Exhibit 10.38

 

SECOND AMENDMENT TO THIRD AMENDED AND RESTATED
WAREHOUSING CREDIT AND SECURITY AGREEMENT

 

This Second Amendment to Third Amended and Restated Warehousing Credit and
Security Agreement (this “Amendment”), is entered into effective as of the 29th
day of June, 2003, by and among SIRVA MORTGAGE, INC., an Ohio corporation f/k/a
Cooperative Mortgage Services, Inc. (“Company”), WASHINGTON MUTUAL BANK, FA, a
federal association, successor by merger to BANK UNITED, in its capacity as one
of the Lenders and Agent for the Lenders (“Agent”) and the lenders (“Lenders”)
party to the Warehouse Agreement, as defined below.

 

Section 1.                                            Recitals.  Company, Agent,
and Lenders have entered into that certain Third Amended and Restated
Warehousing Credit and Security Agreement dated September 30, 2002, (the
“Warehouse Agreement”) for the purposes and consideration therein expressed,
pursuant to which Lenders have agreed to make loans to Company as therein
provided. Company, Agent, and Lenders desire to amend the Warehouse Agreement to
make certain modifications as more particularly set forth herein. Therefore,
Company, Agent, and Lenders hereby agree as follows, intending to be legally
bound:

 

Section 2.                                             Definitions and
References.  Unless the context otherwise requires or unless otherwise expressly
defined herein, the terms in the Warehouse Agreement shall have the same
meanings whenever used in this Amendment.

 

Section 3.                                            Amendments.  The Warehouse
Agreement is hereby amended, as follows:

 

(a)                                  The following definition in Section 1.1 of
the Warehouse Agreement is hereby amended as follows:

 

“Commitment” means the commitment of the Lenders to make Advances hereunder in
an aggregate principal amount at any time outstanding that shall not exceed
SEVENTY-FIVE MILLION AND NO/100 DOLLARS ($75,000,000.00) (“Aggregate Commitment
Amount”), provided, however, that (a) on July 31, 2003, the Aggregate Commitment
Amount shall be reduced to TWENTY-EIGHT MILLION AND NO/100 DOLLARS
($28,000,000.00) and (b) no Lender’s portion of such Advances may ever exceed
its Commitment Amount.  The Commitment shall be composed of two tranches with
the first tranche (“Tranche A Commitment”) being in the amount of $47,000,000.00
and having a Termination Date occurring on the close of business on July 30,
2003 and the second tranche (“Tranche B Commitment”) being in the amount of
$28,000,000.00 and having a Termination Date occurring on July 31, 2004.

 

“Loan Documents” means this Agreement, the Notes, the Swing Line Note, and each
other document, instrument or agreement executed by the Company or any other
Person in connection herewith or therewith, as any of the same may be amended,
restated, renewed or replaced from time to time.

 

“Obligations” means any and all indebtedness, obligations, and liabilities of
the Company to each Lender, the Agent, and the Swing Line Lender (whether now

 

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existing or hereafter arising, voluntary or involuntary, whether or not jointly
owed with others, direct or indirect, absolute or contingent, liquidated or
unliquidated, and whether or not from time to time decreased or extinguished and
later increased, created or incurred), arising out of or related to the Loan
Documents, or any of them, and any renewals, extensions, modifications,
enlargements, reinstatements or rearrangements thereof.

 

“Swing Line” means the short term revolving credit facility provided for in
Section 2.10 under which the Company may borrow from Washington Mutual to bridge
the Company’s daily borrowing requirements under the Commitment.

 

“Swing Line Advances” means a disbursement by the Swing Line Lender under the
Swing Line.

 

“Swing Line Advance Due Date” means, with respect to each Swing Line Advance,
the second (2nd) Business Day following the Business Day when Washington Mutual
funds such Swing Line Advance.

 

“Swing Line Limit” means, for any day, the least of (x) Ten Million Dollars
($10,000,000.00) or (y) the amount of the Commitment for that day minus the sum
of all Advances outstanding on that day.

