freddie Mac and its employees and/or counsel, and will be
boated as confidential information by all such persons.)
I. SERVICER.
Complete legal name MONUMENT MORTGAGE, INC.
Freddie Mac seller/servicer number 920209
II. SECURED PARTY.
Complete legal name RESIDENTIAL FUNDING CORPORATION
Street address 1646 NORTH CALIFORNIA BLVD., SUITE 400
(Do not write WALNUT CREEK, CALIFORNIA 94596
post office box) ______________________________________
Contact person (Name) D. GRAHAM SHIPMAN
(Title) VICE PRESIDENT
(Telephone number) (510) 935-0614
(Telecopier number) (510) 935-6424
III. SECURITY INTEREST.
Is the entire Freddle Mac Servicing Contract (as defined
in the
Acknowledgement Agreement) subject to the secured Interest
granted?
Yes X No
If "no," state the approximate maximum principal
amount of
mortgages serviced under the Freddie Mac Serving
Contract
subject to the security Interest.
Has Servicer granted a security interest in the Freddie Mac
Servicing
Contract to another person besides the Secured Party?
Yes No X
If "yes," write on an additional page for such person the same
information set forth in Part II above.
State principal amount of secured obligation.
Warehouse line of credit $10 Million Other line of credit
or
loan $2 MILLION
State maturity date of secured obligation. 1 MILLION REVOLVING LINE, 1
MILLION FOR FIVE YEARS FULLY AMORTIZING
Explain purpose of secured obligation. Use additional pages, if
necessary.
FUNDS WILL BE USED FOR WAREHOUSE FINANCING
FEDERAL HOME LOAN MORTGAGE CORPORATION
ACKNOWLEDGEMENT AGREEMENT
This Acknowledgement Agreement, entered into effective as of the
23rd
day of March , 1995[1] (the "Agreement"), by and among the Federal Home
Loan
Mortgage Corporation, a corporate instrumentality of the United States
("Freddie
Mac"), MONUMENT MORTGAGE, INC.,[2] organized and existing under the laws
of the
STATE OF CALIFORNIA,[3] whose chief executive office is located at 3091
CITRUS
CIRCLE, SUITE 150. WALNUT CREEK, CA 94598[4](the "Servicer"), and
RESIDENTIAL
FUNDING CORPORATION,[5] organized and existing under the laws of the
STATE OF
DELAWARE,[6]whose chief executive office is located at 8400 NORMANDALE LAKE
BLVD.
SUITE 600, MINNEAPOLIS, MINNESOTA 55437[7] (the "Secured Party");
W I T N E S S E T H:
WHEREAS, the Servicer and the Secured Party have entered into,
or,
contemporaneous with the execution of this Agreement, intend to enter
into, a
security agreement (the "Security Agreement") whereby the Servicer
granted, or
will grant, to the Secured Party a security interest in, among other
things, (a)
part or all of the conditional, non-delegable right of the Servicer to
service
certain single-family mortgages for Freddie Mac, which mortgages are
described
with particularity in Addendum A to this Agreement (the
"Mortgages"), in
exchange for the right to retain certain payments otherwise due to Freddie
Mac,
pursuant to the terms of the unitary, indivisible master servicing contract
(the
"Servicing Contract"`, a; described in the Freddie Mac Sellers' and
Servicers'
Guide, as it may be amended from time to time (the "Guide"), and
(b) any
proceeds resulting from the sale of such right to service mortgages for
Freddie
Mac (the Servicing Contract and such proceeds hereinafter referred to
as the
"Servicing Collateral;" the security interest in the Servicing Collateral
held
by the Secured Party hereinafter referred to as the "Servicing
Security
Interest"); and
___________________
[1] Type day, month and year on which Agreement is executed by Servicer.
[2] Type complete legal name of Servicer.
[3] If Servicer is a corporation or a depository institution organized
under
state law, type name of state in which the corporation or depository
institution
was organized, as follows "state of CALIFORNIA (name of state)." If
Servicer is
a depository institution organized under the laws of the United States
(such as
a federally-chartered commercial bank or savings and loan association),
type
"United States."
[4] Type street address (including any office, suite or floor number),
city and
state or Servicer's chief executive office.
[5] Type complete legal name of Secured Party.
[6] If the Secured Party is a corporation or a depository institution
organized
under state law, type name of state in which the corporation or depository
institution was organized, as follows: "state of DELAWARE (name of
state)." If
the Secured Party is a depository institution organized under the laws of
the
United States (such as a federally-chartered commercial bank or savings and
loan
association) type "United States."
[7] Type street address (including any office, suite or floor number),
city and
state of Secured Party's chief executive office.
<PAGE>
WHEREAS, the Servicer's grant of the Servicing Security
Interest is
prohibited under the terms of the Guide, unless Freddie Mac shall consent
to the
grant of such security interest by entering into this Agreement; and
WHEREAS, the Servicer and the Secured Party have requested that
Freddie
Mac consent to the grant of the Servicing Security Interest, and Freddie
Mac is
agreeable to so doing, on the terms and conditions set forth in this
Agreement,
in consideration of the acknowledgments, promises, undertakings,
warranties and
representations on the part of the Servicer and the Secured Party set
forth in
this Agreement.
NOW, THEREFORE, for good and valuable consideration, the
receipt and
sufficiency of which are hereby acknowledged, the parties hereto
agree as
follows:
1. Extent of Servicing Security Interest. Based upon the
representations
and warranties of the Servicer and the Secured Party set forth in
this
Agreement, and subject to the terms and conditions stated herein,
Freddie Mac
consents to the grant by the Servicer of the Servicing Security Interest
in the
Servicing Collateral, but does not consent to the grant of any other
security
interest in collateral not included in the Servicing Collateral.
2. Purpose of Servicing Security Interest; Loan Participation
and
Assignment of a Loan; No Additional Interests in Servicing Security
Interest.
The Servicer represents and warrants that it has granted or will
grant the
Servicing Security Interest, and the Secured Party represents and warrants
that
it has taken or will take the Servicing Security Interest, as
collateral to
secure an extension of credit for a purpose permitted by Freddie Mac.
The
Secured Party also represents and warrants that, if it sells one or
more
participations in a loan, or assigns a loan, made to the Servicer in
connection
with the Security Agreement, each participant or the assignee shall be
bound by
a written agreement with the Secured Party (a) to benefit under the
Security
Agreement and this Agreement exclusively by and through the Secured Party,
(b)
to authorize the Secured Party or its agent to act exclusively for
each
participant or the assignee with respect to this Agreement and Freddie
Mac, and
(c) to agree that all terms of this Agreement shall be binding
upon the
participant or the assignee as if it had executed the same. The Servicer
and the
Secured Party each further represents and warrants that, besides the
grant of
the Servicing Security Interest by the Servicer, and/or a sale of a
loan
participation or assignment of a loan (as provided for in the
immediately
preceding sentence) by the Secured Party, it has not, and it will not,
sell,
grant or convey to any other person any interest whatsoever in this
Agreement,
the Servicing Security Interest, the Servicing Collateral, and/or the
Servicing
Contract.
3. Filing of Financing Statement. If, under the Security Agreement,
the
Servicer grants to the Secured Party the Servicing Security Interest, but
does
not grant to the Secured Party a security `merest in other rights
which are
similar to the Servicing Collateral and which are owned by the Federal
National
Mortgage Association ("Fannie Mae"), the Government National
Mortgage
Association ("Ginnie Mae"), or another investor, the Secured Party agrees
that
it will write, or cause to be written, the following language in, or
attached
to, each financing statement which it shall file, or cause to be
filed, in
connection with the Security Agreement:
"The security interest referred to in this financing statement
is subject and subordinate in each and every respect (a) to all
rights,
powers and prerogatives of Freddie Mac under and in connection
with
Purchase Documents, as that term is defined in the Freddie Mac
Sellers'
& Servicers' Guide, which rights include, without limitation, the
right
of Freddie Mac to disqualify the debtor named herein as an
approved
Freddie Mac seller/servicer, with or without cause, and the
right to
terminate the unitary, indivisible master servicing contract
and to
transfer and sell all or any portion of said servicing
contract, as
provided in the Purchase Documents; and (b) to all claims of
Freddie
Mac arising out of any and all defaults and outstanding
obligations of
the debtor to Freddie Mac."
If, in contrast to the facts set forth in the immediate preceding
paragraph, the Servicer, in addition to granting to the Secured
Party the
Servicing Security Interest, also grants to the Secured Party a
security
interest in other rights which are similar to the Servicing Collateral and
which
are owned by Fannie Mae, Ginnie Mae, or another investor, the Secured
Party
agrees that it will write, or cause to be written, the following language
in, or
attached to, each financing statement which it shall file, or cause to be
filed,
in connection with the Security Agreement:
"The security interest referred to in this financing
statement is
subject and subordinate in each and every respect (a) to all
rights,
powers and prerogatives of one or more of the following: the
Federal
Home Loan Mortgage Corporation ("Freddie Mac"), the Federal
National
Mortgage Association ("Fannie Mae"), the Government National
Mortgage
Corporation ("Ginnie Mae"), or such other investors that own
mortgage
loans, or which guaranty payments on securities based on and
backed by
pools of mortgage loans, identified on the exhibit(s) or
schedule(s)
attached to this financing statement (the "Investors"); and (b)
to all
claims of an Investor arising out of any and all defaults
and
outstanding obligations of the debtor to the Investor. Such
rights,
powers and prerogatives of the Investors may include,
without
limitation, one or more of the following: the right of an
Investor to
disqualify the debtor from participating in a mortgage
selling or
servicing program or a securities guaranty program with the
Investor;
the right to terminate contract rights of the debtor relating to
such a
mortgage selling or servicing program or securities guaranty
program;
and the right to transfer and sell all or any portion of such
contract
rights following the termination of those rights."
4. Subordination of Servicing Security Interest. The Secured Party
and the
Servicer hereby acknowledge that the Servicing Security Interest is
subject and
subordinate in each and every respect (a) to all rights, powers and
perogatives
of Freddie Mac under and in connection with the Purchase Documents, as that
term
is defined in the Freddie Mac Sellers' & Servicers' Guide, which rights
include,
without limitation, the right of Freddie Mac to disqualify the Servicer
as an
approved Freddie Mac seller/servicer, with or without cause, and the
right to
terminate the Servicing Contract with the Servicer and to transfer and
sell all
or any portion of the Servicing Contract, as provided in the Purchase
Documents;
and (b) to payment of all of Freddie Mac's Claims and Freddie Mac's
Servicing
Transfer Costs, as defined below in Sections 8(a)(1) and 8(a)(2) of
this
Agreement.
5. Non-Applicability of Security Agreement and of UCC. Each of the
parties
agrees, and expressly acknowledges its understanding, that Freddie Mac
shall not
be bound in any way whatsoever by any terms or provisions of the
Security
Agreement, and that in the event of an actual or apparent conflict
between the
provisions of the Security Agreement and the provisions of this Agreement
with
respect to the rights or obligations of the Servicer or the Secured Party,
the
provisions of this Agreement shall govern. Each of the parties also
agrees, and
expressly acknowledges its understanding, that Freddie Mac's rights
and
obligations under this Agreement will in no way be derived from or
subject to
Article 9 of the UCC, as it may have been adopted in any state or
federal
district or territory; provided, however, that the foregoing provision
shall not
affect the applicability of Article 9 to the creation and validity
of the
Servicing Security Interest and the enforceability of the Servicing
Security
Interest against the Servicer or third parties other than Freddie Mac.
6. Continuation of Security Interest in Proceeds. Each of the
parties
agrees, and expressly acknowledges its understanding, that if Freddie Mac
shall
exercise its right to terminate the Servicing Contract, the Secured
Party's
Servicing Security Interest shall continue with respect to any Surplus
Proceeds,
as that term is defined in Section 8(a)(11) below, subject to all of the
terms
and conditions of Sections 8(a) through 8(9) below.
7. Covenant to Cooperate and Not to Interfere; Waiver of Standing to
Sue.
The Servicer and the Secured Party (to the extent that the Secured
Party may
directly or indirectly be in possession or control of any of the
Servicing
Collateral or any documentation, agreements, data, information or
proceeds
related in any way to the Servicing Collateral or the Servicing Contract)
each
covenants that it will cooperate with Freddie Mac in all respects in
connection
with any termination of, or transfer or sale of, the Servicing
Contract by
Freddie Mac. The Secured Party hereby waives any and all right or standing
which
it may have, directly or indirectly, as a secured creditor of the
Servicer, or
in any other capacity, to protest a disqualification of the Servicer
as an
approved Freddie Mac seller/servicer or a termination by Freddie Mac
of the
Servicing Contract, and agrees not to interfere in any way,
directly or
indirectly, with any termination by Freddie Mac of the Servicing
Contract or
with Freddie Mac's exercise of any of its rights relating thereto,
including
Freddie Mac's right to effectuate an Interim Servicing Transfer or a
Permanent
Servicing Transfer, as defined below in Sections 8(a)(3) and 8(a)(4).
The
Secured Party also hereby waives any right or standing which it might
otherwise
have to bring suit, and hereby covenants that it All not bring suit to
restrain
or enjoin any termination of, or transfer or sale of, the Servicing
Contract by
Freddie Mac, or any exercise by Freddie Mac of any of its rights
relating
thereto, including Freddie Mac's right to effectuate an Interim
Servicing
Transfer or a Permanent Servicing Transfer; provided, however, that the
Secured
Party does not hereby waive its right to bring suit against Freddie
Mac for
damages arising out a breach of this Agreement by Freddie Mac.
8. Permanent Servicing Transfer by Freddie Mac; Payment of
Surplus
Proceeds.
(a) Definitions. For the purposes of this Agreement, the
following
terms shall have the meanings ascribed to them in the paragraphs below.
1. "Freddie Mac's Claims" means the amounts of any
and all
defaults and outstanding obligations of the Servicer due and owing to
Freddie
Mac, including Freddie Mac's attorneys' fees and costs, whether arising
under
the Purchase Documents or any agreement or instrument constituting part
of, or
entered into or given in connection with, a purchase contract (including,
but
not limited to, a guaranty, a letter of credit agreement, an
indemnity
agreement, or a spread account agreement); or associated with the
purchase or
sale of securities from or to Freddie Mac (including, but not limited
to, any
transactions entered into between the Servicer and the Security
Sales and
Trading Group ("SS&TG") of Freddie Mac, or any organizational units of
Freddie
Mac which may, at any time hereafter, perform any or all of the functions
which
are presently performed by SS&TG); or associated with repurchase
agreement
transactions with Freddie Mac; or arising under any other agreement
between the
Servicer and Freddie Mac.
2. "Freddie Mac's Servicing Transfer Costs" means all
costs and
expenses incurred by Freddie Mac relating to or arising from a Termination
With
Cause or a Termination Without Cause; all payments made or costs
incurred by
Freddie Mac with respect to an Interim Servicing Transfer; and all
costs and
expenses incurred by Freddie Mac in connection with an actual or
proposed
Permanent Servicing Transfer; and including Freddie Mac's attorneys'
fees and
costs.
3. "Interim Servicing Transfer" means the appointment
of a
servicer by Freddie Mac to service the Mortgages, usually for a period
not to
exceed 180 days, following a Termination With Cause or a Termination
Without
Cause and prior to the effective date of a Permanent Servicing
Transfer,
effectuated in accordance with the Servicing Transfer Procedures.
4. "Permanent Servicing Transfer" means a transfer of
the
Servicing Contract to a new servicer, following a Termination With Cause
or a
Termination Without Cause and, if applicable, following an Interim
Servicing
Transfer, all effectuated in accordance with the Servicing Transfer
Procedures.
5. "Secured Party's Claims" means all defaults and
outstanding
obligations of the Servicer to the Secured Party under the Security
Agreement,
and any related loan agreements or other agreements between the Servicer
and the
Secured Party.
6. "Secured Party's Servicing Transfer Costs" means all
costs and
expenses incurred by the Secured Party in connection with an actual or
proposed
Permanent Servicing Transfer.
7. "Servicing Transfer With Assumption of Warranties"
means a
Permanent Servicing Transfer in which the new servicer assumes all
of the
warranties and obligations of the Servicer under the Purchase Documents
relating
to the sale of the Mortgages to, or the servicing of the Mortgages for,
Freddie
Mac, regardless of whether such warranties and obligations were made and
assumed
by the Servicer upon the sale of the Mortgages to Freddie Mac or assumed
by the
Servicer thereafter.
8. "Servicing Transfer Without Assumption of Warranties"
means a
Permanent Servicing Transfer in which the new servicer does not assume
all of
the warranties and obligations of the Servicer under the Purchase
Documents
relating to the sale of the Mortgages to, or the servicing of the Mortgages
for,
Freddie Mac, regardless of whether such warranties and obligations were
made and
assumed by the Servicer upon the sale of the Mortgages to Freddie Mac or
assumed
by the Servicer thereafter.
9. "Servicing Transfer Proceeds" means the consideration
paid by
a new servicer to Freddie Mac in a Permanent Servicing Transfer
transaction.
10. "Servicing Transfer Procedures" means the provisions
of the
Purchase Documents which prescribe the terms and conditions under
which the
Seryicing Contract may be terminated and transferred and sold, as
supplemented
by Freddie Mac corporate policies relating to servicing transfer
procedures, as
the same may be revised from time to time, which shall at all times apply
with
equal force and effect to all Interim Servicing Transfers and to all
Permanent
Servicing Transfers effectuated by Freddie Mac, whether occurring
pursuant to
this Agreement or not.
11. "Surplus Proceeds" means any monies available for
payment to
the Secured Party and to the Servicer, equal to the balance of monies
remaining
from the Servicing Transfer Proceeds or the Termination Fee after
deduction
therefrom of the amounts of Freddie Mac's Claims and Freddie Mac's
Servicing
Transfer Costs.
12. "Termination Fee" means the fee payable by Freddie
Mac
resulting from a Termination Without Cause, as determined under the
Purchase
Documents.
13. "Termination With Cause" means a termination of the
Servicing
Contract between Freddie Mac and the Servicer for cause under the
Purchase
Documents.
14. "Termination Cause" means a termination of the
Servicing
Contract between Freddie Mac and the Servicer without cause under the
Purchase
Documents, pursuant to which a Termination Fee is payable by Freddie Mac.
(b) Notice to Secured Party of Termination With Cause or
Termination
Without Cause; Interim Servicing Transfer. Freddie Mac shall have at all
times
the unqualified right to effect a Termination With Cause or a
Termination
Without Cause and to transfer and sell the Servicing Contract in accordance
with
the Servicing Transfer Procedures. If Freddie Mac shall effect a
Termination
With Cause or a Termination Without Cause with respect to the
Servicing
Contract, Freddie Mac will give the Secured Party notice of the
same, in
accordance with the provisions of Section 8(b)(1) below.
1. Notice to Secured Party. Freddie Mac will give notice
of a
Termination With Cause or a Termination Without Cause to the Secured
Party
within ten (10) days after the date of the notice of termination. The
notice
shall be in the form of a copy of the notice of Termination With
Cause or
Termination Without Cause sent to the Servicer. Notwithstanding the terms
of the
first sentence of this Section 8(b)(1), the Secured Party agrees, and
expressly
acknowledges its understanding that (A) Freddie Mac will not be liable
to the
Secured Party for failure to provide such notice on a timely basis and
(B) the
Secured Party may contract with the Servicer to require the Servicer to
provide
such notice on a timely basis.
Following receipt of notice of the termination, the Secured Party may
then
contact Freddie Mac to determine (A) whether the termination was a
Termination
With Cause or a Termination Without Cause; and (B) whether the
termination has
been followed by an immediate Interim Servicing Transfer. Freddie Mac
agrees
that, within fifteen (15) days after giving the notice provided for in the
first
paragraph of this Section 8(b)(1), and within each thirty (30)-day
period
thereafter until a Permanent Servicing Transfer has been effectuated, it
will
provide the Secured Party with estimates of Freddie Maces Claims and
Freddie
Mac's Servicing Transfer Costs. Freddie Mac will also provide the Secured
Party
with the final amounts of Freddie Mac's Claims and Freddie Mac's
Servicing
Costs, as provided in Sections 8(c) and 8(f) below.
2. Interim Servicing Transfer Immediate Effectuateded.
If,
following the termination, Freddie Mac shall have immediately
effectuated an
Interim Servicing Transfer, the Secured Party may exercise its option to
seek to
arrange a Permanent Servicing Transfer, as set forth in Section 8(c) below.
3. Impracticality of Interim Servicing Transfer. Freddie
Mac and
the Secured Party agree, and expressly acknowledge their understanding,
that
incurring the cost of an Interim Servicing Transfer may be
impractical,
particularly if it shall appear likely that the cost of an Interim
Servicing
Transfer may exceed the amount of Freddie Mac's Claims and Freddie
Mac's
Servicing Transfer Costs. If, following a termination, Freddie Mac
shall
determine that effectuating an Interim Servicing is impractical,
Freddie Mac
shall immediately notify the Secured Party of that determination. The
Secured
Party expressly acknowledges its understanding that, in such case, the
Secured
Party likely would not elect to seek to arrange a Permanent Servicing
Transfer
under Section 8(c) below, and Freddie Mac would instead assume
sole
responsibility for effectuating a Permanent Servicing Transfer in
accordance
with the provisions of Section 8(d) below. If, however, after
reviewing the
first estimates of Freddie Mac's Claims and Freddie Mac's Servicing
Transfer
Costs provided under Section 8(b)(1), the Secured Party nevertheless in
good
faith disagrees with Freddie Mac's determination regarding the
economic
impracticality of an Interim Servicing Transfer, the Secured Party shall
have
the right to arrange an Interim Servicing Transfer with a Freddie Mac-
approved
servicer. Such an Interim Servicing Transfer shall only be on terms no
less
favorable to Freddie Mac than those negotiable by Freddie Mac.
If the Secured Party shall decide to exercise its right to arrange an
Interim
Servicing Transfer, it shall give Freddie Mac notice of its latent to
do so
within a reasonable period of time after receiving Freddie Mac's notice
provided
for in the immediately preceding paragraph. If the Secured Party gives
Freddie
Mac such notice, the Secured Party shall have a reasonable period of
time to
arrange for the Interim Servicing Transfer. If the Secured Party shall
arrange
for an Interim Servicing Transfer on the terms set forth in the
immediately
preceding paragraph, Freddie Mac and the Secured Party shall then
proceed to
arrange for a Permanent Servicing Transfer in accordance with the
provisions of
Sections 8(c) and 8(d) below (excluding the notice provision set forth
in the
first clause of the first sentence of Section 8(c)).
If it shall eventually occur that the amount of the Servicing Transfer
Proceeds
are less than the amount of the sum of Freddie Mac's Claims and Freddie
Mac's
Servicing Transfer Costs, the Secured Party hereby expressly agrees to
indemnify
Freddie Mac for the amount of the difference; provided, however, that the
amount
of indemnification shall under no circumstances be greater than the cost
of the
Interim Servicing Transfer arranged by the Secured Party under this
Section
8(b)(3). Freddie Mac may request of the Secured Party reasonable
assurances of
the Secured Party's ability to pay a prospective claim for indemnification
(as
reasonably estimated by the parties) before Freddie Mac shall permit the
Secured
Party to arrange for an Interim Servicing Transfer. In determining
whether or
not to request such reasonable assurances, and in determining the
nature
thereof, Freddie Mac may consider the totality of circumstances relating
to the
Secured Party's financial, management, and regulatory status at the
time the
Secured Party requests to arrange an Interim Servicing Transfer.
If the Secured Party (A) shall not give the notice specified in the
first
paragraph of this Section 8(b)(3) on a timely basis, or (B) shall give
such
notice, but shall not arrange for an Interim Servicing Transfer on the
terms and
conditions specified in this section, or (C) shall not provide
reasonable
assurances requested by Freddie Mac, then the Secured Party's rights under
this
Section (b)(3) shall expire. In such case, Freddie Mac shall assume
sole
responsibility for arranging a Permanent Servicing Transfer pursuant
to the
provisions of Section 8(d) below.
(c) Secured Party's Request to Arrange Servicing With
Assumption of
Warranties. The Secured Party may, within ten (10) days after the
date of
Freddie Mac's notice provided for under Section 8(b)(1) request to
enforce its
Servicing Security interest by giving Freddie Mac notice stating
that the
Secured Party so elects and that the Secured Party understands and
acknowledges
that its right to enforce its security interest is and shall be
expressly
conditioned upon Freddie Mac's approval of any proposed new servicer
(including
the Secured Party, if the Secured Party is an approved Freddie
Mac
seller/servicer) and upon such a servicer's being actually able to
satisfy or
discharge all of Freddie Mac's Claims and Freddie Mac's Servicing Transfer
Costs
and consummate a Servicing Transfer With Assumption of Warranties.
1. Effectuation of Servicing Transfer With
Assumption Of
Warranties. If Freddie Mac shall receive a notice from the Secured Party
which
compiles with the terms of the immediately preceding sentence, Freddie Mac
will
reasonably cooperate with the Secured Party in seeking to effect a
Servicing
Transfer with Assumption of Warranties, in accordance with the provisions
of the
Servicing Transfer Procedures, to an approved Freddie Mac
seller/servicer
(including the Secured Party, if the Secured Party is an approved
Freddie Mac
seller/servicer) which, in the determination of Freddie Mac, is
competent to
service the Mortgages, and any other mortgages then being serviced
by the
Servicer, in accordance with the terms of the Purchase Documents;
provided,
however, that such a transfer must be effectuated within 180 days from the
date
of the notice received by Freddie Mac in accordance with the requirements
of the
first sentence of this Section 8(c) and shall be expressly conditioned
upon the
satisfaction or discharge by any proposed new servicer of all of Freddie
Mac's
Claims and Freddie Mac's Servicing Transfer Costs; and, further provided,
that
the Secured Party shall have compiled with all the provisions of this
Agreement.
If a Servicing Transfer with Assumption of Warranties arranged by the
Secured
Part and approved by Freddie Mac shall be effectuated, the Secured
Party and
Freddie Mac shall proceed in accordance with the provisions of Sections
8(e)
through 8(g) below.
In addition to the estimates provided for under Section 8(b)(1),
Freddie Mac
agrees to make its best effort to provide the Secured Party with the
final
amounts of Freddie Mac's Claims and Freddie Mac's Servicing Transfer
Costs
within 150 days from the date of the notice received by Freddie
Mac in
accordance with the requirements of the first sentence of this Section
8(c). If,
however, Freddie Mac is not able to furnish such final amounts within
said
150-day period, then it shall make its best effort to do so within 180
days, and
the period for effectuating a transfer shall be extended to 210 days.
Additional
extensions of thirty (30) days for providing the final amounts
and for
effectuating a transfer may be agreed upon by amendment to this
Agreement
pursuant to the provisions of Section 16 below.
2. Secured Party's Inability to Arrange Servicing Transfer
with
Assumption of Warranties. If, within 180 days (or such greater period of
time as
may be applicable pursuant to the provisions of Section 8(c)(l)) from the
Gate
of the notice received by Freddie Mac in accordance with the requirements
of the
first sentence of this Section 8(c), the Secured Party shall not have
arranged
for a Servicing Transfer with Assumption of Warranties acceptable to
Freddie
Mac, in accordance with the provisions of the Servicing Transfer
Procedures,
Freddie Mac will assume sole responsibility for effectuating a
Permanent
Servicing Transfer, in accordance with the provisions of the Servicing
Transfer
Procedures and the provisions of Section 8(d) below.
3. No Request by Secured Party. Freddie Mac shall also
effectuate
a Permanent Servicing Transfer if the Secured Party shall not give to
Freddie
Mac a written notice which complies with the provisions of the first
sentence of
this Section 8(c). In such case, Freddie Mac will effectuate the
Permanent
Servicing Transfer within 180 days from the expiration of the ten
(10)-day
period set forth in the first sentence of this Section 8(c).
(d) Permanent Servicing Transfer Arranged By Freddie Mac.
If the
Secured Party shall be unable to arrange a Servicing Transfer with
Assumption of
Warranties acceptable to Freddie Mac, pursuant to the provisions of
Section
8(c), Freddie Mac will assume sole responsibility for arranging a
Permanent
Servicing Transfer. Freddie Mac will seek to arrange a Permanent
Servicing
Transfer, in order of preference, in accordance with the provisions of
Sections
8(d)(1), 8(d)(2), and 8(d)(3) below.
1. Consummation of Servicing Transfer with Assumption
Warranties.
If Freddie Mac is able to arrange for a Servicing Transfer with
Assumption of
Warranties, it will do so and conclude the transfer within 180 days of
the end
of the 180-day period in which the Secured Party sought to arrange for
such a
transfer, pursuant to the terms of Section 8(c). In such case, Freddie Mac
will
give the Secured Party notice of the transfer within ten (10) days
of the
effective date. Within 30 days of the date of such notice, the Secured
Party may
submit a statement of the Secured Party's Claims and the Secured
Party's
Servicing Transfer Costs, in conformity with the provisions of Section
8(e)
below, and the parties will proceed in accordance with the
provisions of
Sections 8(e) through 8(9) below.
2. Secured Party's Election to Service. If, at any time
during
the 180-day period provided for in Section 8(d)(1), Freddie Mac shall
determine
that it will be unable to arrange for a Servicing Transfer With
Assumption of
Warranties, Freddie Mac shall so notify the Secured Party. If the Secured
Party
shall be an approved Freddie Mac Seller/Servicer, the Secured Party may
give
Freddie Mac notice requesting that the Secured Party be approved as
the new
servicer of the Mortgages and all other mortgages which had been serviced
by the
Servicer for Freddie Mac. Such request may provide for the use by the
Secured
Party of a servicing agent, as that term is defined in the Purchase
Documents.
If Freddie Mac shall receive such a notice from the Secured Party,
Freddie Mac
will review the request in accordance with the provisions of the
Servicing
Transfer Procedures. Freddie Maces determination of whether or not to
approve
the request shall De conditioned upon (A) the Secured Party s having
complied
with all the provisions of this Agreement; (B.) the Secured Party's
actual
satisfaction or discharge of all of Freddie Mac's Claims and all of
Freddie
Mac's Transfer Costs; (C) the Secured Party's agreement to effect a
Servicing
Transfer With Assumption warranties: (D) Freddie Mac's determination
that the
Secured Party (and any proposed servicing agent, if applicable) is
competent to
service the Mortgages, and all other mortgages which have been serviced
by the
Servicer, in accordance with the terms of the Purchase Documents; and
(E) the
Secured Party's ability to consummate the Servicing Transfer With
Assumption of
Warranties with a reasonable period of time, as determined by Freddie
Mac, in
its sole and absolute discretion. If Freddie Mac shall approve the
Secured
Party's request to be the new servicer of the Mortgages, and the
Servicing
Transfer With Assumption of Warranties shall be effectuated on the
terms
described in this Section 8(d)(2), the provisions of Sections 8(e) through
8(9)
shall not be applicable to the transfer.
3. Servicing Transfer Without Assumption of Warranties.
If the
Secured Party shall not request to be approved as the new Servicer, or
if it
shall so request and Freddie Mac shall disapprove the request, in
accordance
with the Servicing Transfer Procedures, Freddie Mac shall then
effectuate a
Servicing Transfer Without Assumption with Warranties. In such case, the
Secured
Party's Servicing Security Interest in Surplus Proceeds shall be
extinguished,
and the Secured Party shall have no further rights under this Agreement.
The
Secured Party and the Servicer agree, and expressly acknowledge
their
understanding, that because of the indeterminate potential for monetary
losses
to Freddie Mac resulting from the liability to effect a Servicing Transfer
With
Assumption of Warranties, there cannot be any Surplus Proceeds in the event
of a
Servicing Transfer Without Assumption of Warranties resulting from the
transfer,
and, therefore, they hereby waive any claim to any Surplus Proceeds in the
event
of a Servicing Transfer Without Assumption of Warranties.
(e) Secured Party's Claims and Servicing Transfer Costs.
Within 30
days after the date of a notice of the effectuation of a Permanent
Servicing
Transfer by Freddie Mac, or within 30 days of the effectuation of a
Permanent
Servicing Transfer which the Secured Party participating in arranging
under the
provisions of Section 8(c), the Secured Party may submit to Freddie
Mac a
statement of the Secured Party's Claims and the Secured Party's
Servicing
Transfer Costs. Absent manifest error, the statement submitted by the
Secured
Party shall be deemed to be conclusive of the correctness of the amount
payable
to the Secured Party out of Surplus Proceeds, if any, under the
provisions of
Section 8(9) below.
(f) Determination of Freddie Mac's Claims and Freddie Mac's
Servicing
Transfer Costs. After the effective date of a Permanent Servicing
Transfer
effectuated under the provisions of Section 8(d)(1), Freddie Mac shall
determine
the amounts of Freddie Mac's Claims and Freddie Mac's Servicing Transfer
Costs.
Freddie Mac shall complete such determination within 120 days
following the
effective date of the Permanent Servicing Transfer.
(g) Accounting and Distribution of Any Surplus Proceeds.
Immediately
following completion of the determination of Freddie Mac's Claims and
Freddie
Mac's Servicing Transfer Costs, Freddie Mac shall pay to itself the
sum of
Freddie Mac's Claims and Freddie Mac's Servicing Transfer Costs out
of the
amount of the Servicing Transfer Proceeds or the Termination Fee.
Immediately
thereafter, Freddie Mac shall render an accounting to the Secured Party
and to
the Servicer by sending them a notice which shall inform them of the
amount of
the Servicing Transfer Proceeds or the Termination Fee; the sum which
Freddie
Mac has paid to itself to cover Freddie Mac's Claims and Freddie Maces
Servicing
Transfer Costs; the amount of the Surplus Proceeds, if any; and the
amounts, if
any, of the Surplus Proceeds payable to the Secured Party and the
Servicer,
respectively.
Freddie Mac shall make disbursement of any Surplus Proceeds to the Secured
Party
and the Servicer contemporaneously with the sending of the notice
provided for
in the immediately preceding paragraph. Distribution of any Surplus
Proceeds
shall be payable as follows: first, to the Secured Party on account
of the
Secured Party's Claims; second, to the Secured Party for the amount
of the
Secured Party's Transfer Costs; and third, to the Servicer. Freddie Mac
shall
pay interest on the amount of any Surplus Proceeds paid to the Secured
Party or
to the Servicer. Interest shall be payable at the rate of Freddie Mac's
costs of
funds, as determined by Freddie Mac, for the period commencing on the
effective
date of the Permanent Servicing Transfer and ending on the day before the
date
of the notice provided for in the immediately preceding paragraph.
9. Secured Party's Foreclosure of Servicing Security Interest.
(a) Request. If the Secured Party shall, at any time,
declare a
default of the Servicer under the Security Agreement, and if Freddie Mac
shall
not previously have given the Secured Party notice of a Termination With
Cause
or a Termination Without Cause, the Secured Party may request that
it be
permitted to foreclose its security interest by seeking to arrange a
Permanent
Servicing Transfer which is effectuated as a Servicing Transfer With
Assumption
of Warranties. The Secured Party may make such request by giving
Freddie Mac
notice in accordance with the provisions of Section 8(c) of this
Agreement. If
the Secured Party shall give Freddie Mac notice in conformity
with the
requirements of Section 8(c), the Secured Party and Freddie Mac shall
then
proceed in accordance with the balance of the provisions of Section 8(c)
and the
applicable provisions of Sections 8(d) through (9).
(b) Secured Party's Power of Attorney. The Servicer hereby
irrevocably
appoints the Secured Party, and any designee of the Secured Party,
as its
attorney-in-fact to request, seek to arrange, and cooperate in
effecting any
Permanent Servicing Transfer, including a sale of the Servicing Contract.
Said
power of attorney shall be deemed to be in addition to, and shall not
limit the
scope of, any power of attorney granted by the Servicer in the
Secured
Agreement. In connection with any such Permanent Servicing Transfer and any
such
sale of the Servicing Contract which Freddie Mac may approve, Freddie Mac
will
accept the power of attorney as authorizing the Secured Party to act for
and on
behalf of the Servicer in performing any and all acts necessary to effect
such
transactions, and will not consider or regard the Secured Party, when
acting as
such attorney-in-fact, as being the transferor of the Servicing Contract.
