Exhibit 10.12


 


WAREHOUSING CREDIT AGREEMENT


 

















 


LIST OF EXHIBITS


 


	
  Exhibit A

  	
   

  	
  -
  Warehouse Borrowing Base Formula

  
	
   

  	
   

  	
   

  
	
  Exhibit B

  	
   

  	
  -
  Covenant Compliance Certificate

  
	
   

  	
   

  	
   

  
	
  Exhibit C-1

  	
   

  	
  -
  Warehouse Note (National City)

  
	
   

  	
   

  	
   

  
	
  Exhibit D

  	
   

  	
  -
  Pledge, Security and Collateral Agency Agreement

  
	
   

  	
   

  	
   

  
	
  Exhibit E

  	
   

  	
  -
  Form of Swing Note

  
	
   

  	
   

  	
   

  
	
  Exhibit G

  	
   

  	
  -
  Form of Additional Lender Agreement

  
	
   

  	
   

  	
   

  
	
  Exhibit H

  	
   

  	
  -
  Form of Commitment Schedule and Allocation Notice

  
	
   

  	
   

  	
   

  
	
  Exhibit I

  	
   

  	
  -
  Form of Request for Warehouse Advance

  
	
   

  	
   

  	
   

  
	
  Exhibit J

  	
   

  	
  -
  Authorized Signer Letter

  
	
   

  	
   

  	
   

  
	
  SCHEDULES

  
	
   

  	
   

  	
   

  
	
  Schedule 1.1

  	
   

  	
  -
  Approved Investor List

  
	
   

  	
   

  	
   

  
	
  Schedule 2.1

  	
   

  	
  -
  Warehouse Pro Rata Shares and Warehouse Line Commitments

  
	
   

  	
   

  	
   

  
	
  Schedule 6.1

  	
   

  	
  -
  Information Relating to Company Representations and Warranties

  



 

















 


WAREHOUSING CREDIT AGREEMENT


 


THIS WAREHOUSING CREDIT AGREEMENT (this “Credit
Agreement”) is made and entered into as of this 26th day of November, 2007, by
and among (i) HOME LOAN CENTER, INC. D/B/A
LENDINGTREE LOANS, a California corporation with its principal place of
business located at 163 Technology Drive, Irvine, California 92618 (the “Company”),
(ii) NATIONAL CITY BANK, a national
banking association, with a place of business located at 101 South Fifth
Street, Louisville, Kentucky 40202 (“National City” or the “Bank”), and (iii) NATIONAL CITY BANK, a national banking
association, with a place of business located at 101 South Fifth Street,
Louisville, Kentucky 40202, its capacity as Agent for the hereinafter defined
Banks (in such capacity, the “Agent”).


 


P  R  E  L  I  M  I
N  A  R  Y   S  T  A  T  E  M
E  N  T


 


WHEREAS, the Company desires to obtain from the Bank a warehouse line
of credit in the original maximum principal amount as of the date hereof of
Fifty Million Dollars ($50,000,000.00) (the “Warehouse Line”), subject to the
terms and conditions set forth in this Credit Agreement.


 


WHEREAS, the Bank desires to establish the Warehouse Line in favor of
the Company upon the terms and conditions set forth in this Credit Agreement.


 


NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein contained, the parties hereto agree as follows:


 


NOW, THEREFORE, in consideration of the foregoing premises and the
mutual agreements herein contained, the parties hereto agree as follows:


 


ARTICLE 1


 


DEFINITIONS AND ACCOUNTING TERMS


 


1.1           Definitions. In addition
to the definitions set forth in the introduction and the preliminary statement
of this Credit Agreement, the following terms shall have the meanings set forth
below (such meanings to be equally applicable to both the singular and plural
form of the terms defined):


 


“Additional
Lender Agreement” shall have the meaning assigned to such term in Section 11.1 hereof.


 


“Adjustment
Date” shall have the meaning assigned to such term in Section 11.1 hereof.


 


“Advance”
shall mean, as applicable, a Warehouse Advance, a Swing Advance or an Excess
Advance.


 


“Affiliate”
shall mean (i) any Person that, directly or indirectly, is in control of,
is controlled by, or is under common control with, the Company, including without
limitation LendingTree or (ii) any Person who is a director or officer of
the Company or of any Person described in clause (i) above. For purposes
of this definition, control of a Person shall mean the power, direct or
indirect, to vote ten percent (10%) or more of the securities having ordinary
voting power for the election of directors of such Person or to direct the
management or policies of such Person, whether through the ownership of voting
securities, or otherwise.


 

















 


“Aged
Loan” shall mean, as of any date:


 


(a)           Any Loan, which is not a Wet
Loan, which has been pledged as Collateral for more than ninety (90) calendar
days (calculated from the date upon which the Advance relating to such Loan is
made hereunder); and


 


(b)           Any Wet Loan which has been
pledged as Collateral for more than ten (10) calendar days (calculated from the
date upon which the Advance relating to such Loan is made hereunder).


 


“Agent”
shall have the meaning assigned to such term in the introduction of this Credit
Agreement, and includes any successor Agent under Section 10.12 hereof.


 


“Aggregate
Amount Due” shall have the meaning assigned to such term in Section 9.18 hereof.


 


“Aggregate
Outstanding Balance” shall mean, as of any particular date, the sum of the
Aggregate Outstanding Warehouse Balance plus the Aggregate Outstanding Excess
Balance.


 


“Aggregate
Outstanding Excess Balance” shall mean, as of any particular date, the
aggregate unpaid principal balance of all Excess Advances, if any.


 


“Aggregate
Outstanding Warehouse Balance” shall mean, as of any particular date, the
aggregate unpaid principal balance of all Warehouse Advances and Swing
Advances, if any.


 


“Alt
A Advance” shall mean an Advance requested to fund a Alt A Loan.


 


“Alt
A Advance Sublimit” shall mean an amount equal to ten percent (10%) of the
Total Warehouse Line Commitment; provided, however, not more than five percent
(5%) of the Total Warehouse Line Commitment may be used for Advances supported
by Alt A Loans satisfying parts (i), (ii) and (iii) (B) of the definition
of Alt A Loan set forth herein.


 


“Alt
A Loan” shall mean a Loan: (i) the entire interest of which is owned
by the Company and which is secured by a First Trust Deed, (ii) which is
not a Conforming Loan, and (iii) either (A)(1) such Loan shall have a FICO
Score equal to or in excess of six hundred sixty (660), (2) such Loan
shall be a “Limited Documentation Mortgage Loan”, and (3) such Loan shall
have a loan-to-value ratio at origination of not more than ninety-five percent
(95%), or (B)(1) such Loan shall have a FICO Score equal to or in excess of six
hundred twenty (620) but less than or equal to six hundred fifty-nine (659),
and (2) such Loan shall have a loan-to-value ratio at origination of not
more than ninety percent (90%).


 


“Applicant Financial Institution” shall have
the meaning assigned to such term in Section 11.1
hereof.


 


“Appraised
Value” shall mean, with respect to an interest in real estate, the then
current fair market value thereof as of a recent date satisfactory to the
Agent, as determined by the FHA or the VA, if applicable, or, if there is no
such determination, then as determined in accordance with accepted methods of
appraising by a qualified appraiser who is a member of the American Institute
of Real Estate Appraisers or other group of professional appraisers and who is
reasonably acceptable to the Agent.


 

















 


“Approved
Investors” shall mean the financial institutions approved for the shipment
of Eligible Collateral by the Agent and listed on Schedule 1.1 attached hereto and made a part hereof by this
reference, which listing shall include the address of each such Approved
Investor, the name of the contact person for such Approved Investor and the
telephone number of such contact person. The Agent may from time to time, at
its sole and absolute discretion, upon the written request of the Company,
agree to add financial institutions to the list of Approved Investors provided
that a financial institution shall not be deemed to be an Approved Investor
until such time as the Agent has notified the Company that such financial
institution has been approved by the Agent. The Agent may from time to time, at
its sole and absolute discretion, remove any financial institution from the
list set forth in Schedule 1.1 by
giving the Company prior notice of such removal. From and after the Company’s
receipt of notice removing an investor from the Approved Investor list, the
Company shall not enter into any additional commitments for delivery of Loans
for purchase by that investor, which will be the subject of an Advance or a
Firm Commitment hereunder; provided, however, that the Company may deliver to
an investor so removed from the Approved Investor list those Loans, which are
the subject of an Advance hereunder, and only those Loans, which are scheduled
to be, or in the process of being, delivered to that investor as of the date
Company’s receipt of such notice from the Agent.


 


“Average
Monthly Available Deposits” shall mean the monthly average of free
collected balances maintained in non-interest bearing accounts in the name the
Company (or held by the Company in trust for third parties) with a Bank, after
deducting any unpaid service charges or float required by such Bank under its
normal practices to compensate such Bank for the maintenance of such accounts
and taking into consideration reserve requirements and the other costs of
complying with applicable law (including but not limited to any FDIC premium
applicable to such accounts).


 


“Balance
Funded Bank” shall mean National City Bank.


 


“Bank”
and “Banks” shall have the meaning assigned to such terms in the
introduction to this Credit Agreement and shall include each of National City
and any other Applicant Financial which is added as a Bank hereunder by the
Company and the Agent.


 


“Bankruptcy
Code” shall mean Title 11 of the United States Code entitled “Bankruptcy”
as now and hereafter in effect, or any successor statute.


 


“Billing
Statement” shall have the meaning assigned to such term in Section 2.9 hereof.


 


“Borrowing
Base Report” shall mean the report prepared by the Agent to calculate the
Warehouse Borrowing Base in accordance with the formula set forth in Exhibit A to this Credit Agreement.


 


“Business
Day” shall mean for all purposes, any day excluding Saturday, Sunday and
any day which is (a) a legal holiday under the laws of the state in which
the Agent maintains its office for purposes of performing its obligations under
this Credit Agreement as set forth on the signature pages of this Credit
Agreement, or (b) a day on which (i) banking institutions located in
such state are authorized or required by law or other governmental action to
close and/or (ii) the United States Federal Reserve Bank is closed.


 


“Closing
Date” shall mean the date on which the initial Advance is made to the
Company and the conditions set forth in Article 4
hereof are satisfied.


 

















 


“Collateral”
shall mean the assets of the Company, as more particularly described in Section 2.1 of the Security Agreement in
which the Agent, for the benefit of the Banks in proportion to their Pro Rata Shares,
has a Security Interest.


 


“Collateral
Documents” shall mean the Security Agreement, any Intercreditor Agreement
executed pursuant to Section 7.2(a) of
this Credit Agreement and all other agreements, instruments, documents, and
other papers creating, evidencing, or representing the Collateral or the
Security Interests therein, each as may be amended, modified, supplemented and
restated from time to time.


 


“Collateral
Handling Fees” shall have the meaning assigned to such term in Section 2.14(b) hereof.


 


“Collateral
Mortgage Documents” shall have the meaning assigned to such term in the
Security Agreement.


 


“Collateral
Proceeds Account” shall mean the “no access” deposit account maintained by
the Agent at the main office of the Agent in the name of the Agent for the
benefit of the Company and to which the Company shall have no access, for the
purposes of receiving the proceeds of the Collateral and other funds as
provided in this Credit Agreement and the Security Agreement.


 


“Collateral
Value” shall mean as of any date:


 


(a)           With respect to a Loan which
constitutes Eligible Collateral on such date, and which is not an Alt A Loan, a
Jumbo Loan, a HELOC Loan or a Second Trust Deed Loan, ninety-nine percent (99%)
of the lesser of (i) the face amount of the promissory note evidencing such
Loan, or (ii) the purchase price under the Commitment to which the
applicable Loan has been assigned;


 


(b)           With respect to a Loan which
constitutes Eligible Collateral on such date, and which is a Jumbo Loan, ninety-seven
percent (97%) of the lesser of (i) the purchase price under the Commitment
to which such Loan has been assigned, or (ii) the face amount of the
promissory note evidencing such Loan;


 


(c)           With respect to a Loan which
constitutes Eligible Collateral on such date, and which is a HELOC Loan or
Second Trust Deed Loan, ninety-five percent (95%) of the lesser of (i) the
unpaid principal balance of the applicable Loan, or (ii) the purchase
price under the Commitment to which the applicable Loan has been assigned; and


 


(d)           With respect to a Loan which
constitutes Eligible Collateral on such date, and which is an Alt A Loan,
ninety-six percent (96%) of the lesser of (i) the purchase price under the
Commitment to which such Loan has been assigned, or (ii) the face amount
of the promissory note evidencing such Loan.


 


Notwithstanding
anything contained in (a), (b), (c) or (d) to the contrary:


 


A.            The Collateral
Value of all Wet Loans shall not exceed, in the aggregate, the Wet Advance
Sublimit;


 


B.            The Collateral
Value of all Jumbo Loans shall not exceed, in the aggregate, the Jumbo Advance
Sublimit;


 


C.            The Collateral
Value of all HELOC Loans and Second Trust Deed Loans


 


4

















 


shall
not exceed, in the aggregate, the HELOC/Second Trust Deed Advance Sublimit;


 


D.            The Collateral
Value of all Alt A Loans shall not exceed, in the aggregate, the Alt A Advance
Sublimit;


 


E.             Each Wet Loan
in respect to which the Company shall not have delivered all of the Collateral
Documents to the Agent within the number of days required by the Security
Agreement, shall have a Collateral Value of zero;


 


F.             Each Wet Loan
which the Agent determines has not been funded by the Company on the date the
Advance in respect of such Wet Loan is made by the Banks to the Company, shall
have a Collateral Value of zero;


 


G.            If the Agent
shall reasonably determine that the Collateral Value otherwise assigned to an
item of Eligible Collateral does not accurately reflect the value thereof,
then, upon notice to the Company, the Agent may mark an item of collateral to
market at any time to determine the fair market value thereof; provided,
however, in no event shall any mark to market with respect to any item of
Eligible Collateral under this subsection result in such item of Eligible
Collateral having a Collateral Value higher than such item would otherwise
have;


 


H.            In the event
that a Loan shall have been delivered by the Agent to a purchaser under a
Commitment as provided in the Security Agreement, or in the event that such
Loan was delivered by the Agent to an Approved Investor and more than the
maximum number of days allowed by the Security Agreement shall have elapsed
since the date of such delivery and no purchase has taken place or the proceeds
thereof have not been received by the Agent, such Loan shall have a Collateral
Value of zero;


 


I.              All Aged Loans
which do not constitute Eligible Collateral shall have a Collateral Value of
zero;


 


J.             All Loans which
are under Trust Receipt in accordance with the terms of the Security Agreement
which are not returned to the Agent within the required number of days
specified in the Security Agreement, shall have a Collateral Value of zero;


 


K.            The Collateral
Value of each HELOC Loan and Second Trust Deed Loan shall not exceed Three
Hundred Fifty Thousand Dollars ($350,000.00); and


 


L.             The Collateral
Value of all Loans which are under Trust Receipt in accordance with the terms
of the Security Agreement shall not exceed, in the aggregate, Two Million Five
Hundred Thousand Dollars ($2,500,000.00).


 


“Commitment”
shall mean a Firm Commitment or a Standby Commitment. 


 


“Commitment
Fee” shall have the meaning assigned to such term in Section 2.14(b) hereof.


 


“Commitment
Pro Rata Share” shall mean a Bank’s Warehouse Commitment Pro Rata Share.


 


5

















 


“Commitment
Schedule and Allocation Notice” shall mean a notice in the form of the
Commitment Schedule and Allocation Notice attached hereto as Exhibit H and made a part
hereof by this reference.


 


“Company”
shall have the meaning assigned to that term in the introduction of this Credit
Agreement.


 


“Confirmation
of Electronic Request for Advance” shall have the meaning ascribed to such
term in Section 2.4(a) hereof.


 


“Conforming
Loan” shall mean a Loan secured by a Conforming Mortgage or Government
Mortgage, and which may be a “Stated Asset Loan”, “Stated Income Loan” or “Option
ARM Loan”.


 


“Conforming
Mortgage” shall mean a First Trust Deed securing a Loan which is not an Alt
A Loan and which meets all Fannie Mae or FHLMC underwriting standards and
received a favorable eligibility response from any of Fannie Mae Desktop
Underwriter, FHLMC Loan Prospector or other proprietary underwriting system, as
may be approved by the Agent in its sole discretion.


 


“Covenant
Compliance Certificate” shall mean the certificate to be furnished to the
Agent on behalf of the Banks in accordance with Sections 4.2(a) and
7.3(b) hereof and in the form of Exhibit B attached to
this Credit Agreement and made a part hereof by this reference, together with a
spreadsheet or other working papers showing the calculations used to prepare
such certificate.


 


“Credit
Agreement” shall mean this Warehousing Credit Agreement, as amended,
modified, supplemented and restated from time to time.


 


“Default
Rate” means, upon the occurrence and during the continuation of any Event
of Default with respect to the then or thereafter outstanding principal balance
of any Note, a rate per annum equal to the sum of three percent (3%) per annum plus the per annum
rate of interest then applicable to such Note pursuant to Section 2.8
hereof.


 


“Document
Custodian” shall mean National City acting as the custodian of the Loans
(or such other custodian acceptable to the Company and the Banks).


 


“Dry
Loan” shall mean a Loan the Collateral Mortgage Documents for which have
been delivered to the Agent and the entire interest of which Loan is owned by
the Company.


 


“Electronic
Request for Advance” shall mean an electronic data transmission made in
such manner and in accordance with such procedures as may be established by the
Agent from time to time.


 


“Electronic
Tracking Agreement” shall mean an Electronic Tracking Agreement by and among
the Company, the Agent, MERS MERSCORP, in form acceptable to Agent in its sole
discretion.


 


“Electronic
Transmittals” shall mean the electronic delivery to the Agent of collateral
data and collateral transaction data in the format prescribed by the Agent.


 


“Eligible
Collateral” shall mean, collectively and as of any date, [A] each Loan (i) which
is a Conforming Loan, Government Loan, a Wet Loan, a Jumbo Loan, a HELOC Loan, a
Second Trust Deed Loan or an Alt A Loan, (ii) which is not an Aged Loan,
(iii) which constitutes Collateral, (iv) which no


 


6

















 


default
has occurred and is continuing on such Loan, (v) which is pledged as
Collateral within thirty (30) calendar days of
origination, purchase or conversation, (vi) which has no more than one (1)
principal/interest payment past due, (vii) which has not been under Trust
Receipt in accordance with the terms of the Security Agreement for more than
the maximum number of days allowed under the Security Agreement, (viii) which
has not been shipped to an Approved Investor for more than the maximum number
of days allowed by the Security Agreement and no purchase proceeds have been
received by the Agent, (ix) in respect of which the loan-level
representations, warranties and agreements contained in the Credit Agreement
and the Security Agreement are true and correct, (x) which is subject to a
Firm Commitment or Standby Commitment, and (xi) in the case of a HELOC Loan or
Second Trust Deed Loan, such Loan has not been determined by the Agent in its
sole and absolute judgment and discretion to be ineligible for warehousing
under the Warehouse Line and/or any particular Sublimit thereof as a result of
the Agent’s evaluation of market conditions or other market factors without
regard to whether the other specific definitional parameters for Eligible
Collateral set forth in this Agreement have been met, any such determination by
the Agent of ineligibility to be effective immediately upon the Agent’s determination
thereof, with written notice to be provided to the Company as soon as
practicable thereafter; and [B] each Loan (i) that is a
Discretionary Loan (as defined in Section 9.20
hereof) without duplication, (ii) that constitutes Collateral, and (iii) that
is not subject to any lien or security interest other than that granted under
the Credit Agreement and the Security Agreement. Unless specifically
provided for herein, “Stated Asset Loans”, “Stated Income Loans”, and “Option
ARM Loans” are not permitted to be funded under the Warehouse Line and shall
not constitute Eligible Collateral under this Credit Agreement.


 


“ERISA”
shall have the meaning assigned to such term in Section 6.12 hereof.


 


“Event
of Default” shall mean any of the events set forth in Section 8.1 hereof.


 


“Excess
Advances” shall mean the cash amount advanced under the terms of Section 2.2(b) hereof.


 


“Excess
Pro Rata Share” shall mean the entire outstanding principal amount of the
Excess Advances, all as held by the Agent.


 


“Fannie
Mae” shall mean the Federal National Mortgage Association, or any successor
thereto. 


 


“FHA”
shall mean the Federal Housing Administration, or any successor thereto.


 


“FHLMC”
shall mean the Federal Home Loan Mortgage Corporation, or any successor thereto.


 


“FICO
Score” shall mean the credit score obtained by using the credit score
methodology provided by Fair Isaac Corporation.


 


“Firm
Commitment” shall mean a commitment or pre-approval for a commitment from
an Approved Investor or other security dealer reasonably satisfactory to the
Agent, to purchase from the Company a Loan or Loans under which commitment the
Company is obligated to sell such Loan or Loans. Notwithstanding anything
contained herein to the contrary, any Loan which has been underwritten in
accordance with the underwriting guidelines of a substantial and reputable
lending institution, investor, or security dealer, reasonably satisfactory to
Agent, shall be deemed to be subject to a “Firm Commitment” for all purposes
hereunder.


 


7

















 


“First
Trust Deed” shall mean a mortgage, deed of trust, or other security deed in
land and other interests in real property (including, without limitation,
leasehold interests) and the structures, improvements, fixtures, and buildings
located thereon, or in other rights and interests in real property, which
secures a Loan and, which mortgage, deed of trust, or other security deed is
subject to no prior or superior mortgage, deed of trust or other security deed
in the land and other interests in real property encumbered by such mortgage,
deed of trust, or other security deed.


 


“Funding
Date” shall have the meaning assigned to such term in Section 2.4(c) hereof.


 


“GAAP”
shall mean those generally accepted accounting principles set forth in the
opinions and pronouncements of the Financial Accounting Standards Board and its
predecessors and the American Institute of Certified Public Accountants or
those generally accepted principles of accounting which have other substantial
authoritative support and are applicable in the circumstances as of the date of
application, as such principles are from time to time supplemented and amended,
each as consistently applied.


 


“GAAP
Net Worth” shall mean, as of any date of determination, the Company’s net
worth as determined in accordance with GAAP.


 


“GNMA”
shall mean the Government National Mortgage Association, or any successor thereto.


 


“Government
Loan” shall mean a Loan secured by a Government Mortgage.


 


“Government
Mortgage” shall mean a First Mortgage securing a Loan which is eligible to
be (i) insured by FHA, or (ii) guaranteed by VA or GNMA.


 


“Hedging
Program” shall mean any program maintained by the Company to hedge certain
interest rate risks associated with its mortgage banking business.


 


“HELOC
Loan” shall mean a Loan secured by a Home Equity Mortgage, the entire
interest of which is owned by the Company; provided, however, that (a) such
Loan shall be subject to a Firm Commitment, (b) such Loan shall have a
FICO Score equal to or in excess of six hundred sixty (660), and (c) such
Loan shall have a combined loan-to-value ratio at origination of not more than
ninety percent (90%).


 


“HELOC/Second
Trust Deed Advance” shall mean an Advance requested to fund a HELOC Loan or
Second Trust Deed Loan.


 


“HELOC/Second
Trust Deed Advance Sublimit” shall mean an amount equal to ten percent
(10%) of the Total Warehouse Line Commitment.


 


“Home
Equity Mortgage” shall mean a mortgage, deed of trust or other security
deed in land and other interests in real property (including, without
limitation, leasehold interests) and the structures, improvements, fixtures and
buildings located thereon, and in other rights and interests in real property,
which secures a Loan, and which mortgage, deed of trust or other security deed
which may be subject to a prior or superior mortgage, deed of trust or other
security deed in the land and other interest in real property encumbered by
such mortgage, deed of trust or other security deed.


 


“Jumbo
Advance” shall mean an Advance requested to fund a Jumbo Loan.


 


8

















 


“Jumbo
Advance Sublimit” shall mean an amount equal to twenty-five percent (25%)
of the Total Warehouse Line Commitment.


 


“Jumbo
Loan” shall mean a Loan, which is not an Alt A Loan, HELOC Loan or Second
Trust Deed Loan, the amount of which exceeds Fannie Mae or FHLMC guidelines for
maximum eligible amount, but which Loan shall not have a face amount in excess
of One Million Dollars ($1,000,000 00), except as may be otherwise pre-approved
by the Agent in writing in its sole discretion after the Company has provided
the Agent with written notice thereof together with a copy of the related
Commitment from an Approved Investor and the applicable appraisal at least two (2) Business
Days prior to the funding thereof, and the entire interest of which is owned by
the Company and which is secured by a First Trust Deed covering a completed
one-to-four family residential property which is subject to a Firm Commitment,
provided, that: (i) such Loan shall have a FICO Score equal to or in
excess of six hundred sixty (660), and (ii) such Loan shall have a
combined loan-to-value ratio at origination of not more than ninety percent
(90%).