 

“Swing Line Lender” means Washington Mutual.

 

“Swing Line Note” means the promissory note delivered by Company to Swing Line
Lender pursuant to Section 2.13 of this Agreement in the form of Exhibit “R”
attached hereto and all renewals, extensions, and modifications thereof and all
substitutions therefor.

 

(b)           Exhibit “O” to the Warehouse Agreement is deleted in its entirety
and Exhibit “O” to this Amendment is given in substitution and replacement
thereof.

 

(c)           Section 2.2 (d) of the Warehouse Agreement is deleted in its
entirety, and the following is substituted in lieu thereof:

 

“(d)                           Each Advance Request shall constitute a request
for both (l) a Swing Line Advance to be funded by Swing Line Lender and an
Advance to be made by Lenders to refinance that Swing Line Advance on its Swing
Line Due Date and (2) the Advance requested by the text of the Advance Request
to be funded by the Lenders. The Swing Line Lender may elect, in its sole
discretion, to fund such Advance Request as a Swing Line Advance. If the Swing
Line Lender elects not to fund such Advance Request as a Swing Line Advance, the
Agent shall promptly, and in any case not later than 1:00 p.m. on the date an
Advance is to be made, notify each Lender of its receipt of an Advance Request,
the matters specified therein, and of such Lender’s Commitment Percentage of the
requested Advance. If all conditions precedent to such Advance have been met,
each Lender shall remit its Commitment Percentage of any Advance requested in an
Advance Request to Agent’s principal office in Houston, Texas, by wire

 

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transfer according to Agent’s wire instructions, in funds that are available for
immediate use by Agent by 4:00 p.m. on the date such Advance is to be made.”

 

(d)                                 Section 2.7 (a) and (b) of the Warehouse
Agreement is deleted in its entirety, and the following is substituted in lieu
thereof:

 

“(a)                            Payments.  Except as otherwise specifically
provided herein, all payments hereunder shall be made to the Agent on behalf of
the Lenders and the Swing Line Lender, as applicable, not later than the close
of business (Houston, Texas time) on the date when due unless such date is a
non-Business Day, in which case, such payment shall be due not later than 2:00
p.m. (Houston, Texas time) on the first Business Day thereafter, and shall be
made in lawful money of the United States of America in immediately available
funds.  Any such payment made after 2:00 p.m. (Houston, Texas time) shall be
deemed to be received on the next Business Day and, if applicable, interest
thereon shall continue to accrue until such next Business Day. No Lender
directly invoices Company for - and only Agent invoices Company for – interest
under the Loan Documents.

 

(b)                                 Distributions.  When received under Section
2.7(a) above, Agent shall distribute each payment to each Lender ratably in
accordance with its Commitment Percentage or Swing Line Lender, as applicable,
reasonably promptly after receipt but by no later than 4:00 p.m. on the Business
Day the payment is deemed to be received by Agent under Section 2.7(a) above. If
Agent fails to distribute any payment to any Lender or the Swing Line Lender as
required by this Section 2.7(b), then Agent shall pay to that Lender or the
Swing Line Lender, as applicable, on demand interest on that payment, from the
date due under this clause until paid, at any annual interest rate equal from
day to day to the Federal Funds Rate.”

 

(e)                                  The following Section 2.13  Swing Line.  is
hereby added to the end of Article 2 of the Warehouse Agreement for all
purposes:

 

“2.13                     Swing Line.  On the terms and subject to the
conditions set forth herein, the Swing Line Lender agrees, from time to time
during the period from the date hereof to but not including the Termination
Date, to fund revolving credit Swing Line Advances to the Company in principal
amounts which do not on any day exceed in the aggregate when combined with all
other Swing Line Advances outstanding on that day the Swing Line Limit for the
purpose of initially funding requested Advances under the Commitment. A Swing
Line Advance shall bear interest, from the date of such Swing Line Advance until
paid in full, at the interest rates applicable to an Advance if such Swing Line
Advance had been initially funded by the Lenders as an Advance under the
Commitment.  Interest on such Swing Line Advances shall be due and payable to
the Swing Line Lender on the same dates and in the same manner as interest on
Advances is due and payable under Section 2.4 of this Agreement. Swing Line
Advances shall be evidenced by the Swing Line Note. Each Lender absolutely and
unconditionally agrees to fund such Lender’s Commitment Percentage of each Swing
Line Advance, regardless of any Default or Event of Default or other condition
which would otherwise excuse such Lender from funding its Commitment Percentage
of such Swing Line