(c) Continuing Right to Effectuate Termination With
Cause or
Termination Without Cause. Notwithstanding the provisions of Section-
9(a),
Freddie Mac shall, during the 180-day Period under Section 9(a) during
which the
Secured Party may seek to arrange a Permanent Servicing Transfer,
retain its
right to effectuate a Termination With Cause or a Termination Without
Cause, in
accordance with the provisions of the Servicing Transfer Procedures. If
Freddie
Mac shall exercise this right during the 180-day period, Freddie Mac shall
give
the Secured Party notice of the termination in conformity with the
requirements
of Section 8(b)(1), and Freddie Mac and the Secured Party will
thereafter
proceed in accordance with all of the applicable provisions of Sections
8(a)
through 8(g) with respect to any Interim Servicing Transfer, the
Permanent
Servicing Transfer, and the payment of any Surplus Proceeds. Freddie Mac
agrees
that it will not effectuate a Termination With Cause solely because of the
fact
that the Secured Party declares a default of the Servicer under the
Security
Agreement; provided, however, that if the fact or occurrence
constituting the
basis for the Secured Party's declaration of a default shall also
constitute a
default or a breach of an obligation or warranty of the Servicer
under the
Purchase Documents, Freddie Mac shall not be precluded from
effectuating a
Termination with Cause based upon such fact or occurrence.
10. Partial Servicing Security Interest. If the Servicing Security
Interest
of the Security Party only relates to part of the mortgages serviced
by the
Servicer under the Servicing Contract (a "Partial Servicing Security
Interest"),
the provisions of Sections 8 and 9 hereof shall apply only to the limited
extent
stated in the remainder of this Section 10, and the rest of the
rights and
obligations of the parties shall be determined under the Servicing
Transfer
Procedures. In the event that Freddie Mac shall effect a Termination With
Cause
or a Termination Without Cause of the Servicer, and the Servicer shall
have
granted only a Partial Servicing Security Interest to the Secured Party,
Freddie
Mac shall give notice to the Secured Party in accordance with the
provisions of
Section 8(b)(1), and the parties shall then proceed in accordance
with the
Servicing Transfer Procedures. In the event that the Secured Party shall
declare
a default of the Servicer under the Security Agreement, and the Servicer
shall
have granted only a Partial Servicing Security Interest to the Secured
Party,
the Secured Party shall give notice of the default to Freddie Mac,
and the
parties shall then proceed in accordance with the Servicing Transfer
Procedures.
11. Reliance Upon Written Notices. The Secured Party and the Servicer
agree
that Freddie Mac shall be entitled to rely on any written notice,
direction,
request or consent received by Freddie Mac pursuant to the provisions of
this
Agreement which Freddie Mac reasonably believes to be genuine.
12. Indemnification of Freddie Mac. The Secured Party hereby
agrees to
indemnify and hold Freddie Mac harmless from and against any and all
actual
losses, liabilities, damages, charges or expenses (including Freddie
Mac's
reasonable attorneys' fees) incurred by Freddie Mac as a result of
(a) the
material breach of any provision of this Agreement by the Secured Party
or (b)
the willful conduct of any other person (including the Servicer) acting
at the
specific direction of the Secured Party.
13. Indemnification of Secured Party. Freddie Mac hereby
agrees to
indemnify and hold the Secured Party harmless from and against any
and all
actual losses, liabilities, amages, charges or expenses (including the
Secured
Party's reasonable attorneys' fees) incurred by the Secured Party as a
result of
(a) the material breach of any provision of this Agreement by Freddie Mac
or (b)
the willful conduct of any other person acting at the specific
direction of
Freddie Mac.
14. Notices.
(a) Addresses. Any notice required or permitted to be given
under the
terms of this Agreement may be given by delivering or mailing the same
to the
following addresses:
If to Freddie Mac:
Federal Home Loan Mortgage Corporation
8200 Jones Branch Drive
McLean, VA 22102
Attention: Vice President--Institutional Credit
Risk
If to the Servicer:[8]
MONUMENT MORTGAGE, INC.
3021 CITRUS CIRCLE. SUITE 150
WALNUT CHEEK. CA. 94598
Attention: PAUL GARRIGUES
Telephone No.: (510) 906-5868
Telecopier No.: (510) 944-7040
If to the Secured Party:[9]
RESIDENTIAL LENDING CORPORATION
1646 NORTH CALIFORNIA BLVD. SUITE 400
WALNUT CREEK. CA. 94596
Attention: D. GRAHAM SHIPMAN
Telephone No.: (510) 935-0614
Telecopier No.: (510) 935-6424
or to such other addresses and persons as the parties hereto may in
writing
hereafter indicate by like notice.
(b) Effectiveness. A notice shall be in writing unless
communicated by
telephone to the attention of the person identified above and confirmed
within
one business day thereafter by a writing sent to such person by
telex,
telecopier or other direct written electronic means, charges prepaid. A
notice
may be (i) personally delivered (including delivery by a private mail or
courier
service) at the appropriate address stated hereinabove; or (ii) sent by
telex,
telecopier or other direct written electronic means, charges prepaid; or
(iii)
sent by United States registered, certified, or express mall, postage
prepaid.
Any notice personally delivered shall be deemed to have been validly
and
effectively given on the day of such delivery. Any notice communicated
orally
and confirmed in writing the following business day shall be deemed to have
been
validly and effectively given on the date of such oral communication.
Any
________________
[8] Type address to which nontices should be sent, and title or name of
person
to whom they should be addressed.
[9] Type address to which notices should be sent, and title or name of
person
to whom they should be addressed.
<PAGE>
written notice transmitted by telex, telecopier or other direct
written
electronic means shall be deemed to have been validly and effectively
given on
the day (if a business day, and, if not, on the next business day) on
which It
is transmitted. Any notice sent by United States malt shall be deemed to
have
been validly and effectively given on the fifth day (if a business day,
and, if
not, on the next business day) after it shall have been deposited in the
United
States Mall.
15. Entire Agreement. This Agreement constitutes the entire Agreement
among the parties concerning the subject matter hereof, and supersedes
any and
all prior representations, statements, discussions and negotiations
concerning
this Agreement and the subject matter hereof which may have been made or
which
may have occurred prior to or contemporaneous with the execution of
this
Agreement.
16. Amendments. This Agreement may not be amended, and none of its
terms may be waived, except by a writing which specifically refers to
this
Agreement, which expressly states that it constitutes an amendment or
waiver to
this Agreement, and which is signed by the party or parties against
whom
enforcement of the amendment or waiver is sought.
17. Severability. If any term or provision of this Agreement shall be
held to be unenforceable by a court of competent jurisdiction, the
validity of
all of the remaining provisions of this Agreement shaft not be affected,
and the
rights and obligations of the parties shall be construed and enforced as if
this
Agreement did not contain the particular term or provision held to be
invalid.
18. Rights Cumulative. All rights granted to Freddie Mac hereunder
shall be cumulative and shall be in addition to any other rights which
Freddie
Mac may have under the Purchase Documents or under applicable law.
Nothing in
this Agreement is intended to or shall be construed to amend or modify
any of
the terms or provisions of the Purchase Documents or any other
agreements
between the Servicer and Freddie Mac.
19. No Waiver. Neither delay on the Part of Freddie Mac in the
exercise any of its rights hereunder, nor any partial exercise of any
such
right, shall constitute a waiver of such right or of any other rights of
Freddie
Mac under this Agreement.
20. Successors and Assigns. This Agreement shall be binding upon, and
shall inure to the benefit of, the parties hereto and their
respective
successors and assigns.
21. Governing Law. This Agreement and the rights and obligations of
the parties hereunder shall be construed in accordance with and governed
by the
laws of the United States. Insofar as there may be no applicable precedent,
and
insofar as to do so will not frustrate the purposes of this Agreement
or the
transactions governed hereby, the local laws of the State of New York
shall be
deemed reflective of the laws of the United States.
N WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and delivered by their duly authorized corporate officers as
of the
date and year first written above.
FEDERAL HOME LOAN MORTGAGE
CORPORATION
By (Signature)
Leslie Crouch
Typed Name
Rick Analyst
Typed Title
RESIDENTIAL FUNDING CORPORATION[10]
10
By (Signature)
D. GRAHAM SHIPMAN
Typed Name
VICE PRESIDENT
Typed Title
MONUMENT MORTGAGE, INC.[11]
11
920209 [12]
12
------------------------------------
- ----
By (Signature)
PAUL GARRIGUES
Typed Name
SENIOR VICE PRESIDENT / CFO
Typed Title
_______________
[10] Type name of Secured Party.
[11] Type name of Servicer.
[12] Type Freddie Mac seller/servicer number.
<PAGE>
FEDERAL HOME LOAN MORTGAGE CORPORATION
ADDENDUM A
TO
ACKNOWLEDGEMENT AGREEMENT
The Mortgages, as defined in the Acknowledgement Agreement, are the
following
(check applicable box):
[X] All single-family mortgages which are now, or which hereafter
are, in
the ordinary course of business, serviced by the Servicer for
Freddie
Mac under the terms of the Servicing Contract.
[_] The single-family mortgages listed below or on pages attached
hereto,
which are now serviced by the Servicer for Freddie Mac under the
terms
of the Servicing Contract. (List each such mortgage. State,
at a
minimum, the Freddie Mac loan number and name(s) of the
borrower(s) for
each mortgage.)
<PAGE>
EXHIBIT G
EXHIBIT G
SUBSIDIARIES
States
Qualified
to do
Name Incorporated Business Owned (%)
(to be completed by Company)
<PAGE>
SUBSIDIARIES
AT THIS TIME MONUMENT MORTGAGE, INC. HAS NO SUBSIDIARIES.
<PAGE>
EXHIBIT H
EXHIBIT H
FORM OF OPINION OF COUNSEL
Residential Funding Corporation
Attention: Sandra L. Oakes
8400 Normandale Lake Blvd., Suite 600
Minneapolis, Minnesota 55497
Re: $12,000,000 Loan (the "Loan") under Warehousing Credit and
Security
Agreement (the "Agreements) by and between RESIDENTIAL
FUNDING
CORPORATION, a Delaware corporation (the "Lender") and
MONUMENT
MORTGAGE, INC., a California corporation (the "Company"),
guaranteed by
JAMES W. NOACK ("Noack") and JAMES A. UMPHRYES
("Umphryes")
(hereinafter collectively referred to as the "Guarantors") and
secured
by the "Collateral" (as defined in the Agreement).
Gentlemen:
We are special counsel to the Company and to the
Guarantors in
connection with the Loan.[1] As counsel, we have prepared and/or
examined the
following documents:
1. Executed copy of the Warehousing Promissory Note, dated March ,
1995,
made by the Company payable to the order of the Lender,
in the
principal amount of Ten Million Dollars ($10,000,000).
2. Executed copy of the Sublimit Promissory Note, dated March ___,
1995,
made by the Company payable to the order of the Lender,
in the
principal amount of Six Million Dollars ($6,000,000).
3. Executed copy of the Working Capital Promissory Note, dated
March ,
1995, made by the Company payable to the order of the Lender,
in the
principal amount of One Million Dollars ($l,000,000).
4. Executed copy of the Term Loan Promissory Note, dated March ___,
1995,
made by the Company payable to the order of the Lender,
in the
principal amount of One Million Dollars ($l,000,000).
5. Executed copy of the Warehousing Credit and Security Agreement
by and
between the Company and the Lender, dated March ___, 1995
(the
"Agreement").
_____________
[1] The form of opinion should be modified as necessary if separate
counsel is
employed for Company and for Guarantor.
<PAGE>
6. Undated UCC Financing Statements perfecting a security interest
in
collateral, tangible and intangible.
7. Executed copy of the Guaranty, dated March ___, 1995 (the "Noack
Guaranty"), made by JAMES W. NOACK to the Lender.
8. Executed copy of the Guaranty, dated March ___, 1995 (the
"Umphryes
Guaranty"), made by JAMES A. UMPHRYES to the Lender.
9. The Articles of Incorporation of the Company, together with
amendments
thereto, as certified by the Secretary of State of the
State of
California.
10. The Bylaws of the Company, as certified on ______________, 19___
by the
Secretary of the Company as then being complete, accurate and in
effect.
11. Resolutions of the Board of Directors of the Company, adopted
at a
meeting held on , 19___, as certified by the Secretary of the
Company
on , 19___ as then being complete, accurate and in effect,
authorizing
the borrowing of the Loan and the execution and delivery
of and
performance under the Agreement.
12. Certificate of Good Standing for the Company, dated __________,
19___,
issued by the Secretary of State of the State of California.[2]
The above enumerated items, numbered 1, 2, 3, 4, 5 and
6 are
collectively referred to as the "Loan Documents."
The opinions which follow are subject to the following
assumptions,
limitations and qualifications:
A. We have assumed the genuineness of all signatures, other than
of the
Company and the Guarantors, the authenticity of all documents
submitted
to us as originals, and the conformity with the original
documents of
all documents submitted to us as reproduced copies, and
the
authenticity of all such latter documents.
B. We have assumed the organization, existence, good standing and
capacity
of all persons and entities other than the Company and the
Guarantors,
and that such parties, other than the Company and the Guarantors,
have
the right, power and authority to execute and deliver the
Loan
Documents and to perform thereunder.
C. We have assumed that the Lender's obligations under the
Agreement are
within the powers of the Lender and have been duly and
validly
authorized and that the Agreement has been duly executed and
validly
delivered by the Lender.
_______________
[2] A certificate of good standing, dated as of a date within ninety (90)
days
of the date of the Agreement, for the state where the Company is
incorporated
and for each state where the Company is transacting business as a foreign
corporation should be listed.
<PAGE>
D. As to various questions of fact material to this opinion, we have
made
such factual inquiries of the Company and the Guarantors, and
have
examined such other documents and made such examinations of
applicable
laws, as we have deemed necessary for purposes of the
opinions
expressed herein. However, where we state that a matter is to the
best
of our knowledge, we have relied upon the written statements
of the
Guarantors and the officers of the Company, with no inquiry as
to the
facts other than as necessary to establish that such reliance
was
reasonable on our part.
Based upon such examinations and investigations, and such
other
investigations and examinations as we have deemed necessary for the
purposes of
the opinions expressed herein, and subject to the assumptions stated
above in
paragraphs A through D, inclusive, and in our capacity as special
counsel for
the Company and the Guarantors, we are of the opinion that:
[Opinions Concerning Company]
1. The Company and each Subsidiary of the Company[3] is a
corporation duly
organized, validly existing and in good standing under the laws
of the
jurisdiction in which it is incorporated and has the full legal
power
and authority to own its property and to carry on its
business as
currently conducted.
2. The Company is duly qualified to do business as a foreign
corporation
and is in good standing in all jurisdictions where the ownership
of its
property or the conduct of its business makes such
qualification
necessary.
3. The Company has the power and authority to execute, deliver and
perform
the Loan Documents. The execution, delivery and performance of the
Loan
Documents by the Company, including without limitation, the
borrowings
under the Agreement and the pledge of the Collateral, have been
duly
and validly authorized by all necessary actions on the part
of the
Company.
4. The Loan Documents have been duly executed and delivered
by the
Company. The Loan Documents constitute the legal, valid and
binding
obligations of the Company and are enforceable in accordance with
their
respective terms against the Company, except that enforceability
may be
limited by applicable bankruptcy, insolvency, reorganization or
other
similar laws affecting the rights of creditors, and general
principles
of equity.
5. Upon delivery to the Lender of those items of Collateral
consisting of
promissory notes secured by mortgages or deeds of trust ("Pledged
Mortgages")or mortgage-backed securities ("Pledged Securities"),
or in
the case of Pledged Securities issued in book-entry form or
issued in
certificated form and delivered to a clearing corporation (as such
term
is defined in the Uniform Commercial Code) or its nominee, upon
(a)
registration of such Pledged Securities in the name of a financial
intermediary (as such term is defined in the Uniform Commercial
Code)
in an account containing only customer securities, (b) the
notation of
Lender's security interest in such Pledged Securities on the
records of
such financial intermediary, by book entry or otherwise, and (c)
the
sending by such financial intermediary to the Lender of
confirmation of
such notation, the Lender will have a valid and perfected first
security interest therein. We assume, in giving this opinion, that
such
items of Collateral will be owned by the Company and that, at the
time
the Lender's security interest is noted on the records of any
financial
intermediary, such Pledged Securities will be free of any interest
______________
[3] In the alternative, state that the Company has no Subsidiaries.
<PAGE>
created through the Federal Reserve Bank, clearing corporation
and/or
financial intermediary. With respect to Pledged Mortgages, the
laws of
certain jurisdictions may require the recordation of an assignment
of
such deeds of trust or mortgages in order to perfect a security
interest in the deed of trust or mortgage (as opposed to the notes
secured thereby). If the Lender does not record its assignment of
deeds
of trust or mortgages in such jurisdictions, we express no
opinion as
to the Lender's perfected security interest in such deeds of trust
and
mortgages (as opposed to the notes secured thereby) constituting
part
of the Collateral.
6. The execution, delivery and performance by the Company of the Loan
Documents, will not (i) conflict with or violate any provision of
the
Articles of Incorporation or By-laws of the Company; (ii) require
any
license, approval or other action by any governmental authority
that
has not been obtained; (iii) to the best of our knowledge, result
in
the creation of any lien, charge or encumbrance upon any property
or
assets of the Company other than in favor of the Lender; (iv) to
the
best of our knowledge, result in a violation or breach of any term
or
provision, constitute a default under or result in or require the
acceleration of any indebtedness of the Company pursuant to, any
agreement or other instrument to which the Company may be bound or
to
which the Company or any of its property may be subject; or (v) to
the
best of our knowledge, result in any violation of the provisions
of any
law or, to the best of our knowledge, any order of any court or
any
governmental agency, to which the Company may be bound or to which
the
Company or any of its property may be subject.
7. To the best of our knowledge, there are no actions,
suits, or
proceedings pending or threatened against or affecting the
Company, in
any court or before any arbitrator or governmental authority
which, if
adversely determined, may reasonably be expected to result
in any
material and adverse change in the business, operations,
assets or
financial condition of the Company as a whole.
8. The making of the Advances as contemplated by the Agreement
will not
violate Regulation G of the Board of Governors of the Federal
Reserve
System.
9. The Company is not an "investment company" within the meaning f
the
Investment Company Act of 1940, as amended.
[Opinions Concerning the Guarantors]
10. The Noack Guaranty has been duly executed and delivered by Noack.
The
Noack Guaranty constitutes the legal, valid and binding
obligation of
Noack and is enforceable in accordance with its terms against
Noack,
except that enforceability may be limited by applicable
bankruptcy,
insolvency, reorganization or other similar laws affecting the
rights
of creditors, and general principles of equity.
11. The Umphryes Guaranty has been duly executed and delivered by
Umphryes.
The Umphryes Guaranty constitutes the legal, valid and
binding
obligation of Umphryes and is enforceable in accordance with its
terms
against Umphryes, except that enforceability may be
limited by
applicable bankruptcy, insolvency, reorganization or other similar
laws
affecting the rights of creditors, and general principles of
equity.
12. The execution, delivery and performance by the Guarantors of their
respective Guaranties will not (a) require any license, approval
or
other action by any governmental authority that has not been
obtained;
(b) to the best of our knowledge, result in the creation of any
lien,
charge or encumbrance upon any property or assets of the
Guarantors
other than in favor of the Lender; (c) to the best of our
knowledge,
result in a violation or breach of any term or provision,
constitute
a default under, or result in or require the acceleration of any
indebtedness of the Guarantors pursuant to any agreement or other
instrument to which the Guarantors may be bound or to which the
Guarantors or any of their respective properties may be subject;
or
(d) result in any violation of the provisions of any law or, to
the best
of our knowledge, any order of any court or any governmental
agency,
to which the Guarantors may be bound or to which the Guarantors or
any
of their respective properties may be subject.
13. To the best of our knowledge, there are no actions,
suite, or
proceedings pending or threatened against or affecting the
Guarantors,
in any court or before any arbitrator or governmental authority
which,
if adversely determined, may reasonably be expected to result
in any
material adverse change in the assets or financial condition
of the
Guarantors.
This opinion may be relied upon by you and your successors and
assigns
and by any participant in the Loan.
All capitalized terms used herein, not otherwise defined herein,
shall
have the meanings given such terms in the Agreement.
Very truly yours,
__________________________________
By:_______________________________
<PAGE>
Gorelick & Bowman, attorneys
April 11, 1995
Residential Funding Corporation
Attention: Sandra L. Oakes
8400 Normandale Lake Blvd., Suite 600
Minneapolis, Minnesota 55437
RE: $12,000,000 Loan (the "Loan") under Warehousing Credit and
Security
Agreement (the "Agreement") by and between RESIDENTIAL
FUNDING
CORPORATION, a Delaware corporation (the "Lender") and
MONUMENT
MORTGAGE, INC., a California corporation (the "Company"),
guaranteed by
JAMES W. NOACK ("Noack") and JAMES A. UMPHRYES
("Umphryes")
(hereinafter collectively referred to as the Guarantors") and
secured
by the "Collateral" (as defined in the Agreement).
Gentlemen:
We are special counsel to the Company and to the
Guarantors in
connection with the Loan. As counsel, we have prepared and/or
examined the
following documents:
1. Executed copy of the Warehousing Promissory Note, dated
March
22, 1995, made by the Company payable to the order
of the
Lender, in the principal amount of Ten Million
Dollars
($10,000,000).
2. Executed copy of the Sublimit Promissory Note, dated
March 22,
1995, made by the Company payable to the order of the
Lender,
in the principal amount of Six Million Dollars
($6,000,000).
3. Executed copy of the Working Capital Promissory Note,
dated
March 22, 1995, made by the Company payable to the
order of
the Lender, in the principal amount of One Million
Dollars
($1,000,000).
4. Executed copy of the Term Loan Promissory Note, dated
March
22, 1995, made by the Company payable to the order
of the
Lender, in the principal amount of One Million
Dollars
($1,000,000).
5. Executed copy of the Warehousing Credit and Security
Agreement
by and between the Company and the Lender, dated
March 22,
1995 (the "Agreement").
<PAGE>
SCHEDULE OF EXISTING LINES OF CREDIT
LENDER NAME COMMITMENT AMOUNT EXPIRATION DATE
IMPERIAL BANK 5,000,000 AUG. 4, 1995
DLJ 15,000,000 JUN 30, 1995
<PAGE>
EXHIBIT K
EXHIBIT K
FORM FOR FUNDING BANK
LETTER AGREEMENT
(Letterhead of the Company)
March ___, 1995
The First National Bank of Chicago
One North State Street
Chicago, IL 60602
Gentlemen:
The undersigned, MONUMENT MORTGAGE, INC. (the "Company"),
hereby
authorizes The First National Bank of Chicago (the "Funding Bank") to
permit
Residential Funding Corporation (the "Lender") to debit and access
information
on the Company's accounts held by the Funding Bank as outlined below. me
Company
hereby directs and authorizes the Funding Bank to follow the directions
of the
Lender in debiting such accounts.
The Company authorizes the Lender to access account information
from
time to time for the Company's operating account no. (the "Operating
Account")
for the purpose of verifying balance information. In addition, the
Company
requests that the Lender, and the Company hereby authorizes the Lender, to
debit
the Operating Account to the extent necessary to cover (a) wires to be
initiated
by the Lender in accordance with the Company's instructions as set forth
in the
Request for Advance for the purposes permitted in the Warehousing
Credit and
Security Agreement ("Agreement") by and between the Company and the
Lender; and
(b) for amounts due and owing to the Lender, including but not
limited to
principal, interest and fees.
Upon the termination or expiration of the Agreement, the Company
hereby
authorizes the Lender to close the Operating Account and any other
accounts
which have been established by the Company and the Lender to
facilitate
transactions under the Agreement, and the Company directs the Funding
Bank to
follow the directions of the Lender in closing such accounts. The Company
hereby
directs and authorizes the Funding Bank to follow all of the
foregoing
instructions of the Lender.
Very truly yours,
MONUMENT MORTGAGE, INC.,
a California corporation
By:
Its:
ACKNOWLEDGED AND AGREED THIS
_____ DAY OF ____________, 1995.
THE FIRST NATIONAL BANK OF CHICAGO
By:______________________________
Its:_____________________________
<PAGE>
EXHIBIT M
EXHIBIT M
SECURITY AGREEMENT AS PROVIDED FOR
BY THE UNIFORM COMMERCIAL CODE OF MINNESOTA
(Form of Bailee Pledge Agreement)
For new value this day received, and as collateral security
for the
payment of any and all indebtedness and liability of MONUMENT MORTGAGE,
INC., a
California corporation (the "Company") under that certain Warehousing
Credit and
Security Agreement dated as of March ___, 1995, as may be amended from
time to
time, by and between the Company and RESIDENTIAL FUNDING CORPORATION
(the
"Lender"), the Company creates and grants in favor and for the benefit
of the
Lender a security interest in and to the instruments and documents
described in
Exhibit C-SF attached to this Agreement.
(LIST OF MORTGAGE LOANS)
[for each Mortgage Loan identified herein, attach
a completed Exhibit C-SF]
The Company has given to (escrow or title company), who has
possession
of such instruments and documents, notice of the foregoing described
security
interest in favor of the Lender or the Company has possession of
such
instruments and documents and acknowledges the foregoing described
security
interest in favor of the Lender.
The Company further agrees to deliver the documents described
in the
attached Exhibits C-SF to the Lender, immediately upon the request of the
Lender
(whether written or oral), but in any event, on or before five (5) days
from the
date hereof unless otherwise requested by the Lender.
The Company further agrees that this Agreement shall be binding
upon
and inure to the benefit of the legal representatives, successors or
assigns of
the Lender.
The Company further agrees that all rights, interests,
duties and
liabilities arising hereunder shall be determined according to the laws
of the
State of Minnesota.
WAREHOUSING PROMISSORY NOTE
$10, 000, 000 Date: March 22 ,
1995
FOR VALUE RECEIVED, the undersigned, MONUMENT MORTGAGE,
INC., a
California corporation, (herein called the "Company"), hereby promises to
pay to
the order of RESIDENTIAL FUNDING CORPORATION, a Delaware corporation
(the
"Lender" or, together with its successors and assigns, the "Holder")
whose
principal place of business is 8400 Normandale Lake Blvd., Suite
600,
Minneapolis, Minnesota 55437, or at such other place as the Holder may
designate
from time to time, the principal sum of Ten Million Dollars ($10,000,000)
or so
much thereof as may be outstanding from time to time pursuant to the
Warehousing
Credit and Security Agreement described below, and to pay interest on
said
principal sum or such part thereof as shall remain unpaid from time to
time,
from the date of each Advance until repaid in full, and-all other
fees and
charges due under the Agreement, at the rate and at the times set forth
in the
Agreement. All payments hereunder shall be made in lawful money of the
United
States and in immediately available funds.
This Note is given to evidence an actual warehouse facility
in the
above amount and is the Warehousing Promissory Note referred to in that
certain
Warehousing Credit and Security Agreement (the "Agreement") dated the
date
hereof between the Company and the Lender, as the same may be
amended or
supplemented from time to time, and is entitled to the benefits
thereof.
Reference is hereby made to the Agreement (which is incorporated
herein by
reference as fully and with the same effect as if set forth herein at
length)
for a description of the Collateral, a statement of the covenants
and
agreements, a statement of the rights and remedies and securities
afforded
thereby and other matters contained therein. Capitalized terms used
herein,
unless otherwise defined herein, shall have the meanings given them
in the
Agreement.
This Note may be prepaid in whole or in part at any time
without
premium or penalty.
Should this Note be placed in the hands of attorneys for
collection,
the Company agrees to pay, in addition to principal and interest,
fees and
charges due under the Agreement, any and all costs of collecting this
Note,
including reasonable attorneys' fees and expenses.
The Company hereby waives demand, notice, protest and presentment.
This Note shall be construed and enforced in accordance with the
laws
of the State of Minnesota, without reference to its principles of
conflicts of
law.
IN WITNESS WHEREOF, the Company has executed this Note as of
the day
and year first above written.
MONUMENT MORTGAGE, INC.,
a California corporation
By:____________________________
Its: President
STATE OF California )
) ss
COUNTY OF Contra Costa )
On March 22, 1995, before me, a Notary Public, personally
appeared
James W. Noack , the President of MONUMENT MORTGAGE, INC., a
California
corporation, personally known to me (or proved to me on the
basis of
satisfactory evidence) to be the person whose name is subscribed to the
within
instrument and acknowledged to me that he/she executed the same in
his/her
authorized capacity, and that by his/her signature on the instrument the
person,
or the entity upon behalf of which the person acted, executed the
instrument.
WITNESS my hand and official seal.
Notary Public___________________________
My Commission Expires:__________________
(SEAL)
<PAGE>
SUBLIMIT PROMISSORY NOTE
$6,000,000 Date: March 22 ,
1995
FOR VALUE RECEIVED, the undersigned, MONUMENT MORTGAGE,
INC., a
California corporation, (herein called the Company), hereby promises to
pay to
the order of RESIDENTIAL FUNDING CORPORATION, a Delaware corporation
(the
"Lender" or, together with its successors and assigns, the "Holder")
whose
principal place of business is 8400 Normandale Wake Blvd., Suits
600,
Minneapolis, Minnesota 55437, or at such other place as the Holder may
designate
from time to time, the principal sum of Six Million Dollars ($6,000,000)
or so
much thereof as may be outstanding from time to time pursuant to the
Warehousing
Credit and Security Agreement described below, and to pay interest on
said
principal sum or such part thereof as shall remain unpaid from time to
time,
from the date of each Advance until repaid in full, and all other
fees and
charges due under the Agreement, at the rate and at the times set forth
in the
Agreement. All payments hereunder shall be made in lawful money of the
United
States and in immediately available funds.
This Note is given to evidence an actual warehouse facility
in the
above amount and is the Sublimit Promissory-Note referred to in that
certain
Warehousing Credit and Security Agreement (the Agreement n ) dated the
date
hereof between the Company and the Lender, as the same may be
amended or
supplemented from time to time, and is entitled to the benefits
thereof.
Reference is hereby made to the Agreement (which is incorporated
herein by
reference as fully and with the same effect as if set forth herein at
length)
for a description of the Collateral, a statement of the covenants
and
agreements, a statement of the rights and remedies and securities
afforded
thereby and other matters contained therein. Capitalized terms used
herein,
unless otherwise defined herein, shall have the meanings given them
in the
Agreement.
This Note may be prepaid in whole or in part at any time
without
premium or penalty.
Should this Note be placed in the hands of attorneys for
collection,
the Company agree. to pay, in addition to principal and interest,
fees and
charges due under the Agreement, any and all costs of collecting this
Note,
including reasonable attorneys' fees and expenses.
The Company hereby waives demand, notice, protest and presentment.
This Note shall be construed and enforced in accordance with the
laws
of the State of Minnesota, without reference to its principles of
conflicts of
law.
IN WITNESS WHEREOF, the Company has executed this Note as of
the day
and year first above written.
MONUMENT MORTGAGE, INC.,
a California corporation
By:_______________________________
Its: President
STATE OF California )
) ss
COUNTY OF Contra Costa )
On March 22, 1995, before me, a Notary Public, personally
appeared
James W. Noack , the President of MONUMENT MORTGAGE, INC., a
California
corporation, personally known to me (or proved to me on the
basis of
satisfactory evidence) to be the person whose name is subscribed to the
within
instrument and acknowledged to me that he/she executed the same in
his/her
authorized capacity, and that by his/her signature on the instrument the
person,
or the entity upon behalf of which the person acted, executed the
instrument.
WITNESS my hand and official seal.
Notary Public_________________________________
My Commission Expires:________________________
(SEAL)
<PAGE>
WORKING CAPITAL PROMISSORY NOTE
$1,000,000 Date: March 22 ,
1995
FOR VALUE RECEIVED, the undersigned, MONUMENT MORTGAGE,
INC., a
California corporation, (herein called the "Company"), hereby promises to
pay to
the order of RESIDENTIAL FUNDING CORPORATION, a Delaware corporation
(the
"Lender" or, together with its successors and assigns, the "Holder")
whose
principal place of business is 8400 Normandale Lake Blvd., Suite
600,
Minneapolis, Minnesota 55437, or at such other place as the Holder may
designate
from time to time, the principal sum of One Million Dollars ($1,000,000)
or so
much thereof as may be outstanding from time to time pursuant to the
Warehousing
Credit and Security Agreement described below, and to pay interest on
said
principal sum or such part thereof as shall remain unpaid from time to
time,
from the date of each Advance until repaid in full, and all other
fees and
charges due under the Agreement, at the rate and at the times set forth
in the
Agreement. All payments hereunder shall be made in lawful money of the
United
States and in immediately available funds.
This Note is given to evidence an actual working capital
facility in
the above amount and is the Working Capital Promissory Note referred to in
that
certain Warehousing Credit and Security Agreement (the "Agreement")
dated the
date hereof between the Company and the Lender, as the same may be
amended or
supplemented from time to time, and is entitled to the benefits
thereof.
Reference is hereby made to the Agreement (which is incorporated
herein by
reference as fully and with the same effect as if set forth herein at
length)
for a description of the Collateral, a statement of the covenants
and
agreements, a statement of the rights and remedies and securities
afforded
thereby and other matters contained therein. Capitalized terms used
herein,
unless otherwise defined herein, shall have the meanings given them
in the
Agreement.
This Note may be prepaid in whole or in part at any time
without
premium or penalty.
Should this Note be placed in the hands of attorneys for
collection,
the Company agrees to pay, in addition to principal and interest,
fees and
charges due under the Agreement, any and all costs of collecting this
Note,
including reasonable attorneys' fees and expenses.
The Company hereby waives demand, notice, protest and presentment
.
This Note shall be construed and enforced in accordance with the
laws
of the State of Minnesota, without reference to its principles of
conflicts of
law.
IN WITNESS WHEREOF, the Company has executed this Note as of
the day
and year first above written.
MONUMENT MORTGAGE, INC.,
a California corporation
By:__________________________________
Its: Senior V.P. / CFO
STATE OF California )
) ss
COUNTY OF Contra Costa )
On March 22, 1995, before me, a Notary Public, personally appeared
Paul
Garrigues, the Sr. V.P. / CFO of MONUMENT MORTGAGE, INC., a
California
corporation, personally known to me (or proved to me on the
basis of
satisfactory evidence) to be the person whose name is subscribed to the
within
instrument and acknowledged to me that he/she executed the same in
his/her
authorized capacity, and that by his/her signature on the instrument the
person,
or the entity upon behalf of which the person acted, executed the
instrument.
WITNESS my hand and official seal.
Notary Public___________________________
My Commission Expires:__________________
(SEAL)
<PAGE>
TERM LOAN PROMISSORY NOTE
$1,000,000 Date: March 22 ,
1995
FOR VALUE RECEIVED, the undersigned, MONUMENT MORTGAGE,
INC., a
California corporation, (herein called the "Company"), hereby promises to
pay to
the order of RESIDENTIAL FUNDING CORPORATION, a Delaware corporation
(the
"Lender" or, together with its successors and assigns, the "Holder")
whose
principal place of business is 8400 Normandale Lake Blvd., Suite
600,
Minneapolis, Minnesota 55437, or at such other place as the Holder may
designate
from time to time, the principal sum of One Million Dollars ($1,000,000)
or so
much thereof as may be outstanding from time to time pursuant to the
Warehousing
Credit and Security Agreement described below, and to pay interest on
said
principal sum or such part thereof as shall remain unpaid from time to
time,
from the date of each Advance until repaid in full, and all other
fees and
charges due under the Agreement, at-the rate and at the times set forth
in the
Agreement. All payments hereunder shall be made in lawful money of the
United
States and in immediately available funds.
This Note is given to evidence an actual term loan facility
in the
above amount and is the Working Capital Promissory Note referred to in
that
certain Warehousing Credit and Security Agreement (the "Agreement")
dated the
date hereof between the Company and the Lender, as the same may be
amended or
supplemented from time to time, and is entitled to the benefits
thereof.
Reference is hereby made to the Agreement (which is incorporated
herein by
reference as fully and with the same effect as if set forth herein at
length)
for a description of the Collateral, a statement of the covenants
and
agreements, a statement of the rights and remedies and securities
afforded
thereby and other matters contained therein. Capitalized terms used
herein,
unless otherwise defined herein, shall have the meanings given them
in the
Agreement.
This Note may be prepaid in whole or in part at any time
without
premium or penalty.
Should this Note be placed in the hands of attorneys for
collection,
the Company agrees to pay, in addition to principal and interest,
fees and
charges due under the Agreement, any and all costs of collecting this
Note,
including reasonable attorneys' fees and expenses.
The Company hereby waives demand, notice, protest and presentment
.
This Note shall be construed and enforced in accordance with the
laws
of the State of Minnesota, without reference to its principles of
conflicts of
law.
IN WITNESS WHEREOF, the Company has executed this Note as of
the day
and year first above written.
