Document:

Exhibit 4.2

 

UNLESS
THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY
TRUST COMPANY, A NEW YORK CORPORATION (“DTC”) TO THE ISSUER OR ITS AGENT
FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED
IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

 

TRANSFERS OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS IN WHOLE,
BUT NOT IN PART, TO NOMINEES OF CEDE & CO. OR TO A SUCCESSOR THEREOF OR
SUCH SUCCESSOR’S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL NOTE SHALL BE
LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN SECTIONS
3.12 AND 3.13 OF THE INDENTURE.

 

NORTH AMERICAN VAN LINES, INC.

 

13 3/8% Senior
Subordinated Notes due 2009

 

	
  No.
  001

  	
   

  	
  CUSIP No. 657203AC9

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  $150,000,000

  

 

North Arnerican Van Lines, Inc., a Delaware corporation (and its
successors and assigns) (the “Company”), promises to pay to Cede & Co., or
registered assigns, the principal sum of $150,000,000 (One Hundred Fifty
Million United States Dollars) on December 1, 2009 (or such lesser or
greater amounts as shall be outstanding hereunder from time to time in
accordance with Sections 3.12 and 3.13 of the Indenture referred
to on the reverse hereof).

 

Interest Payment Dates:     June 1 and
December 1.

 

Record Dates:     May 15 and November 15.

 

Additional provisions of this Note are set forth on the other side of
this Note.

 

IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed.

 

	
   

  	
  NORTH
  AMERICAN VAN LINES, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ Ralph
  A. Ford

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Ralph A. Ford

  
	
   

  	
   

  	
  Title:

  	
  Secretary

  
					

 

1

 

This is one of the Notes
referred to in the within-named Indenture.

 

	
   

  	
  STATE STREET BANK AND
  TRUST COMPANY,

  as Trustee

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Earl W. Dennison,
  Jr.

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Earl W. Dennison, Jr.

  
	
   

  	
   

  	
  Title:

  	
  Vice President

  
	
   

  	
   

  
	
  Dated: August 2,
  2002

  	
   

  
					

 

2

 

13 3/8% Senior Subordinated Note due 2009

 

1.  Interest

 

The Company promises to pay interest semi-annually on December 1
and June 1 in each year, commencing June 1, 2000 at the rate of 13
3/8% per annum, except that interest accrued on this Note for periods prior to
the date on which the Initial Note was surrendered in exchange for this Note
will accrue at the rate or rates borne by such Initial Note from time to time
during such periods, until the Principal Amount is paid or made available for
payment. Interest on this Note will accrue from the most recent date to which
interest on this Note or any of its Predecessor Notes has been paid or duly
provided for or, if no interest has been paid, from the Issue Date.  Interest on the Notes shall be computed on
the basis of a 360-day year of twelve 30-day months. The interest so payable,
and punctually paid or duly provided for, on any Interest Payment Date will, as
provided in such Indenture, be paid to the Person in whose name this Note (or
one or more Predecessor Notes) is registered at the close of business on the
Regular Record Date for such interest, which shall be the May 15 or
November 15 (whether or not a Business Day), as the case may be, next
preceding such Interest Payment Date. Any such interest not so punctually paid
or duly provided for will forthwith cease to be payable to the Holder on such
Regular Record Date and may either be paid to the Person in whose name this
Note (or one or more Predecessor Notes) is registered at the close of business
on a Special Record Date for the payment of such Defaulted Interest to be fixed
by the Trustee, notice whereof shall be given to Holders of Notes not more than
15 days nor less than 10 days prior to such Special Record Date, or be paid at
any time in any other lawful manner not inconsistent with the requirements of
any securities exchange on which the Notes may be listed, and upon such notice
as may be required by such exchange, all as more fully provided in said
Indenture.

 

2.  Method
of Payment

 

Payment of the principal of (and premium, if any) and interest on this
Note will be made at the office or agency of the Company maintained for that
purpose in The Borough of Manhattan, The City of New York or the corporate
trust office of an affiliate of the Paying Agent in New York City; provided,
however, that at the option of the Company payment of interest may be
made by check mailed to the address of the Person entitled thereto as such
address shall appear in the Note Register or, if a Holder has given wire
instructions to the Company, by wire transfer to a U.S. Dollar account
maintained by the Holder with a bank located in New York City.

 

3.  Paying Agent and Registrar

 

Initially, State Street Bank and Trust Company, a Massachusetts trust
company, the Trustee, will act as principal Paying Agent and Registrar at the
corporate trust offices of its affiliate in the City of New York, State of New
York. The Company may appoint and change any Paying Agent, Registrar or
co-registrar without notice. The Company or any Subsidiary of the Company may
act as Paying Agent, Registrar or co-registrar.

 

3

 

4.  Indenture

 

This Note is one of the duly authorized issue of 13 3/8% Senior
Subordinated Notes Due 2009 of the Company (herein called the “Notes”), issued
under an indenture, dated as of November 19, 1999 (as amended,
supplemented or otherwise modified from time to time, the “Indenture,” which
term shall have the meanings assigned to it in such instrument), between North
American Van Lines, Inc., the Guarantors party thereto, and State Street Bank
and Trust Company as Trustee (herein called the “Trustee,” which term includes
any successor trustee under the Indenture) and reference is hereby made to the
Indenture for a statement of the respective rights, limitations of rights,
duties and immunities thereunder of the Company, any other obligor upon this
Note, the Trustee and the Holders of the Notes and of the terms upon which the
Notes are, and are to be, authenticated and delivered. The terms of the Notes
include those stated in the Indenture and those made a part of the Indenture by
reference to the Trust Indenture Act of 1939, as amended, as in effect from
time to time (the “TIA”). The Notes are subject to all such terms, and Holders
are referred to the Indenture and the TIA for a statement of such terms.
Additional Notes may be issued under the Indenture which may vote as a class
with the Notes and otherwise be treated as Notes for purposes of the Indenture.

 

All terms used in this Note that are defined in the Indenture shall
have the meanings assigned to them in the Indenture.

 

This Note is entitled to the benefits of the certain senior
subordinated Note Guarantees of the Note Guarantors and may hereafter be
entitled to certain other senior subordinated Note Guarantees made for the
benefit of the Holders.  Reference is
made to Article Thirteen of the Indenture and to any Note Guarantees for
terms relating to such Note Guarantees, including the release, termination and
discharge thereof. Neither the Company nor any Note Guarantor shall be required
to make any notation on this Note to reflect any Note Guarantee or any such
release, termination or discharge.

 

5.  Optional
Redemption

 

(a) The Notes will be redeemable, at the Company’s option, in whole or
in part, and from time to time on and after December 1, 2004 and prior to
maturity. Such redemption may be made upon notice mailed by first-class mail to
each Holder’s registered address in accordance with the Indenture. The Notes
will be so redeemable at the following Redemption Prices (expressed as a
percentage of principal amount), plus accrued interest, if any, to the relevant
Redemption Date (subject to the right of Holders of record on the relevant
record date to receive interest due on the relevant interest payment date) if
redeemed during the 12-month period commencing on December 1 of the years
set forth below:

 

4

 

	
  Period

  	
   

  	
  Redemption
Price

  	
   

  
	
  2004

  	
   

  	
  106.688

  	
  %

  
	
  2005

  	
   

  	
  104.458

  	
  %

  
	
  2006

  	
   

  	
  102.229

  	
  %

  
	
  2007 and thereafter

  	
   

  	
  100.000

  	
  %

  

 

(b) In addition, at any time and from time to time prior to
December 1, 2002, the Company at its option may redeem Notes in an
aggregate principal amount equal to up to 35% of the original aggregate
principal amount of the Notes (including the principal amount of any Additional
Notes), with funds in an aggregate amount (the “Redemption Amount”) not
exceeding the aggregate cash proceeds of one or more Equity Offerings, at a
Redemption Price (expressed as a percentage of principal amount thereof) of
113.375% plus accrued interest, if any, to the Redemption Date (subject to the
right of Holders of record on the relevant record date to receive interest due
on the relevant interest payment date); provided, however, that
an, aggregate principal amount of the Notes equal to at least 65% of the
original aggregate principal amount of the Notes (including the principal
amount of any Additional Notes) must remain outstanding after each such
redemption. The Company may make such redemption upon notice mailed by
first-class mail to each Holder’s registered address in accordance with the
Indenture (but in no event more than 180 days after the completion of the
related Equity Offering).

 

6.  No
Sinking Fund

 

The Notes will not be entitled to the benefit of a sinking fund.

 

7.  Subordination

 

The Notes are subordinated to Senior Indebtedness, as defined in the
Indenture. To the extent provided in the Indenture, Senior Indebtedness must be
paid before the Notes may be paid. In addition, any Note Guarantees are or
shall be, as the case may be, subordinated to Guarantor Senior Indebtedness (as
defined in the Indenture), as applicable. To the extent provided in the
Indenture, Guarantor Senior Indebtedness must be paid before any Note Guarantee
may be paid. The Company and any Note Guarantor agree, and each Holder by
accepting a Note agrees, to the subordination provisions contained in the
Indenture and authorizes the Trustee to give such provisions effect and
appoints the Trustee as attorney-in-fact for such purposes.

 

8.  Put
Provisions

 

The Indenture provides that, upon the occurrence of a Change of Control
Triggering Event, each Holder will have the right to require that the Company
repurchase all or any part of such Holder’s Notes at a repurchase price in cash
equal to 101% of the aggregate principal amount thereof plus accrued and unpaid
interest, if any, to the date of such repurchase (subject to the right of
Holders of record on the relevant record date to receive interest due on the
relevant interest payment date); provided, however, that the Company shall not
be obligated to purchase Notes in the event it has exercised its right to
redeem all of the Notes.

 

9.  Denominations:
Transfer; Exchange

 

5

 

 

The Notes are in registered form without coupons in denominations of
$1,000 and whole multiples of $1,000. A Holder may transfer or exchange Notes
in accordance with the Indenture and subject to certain limitations set forth
therein. No service charge shall be made for any transfer or exchange of Notes,
but the Company may require payment of a sum sufficient to cover any tax or
other governmental charge that may be imposed in connection therewith. The
Company shall not be required (i) to issue, transfer or exchange any Note
during a period beginning at the opening of business 15 days before the day of
the mailing of a notice of redemption (or purchase) of Notes selected for
redemption (or purchase) under Section 10.04 of the Indenture and
ending at the close of business on the day of such mailing, or (ii) to transfer
or exchange any Note so selected for redemption (or purchase) in whole or in
part.

 

10.  Persons
Deemed Owners

 

The registered Holder of this Note may be treated as the owner of it
for all purposes.

 

11.  Unclaimed
Money

 

The Trustee shall pay to the Company upon a Company Request any money
held by it for the payment of principal (and premium, if any) or interest that
remains unclaimed for two years. After payment to the Company, Holders entitled
to money must look to the Company for payment as general creditors and all
liability of the Trustee or Paying Agent with respect to such money shall
thereupon cease.

 

12.  Discharge
and Defeasance

 

Subject to certain conditions, the Company at any time may terminate
some or all of its obligations under the Notes and the Indenture if the Company
deposits with the Trustee money or U.S. Government Obligations for the payment
of principal of, and premium (if any) and interest on the Notes to redemption
or maturity, as the case may be.

 

13.  Amendment.
Waiver

 

Subject to certain exceptions, (i) the Indenture may be amended with
the consent of the Holders of a majority in principal amount of the Notes then
outstanding and (ii) any past default or compliance with any provisions may be
waived with the consent of the Holders of a majority in principal amount of the
Notes then outstanding (including in each case, consents obtained in connection
with a tender offer or exchange offer for Notes). In certain instances provided
in the Indenture, the Indenture may be amended without the consent of any
Holder.

 

14.  Defaults
and Remedies

 

If an Event of Default with respect to the Notes occurs and is
continuing, the Notes may be declared due and payable immediately in. the
manner and with the effect provided in the Indenture.

 

6

 

15.  No
Recourse Against Others

 

No director, officer, employee, incorporator, member or stockholder, as
such, of the Company, any Note Guarantor or any subsidiary thereof shall have
any liability for any obligation of the Company, or any Note Guarantor on the
Notes under this Indenture, the Notes, or any Note Guarantee, or for any claim
based on, in respect of, or by reason of, any such obligation or its creation.
Each Noteholder, by accepting the Notes, waives and releases all such
liability. This waiver and release are part of the consideration for issuance
of the Notes.

 

16.  Governing
Law.

 

THE INDENTURE AND THE NOTES SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO
ANY PRINCIPLES OF CONFLICT OF LAWS TO THE EXTENT THAT THE APPLICATION OF THE
LAW OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY. THE TRUSTEE, THE
COMPANY, ANY OTHER OBLIGOR IN RESPECT OF THE NOTES AND (BY THEIR ACCEPTANCE OF
THE NOTES) THE HOLDERS, AGREE TO SUBMIT TO THE JURISDICTION OF ANY UNITED
STATES FEDERAL OR STATE COURT LOCATED IN THE BOROUGH OF MANHATTAN, IN THE CITY
OF NEW YORK IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS
INDENTURE OR THE NOTES.

 

17.  Authentication

 

This Note shall not be valid until an authorized signatory of the
Trustee (or an authenticating agent) manually signs the certificate of
authentication on the other side of this Note.

 

18.  Abbreviations

 

Customary abbreviations may
be used in the name of a Holder or an assignee, such as TEN COM (=tenants in
common), TEN ENT (=tenants by the entireties), JT TEN (=joint tenants with
rights of survivorship and not as tenants in common), CUST (=custodian), and
U/G/M/A (=Uniform Gift to Minors Act).

 

19.  CUSIP
Numbers

 

Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures, the Company has caused CUSIP numbers to be
printed on the Notes and has directed the Trustee to use CUSIP numbers in
notices of redemption as a convenience to Holders. No representation is made as
to the accuracy of such numbers either as printed on the Notes or as contained
in any notice of redemption and reliance may be placed only on the other
identification numbers placed hereon.

 

7Exhibit
10.36

 

 

THIRD
AMENDED AND RESTATED

WAREHOUSING
CREDIT AND SECURITY AGREEMENT

(SINGLE-FAMILY
MORTGAGE LOANS)

 

AMONG

 

SIRVA
MORTGAGE, INC., an Ohio corporation

f/k/a
COOPERATIVE MORTGAGE SERVICES, INC.

 

AND

 

WASHINGTON
MUTUAL BANK, FA,

a
federal association, as Lead Arranger and Agent

 

AND

 

NATIONAL
CITY BANK OF KENTUCKY,

as
Documentation Agent

 

AND

 

THE
LENDERS PARTY HERETO

 

Dated as
of September 30, 2002

 

 

 

TABLE OF CONTENTS

 

	
  1.

  	
  DEFINITIONS

  	
   

  
	
   

  	
  1.1

  	
  Defined Terms

  	
   

  
	
   

  	
  1.2

  	
  Other Definitional
  Provisions

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  2.

  	
  THE CREDIT

  	
   

  
	
   

  	
  2.1

  	
  The Commitment

  	
   

  
	
   

  	
  2.2

  	
  Procedures for
  Obtaining Advances

  	
   

  
	
   

  	
  2.3

  	
  Notes

  	
   

  
	
   

  	
  2.4

  	
  Interest

  	
   

  
	
   

  	
  2.5

  	
  Principal
  Payments

  	
   

  
	
   

  	
  2.6

  	
  Expiration
  of Commitment

  	
   

  
	
   

  	
  2.7

  	
  Payment Procedure

  	
   

  
	
   

  	
  2.8

  	
  Fees

  	
   

  
	
   

  	
  2.9

  	
  Miscellaneous
  Charges

  	
   

  
	
   

  	
  2.10

  	
  Bailee

  	
   

  
	
   

  	
  2.11

  	
  Increased Costs;
  Capital Requirements

  	
   

  
	
   

  	
  2.12

  	
  Restatement

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  3.

  	
  COLLATERAL

  	
   

  
	
   

  	
  3.1

  	
  Grant of Security Interest

  	
   

  
	
   

  	
  3.2

  	
  Security
  Interest in Mortgage-backed Securities

  	
   

  
	
   

  	
  3.3

  	
  Delivery of Collateral
  Documents

  	
   

  
	
   

  	
  3.4

  	
  Delivery
  of Additional Collateral; Mandatory Prepayments

  	
   

  
	
   

  	
  3.5

  	
  Right of Redemption
  from Pledge

  	
   

  
	
   

  	
  3.6

  	
  Collection and
  Servicing Rights

  	
   

  
	
   

  	
  3.7

  	
  Return
  or Release of Collateral at End of Commitment

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  4.

  	
  CONDITIONS
  PRECEDENT

  	
   

  
	
   

  	
  4.1

  	
  Initial Advance

  	
   

  
	
   

  	
  4.2

  	
  Each Advance

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  5.

  	
  REPRESENTATIONS AND
  WARRANTIES

  	
   

  
	
   

  	
  5.1

  	
  Organization;
  Good Standing; Subsidiaries

  	
   

  
	
   

  	
  5.2

  	
  Authorization and
  Enforceability

  	
   

  
	
   

  	
  5.3

  	
  Financial
  Condition.