 

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Advance, provided that (A) no Lender shall be required to make Advances to repay
Swing Line Advances which would cause such Lender’s portion of all Advances then
outstanding to exceed such Lender’s Commitment Amount, in each case at the time
the Lender funds its Commitment Percentage of such Swing Line Advances; and (B)
a Lender shall not be obligated to make Advances to repay Swing Line Advances
unless the Swing Line Lender believed in good faith that all conditions to
making the subject Swing Line Advance were satisfied at the time such Swing Line
Advance was made. Upon an Event of Default and the acceleration of the
Obligations, each Lender (including Wamu) shall fund such Lender’s Commitment
Percentage of all outstanding Swing Line Advances.  Agent shall notify each
Lender no later than 11:00 a.m. of the Swing Line Advance Due Date of an Advance
Request funded by a Swing Line Advance and of such Lender’s Commitment
Percentage in the Advance to refinance such Swing Line Advance.  Each Lender’s
Commitment Percentage of Swing Line Advance shall be remitted to the Agent on
behalf of Swing Line Lender in immediately available funds by wire transfer
according to Agent’s wire instructions by 4:00 p.m. on (i) the date of Agent’s
notice to refinance such Swing Line Advance, if such notice is made prior to
11:00 a.m. on such date or (ii) otherwise, the first Business Day following such
notice.  Agent shall promptly apply such Lender’s Advances to the Swing Line
Advances outstanding and remit the same promptly to the Swing Line Lender. Upon
any such delivery and application, the amount so refunded shall cease to be a
Swing Line Advance, and shall become an Advance made by the applicable Lender to
the Company. If a Lender fails to make its Commitment Percentage of that Swing
Line Advance available to Agent on its due date (whether because of that
Lender’s default, because that Lender is not open for business on that Business
Day, or otherwise) then Agent may recover that amount on demand (i) from that
Lender, together with interest at the Federal Funds Rate, during the period from
the due date to the date Agent recovers that amount from that Lender - which
payment is deemed to be that Lender’s Commitment Percentage of that Advance or
(ii) if that Lender fails to pay that amount upon demand, then from Company
together with interest at an annual interest rate equal to the rate applicable
to the requested Advance during the period from the due date to the date Agent
recovers that amount from Company.

 

(f)                                    Section 7.6  Adjusted Tangible Net Worth
of the Warehouse Agreement is deleted in its entirety, and the following is
substituted in lieu thereof:

 

“7.6                           Adjusted Tangible Net Worth Permit the sum of the
Adjusted Tangible Net Worth of Company (and its Subsidiaries, on a consolidated
basis) to be less than an amount equal to the sum of THREE MILLION SIX HUNDRED
THOUSAND AND NO/100 DOLLARS ($3,600,000.00) plus fifty percent of the Company’s
net income for each calendar month on a cumulative basis (in no event shall the
foregoing amount be reduced by any net loss of the Company realized at any
time), computed as of the end of each calendar month.