MONUMENT MORTGAGE, INC.,
a California corporation
By:________________________
Its: Senior V.P. / CFO
STATE OF California )
) ss
COUNTY OF Contra Costa )
On March 22, 1995, before me, a Notary Public, personally appeared
Paul
Garrigues, the Sr. V.P. / CFO of MONUMENT MORTGAGE, INC., a
California
corporation, personally known to me (or proved to me on the
basis of
satisfactory evidence) to be the person whose name is subscribed to the
within
instrument and acknowledged to me that he/she executed the same in
his/her
authorized capacity, and that by his/her signature on the instrument the
person,
or the entity upon behalf of which the person acted, executed the
instrument.
WITNESS my hand and official seal.
Notary Public_____________________________
My Commission Expires:____________________
(SEAL)
===========================================================================
====
GESTATION
WAREHOUSING CREDIT AND SECURITY AGREEMENT
(SHIPPED MORTGAGE LOANS)
BETWEEN
MONUMENT MORTGAGE, INC., a California corporation
AND
RESIDENTIAL FUNDING CORPORATION,
a Delaware corporation
Dated as of March 23 , 1995
===========================================================================
====
<PAGE>
TABLE OF CONTENTS
PAGE
<PAGE>
THIS GESTATION WAREHOUSING CREDIT AND SECURITY AGREEMENT (SHIPPED
MORTGAGE
LOANS), dated as of March 23 , 1995, between MONUMENT MORTGAGE,
INC., a
California corporation (the "Company"), having its principal office at
3021
Citrus Circle, Suite 150, Walnut Creek, California 94598 and RESIDENTIAL
FUNDING
CORPORATION, a Delaware corporation (the "Lender"), having its principal
office
at 8400 Normandale Lake Blvd., Suite 600, Minneapolis, Minnesota 55437.
WHEREAS, the Lender may from time to time, at its discretion, make
one or
more advances to the Company (each an "Advance"), each of which Advances
will be
secured by a first lien single-family residential mortgage loan which has
been
identified and shipped by the Company to an Investor for purchase; and
WHEREAS, if the Lender determines to make any such Advances to the
Company,
the maximum amount of such Advances that would be outstanding at any time
would
be Ten Million Dollars ($10,000,000); and
WHEREAS, the Company and the Lender desire to set forth herein the
terms
and conditions upon which the Lender shall make Advances to the Company;
NOW, THEREFORE, the parties hereto hereby agree as follows:
1. DEFINITIONS.
1.1. Defined Terms. Capitalized terms defined below or elsewhere in
this
Agreement (including the Exhibits hereto) shall have the following
meanings:
"Advance" means a disbursement by the Lender pursuant to Article
2 of
this Agreement, including, without limitation, readvances of
funds
previously advanced to the Company and repaid to the Lender.
"Affiliate" has the meaning set forth in Rule 12b-2 of the
General
Rules and Regulations under the Exchange Act.
"Agreement" means this Gestation Warehousing Credit and
Security
Agreement (Shipped Mortgage Loans), either as originally executed or
as it
may from time to time be supplemented, modified or amended.
"Approved Custodian" means First Commonwealth Savings Bank,
Chemical
Bank, or any other Person which is deemed acceptable to the Lender
from
time to time in its sole discretion.
"Business Day" means any day excluding Saturday or Sunday
and
excluding any day on which national banking associations are
closed for
business.
"Cash Collateral Account" means a demand deposit account
maintained at
the Funding Bank in the name of the Lender and designated for
receipt of
the proceeds of the sale or other disposition of the Collateral.
"Collateral" has the meaning set forth in Section 3.1 hereof.
"Collateral Documents" means those documents evidencing a
Mortgage
Loan which the Company is required to deliver to the Lender prior
to the
Lender making an advance under the Existing Warehousing Agreement.
"Collateral Value" means (a) with respect to any Mortgage Loan
as of
the date of determination, the lesser of (i) the amount of any Advance
made
against such Mortgage Loan; or (ii) the Fair Market Value of such
Mortgage
Loan; or (b) in the event Pledged Mortgages have been exchanged for
Pledged
Securities, the aggregate Fair Market Value of the Mortgage Loans
backing
such Pledged Securities.
"Company" has the meaning set forth in the first paragraph of
this
Agreement.
"Default" means the occurrence of any event or existence
of any
condition which, but for the giving of notice, the lapse of time, or
both,
would constitute an Event of Default.
"Depository Benefit" shall mean the compensation received
by the
Lender, directly or indirectly, as a result of the Company's
maintenance of
Investable Balances with a Designated Bank.
"Designated Bank" means any bank(s) designated from time to
time by
the Lender to be a Designated Bank with whom the Lender has an
agreement
under which the Lender can receive a Depository Benefit.
"Eligible Mortgage Pool" means a Mortgage Pool for which
(a) an
Approved Custodian has issued its initial certification (on the
basis of
which a Pledged Security is to be issued), (b) there exists a
Purchase
Commitment covering such Pledged Security, and (c) such Pledged
Security
will be delivered to the Lender.
"Event of Default" means any of the conditions or events set
forth in
Section 8.1 hereof.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended
from time to time, and any successor statute.
"Existing Warehousing Advances" means outstanding Warehousing
Advances
made by the Lender to the Company pursuant to the terms of the
Existing
Warehousing Agreement and evidenced by the Existing Warehousing Note.
"Existing Warehousing Agreement" means that certain Warehousing
Credit
and Security Agreement by and between the Company and the Lender,
dated
March 22 , 1995, as such agreement may be or may have been
amended,
restated, modified or extended from time to time.
"Existing Warehousing Note" means collectively that
certain
Warehousing Promissory Note and that certain Sublimit Promissory Note,
each
made by the Company to the order of the Lender, and each dated March
22 ,
1995, as such note notes may be or may have been amended,
restated,
modified or extended from time to time.
"Fair Market Value" means at any date with respect to any
Mortgage
Loan covered by a valid Purchase Commitment, the Committed Purchase
Price,
or in the absence of a valid Purchase Commitment for a Mortgage Loan
or the
related Mortgage-backed Security (if such Mortgage Loan is to be
used to
back a Mortgage-backed Security), the market price (expressed
as a
percentage of the outstanding principal balance) for thirty
(30) day
mandatory future delivery of such Mortgage Loan or Mortgage-backed
Security
published by Knight-Ridder, Inc. on its MoneyCenter system or, if
not so
published, the average bid price (expressed as a percentage of
the
outstanding principal balance) quoted in writing to the Lender as
of the
computation date by any two nationally recognized dealers selected
by the
Lender who at the time are making a market in similar Mortgage
Loans or
Mortgage-backed Securities, multiplied, in the case of Mortgage
Loans, by
the outstanding principal balance thereof and, in the
case of
Mortgage-backed Securities, by the product of the pool factor of
such
Mortgage-backed Security times the face amount of such Mortgage-
backed
Security.
"FHA" means the Federal Housing Administration and any
successor
thereto.
"FHLMC" means the Federal Home Loan Mortgage Corporation
and any
successor thereto.
"FICA" means the Federal Insurance Contributions Act.
"FIRREA" means the Financial Institutions Reform, Recovery
and
Enforcement Act of 1989, as amended from time to time, and the
regulations
promulgated and rulings issued thereunder.
"Floating Rate" means a floating rate of interest which is
equal to
one percent (1.00%) per annum over the LIBOR. The Floating Rate
will be
adjusted as of the effective date of each change in the LIBOR.
"FNMA" means the Federal National Mortgage Association and
any
successor thereto.
"Funding Bank" means The First National Bank of Chicago or any
other
bank designated from time to time by the Lender.
"GAAP" means generally accepted accounting principles set forth
in the
opinions and pronouncements of the Accounting Principles Board
and the
American Institute of Certified Public Accountants and statements
and
pronouncements of the Financial Accounting Standards Board or in such
other
statements by such other entity as may be approved by a significant
segment
of the accounting profession, which are applicable to the
circumstances as
of the date of determination.
"GNMA" means the Government National Mortgage Association
and any
successor thereto.
"Guarantor" means JAMES W. NOACK, JAMES A. UMPHRYES and any such
other
Person that hereafter guarantees all or any portion of the
Company's
Obligations. If more than one Person is named as Guarantor, the
term
Guarantors shall mean each of such Persons and all of them,
and the
obligations of such Persons shall be joint and several.
"Guaranty" means a guaranty of all or any portion of the
Company's
Obligations. If more than one Guaranty is executed and delivered
to the
Lender, the term Guaranty" shall mean each of such Guaranties and
all of
them.
"HUD" means the Department of Housing and Urban Development
and any
successor thereto.
"Indemnified Liabilities" has the meaning set forth in
Article 10
hereof.
"Internal Revenue Code" means the Internal Revenue Code of
1986, or
any subsequent federal income tax law or laws, as any of the foregoing
have
been or may from time to time be amended.
"Investable Balances" means all funds of or maintained by the
Company
and its Subsidiaries in accounts at a Designated Bank, less
balances to
support float, activity charges, reserve requirements, Federal
Deposit
Insurance Corporation insurance premiums and such other reductions
as may
be imposed by governmental authorities from time to time.
"Investor" means FNMA, FHLMC or a financially responsible
private
institution which is deemed acceptable by the Lender from time to
time in
its sole discretion.
"Lender" has the meaning set forth in the first paragraph of
this
Agreement.
"LIBOR" means, for each calendar week, the rate of interest per
annum
which is equal to the arithmetic mean of the U.S. Dollar London
Interbank
Offered Rates for one (1) month periods as of 11:00 a.m. London time
on the
first Business Day of each week on which the London Interbank
market is
open, as published by Knight-Ridder, Inc. on its MoneyCenter system.
LIBOR
shall be rounded, if necessary, to the next higher one sixteenth
of one
percent (1/16%). If such U.S. dollar LIBOR rates are not so
offered or
published for any period, then during such period LIBOR shall
mean the
London Interbank Offered Rate for one (1) month periods published
on the
first Business Day of each week on which the London Interbank
market is
open, in the Wall Street Journal in its regular column entitled
"Money
Rates."
"Lien" means any lien, mortgage, deed of trust, pledge,
security
interest, charge or encumbrance of any kind (including any conditional
sale
or other title retention agreement, any lease in the nature thereof,
and
any agreement to give any security interest).
"Loan Documents" means this Agreement, the Note, the
Guaranties any
agreement of the Company relating to Subordinated Debt, and each
other
document, instrument or agreement executed by the Company in
connection
herewith or therewith, as any of the same may be amended, restated,
renewed
or replaced from time to time.
"Mortgage" means a mortgage or deed of trust on improved
real
property. A Mortgage may be a First Mortgage or a Second Mortgage.
"Mortgage-backed Securities" means GNMA, FNMA or FHLMC securities
that
are backed by Mortgage Loans.
"Mortgage Loan" means any loan evidenced by a Mortgage Note. The
term
"Mortgage Loan" shall include First Mortgage Loans and Second
Mortgage
Loans unless the context otherwise requires.
"Mortgage Note Amount" means, as of the date of determination,
the
then outstanding unpaid principal amount of a Mortgage Note.
"Mortgage Pool" means a pool of one or more Pledged Mortgages
on the
basis of which there is to be issued a Mortgage-backed Security.
"Note" has the meaning set forth in Section 2.2 hereof.
"Notices" has the meaning set forth in Article 9 hereof.
"Obligations" means any and all indebtedness, obligations
and
liabilities of the Company to the Lender (whether now existing or
hereafter
arising, voluntary or involuntary, whether or not jointly owed with
others,
direct or indirect, absolute or contingent, liquidated or
unliquidated, and
whether or not from time to time decreased or extinguished and
later
increased, created or incurred), arising out of or related to the
Loan
Documents.
"Officer's Certificate" means a certificate executed on behalf
of the
Company by its chief financial officer or its treasurer or by such
other
officer as may be designated herein and substantially in the
form of
Exhibit I-SF attached to the Existing Warehousing Agreement.
"Participant" has the meaning set forth in Section 12.5 hereof.
"Person" means and includes natural persons, corporations,
limited
partnerships, general partnerships, joint stock companies, joint
ventures,
associations, companies, trusts, banks, trust companies, land
trusts,
business trusts or other organizations, whether or not legal
entities, and
governments and agencies and political subdivisions thereof.
"Pledged Mortgages" has the meaning set forth in Section
3.1(a)
hereof.
"Pledged Securities" has the meaning set forth in Section
3.1(b)
hereof.
"Purchase Commitment" means a written commitment, in form
and
substance satisfactory to the Lender, issued in favor of the Company
by an
Investor pursuant to which that Investor commits to purchase Mortgage
Loans
or Mortgage-backed Securities.
"Release Amount" has the meaning set forth in Section 3.2(g)
hereof.
"Servicing Contract" means, with respect to any Person,
the
arrangement, whether or not in writing, pursuant to which such
Person has
the right to service Mortgage Loans.
"Single-family Mortgage Loan" means a Mortgage Loan secured
by a
Mortgage covering improved real property containing one to four
family
residences.
"Stated Maturity Date", should the Lender in its sole discretion
make
an Advance hereunder, means for all Obligations due under this
Agreement,
and not earlier paid, the "Warehousing Maturity Date" (as defined
in the
Existing Warehousing Agreement).
"Statement Date" means the date of the most recent
financial
statements of the Company (and, if applicable, its Subsidiaries,
on a
consolidated basis) delivered to the Lender under the terms of
this
Agreement.
"Subordinated Debt" means all indebtedness of the Company,
for
borrowed money, which is, by its terms (which terms shall have
been
approved by the Lender), effectively subordinated in right of
payment to
all other present and future Obligations, and all indebtedness
of the
Company which is required to be subordinated by the Existing
Warehousing
Agreement.
"Subsidiary" means any corporation, association or other
business
entity in which more than fifty percent (50%) of the total voting
power or
shares of stock entitled to vote in the election of directors,
managers or
trustees thereof is at the time owned or controlled,
directly or
indirectly, by any Person or one or more of the other Subsidiaries of
that
Person or a combination thereof.
"Trust Receipt" means a trust receipt in a form approved
by and
pursuant to which the Lender may deliver any document relating
to the
Collateral to the Company for correction or completion.
"VA" means the Department of Veterans Administration and any
successor
thereto.
1.2. Other Definitional Provisions.
1.2(a) Accounting terms not otherwise defined herein shall
have the
meanings given the terms under GAAP.
1.2(b) Defined terms may be used in the singular or the plural,
as the
context requires.
1.2(c) All references to time of day shall mean the then
applicable
time in Chicago, Illinois, unless expressly provided to the contrary.
2. THE CREDIT.
2.1. Funding of Advances.
2.1(a) The Lender may from time to time and in its sole
discretion,
choose to make Advances to the Company by causing the proceeds of each
such
Advance to be applied to the outstanding principal balance of the
Existing
Warehousing Note. If any such Advances are made hereunder, each
such
Advance will be made at a time when a Mortgage Loan pledged to the
Lender
under the Existing Warehousing Agreement is shipped to an Investor
for
purchase or to an Approved Custodian for inclusion in an Eligible
Mortgage
Pool. Upon each Advance, each such Mortgage Loan shall be pledged
hereunder
to secure the Note. The Lender's records regarding which Mortgage
Loans are
pledged to secure the Note shall be binding upon the Company. All
Advances
under this Agreement shall constitute a single indebtedness, and all
of the
Collateral shall be security for the Note, the Existing Warehousing
Note
and for the performance of all the Obligations.
2.1(b) The Company shall hold in trust for the Lender, and the
Company
shall deliver to the Lender promptly upon request of the Lender,
any
documents relating to a Pledged Mortgage which are customarily
desired for
inspection or transfer incidental to the purchase of any Mortgage
Note by
an Investor and any additional documents which are customarily
executed by
the seller of a Mortgage Note to an Investor.
2.2. Note. The Company's Obligations shall be evidenced by the
promissory
note (the Motes) of the Company dated as of the date hereof substantially
in the
form of Exhibit A attached hereto. The term "Note" shall include all
extensions,
renewals and modifications of the Note and all substitutions therefor. All
terms
and provisions of the Note are hereby incorporated herein.
2.3. Interest.
2.3(a) The unpaid principal amount of each Advance hereunder
shall
bear interest from the date of such Advance until paid in full
at the
Floating Rate.
2.3(b) Interest shall be computed on the basis of a 360-day
year and
applied to the actual number of days elapsed in each interest
calculation
period. Such interest shall be payable monthly in arrears, on the
first day
of each month, commencing with the first month following the date of
this
Agreement, and on the Stated Maturity Date, or, if earlier, on the
date to
which the maturity of an Advance is accelerated pursuant to the
provisions
of this Agreement.
2.3(c) Any Obligations not paid when due (whether at the
Stated
Maturity Date, upon acceleration following the occurrence of an
Event of
Default or otherwise) shall bear interest, from the date due until
paid in
full, at a per annum rate of interest equal to the Floating Rate plus
four
percent (4%) (the "Default Rate"), said interest to be payable on
demand of
the Lender.
2.4. Principal Payments.
2.4(a) The outstanding principal amount of all Advances
shall be
payable in full upon the Stated Maturity Date.
2.4(b) The Company shall have the right to prepay the
outstanding
Advances in whole or in part, from time to time, without
premium or
penalty.
2.4(c) All payments of outstanding Advances from the proceeds
of the
sale or other disposition of Pledged Mortgages and Pledged Securities
shall
be paid directly by the Investor to the Cash Collateral Account
to be
applied against the Obligations.
2.4(d) The Company shall be obligated to pay to the Lender,
without
the necessity of prior demand or notice from the Lender, and the
Company
authorizes the Lender to cause the Funding Bank to charge the
Company's
account for, the amount of any outstanding Advance against a
specific
Pledged Mortgage, upon the earliest occurrence of any of the
following
events:
(1) One hundred eighty (180) days elapse from the
date of
the Existing Warehousing Advance made by the Lender against
such
Pledged Mortgage, whether or not such Pledged
Mortgage is
included in an Eligible Mortgage Pool.
(2) Forty-five (45) days elapse from the date the
Pledged
Mortgage was delivered to an Investor for examination
and
purchase, without the purchase being made, or upon
rejection of
the Pledged Mortgage as unsatisfactory by an Investor.
(3) Ten (10) Business Days elapse from the date a
Collateral
Document was delivered to the Company for
correction or
completion under a Trust Receipt, without being returned
to the
Lender.
(4) The Mortgage Loan is defaulted and remains in
default
for a period of thirty (30) days or more.
(5) Three (3) Business Days after the mandatory
delivery
date of the related Purchase Commitment and the specific
Pledged
Mortgage was not delivered under the Purchase Commitment
prior to
such mandatory delivery date, or the Purchase
Commitment is
terminated; unless in either case, such Pledged
Mortgage is
eligible for delivery to an Investor under a comparable
Purchase
Commitment acceptable to the Lender.
(6) Upon sale or other disposition of the Pledged
Mortgage.
(7) If the Pledged Mortgage is included in a Mortgage
Pool,
then, if the Mortgage Pool is an Eligible Mortgage Pool,
upon
sale of the Mortgage-backed Security, or if the Mortgage
Pool is
not an Eligible Mortgage Pool, within two (2) Business Days
after
delivery of the Pledged Mortgages to the pool custodian.
2.4(e) The Company shall then give Notice to the
Lender
(telephonically, to be followed by written notice) of the Pledged
Mortgages
or Pledged Securities for which proceeds have been received. Upon
receipt
of such Notice the Advances against such Pledged Mortgages or
Pledged
Securities shall be repaid and such Pledged Mortgages or Pledged
Securities
shall be considered to have been redeemed from pledge. The
Lender is
entitled to rely upon the Company's affirmation that deposits in the
Cash
Collateral Account represent payment from Investors for the
purchase of
Pledged Mortgages or Pledged Securities as specified by the Company.
In the
event that the payment from an Investor for the purchase of
Pledged
Mortgages or Pledged Securities is less than the outstanding
Advances
against such Pledged Mortgages or the Mortgage Loans backing
Pledged
Securities, the Lender is authorized to cause the Funding sank to
charge
the Company~s account for an amount equal to such deficiency.
Provided no
Default or Event of Default exists, the Lender shall return any
excess
payment from an Investor for Pledged Mortgages or Pledged Securities
to the
Company.
2.5. Method of Making Payments. Except as otherwise specifically-
provided
herein, all payments hereunder shall be made to the Lender not later
than the
close of business on the date when due unless such date is a non-Business
Day,
in which case, such payment shall be due on the first Business Day
thereafter,
and shall be made in lawful money of the United States of America in
immediately
available funds transferred via wire to accounts designated by the Lender
from
time to time.
2.6. Miscellaneous Charges. The Company agrees to reimburse the
Lender for
miscellaneous charges and expenses incurred by or on behalf of the
Lender in
connection with the handling and administration of Advances, and to
reimburse
the Lender for miscellaneous charges and expenses incurred by or on
behalf of
the Lender in connection with the handling and administration of the
Collateral.
For the purposes hereof, miscellaneous charges and expenses shall
include, but
not be limited to, charges for wire transfers, charges for security
delivery
fees, charges for overnight delivery of Collateral to Investors,
charges for
overnight delivery of Collateral to Investors, and the Funding Bank's
service
charges. Miscellaneous charges are due when incurred, but shall
not be
delinquent if paid within fifteen (15) days after receipt of an invoice
or an
account analysis statement from the Lender.
2.7. Interest Limitation. All agreements between the Company and the
Lender
are hereby expressly limited so that in no contingency or event
whatsoever,
whether by reason of acceleration of maturity of this Agreement or the
Note or
otherwise, shall the amount paid or agreed to be paid to the Lender for the
use,
forbearance, loaning or retention of the Advances secured by this
Agreement
exceed the maximum permissible under applicable law. If from any
circumstances
whatsoever, fulfillment of any provisions hereof or of the Note, or any
other
document securing this Agreement at any time given shall involve
transcending
the limit of validity prescribed by law, then, the obligation to be
fulfilled
shall automatically be reduced to the limit of such validity, and if
from any
circumstances the Lender should ever receive as interest an amount which
would
exceed the highest lawful rate of interest, such amount which would be in
excess
of interest shall be applied to the reduction of the principal balance
secured
by the Note and not to the payment of interest thereunder. This provision
"hall
control every other provision of all agreements between the Company and
Lender
and shall also be binding upon and available to any subsequent holder
of the
Note.
2.8. Increased Costs; Capital Requirements. In the event any
applicable
law, order, regulation or directive issued by any governmental or
monetary
authority, or any change therein or in the governmental or
judicial
interpretation or application thereof, or compliance by the Lender
with any
request or directive (whether or not having the force of law) by
any
governmental or monetary authority:
2.8(a) Does or shall subject the Lender to any tax of any
kind
whatsoever with respect to this Agreement or any Advances made
hereunder,
or change the basin of taxation on payments to the Lender of
principal,
fees, interest or any other amount payable hereunder (except for
change in
the rate of tax on the overall gross or net income of the Lender
by the
jurisdictions in which the Lender'g principal office is located);
2.8(b) Does or shall impose, modify or hold applicable any
reserve,
capital requirement, special deposit, compulsory loan or
similar
requirement 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 the Lender which
are not
otherwise included in the determination of the interest rate as
calculated
hereunder;
and the result of any of the foregoing is to increase the cost
to the
Lender of making, renewing or maintaining any Advance or to
reduce any
amount receivable in respect thereof or to reduce the rate of return
on the
capital of the Lender or any Person controlling the Lender as it
relates to
credit facilities in the nature of that evidenced by this Agreement,
then,
in any such cage, the Company "hall promptly pay any additional
amounts
necessary to compensate the Lender for such additional cost or
reduced
amount" receivable or reduced rate of return as determined by the
Lender
with respect to this Agreement or Advances made hereunder. If the
Lender
becomes entitled to claim any additional amount" pursuant to this
Section,
it shall notify the Company of the event by reason of which it has
become
so entitled and the Company shall pay such amount within fifteen (15)
days
thereafter. A certificate as to any additional amount payable
pursuant to
the foregoing sentence containing the calculation thereof in
reasonable
detail submitted by the Lender to the Company shall be conclusive
in the
absence of manifest error. The obligations of the Company under
this
Section shall survive the payment of all other Obligations and
the
termination of this Agreement.
3. COLLATERAL.
3.1. Grant of Security Interest. As security for the payment of the
Note,
the Existing Warehousing Note and for the performance of all of the
Company's
Obligations, the Company hereby assigns and transfers to the Lender all
right,
title and interest in and to and grants a security interest to the Lender
in the
following described property (the "Collateral"):
3.1(a) All Mortgage Loans, including all Mortgage Notes and
Mortgages
evidencing such Mortgage Loans, which from time to time are
delivered or
caused to be delivered to the Lender (including delivery to a third
party
on behalf of the Lender), come into the possession, custody or
control of
the Lender for the purpose of assignment or pledge or in respect of
which
an Advance has been made by the Lender hereunder (the pledged
Mortgages").
3.1(b) All Mortgage-backed Securities which are from time to time
created
in whole or in part on the basis of the Pledged Mortgages or are
delivered
or caused to be delivered to, or are otherwise in the possession
of the
Lender its agent, bailee or custodian as assignee, or pledged
to the
Lender, or for such purpose are registered by book-entry in the name
of the
Lender (including delivery to or registration in the name of a third
party
on behalf of the Lender) hereunder or in respect of which from time to
time
an Advance has been made by the Lender hereunder (the pledged
Securitiesn).
3.1(c) All private mortgage insurance and all commitments
issued by
the FHA or VA to insure or guarantee any Mortgage Loans included
in the
Pledged Mortgages; all guaranties related to Pledged Securities;
all
Purchase Commitments held by the Company covering the Pledged
Mortgages or
the Pledged Securities and all proceeds resulting from the sale
thereof to
Investors pursuant thereto; and all personal property, contract
rights,
servicing and servicing fees and income or other proceeds,
amounts and
payments payable to the Company as compensation or reimbursement,
accounts
and general intangibles of whatsoever kind relating to the
Pledged
Mortgages, the Pledged Securities, said FHA commitments or VA
commitments
and the Purchase Commitments, and all other documents or
instruments
relating to the Pledged Mortgages and the Pledged Securities,
including,
without limitation, any interest of the Company in any fire,
casualty or
hazard insurance policies and any awards made by any public body or
decreed
by any court of competent jurisdiction for a taking or for
degradation of
value in any eminent domain proceeding as the same relate to the
Pledged
Mortgages.
3.1(d) All right, title and interest of the Company in and
to all
escrow accounts, documents, instruments, files, surveys,
certificates,
correspondence, appraisals, computer programs, tapes, discs,
cards,
accounting records (including all information, records, tapes,
data,
programs, discs and cards necessary or helpful in the
administration or
servicing of the Collateral) and other information and data of the
Company
relating to the Collateral.
3.1(e) All now existing or hereafter acquired cash delivered
to or
otherwise in the possession of the Lender or its agent, bailee or
custodian
or designated on the books and records of the Company as assigned
and
pledged to the Lender.
3.l(f) All cash and non-cash proceeds of the Collateral,
including all
dividends, distributions and other rights in connection with,
and all
additions to, modifications of and replacements for, the Collateral,
and
all products and proceeds of the Collateral, together with
whatever is
receivable or received when the Collateral or proceeds thereof are
sold,
collected, exchanged or otherwise disposed of, whether such
disposition is
voluntary or involuntary, including, without limitation, all
rights to
payment with respect to any cause of action affecting or relating
to the
Collateral or proceeds thereof.
3.2. Release of Security Interest in Collateral.
3.2(a) Pledged Mortgages shall be released from the Lender's
security
interest only against payment to the Lender of the Release
Amount in
connection with such Pledged Mortgages.
3.2(b) If Pledged Mortgages are to be transferred to a pool
custodian
or to FHLMC for inclusion in a Mortgage Pool, the Lenders security
interest
in such Pledged Mortgages shall be released only against payment
to the
Lender of the Release Amount in connection with such Pledged
Mortgages. If
the Lender's security interest in the Pledged Mortgages comprising
the
Mortgage Pool is not released prior to the issuance of the Mortgace-
backed
Security, then the Mortgage-backed Security, when issued, shall
be a
Pledged Security. The Lenders security interest shall continue in
such
Pledged Mortgages and the Pledged Security. The Lender shall be
entitled to
possession of such Pledged Security in the manner provided below.
3.2(c) If Pledged Mortgages are to be transferred to an
Approved
Custodian and are included in an Eligible Mortgage Pool, the
Lenders
security interest in the Pledged Mortgages comprising the Eligible
Mortgage
Pool shall be released upon the issuance of the Pledged Security.
The
Lender's security interest in such Pledged Security shall be released
only
against payment to the Lender of the Release Amount in connection
with the
Pledged Mortgages backing such Pledged Security. The Lender
shall be
entitled to possession of such Pledged Security in the manner
provided
below.
3.2(d) The Lender shall have the exclusive right to the
possession of
the Pledged Securities or, if the Pledged Securities are not to be
issued
in certificated form or are to be issued in certificated form
and
registered exclusively with the name of, and held by, a clearing
agency or
its nominee, shall have the right to have the book entries for the
Pledged
Securities issued in the Lenders name or the name or names
of its
designees, and the Lender shall have the right to cause delivery
of the
Pledged Securities to be made to the Investor or the book
entries
registered in the name of the Investor or the Investors designee
only
against payment therefor. The Company acknowledges that the
Lender may
enter into one or more standing arrangements with other
financial
institutions for the issuance of Pledged Securities in book entry
form in
the name of such other financial institutions, as agent or
financial
intermediary for the Lender, and the Company agrees upon request
of the
Lender, to execute and deliver to such other financial institutions
the
Company' 9 written concurrence in any such standing arrangements.
3.2(e) Prior to the occurrence of an Event of Default, the
Company may
redeem a Pledged Mortgage or Pledged Security from the Lenders
security
interest by notifying the Lender of its intention to redeem such
Pledged
Mortgage or Pledged Security from pledge and either (a) paying, or
causing
an Investor to pay, to the Lender, for application to prepayment
of the
principal balance of the Note, the Release Amount in connection with
such
Pledged Mortgage or Pledged Security, or (b) delivering
substitute
Collateral which, in addition to being acceptable to the Lender in its
sole
discretion will, when included with the Collateral, result in a
Collateral
Value of all Collateral held by the Lender which is at least equal
to the
aggregate outstanding Advances .
3.2(f) Following the occurrence of a Default or Event of Default,
the
Lender may, with no liability to the Company or any Person,
continue to
release it. security interest in any Pledged Mortgage or Pledged
Security
against payment of the Release Amount in connection with such
Pledged
Mortgage or Pledged Security.
3.2(g) The Release Amount in connection with any Pledged
Mortgage
shall be (i) prior to the occurrence of an Event of Default, the
principal
amount of the Advances made against such Pledged Mortgage, and (ii)
from
and after the occurrence and during the continuance of an Event of
Default,
the Committed Purchase Price of such Pledged Mortgage or, if there
is no
Purchase Commitment therefor, the amount paid to the Lender
in a
commercially reasonable disposition thereof.
3.3. Delivery of Additional Collateral or Mandatory Prepayment. At any
time
that the aggregate Collateral Value of the Collateral then pledged
hereunder is
less than the aggregate amount of the Advances then outstanding hereunder,
the
Lender may request, and the Company shall within two (2) Business Days
after
Notice by the Lender (a) deliver to the Lender for pledge hereunder
additional
Mortgage Loans and/or cash, in aggregate amounts sufficient to
cover the
difference between the Collateral Value of the Collateral pledged
and the
aggregate amount of Advances outstanding hereunder, or (b) repay the
Advances in
an amount sufficient to reduce the aggregate balance thereof outstanding
to or
below the Collateral Value of the Collateral pledged hereunder.
3.4. Collection and Servicing Rights. So long as no Event of Default
shall
have occurred and is continuing, the Company shall be entitled to
service and
receive and collect directly all sums payable to the Company in respect
of the
Collateral other than proceeds of any Purchase Commitment or proceeds
of the
sale of any Collateral. Following the occurrence of any Event of Default,
the
Lender or its designee shall thereafter be entitled to service and
receive and
collect all sums payable to the Company in respect of the Collateral,
and in
such case (a) the Lender or its designee in its discretion may, in its own
name
or in the name of the Company or otherwise, demand, sue for, collect or
receive
any money or property at any time payable or receivable on account of
or in
exchange for any of the Collateral, but shall be under no obligation to
do so,
(b) the Company shall, if the Lender 90 requests, hold in trust for the
benefit
of the Lender and forthwith pay to the Lender at its office designated by
Notice
hereunder, all amount" thereafter received by the Company upon or in
respect of
any of the Collateral, advising the Lender as to the source of such funds,
and
(c) all amount" so received and collected by the Lender shall be held by
it as
part of the Collateral.
3.5. Return of Collateral at Expiration of Agreement. If (a) this
Agreement
or the Existing Warehousing Agreement shall have expired or been
terminated, and
(b) no Advances, interest or other Obligations shall be outstanding and
unpaid
hereunder or under the Existing Warehousing Agreement, the Lender shall
deliver
or release its security interest and shall deliver all Collateral
in its
possession to the Company at the Company's expense. The receipt of the
Company
for any Collateral released or delivered to the Company pursuant
to any
provision of this Agreement shall be a complete and full acquittance
for the
Collateral so returned, and the Lender shall thereafter be discharged
from any
liability or responsibility therefor.
4. CONDITIONS PRECEDENT.
4.1. Initial Advance. As a condition precedent to the Lender
making an
initial Advance under this Agreement, the Lender shall have received
the
following, all of which must be satisfactory in form and content to the
Lender,
in its sole discretion:
4.1(a) The Lender shall have received the following, all of which
must
be satisfactory in form and content to the Lender, in its sole
discretion:
(1) The Note and this Agreement duly executed by the
Company.
(2) An original resolution of the board of directors
of the
Company, certified as of the date of this Agreement by its
corporate
secretary, authorizing the execution, delivery and performance of
this
Agreement and the other Loan Documents, and all other
instruments or
documents to be delivered by the Company pursuant to this
Agreement.
(3) The Guaranties, in the form attached hereto as
Exhibit B.
duly executed by the Guarantors.
(4) Evidence that all accounts necessary into which Advances
will
be funded and proceeds from the sale or disposition of the
Pledged
Mortgages and Pledged Securities will be deposited have
been
established at the Funding Bank.
4.2. Each Advance. The making of the initial and each subsequent
Advance
under this Agreement is subject to the satisfaction, in the sole
discretion of
the Lender, as of the date of each such Advance, of the following
additional
conditions precedent:
4.2(a) The representations and warranties of the Company
contained in
Article 5 hereof shall be accurate and complete in all material
respects as
if made on and as of the date of each Advance.
4.2(b) The Company shall have performed all agreements to be
performed
by it hereunder, and after giving effect to the requested Advance,
there
shall exist no Default or Event of Default hereunder.
4.2(c) The Guarantor shall have performed all agreements
to be
performed by the Guarantor under the Guaranty.
4.2(d) The Company shall not have incurred any material
liabilities,
direct or contingent, other than in the ordinary course of its
business,
since the Statement Date.
5. REPRESENTATIONS AND PARTIES.
The Company hereby represents and warrants to the Lender, as of the
date of
this Agreement and as of the making of each Advance, that:
5.1. Organization: Good Standing; Subsidiaries. The Company and
each
Subsidiary of the Company is a corporation duly organized, validly
existing and
in good standing under the laws of the jurisdiction of its incorporation,
has
the full legal power and authority to own its property and to carry
on its
business as currently conducted and is duly qualified as a foreign
corporation
to do business and is in good standing in each jurisdiction in which
the
transaction of its business makes such qualification necessary,
except in
jurisdictions, if any, where a failure to be in good standing has no
material
adverse effect on the business, operations, assets or financial condition
of the
Company or any such Subsidiary. For the purposes hereof, good standing
shall
include qualification for any and all licenses and payment of any and all
taxes
required in the jurisdiction of its incorporation and in each
jurisdiction in
which the Company transacts business. The Company has no Subsidiaries
except as
set forth in the Existing Warehousing Agreement.
5.2. Authorization and Enforceability. The Company has the
power and
authority to execute, deliver and perform this Agreement, the Note and all
other
Loan Documents to which the Company is party and to make the
borrowings
hereunder. The Guarantor has the legal capacity to execute, deliver and
perform
the Guaranty. The execution, delivery and performance by the Company of
this
Agreement, the Note and all other Loan Documents to which the Company is
party
and the making of the borrowings hereunder and thereunder, have been
duly and
validly authorized by all necessary corporate action on the part of the
Company
(none of which actions has been modified or rescinded, and all of which
actions
are in full force and effect) and do not and will not conflict with or
violate
any provision of law, of any judgments binding upon the Company, or
of the
articles of incorporation or by-laws of the Company, conflict with or
result in
a breach of or constitute a default or require any consent under, or
result in
the creation of any Lien upon any property or assets of the Company other
than
the Lien on the Collateral granted hereunder, or result in or require
the
acceleration of any indebtedness of the Company pursuant to any
agreement,
instrument or indenture to which the Company is a party or by which the
Company
or its property may be bound or affected. This Agreement, the Note and all
other
Loan Documents contemplated hereby or thereby constitute legal, valid,
and
binding obligations of the Company, or of the Guarantor,
respectively,
enforceable in accordance with their respective terms, except as
limited by
bankruptcy, insolvency or other such laws affecting the
enforcement of
creditors' rights.