 


“LendingTree”
shall mean LendingTree, LLC, a North Carolina limited liability company with
principal office mailing address of 11115 Rushmore Drive, Charlotte,
North Carolina 28277, and the sole stockholder of the Company.


 


“LIBOR”
shall mean the per annum rate equal to the thirty (30) day average of the
London Interbank Offered Rate, as published by Bloomberg Financial Services or
a similar service selected by the Agent during each monthly billing cycle, or
as otherwise determined in good faith by the Agent.


 


“Liquid
Assets” shall mean the sum of (i) cash and cash equivalents, plus (ii) pledged
cash or security deposits with National City-Bank or other lenders, plus (iii) loans
held for sale minus the sum of (y) the outstanding
balance of all mortgage warehouse lines of credit plus (z) drafts payable.


 


“Loan”
shall mean a residential real estate mortgage loan purchased, refinanced or
made by the Company, evidenced by a promissory note, and secured by a mortgage
or deed of trust or similar instrument creating an enforceable first or second
lien upon a one-to-four family residential property which was financed with the
proceeds of such loan.


 


“Loan
Documents” shall mean, collectively, this Credit Agreement, the Warehouse
Notes, the Swing Note, the Security Agreement, the other Collateral Documents
and any and all other documents executed in connection therewith, including,
without limitation, any inter-creditor agreements as may be required by the
Agent, each as the same may be amended, modified, supplemented and restated
from time to time.


 


“Maturity
Date” shall mean October 31, 2008; provided that the Agent and the
Banks shall have the option, in their absolute discretion, either one time or
from time to time, to extend the Maturity Date for an additional period not to
exceed three hundred and sixty four (364) days. If the Maturity Date is
extended, the term Maturity Date shall mean the date of expiration of such
extension.


 


“MERS”
shall mean the Mortgage Electronic Registration System, Inc., or any
successor thereto.


 


“NIERSCORP”
shall mean MERSCORP, Inc., or any successor thereto.


 


“MERS
Loan” shall mean any Loan made by the Company that is secured by a MERS


 


9

















 


Mortgage.


 


“MERS
Member” shall mean any entity which is a member of MERS, in good standing
and in compliance with all rules, regulations, procedures and requirements set
forth by MERS, including, but not limited to the payment of membership dues.


 


“MERS
Mortgage” shall mean any First Trust Deed or Second Trust Deed registered
by the Company on the MERS System.


 


“MERS
System” shall mean the Mortgage Electronic Registration System established
by MERS.


 


“Notes”
shall mean, collectively, the Warehouse Notes and the Swing Note.


 


“Obligor”
shall mean a person or other entity who now or hereafter is or becomes liable
to the Company with respect to any of the Collateral.


 


“origination”
shall mean with respect to any Loan, the date of original funding of such Loan.


 


“Person”
shall mean any individual, sole proprietorship, partnership, joint venture,
trust, unincorporated organization, association, corporation, limited liability
company, institution, entity, party, or government (whether national, federal,
state, county, city, municipal, or otherwise, and including, without
limitation, any instrumentality, division, agency, body, or department
thereof), whether acting in an individual, fiduciary, or other capacity, including,
without limitation, any Affiliate.


 


“Plan”
shall have the meaning assigned to such term in Section 6.12 hereof.


 


“Pledged
Loan” shall mean any Loan made by the Company with respect to which the
Banks have made an Advance, or with respect to which the Company has requested
an Advance unless such Request for Advance is rejected by the Agent, or which
is now or hereafter at any time pledged, assigned, transferred, or conveyed, or
a security interest therein granted, to the Agent for the benefit of the Banks.
If the context so requires, “Pledged Loan” shall also mean any and all
instruments and documents which evidence, secure or relate to any such Loan.


 


“Prevailing
Time” shall mean the prevailing time in Louisville, Kentucky.


 


“Pro
Rata Share” shall mean, as appropriate, a Bank’s Warehouse Pro Rata Share
or Excess Pro Rata Share.


 


“Procedures
Manual” shall mean those certain operating procedures published by the
Agent from time to time, a copy of which was provided to the Company in
connection with this Credit Agreement.


 


“Regulation
D” shall mean Regulation D of the Board of Governors of the Federal Reserve
System as in effect from time to time.


 


“Repayment
Date” shall have the meaning assigned to such term in Section 2.4(c) hereof.


 


“Request
for Advance” shall mean a Request for Warehouse Advance or a Request for
Swing Advance, as appropriate.


 


10














 


“Request
for Swing Advance”  shall mean a
written request for a Swing Advance by the Company in a form acceptable to the
Agent.


 


“Request
for Warehouse Advance”  shall mean a
written request for an Advance by the Company in a form acceptable to the
Agent.


 


“Requisite
Banks”  shall mean either (i) when
an Event of Default does not exist, Banks holding more than sixty-six and
sixty-seven hundredths of one percent (66.67%) of the Total Warehouse Line
Commitment, or (ii) when an Event of Default does exist, Banks holding
more than sixty-six and sixty-seven hundredths of one percent (66.67%) of the
Aggregate Outstanding Warehouse Balance, as of the date of determination of the
Requisite Banks.


 


“Second
Trust Deed”  shall mean a mortgage,
deed of trust or other security deed in land and other interests in real
property (including, without limitation, leasehold interests) and the
structures, improvements, fixtures and buildings located thereon, or in other
rights and interests in real property which mortgage, deed of trust or other
security deed is subject to only one prior or superior mortgage, deed of trust
or other security deed in the land and other interests in real property
encumbered by such mortgage, deed of trust, or other security deed.


 


“Second
Trust Deed Loan”  shall mean a Loan,
the entire interest of which is owned by the Company and which is secured by a
Second Trust Deed; provided, however, that (a) such Loan shall be subject
to a Firm Commitment, (b) such Loan shall have a FICO Score equal to or in
excess of six hundred sixty (660), and (c) such Loan shall have a combined
loan-to-value ratio at origination of not more than ninety percent (90%).


 


“Secured Obligations”   shall mean all obligations,
liabilities, and indebtedness of the Company to the Agent and the Banks, due or
to become due, direct or indirect, absolute or contingent, joint or several,
now existing or at any time hereafter arising, incurred under the Credit
Agreement, this Security Agreement, the Notes, any of the other Loan Documents,
any other credit agreement or note hereafter executed and delivered by the
Company in favor of the Agent and/or the Banks, and any amendment to any of the
foregoing, or otherwise, and any amendment, renewal, or extension of any such
obligations, liabilities, and indebtedness, including without limitation all
interest, fees, charges, expenses, and reasonable attorneys’ fees, to the
extent permitted by law, incurred to enforce the Agent’s or the Banks’ rights
against the Company under this Security Agreement or otherwise, or arising out
of the defense or prosecution of any matter growing out of this Security
Agreement or any of the other foregoing documents, agreements and instruments
referred to above or any security interest granted herein.


 


“Security Agreement”  shall
mean that certain Pledge, Security and Collateral Agency Agreement of even date
herewith by and among the Company, the Banks and the Agent and substantially in
the form of Exhibit D attached to
this Credit Agreement and made a part hereof by this reference, as amended,
modified, supplemented and restated from time to time.


 


“Security Interest”  shall
mean every security interest, pledge, lien, hypothecation, and other
encumbrance on or in any of those assets of the Company now or hereafter granted
by the Company to the Agent (for the ratable benefit of the Banks) or any Bank,
whether pursuant to this Credit Agreement, the Security Agreement, or
otherwise.


 


11

















 


“Standby Commitment”  shall mean a commitment from an Approved
Investor or other security dealer reasonably satisfactory to the Agent, to
purchase from the Company within a specified time period a Loan or Loans, in an
aggregate principal amount which conforms to the criteria set forth therein,
under which commitment the Company has the right, but is not obligated, to sell
such Loan or Loans.


 


“Swing Advance”  shall mean the cash amount, if any, advanced
under the Warehouse Line by the Agent to or for the account of the Company
under the terms of Section 2.2(a) of this Credit
Agreement.


 


“Swing Advance Limitations” shall have the meaning assigned to
such term in Section 2.2(a) hereof.


 


“Swing Line”  shall mean
the swing line of credit established by the Agent pursuant to Article 2 hereof.


 


“Swing Note”  shall mean
that certain Swing Promissory Note to be made by the Company, payable to the
order of the Agent, upon the addition of an Applicant Financial Institution as
a “Bank” hereunder, and in a maximum principle amount to be determined by the Agent
and the Company, a form of which is annexed hereto as Exhibit E, as the
same may hereafter be amended, modified, renewed, replaced and/or restated from
time to time, and which shall evidence all Swing Advances, if any.


 


“Tangible Net Worth”  shall
mean, as of any date of determination, GAAP Net Worth minus the
aggregate net book value of (i) all intangible assets (as determined in
accordance with GAAP) of the Company including, without limitation, capitalized
purchased insurance renewals, goodwill, trademarks, trade names, service marks,
copyrights, patents, licenses, franchises and unamortized debt discount and
expenses, (ii) all notes and accounts receivable due from officers,
stockholders, employees or other Affiliates of the Company, (iii) subscribed
stock, and (iv) any other assets Company deemed unacceptable by the Agent.


 


“Termination Date”  shall
mean the earlier of (i) the Maturity Date, or (ii) the  date this Credit Agreement is terminated pursuant to Section 8.3 hereof.


 


“Total Indebtedness”  shall
mean, as of the date of any determination, all indebtedness of the Company, as
determined in accordance with GAAP, including, without limitation, all unpaid
Secured Obligations, all amounts due under all capital leases, all accounts and
trade payables, and all other liabilities and obligations Company, including
without limitation, any guarantees made by the Company to or for the benefit of
any Affiliate or any other Person.


 


“Total Warehouse Line Commitment”  shall mean the total aggregate principal amount
of all Warehouse Line Commitments as determined from time to time in accordance
with the provisions of Article 2 and
Article 11 of this Credit
Agreement, and shall mean the principal amount of Fifty Million Dollars
($50,000,000.00) subject to adjustment as provided in Section 11.1 hereof.


 


“Trust Receipt”  shall
have the meaning ascribed to such term in the Security Agreement.


 


“Unmatured Event of Default”  shall mean any event which, with the lapse of
time, or with notice to the Company, or both, would constitute an Event of
Default.


 


“VA”  shall mean the
Veterans Administration, or any successor thereto.


 


12

















 


“Warehouse Advance”  shall mean the cash amount advanced under the
Warehouse Line by the Banks to or for the account of the Company under the
terms of Section 2.1 of this
Credit Agreement.


 


“Warehouse
Borrowing Base”  shall mean that
amount which is determined according to the formula set forth in Exhibit A to this Credit Agreement and
made a part hereof by this reference.


 


“Warehouse
Commitment” or “Warehouse Commitments”  shall mean the Commitment of each Bank to
maintain or make Warehouse Advances as set forth in Section 2.1 hereof.


 


“Warehouse
Commitment Pro Rata Share”  shall
mean with respect to each Bank’s pro rata share of the Total Warehouse Line
Commitment, the percentage set forth opposite that Bank’s name on Schedule 2.1 to this Credit Agreement, as
the same shall be amended from time to time as provided herein.


 


“Warehouse
Line”  shall mean the line of credit
in the maximum principal amount of Fifty Million Dollars ($50,000,000.00)
established by the Agent and the Banks in favor of the Company under Article 2 of this Credit Agreement,
subject to adjustment as provided in Section 11.1
hereof.


 


“Warehouse
Line Commitment” or “Warehouse Line Commitments”  shall mean the commitment of each Bank to
maintain or make Warehouse Advances as set forth in Section 2.1 hereof.


 


“Warehouse
Notes”  shall mean, collectively, (i) that
certain Warehouse Promissory Note dated as of November 26, 2007, made by
the Company, payable to the order of National City, in the face principal
amount of Fifty Million Dollars ($50,000,000.00) a form of which is attached
hereto as Exhibit C-1, as the
same may hereafter be amended, modified, renewed, replaced and/or restated from
time to time, and (ii) when executed and delivered, any such additional
Warehouse Promissory Note substantially in the form of Exhibit C-1 attached hereto, made by
the Company, payable to the order of any respective Applicant Financial
Institution as shall be added as a “Bank” hereunder and in the face principal
amount of such Applicant Financial Institution’s Warehouse Line Commitment, as
the same may thereafter be amended, modified, renewed, replaced and/or restated
from time to time.


 


“Warehouse
Pro Rata Share”  shall mean, with
respect to each Bank, the percentage calculated by dividing the average monthly
sum of the Aggregate Outstanding Warehouse Balance plus the Aggregate
Outstanding Excess Balance attributable to such Bank by the average monthly
total of the Aggregate Outstanding Warehouse Balance plus the Aggregate
Outstanding Excess Balance.


 


“Wet
Advance”  shall mean an Advance
requested to fund a Wet Loan.


 


“Wet Advance Sublimit”  shall
mean an amount equal to forty percent (40%) of the Total Warehouse Line
Commitment.


 


“Wet
Loan”  shall mean a Loan the entire
interest of which is owned by the Company and which is a Loan secured by a
First or Second Trust Deed covering a one-to-four family residential property
which is subject to a Firm Commitment or Standby Commitment for which the
Collateral Mortgage Documents relating to such Loan have not been delivered to
the Agent within the maximum number of days allowed by the Security Agreement.


 


1.2                               Accounting
Terms.  All accounting terms, except
as their meanings may be modified by this Credit Agreement, shall have the
meanings given them in accordance with GAAP.


 


13

















 


ARTICLE 2



THE WAREHOUSE LINE


 


2.1                                 Warehouse
Advances.  Each Bank
severally agrees to lend to the Company, and the Company agrees to borrow from
each Bank, on the terms and conditions of this Credit Agreement, an aggregate
amount not exceeding such Bank’s respective Warehouse Line Commitment, and the
aggregate amount of all such Warehouse Line Commitments shall equal the Total
Warehouse Line Commitment; provided, however the Total Warehouse Line
Commitment includes a Wet Advance Sublimit, a Jumbo Advance Sublimit, a
HELOC/Second Trust Deed Advance Sublimit and an Alt A Advance Sublimit. Subject
to the terms and conditions contained herein, Warehouse Advances may be repaid
and reborrowed until the Termination Date. Each Bank’s commitment to make
Warehouse Advances under this Section 2.1
is herein called its “Warehouse Line Commitment” and is set forth
opposite its name in Schedule 2.1 attached
to this Credit Agreement and the aggregate maximum amount of the Warehouse Line
Commitments is herein called the “Total Warehouse Line Commitment”. The Total
Warehouse Line Commitment is equal to Fifty Million Dollars ($50,000,000.00),
as may be increased by the Company and the Agent in their sole, joint
discretion by adding one or more Applicant Financial Institutions as a “Bank” or “Banks” hereunder and as may be decreased in
accordance with the requirements of Section 11.1
hereof. The principal amount set forth above (as the same may be
increased pursuant to the terms hereof) shall be available to the Company as
Warehouse Advances, Excess Advances and Swing Advances, subject to the terms
and conditions hereof, at such times prior to the Termination Date and in such
sums, as the Company may request.


 


Notwithstanding
the foregoing, the Banks shall not be obligated to make a Warehouse Advance
which, (a) when added to the sum of the Aggregate Outstanding Warehouse
Balance plus the Aggregate Outstanding Excess Balance, would cause the
Aggregate Outstanding Warehouse Balance plus the Aggregate Outstanding
Excess Balance to exceed the Warehouse Borrowing Base at such time;
(b) when added to the sum of the Aggregate Outstanding Warehouse Balance plus
the Aggregate Outstanding Excess Balance, would cause or result in a violation
of the financial covenants set forth in Article 5 hereof; (c) if such Warehouse Advance is a Wet
Advance, when added to the aggregate outstanding balance of all Wet Advances
would cause or result in a violation of the Wet Advance Sublimit; (d) if
such Warehouse Advance is a Jumbo Advance, when added to the aggregate
outstanding of all Jumbo Advances would cause or result in a violation of the
Jumbo Advance Sublimit; (e) if such Warehouse Advance is an HELOC/Second
Trust Deed Advance, when added to the aggregate outstanding balance of all
HELOC Advances and Second Trust Deed Advances would cause or result in a
violation of the HELOC/Second Trust Deed Advance Sublimit; (f) if such
Warehouse Advance is an Alt A Advance, when added to the aggregate outstanding
balance of all Alt A Advances would cause or result in a violation of the Alt A
Advance Sublimit; or (g) if such Warehouse Advance would cause or result
in the Aggregate Outstanding Warehouse Balance plus the Aggregate
Outstanding Excess Balance to exceed the Total Warehouse Line Commitment. The
Agent and the Banks shall not be obligated to honor any Request for Advance if
the disbursement of funds thereunder would occur on or after the Termination
Date, or if an Event of Default has occurred and is continuing or if such
disbursement would cause or result in an Event of Default or an Unmatured Event
of Default.


 


2.2                                 Swing Advances
and Excess Advances by Agent.


 


(a)                                  Swing Advances.  Subsequent to the addition of an Applicant
Financial Institution as a “Bank” hereunder and upon the terms and subject to
the conditions contained in this Credit Agreement, the Agent may for its own
account and at its own discretion, make one or more Swing Advances to the
Company, the aggregate unpaid principal amount of which at any time, including
those then to be made, shall not exceed the least of (i) the sum of the Total
Warehouse Line Commitment at such time less the sum of the Aggregate


 


14

















 


Outstanding
Warehouse Balance plus the Aggregate Outstanding
Excess Balance at such time, (ii) the sum of the Agent’s Warehouse Line
Commitment at such time less the amount of the Aggregate Outstanding
Warehouse Balance plus the Aggregate Outstanding
Excess Balance then allocated to the Agent, and (iii) the then current maximum
principal amount of such Swing Line as determined by the Company and the Agent;
provided, that, the sum of the Aggregate Outstanding Warehouse Balance plus the Aggregate
Outstanding Excess Balance plus the Swing Advance to be made by
the Agent, shall not exceed the Warehouse Borrowing Base as set forth in the
most recent Borrowing Base Report prepared by the Agent on the day of the
making of such Swing Advance plus the Collateral Value of the Eligible
Collateral delivered to the Agent on that day and which is not included in the
most recent Borrowing Base Report (the “Swing Advance Limitations”). Subsequent
to a Swing Advance being made by the Agent, the Agent may at any time (and in
any event shall no less frequently than one (1) time each week) in its
sole and absolute discretion, demand the Banks to advance under their
respective Warehouse Notes and pay to the Agent an amount equal to pay their
Warehouse Commitment Pro Rata Share of the Warehouse Advance necessary to repay
the then current aggregate outstanding balance of all Swing Advances. On each
Business Day on which the Agent makes a demand for payment before 2:00 p.m.
Prevailing Time, on any particular Business Day, whether before or after the
occurrence of an Event of Default, each Bank shall irrevocably and
unconditionally purchase from the Agent, without recourse or warranty, an
undivided interest and participation in the Swing Advances then outstanding, by
paying to the Agent, in same day funds available to the Agent at the main
office of the Agent located at 101 South Fifth Street, Louisville, Kentucky, an
amount equal to such Bank’s Warehouse Commitment Pro Rata Share of all Swing
Advances then outstanding, and thereafter, the Bank’s respective interest in
such Swing Advances, and the remaining interest of the Agent in such Swing
Advances, shall in all respects be treated as a Warehouse Advance, but such
Swing Advances shall continue to be evidenced by the Swing Note. In the event
the Agent makes such demand of the Banks after 2:00 p.m. Prevailing Time
on any particular Business Day, the Banks shall be required to make their
respective payments to the Agent before 12:00 noon Prevailing Time on the
immediately succeeding Business Day.


 


(b)                                    Excess Advances
by Agent.  Subsequent
to the addition of an Applicant Financial Institution as a “Bank” hereunder and
upon the terms and subject to the conditions contained in this Credit
Agreement, in the event the Agent is prevented from making a Swing Advance
hereunder as a result of the application of the Swing Advance Limitations
outlined above, the Agent may for its own account as a Bank hereunder and at
its sole discretion, make one or more Excess Advances to the Company, the
aggregate unpaid principal amount of which at any time, including those to be
made, shall not exceed the lesser of (i) the sum of the Total Warehouse
Line Commitment at such time less the sum of the Aggregate Outstanding
Warehouse Balance plus the Aggregate Outstanding
Excess Balance at such time, and (ii) the amount of the Agent’s Warehouse
Line Commitment at such time less the sum of the Agent’s Warehouse
Commitment Pro Rata Share of the Aggregate Outstanding Warehouse Balance plus the Aggregate
Outstanding Excess Balance at such time; provided, that, the sum of the
Aggregate Outstanding Warehouse Balance plus the Aggregate Outstanding Excess
Balance (excluding the Excess Advance to be made) plus the Excess Advance to be
made by the Agent, shall not exceed the Warehouse Borrowing Base as set forth
in the most recent Borrowing Base Report prepared by the Agent on the day of
the making of the Excess Advance plus the Collateral
Value of the Eligible Collateral delivered to the Agent on that day and which
is not included in the most recent Borrowing Base Report. Subsequent to an
Excess Advance being made by the Agent, the Agent may at any time (and in any
event no less frequently than one (1) time each week) in its sole and
absolute discretion request the other Banks to pay their respective Warehouse
Commitment Pro Rata Shares of the Warehouse Advance necessary to repay all or
any portion of the Excess Advances then outstanding. On each day on which the
Agent makes a demand for payment before 2:00 p.m. Prevailing Time, whether
before or after the occurrence of an Event of Default, each Bank shall pay to
the Agent its Warehouse Commitment Pro Rata Share of the Warehouse Advance
necessary to pay the Excess Advances designated by the Agent to be reallocated
and paid by the Banks, such payments shall be wired to the Agent, in same day
funds available to


 


15

















 


the
Agent at the main office of the Agent located at 101 South Fifth Street,
Louisville, Kentucky, in an amount equal to such Bank’s Warehouse Commitment
Pro Rata Share of all Excess Advances then designated by the Agent to be
reallocated and paid by the Banks. In the event the Agent makes such demand of
the Banks after 2:00 p.m. Prevailing Time on any particular day, the Banks
shall be required to make their respective payments to the Agent before 12:00
noon Prevailing Time on the immediately succeeding Business Day.


 


2.3                                 Notes.


 


(a)                                  Warehouse
Advances.  The lending
described above, to be made through Warehouse Advances made by the Banks in
accordance with the terms set forth herein, shall be evidenced by the Warehouse
Notes of the Company, substantially in the form of Exhibit C-1 to this Credit Agreement. The aggregate
amount of the Warehouse Advances made under the Warehouse Notes, less
repayments of principal, shall be the principal amount owing and unpaid on such
Warehouse Notes. The Warehouse Notes shall be payable in the manner, and shall
bear interest at the rates, specified therein and in this Credit Agreement.


 


(b)                                 Swing Advances.  The lending described above, to be made
through Swing Advances made by the Agent for its own account in accordance with
the terms set forth herein, shall be evidenced by the Swing Note made by the
Company payable to the order of the Agent substantially in the form of Exhibit E to this Credit Agreement.
The aggregate amount of Swing Advances made under the Swing Note, less
repayments of principal, shall be the principal amount owing and unpaid on the
Swing Note. The Swing Note shall be payable in the manner, and shall bear
interest at the rates, specified therein and in this Credit Agreement.


 


(c)                                  Excess Advances.  The lending described above, to be made
through Excess Advances by the Agent for its own account through the National
City Warehouse Promissory Note in accordance with the terms set forth herein,
shall be evidenced by the Warehouse Note of the Company made payable to
National City. The aggregate amount of the Warehouse Advances plus Excess Advances
made under the Warehouse Note referenced above, less repayments of principal,
shall be the principal amount owing and unpaid on such Warehouse Note.