  	
   

  
	
   

  	
  5.4

  	
  Litigation

  	
   

  
	
   

  	
  5.5

  	
  Compliance
  with Laws

  	
   

  
	
   

  	
  5.6

  	
  Regulation U

  	
   

  
	
   

  	
  5.7

  	
  Investment
  Company Act

  	
   

  
	
   

  	
  5.8

  	
  Agreements

  	
   

  
	
   

  	
  5.9

  	
  Title to
  Properties

  	
   

  
	
   

  	
  5.10

  	
  ERISA

  	
   

  

 

i

 

	
   

  	
  5.11

  	
  Eligibility

  	
   

  
	
   

  	
  5.12

  	
  Special
  Representations Concerning Collateral

  	
   

  
	
   

  	
  5.13

  	
  RICO

  	
   

  
	
   

  	
  5.14

  	
  Proper Names

  	
   

  
	
   

  	
  5.15

  	
  Direct
  Benefit From Loans

  	
   

  
	
   

  	
  5.16

  	
  Loan
  Documents Do Not Violate Other Documents

  	
   

  
	
   

  	
  5.17

  	
  Consents
  Not Required

  	
   

  
	
   

  	
  5.18

  	
  Material Fact
  Representations

  	
   

  
	
   

  	
  5.19

  	
  Place of Business

  	
   

  
	
   

  	
  5.20

  	
  Use of Proceeds;
  Business Loans

  	
   

  
	
   

  	
  5.21

  	
  No Undisclosed Liabilities

  	
   

  
	
   

  	
  5.22

  	
  Tax
  Returns and Payments

  	
   

  
	
   

  	
  5.23

  	
  Subsidiaries

  	
   

  
	
   

  	
  5.24

  	
  Holding Company

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  6.

  	
  AFFIRMATIVE
  COVENANTS

  	
   

  
	
   

  	
  6.1

  	
  Payment of Notes

  	
   

  
	
   

  	
  6.2

  	
  Financial
  Statements and Other Reports

  	
   

  
	
   

  	
  6.3

  	
  Maintenance
  of Existence; Conduct of Business

  	
   

  
	
   

  	
  6.4

  	
  Compliance with
  Applicable Laws

  	
   

  
	
   

  	
  6.5

  	
  Inspection of
  Properties and Books

  	
   

  
	
   

  	
  6.6

  	
  Notice

  	
   

  
	
   

  	
  6.7

  	
  Payment of Debt, Taxes, etc

  	
   

  
	
   

  	
  6.8

  	
  Insurance

  	
   

  
	
   

  	
  6.9

  	
  Closing
  Instructions

  	
   

  
	
   

  	
  6.10

  	
  Other
  Loan Obligations.

  	
   

  
	
   

  	
  6.11

  	
  Use of Proceeds of Advances

  	
   

  
	
   

  	
  6.12

  	
  Special
  Affirmative Covenants Concerning Collateral

  	
   

  
	
   

  	
  6.13

  	
  Cure of Defects in
  Loan Documents

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  7.

  	
  NEGATIVE
  COVENANTS

  	
   

  
	
   

  	
  7.1

  	
  Contingent
  Liabilities

  	
   

  
	
   

  	
  7.2

  	
  Pledge of
  Servicing Contracts/Mortgage Loans

  	
   

  
	
   

  	
  7.3

  	
  Merger;
  Acquisitions

  	
   

  
	
   

  	
  7.4

  	
  Loss of
  Eligibility.

  	
   

  
	
   

  	
  7.5

  	
  Adjusted Tangible Net
  Worth.

  	
   

  
	
   

  	
  7.6

  	
  Debt to Adjusted
  Tangible Worth Ratio

  	
   

  
	
   

  	
  7.7

  	
  Minimum
  Current Ratio

  	
   

  
	
   

  	
  7.8

  	
  Transactions with
  Affiliates

  	
   

  
	
   

  	
  7.9

  	
  Limits on Corporate
  Distributions

  	
   

  
	
   

  	
  7.10

  	
  RICO

  	
   

  
	
   

  	
  7.11

  	
  No
  Loans or Investments Except Approved Investments

  	
   

  
	
   

  	
  7.12

  	
  Charter
  Documents and Business Termination

  	
   

  
	
   

  	
  7.13

  	
  Changes in Accounting
  Methods

  	
   

  
	
   

  	
  7.14

  	
  No Sales, Leases or Dispositions of Property

  	
   

  
	
   

  	
  7.15

  	
  Changes in Business or
  Assets

  	
   

  
	
   

  	
  7.16

  	
  Changes in
  Office or Inventory Location

  	
   

  

 

ii

 

	
   

  	
  7.17

  	
  Special
  Negative Covenants Concerning Collateral

  	
   

  
	
   

  	
  7.18

  	
  No Indebtedness

  	
   

  
	
   

  	
  7.19

  	
  Ownership
  of the Company

  	
   

  
	
   

  	
  7.20

  	
  Payments of Subordinated
  Debt

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  8.

  	
  DEFAULTS;
  REMEDIES

  	
   

  
	
   

  	
  8.1

  	
  Events of Default

  	
   

  
	
   

  	
  8.2

  	
  Remedies

  	
   

  
	
   

  	
  8.3

  	
  Application
  of Proceeds

  	
   

  
	
   

  	
  8.4

  	
  Agent Appointed
  Attorney-in-Fact

  	
   

  
	
   

  	
  8.5

  	
  Right of Offset

  	
   

  
	
   

  	
  8.6

  	
  Waivers

  	
   

  
	
   

  	
  8.7

  	
  Performance
  by Agent

  	
   

  
	
   

  	
  8.8

  	
  No Responsibility.

  	
   

  
	
   

  	
  8.9

  	
  No Waiver

  	
   

  
	
   

  	
  8.10

  	
  Cumulative Rights

  	
   

  
	
   

  	
  8.11

  	
  Costs

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  9.

  	
  NOTICES

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  10.

  	
  REIMBURSEMENT OF
  EXPENSES; INDEMNITY

  	
   

  
	
   

  	
  10.1

  	
  Reimbursement
  of Expenses and Indemnification by Company

  	
   

  
	
   

  	
  10.2

  	
  INDEMNIFICATION BY THE
  LENDERS

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  11.

  	
  FINANCIAL
  INFORMATION

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  12.

  	
  AGREEMENTS
  CONCERNING THE AGENT AND THE LENDERS

  	
   

  
	
   

  	
  12.1

  	
  Appointment

  	
   

  
	
   

  	
  12.2

  	
  Employment of Others
  by the Agent

  	
   

  
	
   

  	
  12.3

  	
  Exculpatory
  Provisions

  	
   

  
	
   

  	
  12.4

  	
  Defaults

  	
   

  
	
   

  	
  12.5

  	
  Reliance

  	
   

  
	
   

  	
  12.6

  	
  Resignation
  of the Agent

  	
   

  
	
   

  	
  12.7

  	
  Removal
  of the Agent

  	
   

  
	
   

  	
  12.8

  	
  Effective Date
  of Resignation or Removal

  	
   

  
	
   

  	
  12.9

  	
  Successor Agent

  	
   

  
	
   

  	
  12.10

  	
  Credit Decisions

  	
   

  
	
   

  	
  12.11

  	
  Merger of the Agent

  	
   

  
	
   

  	
  12.12

  	
  Agent
  and Affiliates

  	
   

  
	
   

  	
  12.13

  	
  Lender’s
  Cooperation

  	
   

  
	
   

  	
  12.14

  	
  Withholding Tax

  	
   

  
	
   

  	
  12.15

  	
  Sharing

  	
   

  
	
   

  	
  12.16

  	
  Commitment
  Increases

  	
   

  
	
   

  	
  12.17

  	
  Participation

  	
   

  
	
   

  	
  12.18

  	
  Amendments and
  Modifications

  	
   

  

 

iii

 

	
  13.

  	
  MISCELLANEOUS

  	
   

  
	
   

  	
  13.1

  	
  Assignment

  	
   

  
	
   

  	
  13.2

  	
  The Register

  	
   

  
	
   

  	
  13.3

  	
  Disclosures

  	
   

  
	
   

  	
  13.4

  	
  Pledges

  	
   

  
	
   

  	
  13.5

  	
  Governing Law

  	
   

  
	
   

  	
  13.6

  	
  Relationship of the Parties

  	
   

  
	
   

  	
  13.7

  	
  Severability

  	
   

  
	
   

  	
  13.8

  	
  Usury

  	
   

  
	
   

  	
  13.9

  	
  Consent
  to Jurisdiction

  	
   

  
	
   

  	
  13.10

  	
  Arbitration.

  	
   

  
	
   

  	
  13.11

  	
  ADDITIONAL
  INDEMNITY

  	
   

  
	
   

  	
  13.12

  	
  No Waivers Except in
  Writing

  	
   

  
	
   

  	
  13.13

  	
  WAIVER
  OF JURY TRIAL

  	
   

  
	
   

  	
  13.14

  	
  Multiple
  Counterparts

  	
   

  
	
   

  	
  13.15

  	
  No Third Party
  Beneficiaries

  	
   

  
	
   

  	
  13.16

  	
  RELEASE
  OF LIABILITY

  	
   

  
	
   

  	
  13.17

  	
  Entire Agreement; Amendment

  	
   

  
	
   

  	
  13.18

  	
  NOTICE PURSUANT TO TX. BUS.
  & COMM. CODE § 26.02

  	
   

  

 

iv

 

THIRD
AMENDED AND RESTATED

WAREHOUSING
CREDIT AND SECURITY AGREEMENT

 

THIS THIRD AMENDED AND RESTATED WAREHOUSING
CREDIT AND SECURITY AGREEMENT (this “Agreement”), is dated as of September 30,
2002, by and among SIRVA MORTGAGE, INC., an Ohio corporation f/k/a Cooperative
Mortgage Services, Inc. (the “Company”), having its principal office at 6070
Parkland Boulevard, Mayfield Heights, Ohio 44124, the lenders from time to time
party hereto (together with any successors and assigns thereof, being
hereinafter referred to individually as a “Lender” and collectively as the
“Lenders”) and WASHINGTON MUTUAL BANK, FA, a federal association, successor by
merger to BANK UNITED, a federal savings bank, in its capacity as one of the
Lenders, as lead arranger, and as agent (it and its successors in that capacity
called the “Agent”) for the Lenders having its principal office at 3200
Southwest Freeway, Suite 1922, Houston, Texas 77027 and NATIONAL CITY BANK OF
KENTUCKY, as documentation agent (“Documentation Agent”).

 

WHEREAS, the Company, the Agent, the
Documentation Agent, and the Lenders entered into that certain Second Amended
and Restated Warehousing Credit and Security Agreement (as amended, the
“Existing Agreement”) dated April 18, 2002 whereby Lenders agreed, subject to
the terms and conditions of the Existing Agreement, to make certain loans to the
Company to finance the origination or purchase of Mortgage Loans (as that term
is herein defined), which loans are for the benefit of the Company;

 

WHEREAS, the Company and the Lenders desire
to make certain amendments to the Existing Agreement;

 

NOW, THEREFORE, for good and valuable
consideration, the amount and sufficiency of which are hereby acknowledged by
the parties hereto, the parties hereto hereby agree that the Existing Agreement
is amended and restated in its entirety as follows:

 

1.             DEFINITIONS.

 

1.1           Defined Terms.
Capitalized terms defined below or elsewhere in this Agreement (including the
exhibits hereto) shall have the following meanings:

 

“Additional Lender” means a Person admitted as a Lender under
this Agreement by the terms of an amendment hereto.

 

“Adjusted Tangible Net Worth” means with respect to Company at
any date, the Tangible Net Worth of Company at such date plus one percent (1%)
of the unpaid principal balances of Mortgage Loans at such date for which the
Company owns the Servicing Rights and that are serviced by Company for Persons
other than Company plus the unpaid principal amount of all Subordinated Debt of
the Company at such date, if any.

 

“Advance” means a disbursement by the Lenders under the
Commitment pursuant to Article 2 of this Agreement.

 

“Advance Date” means, for any Advance, the date it is disbursed.

 

1

 

“Advance Request” has the meaning set forth in Section 2.2(a)
hereof.

 

“Affiliate” means and includes, with respect to a specified
Person, any other Person:

 

(a)           that directly or indirectly through one or
more intermediaries controls, is controlled by or is under common control with
the specified Person;

 

(b)           that is a director, trustee, general partner
or executive officer of the specified Person or serves in a similar capacity in
respect of the specified Person;

 

(c)           that, directly or indirectly through one or
more intermediaries, is the beneficial owner of ten percent (10%) or more of
any class of equity securities of the specified Person; or

 

(d)           of which the specified Person is directly or
indirectly the owner of ten percent (10%) or more of any class of equity
securities.

 

Without limiting the generality of the foregoing, for the purposes of
this Agreement, SIRVA shall be deemed Affiliate of the Company.

 

“Aged Mortgage Loan” means (a) a HELOC Mortgage Loan that
satisfies all of the requirements of an Eligible Mortgage Loan except that it
has been included in Collateral for a period of more than sixty (60) days and
(b) a Mortgage Loan, other than a HELOC Mortgage Loan or a Repurchased Mortgage
Loan, that satisfies all of the requirements of an Eligible Mortgage Loan
except it has been included in Collateral for a period of more than ninety (90)
days.

 

“Agent” means, at any time, Washington Mutual Bank, FA or its
successors acting as agent for Lenders under the Loan Documents.

 

“Agent’s Fee” has the meaning set forth in Section 2.8(c)
hereof.

 

“Aggregate Commitment Amount” has the meaning set forth in the
definition of “Commitment” found in Section 1.1 hereof.

 

“Agreement” means this Third Amended and Restated Warehousing
Credit and Security Agreement (Single Family Mortgage Loans), either as
originally executed or as it may from time to time be supplemented, modified or
amended.

 

“Applicable Law” means the laws of the State of Texas and the
United States of America in effect from time to time and applicable to the
transactions among the Agent, Lenders and the Company pursuant to this
Agreement and the other Loan Documents whichever permits the charging and
collection of the highest nonusurious rate of interest on such transactions.
For purposes of determining Texas law with respect to the highest nonusurious
rate of interest, the weekly ceiling permitted under Chapter 303 of the Texas
Finance Code, as amended, shall be controlling.

 

2

 

“Approved Custodian” means a Person acceptable to the Agent from
time to time in its sole discretion, who possesses Mortgage Loans that secure
Mortgaged-backed Securities.

 

“Bailee Letter” has the meaning set forth in Section 3.3 hereof.

 

“Basic Rate” has the meaning set forth in Section 2.4(a)(3)
hereof.

 

“Business Day” means any day excluding Saturday, Sunday and any
day on which Agent is closed for business.

 

“Capitalized Lease” means any lease under which rental payments
are required to be capitalized on a balance sheet of the lessee in accordance
with GAAP.

 

“Capitalized Rentals” means the amount of aggregate rentals due
and to become due under all Capitalized Leases under which the Company is a
lessee that would be reflected as a liability on a balance sheet of the
Company.

 

“Change of Control” means

 

(a)           a sale of substantially all of the Company’s
assets to any Person or related group of Persons; or

 

(b)           any merger or consolidation of the Company
with or into another Person with the effect that SIRVA holds (directly or
indirectly) less than one hundred percent (100%) of the total voting power
entitled to vote in election of directors, managers, or trustees of the
survivor of such merger or consolidation; or

 

(c)           the occurrence of any event after which SIRVA
no longer owns (directly or indirectly) voting stock having one hundred percent
(100%) of the total voting power entitled to vote in the election of directors
of the Company.

 

“Collateral” has the meaning set forth in Section 3.1 hereof.

 

“Collateral Documents” means all of the documents and other
items described on Exhibit “C” hereto and required to be delivered to
the Agent in connection with an Advance.

 

“Collateral Value” means, at the time of any determination,

 

(a)           with respect to any Eligible Mortgage Loan,
an amount equal to the least of (i) the actual out-of-pocket cost of such
Mortgage Loan to the Company, i.e., the net amount actually funded
against such Mortgage Loan or the net purchase price of such Mortgage Loan,
(ii) the Par Value thereof, (iii) the amount which the Investor has committed
to pay for such Mortgage Loan pursuant to a Purchase Commitment, or (iv) the
Fair Market Value of such Mortgage Loan;

 

3

 

(b)           with respect to Mortgage-backed Securities,
an amount equal to the least of (i) the sum of the principal balances of the
Mortgage Loans from which such Mortgage-backed Securities were created, (ii)
the amount which the Investor has committed to pay for such Mortgage-backed
Securities pursuant to a Purchase Commitment, or (iii) the Fair Market Value of
such Mortgage-backed Securities;

 

(c)           with respect to any Aged Mortgage Loan, an
amount equal to the least of (i) the Par Value thereof or (ii) the market value
of such Mortgage Loan as determined by Agent in its sole discretion;

 

(d)           with respect to Collateral that is not
described in (a), (b), or (c) the Collateral Value shall be equal to $0.00;

 

(e)           notwithstanding the foregoing, with respect
to Mortgage Loans that are not or cease to be Eligible Mortgage Loans, the
Collateral Value thereof shall equal $0.00.

 

“Combined Loan to Value Ratio” means, with respect to any
Mortgage Loan, the ratio expressed as a percentage that the sum of the original
principal balance of such Mortgage Loan at the time of any determination and if
such Mortgage Loan is secured by a Second Mortgage, the then current principal
balance of any related first priority mortgage bears to the appraised value of
the related mortgaged property at the time such Mortgage Loan was originated.