 

(g)                                 Section 8.3     Application of Proceeds.  of
the Warehouse Agreement is deleted in its entirety, and the following is
substituted in lieu thereof:

 

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“8.3                           Application of Proceeds.  The proceeds of any
sale, disposition or other enforcement of the security interest in all or any
part of the Collateral shall be applied by the Agent as follows:

 

First, to the payment of the costs and expenses of such sale or enforcement,
including reasonable compensation to the Agent’s agents and counsel, and all
expenses, liabilities and advances made or incurred by or on behalf of the Agent
in connection therewith;

 

Second, to the payment of all amounts due and payable on the Swing Line Note;

 

Third, to the payment of all amounts due (other than principal and interest)
under the Notes or this Agreement - payable ratably to Lenders in the proportion
that each Lender’s share of those amounts bears to the total of those amounts
for all Lenders;

 

Fourth, to the payment of interest accrued and unpaid on the Notes - payable
ratably to each Lender in accordance with its Commitment Percentage;

 

Fifth, to the payment of the outstanding principal balance of the Notes -
payable ratably to each Lender in accordance with its Commitment Percentage;

 

Sixth, to the payment of all other Obligations - payable ratably to Lenders in
the proportion that each Lender’s share of those amounts bears to the total of
those amounts for all Lenders; 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 of the Company, the Company shall remain
liable for any deficiency.

 

(h)                                 Exhibit “R” to this Amendment is added as
Exhibit  “R” to the Warehouse Agreement.

 

Section 4.                                            Representations and
Release of Claims. Except as otherwise specified herein, the terms and
provisions hereof shall in no manner impair, limit, restrict or otherwise affect
the Obligations of Company as evidenced by the Loan Documents. Company hereby
acknowledges, agrees, and represents that (i) Company is indebted to Lenders
pursuant to the terms of the Notes; (ii) the liens, security interests and
assignments created and evidenced by the Loan Documents are, respectively,
first, prior, valid and subsisting liens, security interests and assignments
against the Collateral and secure all indebtedness and obligations of Company to
Lenders under the Notes, the Warehouse Agreement, all other Loan Documents, as
modified

 

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herein; (iii) all of the representations and warranties contained in the
Warehouse Agreement and all instruments and documents executed pursuant thereto
or contemplated thereby are true and correct in all material respects on and as
of this date; (iv) there are no claims or offsets against, or defenses or
counterclaims to, the terms or provisions of the Loan Documents, and the other
obligations created or evidenced by the Loan Documents; (v) Company has no
claims, offsets, defenses or counterclaims arising from any of the Agent’s or
Lenders’ acts or omissions with respect to the Loan Documents, or the Agent’s or
Lenders’ performance under the Loan Documents; (vi) the representations and
warranties contained in the Loan Documents are true and correct representations
and warranties of Company, as of the date hereof; and (vii) Company is not in
default and no event has occurred which, with the passage of time, giving of
notice, or both, would constitute a default by Company of Company’s obligations
under the terms and provisions of the Loan Documents. In consideration of the
modification of Loan Documents, all as herein provided, and the other benefits
received by Company hereunder, Company hereby RELEASES, RELINQUISHES and forever
DISCHARGES Agent, each Lender, their respective predecessors, successors,
assigns, shareholders, principals, parents, subsidiaries, agents, officers,
directors, employees, attorneys and representatives (collectively, the “Lender
Released Parties”), of and from any and all claims, demands, actions and causes
of action of any and every kind or character, whether known or unknown, present
or future, which Company has, or may have against Lender Released Parties,
arising out of or with respect to any and all transactions relating to the
Warehouse Agreement, the Notes, and the other Loan Documents occurring prior to
the date hereof, including any other loss, expense and/or detriment, of any kind
or character, growing out of or in any way connected with or in any way
resulting from the acts, actions or omissions of the Lender Released Parties,
and including any loss, cost or damage in connection with any breach of
fiduciary duty, breach of any duty of fair dealing, breach of competence, breach
of funding commitment, undue influence, duress, economic coercion, conflict of
interest, negligence, bad faith, malpractice, violations of the Racketeer
Influence and Corrupt Organizations Act, intentional or negligent infliction of
emotional or mental distress, tortious interference with corporate governance or
prospective business advantage, tortious interference with contractual
relations, breach of contract, deceptive trade practices, libel, slander,
conspiracy, the charging, contracting for, taking, reserving, collecting or
receiving of interest in excess of the highest lawful rate applicable to the
Loan Documents (i.e., usury), any violations of federal or state law, any
violations of federal or state banking rules, laws or regulations, including,
but not limited to, any violations of Regulation B, Equal Credit Opportunity,
bank tying act claims, any violation of the Texas Free Enterprise Antitrust Act
or any violation of federal antitrust acts.