5.3. Approvals. The execution and delivery of this Agreement, the
Note and
all other Loan Documents and the performance of the Company's
obligations
hereunder and thereunder and the validity and enforceability hereof and
thereof
do not require any license, consent, approval or other action of any
state or
federal agency or governmental or regulatory authority other than those
which
have been obtained and remain in full force and effect.
5.4. Litigation. There are no actions, claims, suits or proceedings
pending
or, to the knowledge of the Company, threatened or reasonably
anticipated
against or affecting the Company or any Subsidiary of the Company in any
court
or before any arbitrator or before any government commission, board,
bureau or
other administrative agency which, if adversely determined, may
reasonably be
expected to result in any material and adverse change in the
business,
operations, assets or financial condition of the Company as a whole, or
would
affect the validity or enforceability of this Agreement or the Note.
5.5. Compliance with Laws. Neither the Company nor any Subsidiary
of the
Company is in violation of any provision of any law, or of any judgment,
award,
rule, regulation, order, decree, writ or injunction of any court or
public
regulatory body or authority which might have a material adverse effect
on the
business, operations, assets or financial condition of the Company as a
whole or
would affect the validity or enforceability of this Agreement or the Note.
5.6. Eligibility. The Company is approved and qualified and in
good
standing as a lender or seller/servicer, as set forth in the
Existing
Warehousing Agreement and meets all requirements applicable to its
status as
such.
5.7. Place of Business. The principal place of business of the
Company is
3021 Citrus Circle, Suite 150, Walnut Creek, California 94598.
5.8. Special Representations Concerning Collateral. The Company
hereby
represents and warrants to the Lender, as of the date of this Agreement
and as
of the making of each Advance, that:
5.8(a) The Company is the legal and equitable owner and holder,
free
and clear of all Liens (other than Liens granted hereunder and
under the
Existing Warehousing Agreement), of the Pledged Mortgages and the
Pledged
Securities. All Pledged Mortgages, Pledged Securities and
Purchase
Commitments have been duly authorized and validly issued to the
Company,
and all of the foregoing items of Collateral comply with all
of the
requirements of this Agreement, and have been and will continue
to be
validly pledged or assigned to the Lender, subject to no other Liens.
5.8(b) The Company has, and will continue to have, the full
right,
power and authority to pledge the Collateral pledged and to be
pledged by
it hereunder.
5.8(c) Any Mortgage Loan and any related document included
in the
Pledged Mortgages (1) has been duly executed and delivered by the
parties
thereto at a closing held not more than ninety (90) days prior to the
date
of the Existing Warehousing Advance for such Mortgage Loan, (2) has
been
made in compliance with all requirements of the Real Estate
Settlement
Procedures Act, Equal Credit Opportunity Act, the federal Truth-In-
Lending
Act and all other applicable laws and regulations, (3) is and will
continue
to be valid and enforceable in accordance with its terms, without
defense
or offset, (4) has not been modified or amended except in writing,
which
writing is part of the Collateral Documents, nor any requirement"
thereof
waived, (5) is supported by an underlying appraisal in compliance
with the
requirements of FIRREA, and (6) complies and will continue to comply
with
the terms of this Agreement and, if applicable, with the related
Purchase
Commitment held by the Company. Each Mortgage Loan has been fully
advanced
in the face amount thereof and each Mortgage is a first Lien
on the
premises described therein, and has or will have a title insurance
policy,
in American Land Title Association form or the equivalent thereof,
from a
recognized title insurance company, insuring the priority of the
Lien of
the Mortgage and meeting the usual requirements of Investors
purchasing
such Mortgage Loans.
5.8(d) No default has occurred and is continuing for more than
thirty
(30) days under any Mortgage Loan included in the Pledged
Mortgages,
provided, however, that with respect to Pledged Mortgages which
have
already been pledged as Collateral hereunder, if any default has
occurred,
the Company will promptly notify the Lender.
5.8(e) The Company has complied and will continue to comply
with all
laws, rules and regulations in respect of the FHA insurance or VA
guaranty
of each Mortgage Loan included in the Pledged Mortgages designated
by the
Company as an FHA insured or VA guaranteed Mortgage Loan, and
such
insurance or guarantee is and will continue to be in full force and
effect.
All such FHA insured and VA guaranteed Mortgage Loans comply and
will
continue to comply in all respects with all applicable requirements
for
purchase under the FNMA standard form of selling contract for FHA
insured
and Vet guaranteed loans and any supplement thereto then in effect.
5.8(f) All fire and casualty policies covering the premises
encumbered
by each Mortgage included in the Pledged Mortgages (1) name and
will
continue to name the Company and its successors and assigns as the
insured
under a standard mortgagee clause, (2) are and will continue to be in
full
force and effect, and (3) afford and will continue to afford
insurance
against fire and such other risks as are usually insured against
in the
broad form of extended coverage insurance from time to time available.
5.8(g) Pledged Mortgages secured by premises located in a
special
flood hazard area designated as such by the Secretary of HUD are and
shall
continue to be covered by special flood insurance under the National
Flood
Insurance Program.
5.8 (h) Each FHA insured Mortgage Loan pledged hereunder
meets all
applicable governmental requirements for such insurance. Each
Pledged
Mortgage, against which an Advance is made on the basis of a
Purchase
Commitment, meets all requirements of such Purchase Commitment. The
Company
shall assure that Pledged Mortgages which are intended to be used
in the
formation of Mortgage-backed Securities shall comply or, prior
to the
formation of any such Mortgage-backed Security, shall comply
with the
requirements of the governmental instrumentality, department or
agency
guaranteeing such Mortgage-backed Security.
5.8(i) For Pledged Mortgages which will be used to back
GNMA
Mortgage-backed Securities, the Company has received from
GNMA a
Confirmation Notice or Confirmation Notices for Request
Additional
Commitment Authority and for Request Pool Numbers, and there
remains
available thereunder a commitment on the part of GNMA sufficient to
permit
the issuance of GNMA Mortgage-backed Securities in an amount at least
equal
to the amount of such Pledged Mortgages designated by the Company
as the
Mortgage Loans to be used to back such GNMA Mortgage-backed
Securities;
each such Confirmation Notice is in full force and effect; each of
such
Pledged Mortgages has been assigned by the Company to one of such
Pool
Numbers and a portion of the available GNMA Commitment has been
allocated
thereto by the Company, in an amount at least equal to such
Pledged
Mortgages; and each such assignment and allocation has been
reflected in
the books and records of the Company.
5.9. Servicing. All of the Company's Servicing Contracts are in full
force
and effect and, except as otherwise indicated, are unencumbered by
Liens. No
default or event which, with notice or lapse of time or both, would
become a
default, exists under any such Servicing Contract.
6. AFFIRMATIVE COVENANTS.
The Company hereby covenants and agrees that, so long as there
remain any
Obligations to be paid or performed under this Agreement or under any other
Loan
Document, the Company shall:
6.1. Payment of Note. Punctually pay or cause to be paid all
Obligations
payable hereunder and under the Note in accordance with the terms
hereof and
thereof.
6.2. Existing Warehousing Agreement Covenants. Comply with each
affirmative
covenant set forth in Article 6 of the Existing Warehousing Agreement.
6.3. Use of Proceeds of Advances. Use the proceeds of each Advance
solely
for the purpose of financing Pledged Mortgages, including the
issuance of
Mortgage-backed Securities based thereon.
6.4. Special Affirmative Covenants Concerning Collateral.
6.4(a) Warrant and defend the right, title and interest of the
Lender
in and to the Collateral against the claims and demands of all
Persons
whomsoever.
6.4(b) Service or cause to be serviced all Mortgage
Loans in
accordance with the standard requirements of the issuers of
Purchase
Commitments covering the same and all applicable FHA and VA
requirements,
including without limitation taking all actions necessary to
enforce the
obligations of the obligers under such Mortgage Loans. The Company
shall
service or cause to be serviced all Mortgage Loans backing
Pledged
Securities in accordance with applicable governmental requirements
and
issuers of Purchase Commitments covering the same. The Company shall
hold
all escrow funds collected in respect of Pledged Mortgages and
Mortgage
Loans backing Pledged Securities in trust, without commingling the
same
with non-custodial funds, and apply the same for the purposes for
which
such funds were collected.
6.4(c) Execute and deliver to the Lender such Uniform Commercial
Code
financing statements with respect to the Collateral as the
Lender may
request. The Company shall also execute and deliver to the Lender
such
further instruments of sale, pledge or assignment or transfer, and
such
powers of attorney, as required by the Lender, and shall do and
perform all
matters and things necessary or desirable to be done or observed,
for the
purpose of effectively creating, maintaining and preserving the
security
and benefits intended to be afforded the Lender under this Agreement.
The
Lender shall have all the rights and remedies of a secured party
under the
Uniform Commercial Code of Minnesota, or any other applicable
law, in
addition to all rights provided for herein.
6.4(d) Notify the Lender within two (2) Business Days of any
default
under, or of the termination of, any Purchase Commitment relating
to any
Pledged Mortgage, Eligible Mortgage Pool or Pledged Security.
6.4(e) Promptly comply in all respects with the terms and
conditions
of all Purchase Commitments, and all extensions, renewals and
modifications
or substitutions thereof or thereto. The Company will cause to be
delivered
to the Investor the Pledged Mortgages and Pledged Securities to be
sold
under each Purchase Commitment not later than the expiration thereof.
6.4(f) Maintain, at its principal office or in a regional
office
approved by the Lender, or in the office of a computer service
bureau
engaged by the Company and approved by the Lender, and, upon request,
shall
make available to the Lender the originals, or copies in any case
where the
originals have been delivered to the Lender or to an Investor,
of its
Mortgage Notes and Mortgages included in Pledged Mortgages, Mortgage-
backed
Securities delivered to the Lender as Pledged Securities,
Purchase
Commitments, and all related Mortgage Loan documents and instruments,
and
all files, surveys, certificates, correspondence, appraisals,
computer
programs, tapes, discs, cards, accounting records and other
information and
data relating to the Collateral.
7. NEGATIVE COVENANTS.
The Company hereby covenants and agrees that, so long as there
remain any
Obligations to be paid or performed, the Company shall not, either
directly or
indirectly, without the prior written consent of the Lender:
7.1. Existing Warehousing Agreement Covenants. Breach any negative
covenant
set forth in Article 7 of the Existing Warehousing Agreement.
7.2. Special Negative Covenants Concerning Collateral.
7.2(a) The Company shall not amend or modify, or waive any
of the
terms and conditions of, or settle or compromise any claim in
respect of,
any Pledged Mortgages or Pledged Securities.
7.2(b) The Company shall not sell, assign, transfer or
otherwise
dispose of, or grant any option with respect to, or pledge or
otherwise
encumber (except pursuant to this Agreement or as permitted herein)
any of
the Collateral or any interest therein.
7.2(c) The Company shall not make any compromise,
adjustment or
settlement in respect of any of the Collateral or accept other than
cash in
payment or liquidation of the Collateral.
8. DEFAULTS; REMEDIES.
8.1. Events of Default. The occurrence of any of the following
conditions
or events shall be an event of default (6 Event of Defaults):
8.1(a) Failure to pay the principal of any Advance when due,
whether
at stated maturity, by acceleration, or otherwise; or failure to
pay any
installment of interest on any Advance or any other amount due under
this
Agreement within ten (10) days after the due date; or failure to
pay,
within any applicable grace period, the principal or interest on any
other
indebtedness due the Lender; or
8.1(b) Failure of the Company to perform or comply with any
term or
condition applicable to it contained in Section 6.3 of the
Existing
Warehousing Agreement, Sections 6.3 and 6.4 of this Agreement or
in any
Section of Article 7 of the Existing Warehousing Agreement or
this
Agreement; or
8.1(c) Any of the Company's representations or warranties
made or
deemed made herein or in any other Loan Document, or in any
statement or
certificate at any time given by the Company in writing pursuant
hereto or
thereto shall be inaccurate or incomplete in any material respect
on the
date as of which made or deemed made; or
8.1(d) The Company shall default in the performance of or
compliance
with any term contained in this Agreement other than those
referred to
above in Subsections 8.1(a), 8.1(b) or 8.1(c) and such default
shall not
have been remedied or waived within thirty (30) days after
receipt of
Notice from the Lender of such default; or
8.1(e) The Company shall default in the performance of or
compliance
with any term contained in this Agreement or any other Loan Document
other
than those referred to above in Subsections 8.1(a), 8.1(b) or
8.1(c) and
such default shall not have been remedied or waived within thirty (30)
days
after the earliest of (i) receipt by the Company of Notice from the
Lender
of such default, (ii) receipt by the Lender of Notice from the
Company of
such default, or (iii) the date the Company should have notified the
Lender
of such default pursuant to Section ?(c); or
8.1(f) (1) A court having jurisdiction shall enter a decree or
order
for relief in respect of the Company, any Subsidiary of the Company
or any
Guarantor in an involuntary case under any applicable
bankruptcy,
insolvency or other similar law in respect of the Company, any
Subsidiary
of the Company or any Guarantor now or hereafter in effect, which
decree or
order is not stayed or a filing of a voluntary case under any
applicable
bankruptcy, insolvency or other similar law in respect of the
Company, any
Subsidiary of the Company or any Guarantor has occurred; or any
other
similar relief shall be granted under any applicable federal or state
law;
or (2) the filing of an involuntary case in respect of the Company,
any
Subsidiary of the Company or any Guarantor under any applicable
bankruptcy,
insolvency or other similar law; or a decree or order of a court
having
jurisdiction for the appointment of a receiver, liquidator,
sequestrator,
trustee, custodian or other officer having similar powers over the
Company,
any Subsidiary of the Company or of any Guarantor, or over all
or a
substantial part of their respective property, shall have been
entered; or
the involuntary appointment of an interim receiver, trustee or
other
custodian of the Company, any Subsidiary of the Company or any
Guarantor
for all or a substantial part of their respective property; or the
issuance
of a warrant of attachment, execution or similar process against
any
substantial part of the property of the Company, any Subsidiary
of the
Company or any Guarantor, and the continuance of any such
events in
Subsection (2) above for sixty (60) days unless dismissed, bonded
off or
discharged; or
8.1(g) The Company or the Guarantor shall purport to disavow
its
obligations hereunder or under the Guaranty, as the case may be or
shall
contest the validity or enforceability hereof or of the Guaranty; or
8.1(h) The Lenders security interest on any portion of the
Collateral
shall become unenforceable or otherwise impaired; provided that,
subject to
the Lenders approval, no Event of Default shall occur as a result of
such
impairment if all Advances made against any such Collateral shall be
paid
in full within ten (10) days of the date of such impairment; or
8.1(i) There shall be an Event of Default under the
Existing
Warehousing Agreement.
8.2. Remedies.
8.2(a) Upon the occurrence of any Event of Default
described in
Sections 8.1(e) or 8.1(f), this Agreement shall be terminated
and the
unpaid principal amount of and accrued interest on the Note and all
other
Obligations shall automatically become due and payable,
without
presentment, demand or other requirements of any kind, all of
which are
hereby expressly waived by the Company.
8.2(b) Upon the occurrence of any Event of Default, other than
those
described in Sections 8.1(e) and 8.1(f), the Lender may, by written
notice
to the Company, terminate this Agreement and/or declare all
Obligations to
be immediately due and payable, whereupon the same shall forthwith
become
due and payable, together with all accrued interest thereon,
and the
obligation of the Lender to make any Advances shall thereupon
terminate.
8.2(c) Upon the occurrence of any Event of Default, the
Lender may
also do any of the following:
(1) Foreclose upon or otherwise enforce its security
interest in
and Lien on the Collateral to secure all payments and
performance of
the Obligations in any manner permitted by law or provided
for
hereunder.
(2) Notify all obligers in respect of Collateral
that the
Collateral has been assigned to the Lender and that all
payments
thereon are to be made directly to the Lender or such other
party as
may be designated by the Lender; settle, compromise, or
release, in
whole or in part, any amounts owing on the Collateral, any
such
obligor or any Investor or any portion of the Collateral, on
terms
acceptable to the Lender; enforce payment and prosecute any
action or
proceeding with respect to any and all Collateral; and where any
such
Collateral is in default, foreclose on and enforce security
interests
in such Collateral by any available judicial procedure or
without
judicial process and sell property acquired as a result of any
such
foreclosure.
(3) Act, or contract with a third party to act, as
servicer or
subservicer of each item of Collateral requiring servicing and
perform
all obligations required in connection with Servicing
Contracts and
Purchase Commitments, such third party's fees to be paid
by the
Company.
(4) Require the Company to assemble the Collateral and/or
books
and records relating thereto and make such available to the
Lender at
a place to be designated by the Lender.
(5) Enter onto property where any Collateral or books and
records
relating thereto are located and take possession thereof
with or
without judicial process.
(6) Prior to the disposition of the Collateral, prepare
it for
disposition in any manner and to the extent the Lender
deems
appropriate.
(7) Exercise all rights and remedies of a secured creditor
under
the Uniform Commercial Code of Minnesota or other applicable
law,
including, but not limited to, selling or otherwise disposing
of the
Collateral, or any part thereof, at one or more public or
private
sales, whether or not such Collateral is present at the place of
sale,
for cash or credit or future delivery, on such terms and in
such
manner as the Lender may determine, including, without
limitation,
sale pursuant to any applicable Purchase Commitment. If
notice is
required under such applicable law, the Lender will give the
Company
not less than ten (10) days' notice of any such public sale or
of the
date after which any private sale may be held. The Company agrees
that
ten (10) days, notice shall be reasonable notice. The Lender
may,
without notice or publication, adjourn any public or private
sale or
cause the same to be adjourned from time to time by
announcement at
the time and place fixed for the sale, and such sale may be
made at
any time or place to which the same may be so adjourned. In
case of
any sale of all or any part of the Collateral on credit or for
future
delivery, the Collateral so sold may be retained by the Lender
until
the selling price is paid by the purchaser thereof, but the
Lender
shall not incur any liability in case of the failure of such
purchaser
to take up and pay for the Collateral so sold and, in case of any
such
failure, such Collateral may again be sold upon like notice.
The
Lender may, however, instead of exercising the power of sale
herein
conferred upon it, proceed by a suit or suits at law or in
equity to
collect all amounts due upon the Collateral or to foreclose the
pledge
of and sell the Collateral or any portion thereof under a
judgment or
decree of a court or courts of competent jurisdiction, or both.
(8) Proceed against the Company on the Note or against
the
Guarantor under the Guaranty or both.
8.2(d) The Lender shall incur no liability as a result of the
sale or
other disposition of the Collateral, or any part thereof, at any
public or
private sale or disposition. The Company hereby waives (to the
extent
permitted by law) any claims it may have against the Lender
arising by
reason of the fact that the price at which the Collateral may have
been
sold at such private sale was less than the price which might have
been
obtained at a public sale or was less than the aggregate amount
of the
outstanding Advances and the unpaid interest accrued thereon, even
if the
Lender accepts the first offer received and does not offer the
Collateral
to more than one offeree. Any sale of Collateral pursuant to the terms
of a
Purchase Commitment shall be deemed to have been made in a
commercially
reasonable manner.
8.2(e) The Company acknowledges that Mortgage Loans
and
Mortgage-backed Securities are collateral of a type which is
customarily
sold on a recognized market. The Company waives any right it may
have to
prior notice of the sale of any Pledged Mortgage or Pledged Security.
8.2(f) The Company specifically waives and releases (to the
extent
permitted by law) any equity or right of redemption, all
rights of
redemption, stay or appraisal which the Company has or may have
under any
rule of law or statute now existing or hereafter adopted, and any
right to
require the Lender to (1) proceed against any Person, (2) proceed
against
or exhaust any of the Collateral or pursue its rights and
remedies as
against the Collateral in any particular order, or (3) pursue any
other
remedy in its power. The Lender shall not be required to take any
steps
necessary to preserve any rights of the Company against
holders of
mortgages prior in lien to the Lien of any Mortgage included
in the
Collateral or to preserve rights against prior parties.
8.2(g) The Lender may, but shall not be obligated to, advance any
sums
or do any act or thing necessary to uphold and enforce the
Lien and
priority of, or the security intended to be afforded by, any
Mortgage
included in the Collateral, including, without limitation,
payment of
delinquent taxes or assessments and insurance premiums. All
advances,
charges, costs and expenses, including reasonable attorneys'
fees and
disbursements, incurred or paid by the Lender in exercising any
right,
power or remedy conferred by this Agreement, or in the enforcement
hereof,
together with interest thereon, at the Default Rate, from the
time of
payment until repaid, shall become a part of the principal
balance
outstanding hereunder and under the Note.
8.2(h) No failure on the part of the Lender to exercise, and no
delay
in exercising, any right, power or remedy provided hereunder, at law
or in
equity shall operate as a waiver thereof; nor shall any single or
partial
exercise by the Lender of any right, power or remedy provided
hereunder, at
law or in equity preclude any other or further exercise thereof
or the
exercise of any other right, power or remedy. Without intending to
limit
the foregoing, all defenses based on the statute of limitations are
hereby
waived by the Company to the extent permitted by law. The remedies
herein
provided are cumulative and are not exclusive of any remedies
provided at
law or in equity.
8.3. Application of Proceeds. The proceeds of any sale,
disposition or
other enforcement of the Lender's security interest in all or any part
of the
Collateral shall be applied by the Lender:
First, to the payment of the costs and expenses of such sale or
enforcement
of this Agreement, including reasonable compensation to the Lender's
agents and
counsel, and all expenses, liabilities and advances made or incurred by
or on
behalf of the Lender in connection therewith;
Second, to the payment of interest accrued and unpaid on the Note;
Third, to the payment of any other Obligations due (other than
principal
and interest) under thin Agreement and the Loan Documents;
Fourth, to the payment of the outstanding principal balance of the
Note;
and
Fifth, to the payment of the amounts due under the Existing
Warehousing
Note and the Existing Warehousing Agreement, in the order set forth
therein; and
Finally, to the payment to the Company, or to its successors or
assigns, or
as a court of competent jurisdiction may direct, of any surplus then
remaining
from such proceeds.
If the proceeds of any such sale, disposition or other enforcement
are
insufficient to cover the costs and expenses of such sale, as aforesaid,
and the
payment in full of all Obligations, the Company shall remain liable
for any
deficiency.
8.4. Lender Appointed Attorney-in-Fact. The Lender is hereby
appointed the
attorney-in-fact of the Company, with full power of substitution,
for the
purpose of carrying out the provisions hereof and taking any
action and
executing any instruments which the Lender may deem necessary or
advisable to
accomplish the purposes hereof, which appointment a" attorney-in-
fact is
irrevocable and coupled with an interest. Without limiting the generality
of the
foregoing, the Lender shall have the right and power to give notices
of its
security interest in the Collateral to any Person, either in the name
of the
Company or in its own name, to endorse all Pledged Mortgages or
Pledged
Securities payable to the order of the Company, to change or cause to be
changed
the book-entry registration or name of subscriber or Investor on any
Pledged
Security, or to receive, endorse and collect all checks made payable
to the
order of the Company representing any payment on account of the principal
of or
interest on, or the proceeds of sale of, any of the Pledged Mortgages or
Pledged
Securities and to give full discharge for the same.
8.5. Right of Set-Off. If the Company shall default in the payment
of the
Note, any interest accrued thereon, or any other sums which may become
payable
hereunder when due, or in the performance of any of its other
obligations or
liabilities under this Agreement, the Lender, shall have the right, at any
time
and from time to time, without notice, to set-off and to appropriate or
apply
any and all property or indebtedness of any kind at any time held or
owing by
the Lender to or for the credit or the account of the Company against
and on
account of the Obligations of the Company under the Note and this
Agreement,
irrespective of whether or not the Lender shall have made any demand
hereunder
and whether or not said Obligations shall have matured.
9. NOTICES.
All notices, demands, consents, requests and other communications
required
or permitted to be given or made hereunder (collectively, "Notices)
shall,
except as otherwise expressly provided hereunder, be in writing and
shall be
delivered in person or telecopied or mailed, first class or
delivered by
overnight courier, return receipt requested, postage prepaid, addressed
to the
respective parties hereto at their respective addresses hereinafter set
forth
or, as to any such party, at such other address as may be designated by it
in a
Notice to the other. All Notices shall be conclusively deemed to have
been
properly given or made when duly delivered, in person, by telecopy
or by
overnight courier, or if mailed on the third Business Day after being
deposited
in the mails, addressed as follows:
if to the Company: Monument Mortgage, Inc.
3021 Citrus Circle
Suite 150
Walnut Creek, California 94598
Attention: Paul Garrigues,
SVP/CFO
Telecopier No.:
if to the Lender: Residential Funding Corporation
1646 North California Blvd.
Suite 400
Walnut Creek, CA 94596
Attention: Graham Shipman,
Vice President
Telecopier No.: (510) 935-6424
with a copy to: Residential Funding Corporation
8400 Normandale Lake Boulevard
Suite 600
Minneapolis, Minnesota 55437
Attention: Sandra L. Cakes,
Esq.
Telecopier No.: (612) 832-7190
10. REIMBURSEMENT OF EXPENSES; INDEMNITY.
The Company shall: (a) pay all out-of-pocket costs and expenses
of the
Lender, including, without limitation, reasonable attorneys, fees, court
costs
and all other litigation expenses, including, but not limited to, expert
witness
fees, document copying expenses, exhibit preparation, courier expenses,
postage
expenses and communication expenses, in connection with the
preparation,
negotiation, documentation, amendment, enforcement and administration of
this
Agreement, the Note, and other Loan Documents and the making and
repayment of
the Advances and the payment of interest thereon; (b) indemnify, pay, and
hold
harmless the Lender and any holder of the Note from and against, any
and all
present and future stamp, documentary and other similar taxes with
respect to
the foregoing matters and save the Lender and the holder or holders of the
Note
harmless from and against any and all liabilities with respect to or
resulting
from any delay or omission to pay such taxes; (c) indemnify, pay and
hold
harmless the Lender and any of its officers, directors, employees or
agents and
any subsequent holder of the Note (collectively called the "Indemnities")
from
and against any and all liabilities, obligations, losses, damages,
penalties,
judgments, suits, costs, expenses and disbursements of any kind or
nature
whatsoever (including without limitation, the reasonable fees and
disbursements
of counsel of the Indemnitees (including allocated costs of internal
counsel) in
connection with any investigative, administrative or judicial
proceeding,
whether or not such Indemnitees shall be designated a party thereto)
which may
be imposed upon, incurred by or asserted against such Indemnitees in any
manner
relating to or arising out of this Agreement, the Note, or any other
Loan
Document or any of the transactions contemplated hereby or thereby
(the
"Indemnified Liabilities"); provided, however, that the Company shall
have no
obligation hereunder with respect to Indemnified Liabilities arising
from the
gross negligence or willful misconduct of any such Indemnitees. To the
extent
that the undertaking to indemnify, pay and hold harmless as set forth
in the
preceding sentence may be unenforceable because it is violative of any
law or
public policy, the Company shall contribute the maximum portion which
it is
permitted to pay and satisfy under applicable law, to the payment
and
satisfaction of all Indemnified Liabilities incurred by the Indemnitees
or any
of them. The agreement of the Company contained in this Subsection (c)
shall
survive the expiration or termination of this Agreement and the payment in
full
of the Note. Attorneys' fees and disbursements incurred in enforcing,
or on
appeal from, a judgment pursuant hereto shall be recoverable separately
from and
in addition to any other amount included in such judgment, and this
clause is
intended to be severable from the other provisions of this Agreement
and to
survive and not be merged into such judgment.
11. FINANCIAL INFORMATION.
All financial statements and reports furnished to the Lender
hereunder
shall be prepared in accordance with GAAP, applied on a basis consistent
with
that applied in preparing the financial statements as at the end of and
for the
last fiscal year ended (except to the extent otherwise required to
conform to
good accounting practice).
12. MISCELLANEOUS.
12.1. Terms Binding Upon Successors: Survival of Representations. The
terms
and provisions of this Agreement shall be binding upon and inure to the
benefit
of the parties hereto and their respective successors and assigns.
All
representations, warranties, covenants and agreements herein contained
on the
part of the Company shall survive the making of any Advance and the
execution of
the Note, and shall be effective so long as there remain any Obligations
to be
paid or performed.
12.2. Assignment. This Agreement may not be assigned by the Company.
This
Agreement and the Note, along with the Lenders security interest in any
or all
of the Collateral, may, at any time, be transferred or assigned, in whole
or in
part, by the Lender, and any assignee thereof may enforce this Agreement,
the
Note and such security interest.
12.3. Amendments. Except as otherwise provided in this Agreement,
this
Agreement may not be amended, modified or supplemented unless such
amendment,
modification or supplement is set forth in a writing signed by the
parties
hereto.
12.4. Governing Law. This Agreement and the other Loan Documents
shall be
governed by the laws of the State of Minnesota, without reference
to its
principles of conflicts of laws .
12.5. Participations. The Lender may at any time sell, assign or
grant
participations in, or otherwise transfer to any other Person (a n
Participant n
), all or part of the Obligations. Without limitation of the exclusive
right of
the Lender to collect and enforce such Obligations, the Company agrees that
each
disposition will give rise to a debtor-creditor relationship of the
Company to
the Participant, and the Company authorizes each Participant, upon
the
occurrence of an Event of Default, to proceed directly by right of
setoff,
banker's lien, or otherwise, against any assets of the Company which may
be in
the hands of such Participant. The Company authorizes the Lender to
disclose to
any prospective Participant and any Participant any and all information
in the
Lender's possession concerning the Company, this Agreement and the
Collateral.
12.6. Relationship of the Parties. This Agreement provides for the
making
of Advances by the Lender, in its capacity as a lender, to the Company,
in its
capacity as a borrower, and for the payment of interest, repayment of
principal
by the Company to the Lender, and for the payment of certain fees by the
Company
to the Lender. The relationship between the Lender and the Company is
limited to
that of creditor/secured party, on the one hand, and debtor, on the other
hand.
The provisions herein for compliance with financial covenants and
delivery of
financial statements are intended solely for the benefit of the
Lender to
protect its interests as lender in assuring payments of interest and
repayment
of principal and payment of certain fees, and nothing contained in
this
Agreement shall be construed as permitting or obligating the Lender to act
as a
financial or business advisor or consultant to the Company, as
permitting or
obligating the Lender to control the Company or to conduct the
Company's
operations, as creating any fiduciary obligation on the part of the
Lender to
the Company, or as creating any joint venture, agency, or other
relationship
between the parties hereto other than as explicitly and specifically
stated in
this Agreement. The Company acknowledges that it has had the
opportunity to
obtain the advice of experienced counsel of its own choosing in connection
with
the negotiation and execution of this Agreement and to obtain the advice of
such
counsel with respect to all matters contained herein, including,
without
limitation, the provision for waiver of trial by jury. The Company
further
acknowledges that it is experienced with respect to financial and credit
matters
and has made its own independent decisions to apply to the Lender for
credit and
to execute and deliver this Agreement.
12.7. Severability. If any provision of this Agreement shall be
declared to
be illegal or unenforceable in any respect, such illegal or
unenforceable
provision shall be and become absolutely null and void and of no force
and
effect as though such provision were not in fact get forth herein, but all
other
covenants, term", conditions and provisions hereof shall nevertheless
continue
to be valid and enforceable.
12.8. Operational Reviews. From time to time upon request, the
Company
shall permit access to its premises and records by the Lender or
its
representative, for the purpose of conducting a review of the Company's
general
mortgage business methods, policies, and procedures, auditing loan
files and
reviewing financial and operational aspects of the Company's business.
12.9. Consent to Credit References. The Company hereby consents
to the
disclosure of information regarding the Company and its relationships
with the
Lender to Persons making credit inquiries to the Lender. This
consent is
revocable by the Company at any time upon Notice to the Lender as
provided in
Section 9 hereof.
12.10. Consent to Jurisdiction. The Company hereby agrees that any
action
or proceeding under the Loan Documents, the Note or any document
delivered
pursuant hereto may be commenced against it in any court of
competent
jurisdiction within the State of Minnesota, by service of process
upon the
Company by first class registered or certified mail, return receipt
requested,
addressed to the Company at its address last known to the Lender. The
Company
agrees that any such suit, action or proceeding arising out of or
relating to
this Agreement or any other such document may be instituted in the
Hennepin
County, State District Court or in the United States District Court
for the
District of Minnesota at the option of the Lender; and the Company hereby
waives
any objection to the venue, or any claim as to inconvenient forum, of any
such
suit, action or proceeding. Nothing herein shall affect the right of the
Lender
to accomplish service of process in any other manner permitted by law
or to
commence legal proceedings or otherwise proceed against the Company in any
other
jurisdiction or court.
12.11. Counterparts. This Agreement may be executed in any
number of
counterparts, each of which shall be deemed an original, but all
such
counterparts shall together constitute but one and the same instrument.
12.12. Entire Agreement. This Agreement, the Note and the other
Loan
Documents represent the final agreement among the parties hereto and
thereto
with respect to the subject matter hereof and thereof, and may
not be
contradicted by evidence of prior or contemporaneous oral agreements among
such
parties. There are no oral agreements among the parties with respect
to the
subject matter hereof and thereof.
12.13. WAIVER OF JURY TRIAL. AS TO THIS AGREEMENT THE COMPANY
AND THE
LENDER EACH HEREBY (a) COVENANTS AND AGREES NOT TO ELECT A TRIAL BY JURY
OF ANY
ISSUE TRIABLE OF RIGHT BY A JURY, AND (b) WAIVES ANY RIGHT TO TRIAL BY
JURY
FULLY TO THE EXTENT THAT ANY SUCH RIGHT SHALL NOW OR HEREAFTER EXIST.
THIS
WAIVER OF RIGHT TO TRIAL BY JURY IS SEPARATELY GIVEN, KNOWINGLY AND
VOLUNTARILY,
BY THE COMPANY AND THE LENDER, AND THIS WAIVER IS INTENDED TO
ENCOMPASS
INDIVIDUALLY EACH INSTANCE AND EACH ISSUE AS TO WHICH THE RIGHT OF A JURY
TRIAL
WOULD OTHERWISE ACCRUE. THE LENDER AND THE COMPANY IS EACH HEREBY
AUTHORIZED AND
REQUESTED TO SUBMIT THIS AGREEMENT TO ANY COURT HAVING JURISDICTION
OVER THE
SUBJECT MATTER AND THE PARTIES HERETO, SO AS TO SERVE AS CONCLUSIVE
EVIDENCE OF
THE FOREGOING WAIVER OF THE RIGHT TO JURY TRIAL. FURTHER, THE COMPANY
AND THE
LENDER EACH HEREBY CERTIFIES THAT NO REPRESENTATIVE OR AGENT OF
EITHER THE
COMPANY OR THE LENDER HAS REPRESENTED, EXPRESSLY OR OTHERWISE, TO ANY
OF THE
UNDERSIGNED THAT EITHER THE COMPANY OR THE LENDER WILL NOT SEER TO ENFORCE
THIS
WAIVER OF RIGHT TO JURY TRIAL PROVISION.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be
duly executed as of the date first above written.
MONUMENT MORTGAGE, INC.,
a California corporation
By:
----------------------------------
Paul R. Garrigues
Its: Senior VP/Chief Financial
Officer
RESIDENTIAL FUNDING CORPORATION,
a Delaware corporation
By:
-----------------------------------
- -
Its: Vice President
STATE OF California )
) ss
COUNTY OF Contra Costa )
On November 29, 1995, before me, a Notary Public personally appeared
Paul
R. Garrigues , the Senior VP CFO of MONUMENT MORTGAGE, INC., a
California
corporation, personally known to me (or proved to me on the
basis of
satisfactory evidence) to be the person whose name is subscribed to the
within
instrument and acknowledged to me that he/she executed the same in
his/her
authorized capacity, and that by his/her signature on the instrument the
person,
or the entity upon behalf of which the person acted, executed the
instrument.
WITNESS my hand and official seal.