 


2.4                                 Manner of Borrowing.


 


(a)                                  Request for
Advance.  The Company shall deliver to
the Agent, not later than the Agent’s published deadlines on the Business Day
on which the Company desires to obtain an Advance, an original (or facsimile
copy) executed Request for Advance (which shall be irrevocable) specifying the
amount of the Advance which it desires to borrow. Notwithstanding the
foregoing, if approved by the Agent, any such Request for Advance under the
immediately preceding sentence may be made to Agent, via an Electronic Request
for Advance, prior to the date and time published by the Agent from time to
time on the Business Day on which the Company desires to obtain an Advance and,
if required by Agent, followed by delivery to Agent, via facsimile transmission
or electronic mail, prior to the date and time published by the Agent from time
to time on the date of such proposed Advance, of a written confirmation of such
Electronic Request for Advance (a “Confirmation of Electronic Request for
Advance”) in a form acceptable to Agent in its sole discretion (if Agent
requires a Confirmation of Electronic Request for Advance and there is any
discrepancy between the schedule of Loans electronically transmitted to Agent
and the list of Pledged Loans attached to such Confirmation of Electronic
Request for Advance, Agent shall be entitled to rely solely on the list
attached to said Confirmation of Electronic Request for Advance without further
investigation or inquiry; otherwise, if Agent does not receive a Confirmation
of Electronic Request for Advance, Agent shall be


 


16

















 


entitled
to rely solely on the scheduled of Pledged Loans electronically transmitted to
Agent). Agent in its sole discretion can treat any Request for Advance as either
(i) a Request for Warehouse Advance, (ii) a Request for Swing
Advance, or (iii) a Request for an Excess Advance, as applicable. On the
date of the Agent’s receipt of a Request for Advance if: (a) no Event of
Default or Unmatured Event of Default has occurred and is then existing; (b) all
material terms and conditions of this Credit Agreement required to be satisfied
prior to the making of the particular type of Advance, including without
limitation, all conditions precedent specified in Article 4 hereof, are in
fact satisfied; (c) all material terms and conditions of the Security
Agreement required to be satisfied prior to the making of an Advance are in
fact satisfied; and (d) the making of such Advance shall not cause or
result in either a violation of any of the terms of this Credit Agreement or of
the Security Agreement, or cause or result in an Event of Default, or an
Unmatured Event of Default, the Agent shall (xx) in the case of a Warehouse
Advance, credit each Bank’s Pro Rata Share of such Warehouse Advance received
by the Agent to the Company in accordance with the terms set forth below, (yy)
in the case of a Swing Advance, credit the amount of such Swing Advance to the
Company, and (zz) in the case of an Excess Advance, credit the amount of such
Excess Advance to the Company; provided, however, with respect to each Wet
Advance, the proceeds thereof shall, at the option of the Agent, be (i) wire
transferred by the Agent through the Federal Reserve Wire Transfer System
directly to the Company’s agent responsible for closing such Wet Loan, (ii) funded
by a draft on the Agent, which draft shall be made payable either [a] jointly
to the Company’s agent responsible for closing such Wet Loan and the
Mortgagor(s) under such Wet Loan, [b] only to the Company’s closing agent if
such transaction is a refinance transaction where the three (3) day right
of rescission may preclude the Company from obtaining both endorsements without
incurring significant additional costs, or [c] in the case of a Second Trust
Deed Loan, to the mortgagor’s consumer debt creditor, or (iii) disbursed
in such other manner as is acceptable to the Company and the Agent. Requests
for Advance received by the Agent after 12:00 p.m. Prevailing Time will
not be processed as a Request for Warehouse Advance, but may be treated, at the
Agent’s sole discretion, as a Request for Swing Advance. Requests for Advance
received by the Agent after the Agent’s published deadlines will not be
processed by the Agent as a Request for Warehouse Advance until the next
Business Day.


 


(b)                                 Disbursement of
Bank’s Warehouse Pro Rata Share.  All Warehouse Advances requested by the Agent
under this Credit Agreement shall be made by the Banks simultaneously and
proportionately to their respective Warehouse Commitment Pro Rata Shares of
each such Warehouse Advance, it being understood that, except as provided in Section 2.4(c) below, no Bank shall be responsible for any default
by any other Bank of that other Bank’s obligation to fund its Warehouse
Commitment Pro Rata Share of a Warehouse Advance requested hereunder nor shall
the Warehouse Line Commitment of any Bank be increased or decreased as a result
of the default by any other Bank of that other Bank’s obligation to fund its
Warehouse Commitment Pro Rata Share of a Warehouse Advance requested hereunder.
Promptly after receipt by the Agent of a Request for Advance pursuant to this Section 2.4,
the Agent shall notify each Bank of the Warehouse Advance requested by the
Company pursuant thereto and each Bank’s Warehouse Commitment Pro Rata Share of
such Warehouse Advance. Each Bank shall make its Warehouse Commitment Pro Rata
Share of each Warehouse Advance (other than a Swing Advance or an Excess
Advance) to be made to the Company available to the Agent, in same day funds,
at the office of the Agent located at 101 South Fifth Street, Louisville,
Kentucky not later than 3:00 p.m. Prevailing Time on the date the Request
for Advance from the Company is received by the Agent. The time of the Agent’s
receipt of same day funds from the Banks which are wire transferred through the
Federal Reserve System shall be based upon the Federal Reference Number and the
“time out” for any such wire transfer. Upon satisfaction or waiver of the
conditions precedent specified in Section 4.1 hereof in the case of the
initial Advance and Section 4.2 hereof in the case of any subsequent
Advance, the Agent shall make the proceeds of each Advance requested by the
Company available to the Company on the date specified above by causing an
amount of same day funds equal to the proceeds of the Banks’ respective
Warehouse Commitment Pro Rata Shares of such Warehouse Advance received by the
Agent at its office located at the address set forth in the


 


17

















 


preceding
sentence to be credited to the Company; provided, however, with respect to each
Wet Advance (whether in the form of a Warehouse Advance, Swing Advance or
Excess Advance), the proceeds thereof shall be deposited into the Funding
Account, and at the option of the Agent, be (i) wire
transferred by the Agent through the Federal Reserve Wire Transfer System
directly to the Company’s agent responsible for closing the related Wet Loan,
or if the Company closes its own Wet Loan, then directly to the Company or the
Company’s agent, (ii) funded by a draft or check on the Agent or one of
its affiliates, which draft or check shall be made payable to the Company’s
agent responsible for closing the related Wet Loan, or if the Company closes
its own Wet Loan, then directly to the Company or the Company’s agent, (iii) funded
by a cashier’s check issued by the Agent on behalf of the Company and made
payable to the Company’s agent responsible for closing the related Wet Loan, or
(iv) disbursed in such other manner as is acceptable to the Company and
the Agent.


 


(c)                                  Assumptions by
Agent for Advances; Failure to Fund a Bank.  Unless the Agent shall have been notified by
any Bank prior to the date that such Bank’s Warehouse Commitment Pro Rata Share
of a Warehouse Advance is to be made (the “Funding Date”) that such Bank does
not intend to make available to the Agent such Bank’s Warehouse Commitment Pro
Rata Share of such Warehouse Advance requested on such Funding Date, the Agent
may assume that such Bank has made such amount available to the Agent on such
Funding Date and the Agent may, in its sole discretion, but shall not be
obligated to, make available to the Company a corresponding amount on such
Funding Date. If such corresponding amount is not in fact made available to the
Agent by such Bank, the Agent shall be entitled to recover a Two Hundred Dollar
($200.00) processing fee plus such corresponding amount
owed on demand from such Bank together with interest thereon, for each day from
such Funding Date until the date such amount is paid to the Agent, at the
customary rate set by the Agent for the correction of errors among the Banks
for three (3) Business Days
and thereafter at the Default Rate. If such Bank does not pay such
corresponding amount forthwith upon the Agent’s demand therefor, the Agent
shall notify the other Banks and each of the other Banks (including National
City) shall immediately pay to the Agent a pro rata share (excluding in such
calculation the Bank which failed to fund) of such amount not funded by a Bank;
provided, however, no Bank (including National City) shall be obligated to fund
any amount under this Credit Agreement in excess of that Bank’s Warehouse Line
Commitment, as applicable. If any portion of the amount not funded by a Bank is
not paid to the Agent by the other Banks in accordance with the immediately
preceding sentence, the Agent shall promptly notify the Company and the Company
shall immediately pay such corresponding amount to the Agent and shall pay
interest on such amount for each day from such Funding Date until the date such
amount is paid to the Agent, at the applicable interest rate borne by the
particular Advance, which amount shall be paid to the Agent at the next monthly
billing. Nothing in this Section 2.4 shall be deemed to relieve any Bank from its obligation
to fulfill its Warehouse Line Commitment hereunder or to prejudice any rights
that the Company may have against any Bank as a result of any default by such
Bank hereunder. In the event any Bank gives notice to the Agent that such Bank
does not intend to fund its Warehouse Commitment Pro Rata Share of any
Warehouse Advance to be made to the Company or in the event any Bank otherwise
fails to fund its Warehouse Commitment Pro Rata Share of any Warehouse Advance
to be made to the Company, the Agent shall promptly notify the other Banks of
the occurrence of any such event and the other Banks shall each fund a pro rata
share (excluding in the calculation the nonfunding Bank) of the nonfunding Bank’s
Warehouse Commitment Pro Rata Share of each Advance not funded by such Bank;
provided, however, no Bank shall be obligated to fund any amount under this
Credit Agreement in excess of its Warehouse Line Commitment. In the event any
Bank gives notice to the Agent that such Bank does not intend to fund its
Warehouse Commitment Pro Rata Share of any Warehouse Advance to be made to the
Company or in the event any Bank otherwise fails to fund its Warehouse
Commitment Pro Rata Share of any Advance to be made to the Company, the Agent
shall telephonically notify the Company of the occurrence of any such event.
The Warehouse Commitment Pro Rata Share of principal payments (from any source
whatsoever) payable hereunder to a Bank which fails to fund its


 


18

















 


Warehouse
Commitment Pro Rata Share of any Warehouse Advance, including any Warehouse
Advance requested by the Agent to repay any Swing Advance or Excess Advance,
shall be paid on a pro rata basis to the Banks which funded that Bank’s
Warehouse Commitment Pro Rata Share of such Warehouse Advance, Swing Advance or
Excess Advance, as applicable, until the amount which those Banks funded for
the Bank which failed to fund, has been repaid in full (the “Repayment Date”).
Notwithstanding anything contained herein to the contrary, in the event that
any Bank fails to fund its Warehouse Commitment Pro Rata Share of any Warehouse
Advance on a Funding Date, if on such Funding Date all conditions precedent to
such Warehouse Advance have been satisfied, such Bank shall forfeit all consent
and voting rights for all purposes hereunder and under the other Loan Documents
for the entire period of time commencing upon its failure to fund on the
Funding Date and ending on the Repayment Date; provided, however, such forfeiture
shall not apply to the right of a Bank to consent to any amendment or
modification of this Credit Agreement or any other Loan Documents which
requires the consent of the Agent and all of the Banks pursuant to terms of Section 9.20 hereof.


 


2.5                                 Records.


 


(a)                                  Advances.  The Agent shall record the names and addresses
of the Banks and the Pro Rata Shares of the Advances of each Bank from time to
time in the records of the Agent. The Company, the Agent and the Banks may
treat each Person whose name is so recorded in the records of the Agent as a
Bank hereunder for all purposes of this Credit Agreement. The Agent’s records
maintained pursuant to this Section 2.5 shall
be available for inspection by the Company or any Bank at any reasonable time
and from time to time upon reasonable prior notice to the Agent.


 


(b)                                 Payments.  The Agent shall record each repayment or
prepayment in respect of the principal amount of the Banks’ Pro Rata Shares in the
Advances in the Agent’s records. Any such recordation in accordance with the
terms of this Credit Agreement shall be conclusive and binding on the Company
absent manifest error; provided, that failure to make any such
recordation, or any error in such recordation, shall not affect the Company’s
obligation to repay all Advances to the Banks in accordance with this Credit
Agreement, the Warehouse Notes and the Swing Note.


 


(c)                                  Bank’s Records.  Each Bank shall record on its internal records
its Warehouse Commitment Pro Rata Share of each Warehouse Advance made by it to
the Company and each payment in respect thereof. Any such recordation in
accordance with the terms of this Credit Agreement shall be conclusive and
binding on the Company absent manifest error; provided, that failure to
make any such recordation, or any error in such recordation, shall not affect
the Company’s obligation to repay all Warehouse Advances to the Banks in
accordance with this Credit Agreement, the Warehouse Notes and the Swing Note; provided
further, that in the event of any inconsistency between the Agent’s records
and any Bank’s records, the Agent’s records shall govern in the absence of
manifest or demonstrable error.


 


2.6                                 Certain
Representations.  Each
Request for Advance shall be deemed to be the representation of the Company and
of the officer making such request that: (a) all conditions precedent set
forth in Article 4 hereof have been satisfied; (b) the Company is in
compliance with all financial covenants set forth in Article 5 hereof; (c) the representations and
warranties contained in Article 6 hereof remain true and correct in all material
respects; and (d) no Event of Default and no Unmatured Event of Default
has occurred and is then existing, or will exist upon completion of the
requested Advance.


 


19

















 


2.7                                 Payment of the
Warehouse Notes.


 


(a)                                       Termination
Date.  On the Termination Date,
without necessity of notice or demand, the Company shall pay to the Agent for
the account of the Banks the full amount of the outstanding principal balance
of, and all accrued but unpaid interest on, the Warehouse Notes and the Swing
Note.


 


(b)                                 Warehouse
Borrowing Base Deficiency.  If, at
any time, and for any reason, including without limitation a reduction in the
Collateral Value or any part thereof by virtue of such value being marked to
market, the sum of the Aggregate Outstanding Warehouse Balance plus the
Aggregate Outstanding Excess Balance exceeds the Warehouse Borrowing Base, as
determined by the Agent, then the Company shall immediately pay to the Agent an
amount equal to the amount by which the sum of the Aggregate Outstanding
Warehouse Balance plus the Aggregate Outstanding
Excess Balance exceeds the Warehouse Borrowing Base.


 


(c)                                  Proceeds of
Collateral.  The
proceeds from the Collateral shall be payable to the Agent for application to
the Warehouse Notes, the Swing Note and the other Secured Obligations under and
in accordance with the terms of the Security Agreement.


 


2.8                                 Rates of
Interest.


 


(a)                                  Applicable
Rates of Interest.


 


(i)
With respect to all Advances other than Alt A Advances and HELOC/Second Trust
Deed Advances, the Swing Note and the Warehouse Notes shall bear interest at
the following rates of interest, as applicable: (a) the per annum rate
equal to LIBOR plus three quarters of one percent (0.75%) for that
portion of the aggregate outstanding principal balance of each Warehouse Note
of each Bank which is not a Balance Funded Bank and for that portion of the
aggregate outstanding principal balance of the Balance Funded Bank’s Warehouse
Note and the Swing Note which exceeds the Average Monthly Available Deposits
maintained by the Company with the Balance Funded Bank, and (b) the per
annum rate equal to one percent (1.00%) for that portion of the aggregate
outstanding principal balance of the Warehouse Note payable to the Balance
Funded Bank and the Swing Note which does not exceed the Average Monthly
Available Deposits maintained by the Company with the Balance Funded Bank; and


 


(ii)
With respect to Alt A Advances and HELOC/Second Trust Deed Advances, the Swing
Note and the Warehouse Notes shall bear interest at the following rates of
interest, as applicable: (a) the per annum rate equal to LIBOR plus one
percent (1.00%) for that portion of the aggregate outstanding principal balance
of the each Warehouse Note of each Bank which is not a Balance Funded Bank and
for that portion of the aggregate outstanding principal balance of the Balance
Funded Bank’s Warehouse Note and the Swing Note which exceeds the Average
Monthly Available Deposits maintained by the Company with the Balance Funded
Bank, and (b) the per annum rate equal to one and one-quarter of one
percent (1.25%) for that portion of the aggregate outstanding principal balance
of the Warehouse Note payable to the Balance Funded Bank and the Swing which
does not exceed the Average Monthly Available Deposits maintained by the
Company with the Balance Funded Bank.


 


2.9                                 Interest
Payments.  As soon as
reasonably possible subsequent to the availability of the account analysis
statement, the Agent shall deliver to the Company and each Bank an interest
billing statement (the “Billing Statement”), which Billing Statement shall set
forth the interest accrued with respect to the outstanding principal balance of
the Warehouse Notes and the Swing Note from and including the first


 


20

















 


day
of the preceding month through the last day of such month, provided, that any
failure or delay in delivering such interest billing statement or any
inaccuracy therein shall not affect any of the Company’s obligations and
liabilities hereunder. Interest shall be payable, (i) on the fifth (5th)
calendar day after receipt of the Billing Statement referred to above and (ii) upon
repayment of any of the outstanding principal balance of the Swing Note and the
Warehouse Notes at maturity (by reason of acceleration or otherwise). Any
interest accruing at the Default Rate shall be payable on demand.


 


2.10                           Post-Maturity
Interest.  Any
principal payments on the Swing Note and the Warehouse Notes not paid when due
and, to the extent permitted by applicable law, any interest payments on the
Swing Note and Warehouse Notes or any fees or other amounts owed hereunder not
paid when due, in each case whether at stated maturity, by notice of prepayment,
by acceleration or otherwise, shall thereafter bear interest (including
post-petition interest in any proceeding under the Bankruptcy Code or other
applicable bankruptcy laws) payable on demand at a rate equal to the applicable
Default Rate. Payment or acceptance of the increased rates of interest provided
for in this Section 2.10 is
not a permitted alternative to timely payment and shall not constitute a waiver
of any Event of Default or otherwise prejudice or limit any rights or remedies
of the Agent or any Bank.


 


2.11                           Computation of
Interest.  Interest on
the Warehouse Advances, Excess Advances and Swing Advances shall be computed on
the basis of a 360-day year, in each case for the actual number of calendar
days elapsed in the period during which it accrues.


 


2.12                           General
Provisions Regarding Prepayments and Payments.


 


(a)                                  Prepayments.  The Company may, at any time and from time to
time, prepay all or any portion of the outstanding principal balance of the
Warehouse Notes without premium or penalty. All prepayments (whether voluntary
or involuntary, at maturity, by acceleration or otherwise) of the outstanding
principal balance of the Notes shall be applied, first, to the
repayment of the outstanding principal balance of Swing Note to the full extent
thereof, second, to the repayment of this outstanding principal balance
of all Excess Advances, third, to any delinquent fees, costs or
expenses, fourth, to the repayment of the outstanding principal balance
of all Warehouse Advances, and fifth, to the payment
of the interest thereon. All prepayments of the outstanding principal balance
of the Warehouse Notes shall be applied first to principal bearing interest at
the applicable interest rate to the full extent thereof, in a manner which
minimizes the amount of any payments required to be made by the Company
pursuant to this Section 2.12 hereof.


 


(b)                                 Manner and Time
of Payment.  All
payments of principal, interest and fees hereunder, under the Swing Note and
under the Warehouse Notes by the Company shall be made without defense, setoff
and counterclaim and upon the Agent’s receipt of notice from the Company, which
notice shall not be given later than the fifth (5th) calendar day after the
Company’s receipt of the Billing Statement under Section 2.9 hereof, the Agent shall be authorized to
charge the Company’s “DDA Account” maintained at National City (Account
#986649569) to pay all principal (to the extent that the funds in the
Collateral Proceeds Account are not sufficient to make a payment of principal),
interest and fees due hereunder, provided there are sufficient funds available
in such account for that purpose. If there are not sufficient funds available
in such account for that purpose or if the Agent has not received notice from
the Company authorizing the Agent to charge the Company’s “DDA Account”, the
Company shall make such payments in same day funds and delivered to the Agent
not later than 12:00 p.m. Prevailing Time on the day following the date
due at its office located at 101 South Fifth Street, Louisville, Kentucky, for
the account of the Banks; funds received by the Agent after that time shall be
deemed to have been paid by the Company on the next succeeding Business Day.


 


21














 


(c)             Apportionment of Payments. Except as otherwise provided herein, the
Agent shall apportion all principal and interest payments on the Warehouse
Notes, in each case proportionately to the Banks’ respective Warehouse Pro Rata
Shares. The Agent shall promptly distribute to each Bank at its primary address
set forth below its name on the appropriate signature page hereof or such
other address as any Bank may request, its Warehouse Pro Rata Share of all such
payments when received by the Agent.


 


(d)             Payments on a Business Day. Whenever any payment to be made hereunder or under the Warehouse Notes or the
Swing Note shall be stated to be due on a day that is not a Business Day, such
payment shall be made on the next succeeding Business Day and such extension of
time shall be included in the computation of the payment of interest on the
underlying principal payment due hereunder, under the Swing Note or under the
Warehouse Notes or of the fees hereunder, as the case may be.


 


2.13         Set-Off. The Company hereby irrevocably authorizes each Bank, upon the occurrence of an Event of Default to set off
the liability of the Company on the Warehouse Notes and the Swing Note, without
notice, against all deposits and credits of the Company with, and any and all
claims of the Company against, that Bank at any time outstanding provided,
however, that the Banks shall not offset against deposits and credits of the
Company held in trust or in a custodial capacity for third parties.


 


2.14         Fees.


 


(a)             Collateral Handling/Commitment Fee. The Company agrees to pay to the Agent such collateral handling fees
(collectively, the “Collateral Handling Fees”) and the commitment fee (the “Commitment
Fee”) in the amounts and at the times set forth in the fee letter issued by the
Agent to the Company.


 


(b)             Amendment Fees. The Company agrees to (i) reimburse
the Agent for all legal fees reasonably incurred in connection with any
amendment to the Loan Documents and (ii) pay to each of the Banks an
amendment fee equal to Three Hundred Seventy Five Dollars ($375.00) for each
amendment to the Loan Documents; provided, however, the Company shall not be
required to pay such $375.00 amendment fee to any of the Banks in connection
with any amendment of the Loan Documents which is executed (either individually
or as part of a series of amendments) for the sole purpose of extending the
Termination Date for not more than an aggregate of one hundred twenty (120)
days. Nothing contained in this Section 2.14
shall compel the Agent or the Banks to authorize or execute any
amendment to the Loan Documents, all such amendments being subject to the
compete discretion of the Agent and the Banks.


 


(c)             Payment of Fees. All fees due under this Section 2.14 shall be payable in
arrears each month and all such fees shall be computed on the basis of a
360-day year, in each case for the actual number of calendar days elapsed
during the period during which it accrues. The Agent shall compute the amounts
of the applicable fees include such fees on the Billing Statement to be delivered
to the Company each month under Section 2.9
hereof. The Company shall pay to the Agent the applicable fees set
forth in such Billing Statement within five (5) calendar days of its
receipt of a Billing Statement.


 


(d)             Fees Non-Refundable. The fees payable under this Section 2.14 once paid shall be
non-refundable, in whole or in part under any circumstances, absent manifest
error in the calculation of such fees.


 


2.15         Commitments. The Company shall obtain and maintain Commitments which, in the
aggregate, equal or exceed the aggregate amount of all Loans financed and
outstanding under this Credit Agreement and all loans under credit agreements
of similar nature with other financial institutions. If an Event


 


22

















 


of
Default shall occur and continue, at the option of the Agent or the Requisite
Banks, such Commitments shall be assigned by the Company to the Agent, for the
benefit of the Banks in proportion to their Pro Rata Shares.


 


2.16         Special Provisions Governing Base Rate.


 


(a)             Notwithstanding any other provision of this
Credit Agreement to the contrary, the Agent’s determination of LIBOR shall be
final, conclusive and binding upon all parties in the absence of manifest
error. In the event that (i) it becomes unlawful for the Agent or any Bank
to make or maintain LIBOR loans, or (ii) by reasons of circumstances
occurring after the date of this Credit Agreement affecting the London Interbank Market,
adequate and fair means do not exist for ascertaining LIBOR on the basis provided for in the definition thereof,
the Agent or such Bank shall promptly notify Company, and Agent’s or such Bank’s
obligation to offer such LIBOR loans shall be suspended during such period of
time.


 


(b)             In the event any applicable law, order,
regulation, treaty or directive issued by any central bank or other
governmental authority, or in the governmental or judicial interpretation
thereof, or compliance by the Agent with any request or directive (whether or
not having the force of law) issued subsequent to the date hereof by any
central bank or other governmental authority:


 


(i)            does or shall subject the Agent or any Bank
to any tax of any kind whatsoever with respect to this Credit Agreement or any
Advances made hereunder, or change the basis of taxation of payments to the
Agent or any Bank of principal, fee, interest or any other amount payable
hereunder except for the change in the rate of tax on the overall net income of
the Agent or any Bank imposed by the jurisdiction in which Agent or any Bank
maintains its principal office; or


 


(ii)           does or shall impose on the Agent or any Bank
any other condition; and the result of any of the foregoing is to materially
increase the cost to the Agent or any Bank of making any Advance or renewing or
maintaining this Credit Agreement or reduce any amount receivable in respect
thereof or to reduce the rate of return on the capital of the Agent or any Bank
or any Person controlling the Agent or any Bank, then in any such case, the
Company shall promptly pay to the Agent or any Bank upon its written demand any
additional amounts necessary to compensate the Agent or any Bank for such
additional cost or reduced amounts receivable or rate of return as reasonably
determined by Agent or any Bank with respect to this Credit Agreement or
Advances made hereunder. If the Agent or any Bank becomes entitled to claim any
additional amounts pursuant to this section, it shall promptly notify the
Company of the event by reason of which it has become so entitled and provide
the Company with a certificate specifying any additional amounts payable and
how they are calculated. If the Company reasonably elects to discontinue
requesting Advances hereunder and terminates the Warehouse Line as a result of
any additional amounts the Company it is reasonably determined by the Agent or
any Bank to owe pursuant to the provisions of this Section 2.16(b)(ii), the Agent and the Banks agree to refund a
pro-rata portion of the Commitment Fee theretofore paid by the Company to the
Banks for the current period. The provisions of this section shall survive the
termination of this Credit Agreement and payment of all other Secured
Obligations.