 

“Commitment” means the commitment of the Lenders to make
Advances hereunder in an aggregate principal amount at any time outstanding
that shall not exceed FIFTY-SIX MILLION AND NO/100 DOLLARS ($56,000,000.00)
(“Aggregate Commitment Amount”), provided, however, that (a) on July 30, 2003,
the Aggregate Commitment Amount shall be reduced to TWENTY-EIGHT MILLION AND
NO/100 DOLLARS ($28,000,000.00) and (b) no Lender’s portion of such Advances
may ever exceed its Commitment Amount. The Commitment shall be composed of two
tranches with the first tranche (“Tranche A Commitment”) being in the amount of
$28,000,000.00 and having a Termination Date occurring on July 30, 2003 and the
second tranche (“Tranche B Commitment”) being in the amount of $28,000,000.00
and having a Termination Date occurring on July 31, 2004.

 

“Commitment Amount” means, with respect to each Lender and the
Tranche A Commitment and the Tranche B Commitment, the amount set forth
opposite its name and so designated on Exhibit
“O” hereto, as the same may be amended and as that amount may be
canceled or terminated under this Agreement.

 

“Commitment Percentage” means, at any time, for any Lender, the
proportion (stated as a percentage) that its Commitment Amount bears to the
Aggregate Commitment Amount subject to any adjustment by the Agent pursuant to
the terms of this Agreement.

 

“Company” has the meaning set forth in the first paragraph of
this Agreement.

 

4

 

“Conventional Mortgage Loan” means a Single-family Mortgage
Loan, other than an FHA Loan or VA Loan, that complies with all applicable
requirements for purchase under the FNMA or FHLMC standard form of conventional
mortgage purchase contract.

 

“Credit A Mortgage Loan” means a FHA Loan, VA Loan, Conventional
Mortgage Loan, or a Jumbo Loan.

 

“Current Assets” means, with respect to any Person, those assets
set forth in the consolidated balance sheet of a Person prepared in accordance
with GAAP, as current assets, defined as those assets that are now cash or will
be by their terms or disposition be converted to cash within one year of the
date of calculation; provided, however there shall be excluded
from the assets of the Company, any and all advances or loans to Affiliates of
the Company, accounts from Affiliates of the Company, and investments in
Affiliates of the Company.

 

“Current Liabilities” means, with respect to any Person, those
liabilities set forth in the consolidated balance sheet of a Person prepared in
accordance with GAAP, as current liabilities, defined as those liabilities due
upon demand or within one year from the date of calculation.

 

“Current Ratio” means, with respect to any Person, the sum of
the amounts set forth in the consolidated balance sheet of the Person, prepared
in accordance with GAAP, on the date of calculation as Current Assets divided
by the sum of the amounts set forth in such consolidated balance sheet as
Current Liabilities.

 

“Debt” means, with respect to any Person, at any date (a) all
indebtedness or other obligations of such Person which, in accordance with
GAAP, would be included in determining total liabilities as shown on the
liabilities side of a balance sheet of such Person at such date; and (b) all
indebtedness or other obligations of such Person for borrowed money or for the
deferred purchase price of property or services; provided that for purposes of
this Agreement, there shall be excluded from Debt at any date loan loss
reserves, deferred taxes arising from capitalized excess service fees, and
operating leases. With respect to the Company, the term “Debt” shall include
all off balance sheet warehouse loan obligations owed to any Person, including,
without limitation, indebtedness or other obligations of the Company under all
repurchase arrangements. For the purposes of calculating the Debt of the
Company, Subordinated Debt of the Company shall be excluded from Debt.

 

“Default” means the occurrence of any event or existence of any
condition which, but for the giving of notice, the lapse of time, or both,
would constitute an Event of Default.

 

“Default Rate” has the meaning set forth in Section 2.4(c)
hereof.

 

“Electronic Request” has the meaning set forth in Section 2.2(a)
hereof.

 

“Eligible Mortgage Loan” means a Mortgage Loan, that, at all
times during the term of this Agreement, (a) is a Credit “A” Mortgage Loan,
HELOC Mortgage Loan or a

 

5

 

Repurchased
Mortgage Loan; (b) is evidenced by loan documents that are the standard forms
approved by FNMA or FHLMC or forms previously approved, in writing, by the
Agent in its sole discretion; (c) is made to a natural person or persons; (d)
is validly pledged to the Agent for the benefit of the Lenders, subject to no
other Liens; (e) is not in default in the payment of principal and interest or
in the performance of any obligation under the Mortgage Note or the Mortgage evidencing
or securing such Eligible Mortgage Loan for a period of sixty (60) days or
more; (f) has closed less than twenty-five (25) days prior to the date of the
Advance made in connection with such Eligible Mortgage Loan, excluding
Repurchased Mortgage Loans; (g) has a Combined Loan-to-Value Ratio not greater
than one hundred percent (100%); and (h) is covered by a Purchase Commitment,
excluding Repurchased Mortgage Loans.

 

“Eligible Mortgage Pool” means a pool of Mortgage Loans that
will secure a “mortgage related security,” as defined in Section  3(a)(41) of the Exchange Act administered or
to be administered by a trustee acceptable to Agent in its sole discretion
where the Mortgage, Mortgage Note and other documents relating to such Mortgage
Loans are held or to be held by an Approved Custodian.

 

“ERISA” means the Employee Retirement Income Security Act of
1974 and all rules and regulations promulgated thereunder, as amended from time
to time and any successor statute.

 

“Event of Default” means any of the conditions or events set
forth in Section 8.1 hereof.

 

“Exchange Act” means the Securities Exchange Act of 1934, as
amended from time to time and any successor statute.

 

“Extraordinary Servicing Expenses” means all out-of-pocket costs
and expenses (including, without limitation, reasonable attorneys’ fees and
disbursements, but excluding ordinary overhead expenses and salary expenses for
the Agent’s personnel), which are incurred by the Agent at any time or from
time to time in connection with: (a) the preparation, execution, delivery or
modification of the Loan Documents; (b) the preservation of Collateral; (c) the
collection or enforcement of the Company’s or any other Obligor’s liabilities
to the Lenders under the Loan Documents; (d) the sale, disposition, realization
upon or the recovery of possession of Collateral; or (e) the filing and
prosecution of a complaint or defense to a complaint with respect to any of the
above matters, or the defense of any claim, actual or threatened, by any
Obligor, a receiver or trustee in bankruptcy for any Obligor for, or on account
of, or with respect to the Commitment, or the Loan Documents.

 

“Fair Market Value” means, at any date, with respect to:

 

(a)           any Mortgage-backed Security, the bid price
rate reflected on the Telerate screen for a Mortgage-backed Security with the
closest coupon rate that does not exceed that of the Mortgage-backed Security
in question multiplied by the original face amount

 

6

 

of
such Mortgage-backed Security, and multiplied by the current pool factor for
such Mortgage-backed Security.

 

(b)           any Mortgage Loan,
the market price rate reflected on the Telerate screen for thirty (30) day
mandatory future delivery of such Mortgage Loan multiplied by the outstanding
principal balance thereof.

 

In the event Telerate does not publish or ceases to publish either the
market or bid price rate for any Mortgage Loan or Mortgage-backed Security
referenced in (a) and (b) above, the average bid price rate quoted in writing
to the Agent as of the date of determination by any two nationally recognized
dealers selected by Agent that are making a market in similar Mortgage Loans or
Mortgaged-backed Securities shall be utilized in lieu of the market or bid
price rate, as the case may be.

 

“Federal Funds Rate” means for any day, the rate per annum
(rounded upwards if necessary, to the nearest 1/100th of 1%) equal to the
weighted average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds brokers on such
day, as published by the Federal Reserve Bank of New York on the Business Day
next succeeding such day, provided that (a) if such day is not a Business Day,
the Federal Funds Rate for such day shall be such rate on such transactions on
the next preceding Business Day as so published on the next succeeding Business
Day, and (b) if no such rate is so published on such next succeeding Business
Day, the Federal Funds Rate for such day shall be the average rate quoted to
Agent on such day on such transactions from three Federal funds brokers of
recognized standing.

 

“FHA” means the Federal Housing Administration and any successor
thereto.

 

“FHA Loan” means a Single-family Mortgage Loan, payment of which
is partially or completely insured by the FHA under the National Housing Act or
Title V of the Housing Act of 1949 or with respect to which there is a current,
binding and enforceable commitment for such insurance issued by the FHA.

 

“FHLMC” means the Federal Home Loan Mortgage Corporation and any
successor thereto.

 

“FHLMC Guide” means the Freddie Mac Sellers’ and Servicers’
Guide, dated September 17, 1984, applicable bulletins, the applicable MIDANET
Users Guide (or the MIDAPHONE User’s Guide) and any particular purchase
documents as defined in the Sellers’ and Servicers’ Guide, as revised prior to
the date hereof.

 

“FICA” means the Federal Insurance Contributions Act or any
successor statute.

 

“First Mortgage” means a mortgage or deed of trust which
constitutes a first Lien on improved property containing one-to-four family
residences.

 

“First Mortgage Loan” means a Mortgage Loan secured by a First
Mortgage.

 

7

 

“FNMA” means the Federal National Mortgage Association and any
successor thereto.

 

“FNMA Guide” means the FNMA Servicing Guide dated June 30, 1990,
as revised prior to the date hereof.

 

“Funding Account” means the non-interest bearing demand checking
account established with, maintained by, and pledged to Agent for the benefit
of Lenders into which shall be deposited the proceeds of Advances, the proceeds
from any sale of Collateral, and from which funds shall be disbursed for the
funding or acquisition of Mortgage Loans.

 

“GAAP” means generally accepted accounting principles set forth
in the opinions and pronouncements of the Accounting Principles Board and the
American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in such other statements
by such other entity as may be approved by a significant segment of the
accounting profession, which are applicable to the circumstances as of the date
of determination.

 

“GNMA” means the Government National Mortgage Association and
any successor thereto.

 

“GNMA Guide” means the GNMA I Mortgage-Backed Securities Guide,
Handbook GNMA 5500.1 REV. 6, as revised prior to the date hereof, and as may be
revised from time to time, and GNMA II Mortgage-Backed Securities Guide
Handbook GNMA 5500.2, as revised prior to the date hereof.

 

“Hedging Arrangements” means, with respect to the Company, any
agreements or other arrangement (including, without limitation, interest rate
swap agreements, interest rate cap agreements and forward sale agreements)
entered into by the Company to protect itself against changes in the value of
any of the Collateral or changes in the interest rate applicable to the
Advances.

 

“HELOC Mortgage Loan” means a Single-family Mortgage Loan that
evidences an open-ended revolving line of credit.

 

“HUD” means the Department of Housing and Urban Development and
any successor thereto.

 

“Indebtedness” means and includes, without duplication, (1) all
items which in accordance with GAAP, consistently applied, would be included on
the liability side of a balance sheet on the date as of which Indebtedness is
to be determined (excluding shareholders’ equity), (2) Capitalized Rentals
under any Capitalized Lease, (3) guaranties, endorsements and other contingent
obligations in respect of, or any obligations to purchase or otherwise acquire,
Indebtedness of others, and (4) indebtedness secured by any mortgage, pledge,
security interest or other Lien existing on any property owned by the Person
with respect to which indebtedness is being determined, whether or not the
indebtedness secured thereby shall have been assumed.

 

8

 

“Indemnified Liabilities” has the meaning set forth in Article
10 hereof.

 

“Ineligible Mortgage Loans” has the meaning set forth in Section
12.18 hereof.

 

“Interim Date” has the meaning set forth in Section 4.1(a)(4)
hereof.

 

“Internal Revenue Code” means the Internal Revenue Code of 1986,
or any subsequent federal income tax law or laws, as any of the foregoing have
been or may from time to time be amended.

 

“Investor” means FNMA, FHLMC, GNMA, any of the Persons listed in
Exhibit “L” hereto, or a
financially responsible institution which is acceptable to Agent, in its sole
discretion; provided that at any time by written notice to Company Agent may
disapprove any Investor in its sole discretion, whether or not that Person is
named as an Investor in this definition or in Exhibit “L” or has been previously approved as an Investor
by Agent. Upon receipt of such notice, the Persons named in Agent’s notice
shall no longer be Investors from and after the date of the receipt of such
notice.

 

“Jumbo Loan” means a Single-family Mortgage Loan (other than a
FHA Loan or VA Loan) that complies with all applicable requirements for
purchase under the FNMA or FHLMC standard form of conventional mortgage
purchase contract then in effect except that the amount of such Mortgage Loan
exceeds the maximum amount under those requirements, but in no event shall the
amount of such Single-family Mortgage Loan exceed SIX HUNDRED FIFTY THOUSAND
AND NO/100 DOLLARS ($650,000.00).

 

“Loan” means the loan under this Agreement – the sum of all
Advances made pursuant to Article 2 of this Agreement – all of which shall be
treated and considered as one loan.

 

“Lender” has the meaning set forth in the first paragraph of
this Agreement.

 

“LIBOR Rate” means a rate of interest equal to the London
Interbank Offered Rate for U. S. dollar deposits for an interest period of one
month as quoted or published by Telerate, Bloomberg or any other rate quoting
service, selected by Agent in its sole discretion for any day during a given
month. In the event such rate ceases to be published or quoted, LIBOR Rate
shall mean a comparable rate of interest reasonably selected by Agent. Agent’s
determination of the LIBOR Rate shall be conclusive and binding on the Company,
absent manifest error.

 

“Lien” means any lien, mortgage, deed of trust, pledge, security
interest, charge or encumbrance of any kind (including any conditional sale or
other title retention agreement, any lease in the nature thereof, and any
agreement to give any security interest).

 

“Loan Documents” means this Agreement, the Notes, and each other
document, instrument or agreement executed by the Company or any other Person
in connection

 

9

 

herewith
or therewith, as any of the same may be amended, restated, renewed or replaced
from time to time.

 

“Majority Lenders” means, at any date, (a) if there are only two
(2) Lenders party to this Agreement, Majority Lenders shall mean both Lenders
and (b) if there are more than two (2) Lenders party to this Agreement,
Majority Lenders shall mean the Lenders holding not less than sixty-six and
two-thirds percent (66-2/3%) of the Commitment or, if the Commitment has
expired, the aggregate outstanding principal balance of Advances.

 

“Margin Stock” has the meaning assigned to that term in
Regulation U of the Board of Governors of the Federal Reserve System as in
effect from time to time.

 

“Market Value” means, with respect to any Mortgage Loan, at any
time, an amount determined by Agent, in its sole discretion, to be the market
value of such Mortgage Loan based upon (a) information then available to Agent
regarding quotes to dealers for the purchase of mortgage loans similar to such
Mortgage Loan or (b) sales prices actually received by Company for Mortgage
Loans sold by Company during the immediately preceding thirty (30) day period
similar to such Mortgage Loan.

 

“Maximum Rate” means the maximum lawful non-usurious rate of
interest (if any) that, under Applicable Law, any Lender may charge the Company
on the Advances from time to time. To the extent that the interest rate laws of
the State of Texas are applicable and unless changed in accordance with law, the
applicable rate ceiling shall be the weekly ceiling determined in accordance
with Chapter 303 of the Texas Finance Code, as amended.

 

“Monthly Average LIBOR Rate” means the average of all LIBOR
Rates quoted during a given month. In the event (i) the Notes are paid in full
and the Commitment is terminated prior to a month end; or (ii) the initial
Advance hereunder occurs on a date other than the first day of that month on
which LIBOR Rates are quoted, the Monthly Average LIBOR Rate shall mean, in the
case of clause (i), the average of all LIBOR Rates quoted that month up to and
including the last Business Day prior to such payment in full; or, in the case
of clause (ii), the average of all LIBOR Rates quoted on the date of the
initial Advance through the end of that month.

 

“Mortgage” means a First Mortgage or Second Mortgage on improved
real property containing one-to-four family residences.

 

“Mortgage-backed Securities” means FHLMC, GNMA or FNMA
securities that are backed by Mortgage Loans.

 

“Mortgage Loan” means any loan evidenced by a Mortgage Note. A
Mortgage Loan, unless otherwise expressly stated herein, means a Single-family
Mortgage Loan.

 

“Mortgage Note” means a note secured by a Mortgage.

 

“Mortgage Note Amount” means, as of the date of determination,
the then outstanding unpaid principal amount of a Mortgage Note.

 

10

 

“Mortgage Pool” means a pool of Mortgage Loans that were
warehoused with the Agent, on the basis of which there is to be issued a Mortgage-backed
Security.

 

“Mortgaged Property” means the property, real, personal,
tangible or intangible, securing a Mortgage Note.

 

“Multiemployer Plan” means a “multiemployer plan” as defined in
Section 4001(a)(3) of ERISA that is maintained for employees of the Company or
a Subsidiary of the Company.

 

“Non-Usage Fee” has the meaning set forth in Section 2.8(b)
hereof.

 

“Note” means any promissory note delivered by Company to a
Lender or Additional Lender pursuant to Section 2.3 or Section 12.16 in the form
attached hereto as Exhibit “N”
and all renewals, increases, modifications, replacements, and extensions
thereof. “Notes” means, collectively, each Lender’s and Additional Lender’s
Note.

 

“Notices” has the meaning set forth in Article 9 hereof.