 

Section 5.                                            Severability. In the event
any one or more provisions contained in the Warehouse Agreement or this
Amendment should be held to be invalid, illegal or unenforceable in any respect,
the validity, enforceability and legality of the remaining provisions contained
herein and therein shall not be affected in any way or impaired thereby and
shall be enforceable in accordance with their respective terms.

 

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Section 6.                                            Fees and Expenses.  In
consideration of Lenders’ agreement to enter into this Amendment, Company shall
pay to the Agent on behalf of the Lenders (to be shared in their respective
Commitment Percentages) an amendment fee in the amount of $3,000.00, which fee
shall be due and payable upon the execution and delivery of this Amendment.
Company agrees to pay all out-of-pocket costs and expenses (including reasonable
attorney’s fees and expenses) of the Agent and the Lenders in connection with
the preparation, operation, administration and enforcement of this Amendment.

 

Section 7.                                            Ratification of
Agreements.  (a) Except as amended hereby, Company ratifies and confirms that
the Warehouse Agreement and all other Loan Documents are and remain in full
force and effect in accordance with their respective terms and that all
Collateral is unimpaired by this Amendment and secures the payment and
performance of all indebtedness and obligations of Company under the Notes, the
Warehouse Agreement, and all other Loan Documents, as modified hereby. Company
shall execute and deliver a new Note to each Lender in the amount of its new
Commitment Amount.

 

(b)          The undersigned officer of the Company executing this Amendment
represents and warrants that he has full power and authority to execute and
deliver this Amendment on behalf of the Company this Amendment, that such
execution and delivery has been duly authorized by all necessary corporate
action of Company, and represents and warrants that the resolutions and
affidavits previously delivered to Agent, in connection with the execution and
delivery of the Warehouse Agreement, are and remain in full force and effect and
have not been altered, amended or repealed in anywise.

 

(c)          Any reference to the Warehouse Agreement in any Loan Document shall
be deemed to be references to the Warehouse Agreement as amended hereby.  Any
reference in this Amendment and the other Loan Documents to the Notes shall be
deemed to be references to the new Notes executed and delivered by the Company
in connection herewith.

 

Section 8.                                            Authority.   The
undersigned officer of the Company executing this Amendment represents and
warrants that he has full power and authority to execute and deliver this
Amendment on behalf of the Company this Amendment, that such execution and
delivery has been duly authorized by all necessary corporate action of Company,
and represents and warrants that the resolutions and affidavits previously
delivered to Agent, in connection with the execution and delivery of the
Warehouse Agreement, are and remain in full force and effect and have not been
altered, amended or repealed in anywise.

 

Section 9.                                            No Waiver.  Company agrees
that no Event of Default and no Default has been waived or remedied by the
execution of this Amendment by Agent and Lenders, and any such Default or Event
of Default heretofore arising and currently continuing shall continue after the
execution and delivery hereof.

 

Section 10.                                      Governing Law.  This Amendment
shall be governed by and construed in accordance with the laws of the State of
Texas and, to the extent applicable, by federal law.

 

Section 11.                                      Counterparts and Gender.  This
Amendment may be executed in any number of counterparts and all of such
counterparts taken together shall be deemed to constitute

 

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one and the same instrument.   Each gender used herein shall include and apply
to all genders, including the neuter.

 

Section 12.                                      NO ORAL AGREEMENTS.  THIS
AMENDMENT, THE WAREHOUSE AGREEMENT, THE NOTES, AND THE OTHER LOAN DOCUMENTS, AS
MODIFIED AND AMENDED HEREBY, REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES
AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR ORAL
AGREEMENTS OF THE PARTIES.

 

THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

 

[Signature Pages Follow]

 

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EXECUTED this         day of June, 2003 to be effective as of the date first
written above.