 


2.17         Certain Representations. Each Request for Advance shall be deemed to
be the representation of the Company
and of the officer making the request that: (a) all conditions precedent
set forth in Article 4 hereof have been satisfied; (b) the Company is
in compliance with all financial covenants set forth in Article 5 hereof; (c) the
representations and warranties contained in Article 6 hereof remain true
and correct in all material respects; and (d) no Event of Default and no
Unmatured Event of Default has occurred and is then existing, or will exist
upon completion of the requested Advance.


 


23

















 


2.18         Discretionary Loans. For each Loan that the Requisite Banks or
the Agent agrees to warehouse pursuant to Section 9.20
hereof, that is not a Wet Loan, the Company agrees to pay an
interest premium of one-half of one percent (0.50%) in addition
to the applicable rate of interest pursuant to Section 2.8(a) hereof, as may be the case.


 


ARTICLE 3


 


COLLATERAL SECURITY


 


3.1           Collateral. To secure the payment of the Warehouse Notes, the Swing Note and all other Secured Obligations, the Company
shall grant to the Agent for the ratable benefit of the Banks in proportion to
their Pro Rata Shares, Security Interests in such of its Loans, and other
assets constituting Collateral as may be required under the terms of the
Security Agreement.


 


3.2           Security Agreement. The Company shall execute and deliver to
the Agent for the ratable
benefit of the Banks in proportion to their Pro Rata Shares, the Security
Agreement.


 


3.3          Priority of Security Interests. The Security Interests shall be first and
prior security interests subject
only to the limitations set forth in the Loan Documents. The Company, the Agent
and the Banks hereby acknowledge and agree that the Agent, on behalf of and for
the pro rata benefit of the Banks, now has, and shall continue to have, a first
and prior pledge and security interest in and to the Collateral, as collateral
security for the Warehouse Advances, the other Secured Obligations, and any
other obligations and/or liabilities due and owing by the Company pursuant to
this Credit Agreement and each of the other Loan Documents, without priority,
distinction or preference of any kind whatsoever.


 


3.4          Release of Security Interest. If no Event of Default or Unmatured Event
of Default has occurred and is
then continuing, the Agent, for and on behalf of the Banks, at the request of
the Company, shall release its Security Interest in any item of Collateral so
long as after giving effect to any such requested release the Warehouse
Borrowing Base shall not be less than the sum of the Aggregate Outstanding  Warehouse Balance plus the Aggregate
Outstanding Excess Balance, provided that any such release of Collateral shall
occur only if expressly permitted by the terms of the Security Agreement, and
then only strictly in compliance with the terms thereof.


 


ARTICLE 4


 


CONDITIONS PRECEDENT


 


4.1          Closing; Initial Advance. The obligation of the Agent and the Bank to
close the financing contemplated
hereunder and make the initial Advance under this Credit Agreement shall be
subject to the satisfaction of the following conditions precedent:


 


(a)           Evidence of Corporate Existence and
Qualification of the Company.
The Company shall have furnished
the Agent with a copy of the Company’s Articles of Incorporation and all
amendments thereto, certified by the Secretary of State of California, together
with an original certificate from said Secretary of State, dated not more than
thirty (30) calendar days prior to
the date of this Credit Agreement, stating that the Company is a corporation
duly organized, validly existing, and in good standing under the laws of such
state, and a copy of the Bylaws of the Company and all amendments thereto,
certified by the secretary of the Company to be true, accurate and complete.


 


24

















 


(b)           Corporate Resolutions. The Company shall have furnished to the
Agent copies of updated
resolutions reflecting all necessary corporate action taken by the Company to
authorize the execution,
delivery, and performance of the Credit Agreement, the Warehouse Note, and the
other Loan Documents to which the Company is a party on behalf of the Company,
certified by the secretary of the Company to be true, correct, and in full
force and effect as of the date of the Credit Agreement.


 


(c)           Incumbency Certificate. The Company shall have furnished the Agent
with updated incumbency certificates with respect to the officers of the
Company, as applicable, authorized to execute and deliver the Credit Agreement
and the other Loan Documents to which the Company is a party on behalf of the
Company.


 


(d)           Credit Agreement. This Credit Agreement shall have been duly executed
and delivered by the Company, the Agent and the Banks and delivered to the
Agent.


 


(e)           Notes. The Warehouse Note shall have been duly executed and delivered by the
Company and delivered to the Bank.


 


(f)            Loan Documents. All of the other Loan Documents shall have
been duly executed and delivered by the Company and each of the other parties
thereto and delivered to the Agent.


 


(g)           Financing Statements. The Company shall have executed and
delivered, in appropriate form
for filing in all appropriate governmental offices, such Uniform Commercial
Code financing statements with respect to the Collateral as the Agent shall
reasonably request.


 


(h)           Evidence of Insurance. The Company shall have furnished the Agent
with evidence of the insurance coverage required to be maintained by the
Company pursuant to Section 7.1(i) hereof.


 


(i)            Financial Statements. The Company shall have furnished the Agent
with a copy of its audited
financial statements as at December 31, 2006, and its most recent unaudited statements.


 


(j)            Termination Statements and Releases. All Uniform Commercial Code Termination
Statements and releases necessary to release of record all existing liens and
security interests encumbering any of the Collateral other than those in favor
of the Agent on behalf of and for the benefit of the Banks, duly executed and
delivered by all appropriate or necessary parties.


 


(k)           UCC Search Reports. UCC Search Reports in the name of the
Company shall have been obtained
from all appropriate government offices.


 


(l)            Agency Audits. The Company shall have furnished the Agent
with a copy of the results of any field audit of the Company’s business and/or records
performed by GNMA, Fannie Mae, FHLMC, for the Department of Housing and Urban
Development within two (2) years prior to the date of this Credit
Agreement, together with a copy of all subsequent correspondence relating to
such audit between the Company and such agency, to the extent copies of such
field audits have not been heretofore delivered to the Agent.


 


(m)          Other Loans. The Company shall furnish the Agent with a summary description of any
and all existing loan agreements, lines of credit or similar indebtedness of
the Company for


 


25

















 


amounts of One Million Dollars ($1,000,000.00) or more to which the
Company is a party, such summary  shall be provided as a part of Schedule 6.1.


 


(n)           Covenant Compliance Certificate. The Company shall have furnished the Agent with a completed Covenant
Compliance Certificate as of the initial closing date, together with a
spreadsheet or other working papers showing the calculations used to prepare
such certificate.


 


(o)           Authorized Signer Letter. The Company shall have delivered to the
Agent a letter designating the individuals authorized to sign various documents
or initiate, authorize and/or confirm  electronic communications related to the transactions contemplated
hereby, including without limitation, specimen signatures and electronic
mail addresses for all such individuals, such letter to be substantially in
the form of Exhibit J attached hereto and made a part hereof by
this reference.


 


(p)           Power of Attorney. The Power of Attorney, substantially in the
form of Exhibit B to the Security Agreement, shall have been
duly executed and delivered by the Company to the Agent.


 


(q)           Approved Investor List. The Company shall have provided the Agent
with the list of Approved Investors to be attached hereto as Schedule 1.1.


 


(r)            Representation and Warranty Disclosures. The Company shall have provided the Agent
with the list of representation and warranty disclosures to be attached hereto
as Schedule 6.1.


 


(s)           Other Documents. The Company shall have delivered such other
documents or instruments or reports including, without limitation, any
inter-creditor agreements, as the Agent may reasonably request.


 


(t)            Field Exam and Legal Fees. The Company shall have reimbursed the Agent
for (1) the cost of its field exam performed prior to the Closing Date and
(2) legal fees and expenses incurred in connection with the preparation,
execution and delivery of the Loan Documents up to a maximum dollar amount of
Four Thousand Dollars ($4,000.00).


 


4.2           All Advances. The obligation of the Banks to make their
Pro Rata Share of any Advance
(including the initial Warehouse Advance), and the Agent’s election to make any
Swing Advance or any Excess Advance hereunder shall be subject to each of the
following conditions precedent:


 


(a)           Covenant Compliance Certificate. In accordance with the provisions of Section 7.3(b) below,
the Company shall have executed and delivered to the Agent a completed Covenant Compliance Certificate, together with a
spread sheet or other working papers showing the calculations used to prepare
such certificate.


 


(b)           No Default or Unmatured Event of Default. As of the date of the making of such
Advance, no Event of Default or Unmatured Event of Default shall have occurred
and be then existing.


 


(c)           Compliance with Loan Documents. The Company shall be in full compliance
with all material conditions and provisions of this Credit Agreement, the other
Loan Documents, and all related instruments and documents.


 


26

















 


(d)           No Adverse Change. No material adverse change shall have
occurred in the condition of the
Company, financial or otherwise, or in the earnings or affairs of the Company,
since the date of this Credit Agreement.


 


(e)           Representations and Warranties. The representations and warranties
contained in Article 6 of this Credit Agreement and in the Security
Agreement shall be true and correct in all material respects on the date of
such Advance with the same force and effect as though made on and as of that
date.


 


ARTICLE 5


 


FINANCIAL COVENANTS


 


So
long as any portion of the Advances made under this Credit Agreement remains
unpaid or this Credit Agreement continues in effect, unless the Agent and all
of the Banks otherwise consent in writing, the Company shall abide by each of
the following covenants:


 


5.1           Borrowing Base. The sum of the Aggregate Outstanding
Warehouse Balance plus the Aggregate Outstanding Excess Balance
shall not exceed the Warehouse Borrowing Base.


 


5.2           Leverage Ratio. The ratio of Total Indebtedness to Tangible
Net Worth shall not exceed 10 to
1.


 


5.3           Tangible Net Worth. The Tangible Net Worth of the Company shall
at all times be greater than the sum of Forty-Five Million Dollars
($45,000,000.00).


 


5.4           Liquidity. The Company shall at all times maintain a minimum of Fourteen Million Dollars ($14,000,000.00) of Liquid
Assets on its balance sheet.


 


The
parties hereto acknowledge and agree that in the event that any of the
foregoing covenants are materially changed as a result of a change in GAAP, the
Banks, the Agent and the Company will amend the terms of this Article 5
to accurately reflect the agreement among the Banks, the Agent and the Company
with respect to such financial covenants prior to such change in GAAP.


 


ARTICLE 6


 


REPRESENTATIONS AND WARRANTIES


 


To
induce the Agent and the Banks to enter into this Credit Agreement and to make
Advances pursuant thereto, the Company represents and warrants to the Agent and
the Banks as follows, which representations and warranties shall survive the
execution and delivery of this Credit Agreement and shall be deemed to be
continuing representations and warranties until the Warehouse Notes, the Swing
Note, and the other obligations herein have been respectively paid in full to
the Agent and the Banks and this Credit Agreement has been fully terminated:


 


6.1           Corporate Organization and Good Standing. The Company is a corporation duly incorporated, validly existing and in good
standing under the laws of the State of California, and it has the requisite
power and authority to own its properties and to conduct its business in the
manner in which such


 


27

















 


business
is presently conducted. The correct legal name of the Company, its state of
incorporation, and the correct address of its principal place of business are
set forth in Schedule 6.1 to this
Credit Agreement.


 


6.2           Qualification. The Company is duly qualified to transact
business and is validly existing
and in good standing as a foreign corporation in every foreign jurisdiction
where the failure to so qualify would materially and adversely affect the
Company’s business or its properties.


 


6.3           Power and Authority. The Company has the requisite power and
authority, corporate and otherwise, to enter into this Credit Agreement, to
make the borrowings herein contemplated, to execute and deliver the Notes and
the other Loan Documents to which it is a party, and to perform its obligations
hereunder and thereunder, all of which have been duly authorized by all proper
and necessary corporate action, and the same do not and will not:


 


(a)           violate or conflict with any provision of the articles of incorporation
or bylaws of the Company;


 


(b)           violate or conflict with the provisions of any agreement, law, rule,
regulation, order, writ, judgment, injunction, decree, determination or award
to which either the Company is a party or by which it or its property is bound,
and that would materially and adversely affect the Company;


 


(c)           result in, or require the creation or imposition of, any lien, pledge,
security interest, charge or
encumbrance of any nature upon or with respect to any property now or hereafter
owned by the Company or any Guarantor, other than such encumbrances as
contemplated by the Security Agreement; or


 


(d)           conflict with, result in a breach of, or
constitutes-default under, any indenture,
loan agreement, credit agreement, or any other agreement or instrument to which
either the Company is a party or by which it or its property is bound, and that
would materially and adversely affect the Company.


 


6.4           Binding Effect. This Credit Agreement, the Notes and the
other Loan Documents to which the Company is a party are valid, binding, and
legally enforceable obligations of the Company in accordance with their respective
terms (subject only to limitations as to enforceability which might result from
bankruptcy, reorganization, insolvency, or other similar laws affecting
creditors’ rights generally).


 


6.5           Financial Condition. The Company’s audited financial statements
as at December 31, 2006 (which
have been prepared in conformity with GAAP applied on a basis consistent with
that of the preceding fiscal year), and its most recent unaudited financial
statements, copies of which have been furnished to the Agent and the Banks,
pursuant to Section 4.1(i) of this
Credit Agreement, present fairly the financial condition of the Company as at
such dates and the results of their operations for the period then ended. There
has been no material adverse change in said financial condition except as
disclosed in Schedule 6.1 to this
Credit Agreement. The Company does not have any contingent obligations,
liabilities, taxes, or other outstanding financial obligations which are
material in the aggregate, except as described in Schedule 6.1 to this Credit Agreement.


 


6.6           Properties. The Company has good and marketable title to all of its properties
and assets, and none of its
assets are subject to any mortgage, pledge, title retention lien, security
interest, or encumbrance, except for those permitted by Section 7.2(g) hereof and those described
in Schedule 6.1 to this Credit
Agreement.


 


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6.7           Litigation. No litigation, delinquent tax claim, proceeding, dispute, or
governmental proceeding is
pending or, to its knowledge, threatened in writing against the Company, which (a) in
the opinion of the Company, may have a material adverse effect on the business
or condition (financial or other), affairs, or operations of the Company, or (b) involves
or may affect the validity or enforceability of any Loan Document or the
perfection or priority of any lien created thereby, except those matters
described in Schedule 6.1 to this Credit Agreement.


 


6.8           Purpose of Advances; Regulations U and X. No part of the
proceeds of the borrowings
hereunder will be used for any purpose other than financing Loans. No part of
the proceeds for the borrowings hereunder will be used to purchase or carry any
margin stock (within the meaning of Regulation U of the Board of Governors of
the Federal Reserve System) or to extend credit to others for the purpose of
purchasing or carrying any margin stock, and 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 any such margin stock. If requested by the Agent or
any Bank, the Company will furnish such Agent or Bank with a statement in
conformity with the requirements of Federal Reserve Form U-1 referred to
in said Regulation. The Company also warrants that no part of the proceeds of
the borrowings hereunder will be used by it for any purpose which violates, or
which is inconsistent with, the provisions of Regulation X of said Board of Governors.


 


6.9           Investment Company Act. The Company is not an investment company or
a company controlled by an
investment company within the meaning of the Investment Company Act of 1940, as
amended.


 


6.10         Securities Act. The Company has not issued any unregistered
securities in violation of the registration
requirements of the Securities Act of 1933, as amended, or of any other law,
and is not violating any rule,
regulation, or requirement under the Securities Act of 1933, as amended, or the
Securities and Exchange Act of 1934, as amended. The Company is not required to
qualify an indenture under the Trust Indenture Act of 1939, as amended, in
connection with its execution and delivery of the Warehouse Notes, or the Swing
Note.


 


6.11         Permits; Consents, Compliance, etc. The Company has all necessary certificates, licenses, authorizations,
registrations, permits and approvals necessary to own and operate its property
and to conduct its business as it is currently being conducted. No consent,
approval or authorization of, or registration, declaration, or filing with, any
governmental authority is required on the part of the Company in connection
with the execution and delivery of this Credit Agreement, the Notes or the
other Loan Documents (other than filings to perfect the Security Interests), or
in connection with the performance of or compliance with the terms, provisions,
and conditions hereof except for those that have been obtained. The Company is
in compliance with all applicable statues, regulations and orders of, and all
applicable restrictions imposed by, all governmental bodies and agencies in
respect of the conduct of its business and the ownership of its property. Each
Loan at the time it was originated complied in all material respects with
applicable local, state and federal laws, including, but not limited to, all
applicable predatory and abusive lending laws. None of the Loans are “high cost”,
“high rate”, “high fee” or “predatory” as defined by the applicable predatory
and abusive lending laws.


 


6.12         ERISA. No fact or circumstance, including but not limited to any Reportable
Event within the meaning of the Employee Retirement Income Security Act of
1974, as amended (“ERISA”), exists in connection with any Plan of the Company (“Plan”
shall mean an employee pension benefit plan or pension covered by ERISA which
is guaranteed by the Pension Benefit Guaranty Corporation or any successor
thereto) which might constitute grounds for the termination of any such Plan by
the Pension Benefit Guaranty


 


29














 


Corporation
or any successor thereto or for the appointment of a trustee to administer any
such Plan. For purposes of this representation and warranty, the Company shall
be deemed to have knowledge of all facts attributable to any administrator of
any such Plan.


 


6.13         Affiliates. The correct legal
name of each Affiliate, the state of its organization (or, if a natural person,
of his or her domicile), and the percentage of such Affiliate’s capital stock
or equity that is directly or indirectly owned by the Company or the percentage
of the Company’s stock which is directly or indirectly owned by each Affiliate,
as applicable, are set forth in Schedule 6.1 to
this Credit Agreement.


 


6.14         Tax Returns and Payments. The
Company has filed all tax returns (or allowable extension requests) required by
law to be filed by it and has paid all taxes, assessments and other
governmental charges levied upon its properties, assets, income and
franchisees, other than those not yet delinquent and those, not substantial in
aggregate amount, which are being contested in good faith by the Company. The
charges, accruals and reserves on the books of the Company in respect of their
taxes are adequate in the opinion of the Company. The Company knows of no
material unpaid assessment for additional taxes or any basis for such
assessment.


 


6.15         No Defaults. The Company is not
in default in the payment or performance of any of its obligations or in the
performance of any mortgage, indenture, lease, contract or other agreement,
instrument or undertaking to which it is a party or by which it or any of its
assets may be bound, which default would have a material adverse effect on the
business, operations, assets or condition, financial or otherwise, of the
Company, taken as a whole. No Event of Default or Unmatured Event of Default
hereunder or under the other Loan Documents has occurred and is continuing. The
Company is not in default under any order, award or decree of any court,
arbitrator or governmental authority binding upon or affecting it or by which any
of its assets may be bound or affected which default would have a material
adverse effect on the business of the Company. The Company is not subject to
any order, award or decree which is likely to materially adversely affect the
ability Company to carry on its business as currently conducted or the ability
of the Company to perform its obligations under this Credit Agreement, the
Notes or the other Loan Documents to which it is a party.


 


6.16         Holding Company. The Company is
not a “holding company” or a “subsidiary company” of a “holding company”,
within the meaning of the Public Utility Holding Company Act of 1935, as
amended.


 


6.17         Contingent Obligations. The
Company does not have on the date hereof any material contingent obligations, material
liabilities for taxes, material long-term leases or unusual material forward or
long-term commitments, which have not been disclosed to the Agent in writing
prior to the date of this Credit Agreement and which would have a material
adverse effect on the business, operations, assets or condition, financial or
otherwise, of the Company, taken as a whole.


 


6.18         No Violations. The Company is
not a party to any contract or agreement or subject to any charter or other
corporate restriction which materially and adversely affects its business,
property or financial condition. The execution, delivery and performance of
this Credit Agreement, the Notes and the other Loan Documents to which the
Company is a party will not result in the violation of or be in conflict with
or constitute a default under the Articles of Incorporation or Bylaws of the
Company or any term or provision of any mortgage, loan agreement or other
instrument, or any judgment, decree, governmental order, statute, rule or
regulation, by which the Company is bound or to which any of its assets is
subject and will not result in the creation or imposition of any lien on the
assets of the Company except as contemplated by this Credit Agreement. The
Company is not a party to, or otherwise subject to any provision contained in,
any 


 


30

















 


instrument
evidencing indebtedness of the Company, any agreement relating thereto or any
other contract or agreement (including its Articles of Incorporation) which
restricts or otherwise limits the incurring of the indebtedness to be
represented by this Credit Agreement, the Notes and the other Loan Documents.


 


6.19         Disclosure; Solvency.  Neither
this Credit Agreement nor any other document furnished to the Agent or the
Banks by or on behalf of the Company in connection with the credit facilities
contemplated herein contains any statement of any material fact which is untrue
or misstates a material fact necessary in order to make the statements
contained herein or therein, in light of the circumstances in which they were
made, not misleading. There is no fact known to the Company which materially
adversely affects or in the future will (so far as the Company can now foresee)
materially adversely affect the business, operations, affairs or condition of
the Company or any of its or his properties which has not been set forth in
this Credit Agreement or in the other documents furnished to the Agent or to
the Banks by or on behalf of the Company in connection with the credit
facilities contemplated herein. The Company is currently solvent; and neither
the issuance and delivery of the Warehouse Notes or the Swing Note, nor the
performance of the transactions contemplated hereunder or thereunder, will
render the Company insolvent, inadequately capitalized to undertake the
transactions contemplated hereunder or to undertake the businesses in which it
is presently engaged or about to engage or render the Company unable to pay its
or his debts as they become due; the Company is not contemplating either the
filing of a petition by it or him or the commencement of a case by it or them
under any state or federal bankruptcy or insolvency laws or the liquidation of
all or a major portion of its property; and neither the Company has no
knowledge of any Person contemplating the filing of any such petition or
commencement of any such case against the Company.


 


ARTICLE 7


 


COVENANTS


 


7.1           Affirmative Covenants. So long as any portion of the Secured
Obligations under this Credit Agreement, including the Notes, remains unpaid or
this Credit Agreement continues in effect, unless all of the Banks otherwise
consent in writing, the Company shall abide by each of the following covenants
and agreements:


 


(a)           Payment and Performance of
Obligations. The Company will pay all principal, interest, fees, and other
charges with respect to the Notes and any other obligations when and as the
same become due and payable, will strictly observe and perform all covenants,
agreements, terms, conditions, and limitations contained in this Credit
Agreement, the Notes and the other Loan Documents, and will do all things
necessary to prevent any forfeiture or impairment of the Agent’s or a Bank’s
rights hereunder or thereunder, and to prevent the occurrence of any Event of
Default or an Unmatured Event of Default.


 


(b)           Notice of Default. The Company
shall promptly notify the Agent in writing of the
occurrence of any Event of Default or Unmatured Event of Default, specifying in
connection with such notification all actions proposed to be taken to remedy
such circumstance.


 


(c)           Notice of Non-Payment. The
Company shall notify the Agent in writing of the occurrence of any failure or
refusal by the Company to pay any amount in excess of One Hundred Thousand
Dollars ($100,000.00) payable under any agreement to which it or they are a
party (other than trade payables less than sixty (60) calendar days past due),
within ten (10) calendar days of such failure or refusal, unless the
Company is diligently and in good faith contesting their obligations to make
such payment by appropriate action.


 


31

















 


(d)           Notice of Legal Proceedings.
The Company shall, promptly upon becoming aware of the existence thereof,
notify the Agent in writing of the institution of any litigation or legal
proceeding with any person or tribunal, that might materially and adversely
affect the condition, financial or otherwise, or the earnings, affairs or
properties of the Company.


 


(e)           Continuation of Primary Business.
The Company shall continue to maintain the character of its primary business as
currently conducted.


 


(f)            Maintenance of Corporate
Existence.  Qualification and Assets. The Company shall at all times maintain (i) its
legal existence as a corporation; (ii) its qualification to transact
business and good standing as a foreign corporation in all jurisdictions where
the failure to so qualify would materially and adversely affect the nature of
its properties or the conduct of its businesses; and (iii) all franchises,
licenses, rights, and privileges necessary for the proper conduct of its
businesses.


 


(g)           Maintenance of Security. The
Company shall execute and deliver to the Agent for the benefit of the Banks all
mortgages, security agreements, financing statements, assignments, and such
other documents and instruments, and all supplements thereto, and continuation
statements thereof, and take such other actions as the Agent deems reasonably
necessary in order to maintain as valid, enforceable, and first priority liens
and Security Interests granted to the Agent for the ratable benefit of the
Banks.