 

“Obligations” means any and all indebtedness, obligations, and
liabilities of the Company to each Lender and the Agent (whether now existing
or hereafter arising, voluntary or involuntary, whether or not jointly owed
with others, direct or indirect, absolute or contingent, liquidated or
unliquidated, and whether or not from time to time decreased or extinguished
and later increased, created or incurred), arising out of or related to the
Loan Documents, or any of them, and any renewals, extensions, modifications, enlargements,
reinstatements or rearrangements thereof.

 

“Obligor” means the Company and any guarantor or other person
liable for payment or performance of the Obligations.

 

“Officer’s Certificate” means a certificate executed on behalf
of the Company by its chief financial officer or its treasurer or by such other
officer as may be designated herein, in substantially the form of Exhibit “F” hereto.

 

“Par Value” means, with respect to any Mortgage Loan at the time
of any determination, the unpaid principal balance of such Mortgage Loan on
such date.

 

“Person” means and includes natural persons, corporations,
limited partnerships, general partnerships, joint stock companies, joint
ventures, associations, companies, trusts, banks, trust companies, land trusts,
business trusts or other organizations, whether or not legal entities, and
federal and state governments and agencies or regulatory authorities and
political subdivisions thereof.

 

“Plans” has the meaning set forth in Section 5.10 hereof.

 

“Pledged Mortgages” has the meaning set forth in Section 3.1(a)
hereof.

 

“Pledged Securities” has the meaning set forth in Section 3.1(b)
hereof.

 

11

 

“PMI” means any private mortgage insurance company which is
acceptable to Agent, in its sole discretion; provided that at any time by
written notice to Company, Agent may disapprove any PMI because it has
determined in its sole discretion and for any reason that it is no longer
comfortable with that Person being a PMI, whether or not that Person has been
previously approved as a PMI by Agent. Upon receipt of such notice, the Persons
named in Agent’s notice shall no longer be PMIs from and after the date of
receipt of such notice.

 

“Purchase Commitment” means (a) a written commitment, in form
and substance satisfactory to the Agent, issued in favor of the Company by an
Investor pursuant to which that Investor commits to purchase Mortgage Loans or
Mortgage-backed Securities of a particular type and yield owned by Company at a
committed price, which commitment shall at all times be subject to approval by
Agent as to the terms and conditions or (b) a written master commitment or any
other written commitment on general terms and conditions approved by the Agent,
issued in favor of the Company by an Investor pursuant to which Investor
commits to purchase from Company from time to time up to a specified dollar
amount of Mortgage Loans without specification of the yield or purchase price
of each such Mortgage Loan.

 

“Redemption Amount” has the meaning set forth in Section 3.5
hereof.

 

“Repurchased Mortgage Loan” means a Wamu Mortgage Loan that
Company is obligated to repurchase from Washington Mutual under the terms of
its Purchase Commitment or other contractual obligation owed by Company to
Washington Mutual for any reason other than fraud of the Company or any other
Person in the origination of such Mortgage Loan.

 

“RICO” means the Racketeer Influenced and Corrupt Organizations
Act of 1970, as amended.

 

“Second Mortgage” means a mortgage or deed of trust which
constitutes a second Lien on improved property containing one-to-four family
residences.

 

“Second Mortgage Loan” means a Single-family Mortgage Loan that
is secured by a Second Mortgage that (a) has a Combined Loan-to-Value Ratio not
greater than one hundred percent (100%) (ratio to be based upon all loans,
including such Second Mortgage Loan, secured by the Mortgaged Property securing
such Second Mortgage Loan); (b) is underwritten in accordance with standards
approved by Agent so that such Mortgage Loan is readily salable to an Investor;
and (c) is covered by a Purchase Commitment.

 

“Servicing Contract” means, with respect to any Person, the
arrangement, whether or not in writing, pursuant to which such Person has the
right to service Mortgage Loans.

 

“Servicing Rights” means (a) the rights, obligations, remedies,
powers, and responsibilities of a Person to service Mortgage Loans owned by
that Person, including without limitation the right to collect principal and
interest payments, administer escrow accounts, and the right to own and possess
loan files and all records, documents, and data

 

12

 

relating
to such Mortgage Loans, and (b) the obligations, rights, remedies, powers,
privileges, benefits and responsibilities of a Person to service Mortgage Notes
for GNMA, FNMA or FHLMC under and in accordance with the GNMA Guide, the FNMA
Guide and the FHLMC Guide, respectively or for any Investor under any Servicing
Contract, including, without limitation, (i) the right to receive servicing
fees, termination fees, net sales proceeds, late charges, insufficient fund
fees, and other ancillary income relating to the Mortgage Notes (ii) the right
to hold and administer the escrow accounts, and (iii) the right to all loan
files, insurance files, tax records, collection records, documents, ledgers,
computer printouts, computer tapes and other records, data or information
relating to the Mortgage Notes, the escrow accounts or the servicing or
otherwise necessary or proper to perform the obligations of servicer.

 

“Shipped Mortgage Loans” means a Mortgage Loan for which Agent
has shipped the related Collateral Documents to an Investor for purchase by
such Investor pursuant to a Purchase Commitment. A Mortgage Loan shall be
classified as a Shipped Mortgage Loan for the period beginning on the date the
Agent ships the related Collateral Documents to an Investor and ending on the
earliest to occur of (a) the date the Agent receives the proceeds of such Mortgage
Loan from the Investor, (b) the date the Agent receives the related Collateral
Documents from the Investor and (c) thirty (30) days from the date Agent
shipped the related Collateral Documents to the Investor.

 

“Single-family Mortgage Loan” means a Mortgage Loan secured by a
Mortgage covering improved real property containing one to four family
residences.

 

“SIRVA” means SIRVA, Inc., a Delaware corporation.

 

“Statement Date” has the meaning set forth in Section 4.1(a)(4)
hereof.

 

“Subordinated Debt” means, with respect to any Person, all
Indebtedness of such Person, for borrowed money, which is, by its terms (which
terms shall have been approved by the Agent) or by the terms of a subordination
agreement, in form and substance satisfactory to the Agent, effectively
subordinated in right of payment to all other present and future obligations
and all indebtedness of such Person, of every kind and character, owed to the
Agent.

 

“Subsidiary” means any corporation, association or other
business entity in which more than fifty percent (50%) of the total voting
power or shares of stock entitled to vote in the election of directors,
managers or trustees thereof is at the time owned or controlled, directly or
indirectly, by any Person or one or more of the other Subsidiaries of that
Person or a combination thereof.

 

“Tangible Net Worth” means, with respect to any Person at any
date, the sum of the total shareholders’ equity in such Person (including
capital stock, additional paid-in capital, and retained earnings, but excluding
treasury stock, if any), on a consolidated basis; less the aggregate book value
of all intangible assets of such Person (as determined in accordance with
GAAP), including without limitation, goodwill, trademarks, trade names, service
marks, copyrights, patents, licenses, franchises, and Servicing Rights,

 

13

 

each
to be determined in accordance with GAAP consistent with those applied in the
preparation of the financial statements referred to in Section 5.3 hereof;
provided that, for purposes of this Agreement, there shall be excluded from
total assets, advances or loans to shareholders, officers or Affiliates,
investments in Affiliates, assets pledged to secure any liabilities not
included in the Debt of such Person and those other assets which would be
deemed by HUD to be non-acceptable in calculating adjusted net worth in
accordance with its requirements in the Audit Guide for Audit of Approved
Non-Supervised Mortgagees”, as in effect as of such date. For the purposes of
calculating the Tangible Net Worth of such Person, Subordinated Debt of such
Person shall be excluded from the liabilities of such Person.

 

“Termination Date” means (a) with respect to Tranche A
Commitment, July 30, 2003, or such earlier date upon which Lenders’ obligation
to fund shall be terminated pursuant to the terms of this Agreement and (b)
with respect to Tranche B Commitment, July 31, 2004, or such earlier date upon
which Lenders’ obligation to fund shall be terminated pursuant to the terms of
this Agreement.

 

“Texas Finance Code” is defined in the definition of “Applicable
Law.”

 

“Tranche A Commitment” has the meaning set forth in the
definition of “Commitment” found in Section 1.1 hereof.

 

“Tranche B Commitment” has the meaning set forth in the
definition of “Commitment” found in Section 1.1 hereof.

 

“Tribunal” means any court or governmental department,
commission, board, bureau, agency, or instrumentality of any state,
commonwealth, nation, territory, possession, county, parish, or municipality,
whether now or hereafter constituted and/or existing.

 

“Unit Collateral Value” means, at the time of any determination,
(a) with respect to any Eligible Mortgage Loan that is a Wamu Mortgage Loan,
but not an Aged Mortgage Loan or a Repurchased Mortgage Loan, an amount equal
to one hundred percent (100%) of the Collateral Value of such Mortgage Loan as
of such date; (b) with respect to any Eligible Mortgage Loan that is not a Wamu
Mortgage Loan or a Repurchased Mortgage Loan or a HELOC Mortgage Loan, or an
Aged Mortgage Loan, an amount equal to ninety-eight percent (98%) of the
Collateral Value of such Mortgage Loan as of such date; (c) with respect to any
Eligible Mortgage Loan that is a HELOC Mortgage Loan but not a Repurchased Mortgage
Loan or Aged Mortgage Loan, an amount equal to ninety-six percent (96%) of the
Collateral Value of such Mortgage Loan as of such date; (d) with respect to any
Eligible Mortgage Loan that is a Repurchased Mortgage Loan, an amount equal to
eighty percent (80%) of the Collateral Value of such Mortgage Loan as of such
date; (e) with respect to each Repurchased Mortgage Loan, an amount equal to
eighty percent (80%) of the Collateral Value of such Repurchased Mortgage Loan
as of such date less five percent (5%) of the amount of the original Advance
made against such Repurchased Mortgage Loan for each thirty (30) days such
Repurchased Mortgage Loan is included in Collateral until such Repurchased
Mortgage

 

14

 

Loan
has been included in Collateral for one hundred eighty (180) days at which time
the Unit Collateral Value of such Repurchased Mortgage Loan shall be zero; (f)
with respect to each Aged Mortgage Loan included in the Collateral (calculated
from the date such Mortgage Loan was originally pledged to Agent) for more than
91 days but not in excess of 120 days, an amount equal to ninety percent (90%)
of the Collateral Value of such Mortgage Loan as of such date; (g) with respect
to each Aged Mortgage Loan included in the Collateral (calculated from the date
such Mortgage Loan was originally pledged to Agent) for more than 121 days but
not in excess of 150 days, an amount equal to eighty percent (80%) of the
Collateral Value of such Mortgage Loan as of such date; (h) with respect to
each Aged Mortgage Loan included in the Collateral (calculated from the date
such Mortgage Loan was originally pledged to Agent) for more than 151 days but
not in excess of 180 days, an amount equal to seventy percent (70%) of the Collateral
Value of such Mortgage Loan as of such date; (i) with respect to each Aged
Mortgage Loan included in the Collateral (calculated from the date such
Mortgage Loan was originally pledged to Agent) for more than 180 days, the Unit
Collateral Value of such Mortgage Loan shall be equal to zero, and (j) with
respect to any Mortgage Loan that is not an Eligible Mortgage Loan, its Unit
Collateral Value shall be zero.

 

“VA” means the Veterans Administration and any successor
thereto.

 

“VA Loan” means a Single-family Mortgage Loan, payment of which
is partially or completely guaranteed by the VA under the Servicemen’s
Readjustment Act of 1944 or Chapter 37 of Title 38 of the United States Code or
with respect to which there is a current binding and enforceable commitment for
such a guaranty issued by the VA or its delegated underwriter.

 

“Wamu Mortgage Loan” means an Eligible Mortgage Loan that
Washington Mutual is committed to purchase from the Company pursuant to the
terms of a Purchase Commitment.

 

“Washington Mutual” means Washington Mutual Bank, FA.

 

“Wet Settlement Advance” means a disbursement by a Lender under
the Commitment and pursuant to Section 2.2(a) of this Agreement, in respect of
the closing or settlement of a Single-family Mortgage Loan, prior to delivery
and examination of all Collateral Documents for such Mortgage Loan.

 

1.2           Other Definitional Provisions.

 

(a)           Accounting terms not otherwise defined herein
shall have the meanings given the terms under GAAP.

 

(b)           Defined terms may be used in the singular or
the plural, as the context requires.

 

(c)           All references to time of day shall mean the
then applicable time in Houston, Texas, unless expressly provided to the
contrary.

 

15

 

(d)           References in any of
the Loan Documents to any property being pledged to the Agent or any Liens or
security interests being granted to or held by the Agent (or required so to be)
shall mean, respectively, pledged to, granted to or held by Agent for itself as
Lender and as agent for the other Lenders,

 

2.              THE
CREDIT.

 

2.1           The Commitment.

 

(a)           Subject to the terms and conditions of this
Agreement and provided no Default or Event of Default has occurred and is
continuing, each Lender severally and not jointly agrees, from time to time
during the period from the date hereof to and including the Termination Date,
to make Advances to the Company, provided, however, that (1) the sum of the
total aggregate principal amount outstanding at any one time of all such
Advances shall not exceed the Aggregate Commitment Amount, and (2) no Lender’s
portion of the Advances shall exceed such Lender’s Commitment Amount.   Within the Commitment, the Company may
borrow, repay and reborrow.  All
Advances under this Agreement shall constitute a single indebtedness, and all
of the Collateral shall be security for the Notes and for the performance of
all the Obligations of the Company.

 

(b)           Advances shall be used by the Company solely
for the purpose of funding the acquisition or origination of Eligible Mortgage
Loans, as specified in the Advance Request, and none other, and shall be made
at the request of the Company in the manner hereinafter provided in Section
2.2, against the pledge of such Mortgage Loans, and such other collateral as is
set forth in Section 3.1 hereof as Collateral therefor. Advances shall also be
subject to the following restrictions:

 

(1)      No Advance
shall be made against Mortgage Loans which are not Eligible Mortgage Loans.

 

(2)      The
aggregate amount of Wet Settlement Advances outstanding at any one time shall
not exceed the lesser of (i) TWENTY-FOUR MILLION AND NO/100 DOLLARS
($24,000,000.00) or (ii) forty-three percent (43%) of the Aggregate Commitment
Amount.

 

(3)      The
aggregate amount of Advances against Aged Mortgage Loans outstanding at any one
time shall not exceed ONE MILLION AND NO/100 DOLLARS ($1,000,000.00).

 

(4)      The
aggregate amount of Advances against HELOC Mortgage Loans outstanding at any
one time shall not exceed TWO MILLION AND NO/100 DOLLARS ($2,000,000.00).

 

(5)      The
aggregate amount of Advances against Repurchased Mortgage Loans outstanding at
any one time shall not exceed FIVE HUNDRED THOUSAND AND NO/100 DOLLARS
($500,000.00).

 

16

 

(c)           No Advance against an Eligible Mortgage Loan shall exceed
the following amounts: (i) with respect to a Credit “A” Mortgage Loan that is
not a Wamu Mortgage Loan, an amount equal to ninety-eight percent (98%) of the
Collateral Value of such Mortgage Loan determined as of the date is pledged to
the Agent; (ii) with respect to a Wamu Mortgage Loan, an amount equal to one
hundred percent (100%) of the Collateral Value of such Mortgage Loan determined
as of the date it is pledged to the Agent; (iii) with respect to a HELOC Mortgage
Loan, an amount equal to ninety-six percent (96%) of the Collateral Value of
such Mortgage Loan determined as of the date it is pledged to the Agent; and
(iv) with respect to a Repurchased Mortgage Loan, an amount equal to eighty
percent (80%) of the Collateral Value of such Mortgage Loan determined as of
the date it is pledged to the Agent.

 

2.2           Procedures
for Obtaining Advances.

 

(a)           The Company may obtain an Advance hereunder, subject to the
satisfaction of the conditions set forth in Sections 4.1 and 4.2 hereof, upon
compliance with the procedures set forth in this Section 2.2 and in Exhibit “C” attached hereto and made a
part hereof.  Requests for Advances
shall be initiated by the Company (i) by delivering to the Agent, by telecopy,
a completed and signed request for an Advance (an “Advance Request”) in the
form of Exhibit “A”
attached hereto and made a part hereof, or (ii) by using the electronic data
transmission service provided by the Agent and its licensor, MBMS Incorporated,
to transmit to the Agent a request for Advance (“Electronic Request”), which
shall include all information required by Exhibit
“A” through the Warehouse Management System software provided by
the Agent and its licensor, MBMS Incorporated. The Agent shall have the right,
on not less than three (3) Business Days’ prior notice to the Company, to
modify the Advance Request, Electronic Request, or any exhibits hereto to
conform to current legal requirements or Agent practices, and, as so modified,
said Advance Request, Electronic Request or exhibits shall be deemed a part
hereof.  In consideration of the Lenders
permitting the Company to make Electronic Requests for Advances utilizing the
Warehouse Management System software or Advance Requests by telecopy, the
Company covenants and agrees to assume liability for and to protect, indemnify
and save the Lenders and Agent harmless from, any and all liabilities,
obligations, damages, penalties, claims, causes of action, costs, charges and
expenses, including attorneys’ fees and expenses of employees, which may be
imposed, incurred by or asserted against the Lenders or Agent by reason of any
loss, damage or claim howsoever arising or incurred because of, out of or in
connection with (i) any action of any Lender or the Agent pursuant to Electronic
Requests or Advance Requests by telecopy, (ii) the breach of any provisions of
this Agreement by the Company, (iii) the transfer of funds pursuant to such
Electronic Requests or Advance Requests by telecopy, or (iv) the Agent’s or any
Lender’s honoring or failing to honor any Electronic Request or Advance Request
by telecopy for any reason or no reason whatsoever. The Agent and each Lender
are entitled to rely upon and act upon Electronic Requests or Advance Requests
by telecopy, and the Company shall be unconditionally and absolutely estopped
from denying (x) the authenticity and validity of any such transaction so acted
upon by any Lender once such Lender has advanced funds and has deposited or
transferred such funds as requested in any such Electronic Request or Advance
Request by telecopy, and (y) the Company’s liability and responsibility
therefor.