----------------------------------------
- ---
Notary Public
My Commission Expires:
----------------
- ---
(SEAL)
STATE OF California )
) ss
COUNTY OF Contra Costa )
On November 30, 1995, before me, a Notary Public personally
appeared D.
Graham Shipman, the Vice President of RESIDENTIAL FUNDING
CORPORATION, a
Delaware corporation, personally known to me (or proved to me on the
basis of
satisfactory evidence) to be the person whose name is subscribed to the
within
instrument and acknowledged to me that he/she executed the same in
his/her
authorized capacity, and that by his/her signature on the instrument the
person,
or the entity upon behalf of which the person acted, executed the
instrument.
WITNESS my hand and official seal.
----------------------------------------
- --
Notary Public
My Commission Expires:
-----------------
- --
(SEAL)
<PAGE>
EXHIBIT A
PROMISSORY NOTE
Date: March 23 , 1995
$10,000,000
FOR VALUE RECEIVED, the undersigned, MONUMENT MORTGAGE, INC., a
California
corporation, (herein called the "Company"), hereby promises to pay to the
order
of RESIDENTIAL FUNDING CORPORATION, a Delaware corporation (the
"Lender" or,
together with its successors and assigns, the "Holder") whose principal
place of
business is 8400 Normandale Lake Boulevard, Suite 600, Minneapolis,
Minnesota
55437, or at such other place as the Holder may designate from time to
time, the
principal sum of Ten Million Dollars ($10,000,000) or so much thereof as
may be
outstanding from time to time pursuant to the Gestation Warehousing
Credit and
Security Agreement described below, and to pay interest on said principal
sum or
such part thereof as shall remain unpaid from time to time, from the
date of
each Advance until repaid in full, and all other fees and charges due
under the
Agreement, at the rate and at the times set forth in the Agreement. All
payments
hereunder shall be made in lawful money of the United States and in
immediately
available funds.
This Note is given to evidence an actual gestation warehouse
facility in
the above amount and is the Note referred to in that certain
Gestation
Warehousing Credit and Security Agreement (Shipped Mortgage Loans)
(the
"Agreements) dated the date hereof between the Company and the Lender,
as the
same may be amended or supplemented from time to time, and is entitled
to the
benefits thereof. Reference is hereby made to the Agreement
(which is
incorporated herein by reference as fully and with the same effect as
if set
forth herein at length) for a description of the Collateral, a statement
of the
covenants and agreements, a statement of the rights and remedies and
securities
afforded thereby and other matters contained therein. Capitalized terms
used
herein, unless otherwise defined herein, shall have the meanings given
them in
the Agreement.
This Note may be prepaid in whole or in part at any time without
premium or
penalty.
Should this Note be placed in the hands of attorneys for collection,
the
Company agrees to pay, in addition to principal and interest, fees and
charges
due under the Agreement, and all costs of collecting this Note,
including
reasonable attorneys' fees and expenses .
The Company hereby waives demand, notice, protest and presentment.
This Note shall be construed and enforced in accordance with the
laws of
the State of Minnesota, without reference to its principles of conflicts of
law.
IN WITNESS WHEREOF, the Company has executed this Note as of the
day and
year first above written.
MONUMENT MORTGAGE, INC.,
a California corporation
By:
--------------------------------------
- ---
Its:
--------------------------------------
- ---
STATE OF California )
) ss
COUNTY OF Contra Costa )
On , before me, a Notary Public personally appeared , the of
MONUMENT
MORTGAGE, INC., a California corporation, personally known to me (or
proved to
me on the basis of satisfactory evidence) to be the person whose
name is
subscribed to the within instrument and acknowledged to me that he/she
executed
the same in his/her authorized capacity, and that by his/her signature
on the
instrument the person, or the entity upon behalf of which the person
acted,
executed the instrument.
WITNESS my hand and official seal.
----------------------------------------
- --
Notary Public
My Commission Expires:
------------------
- --
(SEAL)
<PAGE>
EXHIBIT
B-1
GUARANTY
THIS GUARANTY, made and entered into as of 23 day of March 1995, by
JAMES
W. NOACK (the Guarantor), to RESIDENTIAL FUNDING CORPORATION, a
Delaware
corporation (the blenders), having its principal office at 8400 Normandale
Lake
Boulevard, Suite 600, Minneapolis, Minnesota 55437.
RECITALS
A. MONUMENT MORTGAGE, INC., a California corporation (the
"Company"),
and the Lender have agreed that the Lender may, in its discretion,
from
time to time make loans to the Company (each a "Loan") in up
to the
aggregate principal amount of Ten Million Dollars ($10,000,000) to
finance
the making and purchasing of Mortgage Loans.
B. The Loans will be evidenced by a Promissory Note dated of even
date
herewith from the Company to the Lender, as the same may be
amended,
supplemented or otherwise modified from time to time, including any
other
instruments executed and delivered in renewal, extension,
rearrangement or
otherwise in replacement of such Promissory Note (the "Note") and
by a
Gestation Warehousing Credit and Security Agreement of even date
herewith,
as the same may be amended, supplemented or otherwise modified from
time to
time, including any other instruments executed and delivered in
renewal,
extension, rearrangement or otherwise in replacement of such agreement
(the
"Agreements).
C. The Guarantor is a shareholder and the President of the
Company and
will derive benefit from the Loans.
D. In order to induce the Lender to make Loans under the
Agreement, to
accept the Note and the Agreement, and as additional security for
Loans
under the Agreement, the Guarantor has agreed to give this Guaranty.
E. The Lender has refused to make Loans under the Agreement
unless
this Guaranty is executed by the Guarantor and delivered to Lender.
NOW, THEREFORE, in consideration of the recitals and other
good and
valuable consideration, the receipt and sufficiency of which is
hereby
acknowledged, the Guarantor hereby covenants and agrees with the
Lender as
follows:
1. Unless otherwise defined herein, all capitalized terms used herein
shall
have the meanings ascribed to such terms under the Agreement.
2. The Note and the Agreement are hereby made a part of this
Guaranty by
reference thereto with the same force and effect as if fully set forth
herein
and all representations and warranties made by the Company therein are,
to the
best of Guarantor's knowledge, true and correct.
3. The Guarantor hereby irrevocably, unconditionally and
absolutely
guarantees to Lender the due and prompt payment, and not just
the
collectibility, of the principal of, and interest and late charges and all
other
indebtedness, if any, on the Note when due, whether at maturity, by
acceleration
or otherwise all at the times and places and at the rates described
in, and
otherwise according to the terms of the Note and the Agreement, whether
now
existing or hereafter created or arising.
4. The Guarantor further hereby irrevocably, unconditionally and
absolutely
guarantees to Lender the due and prompt performance by the Company
of all
duties, agreements and obligations of the Company contained in the Note
and the
Agreement, and the due and prompt payment of all costs incurred,
including
attorneys' fees, in enforcing the payment and performance of the Note
and the
Agreement and this Guaranty (the payment and performance of the items set
forth
in Paragraphs 2 and 3 of this Guaranty are collectively referred to
as the
"Guaranteed Debt").
5. For the purposes of this Guaranty and notwithstanding anything
to the
contrary contained herein or in any of the Loan Documents, the
Guarantors
liability for payment of the Guaranteed Debt shall be limited to the sum
of (a)
Five Million Dollars ($5,000,000), (b) interest on such amount from the
date
demanded until the date paid at the highest rate applicable to any
of the
Guaranteed Obligations under the Agreement, and (c) all costs and
expenses
incurred by the Lender (including reasonable attorneys' fees) in enforcing
this
Guaranty, which amount may be comprised of any portion of the Guaranteed
Debt,
to be determined at the sole discretion of the Lender.
6. In the event the Company shall at any time fail to pay the
Lender any
principal of or interest on or other sums constituting any Guaranteed Debt
when
due, whether by acceleration or otherwise, the Guarantor promises to pay
such
amount to the Lender forthwith, together with all collection costs and
expenses,
including reasonable attorneys' fees.
7. Upon occurrence of any Event of Default, all Guaranteed Debt
shall at
the option of the Lender immediately become due and payable, and in any
such
event the Guarantor authorizes the Lender, without notice or demand, to
apply
any property, balances, credits, accounts or moneys of the Guarantor then
in the
possession of Lender, or standing to the credit of the Guarantor, to the
payment
of such Guaranteed Debt.
8. The Guarantor does hereby (a) agree to any modifications of any
terms or
conditions of any Guaranteed Debt and/or to any extensions or renewals of
time
of payment or performance by the Company; that it shall not be necessary
for the
Lender to resort to legal remedies against the Company before
proceeding
hereunder, nor to take any action against any other person obligated
(an
"Obligor") for payment or performance of the Guaranteed Debt or
against any
Collateral for the Guaranteed Debt before proceeding against the Guarantor;
and
that no release of any other guarantor, whether by operation of law or
by any
act of the Lender, with or without notice to the Guarantor, shall
release the
Guarantor; (b) waive notice of demand, dishonor, notice of dishonor,
protest,
and notice of protest and waive to the extent permitted by law, all
benefit of
valuation, appraisement, and exemptions under the laws of the State of
Minnesota
or any other state or territory of the United States; and (c) agree,
if the
Guaranteed Debt in not paid in accordance with the terms thereof, to
pay, in
addition to all principal and interest due, all costs of collection
including
reasonable attorneys' fees.
9. The obligations of the Guarantor hereunder shall be primary,
absolute
and unconditional, and shall remain in full force and effect without
regard to,
and shall not be impaired or affected by: (a) the genuineness,
validity,
regularity, enforceability, amendment or change in the Agreement or the
Note, or
any change in or extension of the manner, place or terms of payment of,
all or
any portion of the Guaranteed Debt; (b) the taking or failure to take any
action
to enforce the Agreement or the Note, or the exercise or failure to
exercise any
remedy, power or privilege contained therein or available at law or
otherwise,
or the waiver by the Lender of any provisions of the Agreement or the
Note; (c)
any impairment, modification, change, release or 1 imitation in any
manner of
the liability of the Company or its estate in bankruptcy, or of any
remedy for
the enforcement of the Company's liability, resulting from the operation
of any
present or future provision of the bankruptcy laws or any other
statute or
regulation, or the dissolution, bankruptcy, insolvency, or reorganization
of the
Company; (d) the merger or consolidation of the Company, or any sale or
transfer
by the Company of all or part of its assets or property; te) any
claim the
Guarantor may have against any other Obligor, including any
claim of
contribution; (f) the release, in whole or in part, of the Guarantor
or any
other guarantor (if more than one), the Company or any other Obligor;
(g) any
other action or circumstance which (with or without notice to or
knowledge of
the Guarantor) may or might in any manner or to any extent vary the risks
of the
Guarantor hereunder or otherwise constitute a legal or equitable
discharge or
defense, it being understood and agreed by the Guarantor that the
obligations
under this Guaranty shall not be discharged except by the full payment
and
performance of the Guaranteed Debt.
10. The Lender shall have the right to determine how, when and
what
application of payments and credits, if any, whether derived from the
Company or
from any other source, shall be made on the Guaranteed Debt and any
other
indebtedness owed by the Company and/or any other Obligor to the Lender.
11. The obligations of the Guarantor hereunder shall continue
to be
effective, or be automatically reinstated, as the cane may be, if at any
time
the performance or the payment, as the case may be, in whole or in part,
of any
of the Guaranteed Debt is rescinded or must otherwise be restored or
returned by
the Lender (as a preference, fraudulent conveyance or otherwise)
upon the
insolvency, bankruptcy, dissolution, liquidation or reorganization of
the
Company, the Guarantor or any other person or upon or as a result
of the
appointment of a custodian, receiver, trustee or other officer with
similar
powers with respect to the Company, the Guarantor or any other person,
or any
substantial part of its property, or otherwise, all as though such
payments had
not been made. If an Event of Default shall at any time have occurred
and be
continuing or shall exist and declaration of default or acceleration
under or
with respect to this Guaranty or any Guaranteed Debt shall at such
time be
prevented by reason of the pendency against the Guarantor or the Company
or any
other person of a case or proceeding under a bankruptcy or insolvency
law, the
Guarantor agrees that, for purposes of this Guaranty and its
obligations
hereunder, this Guaranty and such obligations shall be deemed to have
been
declared in default or accelerated with the same effect as if this
Guaranty and
such obligations had been declared in default and accelerated in accordance
with
their respective terms and the Guarantor shall forthwith perform or pay,
as the
case may be, as required hereunder in accordance with the terms
hereunder
without further notice or demand.
12. The Guarantor hereby irrevocably waives any claim or other rights
that
he may now or hereafter acquire against the Company that arises
from the
existence, payment, performance or enforcement of the Guarantor's
obligation"
hereunder, including any right of subrogation, reimbursement,
exoneration or
indemnification, any right to participate in any claim or remedy of the
Lender
against the Company or any collateral that the Lender now has or
hereafter
acquires, whether or not such claim, remedy or right arises in equity or
under
contract, statute or common law, including the right to take or receive
from the
Company directly or indirectly, in cash or other property or by set-off
or in
any manner, payment or security on account of such claim or other rights
until
the Guaranteed Debt shall have been paid and performed in full. If any
amount
shall be paid to the Guarantor in violation of the preceding sentence,
such
amount shall be deemed to have been paid to the Guarantor for the
benefit of,
and held in trust for, the Lender and shall forthwith be paid to the
Lender to
be credited and applied to the Guaranteed Debt, whether matured or
unmatured.
The Guarantor hereby specifically acknowledges that any subrogation rights
which
he may have against the Company or any collateral that the Lender now
has or
hereafter acquires may be destroyed by a nonjudicial foreclosure of
the
collateral. This may give the Guarantor a defense to a deficiency
judgment
against the Guarantor. The Guarantor hereby irrevocably waives such
defense. The
Guarantor acknowledges that he will receive direct and indirect benefits
from
the arrangements contemplated by the Agreement and the Note and that the
waivers
set forth in this Section are knowingly made in contemplation of such
benefits.
13. The Guarantor waives any and all benefits available to
sureties and
creditors which might otherwise be available to the Guarantor under
Section
2809, 2810, 2819, 2839, 2845, 2849, 2850, 2899 and 3433 of the California
Code
of Civil Procedure, as amended or remodified from time to time.
Additionally,
the Guarantor waives the right to require the Lender to comply
with the
provisions of Section 9504 of the California Commercial Code.
14. No postponement or delay on the part of the Lender in the
enforcement
of any right hereunder shall constitute a waiver of such right and all
rights of
the Lender hereunder shall be cumulative and not alternative and shall
be in
addition to any other rights granted to the Lender in any other agreement
or by
law.
15. If any provision hereof shall be or shall be declared to be
illegal or
unenforceable in any respect, such illegal or unenforceable provision
shall be
and become absolutely null and void and of no force and effect as though
such
provision were not in fact set forth herein, but all other covenants,
terms,
conditions and provisions hereof shall nevertheless continue to be
valid and
enforceable and this Guaranty shall be so construed.
16. This Guaranty shall be governed in all respects by the laws
of the
State of Minnesota, other than its principles of conflicts of law, and
shall be
binding upon and shall inure to the benefit of the parties hereto and
their
respective heirs, executors, administrators, personal
representatives,
successors and assigns.
17. The Guarantor does hereby agree that any action or proceeding
under
this Guaranty may be commenced against the Guarantor in any court of
competent
jurisdiction within the State of Minnesota, by service of process
upon the
Guarantor by first class registered or certified mail, return receipt
requested,
addressed to the Guarantor at the Guarantors address last known to the
Lender.
The Guarantor agrees that any such suit, action or proceeding arising out
of or
relating to this Guaranty may be instituted in the District Court of
Hennepin
County, Minnesota or in the United States District Court for the
District of
Minnesota, at the option of the Lender; and the Guarantor hereby
waives any
objection to the venue of any such suit, action or proceeding. Nothing
herein
shall affect the right of the Lender to accomplish service of process
in any
other manner permitted by law or to commence legal proceedings or
otherwise
proceed against the Guarantor in any other jurisdiction or court.
18. The Guarantor hereby represents and warrants to the Lender as
follows:
(a) Financial Statements. Any financial statements and data
which
have heretofore been given to the Lender with respect to the
Guarantor
fairly and accurately represent the financial condition of
the
Guarantor as of the date hereof, and, since the date thereof,
there
has been no material adverse change in the financial condition
of the
Guarantor. The Guarantor shall promptly deliver to the Lender,
or the
Company in time for the Company to deliver the same to the
Lender, all
financial statements of the Guarantor required by the Agreement.
(b) Address. The address of the Guarantor as specified
below is
true and correct and until the Lender shall have actually
received a
written notice specifying a change of address and
specifically
requesting that notices be issued to such changed address, the
Lender
may rely on the address stated as being accurate.
(c) No Default. The Guarantor is not in default with
respect to
any order, writ, injunction, decree or demand of any court or
other
governmental authority, in the payment of any material debt
for
borrowed money or under any material agreement evidencing or
securing
any such debt.
(d) Solvent. The Guarantor is now solvent, and no
bankruptcy or
insolvency proceedings are pending or to the best of the
Guarantors
knowledge contemplated by or against the Guarantor.
(e) Relationship to the Company. The value of the
consideration
received and to be received by the Guarantor is reasonably
worth at
least as much as the liability and obligation of the
Guarantor
incurred or arising under this Guaranty. The Guarantor has had
full
and complete access to the Agreement and the Note and all other
loan
documents relating to the Obligations and the Guaranteed
Debt, has
reviewed them and is fully aware of the meaning and effect of
their
contents. The Guarantor is fully informed of all circumstances
which
bear upon the risks of executing this Guaranty and which a
diligent
inquiry would reveal. The Guarantor has adequate means to obtain
from
the Company on a continuing basis information concerning the
Company's
financial condition, and is not depending on the Lender to
provide
such information, now or in the future. The Guarantor agrees
that the
Lender shall not have any obligation to advise or notify the
Guarantor
or to provide the Guarantor with any data or information.
The
execution and delivery of this Guaranty is not a condition
precedent
(and the Lender has not in any way implied that the execution of
this
Guaranty is a condition precedent) to the Lender's making,
extending
or modifying any loan to the Guarantor or to any other
financial
accommodation to or for the Guarantor.
(f) Litigation. There is not now pending against or
affecting the
Guarantor, nor to the knowledge of the Guarantor is there
threatened,
any action, suit or proceeding at law or in equity or by or
before any
administrative agency that, if adversely determined, would
materially
impair or affect the financial condition of the Guarantor.
(g) Taxes. The Guarantor has filed all federal,
state,
provincial, county, municipal and other income tax returns
required to
have been filed by the Guarantor and has paid all taxes that
have
become due pursuant to such returns or pursuant to any
assessments
received by the Guarantor, and the Guarantor does not know
of any
basis for any material additional assessment against it in
respect of
such taxes.
19. The promises and agreements herein and in any other guaranties
of the
Agreement and the Note shall be construed to be and are hereby declared
to be
joint and several in each and every particular and shall be fully binding
upon
and enforceable against any or all of such parties or persons
guaranteeing the
Agreement and the Note herein or in a separate guaranty, and neither the
death
nor the release of any person or party to this Guaranty or any other
guaranties
of the Agreement and the Note shall affect or release the joint and
several
liability of any other person or party to this Guaranty or any other
guaranties
of the Agreement and the Note. 20. THE GUARANTOR AND THE LENDER
HEREBY (i)
COVENANT AND AGREE NOT TO ELECT A TRIAL BY JURY OF ANY ISSUE TRIABLE OF
RIGHT BY
A JURY, AND (ii) WAIVE ANY RIGHT TO TRIAL BY JURY FULLY TO THE EXTENT
THAT ANY
SUCH RIGHT SHALL NOW OR HEREAFTER EXIST. THIS WAIVER OF RIGHT TO TRIAL BY
JURY
IS SEPARATELY GIVEN, KNOWINGLY AND VOLUNTARILY, BY THE GUARANTOR AND,
PURSUANT
TO THE AGREEMENT, BY THE LENDER, AND THIS WAIVER IS INTENDED TO
ENCOMPASS
INDIVIDUALLY EACH INSTANCE AND EACH ISSUE AS TO WHICH THE RIGHT OF A JURY
TRIAL
WOULD OTHERWISE ACCRUE. THE LENDER IS HEREBY AUTHORIZED AND REQUESTED TO
SUBMIT
THIS WAIVER TO ANY COURT HAVING JURISDICTION OVER THE SUBJECT MATTER
AND THE
PARTIES HERETO, SO AS TO SERVE AS CONCLUSIVE EVIDENCE OF THE FOREGOING
WAIVER OF
THE RIGHT TO JURY TRIAL. FURTHER, THE GUARANTOR HEREBY CERTIFIES
THAT NO
REPRESENTATIVE OR AGENT OF THE LENDER INCLUDING THE LENDER'S COUNSEL
HAS
REPRESENTED, EXPRESSLY OR OTHERWISE, TO ANY OF THE UNDERSIGNED THAT THE
LENDER
WILL NOT SEEK TO ENFORCE THIS WAIVER OF RIGHT TO JURY TRIAL PROVISION.
IN WITNESS WHEREOF, the Guarantor has executed this Guaranty
with the
intent to be legally bound as of the date first above written.
---------------------------------------
JAMES W. NOACK
Address:
-------------------------------
---------------------------------------
Telephone No.
-----------------------------
STATE OF )
) ss
COUNTY OF )
On , 1995, before me, a Notary Public, personally appeared JAMES W.
NOACK,
personally known to me (or proved to me on the basis of satisfactory
evidence)
to be the person whose name is subscribed to the within instrument
and
acknowledged to me that he executed the same in his authorized capacity,
and
that by his signature on the instrument the person, or the entity upon
behalf of
which the person acted, executed the instrument.
WITNESS my hand and official seal.
---------------------------------
- ---
Notary Public
My Commission Expires:
------------
- ---
(SEAL)
<PAGE>
EXHIBIT "B"
CERTIFICATE AS TO INCUMBENCY
TO: RESIDENTIAL FUNDING CORPORATION
I hereby certify to you that I am the duly elected and qualified
Secretary
of MONUMENT MORTGAGE, INC., a California corporation ("Company"), and
that, as
such, I am authorized to execute this Certificate on behalf of the
Company. I
further certify that the persons named below are duly elected,
qualified and
acting officers of the Company, holding on the date hereof the respective
titles
set forth opposite their respective names, and that the respective
signatures
set forth opposite their names are their true and genuine signatures:
Name Title Signature
SEE EXHIBIT "E" ON FILE WITH MONUMENT:3/17/95.
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<PAGE>
EXHIBIT B-2
GUARANTY
THIS GUARANTY, made and entered into as of 23 day of March 1995, by
JAMES
A. UMPHRYES (the "Guarantor"), to RESIDENTIAL FUNDING CORPORATION, a
Delaware
corporation (the "Lender"), having its principal office at 8400 Normandale
Lake
Boulevard, Suite 600, Minneapolis, Minnesota 55437.
RECITALS
A. MONUMENT MORTGAGE, INC., a California corporation (the
"Company"), and
the Lender have agreed that the Lender may, in its discretion,
from
time to time make loans to the Company (each a Loan n ) in up
to the
aggregate principal amount of Ten Million Dollars
($10,000,000) to
finance the making and purchasing of Mortgage Loans.
B. The Loans will be evidenced by a Promissory Note dated of even
date
herewith from the Company to the Lender, as the same may be
amended,
supplemented or otherwise modified from time to time,
including any
other instruments executed and delivered in renewal,
extension,
rearrangement or otherwise in replacement of such Promissory Note
(the
"Note") and by a Gestation Warehousing Credit and Security
Agreement
of even date herewith, as the same may be amended,
supplemented or
otherwise modified from time to time, including any other
instruments
executed and delivered in renewal, extension,
rearrangement or
otherwise in replacement of such agreement (the "Agreement").
C. The Guarantor is a shareholder and the Executive Vice President
of the
Company and will derive benefit from the Loans.
D. In order to induce the Lender to make Loans under the
Agreement, to
accept the Note and the Agreement, and as additional security
for
Loans under the Agreement, the Guarantor has agreed to give
this
Guaranty.
E. The Lender has refused to make Loans under the Agreement unless
this
Guaranty is executed by the Guarantor and delivered to Lender.
NOW, THEREFORE, in consideration of the recitals and other
good and
valuable consideration, the receipt and sufficiency of which is
hereby
acknowledged, the Guarantor hereby covenants and agrees with the
Lender as
follows:
1. Unless otherwise defined herein, all capitalized terms used herein
shall
have the meanings ascribed to such terms under the Agreement.
2. The Note and the Agreement are hereby made a part of this
Guaranty by
reference thereto with the same force and effect as if fully set forth
herein
and all representations and warranties made by the Company therein are,
to the
best of Guarantor's knowledge, true and correct.
3. The Guarantor hereby irrevocably, unconditionally and
absolutely
guarantees to Lender the due and prompt payment, and not just
the
collectibility, of the principal of, and interest and late charges and all
other
indebtedness, if any, on the Note when due, whether at maturity, by
acceleration
or otherwise all at the times and places and at the rates described
in, and
otherwise according to the terms of the Note and the Agreement, whether
now
existing or hereafter created or arising.
4. The Guarantor further hereby irrevocably, unconditionally and
absolutely
guarantees to Lender the due and prompt performance by the Company
of all
duties, agreements and obligations of the Company contained in the Note
and the
Agreement, and the due and prompt payment of all costs incurred,
including
attorneys' fees, in enforcing the payment and performance of the Note
and the
Agreement and this Guaranty (the payment and performance of the items set
forth
in Paragraphs 2 and 3 of this Guaranty are collectively referred to
as the
Guaranteed Debts).
5. For the purposes of this Guaranty and notwithstanding anything
to the
contrary contained herein or in any of the Loan Documents, the
Guarantors
liability for payment of the Guaranteed Debt shall be limited to the sum
of (a)
Five Million Dollars ($5,000,000), (b) interest on such amount from the
date
demanded until the date paid at the highest rate applicable to any
of the
Guaranteed Obligations under the Agreement, and (c) all costs and
expenses
incurred by the Lender (including reasonable attorneys' fees) in enforcing
this
Guaranty, which amount may be comprised of any portion of the Guaranteed
Debt,
to be determined at the sole discretion of the Lender.
6. In the event the Company shall at any time fail to pay the
Lender any
principal of or interest on or other sums constituting any Guaranteed Debt
when
due, whether by acceleration or otherwise, the Guarantor promises to pay
such
amount to the Lender forthwith, together with all collection costs and
expenses,
including reasonable attorneys' fees.
7. Upon occurrence of any Event of Default, all Guaranteed Debt
shall at
the option of the Lender immediately become due and payable, and in any
such
event the Guarantor authorizes the Lender, without notice or demand, to
apply
any property, balances, credits, accounts or moneys of the Guarantor then
in the
possession of Lender, or standing to the credit of the Guarantor, to the
payment
of such Guaranteed Debt.
8. The Guarantor does hereby (a) agree to any modifications of any
terms or
conditions of any Guaranteed Debt and/or to any extensions or renewals of
time
of payment or performance by the Company; that it shall not be necessary
for the
Lender to resort to legal remedies against the Company before
proceeding
hereunder, nor to take any action against any other person obligated
(an
"Obligor") for payment or performance of the Guaranteed Debt or
against any
Collateral for the Guaranteed Debt before proceeding against the Guarantor;
and
that no release of any other guarantor, whether by operation of law or
by any
act of the Lender, with or without notice to the Guarantor, shall
release the
Guarantor; (b) waive notice of demand, dishonor, notice of dishonor,
protest,
and notice of protest and waive to the extent permitted by law, all
benefit of
valuation, appraisement, and exemptions under the laws of the State of
Minnesota
or any other state or territory of the United States; and (c) agree,
if the
Guaranteed Debt is not paid in accordance with the terms thereof, to
pay, in
addition to all principal and interest due, all costs of collection
including
reasonable attorneys' fees.
9. The obligations of the Guarantor hereunder shall be primary,
absolute
and unconditional, and shall remain in full force and effect without
regard to,
and shall not be impaired or affected by: (a) the genuineness,
validity,
regularity, enforceability, amendment or change in the Agreement or the
Note, or
any change in or extension of the manner, place or terms of payment of,
all or
any portion of the Guaranteed Debt; (b) the taking or failure to take any
action
to enforce the Agreement or the Note, or the exercise or failure to
exercise any
remedy, power or privilege contained therein or available at law or
otherwise,
or the waiver by the Lender of any provisions of the Agreement or the
Note; (c)
any impairment, modification, change, release or limitation in any manner
of the
liability of the Company or its estate in bankruptcy, or of any remedy
for the
enforcement of the Company's liability, resulting from the operation
of any
present or future provision of the bankruptcy laws or any other
statute or
regulation, or the dissolution, bankruptcy, insolvency, or reorganization
of the
Company; (d) the merger or consolidation of the Company, or any sale or
transfer
by the Company of all or part of its assets or property; (e) any
claim the
Guarantor may have against any other Obligor, including any
claim of
contribution; (f) the release, in whole or in part, of the Guarantor
or any
other guarantor (if more than one), the Company or any other Obligor;
(g) any
other action or circumstance which (with or without notice to or
knowledge of
the Guarantor) may or might in any manner or to any extent vary the risks
of the
Guarantor hereunder or otherwise constitute a legal or equitable
discharge or
defense, it being understood and agreed by the Guarantor that the
obligations
under this Guaranty shall not be discharged except by the full payment
and
performance of the Guaranteed Debt.
10. The Lender shall have the right to determine how, when and
what
application of payments and credits, if any, whether derived from the
Company or
from any other source, shall be made on the Guaranteed Debt and any
other
indebtedness owed by the Company and/or any other Obligor to the Lender.
11. The obligations of the Guarantor hereunder shall continue
to be
effective, or be automatically reinstated, as the cane may be, if at any
time
the performance or the payment, as the case may be, in whole or in part,
of any
of the Guaranteed Debt is rescinded or must otherwise be restored or
returned by
the Lender (as a preference, fraudulent conveyance or otherwise)
upon the
insolvency, bankruptcy, dissolution, liquidation or reorganization of
the
Company, the Guarantor or any other person or upon or as a result
of the
appointment of a custodian, receiver, trustee or other officer with
similar
powers with respect to the Company, the Guarantor or any other person,
or any
substantial part of its property, or otherwise, all as though such
payments had
not been made. If an Event of Default shall at any time have occurred
and be
continuing or shall exist and declaration of default or acceleration
under or
with respect to this Guaranty or any Guaranteed Debt shall at such
time be
prevented by reason of the pendency against the Guarantor or the Company
or any
other person of a case or proceeding under a bankruptcy or insolvency
law, the
Guarantor agrees that, for purposes of this Guaranty and its
obligations
hereunder, this Guaranty and such obligations shall be deemed to have
been
declared in default or accelerated with the same effect as if this
Guaranty and
such obligations had been declared in default and accelerated in accordance
with
their respective terms and the Guarantor shall forthwith perform or pay,
as the
case may be, as required hereunder in accordance with the terms
hereunder
without further notice or demand.
12. The Guarantor hereby irrevocably waives any claim or other rights
that
he may now or hereafter acquire against the Company that arises
from the
existence, payment, performance or enforcement of the Guarantor' g
obligations
hereunder, including any right of subrogation, reimbursement,
exoneration or
indemnification, any right to participate in any claim or remedy of the
Lender
against the Company or any collateral that the Lender now has or
hereafter
acquires, whether or not such claim, remedy or right arises in equity or
under
contract, statute or common law, including the right to take or receive
from the
Company directly or indirectly, in cash or other property or by set-off
or in
any manner, payment or security on account of such claim or other rights
until
the Guaranteed Debt shall have been paid and performed in full. If any
amount
shall be paid to the Guarantor in violation of the preceding sentence,
such
amount shall be deemed to have been paid to the Guarantor for the
benefit of,
and held in trust for, the Lender and shall forthwith be paid to the
Lender to
be credited and applied to the Guaranteed Debt, whether matured or
unmatured.
The Guarantor hereby specifically acknowledges that any subrogation rights
which
he may have against the Company or any collateral that the Lender now
has or
hereafter acquires may be destroyed by a nonjudicial foreclosure of
the
collateral. This may give the Guarantor a defense to a deficiency
judgment
against the Guarantor. The Guarantor hereby irrevocably waives such
defense. The
Guarantor acknowledges that he will receive direct and indirect benefits
from
the arrangements contemplated by the Agreement and the Note and that the
waivers
set forth in this Section are knowingly made in contemplation of such
benefits.
13. The Guarantor waives any and all benefits available to
sureties and
creditors which might otherwise be available to the Guarantor under
Section
2809, 2810, 2819, 2839, 2845, 2849, 2850, 2899 and 3433 of the California
Code
of Civil Procedure, as amended or remodified from time to time.
Additionally,
the Guarantor waives the right to require the Lender to comply
with the
provisions of Section 9504 of the California Commercial Code.
14. No postponement or delay on the part of the Lender in the
enforcement
of any right hereunder shall constitute a waiver of such right and all
rights of
the Lender hereunder shall be cumulative and not alternative and shall
be in
addition to any other rights granted to the Lender in any other agreement
or by
law.
15. If any provision hereof shall be or shall be declared to be
illegal or
unenforceable in any respect, such illegal or unenforceable provision
shall be
and become absolutely null and void and of no force and effect as though
such
provision were not in fact set forth herein, but all other covenants,
terms,
conditions and provisions hereof shall nevertheless continue to be
valid and
enforceable and this Guaranty shall be so construed.
16. This Guaranty shall be governed in all respects by the laws
of the
State of Minnesota, other than its principles of conflicts of law, and
shall be
binding upon and shall inure to the benefit of the parties hereto and
their
respective heirs, executors, administrators, personal
representatives,
successors and assigns .
17. The Guarantor does hereby agree that any action or proceeding
under
this Guaranty may be commenced against the Guarantor in any court of
competent
jurisdiction within the State of Minnesota, by service of process
upon the
Guarantor by first class registered or certified mail, return receipt
requested,
addressed to the Guarantor at the Guarantor's address lest known to the
Lender.
The Guarantor agrees that any such suit, action or proceeding arising out
of or
relating to this Guaranty may be instituted in the District Court of
Hennepin
County, Minnesota or in the United States District Court for the
District of
Minnesota, at the option of the Lender; and the Guarantor hereby
waives any
objection to the venue of any such suit, action or proceeding. Nothing
herein
shall affect the right of the Lender to accomplish service of process
in any
other manner permitted by law or to commence legal proceedings or
otherwise
proceed against the Guarantor in any other jurisdiction or court.
18. The Guarantor hereby represents and warrants to the Lender as
follows:
(a) Financial Statements. Any financial statements and data which
have
heretofore been given to the Lender with respect to the
Guarantor
fairly and accurately represent the financial condition of
the
Guarantor as of the date hereof, and, since the date thereof,
there
has been no material adverse change in the financial condition
of the
Guarantor. The Guarantor shall promptly deliver to the Lender,
or the
Company in time for the Company to deliver the same to the
Lender, all
financial statements of the Guarantor required by the Agreement.
(b) Address. The address of the Guarantor as specified below is
true and
correct and until the Lender shall have actually received a
written
notice specifying a change of address and specifically requesting
that
notices be issued to such changed address, the Lender may rely
on the
address stated as being accurate.
(c) No Default. The Guarantor is not in default with respect to any
order,
writ, injunction, decree or demand of any court or other
governmental
authority, in the payment of any material debt for borrowed
money or
under any material agreement evidencing or securing any such
debt.
(d) Solvent. The Guarantor is now solvent, and no bankruptcy or
insolvency
proceedings are pending or to the best of the Guarantor's
knowledge
contemplated by or against the Guarantor.
(e) Relationship to the Company. The value of the consideration
received
and to be received by the Guarantor is reasonably worth at
least as
much as the liability and obligation of the Guarantor
incurred or
arising under this Guaranty. The Guarantor has had full and
complete
access to the Agreement and the Note and all other loan
documents
relating to the Obligations and the Guaranteed Debt, hag reviewed
them
and is fully aware of the meaning and effect of their contents.
The
Guarantor is fully informed of all circumstances which bear
upon the
risks of executing this Guaranty and which a diligent inquiry
would
reveal. The Guarantor has adequate means to obtain from the
Company on
a continuing basis information concerning the Company's
financial
condition, and is not depending on the Lender to provide
such
information, now or in the future. The Guarantor agrees
that the
Lender shall not have any obligation to advise or notify the
Guarantor
or to provide the Guarantor with any data or information.
The
execution and delivery of this Guaranty is not a condition
precedent
(and the Lender has not in any way implied that the execution of
this
Guaranty is a condition precedent) to the Lender's making,
extending
or modifying any loan to the Guarantor or to any other
financial
accommodation to or for the Guarantor.