 


(h)           Payment of Taxes and Claims.
The Company shall pay all taxes (or file for an allowable extension) imposed
upon it or them or upon any of its or their properties or with respect to its
or their franchises, business, income, or profits before any material penalty
or interest accrues thereon. The Company shall also pay all material claims
(including without limitation claims for labor, services, materials, and
supplies) for sums which have or shall become due and payable and which by law
have or might become a vendors lien or a mechanics, laborers’, materialmen’s,
statutory, or other lien affecting any of its properties; provided, however,
that the Company shall not be required to pay any such taxes or claims if (i) the
amount, applicability, or validity thereof is being contested in good faith by
appropriate legal proceedings promptly initiated and diligently conducted; and (ii) the
Company shall have set aside on its books reserves (segregated to the extent
required by generally accepted accounting principles) adequate with respect
thereto.


 


(i)            Maintenance of Insurance. The
Company shall at all times maintain, or cause to be maintained, insurance
covering such risks as is customarily carried by prudent businesses similarly
situated, including, without limitation, hazard, general liability, fidelity,
errors and omissions, and blanket bond coverages in conformity with the
requirements set forth in Section 2.7 of the GNMA Mortgage-backed
Securities Guide, Handbook 5500.3. All such insurance shall be written naming
the Agent, for the benefit of the Banks, as additional insured or loss payee,
as applicable. Upon the request of the Agent, the Company shall provide the
Agent with a certificate or certificates from one or more reputable insurance
companies setting forth the amount or amounts of coverage and containing an
agreement from each such insurance company that no termination, expiration,
cancellation, or lapse of any such insurance policy shall occur without at
least thirty (30) calendar days advance written notice to the Agent.


 


(j)            Compliance with Laws and
Agreements; Taxes. The Company shall comply with the provisions of any laws
and the provisions of any agreements material to its or their businesses and
operations and shall maintain its abilities to perform its obligations under
all agreements material to its businesses and operations. The Company will
promptly pay and discharge all lawful taxes (or file for an allowable
extension), assessments and governmental charges or levies imposed upon it or
upon or in respect of all or any part of its property or business and all
claims for work, labor or materials which, if unpaid, might become a lien upon
any of its assets material to the Company taken as a whole unless permitted by Section


 


32

















 


7.2(g) hereof
or otherwise agreed to by the Requisite Banks; provided the Company shall not
be required to pay any such tax, assessment, charge, levy, account payable or
claim if (i) the validity, applicability or amount thereof is being
contested in good faith by appropriate actions or proceedings which will
prevent the forfeiture or sale of any property of the Company or any material
interference with the use thereof by the Company, and (ii) the Company
shall set aside on its books reserves deemed by the Company in its reasonable
business judgment to be adequate with respect thereto or such greater amount as
may be required by GAAP.


 


(k)           Inspections. The Company
shall, at any reasonable time and from time to time upon reasonable prior
notice, permit any agents or representatives of the Agent and/or the Banks to inspect,
examine, and make copies of and abstracts from its records and books of account,
and to discuss its affairs, finances, and accounts with any of its officers,
management employees, or independent public accountants (and by this provision
the Company hereby authorizes said accountants to discuss with the Agents and
the Banks and their respective agents or representatives the Company’s affairs,
finances, and accounts). The Company shall have the right to have a
representative present at any of the inspections, examinations or discussions
conducted by the Agent and/or the Banks; provided, however, the Agent and/or
the Banks shall not be required to delay any of such inspections, examinations
or discussions to accommodate the presence of such representative or
representatives.


 


(l)            Records. The Company shall
keep accurate records and books of account reflecting all of its financial
transactions, in which complete entries shall be made in accordance with
generally accepted accounting principles consistently applied.


 


(m)          ERISA. There is no Plan maintained or adopted by the Company.


 


(n)           Further Assurances. The
Company shall execute and deliver such other and further instruments,
documents, or assurances as in the judgment of the Banks may be reasonably
required to more effectively create or perfect the Security Interests or to
confirm or evidence the obligations imposed by the terms and provisions of this
Credit Agreement, the Notes and the other Loan Documents.


 


(o)           Change in Name or Location. The Company shall notify the Agent in
writing at least thirty (30) calendar days in advance of any change in location
of its principal place of business, or place where records are kept, or of any
proposed change of corporate name. To the extent not in the physical possession
of the Agent, the Collateral and all books and records pertaining thereto shall
be maintained and stored at the location specified on Schedule 6.1 to
this Credit Agreement, and the Company shall not remove any part of the
Collateral from such location, other than temporarily in the ordinary course of
business, unless the Company shall have provided the Agent with prior written
notification of such change in location in accordance with the terms of this
section and shall have assisted the Agent in filing such security agreements,
financing statements, or other notices deemed necessary by the Agent to
preserve and maintain the continued validity, enforceability, and priority
Banks’ lien on and Security Interest in the Collateral.


 


(p)           Other Loan Agreements. The Company shall obtain the prior written
consent of the Agent written notice at least fifteen (15) calendar days prior
to entering into any other loan agreement similar in purpose or effect to this
Credit Agreement. Further, the Company shall provide the Agent with copies of
all such credit agreements and related documentation and all amendments,
modifications and supplements thereto which are entered into after the date
hereof.


 


(q)           Change of Ownership. The Company shall obtain the Agent’s written
consent, which consent shall not be unreasonably withheld, delayed or
conditioned, within thirty (30) days of


 


33

















 


the
effective date of any proposed change of control in the majority ownership of
the capital stock of the Company.


 


(r)            Insured Closing Letters. The Company shall cause all Loans financed
with the proceeds of an Advance to be closed under an insured closing letter
issued by a major nationally recognized title company acceptable to the Agent.


 


(s)           MERS. During any time during which the Company is
using the MERS System, the Company shall (a) at all times, maintain its
status as a MERS Member, (b) at all times, employ officers who have the
authority, pursuant to a corporate resolution from MERS, to execute assignments
of mortgage in the name of MERS in the event deregistration from the MERS
System is necessary or desirable, (c) at all times remain in compliance in
all material respects with all terms and conditions of membership in MERS,
including the MERSCORP, Inc. “Rules of Membership” most recently
promulgated by MERSCORP, Inc., the “MERS Procedures Manual” most recently
promulgated by MERS, and any and all other guidelines or requirements set forth
by MERS or MERSCORP, as each of the foregoing may be modified from time to
time, including, but in no way limited to compliance with guidelines and
procedures set forth with respect to technological capabilities, drafting and
recordation of mortgages, registration of mortgages on the MERS System,
including registration of the interest of the Agent in such mortgages and
membership requirements, (d) promptly, upon the request of the Agent,
execute and deliver to the Agent an assignment of mortgage, in blank, with
respect to any MERS Mortgage that the Agent determines shall be removed from
the MERS System, (e) at all times maintain the Electronic Tracking
Agreement in full force and effect, and (f) immediately provide to Agent a
copy of any notice received from MERS or MERSCORP pursuant to Section 4(a) of
the Electronic Tracking Agreement. The Company shall not de-register or attempt
to de-register any mortgage from the MERS System unless the Company has
complied with the requirements set forth in the Electronic Tracking Agreement
and the requirements hereof and the Security Agreement relating to a release of
Collateral.


 


(t)            Hedging Program. The Company shall at all times maintain a
Hedging Program which represents a reasonable means for the Company to hedge
certain interest rate risks associated with the mortgage banking business, and
such Hedging Program shall be acceptable to the Agent in its reasonable
discretion.


 


7.2           Negative Covenants. So long as any portion of the Secured Obligations remains unpaid or
this Credit Agreement continues in effect, unless all of the Banks otherwise
consent in writing, the Company shall not violate any of the following
covenants and agreements:


 


(a)           Limitation on Indebtedness. The Company shall not incur, create, assume,
have outstanding, guaranty, or otherwise be or become directly or indirectly
liable with respect to any indebtedness, or modify any existing indebtedness,
if, as a result thereof, the Company would be in violation of any of the
covenants set forth in this Credit Agreement. Further, the Company shall not,
without the prior written consent of the Agent and all of the Banks, incur,
create, assume, having outstanding, guaranty, or otherwise become directly or
indirectly liable with respect to any mortgage warehouse indebtedness, other
than the Warehouse Line created hereunder and such indebtedness as shall exist
as date hereof and shall be disclosed on Schedule
6.1 hereof. In the event the Agent and the Banks consent to the
incurrence, creation or assumption of any additional mortgage warehouse
indebtedness, the Company covenants to execute and deliver an Intercreditor
Agreement, fully executed by all of the Company’s then current mortgage
warehouse lenders and in form acceptable to the Banks and the Agent, within
fifteen (15) days of the implementation of such additional mortgage warehouse
indebtedness.


 


34

















 


(b)           Amendment of Corporate Documents. The Company shall not cause or permit any
amendment of its Articles of Incorporation or any material change in its Bylaws
in effect as of the date hereof.


 


(c)           Redemption and Distributions. Except as permitted under Section 7.2(k) hereof, Company
shall not: (i) apply any of its property to the purchase, redemption, or
other retirement of any shares of any class of its capital stock; (ii) set
apart any sum for the payment of or for any dividends on, or for the purchase,
redemption, or other retirement of any shares of any class of its capital
stock; or (iii) make any other distribution, by reduction of capital or
otherwise, in respect of any shares of any class of its capital stock.


 


(d)           Mergers, Sales, Transfers or Other
Disposition of Assets. The
Company shall not do any of the following without the prior written consent of
the Agent, which consent shall not be unreasonably withheld, delayed or
conditioned: (i) dissolve or otherwise dispose of all or any material
portion of its assets (other than mortgage loans in the normal course of
business and unused or obsolete assets of the Company which are not material to
its operation), or acquire all or any material portion of the assets or
outstanding capital stock of any other business entity if such acquisition
involves a purchase price of greater than or equal to Two Hundred Fifty
Thousand Dollars ($250,000.00); (ii) sell, lease, or otherwise transfer or
dispose of any material assets for less than the higher of book value or fair
market value (except assets no longer usable in Company’s business); (iii) consolidate
with or merge into another corporation or other legal entity or permit one or
more other such entities to consolidate with or merge into it if such consolidation
or merger involves a purchase price greater than or equal to Two Hundred Fifty
Thousand Dollars ($250,000.00); (iv) effect any material adverse change in
its capitalization; or (v) sell, lease, transfer, lend, or convey a
material portion of any of its material assets to an Affiliate.


 


(e)           VA Guaranties and FHA Insurance. The Company shall not commit or permit to be
committed any act which would invalidate the guarantee of the Veterans
Administration or insurance by the Federal Housing Administration or cause any
impairment to the validity of or priority of the mortgage lien which secures
any of the Loans, pledged to the Agent for the ratable benefit of the Banks
under the Security Agreement. In the event that any such guarantee or insurance
should lapse or otherwise be invalidated, the Company shall, within fifteen (15) days of such lapse or invalidation, cause the Loan affected by such
lapse or invalidation to be removed from Collateral, with either (i) substitution
of such other property constituting Collateral hereunder of at least equal
value, or (ii) payment of the Advance made by the Banks with respect to
such Loan.


 


(f)            Maintenance of Qualifications. The Company shall not commit or suffer to
be committed any act which would adversely affect its eligibility to
participate as an FHA approved mortgagee, as an approved lender under the VA
guarantee program, as an approved seller-servicer by GNMA, as an approved
seller-servicer of mortgage notes to Fannie Mae and to FHLMC in the FHLMC
regions in which it operates.


 


(g)           Liens. The Company shall not create or permit to exist, any mortgage, pledge,
title retention, lien, lease purchase, or other encumbrance or security
interest, with respect to any assets now owned or hereafter acquired by the
Company except: (i) the Security Interests and the liens and security
interests created under the Collateral Documents; (ii) materialmen’s,
mechanics’, suppliers’, tax, or warehousemen’s liens, statutory liens of
landlords and other like liens arising in the ordinary course of business which
are not yet due or which are being contested in good faith by appropriate
proceedings; (iii) liens incurred or deposits made in the ordinary course
of business in connection with workers’ compensation, unemployment
compensation, and other types of social security, or to secure the performance
of other 


 


35

















 


statutory
obligations; (iv) encumbrances consisting of zoning regulations,
easements, rights of way, survey exceptions, and other similar restrictions on
the use of real property, and minor irregularities in titles thereto which do
not materially impair their use in the operation of its business; (v) liens
and security interests incurred or made in the purchase of property or equipment
in the ordinary course of business; and (vi) existing liens and security
interests described in Schedule 6.1 to this Credit
Agreement which have been deemed acceptable by the Agent and the Banks.


 


(h)           Guaranties. The Company shall not guaranty, endorse, assume, become surety for,
indemnify, or otherwise become or be responsible for the obligations of any
Person except: (i) endorsements of negotiable instruments for deposit or
collection in the ordinary course of business and (ii) obligations
incurred in connection with the sale of Loans in the ordinary course of
business of the Company.


 


(i)            Use of Funds. The Company shall not use any finds provided
by the Banks under this Credit Agreement, or by any Warehouse Advance, Swing
Advance or Excess Advance for any purpose other than funding or purchasing
Loans. The Company shall not use the proceeds of any Wet Advance, Jumbo
Advance, Alt A Advance or HELOC/Second Trust Deed Advance for any purpose other
than the purposes encompassed by the definition of those terms in Article 1
of this Credit Agreement. In addition to the foregoing, the Company shall not
use any finds provided by the Banks under this Credit Agreement or by any
Warehouse Advance for the purpose of making any Loan that would be subject to
the provisions of the Home Ownership and Equity Protection Act of 1994 or other
federal or state legislation relating to “high cost” mortgage lending.


 


(j)            Loans and Advances. Other than existing loans to shareholders,
the Company shall not, other than in the ordinary course of its business, make
any loan or advance to any Person (including without limitation Affiliates) if
such loan or advance would cause the aggregate amount of all such loans and
advances to all such Persons to be in excess of Two Hundred Fifty Thousand
Dollars ($250,000,00), exclusive, however, of the amount of all reasonable
salaries, benefits, and occupational expenses that have traditionally been
borne by the Company and all loans, advances and distributions made by the
Company to LendingTree to pay corporate taxes and/or employee benefits of the
Company.


 


(k)           Dividends, Redemption and
Distributions. The
Company shall not: (i) declare or pay in any fiscal year cash dividends; (ii) declare
or pay any dividends payable in its capital stock on any shares of any class of
its capital stock; (iii) apply any of its property to the purchase,
redemption, or other retirement of any shares of any class of its capital
stock; (iv) set apart any sum for the payment of any dividends on, or for
the purchase, redemption, or other retirement of, any shares of any class of
its capital stock; or (v) make any other distribution, by reduction of
capital or otherwise, in respect of any shares of any class its capital stock,
if such action would cause an Event of Default or an Unmatured Event of Default
hereunder.


 


(l)            Mortgage Loan Early Purchase and
Sale/Repurchase Facilities. Except for the respective early purchase lines of credit of the
Company currently in effect, the Company shall not, without the prior written consent
of the Agent thereto, which consent shall not be unreasonably withheld, delayed
or conditioned, enter into any agreement providing facilities for the early
purchase or the sale and repurchase of mortgage loans and/or mortgage backed
securities. Notwithstanding the foregoing, in the event the Agent consents to
the Company entering into agreements for such facilities, at the Agent’s
request, the Company covenants and agrees to use its best efforts to deliver an
Intercreditor Agreement, filly executed by the Company and all of the Company’s
then current and proposed mortgage warehouse lenders and parties to such early
purchase and sale/repurchase facilities, substantially in a form prescribed by
the Agent, on or before the date of implementation of such facilities.


 


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7.3           Reporting Requirements. So long as any portion of the Company’s
liabilities under the Credit Agreement, including the Notes, remains unpaid or
this Credit Agreement remains in effect, unless the Requisite Banks otherwise
consent in writing, the Company shall furnish to the Agent and the Banks the
following reports:


 


(a)           Annual Reports. As soon as available, and in any event
within ninety (90) calendar days after the end of each fiscal year of the
Company, the Company shall furnish to the Banks (i) a complete annual
audited financial statement with all notes thereto, on a consolidated basis
with the Company, prepared in reasonable detail in accordance with generally
accepted accounting principles consistently applied, and in detail reasonably
satisfactory to the Agent, which shall contain at least a balance sheet, a
statement of profit and loss and stockholder’s equity, and a statement of cash
flows, set forth in each case in comparative form with corresponding figures
from the preceding fiscal year, and (ii) to the extent the same is
prepared by the Company, the management letter prepared by the firm of
independent certified public accountants in connection with the certification
of the annual audited financial statements of the Company, in form acceptable
to the Bank. Each annual audited financial statement of the Company shall be
duly certified by a firm of independent certified public accountants of
recognized national standing or otherwise acceptable to the Requisite Banks.
The certified report of such firm shall include a statement to the effect that
the examination made in preparing and certifying such annual audited financial
statement has not disclosed the existence of a condition or event at the end of
the fiscal year which constitutes an Event of Default or Unmatured Event of
Default hereunder, or a statement specifying the nature and period of existence
of any such condition or event disclosed by such examination.


 


(b)           Monthly Reports. As soon as available, and in any event
within thirty (30) calendar days after the end of each calendar month, the
Company shall furnish to each of the Banks (i) financial statements
for the preceding fiscal month, prepared on a basis consistent with prior
periods and in accordance with generally accepted accounting principles, such
monthly financial statements shall contain at least a balance sheet of the
Company as of the end of such month and a statement of profit and loss for such
month and for the fiscal year to date, (ii) a duly executed Covenant
Compliance Certificate, (with calculations attached), and (iii) production
numbers for the month and year-to-date, all in such form and detail as the
Agent shall reasonably request. Each monthly financial statement shall be
accompanied by a certificate chief financial officer of the Company dated as of
such date and certifying that the monthly financial statement so provided is
correct and complete as of such date and fairly presents the results of
operations for the periods then ended, and that there exists no Event of
Default or Unmatured Event of Default hereunder and that all representations
and warranties contained in this Credit Agreement and the Loan Documents are
true and correct as if made again effective on the date of such certificate.
The financial statements to be delivered to the Agent under this subsection
shall be audited statements same have been obtained by the Company.


 


(c)           Mortgage Position Report. As soon as available and in any event within
thirty (30) calendar days after the end of each calendar month, or more
frequently if requested by the Agent, a mortgage position report which details
the Company’s market and commitment positions relative to Loans in pipeline and
closed Loans in inventory, such mortgage position report to be in form as is
reasonably acceptable to the Agent.


 


(d)           Hedging Reports. At the end of each calendar month, the
Company shall provide to the Agent, a secondary marketing report for that
month, in form reasonably satisfactory to the Agent (each such report, a “Positions
Report”), which shall include a schedule setting forth (A) the components
of the Company’s Hedging Program as of the end of such month, and (B) the
Commitments as of


 


37

















 


the
end of such month.


 


(e)           Agency Audits. Promptly upon delivery to the Company, the
Company shall furnish to the Agent a copy of the results of any field audit of
the Company’s business and/or records performed by GNMA, Fannie Mae, FHLMC or
the Department of Housing and Urban Development, together with a copy of all
subsequent correspondence relating to such audit between the Company and such
agency.


 


(f)                                    Updated List of Approved Investors. The Company shall deliver or cause to be
delivered to the Agent an updated list of all Approved Investors, immediately
upon any change in the same, which list must include the (a) Approved
Investor name, (b) contact person, (c) address, (d) phone
number, and (e) and upon request by the Agent, the financial statements
for such investor.


 


(g)                                 Other Reports and Information. The Company shall deliver or cause to be
delivered to the Agent and/or the Banks such information (not otherwise
required to be furnished under this Credit Agreement or the other Loan Documents)
respecting its business, affairs, assets, and liabilities, and such statements,
lists of property and accounts, reports, opinions, certifications, and
documents as the Agent may from time to time reasonably request.


 


ARTICLE 8


 


EVENTS OF DEFAULT


 


8.1          Events of Default. The occurrence of one or more of the
following events shall constitute an “Event of Default”.


 


(a)           Default under the Loan Documents. The occurrence of an Event of Default under
and as defined in this Credit Agreement or any of the other Loan Documents.


 


(b)           Payments. The Company shall fail to make any payment of principal, interest,
fees, or other amounts with respect to the obligations or liabilities of the
Company to a Bank, whether under this Credit Agreement or any of the other Loan
Documents, including without limitation the obligations set forth in the Notes,
or otherwise, on or before the date such payment is due pursuant to and such
failure shall continue for a period of ten (10) calendar days.


 


(c)           Covenant Defaults. The Company shall fail to perform or observe
any covenant, agreement, or provision contained in this Credit Agreement or the
other Loan Documents by it to be performed or observed, including without
limitation the covenants set forth in Article 7 of this Credit Agreement
and such failure with respect thereto shall continue for a period of forty five
(45) calendar days, except for the covenants
contained in Article 5 and Sections 7.1(a), (b), (c), (e), (f), (g), (i), (k), (o) and (s) and Section 7.2 of this
Credit Agreement, for which there shall be no grace period except as specified
in Section 8.1(b) hereof, or the
occurrence of any other event of default (other than those described above
under any of the other Loan Documents).


 


(d)           Representations and Warranties. Any representation or warranty made or
deemed made by the Company herein or in any other Loan Document, including
without limitation the representations and warranties set forth in Article 6 of this Credit Agreement, or in any
certificate, schedule, statement, report, notice or writing furnished by or on
behalf of the Company to the Agent or any Bank,


 


38














 


whether furnished prior to,
contemporaneously with, or subsequent to the execution of this Credit
Agreement, is untrue or is breached in any material respect.


 


(e)          Default
on Indebtedness. Any
creditor or any representative of any creditor of the Company declares, or is
or becomes entitled to declare, any indebtedness of the Company which exceeds
Two Hundred Fifty Thousand Dollars ($250,000.00), to be due and payable prior
to its expressed maturity by reason of any material default by the Company in
the performance or observance of any obligation or condition, or any such
indebtedness becomes due by its terms and is not promptly paid or extended,
other than those not yet delinquent and those which are being contested in good
faith by the Company.


 


(f)          Insolvency. The Company becomes insolvent or generally
does not pay, or admits in writing its inability to pay its debts as they
become due, or applies for, consents to, or acquiesces in the appointment of a
trustee or receiver of the Company or its property; or in the absence of such
application, consent, or acquiescence, a trustee or receiver is appointed for
the Company or for a substantial part of its property and is not discharged
within forty-five (45) calendar days; or any bankruptcy, reorganization, debt
arrangement, or other proceeding under any bankruptcy or insolvency law is
instituted by or against the Company and, if instituted against the Company, is
consented to or acquiesced in by the Company, or remains for thirty (30)
calendar days undismissed or uncontested.


 


(g)         Dissolution or Liquidation. Any dissolution or liquidation proceeding is
instituted by or against the Company and, if instituted against the Company, is
consented to or acquiesced in by the Company, or remains for thirty (30)
calendar days undismissed or uncontested.


 


(h)         Termination or Suspension of Business. The transaction of the usual business of the
Company is terminated or suspended.


 


(i)           Judgments. The entry of an uninsured money judgment against the Company in excess
of Fifty Thousand Dollars ($50,000,00), unless such judgment shall be
satisfied, appealed, discharged, or stayed within thirty (30) calendar days
after the entry thereof, and if stayed, within ten (10) calendar days
after the expiration or lapse of any such stay.


 


(j)           Material Adverse Change. The occurrence of any material adverse
change in the condition of the Company, financial or otherwise.


 


(k)          Change of Ownership. The Company implements any change in
majority ownership of the Company without notifying Agent in advance and
obtaining Agent’s prior written consent, which consent shall not be
unreasonably withheld, delayed or conditioned.


 


8.2           Remedies Not Exclusive. The rights and remedies provided in this
Credit Agreement, the Notes, the Collateral Documents and all other Loan
Documents are cumulative, may be exercised in such sequence or combination as
the Requisite Banks (or all of the Banks if the context so requires pursuant to
Section 9.20 hereof)
may elect, and are not exclusive of any rights or remedies otherwise provided
by law.


 


8.3           Remedies Upon Event of Default. If an Event of Default shall have occurred,
the Agent may at its sole option, subject to the provisions of Section 9.20 hereof,
exercise any one of more of the following rights and remedies, and any other
remedies provided in this Credit Agreement, any of the other Loan Documents, or
at law or equity or otherwise, and shall, at the direction of the Requisite
Banks, exercise


 


39

















 


any one
or more of such rights and remedies (provided, however, that if any Event of
Default specified in Sections 8.1(b), 8.1(f) or
8.1(g) hereof shall occur, the
principal of, and all interest on, the Notes and other liabilities hereunder
shall thereupon become due and payable concurrently therewith and the Banks’
obligations to make Advances hereunder shall immediately terminate, without any
further action by the Agent or any Bank and without presentment, demand,
protest, notice of default, notice of acceleration or of intention to
accelerate or other notice of any kind, all of which the Company hereby
expressly waives):


 


(a)          Acceleration. Declare the unpaid
balance of the Notes, including principal, interest, and any fees or other
obligations, or any part thereof, to be immediately due and payable, without
demand, presentment, or further notice of any kind, the same being hereby
expressly waived by the Company, whereupon it shall be due and payable.