 

17

 

(b)           In the case of any Wet Settlement Advances, the Company shall follow
the procedures and, at or prior to the Lenders’ making of such Wet Settlement
Advance, shall deliver to the Agent or its designee the documents set forth in
Section II of Exhibit “C”
hereto.  In case of Collateral financed
through a Wet Settlement Advance, the Company shall cause all Collateral
Documents to be delivered to the Agent or its designee within five (5) Business
Days after the date of the Wet Settlement Advance relating thereto.

 

(c)           Before funding, the Agent and its designee shall have a reasonable time
to examine such Advance Request and the Collateral Documents to be delivered
prior to such requested Advance, as set forth in the applicable Exhibit hereto,
and may reject such of them as do not meet the requirements of this Agreement
or of the related Purchase Commitment. 
The Advance Request and the Collateral Documents must be received by
Agent no later than 11:00 a.m. Houston, Texas time in order for funding to
occur the same day.

 

(d)           The Agent shall promptly, and in any case not later than 1:00 p.m. on
the date an Advance is to be made, notify each Lender of its receipt of an
Advance Request, the matters specified therein, and of such Lender’s Commitment
Percentage of the requested Advance.  
If all conditions precedent to such Advance have been met, each Lender
shall remit its Commitment Percentage of any Advance requested in an Advance
Request to Agent’s principal office in Houston, Texas, by wire transfer
according to Agent’s wire instructions, in funds that are available for
immediate use by Agent by 4:00 p.m. on the date such Advance is to be made.

 

(e)           Absent contrary written notice from a Lender received by Agent by 2:00
p.m. on the Advance Date, Agent may assume that each Lender has made its
Commitment Percentage of an Advance under an Advance Request available to Agent
on the Advance Date and may, but is not obligated to, make available to Company
a corresponding amount.   If a Lender
fails to make its Commitment Percentage of that Advance available to Agent on
the Advance Date (whether because of that Lender’s default, because that Lender
is not open for business on that Business Day, or otherwise) then Agent may
recover that amount on demand (i) from that Lender, together with interest at
the Federal Funds Rate, during the period from the Advance Date to the date
Agent recovers that amount from that Lender 
-  which payment is deemed to be
that Lender’s Commitment Percentage of that Advance or (ii) if that Lender
fails to pay that amount upon demand, then from Company together with interest
at an annual interest rate equal to the rate applicable to the requested
Advance during the period from the Advance Date to the date Agent recovers that
amount from Company.  If any Lender
fails to fund its Commitment Percentage in any Advance, the other Lenders shall
be entitled, but not obligated, to fund the defaulting Lender’s Commitment
Percentage in such Advance.  Thereafter,
the Commitment Percentage of each Lender shall be adjusted accordingly.  Nothing in these provisions changes or
limits the obligation of each Lender to lend its Commitment Percentage of each
Advance.  Each Lender assumes the credit
risk for amounts lent by Agent pursuant to this Section 2.2(e) from the time
the Advance is made available to or for the Company, and, after Agent has
recovered the amount of interest

 

18

 

provided for in clause (i) above of this
Section 2.2(e), is entitled to interest on such amount lent from such time.

 

(f)            Although no Lender is responsible for the failure of any other Lender
to make its Commitment Percentage of any Advance, that failure does not excuse
any other Lender from making its Commitment Percentage of that Advance.

 

(g)           To make an Advance, the Agent shall credit the Company’s Funding
Account upon compliance by the Company with the terms of this Agreement.

 

2.3         Notes. The Company’s
obligation to pay the principal of, and accrued and unpaid interest on, all
Advances made by the Lenders shall be evidenced by the Notes of the Company in
favor of each Lender. All terms and provisions of the Notes are hereby
incorporated herein.

 

2.4         Interest.

 

(a)           (1)           Except as provided in Section 2.4(c) below,
the unpaid amount of each Advance against Shipped Mortgage Loans that are not
Repurchased Mortgage Loans or Aged Mortgage Loans shall bear interest, from the
date such Mortgage Loans become Shipped Mortgage Loans until the earlier to
occur of (i) such Mortgage Loan ceases to be a Shipped Mortgage Loan or (ii)
such Advance is paid in full, at a rate of interest equal to 150 basis points
(1.50%) per annum over the Monthly Average LIBOR Rate.

 

(2)           Except as provided in Section 2.4(c) below, the unpaid amount of each
Advance against Mortgage Loans that are not Shipped Mortgage Loans, or HELOC
Mortgage Loans, or Repurchased Mortgage Loans, or Aged Mortgage Loans shall
bear interest, from the date of such Advance until paid in full, at a rate of
interest equal to the lesser of (i) the Maximum Rate, or (ii) a floating rate
of interest which is equal to 200 basis points (2.00%) per annum over the
Monthly Average LIBOR Rate.

 

(3)           Except as provided in Section 2.4(c) below, the unpaid amount of each
Advance against Repurchased Mortgage Loans or HELOC Mortgage Loans shall bear
interest, from the date of such Advance until paid in full, at a rate of
interest equal to the lesser of (i) the Maximum Rate, or (ii) a floating rate
of interest which is equal to 300 basis points (3.00%) per annum over the
Monthly Average LIBOR Rate.

 

(4)           Except as provided in Section 2.4(c) below, the unpaid amount of each
Advance outstanding against Aged Mortgage Loans or HELOC Mortgage Loans shall
bear interest, from the date such Mortgage Loans become Aged Mortgage Loans
until such Advance is paid in full, at a rate of interest equal to the lesser
of (i) the Maximum Rate or (ii) a floating rate of interest (“Basic Rate”)
which is equal to 300 basis points (3.00%) per annum over the Monthly Average
LIBOR Rate.

 

19

 

(b)           Interest shall be computed on the basis of a 360-day year and applied
to the actual number of days elapsed in each interest calculation period and
shall be payable monthly in arrears, on the first day of each month, commencing
with the first month following the date of this Agreement, and continuing on
the 1st day of each calendar month thereafter until the Termination Date when
all outstanding and unpaid Advances plus all accrued and unpaid interest shall
be due and payable.

 

(c)           Obligations not paid when due (whether at stated maturity, upon acceleration
following the occurrence of an Event of Default or otherwise) shall bear
interest, from the date due until paid in full, at a rate of interest (“Default
Rate”) at all times equal to the lesser of (i) four percent (4%) per annum over
the Basic Rate; or (ii) the Maximum Rate, said interest to be payable on demand
by Agent.

 

2.5           Principal
Payments.

 

(a)           The outstanding unpaid principal amount of all Advances shall be
payable in full upon Termination Date.

 

(b)           The Company shall have the right to prepay the outstanding Advances in
whole or in part, from time to time, without premium or penalty, subject to the
Company’s obligation to pay the Non-Usage Fee pursuant to Section 2.8 hereof.

 

(c)           The Company shall be obligated to pay to the Agent on behalf of the
Lenders, without the necessity of prior demand or notice from the Agent or any
Lender, and the Company authorizes the Agent on behalf of the Lenders to charge
the Funding Account or any other accounts of the Company (excluding any monies
held by Company in trust for third parties) in Agent’s possession for the
amount of any outstanding Advance against a specific Mortgage Loan upon the
earliest occurrence of any of the following events:

 

(1)           The expiration of ninety (90) days from the date of any Advance for any
Mortgage Loan (excluding Aged Mortgage Loans, HELOC Mortgage Loans, and
Repurchased Mortgage Loans);

 

(2)           The expiration of sixty (60) days from the date of any Advance for any
HELOC Mortgage Loan (excluding Aged Mortgage Loans);

 

(3)           The expiration of one hundred eighty (180) days from the date of any
Advance for any Repurchased Mortgage Loan;

 

(4)           The expiration of thirty (30) days from the date the Mortgage Loan was
delivered to an Investor for examination and purchase, without the purchase
being made, or upon rejection of the Mortgage Loan as unsatisfactory by an
Investor and without such Mortgage Loan being redelivered by such Investor to
the Agent and continuing thereafter to qualify as an Eligible Mortgage Loan
hereunder;

 

20

 

(5)           The expiration of forty-five (45) days from the date Mortgage Loan is
delivered to the certificating custodian acceptable to the Agent for the
issuance of a Mortgage-backed Security;

 

(6)           The expiration of five (5) Business Days from the date a Wet Settlement
Advance was made without receipt of all Collateral Documents relating to such
Mortgage Loan, or such Collateral Documents, upon examination by the Agent, are
found not to be in compliance with the requirements of this Agreement or the
related Purchase Commitment;

 

(7)           The expiration of ten (10) calendar days from the date a Collateral
Document in connection with such Mortgage Loan was delivered to the Company for
correction or completion, without being returned to the Agent, corrected or
completed;

 

(8)           The Mortgage Loan is not or ceases to be an Eligible Mortgage Loan;

 

(9)           The expiration of three (3) Business Days after the date on  which the related Purchase Commitment,
if any, expires, is terminated or otherwise canceled or no longer in full force
and effect and the specific Mortgage Loan was not delivered under the Purchase
Commitment prior to such termination, expiration or cancellation; and

 

(10)         Upon sale of the Mortgage Loan.

 

Upon receipt of such payment by the Agent,
such Mortgage Loans or Mortgage-backed Securities shall be considered to have
been redeemed from pledge, and the Collateral Documents relating thereto which
have not been delivered to the Investor or the pool custodian or pool trustee
shall be released by the Agent to the Company.

 

(d)           With respect to each Aged Mortgage Loan, the
Company shall be obligated to pay to the Agent on behalf of the Lenders without
the necessity of prior demand or notice from Agent or any Lender (and the
Company authorizes the Agent to charge the Funding Account or any other
accounts of the Company [excluding monies held by the Company in trust for
third parties] in Agent’s possession for the payment thereof) the principal
payments in the amounts and on the dates specified below:

 

(1)       On the
date a Pledged Mortgage becomes an Aged Mortgage Loan, a principal payment in
an amount necessary to reduce the outstanding unpaid Advances against such Aged
Mortgage Loan to an amount equal to ninety percent (90%) of the Collateral
Value of such Aged Mortgage Loan as of such date;

 

(2)       Thirty
(30) days following the date a Pledge Mortgage becomes an Aged Mortgage Loan, a
principal payment in an amount necessary to reduce the outstanding unpaid
Advances against such Aged Mortgage Loan to an amount equal to eighty percent
(80%) of the Collateral Value of such Aged Mortgage Loan as of such date;

 

21

 

(3)       Sixty
(60) days following the date a Pledge Mortgage becomes an Aged Mortgage Loan, a
principal payment in an amount necessary to reduce the outstanding unpaid
Advances against such Aged Mortgage Loan to an amount equal to seventy percent
(70%) of the Collateral Value of such Aged Mortgage Loan as of such date;

 

(4)       Ninety
(90) days following the date a Pledge Mortgage becomes an Aged Mortgage Loan,
an amount equal to the balance of the aggregate outstanding unpaid Advances
against such Aged Mortgage Loan.

 

(e)           With respect to each Repurchased Mortgage
Loan that is a Pledged Mortgage, Company shall pay to the Lender a monthly
mandatory principal payment equal to five percent (5%) of the original Advance
made against such Repurchased Mortgage Loan commencing thirty (30) days after
the date of such original Advance against such Repurchased Mortgage Loan and
every thirty (30) days thereafter until one hundred eighty (180) days from the
date of such original Advance against such Repurchased Mortgage Loan when the
entire principal balance of all Advances outstanding against such Repurchased
Mortgage Loan shall be immediately due and payable.

 

2.6           Expiration
of Commitment. 
Unless extended or terminated earlier as permitted hereunder, the
Tranche A Commitment and the Tanche B Commitment shall each expire of its own
term, and without the necessity of action by the Lenders or the Agent, at the
close of business on the Termination Date. 
However, the remainder of this Agreement shall remain in full force and
effect until all amounts due on the Obligations have been paid in full. The
Lenders have not made, and do not hereby make, any commitment to renew, extend,
rearrange or otherwise refinance the outstanding and unpaid principal of the
Notes or accrued interest thereon.  In
the event, however, the Lenders from time to time renew, extend, rearrange,
increase and/or otherwise refinance any portion or all of any Obligation and
any accrued interest thereon at any time, such refinancing shall be evidenced
by appropriate promissory notes in form and substance satisfactory to the
Lenders and, unless otherwise noted or modified at such time or times by the
terms of such promissory note or any agreements executed in connection
therewith, any such promissory notes and refinancing evidenced thereby shall be
governed in all respects by the terms of this Agreement.

 

2.7           Payment
Procedure.

 

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

 

22

 

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

 

2.8           Fees.

 

(a)           In consideration of each Lender’s commitment to make Advances, Company
shall pay to Agent for the ratable account of each Lender in accordance with
their respective Commitment Percentage, a commitment fee  (“Commitment Fee”) determined by applying a
rate of twelve and one-half basis points (0.125%) per annum (based on a 360
day-year and applied to the actual number of days elapsed) on the Aggregate
Commitment Amount commencing from August 1, 2002 through and including the
Termination Date, which Commitment Fee shall be due and payable quarterly in
advance with the first quarterly payment being due on the execution date hereof
and each subsequent quarterly payment being due and payable on the first day of
each November, February, May, and August thereafter.   If the Aggregate Commitment Amount is increased, Company shall
pay to Agent for the account of the Lenders, in accordance with their
respective Commitment Percentage in such increase, an additional commitment fee
of 0.125% per annum on the amount of such increase from the effective date of
such increase through and including the Termination Date, such additional
commitment fee shall be due and payable on the effective date of such increase.

 

(b)           At the end of each month during the term of this Agreement (i.e.,
from its effective date through the Termination Date), the Agent shall
determine average usage of the Commitment by calculating the arithmetic daily
average of the outstanding balance of Advances in that month.   The Agent shall then subtract the average
usage (the “Used Portion”) from the Commitment (the result being called the
“Unused Portion”) and the Company shall pay to the Agent on behalf of the
Lenders in arrears (without duplication of payment), on or before five (5) days
after the later of (a) the end of each month or (b) the Company’s receipt of
the bill for such monthly period, a Non-Usage Fee equal to 0.250% per annum on
the total amount of the Unused Portion of the Commitment for that month, as
compensation to the Lenders for their agreement to make the Commitment
available to the Company during that month and not as compensation for the use,
forbearance or detention of money (i.e., as a “true commitment fee”
under Texas law); provided that such fee shall be waived for any month
if the Used Portion for such month is equal to or greater than fifty percent
(50%) of the Commitment.  Each
calculation by the Agent of the amount of any Non-Usage Fee shall be conclusive
and binding on the Company, absent manifest error.  Upon receipt of any Non-Usage Fee, Agent shall distribute to each
Lender its Commitment Percentage in such Non-Usage Fee pursuant to Section
2.7(b) hereof.

 

23

 

(c)           The Agent shall receive for its own account an agent’s fee
(“Agent’s Fee”) pursuant to the certain agreement of even date herewith among
the Agent and the other Lenders.

 

2.9           Miscellaneous
Charges.  At
the end of each month during the term of this Agreement, the Company shall pay
to the Agent in arrears on or before five (5) days after the later of (a) the
end of each calendar month or (b) the Company’s receipt of the Agent’s bill for
such monthly period, a transaction fee equal to EIGHTEEN AND NO/100 DOLLARS
($18.00) per Pledged Mortgage held by Agent during such month and for which
Agent has not previously received a transaction fee, for the handling and
administration of Advances and Collateral. 
For the purposes hereof, Company shall, at its sole cost and expense,
pay all miscellaneous charges and expenses incurred by the Agent in connection
with the handling and administration of Advances and Collateral, including,
without limitation, all charges for security delivery fees, wiring fees, and
charges for overnight delivery of Collateral to Investors. Miscellaneous
charges are due when incurred, but shall not be delinquent if paid within ten
(10) days after receipt of an invoice or an account analysis statement from the
Agent. No Lender (other than a Lender acting as Agent) shall be entitled to
share or participate in the fees, sums and other amounts due and payable to the
Agent under this Section 2.9, Section 2.8(b), or any other agreement between
the Company or any Lender and Agent relating to an agent’s fee for the handling
and administration of Advances and Collateral and acting as Agent under this
Agreement.