 

 

COMPANY:

 

 

 

 

 

SIRVA MORTGAGE, INC.,

 

an Ohio corporation f/k/a

 

COOPERATIVE MORTGAGE SERVICES, INC.

 

 

 

 

 

By:

 /s/ Paul Klemme

 

 

PAUL KLEMME, President

 

 

 

 

 

Notice Address:

 

 

 

SIRVA MORTGAGE, INC

 

Attn: Attn: Paul Klemme, President

 

6070 Parkland Boulevard

 

Mayfield Heights, Ohio 44124

 

Fax No.: (440) 646-1835

 

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WASHINGTON MUTUAL BANK, F.A., successor

 

by merger to BANK UNITED, as Agent and a

 

Lender

 

 

 

 

 

By:

 /s/ Ben R. Culver

 

 

Name:

 BEN CULVER

 

 

Title:

VP

 

 

 

 

 

 

Notice Address:

 

 

 

Attn: Michael D. McAuley, Managing Director

 

Mortgage Banker Finance

 

3200 Southwest Freeway, Suite 1922

 

Houston, Texas 77027

 

Facsimile: (713) 543-4292

 

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NATIONAL CITY BANK OF KENTUCKY, as

 

Documentation Agent and a Lender

 

 

 

 

 

By:

/s/ Paul Best

 

 

Name:

Paul Best

 

 

Title:

   Senior Vice President

 

 

 

 

 

 

Notice Address:

 

 

 

NATIONAL CITY BANK OF KENTUCKY

 

Attn: Mary Jo Reiss, Vice President,

 

Mortgage Banking

 

421 West Market Street

 

Louisville, Kentucky 40202

 

Fax: (502) 581.4154

 

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EXHIBIT “O”

 

LENDERS, AGGREGATE COMMITMENT AMOUNT,
AND COMMITMENT AMOUNT

 

 

 

COMMITMENT AMOUNT

 

NAME OF LENDER

 

Prior to and on
July 30, 2003

 

On and After
July 31, 2003

 

Washington Mutual Bank, FA
3200 Southwest Freeway, Suite 1922
Houston, Texas 77027

 

Tranche A Commitment:

 

$

32,500,000.00

 

-0

-

 

 

 

 

 

 

 

 

 

 

 

Tranche B Commitment:

 

$

17,500,000.00

 

$

17,500,000.00

 

 

 

 

 

 

 

 

 

National City Bank of Kentucky
101 South Fifth Street, T06K
Louisville, Kentucky 40202

 

Tranche A Commitment:

 

$

14,500,000.00

 

-0

-

 

 

 

 

 

 

 

 

 

 

 

Tranche B Commitment:

 

$

10,500,000.00

 

$

10,500,000.00

 

 

 

 

 

 

 

 

 

Aggregate Commitment Amount

 

$

75,000,000.00

 

$

28,000,000.00

 

 

O-1

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EXHIBIT “R”

 

SWING LINE NOTE

 

$10,000,000.00

 

Houston, Texas

 

June 29, 2003

 

 

FOR VALUE RECEIVED, the undersigned, SIRVA MORTGAGE, INC. an Ohio corporation
f/k/a COOPERATIVE MORTGAGE SERVICES, INC. (herein called the “Borrower”), hereby
promises to pay to the order of WASHINGTON MUTUAL BANK, FA, a federal
association (the “Lender” or, together with its successors and assigns, the
“Holder”) whose principal place of business is 3200 Southwest Freeway, Suite
1922, Houston, Texas 77027, or at such other place as the Holder may designate
from time to time, the principal sum of TEN MILLION AND NO/100 DOLLARS
($10,000,000.00) or so much thereof as may be outstanding from time to time
pursuant to the Third Amended and Restated Warehousing Credit and Security
Agreement (the “Agreement’) dated September 30, 2002 among the Borrower and
Washington Mutual Bank, FA, in its capacity as one of the lenders and as Agent
for the lenders party thereto (including the Lender), as the same may be
amended, supplemented, or restated from time to time, 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. Capitalized terms used herein, unless
otherwise defined herein, shall have the meanings given them in the Agreement.