(f) Litigation. There is not now pending against or affecting
the
Guarantor, nor to the knowledge of the Guarantor is there
threatened,
any action, suit or proceeding at law or in equity or by or
before any
administrative agency that, if adversely determined, would
materially
impair or affect the financial condition of the Guarantor.
(g) Taxes. The Guarantor hag filed all federal, state, provincial,
county,
municipal and other income tax returns required to have been
filed by
the Guarantor and has paid all taxes that have become due
pursuant to
such returns or pursuant to any assessments received by the
Guarantor,
and the Guarantor does not know of any basis for any
material
additional assessment against it in respect of such taxes.
19. The promises and agreements herein and in any other guaranties
of the
Agreement and the Note shall be construed to be and are hereby declared
to be
joint and several in each and every particular and shall be fully binding
upon
and enforceable against any or all of such parties or persons
guaranteeing the
Agreement and the Note herein or in a separate guaranty, and neither the
death
nor the release of any person or party to this Guaranty or any other
guaranties
of the Agreement and the Note shall affect or release the joint and
several
liability of any other person or party to this Guaranty or any other
guaranties
of the Agreement and the Note. 20. THE GUARANTOR AND THE LENDER
HEREBY (i)
COVENANT AND AGREE NOT TO ELECT A TRIAL BY JURY OF ANY ISSUE TRIABLE OF
RIGHT BY
A JURY, AND (ii) WAIVE ANY RIGHT TO TRIAL BY JURY FULLY TO THE EXTENT
THAT ANY
SUCH RIGHT SHALL NOW OR HEREAFTER EXIST. THIS WAIVER OF RIGHT TO TRIAL BY
JURY
IS SEPARATELY GIVEN, KNOWINGLY AND VOLUNTARILY, BY THE GUARANTOR AND,
PURSUANT
TO THE AGREEMENT, BY THE LENDER, AND THIS WAIVER IS INTENDED TO
ENCOMPASS
INDIVIDUALLY EACH INSTANCE AND EACH ISSUE AS TO WHICH THE RIGHT OF A JURY
TRIAL
WOULD OTHERWISE ACCRUE. THE LENDER IS HEREBY AUTHORIZED AND REQUESTED TO
SUBMIT
THIS WAIVER TO ANY COURT HAVING JURISDICTION OVER THE SUBJECT MATTER
AND THE
PARTIES HERETO, SO AS TO SERVE AS CONCLUSIVE EVIDENCE OF THE FOREGOING
WAIVER OF
THE RIGHT TO JURY TRIAL. FURTHER, THE GUARANTOR HEREBY CERTIFIES
THAT NO
REPRESENTATIVE OR AGENT OF THE LENDER INCLUDING THE LENDER'S COUNSEL
HAS
REPRESENTED, EXPRESSLY OR OTHERWISE, TO ANY OF THE UNDERSIGNED THAT THE
LENDER
WILL NOT SEEK TO ENFORCE THIS WAIVER OF RIGHT TO JURY TRIAL PROVISION.
IN WITNESS WHEREOF, the Guarantor has executed this Guaranty
with the
intent to be legally bound as of the date first above written.
-----------------------------------
- ---
JAMES A. UMPHRYES
Address
-----------------------------------
- ---
-----------------------------------
- ---
Telephone No.:
-------------------------
- ---
STATE OF )
) ss
COUNTY OF )
On , 1995, before me, a Notary Public, personally appeared
JAMES A.
HUMPHRYES, personally known to me (or proved to me on the basis of
satisfactory
evidence) to be the person whose name is subscribed to the within
instrument and
acknowledged to me that he executed the same in his authorized capacity,
and
that by his signature on the instrument the person, or the entity upon
behalf of
which the person acted, executed the instrument.
WITNESS my hand and official seal.
----------------------------------------
- ---
Notary Public
My Commission Expires:
--------------------
- ---
(SEAL)
<PAGE>
EXHIBIT C
ADVANCE REQUEST FOR ELIGIBLE MORTGAGE POOL
Reference is hereby made to that Gestation Warehousing Credit and
Security
Agreement (Pooled Mortgage Loans), dated as of March , 1995 (the
"Agreement"),
by and between MONUMENT MORTGAGE, INC., a California corporation (the
"Company")
and RESIDENTIAL FUNDING CORPORATION, a Delaware corporation (the
"Lender").
Capitalized terms which are used herein and are not otherwise defined
herein
shall have the meanings assigned to them in the Agreement.
The Company hereby requests that the Lender make an Advance to the
Company
for the Eligible Mortgage Pool comprise of the Pledged Mortgages listed
on the
attached Schedule of Mortgage Loans and against which a Mortgage-backed
Security
will be issued. Receipt of the following information is a prerequisite to
such
Advance.
Requested Advance amount for the Eligible Mortgage Pool (99% of
Committed
Purchase Price (in dollars)" as set forth below: $
-------------------------
- ---
Identity of Investor:
--------------------------------------------------
- ---
Information Concerning Eligible Mortgage Pool:
Issuer of Mortgage-backed Security:
------------------------------
- ---
Pool Number:
------------------------------------------------------
- ---
Scheduled delivery and settlement date of Mortgage-
backed Security:
--------------------------------------------------
- ---
Total initial principal amount of Pledged Mortgages comprising
Eligible Mortgage Pool:
$
-------------------------------------------------------
- ---
Committed Purchase Price (as a percentage):
-----------------------
- --%
Committed Purchase Price (in dollars): $
-------------------------
- ---
Identity of Approved Custodian:
----------------------------------------
- ---
Attached hereto is a true and correct Schedule of Mortgage Loans
included
in the Eligible Mortgage Pool (For GNMA: Schedule of Pooled Mortgages HUD
Form
11706; For FNMA: Schedule of Mortgages FNMA Form 2005 or 2025; For
FHLMC:
Security Settlement Information and Delivery Authorization FHLMC Form 939).
Such
Mortgage Loans will constitute the Pledged Mortgages for such Advance;
the
Eligible Mortgage Pool identified above will constitute the Pledged
Securities;
and the Purchase Commitment referred to above will be included in the
Collateral
for such Advance.
Dated:
----------------------
MONUMENT MORTGAGE, INC.,
a California corporation
By:
------------------------------------------
Its:
------------------------------------------
Attachment: Schedule of Mortgage Loans
<PAGE>
SCHEDULE OF MORTGAGE LOANS
<PAGE>
EXHIBIT D
FORM FOR PENDING BANK
LETTER AGREEMENT
(Letterhead of the Company)
March ___,
1995
The First National Bank of Chicago
One North State Street
Chicago, IL 60602
Gentlemen:
The undersigned, MONUMENT MORTGAGE, INC. (the "Companyn), hereby
authorizes
The First National Bank of Chicago (the Funding Bank n) to permit
Residential
Funding Corporation (the "Lender") to debit and access information
on the
Company's accounts held by the Funding Bank as outlined below. The
Company
hereby directs and authorizes the Funding Bank to follow the directions
of the
Lender in debiting such accounts.
The Company authorizes the Lender to access account information from
time
to time for the Company's operating account no. (the "Operating
Accounts) for
the purpose of verifying balance information. In addition, the Company
requests
that the Lender, and the Company hereby authorizes the Lender, to
debit the
Operating Account to the extent necessary to cover (a) wires to be
initiated by
the Lender in accordance with the Company's instructions as set forth
in the
Request for Advance for the purposes permitted in the Warehousing
Credit and
Security Agreement (Agreements) by and between the Company and the
Lender; and
(b) for amounts due and owing to the Lender, including but not
limited to
principal, interest and fees.
Upon the termination or expiration of the Agreement, the Company
hereby
authorizes the Lender to close the Operating Account and any other
accounts
which have been established by the Company and the Lender to
facilitate
transaction" under the Agreement, and the Company directs the Funding
Bank to
follow the directions of the Lender in closing such accounts. The Company
hereby
directs and authorizes the Funding Bank to follow all of the
foregoing
instructions of the Lender.
Very truly yours,
MONUMENT MORTGAGE, INC.,
a California corporation
By:
------------------------------------------
Its:
------------------------------------------
<PAGE>
CERTIFICATE OF SECRETARY
OF
MONUMENT MORTGAGE, INC.
I, the undersigned, hereby certify that I am the Secretary of
MONUMENT
MORTGAGE, INC., a California corporation (the Company), and have
knowledge of
the matters contained in this Certificate and hereby certify that:
1. The Articles of Incorporation of the Company and the Bylaws
of the
Company submitted to the Lender in connection with the
Warehousing
Credit and Security Agreement ("Existing Credit Agreement")
dated as
of March 22 , 1995, by and between RESIDENTIAL FUNDING
CORPORATION, a
Delaware corporation (the Blenders), are true and correct
copies of
the current Articles of Incorporation and Bylaws, and have not
been
altered, modified or amended and are still in full force and
effect.
2. The Certificates of Good Standing of the Company and the
Certificate
of the Franchise Tax Board of the State of California for the
Company
submitted to the Lender in connection with the Existing
Credit
Agreement, are true and correct copies of the current
Certificates of
Good Standing and Certificate of the Franchise Tax Board of the
State
of California of the Company, and have not been altered,
modified or
amended and are still in full force and effect.
3. The Company is a corporation duly organized, validly existing
and in
good standing under the laws of the State of California
(the
jurisdiction where it is incorporated) and has complied
with all
certifications, filings and requirements necessary to continue
as a
corporation in the State of California and is qualified to do
business
as a foreign corporation and in good standing in all
jurisdictions
where the conduct of its business makes such qualification
necessary.
4. In connection with a Ten Million Dollar ($10,000,000) single
family
revolving warehouse facility made to the Company by the Lender,
the
Company has the valid power and authority to execute and
deliver to
the Lender the Promissory Note, the Gestation Warehousing
Credit and
Security Agreement (Shipped Mortgage Loans) and such other
security
documents as required by the Lender.
5. The resolutions attached to this Certificate as Exhibit "A" were
duly
adopted either: (a) by unanimous written action of the
Board of
Directors of the Company; or (b) at a meeting of the
Board of
Directors of the Company held on the 8th day of November, 1995
, at
which meeting a quorum was present. I am the keeper of the Minute
Book
of the Company and said resolutions have been entered therein,
have
not been altered, amended, repealed or rescinded, and are now in
full
force and effect.
6. The names of the officers of the Company and any other
persons
authorized to act under the resolutions attached hereto and
their
official signatures are as shown on the Certificate of
Incumbency
attached hereto as Exhibit "B".
IN WITNESS WHEREOF, I have hereunto set my hand and the seal of the
Company
as of this 29th day of November 1995.
----------------------------------------
- --
Secretary
[SEAL]
ACKNOWLEDGED AND AGREED THIS
_____ DAY OF ______________, 1995.
THE FIRST NATIONAL BANK OF CHICAGO
By:
---------------------------------
Its:
---------------------------------
<PAGE>
EXHIBIT "A"
MONUMENT MORTGAGE, INC.
RESOLUTIONS OF BOARD OF DIRECTORS
WHEREAS, MONUMENT MORTGAGE, INC., a California corporation (the
"Company"),
proposes to borrow from RESIDENTIAL FUNDING CORPORATION, a Delaware
corporation
(the "Lender"), a Ten Million Dollar ($10,000,000) single family
revolving
warehouse facility (the "Loan"); and
WHEREAS, to evidence the Loan, the Company proposes to execute and
deliver
the following instruments, each dated as of March ___, 1995, unless
otherwise
indicated (herein collectively referred to as the "Loan Documents"):
(a) A Promissory Note in the principal sum of Ten Million
Dollars
($10,000,000) payable to the order of Lender; and
(b) A Gestation Warehousing Credit and Security Agreement
(Shipped
Mortgage Loans) evidencing the Loan and creating a security
interest
in the Collateral defined therein in favor of the Lender;
copies of which have been presented to the Board of Directors of the
Company; and
WHEREAS, the Board of Directors of the Company have determined that it
will
be in the best interests of the Company for the Company to borrow the Loan.
RESOLVED, that these resolutions are enacted by the Board of
Directors of
the Company on their behalf and on behalf of the Company.
FURTHER RESOLVED, that the Company shall borrow the Loan to be
evidenced
and secured by the Loan Documents.
FURTHER RESOLVED, that the Loan Documents in the form presented
to the
Board of Directors of the Company are hereby approved and copies
thereof are
filed in the records of the Company with these Resolutions.
FURTHER RESOLVED, that any one (insert minimum number required to
sign) of
the following officers of the Company: President, Executive Vice
President,
Senior Vice President, Vice President, Secretary, Assistant Secretary,
Assistant
Vice President (list titles of officers authorized), shall be and
are
authorized, empowered and directed in the name of and on behalf of the
Company,
to execute, acknowledge and deliver the Loan Documents, and each of them,
in the
form approved by the Board of Directors of the Company as aforesaid, with
such
changes therein as may be acceptable to such officers, as conclusively
evidenced
by their execution thereof.
FURTHER RESOLVED, that such officers shall be and are hereby
authorized,
empowered and directed to do and perform each and every act and execute
any and
all documents and instruments in the name of the Company as may be
necessary or
desirable to enable the Company to borrow the Loan and to carry out the
purpose
and intent of the foregoing Resolutions.
FURTHER RESOLVED, that any one (insert minimum number required to
sign) of
the following officers of the Company: President, Executive Vice
President,
Senior Vice President, Vice President, Assistant Vice President,
Secretary,
Assistant Secretary (list titles of officers authorized), shall be
and are
authorized, empowered and directed in the name of and on behalf of the
Company,
to execute, acknowledge and deliver any loan requests, shipping requests,
wire
transfer instructions, assignments, security delivery instructions and
trust
receipts and to endorse notes in the name of the Company, in any form
prescribed
by the Lender.
FURTHER RESOLVED, that these Resolutions shall remain in full
force and
effect and the Lender shall be fully protected in acting thereon until
written
notice of their change or revocation has been duly given to and received
by the
Lender, and the Lender is authorized to accept, and the Secretary of the
Company
shall from time to time provide, signed certificates of the Secretary
setting
forth any change of names of officers and other persons authorized
to act
hereunder on behalf of the Company, which certificates shall become a
part of
these Resolutions.
<PAGE>
GUARANTY
THIS GUARANTY, made and entered into as of 23 day of March 1995, by
JAMES
W. NOACK (the "Guarantor"), to RESIDENTIAL FUNDING CORPORATION, a
Delaware
corporation (the "Lender"), having its principal office at 8400 Normandale
Lake
Boulevard, Suite 600, Minneapolis, Minnesota 55437.
RECITALS
A. MONUMENT MORTGAGE, INC., a California corporation the "Company"),
and
the Lender have agreed that the Lender may, in its discretion,
from
time to time make loans to the Company (each a "Loan") in up
to the
aggregate principal amount of Ten Million Dollars
($10,000,000) to
finance the making and purchasing of Mortgage Loans.
B. The Loans will be evidenced by a Promissory Note dated of even
date
herewith from the Company to the Lender, as the same may be
amended,
supplemented or otherwise modified from time to time,
including any
other instruments executed and delivered in renewal,
extension,
rearrangement or otherwise in replacement of such Promissory Note
(the
"Note") and by a Gestation Warehousing Credit and Security
Agreement
of even date herewith, as the same may be amended,
supplemented or
otherwise modified from time to time, including any other
instruments
executed and delivered in renewal, extension,
rearrangement or
otherwise in replacement of such agreement (the "Agreement").
C. The Guarantor is a shareholder and the President of the
Company and
will derive benefit from the Loans.
D. In order to induce the Lender to make Loans under the
Agreement, to
accept the Note and the Agreement, and as additional security
for
Loans under the Agreement, the Guarantor has agreed to give
this
Guaranty.
E. The Lender has refused to make Loans under the Agreement unless
this
Guaranty is executed by the Guarantor and delivered to Lender.
NOW, THEREFORE, in consideration of the recitals and other
good and
valuable consideration, the receipt and sufficiency of which is
hereby
acknowledged, the Guarantor hereby covenants and agrees with the
Lender as
follows:
1. Unless otherwise defined herein, all capitalized terms used herein
shall
have the meanings ascribed to such terms under the Agreement.
2. The Note and the Agreement are hereby made a part of this
Guaranty by
reference thereto with the same force and effect as if fully set forth
herein
and all representations and warranties s de by the Company therein are,
to the
best of Guarantor's knowledge, true and correct.
3. The Guarantor hereby irrevocably, unconditionally and
absolutely
guarantees to Lender the due and prompt payment, and not just
the
collectibility, of the principal of, and interest and late charges and all
other
indebtedness, if any, on the Note when due, whether at maturity, by
acceleration
or otherwise all at the times and places and at the rates described
in, and
otherwise according to the terms of the Note and the Agreement, whether
now
existing or hereafter created or arising.
4. The Guarantor further hereby irrevocably, unconditionally and
absolutely
guarantees to Lender the due and prompt performance by the Company
of all
duties, agreements and obligations of the Company contained in the Note
and the
Agreement, and the due and prompt payment of all costs incurred,
including
attorneys' fees, in enforcing the payment and performance of the Note
and the
Agreement and this Guaranty (the payment and performance of the items set
forth
in Paragraphs 2 and 3 of this Guaranty are collectively referred to
as the
"Guaranteed Debt").
5. For the purposes of this Guaranty and notwithstanding anything
to the
contrary contained herein or in any of the Loan Documents, the
Guarantors
liability for payment of the Guaranteed Debt shall be limited to the sum
of (a)
Five Million Dollars ($5,000,000), (b) interest on such amount from the
date
demanded until the date paid at the highest rate applicable to any
of the
Guaranteed Obligations under the Agreement, and (c) all costs and
expenses
incurred by the Lender (including reasonable attorneys' fees) in enforcing
this
Guaranty, which amount may be comprised of any portion of the Guaranteed
Debt,
to be determined at the sole discretion of the Lender.
6. In the event the Company shall at any time fail to pay the
Lender any
principal of or interest on or other sums constituting any Guaranteed Debt
when
due, whether by acceleration or otherwise, the Guarantor promises to pay
such
amount to the Lender forthwith, together with all collection costs and
expenses,
including reasonable attorneys' fees.
7. Upon occurrence of any Event of Default, all Guaranteed Debt
shall at
the option of the Lender immediately become due and payable, and in any
such
event the Guarantor authorizes the Lender, without notice or demand, to
apply
any property, balances, credits, accounts or moneys of the Guarantor then
in the
possession of Lender, or standing to the credit of the Guarantor, to the
payment
of such Guaranteed Debt.
8. The Guarantor does hereby (a) agree to any modifications of any
terms or
conditions of any Guaranteed Debt and/or to any extensions or renewals of
time
of payment or performance by the Company; that it shall not be necessary
for the
Lender to resort to legal remedies against the Company before
proceeding
hereunder, nor to take any action against any other person obligated
(an
Obliger) for payment or performance of the Guaranteed Debt or against
any
Collateral for the Guaranteed Debt before proceeding against the Guarantor;
and
that no release of any other guarantor, whether by operation of law or
by any
act of the Lender, with or without notice to the Guarantor, shall
release the
Guarantor; (b) waive notice of demand, dishonor, notice of dishonor,
protest,
and notice of protest and waive to the extent permitted by law, all
benefit of
valuation, appraisement, and exemptions under the laws of the State of
Minnesota
or any other state or territory of the United States; and (c) agree,
if the
Guaranteed Debt is not paid in accordance with the terms thereof, to
pay, in
addition to all principal and interest due, all costs of collection
including
reasonable attorneys' fees.
9. The obligations of the Guarantor hereunder shall be primary,
absolute
and unconditional, and shall remain in full force and effect without
regard to,
and shall not be impaired or affected by: (a) the genuineness,
validity,
regularity, enforceability, amendment or change in the Agreement or the
Note, or
any change in or extension of the manner, place or terms of payment of,
all or
any portion of the Guaranteed Debt; (b) the taking or failure to take any
action
to enforce the Agreement or the Note, or the exercise or failure to
exercise any
remedy, power or privilege contained therein or available at law or
otherwise,
or the waiver by the Lender of any provisions of the Agreement or the
Note; (c)
any impairment, modification, change, release or limitation in any manner
of the
liability of the Company or its estate in bankruptcy, or of any remedy
for the
enforcement of the Company's liability, resulting from the operation
of any
present or future provision of the bankruptcy laws or any other
statute or
regulation, or the dissolution, bankruptcy, insolvency, or reorganization
of the
Company; (d) the merger or consolidation of the Company, or any sale or
transfer
by the Company of all or part of its assets or property; (e) any
claim the
Guarantor may have against any other Obligor, including any
claim of
contribution; (f) the release, in whole or in part, of the Guarantor
or any
other guarantor (if more than one), the Company or any other Obligor;
(g) any
other action or circumstance which (with or without notice to or
knowledge of
the Guarantor) may or might in any manner or to any extent vary the risks
of the
Guarantor hereunder or otherwise constitute a legal or equitable
discharge or
defense, it being understood and agreed by the Guarantor that the
obligation"
under this Guaranty shall not be discharged except by the full payment
and
performance of the Guaranteed Debt.
10. The Lender shall have the right to determine how, when and
what
application of payments and credits, if any, whether derived from the
Company or
from any other source, shall be made on the Guaranteed Debt and any
other
indebtedness owed by the Company and/or any other Obligor to the Lender.
11. The obligations of the Guarantor hereunder shall continue
to be
effective, or be automatically reinstated, as the case may be, if at any
time
the performance or the payment, as the case may be, in whole or in part,
of any
of the Guaranteed Debt is rescinded or must otherwise be restored or
returned by
the Lender (as a preference, fraudulent conveyance or otherwise)
upon the
insolvency, bankruptcy, dissolution, liquidation or reorganization of
the
Company, the Guarantor or any other person or upon or as a result
of the
appointment of a custodian, receiver, trustee or other officer with
similar
powers with respect to the Company, the Guarantor or any other person,
or any
Substantial part of its property, or otherwise, all as though such
payments had
not been made. If an Event of Default shall at any time have occurred
and be
continuing or shall exist and declaration of default or acceleration
under or
with respect to this Guaranty or any Guaranteed Debt shall at such
time be
prevented by reason of the pendency against the Guarantor or the Company
or any
other person of a case or proceeding under a bankruptcy or insolvency
law, the
Guarantor agrees that, for purposes of this Guaranty and its
obligations
hereunder, this Guaranty and such obligations shall be deemed to have
been
declared in default or accelerated with the same effect as if this
Guaranty and
such obligations had been declared in default and accelerated in accordance
with
their respective terms and the Guarantor shall forthwith perform or pay,
as the
case may be, as required hereunder in accordance with the terms
hereunder
without further notice or demand.
12. The Guarantor hereby irrevocably waives any claim or other rights
that
he may now or hereafter acquire against the Company that arises
from the
existence, payment, performance or enforcement of the Guarantors
obligation"
hereunder, including any right of subrogation, reimbursement,
exoneration or
indemnification, any right to participate in any claim or remedy of the
Lender
against the Company or any collateral that the Lender now has or
hereafter
acquires, whether or not such claim, remedy or right arises in equity or
under
contract, statute or common law, including the right to take or receive
from the
Company directly or indirectly, in cash or other property or by set-off
or in
any manner, payment or security on account of such claim or other rights
until
the Guaranteed Debt shall have been paid and performed in full. If any
amount
"hall be paid to the Guarantor in violation of the preceding sentence,
such
amount shall be deemed to have been paid to the Guarantor for the
benefit of,
and held in trust for, the Lender and shall forthwith be paid to the
Lender to
be credited and applied to the Guaranteed Debt, whether matured or
unmatured.
The Guarantor hereby specifically acknowledges that any subrogation rights
which
he may have against the Company or any collateral that the Lender now
has or
hereafter acquires may be destroyed by a nonjudicial foreclosure of
the
collateral. This may give the Guarantor a defense to a deficiency
judgment
against the Guarantor. The Guarantor hereby irrevocably waives such
defense. The
Guarantor acknowledges that he will receive direct and indirect benefits
from
the arrangements contemplated by the Agreement and the Note and that the
waivers
set forth in this Section are knowingly made in contemplation of such
benefits.
13. The Guarantor waives any and all benefits available to
sureties and
creditors which might otherwise be available to the Guarantor under
Section
2809, 2810, 2819, 2839, 2845, 2849, 2850, 2899 and 3433 of the California
Code
of Civil Procedure, as amended or remodified from time to time.
Additionally,
the Guarantor waives the right to require the Lender to comply
with the
provisions of Section 9504 of the California Commercial Code.
14. No postponement or delay on the part of the Lender in the
enforcement
of any right hereunder shall constitute a waiver of such right and all
rights of
the Lender hereunder shall be cumulative and not alternative and shall
be in
addition to any other rights granted to the Lender in any other agreement
or by
law.
15. If any provision hereof shall be or shall be declared to be
illegal or
unenforceable in any respect, such illegal or unenforceable provision
shall be
and become absolutely null and void and of no force and effect as though
such
provision were not in fact set forth herein, but all other covenants,
teems,
conditions and provisions hereof shall nevertheless continue to be
valid and
enforceable and this Guaranty shall be so construed.
16. This Guaranty shall be governed in all respects by the lawn
of the
State of Minnesota, other than its principles of conflicts of law, and
shall be
binding upon and shall inure to the benefit of the parties hereto and
their
respective heirs, executors, administrators, personal
representatives,
successors and assigns .
17. The Guarantor does hereby agree that any action or proceeding
under
this Guaranty may be commenced against the Guarantor in any court of
competent
jurisdiction within the State of Minnesota, by service of process
upon the
Guarantor by first class registered or certified mail, return receipt
requested,
addressed to the Guarantor at the Guarantor's address last known to the
Lender.
The Guarantor agrees that any such suit, action or proceeding arising out
of or
relating to this Guaranty may be instituted in the District Court of
Hennepin
County, Minnesota or in the United States District Court for the
District of
Minnesota, at the option of the Lender; and the Guarantor hereby
waives any
objection to the venue of any such suit, action or proceeding. Nothing
herein
shall affect the right of the Lender to accomplish service of process
in any
other manner permitted by law or to commence legal proceedings or
otherwise
proceed against the Guarantor in any other jurisdiction or court.
18. The Guarantor hereby represents and warrants to the Lender as
follows:
(a) Financial Statements. Any financial statements and data which
have
heretofore been given to the Lender with respect to the
Guarantor
fairly and accurately represent the financial condition of
the
Guarantor as of the date hereof, and, since the date thereof,
there
has been no material adverse change in the financial condition
of the
Guarantor. The Guarantor shall promptly deliver to the Lender,
or the
Company in time for the Company to deliver the same to the
Lender, all
financial statements of the Guarantor required by the Agreement.
(b) Address. The address of the Guarantor as specified below is
true and
correct and until the Lender shall have actually received a
written
notice specifying a change of address and specifically requesting
that
notices be issued to such changed address, the Lender may rely
on the
address stated as being accurate.
(c) No Default. The Guarantor is not in default with respect to any
order,
writ, injunction, decree or demand of any court or other
governmental
authority, in the payment of any material debt for borrowed
money or
under any material agreement evidencing or securing any such
debt.
(d) Solvent. The Guarantor is now solvent, and no bankruptcy or
insolvency
proceedings are pending or to the best of the Guarantor's
knowledge
contemplated by or against the Guarantor.
(e) Relationship to the Company. The value of the consideration
received
and to be received by the Guarantor is reasonably worth at
least as
much as the liability and obligation of the Guarantor
incurred or
arising under this Guaranty. The Guarantor has had full and
complete
access to the Agreement and the Note and all other loan
documents
relating to the Obligations and the Guaranteed Debt, has reviewed
them
and is fully aware of the meaning and effect of their contents.
The
Guarantor is fully informed of all circumstances which bear
upon the
rinks of executing this Guaranty and which a diligent inquiry
would
reveal. The Guarantor has adequate means to obtain from the
Company on
a continuing basis information concerning the Company's
financial
condition, and is not depending on the Lender to provide
such
information, now or in the future. The Guarantor agrees
that the
Lender shall not have any obligation to advise or notify the
Guarantor
or to provide the Guarantor with any data or information.
The
execution and delivery of this Guaranty is not a condition
precedent
(and the Lender has not in any way implied that the execution of
this
Guaranty is a condition precedent) to the Lender's making,
extending
or modifying any loan to the Guarantor or to any other
financial
accommodation to or for the Guarantor.
(f) Litigation. There is not now pending against or affecting
the
Guarantor, nor to the knowledge of the Guarantor is there
threatened,
any action, suit or proceeding at law or in equity or by or
before any
administrative agency that, if adversely determined, would
materially
impair or affect the financial condition of the Guarantor.
(g) Taxes. The Guarantor has filed all federal, state, provincial,
county,
municipal and other income tax returns required to have been
filed by
the Guarantor and has paid all taxes that have become due
pursuant to
such returns or pursuant to any assessments received by the
Guarantor,
and the Guarantor does not know of any basis for any
material
additional assessment against it in respect of such taxes.
19. The promises and agreements herein and in any other guaranties
of the
Agreement and the Note shall be construed to be and are hereby declared
to be
joint and several in each and every particular and shall be fully binding
upon
and enforceable against any or all of such parties or persons
guaranteeing the
Agreement and the Note herein or in a separate guaranty, and neither the
death
nor the release of any person or party to this Guaranty or any other
guaranties
of the Agreement and the Note shall affect or release the joint and
several
liability of any other person or party to this Guaranty or any other
guaranties
of the Agreement and the Note.
20. THE GUARANTOR AND THE LENDER HEREBY (i) COVENANT AND AGREE NOT TO
ELECT
A TRIAL BY JURY OF ANY ISSUE TRIABLE OF RIGHT BY A JURY, AND (ii)
WAIVE ANY
RIGHT TO TRIAL BY JURY FULLY TO THE EXTENT THAT ANY SUCH RIGHT SHALL
NOW OR
HEREAFTER EXIST. THIS WAIVER OF RIGHT TO TRIAL BY JURY IS SEPARATELY
GIVEN,
KNOWINGLY AND VOLUNTARILY, BY THE GUARANTOR AND, PURSUANT TO THE
AGREEMENT, BY
THE LENDER, AND THIS WAIVER IS INTENDED TO ENCOMPASS INDIVIDUALLY EACH
INSTANCE
AND EACH ISSUE AS TO WHICH THE RIGHT OF A JURY TRIAL WOULD OTHERWISE
ACCRUE. THE
LENDER IS HEREBY AUTHORIZED AND REQUESTED TO SUBMIT THIS WAIVER TO ANY
COURT
HAVING JURISDICTION OVER THE SUBJECT MATTER AND THE PARTIES HERETO, SO
AS TO
SERVE AS CONCLUSIVE EVIDENCE OF THE FOREGOING WAIVER OF THE RIGHT TO JURY
TRIAL.
FURTHER, THE GUARANTOR HEREBY CERTIFIES THAT NO REPRESENTATIVE OR AGENT
OF THE
LENDER INCLUDING THE LENDER'S COUNSEL HAS REPRESENTED, EXPRESSLY OR
OTHERWISE,
TO ANY OF THE UNDERSIGNED THAT THE LEADER WILL NOT SEEK TO ENFORCE THIS
WAIVER
OF RIGHT TO JURY TRIAL PROVISION.
IN WITNESS WHEREOF, the Guarantor has executed this Guaranty
with the
intent to be legally bound as of the date first above written.
JAMES W. NOACK
Address:
------------------------------
- ---
-------------------------------------
- ---
Telephone No.
------------------------------
- ---
STATE OF California )
) ss
COUNTY OF Contra Costa )
On November 29, 1995, before me, a Notary Public, personally appeared
JAMES
W. NOACK, personally known to me (or proved to me on the basis of
satisfactory
evidence) to be the person whose name is subscribed to the within
instrument and
acknowledged to me that he executed the same in his authorized capacity,
and
that by his signature on the instrument the person, or the entity upon
behalf of
which the person acted, executed the instrument.
WITNESS my hand and official seal.
-------------------------------------
- ---
Notary Public
My Commission Expires:
---------------
- ---
(SEAL)
<PAGE>
EXHIBIT "E"
CERTIFICATE AS TO INCUMBENCY
TO: RESIDENTIAL FUNDING CORPORATION
I hereby certify to you that I am the duly elected and qualified
Secretary
of MONUMENT MORTGAGE, INC., a California corporation ("Company") and
that, as
such, I am authorized to execute this Certificate on behalf of the
Company. I
further certify that the persons named below are duly elected,
qualified and
acting officers of the Company, holding on the date hereof the respective
titles
set forth opposite their respective names, and that the respective
signatures
set forth opposite their names are their true and genuine signatures:
Name Title Signature
James A. Umphrves Executive Vice Pres. --------------
- ----
James W. Noack President --------------
- ----
Paul Garrigues Chief Financial Officer --------------
- ----
Sr. Vice Pres.
Lee Decker Sr. Vice Pres. --------------
- ----
Robert Kamm Sr. Vice Pres. --------------
- ----
Jenny Pusich Secretary --------------
- ----
Julieann Woodley Asst. Sec. --------------
- ----
Deshon Chambers Asst. Sec. --------------
- ----
Jill Lewis Asst. Sec. --------------
- ----
Jennifer R. Huntley Asst. Sec. --------------
- ----
Regina E. Kimura Asst. Sec. --------------
- ----
Abigail A. Bally Asst. Sec. --------------
- ----
You may conclusively rely on this Certificate until formally advised
by a
like Certificate of any changes herein.
IN WITNESS WHEREOF, I have hereunto executed this Certificate on this
29th
day of November , 1995.
----------------------------------
Secretary
<PAGE>
GUARANTY
THIS GUARANTY, made and entered into as of 23 day of March 1995, by
JAMES
A. UMPHRYES (the "Guarantor"), to RESIDENTIAL FUNDING CORPORATION, a
Delaware
corporation (the "Lender"), having its principal office at 8400 Normandale
Lake
Boulevard, Suite 600, Minneapolis, Minnesota 55437.
RECITALS
A. MONUMENT MORTGAGE, INC., a California corporation (the
"Company"), and
the Lender have agreed that the Lender may, in its discretion,
from
time to time make loans to the Company (each a "Loan") in up
to the
aggregate principal amount of Ten Million Dollars
($10,000,000) to
finance the making and purchasing of Mortgage Loans.
B. The Loans will be evidenced by a Promissory Note dated of even
date
herewith from the Company to the Lender, as the same may be
amended,
supplemented or from time to time, including any executed
and
delivered in renewal, extension, rearrangement or
otherwise in
replacement of such Promissory Note (the "Note") and by a
Gestation
Warehousing Credit and Security Agreement of even date
herewith, as
the same may be amended, supplemented or otherwise modified from
time
to time, including any other instruments executed and
delivered in
renewal, extension, rearrangement or otherwise in replacement of
such
agreement (the "Agreement").
C. The Guarantor is a shareholder and the Executive Vice President
of the
Company and will derive benefit from the Loans.
D. In order to induce the Lender to make Loans under the
Agreement, to
accept the Note and the Agreement, and as additional security
for
Loans under the Agreement, the Guarantor has agreed to give
this
Guaranty.
E. The Lender hag refused to make Loans under the Agreement unless
this
Guaranty is executed by the Guarantor and delivered to Lender.
NOW, THEREFORE, in consideration of the recitals and other
good and
valuable consideration, the receipt and sufficiency of which is
hereby
acknowledged, the Guarantor hereby covenants and agrees with the
Lender as
follows:
1. Unless otherwise defined herein, all capitalized terms used herein
shall
have the meanings ascribed to such terms under the Agreement.
2. The Note and the Agreement are hereby made a part of this
Guaranty by
reference thereto with the same force and effect as if fully set forth
herein
and all representations and warranties made by the Company therein are,
to the
best of Guarantor's knowledge, true and correct.
3. The Guarantor hereby irrevocably, unconditionally and
absolutely
guarantees to Lender the due and prompt payment, and not just
the
collectibility, of the principal of, and interest and late charges and all
other
indebtedness, if any, on the Note when due, whether at maturity, by
acceleration
or otherwise all at the times and places and at the rates described
in, and
otherwise according to the terms of the Note and the Agreement, whether
now
existing or hereafter created or arising.
4. The Guarantor further hereby irrevocably, unconditionally and
absolutely
guarantees to Lender the due and prompt performance by the Company
of all
duties, agreements and obligations of the Company contained in the Note
and the
Agreement, and the due and prompt payment of all costs incurred,
including
attorneys' fees, in enforcing the payment and performance of the Note
and the
Agreement and this Guaranty (the payment and performance of the items set
forth
in Paragraphs 2 and 3 of this Guaranty are collectively referred to
as the
"Guaranteed Debt").