 

2.10         Bailee. Each Lender appoints
Company -  and Company shall act - as
its bailee to (i) hold in trust for such Lender (A) the original recorded copy
of the mortgage, deed of trust, or trust deed securing each Pledged Mortgage,
(B) a mortgagee policy of title insurance (or binding unexpired and
unconditional commitment to issue such insurance if the policy has not yet been
delivered to Company) insuring the Company’s perfected, first priority Lien
created by that mortgage, deed of trust, or trust deed, (C) the original
insurance policies for each Pledged Mortgage, and (D) all other original
documents relating to each Pledged Mortgage, including any promissory notes,
any other loan documents, and supporting documentation, surveys, settlement
statements, closing instructions, and Mortgage-backed Securities, and (ii)
deliver to Agent any of the foregoing items as soon as reasonably practicable
upon Agent’s request.

 

2.11         Increased
Costs; Capital Requirements.   In
the event any applicable law, order, regulation or directive issued by any
governmental or monetary authority, or any change therein or in the
governmental or judicial interpretation or application thereof, or compliance
by any Lender with any request or directive (whether or not having the force of
law) by any governmental or monetary authority:

 

(a)         Does or shall subject any Lender to any tax of any kind whatsoever with
respect to this Agreement or any Advances made hereunder, or change the basis
of taxation on payments to such Lender of principal, fees, interest or any
other amount payable hereunder (except for change in the rate of tax on the
overall gross or net income of such Lender by the jurisdiction in which such
Lender’s principal office is located);

 

(b)         Does or shall impose, modify or hold applicable any reserve, capital
requirement, special deposit, compulsory loan or similar requirement against
assets held by, or deposits or other liabilities in or for the account of,
advances or loans by, or other

 

24

 

credit
extended by, or any other acquisition of funds by, any office of such Lender
which are not otherwise included in the determination of the interest rate as
calculated hereunder;

 

and the result of any of the foregoing is to increase the cost to such
Lender of making, renewing or maintaining any Advance or to reduce any amount
receivable in respect thereof or to reduce the rate of return on the capital of
such Lender or any Person controlling such Lender as it relates to credit
facilities in the nature of that evidenced by this Agreement, then, in any such
case, the Company shall promptly pay necessary to compensate such Lender for
reduced amounts receivable or reduced rate by such Lender with respect to this
Agreement hereunder or such Lender’s obligations becomes entitled to claim any
additional amounts pursuant to this Section, it shall notify the Company
through the Agent of the event by reason of which it has become so entitled and
the Company shall pay such amount within fifteen (15) days thereafter.
Notwithstanding the foregoing, the Company shall not be obligated to pay any
such additional amounts attributable to the period (the “Excluded Period”)
ending ninety (90) days prior to the date the Company receives written notice
of the law, order, regulation, directive, change or request by reason of which
such additional amounts are payable, except to the extent such additional
amounts accrued during the Excluded Period due to the retroactive application
of such law, order, regulation, directive, change or request, in which case the
limitation set forth in this sentence shall not apply. A certificate as to any
additional amount payable pursuant to the foregoing sentence containing the
calculation thereof in reasonable detail submitted by a Lender, through the
Agent, to the Company shall be conclusive in the absence of manifest error. The
obligations of the Company under this Section shall survive the payment of all
other Obligations and the termination of this Agreement.

 

2.12         Restatement.  This Agreement amends and restates the
Existing Agreement in its entirety. All outstanding and unpaid advances under
the Existing Agreement and all other sums owing under the Existing Agreement
shall continue and be deemed Advances due and owing hereunder and evidenced by
the Notes (each Lender’s Note shall evidence its Commitment Percentage in such
Advances). The Notes are given in renewal and extension, but not extinguishment
of the outstanding unpaid balances of those certain promissory notes (“Prior
Notes”) executed by the Company and delivered to each of the Lenders as more
particularly described in the Notes. All liens, security interests, and
assignments securing the obligations of the Company under the Prior Notes and
the Existing Agreement are hereby ratified, confirmed, and brought forward as
security for the Obligations, in addition to and cumulative of all other
security.

 

3.              COLLATERAL.

 

3.1           Grant
of Security Interest.  As
security for the payment of the Notes and for the payment and performance of all
of the Company’s Obligations hereunder, the Company hereby assigns and
transfers all of its rights, titles and interests in and to and grants a
security interest to the Agent for the benefit of the Lenders in the following
described property, whether now owned or hereafter acquired (the “Collateral”):

 

(a)           All Mortgage Loans which from time to time
are delivered or caused to be delivered to the Agent or its designee, come into
the possession, custody or control of the

 

25

 

Agent
for the purpose of assignment or pledge or in respect of which an Advance has
been made by the Agent hereunder, including all Mortgage Notes and Mortgages
evidencing such Mortgage Loans and all Mortgage Loans in respect of which Wet
Settlement Advances have been made by the Lender (the “Pledged Mortgages”).

 

(b)           All Mortgage-backed Securities which are from
time to time delivered or caused to be delivered to, or are otherwise in the
possession of the Agent, or its designee, its agent, bailee or custodian as
assignee or pledged to the Agent, or for such purpose are registered by
book-entry in the name of the Agent (the “Pledged Securities”).

 

(c)           All private mortgage insurance and all
commitments issued by the FHA or VA to insure or guarantee any Mortgage Loans
included in the Pledged Mortgages; all guaranties related to Pledged
Securities; all Purchase Commitments held by the Company covering the Pledged
Mortgages or the Pledged Securities and all proceeds resulting from the sale thereof
to Investors pursuant thereto; all personal property, contract rights,
servicing and servicing fees and income or other proceeds, amounts and payments
payable to the Company as compensation or reimbursement, accounts and general
intangibles of whatsoever kind relating to the Pledged Mortgages, the Pledged
Securities, and all other documents or instruments relating to the Pledged
Mortgages, including, without limitation, any interest of the Company in any
fire, casualty or hazard insurance policies and any awards made by any public
body or decreed by any court of competent jurisdiction for a taking or for
degradation of value in any eminent domain proceeding as the same relate to the
Pledged Mortgages.

 

(d)           All right, title and interest of the Company
in and to all escrow accounts, documents, instruments, files, surveys,
certificates, correspondence, appraisals, computer programs, tapes, discs,
cards, accounting records (including all information, records, tapes, data,
programs, discs and cards necessary or helpful in the administration or
servicing of the foregoing Collateral) and other information and data of the
Company relating to the foregoing Collateral.

 

(e)           All now existing or hereafter acquired cash
delivered to or otherwise in the possession of the Agent or any Lender or its
agent, bailee or custodian or designated on the books and records of the
Company as assigned and pledged to the Agent for the benefit of the Lenders.

 

(f)            All money, property, deposit accounts,
accounts, securities, documents, chattel paper, claims, demands, instruments,
items or deposits of the Company now held or hereafter coming within Agent’s
custody or control, including, without limitation, the Funding Account.

 

(g)           All Accounts, Chattel Paper, Instruments,
General Intangibles, Certificated Securities, Uncertificated Securities, and
Investment Property, as those terms are defined in the Texas Uniform Commercial
Code, arising from or relating to any of the foregoing Collateral.

 

26

 

(h)           All cash and non-cash proceeds of the
foregoing Collateral, including all dividends, distributions and other rights
in connection with, and all additions to, modifications of and replacements
for, the foregoing Collateral, and all products and proceeds of the foregoing
Collateral, together with whatever is receivable or received when the foregoing
Collateral or proceeds thereof are sold, collected, exchanged or otherwise
disposed of, whether such disposition is voluntary or involuntary, including,
without limitation, all rights to payment with respect to any cause of action
affecting or relating to the foregoing Collateral or proceeds thereof.

 

3.2          Security Interest in Mortgage-backed Securities.  The
Company’s ability to convert Mortgage Loans that are within the Collateral to
Mortgage-backed Securities are subject to the following conditions:

 

(a)           Pledged Mortgages that are to be transferred
to a pool custodian in connection with the issuance of Mortgage-backed
Securities, shall be released from the security interest granted hereunder only
against payment to the Agent of the amount due in connection with such Pledged
Mortgages as determined in accordance with Section 3.5 of this Agreement or
against the issuance of such Mortgage-backed Securities and the continuation of
the Agent’s first priority, perfected security interest in such Mortgage-backed
Securities and the proceeds thereof until payment due the Lenders, in respect
of said Pledged Mortgages is made to the Agent on behalf of the Lenders.

 

(b)           In the case of Mortgage-backed Securities
created from Pledged Mortgages, the Agent, for the benefit of the Lenders,
shall have the exclusive right to the possession of the Mortgage-backed
Securities or, if the Mortgage-backed Securities are not to be issued in
certificated form, shall have the right to have the book entries for the
Mortgage-backed Securities issued in the Agent’s name or the name or names of
its designees, in each case, for the benefit of the Lenders. Agent shall cause
delivery of the Mortgage-backed Securities to be made to the Investor or the
book entries registered in the name of the Investor or the Investor’s designee
only against payment therefor.  The
Company acknowledges that the Agent may enter into one or more standing
arrangements with other financial institutions for the issuance of
Mortgage-backed Securities in book entry form in the name of such other
financial institutions, as agent for the Agent, and the Company agrees upon
request of the Agent, to execute and deliver to such other financial
institutions the Company’s written concurrence in any such standing
arrangements.

 

3.3         Delivery
of Collateral Documents.  The
Agent or its designee exclusively shall deliver Pledged Mortgages or Pledged
Securities to (a) an Investor that has issued a Purchase Commitment with
respect thereto for its examination and purchase, or (b) an Approved Custodian
for purposes of examination or delivery in connection with the issuance of
Mortgage-backed Securities.  In such
cases where the Agent must deliver documents to an Investor or Approved
Custodian, the Agent must receive signed shipping instructions (in the form of Exhibit “D” attached hereto), no later
than 2:00 p.m. Houston, Texas time one (1) Business Day prior to the expiration
of the appended Purchase Commitment, in addition to any other documents listed
in Section III of Exhibit “C”
in respect of the issuance of Mortgage-backed Securities. If shipping
instructions are received by Agent before 2:00 p.m. Houston, Texas time

 

27

 

of any Business Day, Agent will ship the documents together with the
Bailee Letter (in form of Exhibit “K”)
to the Investor or Approved Custodian on the same Business Day, otherwise Agent
will ship the documents the next Business Day following receipt of shipping
instructions. In any case in which an Advance has been made hereunder against
Pledged Mortgages, based on the existence of a Purchase Commitment covering
such Pledged Mortgages, the Company agrees that such Pledged Mortgages will not
be placed in any mortgage pool other than an Eligible Mortgage Pool, unless
such Pledged Mortgages have been redeemed from pledge as permitted hereunder or
other arrangements, satisfactory to the Agent in its sole discretion, have been
made for the redemption of such Pledged Mortgages from pledge hereunder. The
Agent may deliver any document relating to the Collateral to the Company for
correction or completion against a trust receipt in the form of Exhibit “E”  attached hereto
executed by the Company. The Company hereby represents and warrants to and
agrees with the Agent that any request by the Company for release of the
Collateral consisting of or relating to Mortgage Loans to the Company shall be
solely for the purposes of correcting clerical or non-substantial documentation
problems in preparation for returning such Collateral to the Agent for ultimate
sale or exchange and the aggregate Collateral Value of the Collateral released
to the Company pursuant to this Section 3.3 will not exceed FIVE HUNDRED
THOUSAND AND NO/100 DOLLARS ($500,000.00); the Company shall request such
release in compliance with all of the terms and conditions of such release set
forth herein; and the Company will return to the Agent such documentation
released to the Company pursuant to this Section 3.3 within ten (10) calendar
days after such delivery.

 

3.4         Delivery of Additional Collateral; Mandatory Prepayments.  At
any time that the aggregate sum of the Unit Collateral Values of all Pledged
Mortgages is less than the aggregate amount of the Advances then outstanding
hereunder, the Agent may request, and the Company shall immediately after
Notice by the Agent (a) deliver to the Agent or its designee for pledge
hereunder additional Mortgage Loans and/or cash, in aggregate amounts
sufficient to cover the difference between the aggregate Unit Collateral Values
of all Pledged Mortgages and the aggregate amount of Advances outstanding
hereunder, or (b) repay the Advances in an amount sufficient to reduce the
aggregate balance thereof outstanding to an amount equal to or below the
aggregate Unit Collateral Values of all Pledged Mortgages. If at any time or
from time to time any of the limitations of Section 2.1(b) hereof are exceeded,
the Company shall immediately pay to the Agent on behalf of the Lenders the
amount of such excess for application to the principal balance of the
Notes.  If on July 30, 2003 the
aggregate amount of Advances then outstanding exceeds the new Aggregate
Commitment Amount of $28,000,000.00, the Company shall immediately pay to the
Agent on behalf of the Lenders the amount of such excess for application to the
principal balance of the Note.

 

3.5         Right
of Redemption from Pledge.  So
long as no Event of Default has occurred, the Company may redeem a Mortgage
Loan or Mortgage-backed Security, by notifying the Agent of its intention to
redeem such Mortgage Loan or Mortgage-backed Security, from pledge and by
paying, or causing an Investor to pay, to the Agent, for application to prepayment
of the principal balance of the Notes as determined by the Agent in its
reasonable discretion, an amount (the “Redemption Amount”) equal to the
aggregate amount of the outstanding, unpaid Advances made with respect to or
relating to such Mortgage Loan or Mortgage-backed Security.

 

28

 

3.6           Collection
and Servicing Rights.  So
long as no Event of Default shall have occurred, the Company shall have a
revocable and nontransferable license to service and receive and collect
directly all sums payable to the Company in respect of the Collateral other
than proceeds of any Purchase Commitment or proceeds of the sale of any
Collateral. Following the occurrence of any Event of Default, the Agent or its
designee may revoke such license by notice to the Company (or its successor,
trustee, or receiver) whereupon the Company’s rights to so service the
Collateral shall terminate. Agent or its designee shall thereafter be entitled
to service and receive and collect all sums payable to the Company in respect
of the Collateral, and in such case (a) the Agent or its designee in its
discretion may, in its own name or in the name of the Company or otherwise,
demand, sue for, collect or receive any money or property at any time payable
or receivable on account of or in exchange for any of the Collateral, but shall
be under no obligation to do so, (b) the Company shall, if the Agent so
requests, forthwith deliver the credit files and the servicing files for the
Collateral to the Agent or its designee and pay to the Agent, on behalf of the
Lenders, at its principal office all amounts thereafter received by the Company
upon or in respect of any of the Collateral, advising the Agent as to the
source of such funds, and (c) all amounts so received and collected by the
Agent shall be held by it for the benefit of the Lenders as part of the
Collateral.

 

3.7          Return
or Release of Collateral at End of Commitment.  If
(a) the Commitment shall have expired or been terminated, and (b) no Advances,
interest or other Obligations evidenced by the Loan Documents or due under this
Agreement shall be outstanding and unpaid, the Agent shall deliver or release
all Collateral in its possession to the Company. The receipt of the Company for
any Collateral released or delivered to the Company pursuant to any provision
of this Agreement shall be a complete and full acquittance for the Collateral
so returned, and the Agent and the Lenders shall thereafter be discharged from
any liability or responsibility therefor.

 

4.              CONDITIONS PRECEDENT.

 

4.1           Initial Advance. The obligation of the Lenders to make any Advance under this
Agreement is subject to the satisfaction, in the sole discretion of the Agent,
on or before the date thereof, of the following conditions precedent:

 

(a)           The Agent shall have received the following,
all of which must be satisfactory in form and content to the Agent, in its sole
discretion:

 

(1)           The Loan Documents dated as of the date
hereof duly executed by the Company;

 

(2)           Certified copies of the Company’s articles of
incorporation and bylaws and certificates of good standing dated no less
recently than ninety (90) days prior to the date of this Agreement and a
certification from the taxing authority of the state of incorporation stating
that the Company is in good standing with said taxing authority;

 

(3)           A certificate of corporate resolutions by the
corporate secretary of the Company in the form of Exhibit “J” attached hereto certifying the resolutions
authorizing the execution, delivery and performance of this Agreement and the

 

29

 

other
Loan Documents, and all other instruments or documents to be delivered by the
Company pursuant to this Agreement;

 

(4)           Financial statements of the Company (and its
Subsidiaries, on a consolidated basis) containing a balance sheet as of
December 31, 2001 (the “Statement Date”) and related statements of income,
changes in stockholders’ equity and cash flows for the period ended on the
Statement Date and a balance sheet as of July 31, 2002 (“Interim Date”) and
related statement of income for the period ended on the Interim Date, all
prepared in accordance with GAAP applied on a basis consistent with prior
periods and in the case of the statements as of the Statement Date, audited by
independent certified public accountants of recognized standing acceptable to
the Agent, together with an Officer Certificate prepared as of the Interim Date
and executed by the president or chief financial officer of the Company;

 

(5)           A favorable written opinion of counsel to the
Company, dated as of the Closing Date in form and substance satisfactory to the
Agent, addressed to the Agent and the Lenders

 

(6)           A tax, lien and judgment search of the
appropriate public records for the Company, including a search of Uniform
Commercial Code financing statements, which search shall not have disclosed the
existence of any prior Lien on the Collateral other than in favor of the Agent
or as permitted hereunder; and

 

4.2           Each Advance.
The obligation of the Lenders to make any Advance under this Agreement is
subject to the satisfaction, in the sole discretion of the Agent, as of the
date of each such Advance, of the following additional conditions precedent:

 

(a)           In
connection with an Advance, the Company shall have delivered to the Agent the
Advance Request or the Electronic Request, Collateral Documents, and documents
required under and shall have satisfied the procedures set forth in Section 2.2
and Exhibit “C”. All
items delivered to the Agent or its designee shall be satisfactory to the Agent
in form and content, and the Agent may reject such of them as do not meet the
requirements of this Agreement or of the related Purchase Commitment.