 


(b)         Advances; Termination. Refuse to make any
further Advances or readvances under any of the Notes, and terminate this
Credit Agreement and the other Loan Documents.


 


(c)          Judgment. Reduce any claim to
judgment.


 


(d)         Offset. Exercise the rights of
offset and/or banker’s lien against the interests of the Company in and to
every property of the Company (other than escrow deposits or custodial trust
accounts managed by the Company) which is in the possession of a Bank to the
extent of the full amount of the Company’s obligations to such Bank.


 


(e)          Foreclosure/Repurchase. Exercise all those
rights and remedies allowed to secured parties by all applicable laws,
including without limitation the Kentucky Uniform Commercial Code and the
Uniform Commercial Code as enacted in any other jurisdiction in which the
Collateral or any portion thereof may be located.


 


(f)          Possession. Enter upon the premises
of the Company and take immediate possession of the Collateral, with or without
legal process, either personally or by means of a receiver appointed by a court
of competent jurisdiction.


 


(g)         Collection of Accounts. Collect and receive all
accounts, rents, income, revenue, earnings, issues, and profits arising from
the Collateral or any part thereof.


 


(h)         Exercise of Rights. Exercise any and all
other rights afforded by any applicable laws or by this Credit Agreement and
the other Loan Documents at law, in equity, or otherwise, including, but not
limited to, the rights to bring suits or other proceedings before any tribunal
of competent jurisdiction, either for specific performance of any covenant or
condition contained in the Loan Documents or in aid of the exercise of any
right granted to the Agent or a Bank in this Credit Agreement or any other Loan
Document.


 


8.4           Performance by the Banks. Should the Company fail
to observe or perform any covenant, duty, or promise by it to be observed or
performed under the terms of this Credit Agreement or the other Loan Documents,
the Agent or the Banks may, in their discretion and without any obligation to
do so, perform or attempt to perform, such covenant, duty, or promise on behalf
of the Company, and, in the event the Agent or a Bank should do so, the Company
shall immediately upon demand reimburse the Agent or such Bank for all its
expenses, disbursements, fees, and costs incurred in connection therewith, with
interest thereon at the rate specified in the Notes. The Agent and the Banks do
not assume and shall never have,


 


40

















 


except
by its express written consent, any liability or responsibility for the performance
of any covenant, duty, or promise of the Company hereunder.


 


8.5           Attorneys; Accountants;
Other Third Parties. In the exercise of their rights under this Credit
Agreement, the Notes, or the other Loan Documents, the Agent and the Banks may
retain, consult with, and otherwise utilize the services of counsel,
accountants and other third parties. Whenever attorneys, accountants or other
third parties are used by the Agent or a Bank in the exercise of any of its
remedies under this Credit Agreement, the Notes, or the other Loan Documents,
or otherwise, including collection or enforcement of this Credit Agreement, the
Notes, or the other Loan Documents, or to enforce, defend, declare, or
adjudicate any of the Agent’s or a Bank’s rights under any of such instruments
and documents or in any of the Collateral, whether by suit, negotiation, or
otherwise, such reasonable attorneys’, accountants’ and other third parties’
fees as are incurred by the Agent or a Bank in connection therewith shall be
payable by the Company to the fullest extent allowed by law provided that an
Event of Default has occurred hereunder or it is otherwise determined that the
Company is liable to the Agent or a Bank hereunder or under the other Loan
Documents.


 


ARTICLE 9


 


MISCELLANEOUS


 


9.1           Expenses. The Company agrees to
reimburse the Agent, upon demand, for all out-of-pocket expenses (including
reasonable attorneys’ fees and legal expenses), incurred in connection with the
preparation, review, and amendment of this Credit Agreement, and, if an Event
of Default has occurred hereunder or if it is otherwise determined that the
Company is liable to the Agent or a Bank, the Company agrees to promptly
reimburse the Agent or any Bank, upon demand, for all reasonable out-of-pocket expenses
(including reasonable attorneys’ fees and legal expenses), incurred in
enforcing or attempting to enforce the obligations of the Company hereunder and
under the Notes and the other Loan Documents, which obligations shall survive
any termination of this Credit Agreement.


 


9.2           Non-Liability of Banks. The relationship between
the Company and the Banks is, and shall at all times remain, solely that of
debtor and creditor, and the Banks neither undertake nor assume any
responsibility or duty to review, inspect, supervise, pass judgment upon, or
inform the Company of any matter in connection with any aspect or phase of the
Company’s businesses, operations, or condition, financial or otherwise. The
Company shall rely entirely upon its own judgment with respect to all such matters,
and any review of, inspection of, supervision of, exercise of judgment on, or
supply of information to, the Company by the Agent or a Bank in connection with
any such matter is for the protection and benefit of the Banks, and neither the
Company nor any third party is entitled to rely thereon.


 


9.3           Waivers. etc. No failure to exercise
and no delay in exercising, on the part of the Banks or the Agent or any holder
of the Notes, of any power or right hereunder or under the Notes or the other
Loan Documents and no course of dealing between the Company and the Agent or a
Bank or the holder of the Notes, shall operate as a waiver thereof; nor shall
any single or partial exercise of any power or right preclude any other or
further exercise thereof or the exercise of any other power or right.


 


9.4           Amendments. Except as set forth in Section 9.20 hereof, no amendment,
modification, or supplement to this Credit Agreement, the Notes, or the other
Loan Documents, or to any other document or instrument executed or issued by
any of the parties hereto in connection with the transactions contemplated
herein, shall be binding unless executed in writing by all parties hereto; and
this provision of this Credit Agreement shall not be subject to waiver by any
party and shall be strictly enforced.


 


41

















 


9.5           Taxes. The Company agrees to
pay, and save the Agent and the Banks harmless from all liability for, any
stamp or other taxes (otherwise than by a change in taxation of a Bank’s
overall net income) which may be payable with respect to the execution or
delivery of this Credit Agreement, the Notes, and the other Loan Documents,
which obligation of the Company shall survive the termination of this Credit
Agreement.


 


9.6           Governing Law. This Credit Agreement
shall be construed in accordance with and governed by the law of the
Commonwealth of Kentucky, without giving effect to the conflict of laws
principles thereof. Service of any writ, process, summons, or complaint upon
the Company may be made by mail upon it at the address stated in this Credit
Agreement, upon any registered agent for service of process, or by any other
method provided by law. Service by any such method shall be conclusively deemed
to be legally sufficient in all respects, and the Company hereby irrevocably
waives any objection to the service or sufficiency of service of any writ,
process, summons, or complaint which is served in accordance with the
foregoing.


 


9.7           Section Titles;
Table of Contents. The section titles and the table of contents contained in this Credit
Agreement are inserted for convenience only and shall not govern the
interpretation of any of the provisions of this Credit Agreement.


 


9.8           Reliance by the Banks. All covenants,
agreements, representations, and warranties made herein by the Company shall,
notwithstanding any investigation by the Agent and the Banks, be deemed to be
material to the Agent or the Banks and to have been relied upon by the Agent or
the Banks and shall survive the execution and delivery of this Credit
Agreement.


 


9.9           Severability. The provisions of this
Credit Agreement are severable. If any provision hereof shall be held invalid
or unenforceable in whole or in part by a court of competent jurisdiction, the
remainder of this Credit Agreement shall not thereby fail or be rendered void
or unenforceable, but shall continue in full force and effect, with only the
invalid or unenforceable provision rendered a nullity and severed from this
Credit Agreement.


 


9.10         Survival of Representations
and Warranties. All representations and warranties made by the Company in this Credit
Agreement shall survive the execution hereof, the delivery of the Notes and the
making of all Advances, and the Banks and the Agent shall be entitled to rely
on such representations and warranties at all times.


 


9.11         Termination. This Credit Agreement
shall terminate on the Termination Date, at which time no further Advances
shall be made hereunder. Upon such termination, the Notes shall be immediately
due and payable.


 


9.12         Counterparts;
Effectiveness. This Credit Agreement and any amendments, waivers, consents, or
supplements may be executed in any number of counterparts, and by different
parties hereto in separate counterparts, each of which when so executed and delivered
shall be deemed an original, but all such counterparts together shall
constitute but one and the same instrument. This Credit Agreement shall become
effective upon the later of: (a) the receipt by the Agent of a counterpart
hereof executed by the Company, the Banks and the Agent; and (b) the
delivery to the Company of a counterpart hereof executed by the Company, the
Banks and the Agent.


 


42

















 


9.13         Entire Agreement. This Credit Agreement,
the Notes, the other Loan Documents and all other documents related to any of
the foregoing or otherwise contemplated hereunder embody the final and entire
agreement between the parties hereto relating to the subject matter hereof and
thereof and supersede any and all prior commitments, arrangements,
representations, understandings and agreements and any and all oral agreements
between the parties relating to the subject matter hereof. There are no
unwritten, oral agreements between the parties.


 


9.14         Exhibits and Schedules. The Exhibits and
Schedules to this Credit Agreement are a part hereof, and are hereby
incorporated by reference as if fully set out where first mentioned herein.


 


9.15         Indemnity. The Company shall
indemnify and hold harmless the Banks, the Agent, their respective successors,
assigns, agents and employees, from and against any and all claims, actions,
suits, proceedings, costs, expenses, damages, fines, penalties and liabilities,
including, without limitation, reasonable attorneys’ fees and costs, arising
out of, connected with or resulting from (a) this Credit Agreement or any
of the other Loan Documents, (b) the operation of the business of the
Company, (c) the Agent’s and/or any Bank’s preservation or attempted
preservation of the Collateral, or (d) any failure of the Liens
granted to the Agent in its capacity as agent for the Banks in the Collateral
to be or to remain perfected or to have the priority as contemplated herein and
in the Collateral Documents; provided, the Company shall have no obligation to
indemnify the Banks for any loss caused in whole or in part by the Banks’ or
the Agent’s gross negligence or willful misconduct. At each Bank’s request, the
Company shall, at its own cost and expense, defend or cause to be defended any
and all such actions or suits that may be brought against such Bank as a result
of this Credit Agreement or any of the other Loan Documents, unless the claim
arose due to gross negligence or willful misconduct on the part of such Bank
and, in any event, shall satisfy, pay and discharge any and all judgments,
awards, penalties, costs and fines that may be recovered against the applicable
Bank in any such action, plus all reasonable attorneys’ fees and costs related
thereto to the extent permitted by applicable law; provided, however, that each
Bank shall give the Company, to the extent such Bank seeks indemnification from
the Company under this Section 9.15, written notice of any
such claim, demand or suit as soon as practicable after the applicable Bank has
received written notice thereof, and the applicable Bank shall not settle any
such claim, demand or suit, if such Bank seeks indemnification therefor from
the Company, without first giving notice to Company of such Bank’s desire to
settle and obtaining the consent of Company to the same, which consent Company
hereby agrees not to unreasonably withhold or delay.


 


9.16         Role of the Banks. Notwithstanding any of
the terms or conditions hereof or of the other Loan Documents to the contrary,
the Banks shall not have, and by their execution and acceptance of this Credit
Agreement hereby expressly disclaim, any obligation or responsibility for the
management, conductor operation of the business and affairs of the Company. Any
term or condition hereof, or of any of the other Loan Documents, permitting the
Banks to take or refrain from taking any action with respect to the Company or
the Collateral shall be deemed solely to permit the Banks to audit and review
the management, operation and conduct of the business and affairs of the Company
and to maintain and preserve the security given by the Company to the Agent, in
its capacity as agent for the Banks, for the Secured Obligations, and may not
be relied upon by any other Person. Further, the Banks shall not have, have not
assumed, and by their execution and acceptance of this Credit Agreement hereby
expressly disclaim, any liability or responsibility for the payment or
performance of any indebtedness or obligation of the Company, and no term or
condition hereof, or of any of the other Loan Documents, shall be construed
otherwise.


 


9.17         Notices. All notices required or permitted to be
given hereunder shall be given in writing and shall be personally delivered or
sent by telecopier, by express courier service or by registered or


 


43

















 


certified
United States mail, return receipt requested, postage prepaid, addressed as
follows (or to such other address as to which any party hereto shall have given
the other written notice):


 


	
  If to the Company: 

  	
   

  	
  At the
  telecopy number or address 

  
	
   

  	
   

  	
  specified
  below the signature of 

  
	
   

  	
   

  	
  the
  Company

  
	
   

  	
   

  	
   

  
	
  If to the Agent or Banks: 

  	
   

  	
  At the
  telecopy number or address

  
	
   

  	
   

  	
  specified
  below the signature of 

  
	
   

  	
   

  	
  the
  applicable Bank

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  cc: 

  	
  Jeffrey
  A. Hamilton, Esq.

  
	
   

  	
   

  	
   

  	
  Reed
  Weitkamp Schell & Vice PLLC

  
	
   

  	
   

  	
   

  	
  500
  West Jefferson Street 

  
	
   

  	
   

  	
   

  	
  Suite 2400

  
	
   

  	
   

  	
   

  	
  Louisville,
  KY 40202 

  
	
   

  	
   

  	
   

  	
  Ph: 

  	
  (502)
  589-1000

  
	
   

  	
   

  	
   

  	
  Fax: 

  	
  (502)
  562-2200

  



 


All
notices hereunder shall be deemed given upon the earliest of (a) actual
delivery in person or by telecopier, (b) one (1) Business Day after
delivery to an express courier service for overnight delivery for next Business
Day, and in event express courier service is not available, (y) five (5) Business
Days after having been deposited in the United States mails, certified
delivery, return receipt requested or (z) the Business Day on which a
facsimile was sent and confirmed, in accordance with the foregoing. Any notice
of an Event of Default to the Company shall be sent by personal delivery,
express courier service or by registered or certified mail in accordance with
this Section 9.17.


 


9.18         Ratable Sharing. Except as otherwise
specifically set forth in this Credit Agreement, including without limitation,
in Article 2 hereof and this Section 9.18, each Bank agrees with each other Bank that (i) with respect to all amounts received by them which
are applicable to the payment of principal of or interest on the Advances or
fees relating thereto including, without limitation, all amounts received by
such Bank pursuant to the exercise of the right of set-off pursuant to this
Credit Agreement, equitable adjustment will be made so that all such amounts
will be shared among the Banks proportionately to their respective Pro Rata
Shares whether received by voluntary payment, by the exercise of the right of
set-off or banker’s lien, by counterclaim or cross action or by the enforcement
of any or all of the Secured Obligations owed by the Company to the Banks
hereunder and under the Notes, and (ii) if any of them shall exercise any
right of counterclaim, set-off, banker’s lien or similar right with respect to
amounts owed by the Company hereunder, that Bank shall apportion the amount
recovered as a result of the exercise of such right pro rata in accordance with
(a) all amounts outstanding at such time owed by the Company to it
hereunder, and (b) all amounts otherwise owed by the Company to it, and (iii) if
any of them shall thereby through the exercise of any right of counterclaim,
set-off, banker’s lien or otherwise, or as adequate protection of a deposit
treated as cash collateral under the Bankruptcy Code, receive payment or
reduction of a proportion of the aggregate amount of principal and interest due
with respect to the Advances made by that Bank or any other amount payable
hereunder (collectively, the “Aggregate Amount Due” to such Bank), which is
greater than the proportion received by any other Bank in respect of the
Aggregate Amount Due to such other Bank, then the Bank receiving such
proportionately greater payment shall (y) notify each other Bank and the
Agent of such receipt and (z) purchase participations (which it shall be
deemed to have done simultaneously upon the receipt of such payment) in the
Aggregate Amount Due to the other Banks so that all recoveries of Aggregate
Amount Due shall be shared by the Banks in proportion to their respective Pro
Rata Shares; provided that if all of part


 


44

















 


of such
proportionately greater payment received by such purchasing Bank is thereafter
recovered from such Bank, those purchases shall be rescinded and the purchase
prices paid for such participations shall be returned to that Bank to the
extent of such recovery, but without interest. The Company expressly consents
to the foregoing arrangements and agrees that any participant in respect of any
Advance may exercise any and all rights of banker’s lien, set-off or
counterclaim with respect to any and all rights of banker’s lien, set-off or
counterclaim with respect to any and all monies owing by the Company to that participant
as if that participant were a Bank in the amount of such participation held by
that participant. Notwithstanding anything contained herein to the contrary,
immediately upon the occurrence of an Event of Default, acceleration of the
Secured Obligations and/or termination, the Banks hereby absolutely and
unconditionally agree to purchase or sell, as applicable, such participation in
the Advances outstanding as shall be required to assure that each Bank holds
its Pro Rata Share of all such Advances.


 


9.19       Assignment. This Credit Agreement
may not be assigned by the Company without the prior written consent of the
Banks. All rights of the Banks hereunder shall inure to the benefit of their
respective successors and assigns, and all obligations, covenants and
agreements of the Company shall bind its successors and assigns, if any.


 


9.20         Consent of Banks. Any amendment or
modification of this Credit Agreement or any other Loan Document, or waiver of
any term or provision hereof or thereof, shall require the affirmative written
consent of the Agent and the Requisite Banks; provided, notwithstanding anything herein to the contrary, the following shall
require the affirmative written consent of the Agent and all of the
Banks: (i) except as permitted under the terms of the Security Agreement,
the release of any part of the Collateral from the liens respectively created
by the Loan Documents, (ii) the termination, cancellation or release of
any Loan Documents, (iii) the decrease in the interest rate(s) borne
by the Advances, other than decreases in the interest rate(s) borne by
the Advances by virtue of any decreases or changes in the LIBOR as expressly
contemplated herein, (iv) any reduction in the amount of the installments
of principal due under this Credit Agreement or the Notes or in the aggregate
principal amount of principal due thereunder, (v) any extension of the
Termination Date or the due dates of any installments of principal of and/or
accrued interest on the Notes, (vi) any change in the definition of the
term Requisite Banks, (vii) any change in the amount or the calculation of
the Commitment Fee, (viii) any change in the computation of (including any
change in the definition of any term used in) the Warehouse Borrowing Base, or (ix) any
amendment to Section 2.8
hereof or this Section 9.20 or any other section of this Credit Agreement that
expressly requires the consent of all of the Banks. Notwithstanding anything to
the contrary in this Section 9.20 or elsewhere
in this Credit Agreement, (y) with the approval of the Requisite Banks,
the Agent may temporarily waive or suspend one or more of this Credit Agreement’s
eligibility requirements or conditions for a particular grouping of Loans to
qualify as Eligible Collateral where their failure to so qualify is beyond the
Company’s reasonable control and if the Agent and the Requisite Banks believe
at the time of such temporary waiver or suspension that the factors which
apparently caused such disqualification will be eliminated in a reasonably
shorttime, and (z) in addition to the provisions of the foregoing subclause (y) Agent
may, in its sole discretion, warehouse or continue to warehouse Loans (“Discretionary
Loans”) which would otherwise fail to qualify as Eligible Collateral or waive
or temporarily suspend or delay any obligation of the Company hereunder in
connection with such Discretionary Loans, including, without limitation,
suspension of any mandatory prepayment due in connection with such
Discretionary Loans, so long as the aggregate Advances outstanding at any one
time against such Discretionary Loans shall not exceed Five Million Dollars
($5,000,000.00). Each Loan which the Agent warehouses or continues to warehouse
as a particular type of Loan pursuant to subclause (y) or (z) above,
shall, for the entire time such Loan is warehoused pursuant to such subclause,
be treated as such particular type of Loan for all purposes under this Credit
Agreement and each of the other Loan Documents.


 


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ARTICLE 10


 


THE AGENT


 


10.1       Appointment. Each Bank hereby irrevocably designates, appoints
and authorizes National City to act as Agent for such Bank under this Credit
Agreement, to act as collateral agent for such Bank under all Loan Documents
and all Uniform Commercial Code Financing Statements filed pursuant thereto and
to execute and deliver or accept on behalf of each of the Banks the other Loan
Documents. Each Bank hereby irrevocably appoints, designates and authorizes the
Agent to act as the Agent under and in accordance with the provisions of the
Security Agreement. Each Bank hereby irrevocably authorizes, and each holder of
any Note by the acceptance of such Note shall be deemed irrevocably to
authorize, the Agent to take such action on behalf of such Bank and such holder
under the provisions of this Credit Agreement and the other Loan Documents and
any other instruments and agreements referred to herein, and to exercise such
powers and to perform such duties hereunder as are specifically delegated to or
required of the Agent by the terms hereof, together with such powers as are
reasonably incidental thereto. National City agrees to act as the Agent on
behalf of the Banks to the extent provided in this Credit Agreement, and
National City expressly acknowledges and agrees that it is holding the other
Loan Documents for the benefit of the Banks to secure the payment and
performance of the Notes and the other obligations of the Company under the
Loan Documents.


 


10.2       Delegation of Duties. The Agent may perform any of its duties hereunder
by or through agents or employees and, subject to Sections 10.5, 10.6 and 10.7 hereof, shall be entitled to engage and pay for the advice
or services of any attorneys, accountants or other experts concerning all
matters pertaining to its duties hereunder and to rely upon any advice so
obtained.


 


10.3       Nature of Duties; Independent Credit Investigation. The Agent shall have no
duties or responsibilities except those expressly set forth in this Credit
Agreement and the other Loan Documents and no implied covenants, functions,
responsibilities, duties, obligations, or liabilities shall be read into this
Credit Agreement or shall otherwise exist. National City agrees that it shall
administer its responsibilities and duties as Agent hereunder and under the
other Loan Documents with at least the same degree of care that it customarily
employs in the administration of similar credit facilities for its own account.
The duties of the Agent shall be mechanical and administrative in nature and
shall include the duty to provide to each Bank an executed original of such
Bank’s Note and an executed original of this Credit Agreement and a copy of the
other Loan Documents; the Agent shall not have by reason of this Credit
Agreement a fiduciary or trust relationship in respect of any Bank; and nothing
in this Credit Agreement, expressed or implied, is intended to or shall be so
construed as to impose upon the Agent any obligations in respect of this Credit
Agreement except as expressly set forth herein. The Agent shall provide the
Banks copies of all notices and documents received by it in its capacity as
Agent hereunder or under any of the other Loan Documents except as otherwise
specifically provided herein. Each Bank expressly acknowledges (i) that
the Agent has not made any representations or warranties to it and that no act
by the Agent hereafter taken, including any review of the affairs of the
Company shall be deemed to constitute any representation or warranty by the
Agent to any Bank; (ii) that it has made and will continue to make,
without reliance upon the Agent, its own independent investigation of the
financial condition and affairs and its own appraisal of the creditworthiness
of the Company in connection with this Credit Agreement and the making and
continuance of the Warehouse Advances hereunder; and (iii) except as
expressly provided herein, that the Agent shall have no duty or responsibility,
either initially or on a continuing basis, to provide any Bank with any credit
or other information with respect thereto, whether coming into its possession
before the making of any Advance or at any time or times thereafter.


 


46














 


10.4                           Actions in Discretion of the Agent: Instructions
from the Banks. The Agent
agrees, upon the written request of the Requisite Banks, to take or refrain
from taking any action of the type specified as being within the Agent’s
rights, powers or discretion herein, provided that the Agent shall not
be required to take any action which exposes the Agent to legal liability or
which is contrary to this Credit Agreement or any other Loan Documents or
applicable law. In the absence of a request by the Requisite Banks, the Agent
shall have authority, in its sole discretion, to take or not to take any such
action, unless this Credit Agreement specifically requires the consent of the
Requisite Banks or all of the Banks. Any action taken or failure to act
pursuant to such instructions or discretion shall be binding on the Banks,
subject to Section 10.6 hereof.
Subject to the provisions of Section 10.6
hereof, no Bank shall have any right of action whatsoever against
the Agent as a result of the Agent acting or refraining from acting hereunder
in accordance with the instructions of the Requisite Banks or all of the Banks,
as applicable, or in the absence of such instructions, in the absolute
discretion of the Agent.


 


10.5                           Reimbursement and Indemnification of the
Agent by the Company. The
Company unconditionally agrees to pay or reimburse the Agent and save the Agent
harmless against (i) liability for the payment of all reasonable and
necessary out-of-pocket costs, expenses and disbursements, including fees and
expenses of counsel and consultants, incurred by the Agent (a) in
connection with the development, negotiation, preparation, printing, execution,
interpretation and performance of this Credit Agreement and the other Loan
Documents, subject to the provisions of Sections
9.1 and 10.7 hereof, (b) relating
to any Company requested amendments, waivers or consents pursuant to the
provisions hereof, (c) in connection with the enforcement of this Credit
Agreement or any other Loan Document or collection of amounts due hereunder or
thereunder or the proof and allowability of any claim arising under this Credit
Agreement or any other Loan Document, whether in bankruptcy or receivership
proceedings or otherwise, and (d) in any workout or restructuring or in
connection with the protection, preservation, exercise or enforcement of any of
the terms hereof or of any rights hereunder or underany other Loan Document or
in connection with any foreclosure/repurchase, collection or bankruptcy
proceedings, and (ii) all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind or nature whatsoever which be imposed on, incurred by or asserted against
the Agent, in its capacity as such, in any way relating to or arising out of
this Credit Agreement or any other Loan Document or any action taken or omitted
by the Agent hereunder or thereunder; provided that the Company shall
not be liable for any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
(a) if the same results from the Agent’s or the Banks’ gross negligence or
willful misconduct, or (b) if the Company was not given notice of the
subject claim and the opportunity to participate in the defense thereof, at its
expense, or (c) if the same results from a compromise or settlement
agreement entered into without the consent of the Company which consent shall
not be unreasonably withheld.