 

This Note is issued and delivered under the Agreement and is the Swing Line Note
as defined therein 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.

 

The entire unpaid principal balance of this Note plus all accrued and unpaid
interest shall be due and payable in full on the Termination Date.

 

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
Borrower 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.

 

This Note shall be construed and enforced in accordance with the laws of the
State of Texas, without reference to its principles of conflicts of law, and
applicable federal laws of the United States of America.

 

This Note is secured by all security agreements, collateral assignments, deeds
of trust and lien instruments executed by the Borrower in favor of the Agent for
the benefit of the Lenders, or executed by any other Person as security for this
Note, including any executed prior to, simultaneously with, or after the date of
this Note.

 

The Borrower and any and each co-maker, guarantor, accommodation party, endorser
or other Person liable for the payment or collection of this Note expressly
waive notice, presentment, demand for payment, protest, notice of protest and
non-payment or dishonor, notice of acceleration, notice of intent to accelerate,
notice of intent to demand, bringing of suit, and diligence in taking any action
to collect amounts called for hereunder and in the handling of Collateral at any
time existing as security in connection herewith, and shall be directly and
primarily liable for the payment of all sums owing and to be owing hereon,
regardless of and without any notice, diligence, act or omission as or with
respect to the collection of any amount called for hereunder or in connection
with any Lien at any time had or existing as security for any amount called for
hereunder.

 

It is the intention of the parties hereto to conform strictly to usury laws
applicable to the Lender. Accordingly, if the transactions contemplated hereby
would be usurious under applicable law (including the laws of the United States
of America and the State of Texas), then, in that event, notwithstanding
anything to the contrary herein or in the Agreement or in any other Loan
Document or agreement entered into in connection with or as

 

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security for this Note, it is agreed as follows: (i) the aggregate of all
consideration which constitutes interest under law applicable to the Lender that
is contracted for, taken, reserved, charged, or received herein or under the
Agreement or under any of the other aforesaid Loan Documents or agreements or
otherwise in connection herewith shall under no circumstances exceed the maximum
amount allowed by such applicable law, and any excess shall be credited by the
Lender on the principal amount of the Obligations (or, if the principal amount
of the Obligations shall have been paid in full, refunded by the Lender to the
Borrower, as required); and (ii) in the event that the maturity of this Note is
accelerated by reason of an election of the Lender resulting from any Event of
Default under the Agreement or otherwise, or in the event of any required or
permitted prepayment, then such consideration that constitutes interest under
law applicable to the Lender may never include more than the maximum amount
allowed by such applicable law, and excess interest, if any, provided for in the
Agreement or otherwise shall be canceled automatically as of the date of such
acceleration or prepayment and, if theretofore paid, shall be credited by the
Lender on the principal amount of the Obligations (or, if the principal amount
of the Obligations shall have been paid in full, refunded by the Lender to the
Borrower, as required). Without limiting the foregoing, all calculations of the
rate of interest taken, reserved, contracted for, charged, received or provided
for under this Note or any of the Loan Documents which are made for the purpose
of determining whether the interest rate exceeds the Maximum Rate shall be made,
to the extent allowed by law, by amortizing, prorating, allocating and spreading
in equal parts during the period of the full stated term of the loan evidenced
hereby, all interest at any time taken, reserved, contracted for, charged,
received, or provided for under this Note of any of the Loan Documents. To the
extent that Section 303 of the Texas Finance Code is relevant for purposes of
determining the Maximum Rate, the Lender hereby elects to determine the
applicable rate ceiling under such statute by the weekly rate ceiling from time
to time in effect, subject to the Lender’s right subsequently to change such
method in accordance with applicable law.

 

 

BORROWER:

 

 

 

SIRVA MORTGAGE, INC.,

 

an Ohio corporation f/k/a

 

COOPERATIVE MORTGAGE SERVICES, INC.

 

 

 

 

By:

 

 

 

Name:

 

 

 

Title:

 

 

 

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