 

(b)           The
representations and warranties of the Company contained in Article 5 hereof
shall be accurate and complete in all material respects as if made on and as of
the date of each Advance.

 

(c)           The
Company shall have performed all agreements to be performed by it hereunder,
including without limitation, the payment of all Non-Usage Fees when due
hereunder, and, as of the date of the Advance Request, and after giving effect
to the requested Advance, there shall exist no Default or Event of Default
hereunder.

 

(d)           The
Company shall not have incurred any material liabilities, direct or contingent,
except as approved by Agent in writing or permitted by Section 7.18, since the
dates of the Company’s most recent financial statements theretofore delivered
to the Agent.

 

30

 

(e)        Such
additional documents, instruments, and information as Agent or its legal
counsel may reasonably require, including, without limitation, all documents,
instruments and information required pursuant to Section 4.1 of this Agreement.

 

Acceptance of the proceeds of the requested Advance by the Company
shall be deemed a representation by the Company that all conditions set forth
in this Article 4 shall have been satisfied as of the date of such Advance.

 

5.              REPRESENTATIONS AND WARRANTIES.

 

The Company hereby represents and warrants to
the Agent and the Lenders, as of the date of this Agreement and (unless
otherwise notified in writing by the Company and Agent, in its sole discretion,
approves in writing) as of the date of each Advance Request and the making of
each Advance, that:

 

5.1          Organization; Good Standing; Subsidiaries.  The
Company and each Subsidiary of the Company is a corporation duly organized,
validly existing and in good standing under the laws of the jurisdiction of its
incorporation, has the full legal power and authority to own its property and
to carry on its business as currently conducted and is duly qualified as a
foreign corporation to do business and is in good standing in each jurisdiction
in which the transaction of its business makes such qualification necessary,
except in jurisdictions, if any, where a failure to be in good standing has no
material adverse effect on the business, operations, assets or financial
condition of the Company or any such Subsidiary. For the purposes hereof, good
standing shall include qualification for any and all licenses and payment of
any and all taxes required in the jurisdiction of its incorporation and in each
jurisdiction in which the Company transacts business.  The Company has no Subsidiaries except as set forth on Exhibit “G” hereto. Exhibit “G” sets forth with respect to
each such Subsidiary, its name, address, place of incorporation, each state in
which it is qualified as a foreign corporation, and the percentage ownership of
the Company in such Subsidiary.

 

5.2          Authorization
and Enforceability.  The
Company has all requisite corporate power and authority to execute, deliver,
create, issue, comply and perform this Agreement, the Notes and all other Loan
Documents to which the Company is party and to make the borrowings
hereunder.  The execution, delivery and
performance by the Company of this Agreement, the Notes and all other Loan
Documents to which the Company is party and the making of the borrowings
hereunder and thereunder, have been duly and validly authorized by all
necessary corporate action on the part of the Company (none of which actions
has been modified or rescinded, and all of which actions are in full force and
effect) and do not and will not conflict with or violate any provision of law
or of the articles of incorporation or by-laws of the Company, conflict with or
result in a breach of or constitute a default or require any consent under any
contracts to which Company is a party, or result in the creation of any Lien
upon any property or assets of the Company other than the Lien on the
Collateral granted hereunder, or result in or require the acceleration of any
Indebtedness of the Company pursuant to any agreement, instrument or indenture
to which the Company is a party or by which the Company or its property may be
bound or affected.  This Agreement, the
Notes and all other Loan Documents contemplated hereby or thereby constitute
legal, valid, and binding obligations of the Company, enforceable in accordance
with their respective terms, except as limited by

 

31

 

bankruptcy, insolvency or other such laws affecting the enforcement of
creditors’ rights generally.

 

5.3           Financial
Condition.  The
balance sheet of the Company provided to Agent pursuant to Section 4.1(a)(5)
hereof (and if applicable, its Subsidiaries, on a consolidating and
consolidated basis) as at the Statement Date, and the related statements of
income, changes in stockholders’ equity, and cash flows for the fiscal year
ended on the Statement Date, heretofore furnished to the Agent, fairly present
the financial condition of the Company and its Subsidiaries as at the Statement
Date and the Interim Date and the results of its and their operations for the fiscal
period ended on the Statement Date and the Interim Date.   The Company had, on the Statement Date and
the Interim Date, no known material liabilities, direct or indirect, fixed or
contingent, matured or unmatured, or liabilities for taxes, long-term leases or
unusual forward or long-term commitments not disclosed by, or reserved against
in, said balance sheet and related statements, and at the present time there
are no material unrealized or anticipated losses from any loans, advances or
other commitments of the Company except as heretofore disclosed to the Agent in
writing.  Said financial statements were
prepared in accordance with GAAP applied on a consistent basis throughout the
periods involved.   Since the Interim
Date, there has been no material adverse change in the business, operations,
assets or financial condition of the Company or its Subsidiaries, nor is the
Company aware of any state of facts particular to the Company which (with or
without notice or lapse of time or both) would or could result in any such
material adverse change.

 

5.4         Litigation.
Except as disclosed on Exhibit “H”,
there are no actions, claims, suits or proceedings pending, or to the knowledge
of the Company, threatened or reasonably anticipated against or affecting the
Company or any Subsidiary of the Company in any court or before any arbitrator
or before any government commission, board, bureau or other administrative
agency which, if adversely determined, may reasonably be expected to result in
any material and adverse change in the business, operations, assets or
financial condition of the Company or any of Company’s Subsidiaries, as a
whole.

 

5.5         Compliance
with Laws.  To
the knowledge of Company, neither the Company nor any Subsidiary of the Company
is in violation of any provision of any law, or of any judgment, award, rule,
regulation, order, decree, writ or injunction of any court or public regulatory
body or authority which might have a material adverse effect on the business,
operations, assets or financial condition of the Company or any of Company’s
Subsidiaries, as a whole.

 

5.6         Regulation U.
The Company is not engaged principally, or as one of its important activities,
in the business of extending credit for the purpose of purchasing or carrying
Margin Stock, and no part of the proceeds of any Advances made hereunder will
be used to purchase or carry any Margin Stock or to extend credit to others for
the purpose of purchasing or carrying any Margin Stock.

 

5.7         Investment
Company Act. Neither the Company nor any of its
Subsidiaries is an “investment company” or controlled by an “investment
company” within the meaning of the Investment Company Act of 1940, as amended.

 

32

 

5.8           Agreements.  Neither the Company nor any Subsidiary of
the Company is a party to any agreement, instrument or indenture, or subject to
any restriction, materially and adversely affecting its business, operations,
assets or financial condition, except as disclosed in the financial statements described
in Section 5.3 hereof.  The Company and
each Subsidiary of the Company are not in default in the performance,
observance or fulfillment of any of the obligations, covenants or conditions
contained in any agreement, instrument, or indenture which default could have a
material adverse effect on the business, operations, properties or financial
condition of the Company as a whole. No holder of any Indebtedness of the
Company or of any of its Subsidiaries has given notice of any alleged default
thereunder or, if given, the same has been cured or will be cured by Company
within the cure period provided therein, and no liquidation or dissolution of
the Company or any of its Subsidiaries and no receivership, insolvency,
bankruptcy, reorganization or other similar proceedings relative to the Company
or any of its Subsidiaries or any of their respective properties is pending, or
to the knowledge of the Company, threatened.

 

5.9           Title to
Properties. The Company and each Subsidiary of the
Company has good, valid, insurable (in the case of real property) and
marketable title to all of its properties and assets (whether real or personal,
tangible or intangible) reflected on the financial statements described in
Section 5.3 hereof, and all such properties and assets are free and clear of
all Liens except as disclosed in such financial statements (other than
Collateral which shall be free and clear of all Liens other than those held by
Agent), as approved by Agent in writing, or permitted pursuant to this Agreement.

 

5.10          ERISA.  All plans (“Plans”) of a type described in
Section 3(3) of ERISA in respect of which the Company or any Subsidiary of the
Company is an “Employer,” as defined in Section 3(5) of ERISA, are in
substantial compliance with ERISA, and none of such Plans is insolvent or in
reorganization, has an accumulated or waived funding deficiency within the
meaning of Section 412 of the Internal Revenue Code, and neither the Company
nor any Subsidiary of the Company has incurred any material liability (including
any material contingent liability) to or on account of any such Plan pursuant
to Sections 4062, 4063, 4064, 4201 or 4204 of ERISA; and no proceedings have
been instituted to terminate any such Plan, and no condition exists which
presents a material risk to the Company or a Subsidiary of the Company of
incurring a liability to or on account of any such Plan pursuant to any of the
foregoing Sections of ERISA. No Plan or trust forming a part thereof has been
terminated since December 1, 1974.

 

5.11         Eligibility.
The Company has all requisite corporate power and authority and all necessary
licenses, permits, franchises and other authorizations to own and operate its
property and to carry on its business as now conducted. If approved now or
hereafter as a lender or seller/servicer for any one or more of the
governmental agencies as set forth below, the Company will remain at all times
approved and qualified and in good standing and meet all requirements
applicable to such status:

 

(a)           FNMA
approved seller/servicer of Mortgage Loans, eligible to originate, purchase,
hold, sell, and service Mortgage Loans to be sold to FNMA.

 

(b)           FHLMC
approved seller/servicer of Mortgage Loans, eligible to originate, purchase,
hold, sell, and service Mortgage Loans to be sold to FHLMC.

 

33

 

(c)           GNMA
approved seller/servicer of Mortgage Loans, eligible to originate, purchase,
hold, sell, and service Mortgage Loans to be sold to GNMA.

 

(d)           HUD
approved lender, eligible to originate, purchase, hold, sell and service
FHA-insured Mortgage Loans.

 

(e)           VA
lender in good standing under the VA loan guarantee program eligible to
originate, purchase, hold, sell, and service VA-guaranteed Mortgage Loans.

 

(f)            A
lender in good standing with any Investor.

 

5.12         Special Representations Concerning Collateral.  The
Company hereby represents and warrants to the Agent and each Lender, as of the
date of this Agreement and as of the date of each Advance, that:

 

(a)           The
Company is the legal and equitable owner and holder, free and clear of all
Liens (other than Liens granted hereunder), of the Pledged Mortgages and the
Pledged Securities.  All Pledged
Mortgages, Pledged Securities, and Purchase Commitments have been duly authorized and validly granted or issued to the Company, and
all of the foregoing items of Collateral comply with all of the requirements of
this Agreement, and have been validly pledged or assigned to the Agent for the
benefit of the Lenders, subject to no other Liens.

 

(b)           The
Company has, and will continue to have, the full right, power and authority to
pledge the Collateral pledged and to be pledged by it hereunder.

 

(c)           Any
Mortgage Loan and related documents included in the Pledged Mortgages (1) has
been duly executed and delivered by the parties thereto at a closing held not
more than twenty-five (25) days prior to such date except for Repurchased
Mortgage Loans; (2) has been made in compliance with all requirements of the
Real Estate Settlement Procedures Act, Equal Credit Opportunity Act, the
federal Truth-In-Lending Act, the Financial Institutions Reform, Recovery and
Enforcement Act, and all other applicable laws and regulations; (3) is valid
and enforceable in accordance with its terms, without defense or offset; (4) has
not been modified or amended except in writing, which writing is part of the
Collateral Documents, nor any requirements thereof waived; and (5) complies
with the terms of this Agreement and, if applicable, with the related Purchase
Commitment held by the Company.  Each
Mortgage Loan has been fully advanced in the face amount thereof and each First
Mortgage creates a Lien on the premises described therein; each Second Mortgage
is a second Lien on the premises described therein, and each Mortgage Loan has or
will have a title insurance policy, in American Land Title Association form or
equivalent thereof, from a recognized title insurance company, insuring the
priority of the Lien of the Mortgage and meeting the usual requirements of
Investor purchasing such Mortgage Loans.

 

(d)           Except
for Repurchased Mortgage Loans, no monetary default, nor, to the knowledge of
the Company, any event which, with notice or lapse of time or both, would
become a default, has occurred and is continuing under any Mortgage Loan included
in the Pledged Mortgages; provided, however, that, with respect to Pledged
Mortgages

 

34

 

which have already been pledged as Collateral
hereunder, if any such default or event has occurred, the Company will promptly
notify the Agent and the same shall not have continued for more than sixty (60)
days.

 

(e)           The
Company has complied with all laws, rules and regulations in respect of the FHA
insurance or VA guarantee of each Mortgage Loan included in the Pledged
Mortgages designated by the Company as an FHA insured or VA guaranteed Mortgage
Loans, and such insurance or guarantee is in full force and effect. All such
FHA insured and VA guaranteed Mortgage Loans comply in all respects with all
applicable requirements for purchase under the FNMA standard form of selling
contract for FHA insured and VA guaranteed loans and any supplement thereto
then in effect.

 

(f)            All
fire and casualty policies covering Mortgaged Property encumbered by a Pledged
Mortgage (1) name the Company and its successors and assigns as the insured
under a standard mortgagee clause, (2) are and will continue to be in full
force and effect, and (3) afford and will continue to afford insurance against
fire and such other risks as are usually insured against in the broad form of
extended coverage insurance from time to time available, as well as insurance
against flood hazards if the same is required by FHA or VA.

 

(g)           Pledged
Mortgages encumbering Mortgaged Property located in a special flood hazard area
designated as such by the Secretary of HUD are and shall continue to be covered
by special flood insurance under the National Flood Insurance Program.

 

(h)           Each
FHA insured Mortgage Loan pledged hereunder meets all applicable governmental
requirements for such insurance. Each Mortgage Loan, against which an Advance
is made on the basis of a Purchase Commitment meets all requirements of such
Purchase Commitment. The Company shall assure that Mortgage Loans pledged
pursuant to this Agreement and intended to be used in the formation of
Mortgage-backed Securities shall comply, or prior to the formation of any such
Mortgage-backed Security, shall comply with the requirements of the
governmental instrumentality, department or agency guaranteeing such
Mortgage-backed Security.

 

(i)            For
Pledged Mortgages which will be used to secure GNMA Mortgage-backed Securities,
the Company has received from GNMA a Confirmation Notice or Confirmation
Notices for Request Additional Commitment Authority and for Request Pool
Numbers, and there remains available thereunder a commitment on the part of
GNMA sufficient to permit the issuance of GNMA Mortgage-backed Securities in an
amount at least equal to the amount of such Pledged Mortgages designated by the
Company as the Mortgage Loans to be used to secure such GNMA Mortgage-backed
Securities; each such Confirmation Notice is in full force and effect; each of
such Pledged Mortgages has been assigned by the Company to one of such Pool
Numbers and a portion of the available GNMA Commitment has been allocated
thereto by the Company, in an amount at least equal to the principal amount of
each Mortgage Note secured by such Pledged Mortgages; and each such assignment
and allocation has been reflected in the books and records of the Company.

 

35

 

(j)            Each
Pledged Mortgage in excess of TWO HUNDRED FIFTY THOUSAND AND NO/100 DOLLARS
($250,000.00) is supported by an appraisal that meets the appraisal
requirements of FNMA or FHLMC (in the case of residential Mortgaged Property),
or the Office of Thrift Supervision for the type of Mortgaged Property securing
that Pledged Mortgage; or, alternatively, such Pledged Mortgage is eligible for
purchase or is guaranteed or insured by a U.S. Government agency or a U.S.
Government sponsored enterprise.

 

5.13         RICO.  
The Company is not in violation of any laws, statutes or regulations,
including, without limitation, RICO, which contain provisions which could
potentially override Agent’s security interest in the Collateral.

 

5.14         Proper Names.  The
Company does not operate in any jurisdiction under a trade name, division,
division name or name other than those names set forth on Exhibit “I” attached hereto and all
such names included on Exhibit “I”
are utilized by the Company only in the jurisdictions listed therein.

 

5.15         Direct Benefit From Loans.  The Company has received, or,
upon the execution and funding thereof, will receive (a) direct and indirect
benefit from the making and execution of this Agreement and the other Loan
Documents to which it is a party, and (b) fair and independent consideration
for the entry into, and performance of, this Agreement and the other Loan
Documents to which it is a party. 
Contemporaneously with the disbursements of each Advance by the Lenders
to the Company, all such proceeds will be used to finance the origination or
purchase of Eligible Mortgage Loans.

 

5.16         Loan Documents Do Not Violate Other Documents.  
Neither the execution and delivery by the Company of this Agreement or
any other Loan Document to which it is a party nor the consummation of the
transactions herein and therein contemplated, nor the performance of, or
compliance with, the terms and provisions hereof and thereof, does or will
contravene, breach or conflict with any provision of either of its articles of
incorporation or by-laws, or any applicable law, statute, rule or regulation or
any judgment, decree, writ, injunction, franchise, order or permit applicable
to the Company or its assets or properties, or does or will conflict or be
inconsistent with, or does or will result in any breach or default of, any of
the terms, covenants, conditions or provisions of, or constitute a default
under, or result in the creation or imposition of any Lien upon any of the
property or assets of the Company pursuant to the terms of any indenture,
mortgage, deed of trust, loan agreement, or other instrument to which the
Company is a party or by which the Company or any of its property may be bound,
the contravention, conflict, inconsistency, breach or default of which will
have a materially adverse effect on the Company’s condition, financial or
otherwise, or affect its ability to perform, promptly and fully, its
obligations hereunder or under any of the other Loan Documents.