 


10.6                           Exculpatory Provisions. Neither the Agent nor any of its directors,
officers, employees, agents or affiliates shall (i) be liable to any Bank
for any action taken or omitted to be taken by it or them hereunder, or in
connection herewith including pursuant to any other Loan Documents, including
without limitation, the provision of any notice or copies of documents to the
Banks, unless caused by its or their own gross negligence or willful
misconduct, (ii) be responsible in any manner to any of the Banks for the
effectiveness, enforceability, genuineness, validity or the due execution of
this Credit Agreement or any other Loan Document or for any recital,
representation, warranty, document, certificate, report or statement herein or
made or furnished under or in connection with this Credit Agreement or any
other Loan Document, or (iii) be under any obligation to any of the Banks
to ascertain or to inquire as to the performance or observance of any of the
terms, covenants or conditions hereof or thereof on the part of the Company, or
the financial condition of the Company, or the existence or possible existence
of any Event of Default or default under the Loan Documents. Neither the Agent
nor any Bank nor any of their respective directors, officers, employees,
agents, attorneys or affiliates shall be liable to the Company or any other
Person for consequential


 


47

















 


damages
resulting from any breach of contract, tort or other wrong in connection with
the negotiation, documentation or administration of the Loan Documents or the
collection of the Advances, except for those caused by or resulting from the
gross negligence or willful misconduct thereof.


 


10.7                           Reimbursement and Indemnification of the
Agent by the Banks. Each
Bank agrees to reimburse and indemnify the Agent (to the extent not reimbursed
by the Company and without limiting the obligation of the Company to do so) in
proportion to its Pro Rata Share from and against all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind or nature whatsoever which may be imposed on,
incurred by or asserted against the Agent, in its capacity as such, in any way
relating to or arising out of this Credit Agreement or any other Loan Document
or any action taken or omitted by the Agent hereunder or thereunder, provided
that no such reimbursement shall be required with respect to expenses incurred
by the Agent during the time period through the date hereof and no Bank shall
be liable for any portion of such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements if the
same relates to or arises out of the Agent’s gross negligence or willful
misconduct.


 


10.8                           Reliance by the Agent. The Agent shall be entitled to rely upon any
writing, telegram, telex or teletype message, facsimile, resolution, notice,
consent, certificate, letter, cablegram, statement, order or other document or
conversation by telephone or otherwise believed by it to be genuine and correct
and to have been signed, sent or made by the proper Person or Persons, and upon
the advice and opinions of counsel and other professional advisers selected by
the Agent. The Agent shall be fully justified in failing or refusing to take
any action hereunder unless it shall first be indemnified to is satisfaction by
the Banks against any and all liability and expense which may be incurred by it
by reason of taking or continuing to take any such action.


 


10.9                           Notice of Default. The Agent shall not be deemed to have
knowledge or notice of the occurrence of any default under the Loan Documents
or Event of Default unless the Agent has received written notice from a Bank or
the Company referring to this Credit Agreement, specifically describing such
default or Event of Default and stating that such notice is a “notice of default.”
In the event that the Agent receives such a notice of an occurrence of an Event
of Default, the Agent shall give prompt notice thereof to the Banks. If an
Event of Default shall occur, the Agent shall take such actions as shall be
reasonably directed by the Requisite Banks or all of the Banks, as applicable.
Unless and until the Agent shall have received such instructions, the Agent may
(but shall not be obligated to) take such action or refrain from taking such
action, as it shall deem advisable in the best interests of the Banks.


 


10.10                     The Banks in Their Individual Capacities. With respect to its Warehouse Line
Commitment and the Warehouse Advances made by it, the entity which is the Agent
shall have the same rights and powers hereunder as any other Bank and may
exercise the same as though it were not the Agent, and the term “Banks” shall,
unless the context otherwise indicates, include the entity which is the Agent
in its individual capacity. National City and its affiliates and each of the
Banks and their respective affiliates may, without liability to account, except
as prohibited herein, make loans to, accept deposits from, discount drafts for,
act as trustee under indentures of, and generally engage in any kind of banking
or trust business with, the Company and its Affiliates, in the case of the
entity which is the Agent, as though it were not acting as Agent hereunder and
in the case of each Bank, as though such Bank were not a Bank hereunder.


 


10.11                     Holders of Notes. The Agent may deem and treat any payee of
any Note as the owner thereof for all purposes hereof unless and until written
notice of the assignment or transfer thereof shall have been filed with the
Agent. Any request, authority or consent of any Person who at the time of
making such request or giving such authority or consent is the holder of any
Note shall be conclusive and binding on


 


48

















 


any subsequent holder, transferee or assignee of such Note or of any
Note or Notes issued in exchange therefor.


 


10.12                     Successor Agent. The Agent (i) may resign as Agent with
the consent of the Company, such consent not to be unreasonably withheld, or (ii) shall
resign if such resignation is requested by the Requisite Banks, in either case (i) or
(ii) by giving not less than ninety (90) calendar days prior written
notice to the Company and the Banks; provided, however, in no event shall the
Agent be required to remain in such capacity beyond the Termination Date. If
the Agent shall resign under this Credit Agreement, then either (a) the
Requisite Banks shall appoint from among the Banks a successor agent for the
Banks, subject to the consent of such successor agent by the Company, such
consent not to be unreasonably withheld, or (b) if a successor agent shall
not be so appointed and approved within the ninety (90) calendar day period
following the Agent’s notice to the Banks of its resignation, then the Agent
shall appoint, with the consent of the Company, such consent not to be
unreasonably withheld, a successor agent who shall serve as Agent until such
time as the Requisite Banks appoint, and the Company consents, which consent
shall not be unreasonably withheld, to the appointment of, a successor agent.
Upon its appointment pursuant to either clause (a) or (b) above, such
successor agent shall succeed to the rights, powers and duties of the Agent and
the term “Agent” shall mean such successor agent, effective upon its
appointment, and the former Agent’s rights, powers and duties as Agent shall be
terminated without any other or further act or deed on the part of such former
Agent or any of the parties to this Credit Agreement. After the resignation of
any Agent hereunder, the provisions of this Article 10
shall not by reason of such resignation be deemed to be released
from liability for any actions taken or not taken by it while it was an Agent
under this Credit Agreement.


 


10.13                     Calculations. In the absence of gross negligence or
willful misconduct, the Agent shall not be liable for any error in computing
the amount payable to any Bank whether in respect of the Warehouse Advances or
the fees or other amounts due to the Banks under this Credit Agreement. In the
event an error in computing any amount payable to any Bank is made, the Agent,
the Company and each affected Bank shall, forthwith upon discovery of such
error, make such adjustments as shall be required to correct such error. In no
event, however, shall the Company be required to pay more than the amount of
error itself.


 


10.14                     Beneficiaries. Except as set forth in Sections 10.5 and 10.12 hereof, the
provisions of this Article 10 are
solely for the benefit of the Agent and the Banks, and the Company shall not
have any rights to rely on or enforce any of the provisions hereof. In
performing its functions and duties under this Credit Agreement, the Agent
shall act solely as agent of the Banks and does not assume and shall not be
deemed to have assumed any obligation toward or relationship of agency or trust
with or for the Company or any other Person.


 


ARTICLE 11


 


ADDITIONAL BANKS; ASSIGNMENTS AND PARTICIPATIONS


 


11.1                           Additional Banks. The Agent with the consent of the Company
may at any time propose that one or more commercial banks each of which is
organized under the laws United States or any state thereof or organized under
the laws of any other country, or a political subdivision thereof (provided
that such foreign bank is acting through a branch or agency located in the
United States, or is organized under the laws of a country that is a member of
the Organization for Economic Cooperation and Development or a political
subdivision of such country), is regularly engaged in the business of mortgage
warehouse lending, and has capital and surplus of at least Three Hundred
Million Dollars ($300,000,000.00) (each, an “Applicant Financial Institution”)
become an additional Bank hereunder. At such time, the Company or the Agent, as


 


49

















 


applicable,
shall notify the other parties hereto of the identity of such Applicant
Financial Institution and such Applicant Financial Institution’s proposed
Warehouse Line Commitment (which must not be less than Five Million
Dollars ($5,000,000.00) and which must be a multiple of Five Million Dollars
($5,000,000.00)); provided, however, notwithstanding anything contained herein
to the contrary, without the prior written consent of the Agent and the
Requisite Banks, the Total Warehouse Line Commitment shall never exceed Fifty Million
Dollars ($50,000,000.00). The Agent and the Company shall mutually agree on the
effective date on which such Applicant Financial Institution shall become a
party hereto and a Bank hereunder (the “Adjustment Date”). On such Adjustment
Date: (i) the Agent shall deliver to the Company and each of the Banks a
Commitment Schedule and Allocation Notice to be effective from such Adjustment
Date; (ii) such Applicant Financial Institution shall pay to the Agent, no
later than 12:00 noon Prevailing Time, an amount equal to such Applicant
Financial Institution’s Pro Rata Share of the Aggregate Outstanding Warehouse
Balance and the Aggregate Outstanding Excess Balance to be funded on such
Adjustment Date, as applicable, whereupon, the Agent shall thereupon remit to
the Banks their respective shares of such funds, as applicable, and following
such Adjustment Date, fees and interest accrued on Loans to but not including
such Adjustment Date shall be payable to the Banks in accordance with their
respective Pro Rata Shares prior to such Adjustment Date before giving effect
to the readjustment thereof pursuant to the Commitment Schedule and Allocation
Notice provided by the Company on such Adjustment Date; (iii) the Agent,
the Company and such Applicant Financial Institution shall execute and deliver
an agreement in the form of that attached hereto as Exhibit G (an
“Additional Lender Agreement”), which agreement shall constitute an amendment
to this Credit Agreement to the extent necessary to reflect the inclusion of such
Applicant Financial Institution as a Bank hereunder, and if in connection with
the inclusion of such Applicant Financial Institution as a Bank hereunder, the
Total Warehouse Line Commitment will be increased, the parties hereto will
execute any additional amendments to the Loan Documents as the Agent reasonably
requests to reflect such increase; (iv) the Company shall execute and
deliver new Notes, as applicable, to such Applicant Financial Institution; (v) subject
to the requirements described above, such Applicant Financial Institution shall
become a party hereto and a Bank hereunder and shall be entitled to all rights,
benefits and privileges accorded a Bank hereunder and under the other Loan
Documents and shall be subject to all obligations of a Bank hereunder and under
the other Loan Documents; and (vi) the Applicant Financial Institution
shall pay to the Agent a registration fee in an amount determined by the Agent
in its sole discretion covering the admission of the Applicant Financial
Institution into this Credit Agreement. Notwithstanding anything contained
herein to the contrary, the Company may, with the prior written consent of the
Agent and the Requisite Banks, reduce the Total Warehouse Line Commitment in
multiples of Five Million Dollars ($5,000,000.00); provided, however, any such
reduction (y) shall not reduce the Agent’s Warehouse Pro Rata Share to
less than fifty five percent (55%), and (z) any such reduction shall be
prorated as to the Banks, except reductions which occur during the annual
renewal period which shall only require the consent of the Company and the
Agent. Furthermore, the Company may, with the prior written consent of the
Agent, remove any financial institution as a Bank hereunder with or without
cause.


 


11.2                           Assignments and Participations. No Bank shall sell, assign, transfer or
negotiate all or any part of its interests, liabilities or obligations under
this Credit Agreement or any other Loan Document. Notwithstanding the
foregoing, each Bank shall be permitted to sell, assign, transfer or negotiate
such interests, liabilities or obligations to another lender which is an
Affiliate of such Bank or if such lender is the surviving entity of a merger,
consolidation or other business combination with such Bank (each a “transferee”)
so long as such transferee meets the capital and surplus requirement of Section 11.1 hereof and executes an
assignment and assumption agreement in form acceptable to the Agent. Each Bank
may, at no additional cost to the Company, grant participations in all or any
part of the outstanding principal balance of its Warehouse Note and its
Warehouse Line Commitment to one or more Persons provided that (i) any
such disposition shall not, without the consent of the Company, require the
Company to file a registration statement with the Securities and Exchange
Commission or apply to qualify the Warehouse Advances or the


 


50

















 


Warehouse
Notes under the blue sky law of any state; (ii) the holder of any such
participation shall not be entitled to require such Bank to take or omit to
take any action hereunder; and (iii) any Person to whom such disposition
has been made shall not be considered a “Bank” for purposes of this Credit
Agreement. No Bank shall, as between the Company and that Bank, be relieved of
any of its obligations hereunder as a result of any granting of participations
in all or any part of the outstanding principal balance of its Warehouse Note
or its Warehouse Line Commitment of or other obligations owed to such Bank.
Notwithstanding anything contained here and to the contrary, any Bank may at
any time pledge or sign or any portion of such Bank’s rights under this Credit
Agreement and the other Loan Documents to a Federal Reserve Bank.


 


ARTICLE 12


 


WAIVER OF JURY TRIAL


 


THE COMPANY, THE BANKS, AND THE AGENT HEREBY WAIVE THEIR RESPECTIVE
RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING
OUT OF THIS CREDIT AGREEMENT OR THE OTHER LOAN DOCUMENTS. THE SCOPE OF THIS
WAIVER IS INTENDED TO BE ALLENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE
FILED IN ANY COURT THAT RELATE TO THE SUBJECT MATTER OF THIS TRANSACTION,
INCLUDING, WITHOUT LIMITATION, CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY
CLAIMS, AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS. THE COMPANY, THE BANKS,
AND THE AGENT EACH ACKNOWLEDGE THAT THIS WAIVER IS A MATERIAL INDUCEMENT FOR
EACH SUCH PARTY TO ENTER INTO A BUSINESS RELATIONSHIP, THAT THE COMPANY, THE
BANKS, AND THE AGENT HAVE ALREADY RELIED ON THIS WAIVER IN ITS RELATED FUTURE
DEALINGS WITH THE OTHERS. THE COMPANY, THE BANKS, AND THE AGENT FURTHER WARRANT
AND REPRESENT THAT EACH HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL, AND
THAT EACH KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING
CONSULTATION WITH LEGAL COUNSEL. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT
BE MODIFIED EITHER ORALLY OR IN WRITING, AND THIS WAIVER SHALL APPLY TO ANY
SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS CREDIT
AGREEMENT OR THE OTHER LOAN DOCUMENTS. IN THE EVENT OF LITIGATION, THIS
AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.


 


[The remainder of this page has been intentionally left blank.]


 


51

















 


IN WITNESS WHEREOF, the parties hereto have caused
this Credit Agreement to be executed as of the day and year first above
written.


 


	
   

  	
  HOME
  LOAN CENTER, INC. D/B/A 

  	
   

  
	
   

  	
  LENDINGTREE
  LOANS

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  /s/
  Jim Svinth

  	
   

  
	
   

  	
   

  	
  Jim
  Svinth

  	
   

  
	
   

  	
  Title:

  	
   

  	
  President
  EVP & COO

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Address:

  	
  Home
  Loan Center, Inc.

  	
   

  
	
   

  	
   

  	
  d/b/a
  LendingTree Loans

  	
   

  
	
   

  	
   

  	
  163
  Technology Drive 

  	
   

  
	
   

  	
   

  	
  Irvine,
  California 92618

  	
   

  
	
   

  	
  Attn
  :

  	
  Robert
  Hill

  	
   

  
	
   

  	
   

  	
  Senior
  Vice President, Finance

  	
   

  
	
   

  	
  Fax:

  	
  (949)
  885-3222

  	
   

  
	
   

  	
  Ph:

  	
  (800)
  756-0789

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Attn:

  	
  Val
  C. Stiefel

  	
   

  
	
   

  	
   

  	
  Assistant
  General Counsel

  	
   

  
	
   

  	
  Fax:

  	
  (949)
  231-6516

  	
   

  
	
   

  	
  Ph:

  	
  (800)
  231-6616

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (the
  “Company”)

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  NATIONAL
  CITY BANK

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  /s/
  Michael A. Johnson

  	
   

  
	
   

  	
   

  	
  Michael
  A. Johnson

  	
   

  
	
   

  	
  Title:

  	
   

  	
  Vice
  President

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Address:

  	
  National
  City Bank

  	
   

  
	
   

  	
   

  	
  101
  South Fifth Street, 6th Floor

  	
   

  
	
   

  	
   

  	
  Louisville,
  Kentucky 40202

  	
   

  
	
   

  	
  Attn
  :

  	
  Michael
  A. Johnson

  	
   

  
	
   

  	
   

  	
  Vice
  President

  	
   

  
	
   

  	
  Fax:

  	
  (502)
  581-4154

  	
   

  
	
   

  	
  Ph:

  	
  (502)
  581-7549

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (“National
  City”)

  	
   

  
								



 

















 


	
   

  	
  NATIONAL
  CITY BANK,

  
	
   

  	
  in
  its capacity as Agent for the Banks

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  /s/
  Michael A. Johnson

  	
   

  
	
   

  	
   

  	
  Michael
  A. Johnson

  	
   

  
	
   

  	
  Title:

  	
   

  	
  Vice
  President

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Address:

  	
  National
  City Bank

  
	
   

  	
   

  	
  101
  South Fifth Street, 6th Floor

  
	
   

  	
   

  	
  Louisville,
  Kentucky 40202

  
	
   

  	
  Attn:

  	
  Michael
  A. Johnson

  
	
   

  	
   

  	
  Vice
  President

  
	
   

  	
  Fax:

  	
  (502)
  581-4154

  
	
   

  	
  Ph:

  	
  (502)
  581-7660

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (the
  “Agent”)

  
						



 

















 


EXHIBIT A

TO WAREHOUSING CREDIT AGREEMENT


 


WAREHOUSE BORROWING BASE FORMULA


 


“Warehouse
Borrowing Base” shall be determined according to the following formula:


 


Warehouse Borrowing Base =


 


+A                               Collateral Value of all Loans constituting
Eligible Collateral which are not included in any other category set forth
below.


 


+B                                 Collateral Value of all Wet Loans
constituting Eligible Collateral (B shall not exceed the Wet Advance Sublimit).


 


+C                                 Collateral Value of all Alt A Loans
constituting Eligible Collateral (C shall not exceed the Alt A Advance
Sublimit; provided, however, not more than five percent (5%) of the Total
Warehouse Line Commitment may be used for Advances supported by Alt A Loans
satisfying parts (i), (ii) and (iii)(B) of the definition of Alt A Loan
set forth in the Credit Agreement).


 


+D                                Collateral Value of all Jumbo Loans
constituting Eligible Collateral (D shall not exceed the Jumbo Advance
Sublimit).


 


+E                                  Collateral Value of all Second Trust Deed
Loans and HELOC Loans constituting Eligible Collateral (E shall not exceed the
HELOC/Second Trust Deed Advance Sublimit).


 


Provided,
however, that (i) notwithstanding anything in the Credit Agreement or the
other Loan Documents to the contrary, the Agent may mark an item of Collateral
to market at any time for the purpose of determining the Warehouse Borrowing
Base; and (ii) the Warehouse Borrowing Base formula set forth above is
subject to the further limits set forth in the definition of Collateral Value
contained in Section 1.1 of
the Credit Agreement.


 


DEFINITIONS


 


Each
capitalized term used herein which is not otherwise defined herein shall have
the meaning given such term in the Credit Agreement.


 

















 


EXHIBIT B

TO WAREHOUSING CREDIT AGREEMENT


 


COVENANT COMPLIANCE CERTIFICATE


 


[On Company Letterhead]


 


	
  TO:

  	
   

  	
  National
  City Bank

  
	
   

  	
   

  	
   

  
	
  RE:

  	
   

  	
  $50,000,000.00
  Warehouse Line

  



 


Ladies
and Gentlemen:


 


This
Certificate is delivered pursuant to that certain Warehousing Credit Agreement
(“Agreement”), dated as of November 26,2007 among National City Bank (the “Bank”),
National City Bank, as agent for the Bank (the “Agent”), and Home Loan Center, Inc.
d/b/a Lending Tree Loans (the “Company”). Capitalized terms used herein and not
defined shall have the meanings ascribed thereto in the Agreement and the
Schedules attached thereto.


 


I
hereby certify to the Agent as follows:


 


1.                                       I am, and at all times mentioned herein have
been, the-duly-elected, qualified and acting
                        
of the Company.


 


2.                                       I have individually reviewed the provisions
of the Agreement and Schedules thereto, and a review of the activities of
Company has been made under my supervision with a view towards determining
whether the Company has met and complies with the covenants as set forth in the
Agreement.


 


3.                                       Based on the foregoing review, the
representations and warranties made in the Agreement are true and correct in
all material respects as of the date hereof, and no Event of Default has
occurred, nor does any circumstance exist which with the passage of time or
giving notice, or both, would constitute an Event of Default under the Loan
Documents.


 


4.                                       There are no material actions, suits, legal,
equitable, arbitration or administrative proceedings pending or threatened
against Company, the adverse determination of which could have a material
adverse effect on the Loan Documents, the business operations or financial
condition of Company or the ability of Company to fulfill its obligations under
the Loan Documents.


 


5.                                       The ratio of Total Indebtedness to Tangible
Net Worth, as calculated using the formula set forth in the Agreement, is


 


Requirement of Agreement: Leverage ratio shall not exceed ten (10) to
one (1).


 


Covenant satisfied                               Covenant
not satisfied           


 


6.                                       The Tangible Net Worth of the Company, as
calculated using the formula set forth in the Agreement, is $                      


 

















 


Requirement
of Agreement: Minimum Tangible Net Worth of Forty-Five Million Dollars
($45,000,000.00).


 


Covenant satisfied                                      Covenant
not satisfied               


 


7.                                       The Liquid Assets of the Company as defined
in the Agreement, is                 


 


Requirement of Agreement: Minimum Liquid Assets of Fourteen Million
Dollars ($14,000,000.00).


 


Covenant
satisfied                              Covenant
not satisfied             


 


8.                                       The financial statements prepared for the
immediately preceding fiscal quarter and year are correct and complete as of
their date and fairly present the results of operations of the Company for such
periods.


 


9.                                       All working papers and spreadsheets used in
the preparation of this Covenant Compliance Certificate have been attached
hereto.


 


This Covenant Compliance Certificate executed and delivered on                     ,200    .


 


 


	
   

  	
  HOME LOAN CENTER, INC.D/B/A

  
	
   

  	
  LENDINGTREE LOANS

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
					



 














 


EXHIBIT C-1


TO WAREHOUSING CREDIT AGREEMENT


 


WAREHOUSE PROMISSORY NOTE


 


	
  $50,000,000.00

  	
   

  	
  Louisville, Kentucky 

  November 26, 2007

  



 


For
value received, HOME LOAN CENTER, INC. D/B/A
LENDINGTREE LOANS, a California corporation with its principal office and place
of business at 163 Technology Drive, Irvine, California 92618 (the “Maker”),
hereby promises and agrees to pay to the order of NATIONAL CITY BANK, a
national banking association, with a principal office and place of business in
Louisville, Kentucky (the “Payee”), on or before the Termination Date (as
defined in the Credit Agreement defined below), the principal sum of Fifty
Million Dollars ($50,000,000.00) or so much thereof as may be advanced to the
Maker by the Payee as “Warehouse Advances” or “Excess Advances” under the
Credit Agreement referred to below.


 


This
Note is one of the Maker’s “Warehouse Notes” referred to in and is issued
pursuant to and is entitled to the benefits of that certain Warehousing Credit
Agreement dated November 26, 2007 entered into by and among the Maker, the
Bank or Banks a party thereto from time to time (including the Payee) and
National City Bank, as Agent for such Bank or Banks (the “Agent”) (as such
agreement may hereafter be amended, restated, supplemented or otherwise modified
from time to time, the “Credit Agreement”; capitalized terms used herein
without definition shall have the meanings assigned those terms in the Credit
Agreement).


 


The
unpaid principal balance of this Note, as the same shall exist from time to time,
shall bear interest at the rates and in the manner set forth in the Credit
Agreement. All payments of principal on this Note that are not paid when due
and, to the extent permitted by applicable law, any interest payments on this
Note or any fees or other amounts owed hereunder or under the Credit Agreement
not paid when due, in each case whether at stated maturity, by notice of
prepayment, by acceleration or otherwise, shall thereafter bear additional
interest at the Default Rate until paid in full. Interest on delinquent
principal and interest shall be payable on demand. In no event shall the
interest rate or rates payable under this Note exceed the maximum rate allowed
by law. Interest on this Note shall be computed on the basis of a 360-day year,
for the actual number of calendar days elapsed in the period during which it
accrues.