5. For the purposes of this Guaranty and notwithstanding anything
to the
contrary contained herein or in any of the Loan Documents, the
Guarantors
liability for payment of the Guaranteed Debt shall be limited to the sum
of (a)
Five Million Dollars ($5,000,000), (b) interest on such amount from the
date
demanded until the date paid at the highest rate applicable to any
of the
Guaranteed Obligations under the Agreement, and (c) all costs and
expenses
incurred by the Lender (including reasonable attorneys' fees) in enforcing
this
Guaranty, which amount may be comprised of any portion of the Guaranteed
Debt,
to be determined at the sole discretion of the Lender.
6. In the event the Company shall at any time fail to pay the
Lender any
principal of or interest on or other sums constituting any Guaranteed Debt
when
due, whether by acceleration or otherwise, the Guarantor promises to pay
such
amount to the Lender forthwith, together with all collection costs and
expenses,
including reasonable attorneys' fees.
7. Upon occurrence of any Event of Default, all Guaranteed Debt
shall at
the option of the Lender immediately become due and payable, and in any
such
event the Guarantor authorizes the Lender, without notice or demand, to
apply
any property, balances, credits, accounts or moneys of the Guarantor then
in the
possession of Lender, or standing to the credit of the Guarantor, to the
payment
of such Guaranteed Debt.
8. The Guarantor does hereby (a) agree to any modifications of any
terms or
conditions of any Guaranteed Debt and/or to any extensions or renewals of
time
of payment or performance by the Company; that it shall not be necessary
for the
Lender to resort to legal remedies against the Company before
proceeding
hereunder, nor to take any action against any other person obligated
(an
"Obligor") for payment or performance of the Guaranteed Debt or
against any
Collateral for the Guaranteed Debt before proceeding against the Guarantor;
and
that no release of any other guarantor, whether by operation of law or
by any
act of the Lender, with or without notice to the Guarantor, shall
release the
Guarantor; (b) waive notice of demand, dishonor, notice of dishonor,
protest,
and notice of protest and waive to the extent permitted by law, all
benefit of
valuation, appraisement, and exemptions under the laws of the State of
Minnesota
or any other state or territory of the United States; and (c) agree,
if the
Guaranteed Debt is not paid in accordance with the terms thereof, to
pay, in
addition to all principal and interest due, all costs of collection
including
reasonable attorneys' fees.
9. The obligations of the Guarantor hereunder shall be primary,
absolute
and unconditional, and shall remain in full force and effect without
regard to,
and shall not be impaired or affected by: (a) the genuineness,
validity,
regularity, enforceability, amendment or change in the Agreement or the
Note, or
any change in or extension of the manner, place or terms of payment of,
all or
any portion of the Guaranteed Debt; (b) the taking or failure to take any
action
to enforce the Agreement or the Note, or the exercise or failure to
exercise any
remedy, power or privilege contained therein or available at law or
otherwise,
or the waiver by the Lender of any provisions of the Agreement or the
Note; (c)
any impairment, modification, change, release or limitation in any manner
of the
liability of the Company or its estate in bankruptcy, or of any remedy
for the
enforcement of the Company's liability, resulting from the operation
of any
present or future provision of the bankruptcy laws or any other
statute or
regulation, or the dissolution, bankruptcy, insolvency, or reorganization
of the
Company; (d) the merger or consolidation of the Company, or any sale or
transfer
by the Company of all or part of its assets or property; (e) any
claim the
Guarantor may have against any other Obligor, including any
claim of
contribution; (f) the release, in whole or in part, of the Guarantor
or any
other guarantor (if more than one), the Company or any other Obligor;
(g) any
other action or circumstance which (with or without notice to or
knowledge of
the Guarantor) may or might in any manner or to any extent vary the risks
of the
Guarantor hereunder or otherwise constitute a legal or equitable
discharge or
defense, it being understood and agreed by the Guarantor that the
obligations
under this Guaranty shall not be discharged except by the full payment
and
performance of the Guaranteed Debt.
10. The Lender shall have the right to determine how, when and
what
application of payments and credits, if any, whether derived from the
Company or
from any other source, shall be made on the Guaranteed Debt and any
other
indebtedness owed by the Company and/or any other Obligor to the Lender.
11. The obligations of the Guarantor hereunder shall continue
to be
effective, or be automatically reinstated, as the case may be, if at any
time
the performance or the payment, as the case may be, in whole or in part,
of any
of the Guaranteed Debt is rescinded or must otherwise be restored or
returned by
the Lender (as a preference, fraudulent conveyance or otherwise)
upon the
insolvency, bankruptcy, dissolution, liquidation or reorganization of
the
Company, the Guarantor or any other person or upon or as a result
of the
appointment of a custodian, receiver, trustee or other officer with
similar
powers with respect to the Company, the Guarantor or any other person,
or any
substantial part of its property, or otherwise, all as though such
payments had
not been made. If an Event of Default shall at any time have occurred
and be
continuing or shall exist and declaration of default or acceleration
under or
with respect to this Guaranty or any Guaranteed Debt shall at such
time be
prevented by reason of the pendency against the Guarantor or the Company
or any
other person of a case or proceeding under a bankruptcy or insolvency
law, the
Guarantor agrees that, for purposes of this Guaranty and its
obligations
hereunder, this Guaranty and such obligations shall be deemed to have
been
declared in default or accelerated with the same effect as if this
Guaranty and
such obligations had been declared in default and accelerated in accordance
with
their respective terms and the Guarantor shall forthwith perform or pay,
as the
case may be, as required hereunder in accordance with the terms
hereunder
without further notice or demand.
12. The Guarantor hereby irrevocably waives any claim or other rights
that
he may now or hereafter acquire against the Company that arises
from the
existence, payment, performance or enforcement of the Guarantors
obligations
hereunder, including any right of subrogation, reimbursement,
exoneration or
indemnification, any right to participate in any claim or remedy of the
Lender
against the Company or any collateral that the Lender now has or
hereafter
acquires, whether or not such claim, remedy or right arises in equity or
under
contract, statute or common law, including the right to take or receive
from the
Company directly or indirectly, in cash or other property or by set-off
or in
any manner, payment or security on account of such claim or other rights
until
the Guaranteed Debt shall have been paid and performed in full. If any
amount
shall be paid to the Guarantor in violation of the preceding sentence,
such
amount shall be deemed to have been paid to the Guarantor for the
benefit of,
and held in trust for, the Lender and shall forthwith be paid to the
Lender to
be credited and applied to the Guaranteed Debt, whether matured or
unmatured.
The Guarantor hereby specifically acknowledges that any subrogation rights
which
he may have against the Company or any collateral that the Lender now
has or
hereafter acquires may be destroyed by a nonjudicial foreclosure of
the
collateral. This may give the Guarantor a defense to a deficiency
judgment
against the Guarantor. The Guarantor hereby irrevocably waives such
defense. The
Guarantor acknowledges that he will receive direct and indirect benefits
from
the arrangements contemplated by the Agreement and the Note and that the
waivers
set forth in this Section are knowingly made in contemplation of such
benefits.
13. The Guarantor waives any and all benefits available to
sureties and
creditors which might otherwise be available to the Guarantor under
Section
2309, 2810, 2819, 2839, 2845, 2849, 2850, 2899 and 3433 of the California
Code
of Civil Procedure, as amended or recodified from time to time.
Additionally,
the Guarantor waives the right to require the Lender to comply
with the
provisions of Section 9504 of the California Commercial Code.
14. No postponement or delay on the part of the Lender in the
enforcement
of any right hereunder shall constitute a waiver of such right and all
rights of
the Lender hereunder shall be cumulative and not alternative and shall
be in
addition to any other rights granted to the Lender in any other agreement
or by
law.
15. If any provision hereof shall be or shall be declared to be
illegal or
unenforceable in any respect, such illegal or unenforceable provision
shall be
and become absolutely null and void and of no force and effect as though
such
provision were not in fact set forth herein, but all other covenants,
terms,
conditions and provisions hereof shall nevertheless continue to be
valid and
enforceable and this Guaranty shall be so construed.
16. This Guaranty shall be governed in all respects by the laws
of the
State of Minnesota, other than its principles of conflicts of law, and
shall be
binding upon and shall inure to the benefit of the parties hereto and
their
respective heirs, executors, administrators, personal
representatives,
successors and assigns.
17. The Guarantor does hereby agree that any action or proceeding
under
this Guaranty may be commenced against the Guarantor in any court of
competent
jurisdiction within the State of Minnesota, by service of process
upon the
Guarantor by first class registered or certified mail, return receipt
requested,
addressed to the Guarantor at the Guarantor's address last known to the
Lender.
The Guarantor agrees that any such suit, action or proceeding arising out
of or
relating to this Guaranty may be instituted in the District Court of
Hennepin
County, Minnesota or in the United States District Court for the
District of
Minnesota, at the option of the Lender; and the Guarantor hereby
waives any
objection to the venue of any such suit, action or proceeding. Nothing
herein
shall affect the right of the Lender to accomplish service of process
in any
other manner permitted by law or to commence legal proceedings or
otherwise
proceed against the Guarantor in any other jurisdiction or court.
18. The Guarantor hereby represents and warrants to the Lender as
follows:
(a) Financial Statements. Any financial statements and data
which
have heretofore been given to the Lender with respect
to the
Guarantor fairly and accurately represent the financial
condition
of the Guarantor as of the date hereof, and, since the
date
thereof, there has been no material adverse change
in the
financial condition of the Guarantor. The Guarantor
shall
promptly deliver to the Lender, or the Company in time
for the
Company to deliver the same to the Lender, all
financial
statements of the Guarantor required by the Agreement.
(b) Address. The address of the Guarantor as specified below is
true
and correct and until the Lender shall have actually
received a
written notice specifying a change of address and
specifically
requesting that notices be issued to such changed address,
the
Lender may rely on the address stated as being accurate.
(c) No Default. The Guarantor in not in default with respect
to any
order, writ, injunction, decree or demand of any court or
other
governmental authority, in the payment of any material
debt for
borrowed money or under any material agreement
evidencing or
securing any such debt.
(d) Solvent. The Guarantor is now solvent, and no
bankruptcy or
insolvency proceedings are pending or to the best of
the
Guarantor's knowledge contemplated by or against the
Guarantor.
(e) Relationship to the Company. The value of the
consideration
received and to be received by the Guarantor is reasonably
worth
at least as much as the liability and obligation of the
Guarantor
incurred or arising under this Guaranty. The Guarantor
has had
full and complete access to the Agreement and the Note
and all
other loan documents relating to the Obligations and
the
Guaranteed Debt, has reviewed them and is fully aware
of the
meaning and effect of their contents. The Guarantor is
fully
informed of all circumstances which bear upon the
risks of
executing this Guaranty and which a diligent inquiry
would
reveal. The Guarantor has adequate means to obtain
from the
Company on a continuing basis information concerning
the
Company's financial condition, and is not depending on the
Lender
to provide such information, now or in the future. The
Guarantor
agrees that the Lender shall not have any obligation to
advise or
notify the Guarantor or to provide the Guarantor with any
data or
information. The execution and delivery of this Guaranty is
not a
condition precedent (and the Lender has not in any way
implied
that the execution of this Guaranty is a condition
precedent) to
the Lender's making, extending or modifying any loan
to the
Guarantor or to any other financial accommodation to or
for the
Guarantor.
(f) Litigation. There is not now pending against or affecting
the
Guarantor, nor to the knowledge of the Guarantor is
there
threatened, any action, suit or proceeding at law or in
equity or
by or before any administrative agency that, if
adversely
determined, would materially impair or affect the
financial
condition of the Guarantor.
(g) Taxes. The Guarantor has filed all federal, state,
provincial,
county, municipal and other income tax returns required to
have
been filed by the Guarantor and has paid all taxes that
have
become due pursuant to such returns or pursuant to
any
assessments received by the Guarantor, and the Guarantor
does not
know of any basis for any material additional assessment
against
it in respect of such taxes.
19. The promises and agreements herein and in any other guaranties
of the
Agreement and the Note shall be construed to be and are hereby declared
to be
joint and several in each and every particular and shall be fully binding
upon
and enforceable against any or all of such parties or persons
guaranteeing the
Agreement and the Note herein or in a separate guaranty, and neither the
death
nor the release of any person or party to this Guaranty or any other
guaranties
of the Agreement and the Note shall affect or release the joint and
several
liability of any other person or party to this Guaranty or any other
guaranties
of the Agreement and the Note.
20. THE GUARANTOR AND THE LENDER HEREBY (i) COVENANT AND AGREE NOT TO
ELECT
A TRIAL BY JURY OF ANY ISSUE TRIABLE OF RIGHT BY A JURY, AND (ii)
WAIVE ANY
RIGHT TO TRIAL BY JURY FULLY TO THE EXTENT THAT ANY SUCH RIGHT SHALL
NOW OR
HEREAFTER EXIST. THIS WAIVER OF RIGHT TO TRIAL BY JURY IS SEPARATELY
GIVEN,
KNOWINGLY AND VOLUNTARILY, BY THE GUARANTOR AND, PURSUANT TO THE
AGREEMENT, BY
THE LENDER, AND THIS WAIVER IS INTENDED TO ENCOMPASS INDIVIDUALLY EACH
INSTANCE
AND EACH ISSUE AS TO WHICH THE RIGHT OF A JURY TRIAL WOULD OTHERWISE
ACCRUE. THE
LENDER IS HEREBY AUTHORIZED AND REQUESTED TO SUBMIT THIS WAIVER TO ANY
COURT
HAVING JURISDICTION OVER THE SUBJECT MATTER AND THE PARTIES HERETO, SO
AS TO
SERVE AS CONCLUSIVE EVIDENCE OF THE FOREGOING WAIVER OF THE RIGHT TO JURY
TRIAL.
FURTHER, THE GUARANTOR HEREBY CERTIFIES THAT NO REPRESENTATIVE OR AGENT
OF THE
LENDER INCLUDING THE LENDER'S COUNSEL HAS REPRESENTED, EXPRESSLY OR
OTHERWISE,
TO ANY OF THE UNDERSIGNED THAT THE LENDER WILL NOT SEEK TO ENFORCE THIS
WAIVER
OF RIGHT TO JURY TRIAL PROVISION.
IN WITNESS WHEREOF, the Guarantor has executed this Guaranty
with the
intent to be legally bound as of the date first above written.
----------------------------------------
- ---
JAMES A. UMPHRYES
Address:
---------------------------------
- ---
----------------------------------------
- ---
Telephone No.:
---------------------------------
- ---
STATE OF California )
) ss
COUNTY OF Contra Costa )
On November 29, 1995, before me, a Notary Public, personally appeared
JAMES
A. HUMPHRYES, personally known to me (or proved to me on the
basis of
satisfactory evidence) to be the person whose name is subscribed to the
within
instrument and acknowledged to me that he executed the same in his
authorized
capacity, and that by his signature on the instrument the person, or the
entity
upon behalf of which the person acted, executed the instrument.
WITNESS my hand and official seal.
----------------------------------------
- ---
Notary Public
My Commission Expires:
--------------------
- ---
(SEAL)
<PAGE>
PROMISSORY NOTE
$10,000,000 Date: March 23,
1995
FOR VALUE RECEIVED, the undersigned, MONUMENT MORTGAGE, INC., a
California
corporation, (herein called the "Company"), hereby promises to pay to the
order
of RESIDENTIAL FUNDING CORPORATION, a Delaware corporation (the
"Lender" or,
together with its successors and assigns, the holders) whose principal
place of
business is 8400 Normandale Lake Boulevard, Suite 600, Minneapolis,
Minnesota
55437, or at such other place as the Holder may designate from time to
time, the
principal sum of Ten Million Dollars ($10,000,000) or so much thereof as
may be
outstanding from time to time pursuant to the Gestation Warehousing
Credit and
Security Agreement described below, and to pay interest on said principal
sum or
such part thereof as shall remain unpaid from time to time, from the
date of
each Advance until repaid in full, and all other fees and charges due
under the
Agreement, at the rate and at the times set forth in the Agreement. All
payments
hereunder shall be made in lawful money of the United States and in
immediately
available funds.
This Note is given to evidence an actual gestation warehouse
facility in
the above amount and is the Note referred to in that certain
Gestation
Warehousing Credit and Security Agreement (Shipped Mortgage Loans)
(the
"Agreement") dated the date hereof between the Company and the Lender,
as the
same may be amended or supplemented from time to time, and is entitled
to the
benefits thereof. Reference is hereby made to the Agreement
(which is
incorporated herein by reference as fully and with the same effect as
if set
forth herein at length) for a description of the Collateral, a statement
of the
covenants and agreements, a statement of the rights and remedies and
securities
afforded thereby and other matters contained therein. Capitalized terms
used
herein, unless otherwise defined herein, shall have the meanings given
them in
the Agreement.
This Note may be prepaid in whole or in part at any time without
premium or
penalty.
Should this Note be placed in the hands of attorneys for collection,
the
Company agrees to pay, in addition to principal and interest, fees and
charges
due under the Agreement, and all costs of collecting this Note,
including
reasonable attorneys' fees and expenses .
The Company hereby waives demand, notice, protest and presentment .
This Note shall be construed and enforced in accordance with the
laws of
the State of Minnesota, without reference to its principles of conflicts of
law.
IN WITNESS WHEREOF, the Company has executed this Note as of the
day and
year first above written.
MONUMENT MORTGAGE, INC.,
a California corporation
By:
---------------------------------------------
- --
Paul R. Garrigues
Its: Senior VP / Chief Financial Officer
STATE OF California )
) ss
COUNTY OF Contra Costa )
On November 29, 1995, before me, a Notary Public personally appeared
Paul
R. Garrigues, the of MONUMENT MORTGAGE, INC., a California
corporation,
personally known to me (or proved to me on the basis of satisfactory
evidence)
to be the person whose name is subscribed to the within instrument
and
acknowledged to me that he/she executed the same in his/her authorized
capacity,
and that by his/her signature on the instrument the person, or the entity
upon
behalf of which the person acted, executed the instrument.
WITNESS my hand and official seal.
-----------------------------------
- --
Notary Public
My Commission Expires:
---------------
- --
(SEAL)
<PAGE>
PROMISSORY NOTE
$10,000,000 Date: March 23 , 1995
FOR VALUE RECEIVED, the undersigned, MONUMENT MORTGAGE, INC., a
California
corporation, (herein called the "Company"), hereby promises to pay to the
order
of RESIDENTIAL FUNDING CORPORATION, a Delaware corporation (the
"Lender" or,
together with its successors and assigns, the holders) whose principal
place of
business is 8400 Normandale Lake Boulevard, Suite 600, Minneapolis,
Minnesota
55437, or at such other place as the Holder may designate from time to
time, the
principal sum of Ten Million Dollars ($10,000,000) or so much thereof as
may be
outstanding from time to time pursuant to the Gestation Warehousing
Credit and
Security Agreement described below, and to pay interest on said principal
sum or
such part thereof as shall remain unpaid from time to time, from the
date of
each Advance until repaid in full, and all other fees and charges due
under the
Agreement, at the rate and at the times set forth in the Agreement. All
payments
hereunder shall be made in lawful money of the United States and in
immediately
available funds.
This Note is given to evidence an actual gestation warehouse
facility in
the above amount and is the Note referred to in that certain
Gestation
Warehousing Credit and Security Agreement (Shipped Mortgage Loans)
(the
"Agreement") dated the date hereof between the Company and the Lender,
as the
same may be amended or supplemented from time to time, and is entitled
to the
benefits thereof. Reference is hereby made to the Agreement
(which is
incorporated herein by reference as fully and with the same effect as
if set
forth herein at length) for a description of the Collateral, a statement
of the
covenants and agreements, a statement of the rights and remedies and
securities
afforded thereby and other matters contained therein. Capitalized terms
used
herein, unless otherwise defined herein, shall have the meanings given
them in
the Agreement.
This Note may be prepaid in whole or in part at any time without
premium or
penalty.
Should this Note be placed in the hands of attorneys for collection,
the
Company agrees to pay, in addition to principal and interest, fees and
charges
due under the Agreement, and all costs of collecting this Note,
including
reasonable attorneys' fees and expenses.
The Company hereby waives demand, notice, protest and presentment .
This Note shall be construed and enforced in accordance with the
laws of
the State of Minnesota, without reference to its principles of conflicts of
law.
IN WITNESS WHEREOF, the Company has executed this Note as of the
day and
year first above written.
MONUMENT MORTGAGE, INC.,
a California corporation
By:
----------------------------------------
- ---
Paul R. Garrigues
Its: Senior VP/Chief Financial Officer
STATE OF California )
) ss
COUNTY OF Contra Costa )
On November 29, 1995, before me, a Notary Public personally appeared
Paul
R. Garrigues, the of MONUMENT MORTGAGE, INC., a California
corporation,
personally known to me (or proved to me on the basis of satisfactory
evidence)
to be the person whose name is subscribed to the within instrument
and
acknowledged to me that he/she executed the same in his/her authorized
capacity,
and that by his/her signature on the instrument the person, or the entity
upon
behalf of which the person acted, executed the instrument.
WITNESS my hand and official seal.
----------------------------------------
- --
Notary Public
My Commission Expires:
--------------------
- --
(SEAL)
STATE OF DELAWARE
SECRETARY OF
STATE
DIVISION OF
CORPORATIONS
FILED 01:00 PM
9/30/1998
981379294 -
2198205
CERTIFICATE OF DESIGNATIONS, PREFERENCES
AND RIGHTS
OF
SERIES A CONVERTIBLE PREFERRED STOCK
OF
FINET HOLDINGS CORPORATION
Finet Holdings Corporation (the "Company"), a corporation
organized and
existing under the General Corporation Law of the State of Delaware, does
hereby
certify that, pursuant to authority conferred upon the Board of Directors
of the
Company by the Certificate of Incorporation of the Company, and
pursuant to
Section 151 of the General Corporation Law of the State of Delaware, the
Board
of Directors of the Company at a meeting duly held, adopted resolutions
(i)
authorizing a series of the Company's authorized preferred stock, $.01 par
value
per share, and (ii) providing for the designations, preferences and
relative,
participating, optional or other rights, and the qualifications,
limitations or
restrictions thereof, of 300 shares of Series A Convertible Preferred
Stock of
the Company, as follows:
RESOLVED, that the Company is authorized to issue 300 shares of
Series A
Convertible Preferred Stock (the "Series A Preferred Shares"), $.01 par
value
per share, which shall have the following powers, designations,
preferences and
other special rights:
(1) Dividends. The Series A Preferred Shares shall not
bear any
dividends.
(2) Holder's Conversion of Series A Preferred Shares. A
holder of
Series A Preferred Shares shall have the right, at such holder's
option, to
convert the Series A Preferred Shares into shares of the Company's
common
stock, $. 01 par value per share (the "Common Stock"), on the
following
terms and conditions:
(a) Conversion Right. Subject to the provisions of Sections
2(g)
and 3(a) below, at any time or times on or after the earlier to
occur
of: (i) February 15, 1999, or (ii) the Closing Bid Price (as
defined
herein) of the Common Stock shall be above $1.50 per share, any
holder
of Series A Preferred Shares shall be entitled to convert any
Series A
Preferred Shares into fully paid and nonassessable shares
(rounded to
the nearest whole share in accordance with Section 2(h)
below) of
Common Stock, at the Conversion Rate (as defined below);
provided,
however, that in no event other than upon a Mandatory
Conversion
pursuant to Section 2(g) hereof, shall any holder be
entitled to
convert Series A Preferred Shares in excess of that number of
Series A
Preferred Shares which, upon giving effect to such conversion,
would
cause the aggregate number of shares of Common Stock
beneficially
owned by the holder and its affiliates to exceed 4.9%
of the
outstanding shares of the Common Stock following such conversion.
For
purposes of the foregoing proviso, the aggregate number of
shares of
Common Stock beneficially owned by the holder and its affiliates
shall
include the number of shares of Common Stock issuable upon
conversion
of the Series A Preferred Shares with respect to which
the
determination of such proviso is being made, but shall
exclude the
number of shares of Common Stock which would be issuable
upon (i)
conversion of the remaining, nonconverted Series A Preferred
Shares
beneficially owned by the holder and its affiliates beneficially
owned
by the holder and its affiliates. Except as set forth in the
preceding
sentence, for purposes of this paragraph, beneficial ownership
shall
be calculated in accordance with Section 13(d) of the
Securities
Exchange Act of 1934, as amended.
(b) Conversion Rate. The number of shares of Common
Stock
issuable upon conversion of each of the Series A Preferred
Shares
pursuant to Section (2)(a) shall be determined according
to the
following formula (the "Conversion Rate");
(.06)(N/365)(10,000) + 10,000
-----------------------------
Conversion Price
For purposes of this Certificate of Designations, the following terms
shall
have the following meanings:
(i) "Conversion Price" means as, of any Conversion
Date (as
defined below), the Floating Conversion Price, in effect as of
such
date, if applicable, and subject to adjustment as provided
herein;
(ii) "Floating Conversion Price" means, as of any
date of
determination, the amount obtained by multiplying the
Conversion
Percentage in effect as of such date by the Average Market
Price for
the Common Stock for the five (5) consecutive trading days
immediately
preceding such date;
(iii) "Conversion Percentage" means 78% and shall be
reduced by
an additional 2% for every 30 days (pro-rated for partial
months)
beyond forty-five (45) days from the Issuance Date (the
"Scheduled
Filing Date") that the registration statement covering the
resale of
Common Stock issued upon conversion of the Series A Preferred
Shares
(the "Registration Statement") is not filed by the Company;
provided,
however, that no such reduction to the Conversion Percentage
shall
occur with respect to any Series A Preferred Shares which are
redeemed
by the Company pursuant to Section 3(a) herein;
(iv) "Average Market Price" means, with respect to any
security
for any period, that price which shall be computed as the
arithmetic
average of the Closing Bid Prices (as defined below) for such
security
for each trading day in such period;
(v) "Closing Bid Price" means, for any security as of any
date,
the last closing bid price on the Nasdaq National Market
(the
"Nasdaq-NM") as reported by Bloomberg Financial Markets
("Bloomberg"),
or, if the Nasdaq-NM is not the principal trading market for
such
security, the last closing bid price of such security on the
principal
securities exchange or trading market where such security is
listed or
traded as reported by Bloomberg, or if the foregoing do not
apply, the
last closing bid price of such security in the over-the-counter
market
on the pink sheets or bulletin board for such security as
reported by
Bloomberg, or, if no closing bid price is reported for such
security
by Bloomberg, the last closing trade price of such
security as
reported by Bloomberg. If the Closing Bid Price cannot be
calculated
for such security on such date on any of the foregoing bases,
the
Closing Bid Price of such security on such date shall be the
fair
market value as reasonably determined in good faith by the
Board of
Directors of the Company (all as appropriately adjusted for any
stock
dividend, stock split or other similar transaction during
such
period); and
(vi) "N" means the number of days from, but excluding,
the
Issuance Date through and including the Conversion Date for the
Series
A Preferred Shares for which conversion is being elected.
(vii) "Issuance Date" means the date of issuance of the
Series A
Preferred Shares.
(c) Adjustment to Conversion Price - Registration Statement.
If the
Registration Statement is not declared effective by the SEC on or
before
the ninetieth (90th) day following the Issuance Date (the
"Scheduled
Effective Date"), or if after the Registration Statement has been
declared
effective by the SEC, sales cannot be made pursuant to the
Registration
Statement (whether because of a failure to keep the Registration
Statement
effective, to disclose such information as is necessary for sales
to be
made pursuant to the Registration Statement, to register sufficient
shares
of Common Stock or otherwise), then, as partial relief for the
damages to
any holder by reason of any such delay in or reduction of its
ability to
sell the underlying shares of Common Stock (which remedy shall
not be
exclusive of any other remedies at law or in equity), the
Conversion
Percentage shall be adjusted as follows:
(i) Conversion Percentage. The Conversion Percentage in
effect,
at such time for each time period set forth in Section 2(b)(iv)
with
respect to the Series A Preferred Shares which may be
converted as
permitted by Section 2(a) hereof during the period that sales
cannot
be made pursuant to the Registration Statement, shall be reduced
by a
number of percentage points equal to the product of (A) three
(3) and
(B) the sum of (I) the number of months (prorated for partial
months)
after the Scheduled Effective Date and prior to the date
that the
relevant Registration Statement is declared effective by the
SEC and
(II) the number of months (prorated for partial months) that
sales
cannot be made pursuant to the Registration Statement after
the
Registration Statement has been declared effective. (For
example, if
the Registration Statement becomes effective one and one-half (1
1/2)
months after the Scheduled Effective Date, the Conversion
Percentage
with respect to the Series A Preferred Shares would decrease by
four
and one-half percent (4.5% to 73.5%) until any subsequent
adjustment;
if thereafter sales could not be made pursuant to the
Registration
Statement for a period of two (2) additional months, the
Conversion
Percentage with respect to the Series A Preferred Shares
would
decrease by an additional six percent (6%), for an aggregate
decrease
of ten and one-half percent (10.5% to 67.5%); provided, however,
that
no such reduction to the Conversion Percentage shall occur
with
respect to any Series A Preferred Shares which are redeemed
by the
Company pursuant to Section 3(a) herein.
(d) Adjustment to Conversion Price - Dilution and Other
Events. In
order to prevent dilution of the rights granted under this
Certificate of
Designations, the Conversion Price will be subject to adjustment from
time
to time as provided in this Section 2(d).
(i) Adjustment of Fixed Conversion Price upon
Subdivision or
Combination of Common Stock. If the Company at any time
subdivides (by
any stock split, stock dividend, recapitalization or otherwise)
one or
more classes of its outstanding shares of Common Stock into a
greater
number of shares, the Fixed Conversion Price in effect
immediately
prior to such subdivision will be proportionately reduced.
If the
Company at any time combines (by combination, reverse stock
split or
otherwise) one or more classes of its outstanding shares of
Common
Stock into a smaller number of shares, the Fixed Conversion
Price in
effect immediately prior to such combination will be
proportionately
increased.
(ii) Reorganization, Reclassification, Consolidation,
Merger, or
Sale. Any recapitalization, reorganization
reclassification,
consolidation. merger, sale of a or substantially all of the
Company's
assets to another Person (as defined below) or other
similar
transaction which is effected in such a way that holders of
Common
Stock are entitled to receive (either directly or upon
subsequent
liquidation) stock, securities or assess with respect to
or in
exchange for Common Stock is referred to herein as in
"Organic
Change." Prior to the consummation of any Organic Change, the
Company
will make appropriate provision (in form and substance
satisfactory to
the holders of a majority of the Series A Preferred Shares
then
outstanding) to insure that each of the holders of the
Series A
Preferred Shares will thereafter have the right to acquire and
receive
in lieu of or in addition to (as the case may be) the shares of
Common
Stock immediately theretofore acquirable and receivable
upon the
conversion of such holder's Series A Preferred Shares, such
shares of
stock, securities or assets as may be issued or payable with
respect
to or in exchange for the number of shares of Common Stock
immediately
theretofore acquirable and receivable upon the conversion of
such
holder's Series A Preferred Shares had such Organic Change not
taken
place. In any such case, the Company will make appropriate
provision
(in form and substance satisfactory to the holders of a
majority of
the Series A Preferred Shares then outstanding) with respect to
such
holders' rights and interests to insure that the provisions of
this
Section 2(d) and Section 2(e) below will thereafter be
applicable to
the Series A Preferred Shares. The Company will not effect any
such
consolidation, merger or sale, unless prior to the
consummation
thereof the successor entity (if other than the Company)
resulting
from consolidation or merger or the entity purchasing such
assets
assumes, by written instrument (in form and substance
satisfactory to
the holders of a majority of the Series A Preferred Shares
then
outstanding), the obligation to deliver to each holder of
Series A
Preferred Shares such shares of stock, securities or assets
as, in
accordance with the foregoing provisions, such holder may be
entitled
to acquire. For purposes of this Agreement, "Person" shall
mean an
individual, a limited liability company, a partnership, a
joint
venture, a corporation, a trust, an unincorporated organization
and a
government or any department or agency thereof.
(iii) Notices.
a) Immediately upon any adjustment of the Conversion
Price, the
Company will give written notice thereof to each holder of
Series A
Preferred Shares, setting forth in reasonable detail and
certifying
the calculation of such adjustment.
b) The Company will give written notice to each holder of
Series
A Preferred Shares at least twenty (20) days prior to the
date on
which the Company closes its books or takes a record (I) with
respect
to any dividend or distribution upon the Common Stock, (II)
with
respect to any pro rata subscription offer to holders of Common
Stock
or (III) for determining rights to vote with respect to any
Organic
Change, dissolution or liquidation.
c) The Company will also give written notice to each
holder of
Series A Preferred Shares at least twenty (20) days prior to the
date
on which any Organic Change, Major Transaction (as defined
below),
dissolution or liquidation will take place.
(e) Purchase Rights. If at any time the Company grants,
issues or
sells any Options, Convertible Securities or rights to purchase
stock,
warrants, securities or other property pro rata to the record
holders of
any class of Common Stock (the "Purchase Rights"), then the
holders of
Series A Preferred Shares will be entitled to acquire, upon the
terms
applicable to such Purchase Rights, the aggregate Purchase Rights
which
such holder could have acquired if such holder had held the
number of
shares of Common Stock acquirable upon complete conversion of the
Series A
Preferred Shares immediately before the date an which a record is
taken for
the grant issuance or sale of such Purchase Rights, or, if no such
record
is taken, the date as of which the record holders of Common Stock are
to be
determined for the grant, issue or sale of such Purchase Rights.
(f) Mechanics of Conversion. Subject to the Company's
inability to
fully satisfy its obligations under a Conversion Notice (as defined
below)
as provided for in Section 5 below:
(i) Holder's Delivery Requirements. To convert Series A
Preferred
Shares into full shares of Common Stock on any date (the
"Conversion
Date"), the holder thereof shall (A) deliver or transmit by
facsimile,
for receipt on or prior to 11:59 p.m., Eastern Standard Time, on
such
date, a copy of a fully executed notice of conversion in the
form
attached hereto as Exhibit I (the "Conversion Notice") to the
Company
or its designated transfer agent (the "Transfer Agent"),
and (B)
surrender to a common carrier for delivery to the Company
or the
Transfer Agent as soon as practicable following such date,
the
original certificates representing the Series A Preferred Shares
being
converted (or an indemnification undertaking with respect to
such
shares in the case of their loss, theft or destruction)
(the
"Preferred Stock Certificates") and the originally executed
Conversion
Notice.
(ii) Company's Response. Upon receipt by the Company
of a
facsimile copy of a Conversion Notice, the Company shall
immediately
send, via Facsimile, a confirmation of receipt of such
Conversion
Notice to such holder. Upon receipt by the Company or the
Transfer
Agent of the Preferred Stock Certificates to be converted
pursuant to
a Conversion Notice, together with the originally executed
Conversion
Notice, the Company or the Transfer Agent (as applicable)
shall,
within five (5) business days following the date of receipt, (A)
issue
and surrender to a common carrier for overnight delivery
to the
address as specified in the Conversion Notice, a
certificate,
registered in the name of the holder or its designee, for the
number
of shares of Common Stock to which the holder shall be entitled
or (B)
credit the aggregate number of shares of Common Stock to
which the
holder shall be entitled to the holder's or its designee's
balance
account at The Depository Trust Company. (iii) Dispute
Resolution. In
the case of a dispute as to the determination of the Average
Market
Price or the arithmetic calculation of the Conversion Rate,
the
Company shall promptly issue to the holder the number of
shares of
Common Stock that is not disputed and shall submit the
disputed
determinations or arithmetic calculations to the holder via
facsimile
within three (3) business days of receipt of such holder's
Conversion
Notice. If such holder and the Company are unable to agree
upon the
determination of the Average Market Price or arithmetic
calculation of
the Conversion Rate within two (2) business days of such
disputed
determination or arithmetic calculation being submitted to the
holder,
then the Company shall within one (1) business day submit
via
facsimile (A) the disputed determination of the Average Market
Price
to an independent, reputable investment bank or (B) the
disputed
arithmetic calculation of the Conversion Rate to its
independent,
outside accountant. The Company shall cause the investment bank
or the
accountant, as the case may be, to perform the
determinations or
calculations and notify the Company and the holder of the
results no
later than forty-eight (48) hours from the time it receives
the
disputed determinations or calculations. Such investment
bank's or
accountant's determination or calculation, as the case may be,
shall
be binding upon all parties absent manifest error.
(iv) Record Holder. The person or persons entitled to
receive the
shares of Common Stock issuable upon a conversion of
Series A
Preferred Shares shall be treated for all purposes as the
record
holder or holders of such shares of Common Stock on the
Conversion
Date.