 


The
Maker covenants and agrees to pay interest on the unpaid principal amount of
this Note until paid in full at the rates, at the times and from the dates
which shall be determined in accordance with the provisions of Article 2 of the Credit
Agreement.


 


All
payments of principal and interest in respect of this Note shall be made in
lawful money of the United States of America in same day funds at the office of
the Payee, located at 101 South Fifth Street, Louisville, Kentucky, or at such
other place as shall be designated in writing for such purpose in accordance
with the terms of the Credit Agreement. Until notified in writing of the
transfer of this Note, the Maker and the Agent shall be entitled to deem the
Payee or such person who has been so identified by the transferor in writing to
the Maker and the Agent as the holder of this Note, as the owner and holder of
this Note. Each of the Payee and any subsequent holder of this Note agrees that
before disposing of this Note or any part thereof it will make a notation
hereon or in its records of all principal payments previously made hereunder
and of the date to which interest hereon has been paid; provided, however, that
failure to make a notation of any payment made on this Note shall not limit or
otherwise affect the obligation of the Maker hereunder with respect to payments
of principal or interest on this Note.


 

















 


This
Note is subject to mandatory prepayment and to prepayment at the option of the
Maker as provided in of the Credit Agreement.


 


This
Note is subject to restrictions on transfer and assignment as provided in the
Credit Agreement.


 


THE CREDIT AGREEMENT AND THIS NOTE SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE INTERNAL LAWS OF THE COMMONWEALTH OF KENTUCKY, WITHOUT
REGARD TO CONFLICTS OF LAW PRINCIPLES.


 


The
terms of this Note are subject to amendment only in the manner provided in the
Credit Agreement.


 


No
reference herein to the Credit Agreement and no provision of this Note or the
Credit Agreement shall alter or impair the obligation of the Maker, which is
absolute and unconditional, to pay the principal of and interest on this Note
at the place, at the respective times, and in the currency herein prescribed.


 


All
payments made upon this Note shall be applied first to delinquent accrued
interest, if any, then to the outstanding principal balance hereof and then to
nondelinquent accrued interest hereon.


 


This
Note is secured by the Security Agreement and each of the other Collateral
Documents.


 


Upon
the occurrence of any Event of Default under the Credit Agreement, or at any
time thereafter, the entire unpaid principal balance of, and all accrued
interest on, this Note may become, or may be declared to be, immediately due
and payable in the manner, upon the conditions and with the effect provided in
the Credit Agreement. If this Note is placed in the hands of an attorney for
collection, or if this Note is collected through-any court, the Maker promises
and agrees to pay to the Agent and the Payee all reasonable costs and expenses
of collection permitted by law, including, but not limited to, attorneys’ fees
and court costs as provided in the Credit Agreement.


 


Failure
of the Agent or the Payee to exercise any of its rights and remedies hereunder,
or under the Credit Agreement, the Security Agreement or the other Loan
Documents, shall not constitute a waiver of the right to exercise the same at
that or any other time. All remedies of the Agent and the Payee in the event of
a breach or default hereunder or under any of the instruments referred to
herein shall be cumulative to the fullest extent permitted by law. Time shall
be of the essence with respect to all of the Maker’s obligations hereunder.


 


The
Maker hereby waives presentment, demand, notice of dishonor, protest, notice of
protest, and nonpayment and all exemptions to which it may be entitled under
the laws of the Commonwealth of Kentucky, the State of California or any other
state of the United States or of the United States, and further agrees that the
holder hereof shall have the right, subject to the provisions of the Credit
Agreement, to grant the Maker any extension of time for payment of this Note,
to modify the terms of any of the instruments referred to herein with the
consent of all other parties thereto, or to release any party liable hereon
without in any way affecting the liability of the Maker or any other parties
liable for payment of this Note.


 


EACH OF THE MAKER AND THE PAYEE, HEREBY WAIVES ITS RESPECTIVE
RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING
OUT OF THIS NOTE OR THE OTHER LOAN DOCUMENTS. THE SCOPE OF THIS WAIVER IS
INTENDED TO BE ALL-ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE FILED
IN ANY COURT THAT RELATE TO THE SUBJECT MATTER OF THIS TRANSACTION, INCLUDING,
WITHOUT LIMITATION, CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND
ALL OTHER COMMON LAW AND STATUTORY CLAIMS.


 

















 


EACH OF THE MAKER AND THE PAYEE ACKNOWLEDGES THAT THIS
WAIVER IS A MATERIAL INDUCENZENT FOR EACH SUCH PARTY TO ENTER INTO A BUSINESS
RELATIONSHIP, AND THAT EACH OF THE MAKER AND THE PAYEE HAS ALREADY RELIED ON
THIS WAIVER IN ITS RELATED FUTURE DEALINGS WITH THE OTHER. EACH OF THE MAKER
AND THE PAYEE FURTHER WARRANTS AND REPRESENTS THAT EACH HAS REVIEWED THIS
WAIVER WITH ITS LEGAL COUNSEL, AND THAT EACH KNOWINGLY AND VOLUNTARILY WAIVES
ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL. THIS WAIVER IS
IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN
WRITING, AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS,
SUPPLEMENTS OR MODIFICATIONS TO THIS NOTE OR THE OTHER LOAN DOCUMENTS. IN THE
EVENT OF LITIGATION, THIS NOTE MAY BE FILED AS A WRITTEN CONSENT TO A
TRIAL BY THE COURT.


 


[The remainder of this page has been
intentionally left blank]


 

















 


IN
WITNESS WHEREOF, the Maker has caused this
Note to be duly executed and delivered by its duly authorized officer as of the
date first written above.


 


 


	
   

  	
  HOME LOAN CENTER, INC. D/B/A

  
	
   

  	
  LENDINGTREE LOANS

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Jim Svinth

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
  COO

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (the “Maker”)

  
					



 

















 


EXHIBIT E

TO WAREHOUSING CREDIT AGREEMENT


 


SWING PROMISSORY NOTE


 


	
  $ 

  	
  Louisville, Kentucky 

                       ,
  20    

  



 


For
value received, HOME LOAN CENTER, INC. D/B/A LENDINGTREE LOANS, a California
corporation with its principal office and place of business at 163 Technology
Drive, Irvine, California 92618 (the “Maker”), hereby promises and agrees to
pay to the order of NATIONAL CITY BANK, a national banking association, with a
place of business in Louisville, Kentucky (the “Payee”), on or before the
Termination Date (as defined in the Credit Agreement defined below), the
principal sum of         MILLION DOLLARS ($   ,000,000.00)
or so much thereof as may be advanced to the Maker by the Payee as “Swing
Advances” under the Credit Agreement referred to below.


 


This
Note is the “Swing Note” referred to in and is issued pursuant to and is
entitled to the benefits of that certain Warehousing Credit Agreement dated November 26,
2007 entered into by and among the Maker, the Bank or Banks party thereto from
time to time and National City Bank, as agent for the Bank or Banks (the
“Agent”) (as such agreement may be amended, restated, supplemented or otherwise
modified from time to time, the “Credit Agreement”; capitalized terms used
herein without definition shall have the meanings assigned those terms in the
Credit Agreement).


 


The
unpaid principal balance of this Note, as the same shall exist from time to
time, shall bear interest at the rates and in the manner set forth in the
Credit Agreement. All payments of principal on this Note that are not paid when
due and, to the extent permitted by applicable law, any interest payments on
this Note or any fees or other amounts owed hereunder or under the Credit
Agreement not paid when due, in each case whether at stated maturity, by notice
of prepayment, by acceleration or otherwise, shall thereafter bear additional
interest at the Default Rate until paid in full. Interest on delinquent
principal and interest shall be payable on demand. In no event shall the
interest rate or rates payable under this Note exceed the maximum rate allowed
by law. Interest on this Note shall be computed on the basis of a 360-day year,
for the actual number of calendar days elapsed in the period during which it
accrues.


 


The
Maker covenants and agrees to pay interest on the unpaid principal amount of
this Note until paid in full at the rates, at the times and from the dates
which shall be determined in accordance with the provisions of Article 2 of the Credit Agreement.


 


All
payments of principal and interest in respect of this Note shall be made in
lawful money of the United States of America in same day funds at the office of
the Agent, located at 101 South Fifth Street, Louisville, Kentucky, or at such
other place as shall be designated in writing for such purpose in accordance
with the terms of the Credit Agreement. Until notified in writing of the
transfer of this Note, the Maker and the Agent shall be entitled to deem the
Payee or such person who has been so identified by the transferor in writing to
the Maker and the Agent as the holder of this Note, as the owner and holder of
this Note. Each of the Payee and any subsequent holder of this Note agrees that
before disposing of this Note or any part thereof it will make a notation
hereon or in its records of all principal payments previously made hereunder
and of the date to which interest hereon has been paid; provided, however, that
failure to make a notation of any payment made on this Note shall not limit or
otherwise affect the obligation of the Maker hereunder with respect to payments
of principal or interest on this Note.


 

















 


This
Note is subject to mandatory prepayment and to prepayment at the option of the
Maker as provided in the Credit Agreement.


 


This
Note is subject to restrictions on transfer and assignment as provided in the
Credit Agreement.


 


THE CREDIT AGREEMENT AND THIS NOTE SHALL BE GOVERNED BY, AND
SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE
COMMONWEALTH OF KENTUCKY, WITHOUT REGARD TO CONFLICTS OF LAW PRINCIPLES.


 


The
terms of this Note are subject to amendment only in the manner provided in the
Credit Agreement.


 


No reference herein to the Credit Agreement and no provision of this
Note or the Credit Agreement shall alter or impair the obligation of the Maker,
which is absolute and unconditional, to pay the principal of and interest on
this Note at the place, at the respective times, and in the currency herein
prescribed.


 


All
payments made upon this Note shall be applied first to delinquent accrued
interest, if any, then to the outstanding principal balance hereof and then to
nondelinquent accrued interest hereon.


 


This
Note is secured by the Security Agreement and each of the other Collateral
Documents.


 


Upon
the occurrence of any Event of Default under the Credit Agreement, or at any
time thereafter, the entire unpaid principal balance of and all accrued
interest on, this Note may become,-or may be declared to be, immediately due
and payable in the manner, upon the conditions and with the effect provided in
the Credit Agreement. If this Note is placed in the hands of an attorney for
collection, or if this Note is collected through any court, the Maker promises
and agrees to pay to the Agent and the Payee all reasonable costs and expenses
of collection permitted by law, including, but not limited to, attorneys’ fees
and court costs as provided in the Credit Agreement.


 


Failure
of the Agent or the Payee to exercise any of its rights and remedies hereunder,
or under the Credit Agreement, the Security Agreement or the other Loan Documents,
shall not constitute a waiver of the right to exercise the same at that or any
other time. All remedies of the Agent and the Payee in the event of a breach or
default hereunder or under any of the instruments referred to herein shall be
cumulative to the fullest extent permitted by law. Time shall be of the essence
with respect to all of the Maker’s obligations hereunder.


 


The
Maker hereby waives presentment, demand, notice of dishonor, protest, notice of
protest, and nonpayment and all exemptions to which it may be entitled under
the laws of the Commonwealth of Kentucky, the State of California or any other
state of the United States, or of the United States, and further agrees that
the holder hereof shall have the right, subject to the provisions of the Credit
Agreement to grant the Maker any extension of time for payment of this Note, to
modify the terms of any of the instruments referred to herein with the consent
of all other parties thereto, or to release any party liable hereon without in
any way affecting the liability of the Maker or any other parties liable for
payment of this Note.


 

















 


EACH OF THE MAKER AND THE PAYEE HEREBY WAIVES ITS
RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR
ARISING OUT OF THIS NOTE OR THE OTHER LOAN DOCUMENTS. THE SCOPE OF THIS WAIVER
IS INTENDED TO BE ALL-ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE
FILED IN ANY COURT THAT RELATE TO THE SUBJECT MATTER OF THIS TRANSACTION,
INCLUDING, WITHOUT LIMITATION, CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY
CLAIMS, AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS. EACH OF
THE MAKER AND THE PAYEE ACKNOWLEDGES THAT THIS WAIVER IS A MATERIAL INDUCEMENT
FOR EACH SUCH PARTY TO ENTER INTO A BUSINESS RELATIONSHIP, AND THAT EACH OF THE
MAKER AND THE PAYEE HAS ALREADY RELIED ON THIS WAIVER IN ITS RELATED FUTURE
DEALINGS WITH THE OTHER. EACH OF THE MAKER AND THE PAYEE FURTHER WARRANTS AND
REPRESENTS THAT EACH HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL, AND THAT
EACH KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING
CONSULTATION WITH LEGAL COUNSEL. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT
BE MODIFIED EITHER ORALLY OR IN WRITING, AND THIS WAIVER SHALL APPLY TO ANY
SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS NOTE OR
THE OTHER LOAN DOCUMENTS. IN THE EVENT OF LITIGATION, THIS NOTE MAY BE
FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.


 


[The remainder of this page has been
intentionally left blank.]


 

















 


IN WITNESS WHEREOF, the Maker has caused this Note to be duly executed
and delivered by its duly authorized officer as of the day, month and year
first written above.


 


 


	
   

  	
  HOME LOAN CENTER, INC. D/B/A

  
	
   

  	
  LENDINGTREE LOANS

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Jim Svinth

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
  COO

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (the “Maker”)

  
					



 

















 


EXHIBIT G


TO WAREHOUSING CREDIT AGREEMENT


 


ADDITIONAL LENDER AGREEMENT


 


THIS ADDITIONAL LENDER AGREEMENT (the “AL Agreement”) is made
and dated as of
                                ,
20    by                                              
(the “Applicant Financial Institution”), NATIONAL CITY BANK, as “Agent” under
the Credit Agreement referred to in Recital A below (in such capacity, the “Agent”),
and HOME LOAN CENTER, INC. D/B/A LENDINGTREE
LOANS, a California corporation (the “Company”).


 


RECITALS


 


A.            The Applicant Financial
Institution desires to become a “Bank” under that certain Warehousing Credit
Agreement dated as of November 26, 2007 (as may be amended, supplemented
and modified from time to time, the “Credit Agreement”) by and among the Agent,
the Banks currently participating therein (collectively, the “Existing Banks”)
and the Company, effective as of                   ,
20    (the “Adjustment Date”). Capitalized terms used but not
defined herein shall have the meanings ascribed thereto in the Credit
Agreement.


 


B.              The Applicant Financial
Institution has been approved for inclusion as a Bank under the terms of the
Credit Agreement.


 


NOW, THEREFORE, for good and valuable consideration, the
receipt and adequacy of which are hereby acknowledged, the parties agree as
follows:


 


AGREEMENT


 


1.             The Applicant Financial
Institution hereby acknowledges and agrees that from and after the Adjustment
Date it shall be a party to the Credit Agreement and the other Loan Documents
as a “Bank” thereunder for all purposes and shall be entitled to all rights,
benefits and privileges accorded a Bank thereunder and shall be subject to all
obligations of a Bank thereunder.


 


2.             The Applicant Financial
Institution hereby agrees to purchase on the Adjustment Date and to accept the
assignment and transfer of a portion of the obligations held by the Existing
Banks consistent with the Commitment Schedule and Allocation Notice delivered
by the Agent effective as of the Adjustment Date, a copy of which is attached
hereto as Exhibit A.


 


3.             The Applicant Financial
Institution: (a) represents, warrants and covenants that (i) it is a banking corporation or
other warehouse lender duly organized under the laws of the State of                   , (ii) it
is regularly engaged in the business of mortgage warehousing lending, and (iii) it
has capital and surplus of at least Three Hundred Million Dollars
($300,000,000.00); (b) confirms that it has received a copy of the Loan Documents,
together with copies of any financial statements requested by the Applicant
Financial Institution and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into this AL
Agreement, (c) agrees that it will, independently and without reliance
upon the Agent or any Existing Bank and based on such documents and information
as it shall deem appropriate at the time, continue to make its own credit
decisions in taking or not taking action under the Loan Documents, (d) appoints
and authorizes the Agent to take such actions as agent on its behalf and to
exercise such powers under


 

















 


the
Loan Documents as are delegated to the Agent by the terms thereof on the terms
set forth therein, including, without limitation, the terms set forth in Article 10 of the Credit Agreement
entitled “The Agent”, (e) agrees that on and after the Adjustment Date it
will perform all of the obligations which by the terms of the Loan Documents
are required to be performed by it as a Bank, and (f) agrees that its payment
instructions and notice instructions are as set forth in Schedule I attached hereto.


 


4.               Notices shall be given under this AL
Agreement in the manner set forth in the Credit Agreement.


 


5.               The address of the Applicant Financial
Institution for purposes of the Credit Agreement shall be as set forth beneath
its signature below.


 


6.               This AL Agreement shall be governed by and
construed and interpreted in accordance with the laws of the Commonwealth of
Kentucky.


 


7.               This AL Agreement may be executed in
counterparts and such counterparts together shall constitute one and the same
agreement.


 


8.               This AL Agreement, when executed by each of
the parties hereto shall constitute an amendment of the Credit Agreement
consistent with the Commitment Schedule and Allocation Notice referred to in
Paragraph 2 above.


 


IN WITNESS
WHEREOF, the undersigned have duly executed this Additional Lender Agreement as
of the day and year first above written.


 


	
  APPLICANT FINANCIAL 

  INSTITUTION:

  	
  [                                                                                                        ]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Address:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Attn:

  	
   

  
	
   

  	
   

  
	
   

  	
  NATIONAL
  CITY BAIVK, 

  a national banking association

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (“Agent”)

  
					



 

















 


	
   

  	
  HOME LOAN CENTER, INC. D/B/A

  
	
   

  	
  LENDINGTREE LOANS,

  
	
   

  	
  a California corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (“Company”)

  



 

















 


SCHEDULE 1.1

TO WAREHOUSING CREDIT AGREEMENT


 


APPROVED INVESTOR LIST


 


[See attached list]


 

















 


	
  lnvestor Name

  	
   

  	
  Investor Desk
  Contact

  	
   

  	
  

  Contact Phone#

  	
   

  	
  

  Contact Email

  	
   

  	
  

  Investor Audit Contac Contact Phone# Contact Email

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Best Effort Commitments

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Aurora Loan Services

  	
   

  	
  Christian Stevens

  	
   

  	
  (720) 945-5353

  	
   

  	
  cstevens@alservices.com

  	
   

  	
   

  	
   

  
	
  BayView Financial Trading Group

  	
   

  	
  Peter Wicknertz

  	
   

  	
  (305) 341-3673

  	
   

  	
  peterwicknertz@bayviewfinancial.com

  	
   

  	
   

  	
   

  
	
  Charter One

  	
   

  	
  Margo Knopf

  	
   

  	
  (513) 833-2808

  	
   

  	
  mknopf@CharterOneBank.com

  	
   

  	
   

  	
   

  
	
  Chase Home Finance LLC

  	
   

  	
  Miguel Parducho

  	
   

  	
  (661) 297-5175

  	
   

  	
  rniqdel.s.parducho@chase.com

  	
   

  	
   

  	
   

  
	
  Citi Mortgage

  	
   

  	
  Mauricio Perez

  	
   

  	
  (805) 578-4698

  	
   

  	
  mauricio.perez@citigroup.com

  	
   

  	
   

  	
   

  
	
  Countrywide Home Loans

  	
   

  	
  Josh Copeland

  	
   

  	
  (415) 835-1233 (;

  	
   

  	
  Joshua_Copeland@countrywide.com

  	
   

  	
   

  	
   

  
	
  Deutsche Bank

  	
   

  	
  Bill Moss

  	
   

  	
  (212) 250-2367

  	
   

  	
  william.moss@db.com

  	
   

  	
   

  	
   

  
	
  EMC Mortgage Corporation / Bear Stearns

  	
   

  	
  Erin Johnson

  	
   

  	
  (214) 626-3301

  	
   

  	
  Erin.Johnson@bear.com

  	
   

  	
   

  	
   

  
	
  GMAC Bank

  	
   

  	
  Pat Gilmore

  	
   

  	
  (714) 849-3679

  	
   

  	
  Pat iGilmore@GMACM.COM

  	
   

  	
   

  	
   

  
	
  Goldman Sachs

  	
   

  	
  Sandra Keebler

  	
   

  	
  (212) 902-5626

  	
   

  	
  sandra.keebler@gs.com

  	
   

  	
   

  	
   

  
	
  Greenpoint Mortgage

  	
   

  	
  Martha Satterfield

  	
   

  	
  (323) 850-5744

  	
   

  	
  martha.satterfield@,qreenpoint.com

  	
   

  	
   

  	
   

  
	
  IndyMac

  	
   

  	
  Edward Aloe

  	
   

  	
  (626) 535-5298

  	
   

  	
  edwbrd.aloe@indvrnacbank.com

  	
   

  	
   

  	
   

  
	
  National City Mortgage

  	
   

  	
  Brian Barnes

  	
   

  	
  (602) 392-1192

  	
   

  	
  Brian.Barnes@ncmc.com

  	
   

  	
   

  	
   

  
	
  Residential Funding Corporation

  	
   

  	
  Pat Gilmore

  	
   

  	
  (714) 849-3679

  	
   

  	
  Pat Gilmore@GMACM.COM

  	
   

  	
   

  	
   

  
	
  Wells Fargo Bank

  	
   

  	
  Eddie Fernandez

  	
   

  	
  (949) 347-2063

  	
   

  	
  edward.fernandez@wellsfargo.com

  	
   

  	
   

  	
   

  
	
  Countrywide Securities Corp

  	
   

  	
  Robert Wellerstein

  	
   

  	
  (818) 225-3804

  	
   

  	
  robert wellerstein@countrywide.com

  	
   

  	
   

  	
   

  
	
  Franklin Credit Management Corp.

  	
   

  	
  Bob Balsamo

  	
   

  	
  (201) 604-4451

  	
   

  	
  bbalsamo@franklincredit.com

  	
   

  	
   

  	
   

  
	
  U.S. Bank

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Freddie Mac

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Fannie Mae

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 


	
  MBS/AOT Trades

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Bear Stearns

  	
   

  	
  Mieko Willoughby

  	
   

  	
  (877) 391-4039

  	
   

  	
  rnilloughby@bear.com

  	
   

  	
   

  	
   

  
	
  Goldman Sachs

  	
   

  	
  Steve Harris

  	
   

  	
  (212) 902-4570

  	
   

  	
  steve.harris@gs.com

  	
   

  	
   

  	
   

  
	
  Lehman Brothers

  	
   

  	
  Adrienne Coyle

  	
   

  	
  (212) 526-7605

  	
   

  	
  adrienne.coyle@lehman.com

  	
   

  	
   

  	
   

  
	
  Merrill Lynch

  	
   

  	
  Kathy Wade

  	
   

  	
  (206) 340-4334

  	
   

  	
  kathy_wade@rnl.com

  	
   

  	
   

  	
   

  
	
  WaMu Capital

  	
   

  	
  Kimberly Cottrell

  	
   

  	
  (212) 702-6906

  	
   

  	
  kimberly.cottrell@wamu.net

  	
   

  	
   

  	
   

  



 

















 


SCHEDULE 6.1

TO WAREHOUSING CREDIT AGREEMENT


 


REPRESENTATION AND WARRANTY DISCLOSURES


 


	
  A.

  	
   

  	
  Legal Name, State of Organization and
  Principal Place of Business for the Company

  



 


	
  (i)

  	
   

  	
  Home Loan Center, Inc. d/b/a LendingTree Loans

  
	
  (ii)

  	
   

  	
  California

  
	
  (iii)

  	
   

  	
  163 Technology Drive

  
	
   

  	
   

  	
  Irvine, California 92618

  



 


	
  B.

  	
   

  	
  Material Adverse Changes in Financial Condition of the
  Company

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  [To Be Provided by the Company]

  
	
   

  	
   

  	
   

  
	
  C.

  	
   

  	
  Material Obligations, Liabilities, Taxes or Financial
  Obligations of the Company

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  [To Be Provided by the Company]

  
	
   

  	
   

  	
   

  
	
  D.

  	
   

  	
  Litigation of the Company 

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  [To Be Provided by the Company]

  
	
   

  	
   

  	
   

  
	
  E.

  	
   

  	
  Legal Name, State of Organization and Principal Place of Business for
  each Affiliate

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  [To Be Provided by the Company]

  
	
   

  	
   

  	
   

  
	
  F.

  	
   

  	
  Loans in Excess of $100,000.00 

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  [To Be Provided by the Company]

  
	
   

  	
   

  	
   

  
	
  G.

  	
   

  	
  Assumed and Fictitious Names of the Company 

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  [To Be Provided by the Company]