(v) Company's Failure to Timely Convert. If the Company
shall
fail to issue to a holder within five (5) business days
following the
date of receipt by the Company or the Transfer Agent of the
Preferred
Stock Certificates to be converted pursuant to a Conversion
Notice, a
certificate for the number of shares of Common Stock to which
such
holder is entitled upon such holder's conversion of Series A
Preferred
Shares, in addition to all other available remedies which such
holder
may pursue hereunder and under the Securities Purchase
Agreement
between the Company and the initial holders of the Series A
Preferred
Shares (the "Securities Purchase Agreement")
(including
indemnification pursuant to Section 8 thereof), the Company
shall pay
additional damages to such holder on each day after the fifth
(5th)
business day following the date of receipt by the Company
or the
Transfer Agent of the Preferred Stock Certificates to be
converted
pursuant to the Conversion Notice, for which such conversion
is not
timely effected, an amount calculated in accordance with the
following
schedule:
Late Payment for Each
Series A Preferred Share
No. Business Days Late Converted
1 $100
2 $200
3 $300
4 $400
5 $500
6 $600
7 $700
8 $800
9 $900
10 $1,000
11 $1,000 + $200 for each
Business Days Late Beyond
10 days
(g) Mandatory Conversion. If any Series A Preferred Shares
remain
outstanding on September 29, 2000, then all such Series A Preferred
Shares
shall be converted as of such date in accordance with this Section 2
as if
the holders of such Series A Preferred Shares had given the
Conversion
Notice on September 29, 2000, and the Conversion Date had been fixed
as of
September 29, 2000, for all purposes of this Section 2, and all
holders of
Series A Preferred Shares shall thereupon and with two (2) business
days
thereafter surrender all Preferred Stock Certificates, duly
endorsed for
cancellation, to the Company or the Transfer Agent. No person
shall
thereafter have any rights in respect of Series A Preferred Shares,
except
the right to receive shares of Common Stock on conversion
thereof as
provided in this Section 2.
(h) Fractional Shares. The Company shall not issue any fraction
of a
share of Common Stock upon any conversion. All shares of Common
Stock
(including fractions thereof) issuable upon conversion of more
than one
share of the Series A Preferred Shares by a holder thereof
shall be
aggregated for purposes of determining whether the conversion would
result
in the issuance of a fraction of a share of Common Stock. If,
after the
aforementioned aggregation, the issuance would result in the issuance
of a
fraction of it share of Common Stock, the Company shall round such
fraction
of a share of Common Stock up or down to the nearest whole share.
(i) Taxes. The Company shall pay any and all taxes which
may be
imposed upon it with respect to the issuance and delivery of
Common
Stock upon the conversion of the Series A Preferred Shares.
(3) Company's Right to Redeem at its Election.
(a) At any time, from the Issuance Date, through February 15,
1999, as
long as the Company has not breached any of the representations,
warrants,
and covenants contained herein or in any related agreements, the
Company
shall have the right, in it sole discretion, to redeem
("Redemption at
Company's Election"), from time to time, any or all of the
Series A
Preferred Stock: provided (i) Company shall first provide fifteen (15)
days
advance written notice as provided in subparagraph 3(a)(ii) below, and
(ii)
that the Company shall only be entitled to redeem Series A Preferred
Stock
having an aggregate Stated Value (as defined below) of at least
Five
Hundred Thousand Dollars ($500,000). If the Company elects to redeem
some,
but not all, of the Series A Preferred Stock, the Company shall
redeem a
pro-rata amount from each Holder of the Series A Preferred Stock.
(i) Redemption Price At Company's Election. The "Redemption
Price
at Company's Election" shall be calculated as 105% of Stated
Value, as
that term is defined below, of the Series A Preferred Stock.
For
purposes hereof, "Stated Value" shall mean the original
principal
amount of Preferred Stock being redeemed, plus the unpaid 6% per
annum
premium being redeemed pursuant to this Section 3(a).
(ii) Mechanics of Redemption at Company's Election. The
Company
shall effect each such redemption by giving at least fifteen (15)
days
prior written notice ("Notice of Redemption at Company's
Election") to
(A) the Holders of the Series A Preferred Stock selected
for
redemption at the address and facsimile number of such
Holder
appearing in the Company's Series A Preferred Stock register
and (B)
the Transfer Agent, which Notice of Redemption At Company's
Election
shall be deemed to have been delivered three (3) business days
after
the Company's mailing (by overnight or two (2) day courier,
with a
copy by facsimile) of such Notice of Redemption at Company's
Election.
Such Notice of Redemption At Company's Election shall indicate
(i) the
number of shares of Series A Preferred Stock that have been
selected
for redemption, (ii) the date which such redemption is to
become
effective (the "Date of Redemption At Company's Election") and
(iii)
the applicable Redemption Price At Company's Election, as
defined in
subsection (a)(i) above. Notwithstanding the above, Holder may
convert
into Common Stock, prior to the close of business on the
Date of
Redemption at Company's Election, any Series A Preferred Stock
which
it is otherwise entitled to convert, including Series A
Preferred
Stock that has been selected for redemption at Company's
election
pursuant to this subsection 3(b).
(b) Company Must Have Immediately Available Funds or
Credit
Facilities. The Company shall not be entitled to send any Redemption
Notice
and begin the redemption procedure under Sections 3(a) unless it has:
(i) the full amount of the redemption price to cash,
available in
a demand or other immediately available account in a bank or
similar
financial institution; or
(ii) immediately available credit facilities, in the full
amount
of the redemption price with a bank or similar financial
institution,
or
(iii) an agreement with a standby underwriter willing to
purchase
from the Company a sufficient number of shares of stock to
provide
proceeds necessary to redeem any stock that is not converted
prior to
redemptions; or
(iv) a combination of the items set forth in (i), (ii), and
(iii)
above, aggregating the full amount of the redemption price.
(v) the failure of the Company's shareholders to
approve an
amendment to its Certificate of Incorporation to
authorize an
additional forty million (40,000,000) shares of Common Stock
(the
"Share Increase") at its annual shareholders' meeting to be
held in
November 1998 (the Shareholders' Meeting).
(c) Payment of Redemption Price. Each Holder submitting
Preferred
Stock being redeemed under this Section 3 shall send their
Series A
Preferred Stock Certificates to redeemed to the Company or its
Transfer
Agent, and the Company shall pay the applicable redemption price to
that
Holder within five (5) business days of the Date of Redemption at
Company's
Election.
(4) Redemption at Option of Holders.
(a) Redemption Option Upon Major Transaction. In addition to all
other
rights of the holders of Series A Preferred Shares contained herein,
after
a Major Transaction (as defined below), the holders of Series A
Preferred
Shares shall have the right in accordance with Section 4(f), at the
option
of the holders of at least two-thirds (2/3) of the Series A
Preferred
Shares then outstanding, to require the Company to redeem all of the
Series
A Preferred Shares then outstanding at a price per Series A Preferred
Share
equal to the greater of (i) 115% of the Liquidation Value (as
defined
below) of such share and (ii) the price calculated in accordance
with the
Redemption Rate (as defined below) calculated as of the date of the
public
announcement of such Major Transaction or the next date on which
the
exchange or market on which the Common Stock is traded in open if
such
public announcement is made (A) after 1:00 p.m. Eastern Standard
Time on
such date or (B) on a date on which the exchange or market on
which the
Common Stock is traded is closed.
(b) Redemption Option Upon Triggering Event. In addition to all
other
rights of the holders of Series A Preferred Shares contained herein,
after
a Triggering Event (as defined below), the holders of Series A
Preferred
Shares shall have the right in accordance with Section 4(g), at the
option
of the holders of at least two-thirds (2/3) of the Series A
Preferred
Shares then outstanding, to require the Company to redeem all of the
Series
A Preferred Shares then outstanding at a price per Series A
Preferred
Shares equal to the greater of (i) 115% of the Liquidation Value of
such
share and (ii) the price calculated in accordance with the Redemption
Rate
as of the date immediately preceding such Triggering Event on
which the
exchange or market on which the Common Stock is traded is open.
(c) "Redemption Rate." The "Redemption Rate" shall, as of any
date of
determination, be equal to (i) the Conversion Rate in effect as of
such
date as calculated pursuant to Section 2(b) multiplied by (ii) the
Closing
Bid Price of the Common Stock on such date.
(d) "Major Transaction." A "Major Transaction" shall be deemed to
have
occurred at such time as any of the following events:
(i) the consummation of any merger,
reorganization,
restructuring, consolidation, or similar transaction by or
involving
the Company except (A) a merger or consolidation where the
Company is
the survivor or (B) pursuant to a migratory merger effected
solely for
the purpose of changing the jurisdiction of incorporation
of the
Company;
(ii) sale of all or substantially all of the assets
of the
Company or all of its material subsidiaries or any similar
transaction
or related transactions which effectively results in a sale of
all or
substantially all of the assets of the Company and/or
its
subsidiaries;
(iii) the occurrence, after the date hereof, of the
acquisition,
by any person (including any entity or association) or persons
(other
than any existing stockholder of the Company or two or more
existing
stockholders of the Company, acting in concert, of securities
of the
Company (or the power to vote such securities) representing
50% or
more of the total voting power of all outstanding Common
Stock or
other voting securities of the Company; or
(iv) the failure of the Company to continue to own,
directly or
indirectly, all of the capital stock of all of its
material
subsidiaries (other than due to a merger or consolidation
of any
subsidiary into the Company or a wholly-owned subsidiary
of the
Company).
(e) "Triggering Event." A "Triggering Event" shall be deemed to
have
occurred at such time as any of the following events:
(i) either (A) the failure of the Registration Statement
to be
effective or to cover the resale of all of the shares of Common
Stock
issued or issuable upon conversion of the Series A Preferred
Shares at
any time after sixty (60) days after the Scheduled Effective
Date
(provided that for purposes of determining the Closing Bid Price
under
Section 4(c) above, the Triggering Event shall be deemed to
have
occurred on the first day of such 60-day period)or (B) for any
period
of sixty (60) consecutive days after the date that is sixty (60)
days
after the Scheduled Effective Date that Common Stock
issued or
issuable upon conversion of the Series A Preferred Shares
cannot be
sold under the Registration Statement for any reason (provided
that
for purposes of determining the Closing Bid Price under Section
4(c)
above, the Triggering Event shall be deemed to have occurred
on the
first day of such 60-day period);
(ii) if for any reason the Company fails to perform or
observe
any covenant, agreement, or other provision contained in Section
9 or
10 hereof or in Section 4(g) of the Securities Purchase
Agreement;
(iii) the Company's notice to any holder of Series A
Preferred
Shares, including by way of public announcement, at any time,
of its
intention for any reason not to comply with requests for
conversion of
any Series A Preferred Shares for shares of Common Stock;
(iv) if for any reason the Company fails to perform or
observe
any covenant, agreement, or other provision contained herein or
in the
Securities Purchase Agreement or the registration rights
agreement
required to be filed by the Company pursuant to Registration
Rights
Agreement, dated of even date herewith, between the Company
and its
initial holders of Series A Preferred Shares (the "Registration
Rights
Agreement"), and such failure is not cured within 30 days
after the
Company knows, or should have known with the exercise of
reasonable
diligence, of the occurrence thereof, and such failure has
had, or
could reasonably be expected to have, a material adverse effect
on (A)
the financial condition, operating results, business,
properties, or
operations of the Company and its subsidiaries taken as a whole
taking
into account any proceeds reasonably expected to be received
by the
Company or its subsidiaries in the foreseeable future from
insurance
policies or rights of indemnification or (B) the Series A
Preferred
Shares; or
(v) any representation or warranty contained in the
Securities
Purchase Agreement or the Registration Rights Agreement is
false or
misleading on or as of the date made and which either reflects
or has
had a material adverse effect on (A) the financial
condition,
operating results, business, properties, or operations of the
Company
and its subsidiaries taken as a whole taking into account any
proceeds
reasonably expected to be received by the Company or its
subsidiaries
in the foreseeable future from insurance policies or
rights of
indemnification or (B) the Series A Preferred Shares.
(vi) the failure of the Company's shareholders to
approve the
Share Increase at the Shareholders' Meeting.
(f) Mechanics of Redemption at Option of Buyer Upon Major
Transaction.
No sooner than fifteen (15) days nor later than ten (10) days prior
to the
consummation of a Major Transaction, but not prior to the
public
announcement of such Major Transaction, the Company shall deliver
written
notice thereof via facsimile and overnight courier ("Notice of
Major
Transaction") to each holder of Series A Preferred Shares. At any
time
after receipt of a Notice of Major Transaction, the holders of at
least
two-thirds (2/3) of the Series A Preferred Shares then outstanding
may
require the Company to redeem all of the holders' Series A Preferred
Shares
then outstanding in accordance with Section 4(a) by delivering
written
notice thereof via facsimile and overnight courier ("Notice of
Redemption
at Option of Buyer Upon Major Transaction") to the Company, which
Notice of
Redemption at Option of Buyer Upon Major Transaction shall indicate
(i) the
number of Series A Preferred Shares that such holders are voting in
favor
of redemption and (ii) the applicable redemption price, as
calculated
pursuant to Section 4(a) above.
(g) Mechanics of Redemption at Option of Buyer Upon Triggering
Event.
Within one (1) day after the occurrence of a Triggering Event, the
Company
shall deliver written notice thereof via facsimile and overnight
courier
("Notice of Triggering Event") to each holder of Series A Preferred
Shares.
At any time after receipt of a Notice of Triggering Event, the
holders of
at least two-thirds (2/3) of the Series A Preferred Shares then
outstanding
may require the Company to redeem all of the Series A Preferred Shares
then
outstanding in accordance with Section 4(b) by delivering written
notice
thereof via facsimile and overnight courier ("Notice of
Redemption at
Option of Buyer Upon Triggering Event") to the Company, which
Notice of
Redemption at Option of Buyer Upon Triggering Event shall indicate
(i) the
number of Series A Preferred Shares that such holders are voting in
favor
of redemption and (ii) the applicable redemption price, as
calculated
pursuant to Section 4(b) above.
(h) Payment of Redemption Price. Upon the Company's receipt
of a
Notice(s) of Redemption at Option of Buyer Upon Major Transaction
or a
Notice(s) of Redemption at Option of Buyer Upon Triggering Event,
as the
case may be, from the holders of at least two-thirds (2/3) of the
Series A
Preferred Shares then outstanding, the Company shall immediately
notify
each holder by facsimile of the Company's receipt of such requisite
notices
necessary to affect a redemption and each holder of Series A
Preferred
Shares shall thereafter promptly send such holder's Preferred
Stock
Certificates to be redeemed to the Company or its Transfer Agent.
The
Company shall pay the applicable redemption price, as calculated
pursuant
to Section 4(a) or 4(b) above, in cash to such holder within thirty
(30)
days after the Company' receipt of the requisite notices required to
affect
a redemption; provided that a holder's Preferred Stock Certificates
shall
have been so delivered to the Company or its Transfer Agent;
provided
further that if the Company is unable to redeem all of the
Series A
Preferred Shares, the Company shall redeem an amount from each
holder of
Series A Preferred Shares equal to such holder's pro-rata amount
(based on
the number of Series A Preferred Shares held by such holder relative
to the
number of Series A Preferred Shares outstanding) of all Series A
Preferred
Shares being redeemed. If the Company shall fail to redeem all
of the
Series A Preferred Shares submitted for redemption (other than
pursuant to
a dispute as to the determination of the Closing Bid Price
or the
arithmetic calculation of the Redemption Rate), the applicable
redemption
price payable in respect of such unredeemed Series A Preferred Shares
shall
bear interest at the rate of 2.5% per month (prorated for partial
months)
until paid in full. Until the Company pays such unpaid
applicable
redemption price in full to each holder, holders of at least two-
thirds
(2/3) of the Series A Preferred Shares then outstanding, including
shares
of Series A Preferred Shares submitted for redemption pursuant to
this
Section 4 and for which the applicable redemption price has not been
paid,
shall have the option (the "Void Optional Redemption Option") to, in
lieu
of redemption, require the Company to promptly return to each holder
all of
the Series A Preferred Shares that were submitted for redemption by
such
holder under this Section 4 and for which the applicable redemption
price
has not been paid, by sending written notice thereof to the
Company via
facsimile (the "Void Optional Redemption Notice"). Upon the
Company's
receipt of such Void Optional Redemption Notice(s) and prior to
payment of
the full applicable redemption price to each holder, (i) the
Notice(s) of
Redemption at Option of Buyer Upon Triggering Event or the
Notice(s) of
Redemption at Option of Buyer Upon Major Transaction, as the case
may be,
shall be null and void with respect to those Series A Preferred
Shares
submitted for redemption and for which the applicable redemption
price has
not been paid, (ii) the Company shall immediately return any
Series A
Preferred Shares submitted to the Company by each holder for
redemption
under this Section 4(i) and for which the applicable redemption
price had
not been paid, (iii) the Fixed Conversion Price of such returned
Series A
Preferred Shares shall be adjusted to the lesser of (A) the
Fixed
Conversion Price as in effect on the date on which the Void
Option
Redemption Notice(s) is delivered to the Company and (B) the lowest
Closing
Bid Price during the period beginning on the date on which the
Notice(s) of
Redemption of Option of Buyer Upon Major Transaction or the
Notice(s) of
Redemption at Option of Buyer Upon Triggering Event, as the case may
be, is
delivered to the Company and ending on the date on which the Void
Optional
Redemption Notice(s) is delivered to the Company; provided
that no
adjustment shall be made if such adjustment would result in an
increase of
the Fixed Conversion Price then in effect, and (iv) the
Conversion
Percentage in effect at such time and thereafter shall be reduced
by a
number of percentage points equal to the product of (A) two and one-
half
(2.5) and (B) the number of months (prorated for partial months)
in the
period beginning on the date on which the Notice(s) of Redemption at
Option
of Buyer Upon Major Transaction or the Notice(s) of Redemption at
Option of
Buyer Upon Triggering Event, as the case may be, is delivered
to the
Company and ending on the date on which the Void Optional
Redemption
Notice(s) is delivered to the Company. Notwithstanding the
foregoing, in
the event of a dispute as to the determination of the Closing Bid
Price or
the arithmetic calculation of the Redemption Rate, such dispute
shall be
resolved pursuant to Section 2(f)(iii) above with the term
"Closing Bid
Price" being substituted for the term "Average Market Price" and the
term
"Redemption Rate" being substituted for the term "Conversion Rate."
(5) Inability to Fully Convert.
(a) Holder's Option if Company Cannot Fully Convert. If at any
time
after the earlier to occur of (i) effectiveness of the
Registration
Statement or (ii) sixty (60) days after the Scheduled Effective Date,
upon
the Company's receipt of a Conversion Notice, the Company does not
issue
shares of Common Stock which are registered for resale under
the
Registration Statement within five (5) business days of the time
required
in accordance with Section 2(f) hereof, for any reason or for no
reason,
including, without limitation, because the Company (x) does not
have a
sufficient number of shares of Common Stock authorized and available,
(y)
is otherwise prohibited by applicable law or by the rules or
regulations of
any stock exchange, interdealer quotation system or other self-
regulatory
organization with jurisdiction over the Company or its
Securities,
including without limitation the Nasdaq-Small Cap, from issuing all
of the
Common Stock which is to be issued to a holder of Series A Preferred
Shares
pursuant to a Conversion Notice or (z) fails to have a sufficient
number of
shares of Common Stock registered and eligible for resale
under the
Registration Statement, then the Company shall issue as many
shares of
Common Stock as it is able to issue in accordance with such
holder's
Conversion Notice and pursuant to Section 2(f) above and, with
respect to
the unconverted Series A Preferred Shares, the holder, solely at
such
holder's option, can, in addition to any other remedies such
holder may
have hereunder, under the Securities Purchase Agreement
(including
indemnification under Section 8 thereof), under the Registration
Rights
Agreement, at law or in equity, elect to:
(i) require the Company to redeem from such holder those
Series A
Preferred Shares for which the Company is unable to issue Common
Stock
in accordance with such holder's Conversion Notice
("Mandatory
Redemption") at a price per Series A Preferred Share (the
"Mandatory
Redemption Price") equal to the greater of (x) 115% of the
Liquidation
Value of such share and (y) the Redemption Rate as of such
Conversion
Date;
(ii) if the Company's inability to fully convert
Series A
Preferred Shares is pursuant to Section 5(a)(z) above,
require the
Company to issue restricted shares of Common Stock in accordance
with
such holder's Conversion Notice and pursuant to Section 2(f)
above; or
(iii) void its Conversion Notice and retain or have
returned, as
the case may be, the nonconverted Series A Preferred Shares that
were
to be converted pursuant to such holder's Conversion Notice.
(b) Mechanics of Fulfilling Holder's Election. The Company
shall
immediately send via facsimile to a holder of Series A Preferred
Shares,
upon receipt of a facsimile copy of a Conversion Notice from such
holder
which cannot be fully satisfied as described in Section 5(a)
above, a
notice of the Company's inability to fully satisfy such holder's
Conversion
Notice (the "Inability to Fully Convert Notice"). Such Inability to
Fully
Convert Notice shall indicate (i) the reason why the Company is
unable to
fully satisfy such holder's Conversion Notice, (ii) the number of
Series A
Preferred Shares which cannot be converted and (iii) the
applicable
Mandatory Redemption Price. Such holder must within five (5) business
days
of receipt of such Inability to Fully Convert Notice deliver written
notice
via facsimile to the Company ("Notice in Response to Inability to
Convert")
of its election pursuant to Section 5(a) above.
(c) Payment of Redemption Price. If such holder shall elect to
have
its shares redeemed pursuant to Section 5(a) above, the Company
shall pay
the Mandatory Redemption Price in cash to such holder within thirty
(30)
days of the Company's receipt of the holder's Notice in
Response to
Inability to Convert. If the Company shall fail to pay the
applicable
Mandatory Redemption Price to such holder on a timely basis as
described in
this Section 5(c) (other than pursuant to a dispute as to the
determination
of the Closing Bid Price or the arithmetic calculation of the
Redemption
Rate), such unpaid amount shall bear interest at the rate of 2.5% per
month
(prorated for partial months) until paid in full. Until the full
Mandatory
Redemption Price is paid in full to such holder, such holder may
void the
Mandatory Redemption with respect to those Series A Preferred
Shares for
which the full Mandatory Redemption Price has not been paid and
receive
back such Series A Preferred Shares. Notwithstanding the foregoing,
if the
Company fails to pay the applicable Mandatory Redemption Price within
such
thirty (30) days time period due to a dispute as to the
determination of
the Closing Bid Price or the arithmetic calculation of the Redemption
Rate,
such dispute shall be resolved pursuant to Section 2(f)(iii) above
with the
term "Closing Bid Price" being substituted for the term "Average
Market
Price" and the term, "Redemption Rate" being substituted for the
term
"Conversion Rate."
(d) Pro-rata Conversion and Redemption. In the event the
Company
receives a Conversion Notice from more than one holder of
Series A
Preferred Shares on the same day and the Company can convert and
redeem
some, but not all, of the Series A Preferred Shares pursuant to
this
Section 5, the Company shall convert and redeem from each holder of
Series
A Preferred Shares electing to have Series A Preferred Shares
converted and
redeemed at such time an amount equal to such holder's pro-rata
amount
(based on the number of Series A Preferred Shares held by such
holder
relative to the number of Series A Preferred Shares outstanding)
of all
Series A Preferred Shares being converted and redeemed at such time.
(6) Reissuance of Certificates. In the event of a conversion or
redemption
pursuant to this Certificate of Designations of less than all of the
Series A
Preferred Shares represented by a particular Preferred Stock Certificate,
the
Company shall promptly cause to be issued and delivered to the holder of
such
Series A Preferred Shares a Preferred stock certificate representing
the
remaining Series A Preferred Shares which have not been so
converted or
redeemed.
(7) Reservation of Shares. The Company shall, so long as any of the
Series
A Preferred Shares are outstanding reserve and keep available out
of its
authorized and unissued Common Stock, solely for the purpose of
effecting the
conversion of the Series A Preferred Shares, such number of shares of
Common
Stock as shall from time to time be sufficient to affect the conversion
of all
of the Series A Preferred Shares then outstanding; provided that the
number of
shares of Common Stock so reserved shall at no time be less than 200%
of the
number of shares of Common Stock for which the Series A Preferred Shares
are at
any time convertible and provide further that until approval of the
Share
Increase by the Company's shareholders at the Shareholder's Meeting, the
Company
will not be required to comply with such reservation ratio (the
"Reservation
Ratio").
(8) Voting Rights. Holders of Series A Preferred Shares shall
have no
voting rights, except as required by law, including but not limited
to the
General Corporation Law of the State of Delaware and as expressly
provided in
this Certificate of Designations.
(9) Liquidation, Dissolution, Winding-Up. In the event of any
voluntary or
involuntary liquidation, dissolution, or winding up of the Company, the
holders
of the Series A Preferred Shares shall be entitled to receive in cash out
of the
assets of the Company, whether from capital or from earnings available
for
distribution to its stockholders (the "Preferred Funds"), before any
amount
shall be paid to the holders of any of the capital stock of the Company
of any
class junior in rank to the Series A Preferred Shares in respect
of the
preferences as to the distributions and payments on the liquidation,
dissolution
and winding up of the Company, an amount per Series A Preferred Share
equal to
the sum of (i) $10,000 and (ii) an amount equal to the product of (.06)
(N/365)
($10,000) (such sum being referred to as the "Liquidation Value");
provided
that, if the Preferred Funds are insufficient to pay the full amount due
to the
holders of Series A Preferred Shares and holders of shares of other
classes or
series of preferred stock of the Company that are of equal rank with the
Series
A Preferred Shares as to payments of Preferred Funds (the "Pari Passu
Shares"),
then each holder of Series A Preferred Shares and Pari Passu Shares
shall
receive a percentage of the Preferred Funds equal to the full
amount of
Preferred Funds payable to such holder as a liquidation
preference, in
accordance with their respective Certificate of Designations,
Preferences and
Rights as a percentage or the full amount of Preferred Funds payable
to all
holders of Series A Preferred Shares and Pari Passu Shares. The
purchase or
redemption by the Company of stock of any class in any manner permitted by
law,
shall not for the purposes hereof, be regarded as a liquidation,
dissolution or
winding up of the Company. Neither the consolidation or merger of the
Company
with or into any other Person, nor the sale or transfer by the Company of
less
than substantially all of its assets, shall, for the purposes hereof, be
deemed
to be a liquidation, dissolution or winding up of the Company. No
holder of
Series A Preferred Shares shall be entitled to receive any amounts with
respect
thereto upon any liquidation, dissolution or winding up of the Company
other
than the amounts provided for herein.
(10) Preferred Rate. All shares of Common Stock shall be of junior
rank to
all Series A Preferred Shares in respect to the preferences as to
distributions
and payments upon the liquidation, dissolution, and winding up of the
Company.
The rights of the shares of Common Stock shall be subject to the
Preferences and
relative rights of the Series A Preferred Shares. The Series A Preferred
Shares
shall be of greater priority than any Series of Common or Preferred
Stock
hereinafter issued by the Company. Without the prior express written
consent of
the holders of not less than a majority of the then outstanding
Series A
Preferred Shares, the Company shall not hereafter authorize or issue
additional
or other capital stock that is of senior or equal rank to the Series A
Preferred
Shares in respect of the preferences as to distributions and payments
upon the
liquidation, dissolution and winding up of the Company. Without the
prior
express written consent of the holders of not less than two-thirds (2/3)
of the
then outstanding Series A Preferred Shares, the Company shall not
hereafter
authorize or make any amendment to the Company's Certificate of
Incorporation or
bylaws, or make any resolution of the board of directors with the
Delaware
Secretary of State containing any provisions, which would adversely
affect or
otherwise impair the rights or relative priority of the holders of the
Series A
Preferred Shares relative to the holders of the Common Stock or the
holders of
any other class of capital stock. In the event of the merger or
consolidation of
the Company with or into another corporation, the Series A Preferred
Shares
shall maintain their relative powers, designations, and preferences
provided for
herein and no merger shall result inconsistent therewith.
(11) Restriction on Redemption and Dividends.
(a) Restriction on Dividend. If any Series A Preferred
Shares are
outstanding, without the prior express written consent of the
holders of
not less than a majority of the then outstanding Series A Preferred
Shares,
the Company shall not directly or indirectly declare, pay or
make any
dividends or other distributions upon any of the Common Stock so
long as
written notice thereof has been given to holders of the Series A
Preferred
Shares at least 30 days prior to the earlier of (a) the record date
taken
for or (b) the payment of any such dividend or other
distribution.
Notwithstanding the foregoing, this Section 10(a) shall not
prohibit the
Company from declaring and paying a dividend in cash with respect
to the
Common Stock so long as the Company: (i) pays simultaneously to each
holder
of Series A Preferred Shares an amount in cash equal to the amount
such
holder would have received had all of such holder's Series A
Preferred
Shares been converted to Common Stock pursuant to Section 2
hereof one
business day prior to the record date for any such dividend, and (ii)
after
giving effect to the payment of any dividend and any other
payments
required in connection therewith including to the holders of the
Series A
Preferred Shares under clause 10(a)(i) hereof, the Company has in
cash or
cash equivalents an amount equal to the aggregate of: (A) all
of its
liabilities reflected on its most recently available balance sheet,
(B) the
amount of any indebtedness incurred by the Company or any of
its
subsidiaries since its most recent balance sheet and (C) 125% of the
amount
payable to all holders of any shares of any class of preferred stock
of the
Company assuming a liquidation of the Company as the date of its
most
recently available balance sheet.
(b) Restriction on Redemption. If any Series A Preferred
Shares are
outstanding, without the prior express written consent of the
holders of
not less than a majority of the then outstanding Series A Preferred
Shares,
the Company shall not directly or indirectly redeem, purchase or
otherwise
acquire from any person or entity other than from a direct or
indirect
wholly-owned subsidiary of the Company, or permit any subsidiary
of the
Company to redeem, purchase or otherwise acquire from any person or
entity
other than from the Company or another direct or indirect wholly-
owned
subsidiary of the Company, any of the Company's or any subsidiary's
capital
stock or other equity securities (including, without limitation,
warrants,
options and other rights to acquire such capital stock or other
equity
securities).
(12) Vote to Change the Terms of Series A Preferred Shares. The
affirmative
vote at a meeting duly called for such purpose or the written consent
without a
meeting, of the holders of not less than a majority of the then
outstanding
Series A Preferred Shares, shall be required for any change to this
Certificate
of Designations or the Company's Certificate of Incorporation which would
amend,
alter, change or repeal any of the powers, designations, preferences and
rights
of the Series A Preferred Shares.
(13) Lost or Stolen Certificates. Upon receipt by the Company of
evidence
satisfactory to the Company of the loss, theft, destruction or mutilation
of any
Preferred Stock Certificates representing the Series A Preferred Shares,
and, in
the case of loss, theft or destruction, of any indemnification
undertaking by
the holder to the Company and, in the case of mutilation, upon surrender
and
cancellation of the Preferred Stock Certificate(s), the Company shall
execute
and deliver new preferred stock certificate(s) of like tenor and date;
provided,
however, the Company shall not be obligated to re-issue preferred
stock
certificates if the holder contemporaneously requests the Company to
convert
such Series A Preferred Shares into Common Stock.
(14) Withholding Tax Obligations. Notwithstanding anything herein
to the
contrary, to the extent that the Company receives advice in writing
from its
counsel that there is a reasonable basis to believe that the Company is
required
by applicable federal laws or regulations and delivers a copy of such
written
advice to the holders of the Series A Preferred Shares so effected, the
Company
may reasonably condition the making of any distribution (as such term is
defined
under applicable federal tax law and regulations) in respect of any
Series A
Preferred Share on the holder of such Series A Preferred Shares depositing
with
the Company an amount of cash sufficient to enable the Company to
satisfy its
withholding tax obligations (the "Withholding Tax") with respect to
such
distribution. Notwithstanding the foregoing or anything to the contrary,
if any
holder of the Series A Preferred Shares so effected receives advice in
writing
from its counsel that there is a reasonable basis to believe that the
Company is
not so required by applicable federal laws or regulations and delivers a
copy of
such written advice to the Company, the Company shall not be
permitted to
condition the making of any such distribution in respect of any
Series A
Preferred Share on the holder of such Series A Preferred Shares depositing
with
the Company any Withholding Tax with respect to such distribution,
provided,
however, the Company may reasonably condition the making of any
such
distribution in respect of any Series A Preferred Share on the holder of
such
Series A Preferred Shares executing and delivering to the Company,
at the
election of the holder, either: (i) if applicable, a properly completed
Internal
Revenue Service Form 4224, or (a) an indemnification agreement in
reasonably
acceptable form, with respect to any federal tax liability, penalties
and
interest that may be imposed upon the Company by the Internal Revenue
Service as
a result of the Company's failure to withhold in connection with
such
distribution to such holder. If the conditions in the preceding two
sentences
are fully satisfied, the Company shall not be required to pay any
additional
damages set forth in Section 2(f)(v) of this Certificate of Designations
if its
failure to timely deliver any Conversion Shares results solely from the
holder's
failure to deposit any withholding tax hereunder or provide to the
Company an
executed indemnification agreement in the form reasonably satisfactory
to the
Company.
IN WITNESS WHEREOF, the Company has caused this Certificate of
Designations
to be signed by L. Daniel Rawitch, its Chief Executive Officer, as of the
29th
day of September, 1998.
FINET HOLDINGS CORPORATION
By: /s/ Jan C. Hoeffel
----------------------------------------
- --
Jan C. Hoeffel
President
<PAGE>
EXHIBIT I
FINET HOLDINGS CORPORATION
CONVERSION NOTICE
Reference is made to the Certificate of Designations, Preferences,
and
Rights of Finet Holdings Corporation (the "Certificate of
Designations"). In
accordance with and pursuant to the Certificate of Designations, the
undersigned
hereby irrevocably elects to convert the above shares of Series A
Preferred
Stock No(s).___________ into shares of Common Stock, $.01 par value (the
"Common
Stock"), of Finet Holdings Corporation (the "Company") according to
the
conditions hereof, as of the date written below. If shares are to be
issued in
the name of a person other than undersigned, the undersigned will
pay all
transfer taxes payable with respect thereto and is delivering herewith
such
certificates, opinions, and signature guarantee as reasonably requested
by the
Company or its Transfer Agent. No fee will be charged to the Holder
for any
conversion, except for transfer taxes, if any.
The undersigned represents and warrants that all offers and sales
by the
undersigned of the shares of Common Stock issuable to the undersigned
upon
conversion of the shares of Series A Preferred Stock shall be made only
pursuant
to (i) registration of the Common Stock under the Act or (ii) advice of
counsel
that such sale is exempt from registration required by Section 5 under the
Act.
Date of Conversion:
---------------------------------------------
- ---
Number of Series A Preferred Shares
to be converted:
---------------------------------------------
- ---
Stock certificate no(s). of Series A
Preferred Shares to be converted:
Please confirm the following information
Conversion Price:
--------------------------------------------
- ---
Number of Shares of Common Stock to
be issued:
---------------------------------------------
- ---
Please issue the Common Stock into which the Series A Preferred Shares are
being
converted in the following name and to the following address:
<PAGE>
Issue to:(1)
---------------------------------------------
- ---
---------------------------------------------
- ---
Facsimile Number:
---------------------------------------------
- ---
Authorization:
---------------------------------------------
- ---
By:
------------------------------------------
- ---
Title:
------------------------------------------
- ---
Dated:
------------------------------------------
- ---
ACKNOWLEDGED AND AGREED:
FINET HOLDINGS CORPORATION
By:
----------------------------------------
Name:
----------------------------------------
Title:
----------------------------------------
Date:
----------------------------------------
- --------
(1) If other than to the record holder of the Series A Preferred Shares,
any applicable transfer tax must be paid by the undersigned.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
Registrant's unaudited financial reports and is qualified in its entirety
by reference to such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> APR-30-1999
<PERIOD-END> OCT-31-1998
<CASH> 137,000
<SECURITIES> 0
<RECEIVABLES> 122,896,000
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 5,684,000
<DEPRECIATION> 3,361,000
<TOTAL-ASSETS> 137,217,000
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 391,000
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 137,217,000
<SALES> 0
<TOTAL-REVENUES> 9,265,000
<CGS> 0
<TOTAL-COSTS> 16,644,000
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 2,243,000
<INCOME-PRETAX> (7,379,000)
<INCOME-TAX> 0
<INCOME-CONTINUING> (7,379,000)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (7,379,000)
<EPS-PRIMARY> (.23)
<EPS-DILUTED> (.23)
</TABLE>