 

5.17         Consents Not Required.   Except for those consents
that have already been obtained and delivered to Agent or required as a
condition to any Advance hereunder, no consent of any Person and no consent,
license, permit, approval, or authorization of, exemption by, or registration
or declaration with, any Tribunal is required in connection with the execution,
delivery, performance, validity, or enforceability of this Agreement or any of
the Loan Documents by the Company.

 

36

 

5.18         Material Fact Representations.    Neither the Loan Documents
nor any other agreement, document, certificate, or written statement furnished
to the Agent or any Lender by or on behalf of the Company in connection with
the transactions contemplated in any of the Loan Documents contains any untrue
statement of a material adverse fact. 
There are no material adverse facts or conditions relating to the making
of the Commitment, any of the Collateral, and/or the financial condition and
business of the Company known to the Company which have not been fully
disclosed, in writing, to the Agent and the Lenders, it being understood that
this representation is made as of, and shall be limited to the date of this
Agreement.  All writings heretofore or
hereafter exhibited or delivered to the Agent or any Lender by or on behalf of
the Company are and will be genuine and what they purport to be.

 

5.19         Place of Business.     The principal place of
business of the Company is 6070 Parkland Boulevard, Mayfield Heights, Ohio
44124 and the chief executive office of the Company and the office where it
keeps its financial books and records relating to its property and all
contracts relating thereto and all accounts arising therefrom is located at the
address set forth for the Company in Section 9 hereof.

 

5.20         Use of Proceeds; Business Loans.   The Company will use the
proceeds of the Advances made pursuant to the Commitment solely as follows, and
for no other purpose: finance the origination and purchase of Eligible Mortgage
Loans.   All loans evidenced by the Note
are and shall be “business loans”, as such term is used in the Depository
Institutions Deregulation and Monetary Control Act of 1980, as amended, and
such loans are for business or commercial purposes and not primarily for
personal, family, household or agricultural use, as such terms are used or
defined in Texas Revised Civil Statutes, Texas Finance Code, Regulation Z
promulgated by the Board of Governors of the Federal Reserve System, and Titles
I and V of the Consumer Credit Protection Act.   Section 346 of the Texas Finance Code which regulates revolving
loans and revolving triparty accounts shall not apply to this Agreement.

 

5.21         No Undisclosed Liabilities.    Other than as approved by
Agent, in writing or permitted in Section 7.18 hereof, the Company does not
have any liabilities or Indebtedness, direct or contingent, except for
liabilities or Indebtedness which, in the aggregate, do not exceed TWENTY-FIVE
THOUSAND AND NO/100 DOLLARS ($25,000.00).

 

5.22         Tax Returns and Payments.   All federal, state and local
income, excise, property and other tax returns required to be filed with
respect to Company’s operations and those of its Subsidiaries in any
jurisdiction have been filed on or before the due date thereof (plus any
applicable extensions); all such returns are true and correct; all taxes,
assessments, fees and other governmental charges upon the Company, and
Company’s Subsidiaries and upon its property, income or franchises, which are
due and payable have been paid, including, without limitation, all FICA
payments and withholding taxes, if appropriate, other than those which are
being contested in good faith by appropriate proceedings, diligently pursued
and as to which the Company has established adequate reserves determined in
accordance with GAAP, consistently applied. The amounts reserved, as a
liability for income and other taxes payable, in the financial statements
described in Section 5.3 hereof are sufficient for payment of all unpaid
federal, state and local income, excise, property and other taxes, whether or
not disputed, of the Company and its Subsidiaries, accrued for or applicable to
the period and on the dates of such financial statements and all years and periods
prior thereto and for which the Company, and Company’s

 

37

 

Subsidiaries may be liable
in their own right or as transferee of the assets of, or as successor to, any
other Person.

 

5.23         Subsidiaries.   The Company has not issued, and does not have
outstanding, any warrants, options, rights or other obligations to issue or
purchase any shares of its capital stock or other securities.  The outstanding shares of capital stock of
the Company have been duly authorized and validly issued and are fully paid and
nonassessable.

 

5.24         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.             AFFIRMATIVE COVENANTS.

 

The Company hereby covenants and agrees with the Agent and the Lenders
that, so long as the Commitment is outstanding or there remain any Obligations
of the Company to be paid or performed under this Agreement or under any other
Loan Document, the Company shall:

 

6.1           Payment of Notes. Punctually pay or cause to be paid the principal of, interest on and
all other amounts payable hereunder and under the Notes in accordance with the
terms thereof.

 

6.2           Financial Statements and Other Reports.  
Deliver or cause to be delivered to the Agent:

 

(a)           As
soon as available and in any event within thirty (30) days after the end of
each calendar month, statements of income and changes in stockholders’ equity
and cash flow of the Company and, if applicable, Company’s Subsidiaries, on a
consolidated and consolidating basis for the immediately preceding month, and
related balance sheet as at the end of the immediately preceding month, all in
reasonable detail, prepared in accordance with GAAP applied on a consistent
basis, and certified as to the fairness of presentation by the president and
chief financial officer of the Company, subject, however, to year-end audit
adjustments.

 

(b)           As
soon as available and in any event within ninety (90) days after the close of
each fiscal year: statements of income, changes in stockholders’ equity and
cash flows of the Company, and, if applicable, Company’s Subsidiaries, on a
consolidated and consolidating basis for such year, the related balance sheet
as at the end of such year (setting forth in comparative form the corresponding
figures for the preceding fiscal year), all in reasonable detail, prepared in
accordance with GAAP applied on a consistent basis throughout the periods
involved, and accompanied by an opinion in form and substance satisfactory to
the Agent and prepared by an accounting firm reasonably satisfactory to the
Agent, or other independent certified public accountants of recognized standing
selected by the Company and acceptable to the Agent, as to said financial
statements and a certificate signed by the president and chief financial
officer of the Company stating that said financial statements fairly present
the financial condition and results of operations of the Company and, if applicable,
Company’s Subsidiaries as at the end of, and for, such year.

 

38

 

(c)           Together
with each delivery of financial statements required in this Section 6.2, an
Officer’s Certificate by the president, chief financial officer, or other
officer of the Company acceptable to the Agent.

 

(d)           With
respect to Aged Mortgage Loans, copies of the complete credit and collateral
file relating each Aged Mortgage Loan, an updated title opinion covering the
Mortgaged Property securing each Aged Mortgage Loan issued inform and substance
acceptable to Agent and issued by a title company acceptable to Agent, a
current appraisal or brokers price opinion certifying the current market value
of the Mortgaged Property securing each Aged Mortgage Loan in form and
substance acceptable to Agent and such other information or documentation
relating to the borrowers or Mortgaged Property of each Aged Mortgage Loan, all
of the foregoing to be provided as the Agent in its discretion may request at
any time or from time to time and at the sole cost and expense of the Company.

 

(e)           Reports
in respect of the Pledged Mortgages and Pledged Securities, in such detail and
at such times as the Agent in its discretion may request at any time or from
time to time, including, without limitation, a monthly pipeline report in form
satisfactory to Agent, to be delivered with the monthly financial statements
required in Section 6.2(a).

 

(f)            Copies
of all regular or periodic financial and other reports, if any, which the
Company shall file with the Securities and Exchange Commission or any
governmental agency successor thereto and copies of any audits completed by
GNMA, FHLMC, or FNMA. Copies of the Mortgage Bankers’ Financial Reporting Forms
(FNMA Form 1002) which the Company shall have filed with FNMA.

 

(g)           From
time to time, with reasonable promptness, such further information regarding
the business, operations, properties or financial condition of the Company as
the Agent may reasonably request.

 

6.3           Maintenance of Existence; Conduct of Business.    
Preserve and maintain its corporate existence in good standing and all
of its rights, privileges, licenses and franchises necessary in the normal
conduct of its business, including, without limitation, its eligibility as
lender, seller/servicer and issuer described under Section 5.11 hereof; conduct
its business in an orderly and efficient manner; maintain a net worth of
acceptable assets as required by HUD at any and all times for maintaining the
Company’s status as a FHA approved mortgagee; and make no material change in
the nature or character of its business or engage in any business in which it
was not engaged on the date of this Agreement.

 

6.4           Compliance with Applicable Laws.    
Comply with the requirements of all applicable laws, rules, regulations
and orders of any governmental authority, a breach of which could materially
adversely affect its business, operations, assets, or financial condition,
except where contested in good faith and by appropriate proceedings, and with
sufficient reserves established therefor.

 

39

 

6.5            Inspection of Properties and Books.    Permit authorized representatives of the
Agent and any Lender to (a) discuss the business, operations, assets and
financial condition of the Company and Company’s Subsidiaries with their
officers and employees and to examine their books of account, records, reports
and other papers and make copies or extracts thereof, and (b) inspect all of
the Company’s property and all related information and reports at the expense
of such Lender or Agent, as applicable, all at such reasonable times as the
Agent or any Lender may request. The Company will provide its accountants with
a copy of this Agreement promptly after the execution hereof and will instruct
its accountants to answer candidly any and all questions that the officers of
the Agent or any Lender or any authorized representatives of the Agent or any
Lender may address to them in reference to the financial condition or affairs
of the Company and Company’s Subsidiaries. 
The Company may have its representatives in attendance at any meetings
between the officers or other representatives of the Agent or any Lender and
the Company accountants held in accordance with this authorization.

 

6.6            Notice.    Give
prompt written notice to the Agent of (a) any action, suit or proceeding
instituted by or against the Company or any of its Subsidiaries in any federal
or state court or before any commission or other regulatory body (federal,
state or local, domestic or foreign) which action, suit or proceeding has at
issue in excess of ONE HUNDRED THOUSAND AND NO/100 DOLLARS  ($100,000.00) (except for normal collection
and foreclosure proceedings initiated by the Company in connection with a
Mortgage Loan or any other Mortgage loan), or any such proceedings threatened
against the Company, or any of Company’s Subsidiaries in writing containing the
details thereof, (b) the filing, recording or assessment of any federal, state
or local tax Lien against it, or any of its assets or any of its Subsidiaries,
(c) the occurrence of any Event of Default hereunder or the occurrence of any
Default and continuation thereof for five (5) days, (d) the suspension,
revocation or termination of the Company’s eligibility, in any respect, as
approved lender, seller/servicer or issuer as described under Section 5.11
hereof, (e) the transfer, loss or termination of any Servicing Contract to
which the Company is a party, or which is held for the benefit of the Company,
and the reason for such transfer, loss or termination, if known to the Company,
and (f) any other action, event or condition of any nature which may lead to or
result in a material adverse effect upon the business, operations, assets, or
financial condition of the Company or Company’s Subsidiaries or which, with or
without notice or lapse of time or both, would constitute a default under any
other agreement instrument or indenture to which the Company is a party or to
which the Company its properties or assets may be subject.

 

6.7            Payment of Debt, Taxes, etc.  Pay and perform all obligations and
Indebtedness of the Company, and cause to be paid and performed all obligations
and Indebtedness of its Subsidiaries in accordance with the terms thereof and
pay and discharge or cause to be paid and discharged all taxes, assessments and
governmental charges or levies imposed upon the Company or its Subsidiaries, or
upon their respective income, receipts or properties before the same shall
become past due, as well as all lawful claims for labor, materials and supplies
or otherwise which, if unpaid, might become a Lien or charge upon such
properties or any part thereof; provided, however, that the Company and its
Subsidiaries shall not be required to pay obligation, Indebtedness, taxes,
assessments or governmental charges or levies or claims for labor, materials or
supplies for which the Company or its Subsidiaries shall have obtained an
adequate bond or adequate insurance or which are being contested in good faith
and by proper proceedings which are being reasonably and diligently pursued if
such proceedings do not

 

40

 

involve any likelihood of
the sale, forfeiture or loss of any such property or any interest therein while
such proceedings are pending, and provided further that book reserves adequate
under generally accepted accounting principles shall have been established with
respect thereto and provided further that the owing Person’s title to, and its
right to use, its property is not materially adversely affected thereby.

 

6.8            Insurance. 
Maintain (a) errors and omissions insurance or Mortgage impairment
insurance and blanket bond coverage, with such companies and in such amounts as
satisfy prevailing FNMA and FHLMC requirements applicable to a qualified
Mortgage originating institution, and (b) liability insurance and fire and
other hazard insurance on its properties, with responsible insurance companies
approved by the Agent, in such amounts and against such risks as is customarily
carried by similar businesses operating in the same vicinity; and (c) within
thirty (30) days after notice from the Agent, obtain such additional insurance
as the Agent shall reasonably require, all at the sole expense of the
Company.   Copies of such policies shall
be furnished to the Agent without charge upon obtaining such coverage or any
renewal of or modification to such coverage.

 

6.9            Closing Instructions.   Indemnify and hold the Agent and the Lenders
harmless from and against any loss, including reasonable attorneys’ fees and
costs, attributable to the failure of a title insurance company, agent or
attorney to comply with the disbursement or instruction letter or letters of
the Company or of the Agent relating to any Mortgage Loan.  The Agent shall have the right to
pre-approve the closing instructions of the Company to the title insurance
company, agent or attorney in any case where the Mortgage Loan to be created at
settlement is intended to be warehoused by the Company pursuant hereto.

 

6.10          Other Loan Obligations.   Perform all obligations under the terms of
each loan agreement, note, mortgage, security agreement or debt instrument by
which the Company is bound or to which any of its property is subject, and
promptly notify the Agent in writing of a declared default under or the
termination, cancellation, reduction or non-renewal of any of its other lines
of credit or financing agreements with any other lender.  Exhibit
“B” hereto is a true and complete list of all such lines of
credit or financing agreements as of the date hereof.

 

6.11          Use of Proceeds of Advances.   Use the proceeds of each Advance solely for
the purpose of financing or purchasing Eligible Mortgage Loans.

 

6.12          Special Affirmative Covenants
Concerning Collateral.

 

(a)            Warrant
and defend the right, title and interest of the Agent and the Lenders in and to
the Collateral against the claims and demands of all Persons whomsoever.

 

(b)            Service
or cause to be serviced all Pledged Mortgages in accordance with the standard
requirements of the issuers of Purchase Commitments covering the same and all
applicable FHA and VA requirements, including without limitation taking all
actions necessary to enforce the obligations of the obligors under such
Mortgage Loans.   The Company shall
service or cause to be serviced all Mortgage Loans backing Pledged Securities
in accordance with applicable governmental requirements and issuers of

 

41

 

Purchase
Commitments covering the same. The Company shall hold all escrow funds
collected in respect of Pledged Mortgages and Mortgage Loans backing Pledged
Securities in trust, without commingling the same with non-custodial funds, and
apply the same for the purposes for which such funds were collected.

 

(c)           Execute
and deliver to the Agent such Uniform Commercial Code financing statements with
respect to the Collateral as the Agent may request.  The Company shall also execute and deliver to the Agent such
further instruments of sale, pledge or assignment or transfer, and such powers
of attorney, as required by the Agent to secure the Collateral, and shall do
and perform all matters and things necessary or desirable to be done or
observed, for the purpose of effectively creating, maintaining and preserving
the security and benefits intended to be afforded the Lenders under this
Agreement.  The Agent, on behalf of the
Lenders, shall have all the rights and remedies of a secured party under the
Uniform Commercial Code of Texas, or any other applicable law, in addition to
all rights provided for herein.

 

(d)           Notify
the Agent within two (2) Business Days after receipt of notice from an Investor
of any default under, or of the termination of, any Purchase Commitment relating
to any Pledged Mortgage, Eligible Mortgage Pool or Pledged Security.

 

(e)           Promptly
comply in all respects with the terms and conditions of all Purchase
Commitments, and all extensions, renewals and modifications or substitutions
thereof or thereto.  The Company will
cause to be delivered to the Investor the Pledged Mortgages and Pledged
Securities to be sold under each Purchase Commitment not later than the
expiration thereof.

 

(f)            Maintain,
at its principal office or in a regional office approved by the Agent, or in
the office of a computer service bureau engaged by the Company and approved by
the Agent, and, upon request, shall make available to the Agent, for the
benefit of the Lenders, the originals, or copies in any case where the
originals have been delivered to the Agent, for the benefit of the Lenders, or
to an Investor, of its Mortgage Notes and Mortgages included in Collateral,
Mortgage-backed Securities delivered to the Agent, for the benefit of the
Lenders, as Pledged Securities, Purchase Commitments, and all related Mortgage
Loan documents and instruments, and all files, surveys, certificates,
correspondence, appraisals, computer programs, tapes, discs, cards, accounting
records and other information and data relating to the Collateral.

 

6.13         Cure of Defects in Loan Documents. Promptly cure and cause to be promptly
cured any defects in the creation, issuance, execution and delivery of this
Agreement and the other Loan Documents; and upon request of the Agent and at
the Company’s expense, the Company will promptly execute and deliver, and cause
to be executed and delivered, to the Agent or its designee, all such additional
documents, agreements and/or instruments in compliance with or in
accomplishment of the covenants and agreements of this Agreement and the other
Loan Documents, and/or to create, perfect, preserve, extend and/or maintain any
and all Liens created pursuant hereto or pursuant to any other Loan Document as
valid and perfected Liens (of a priority as set forth in this Agreement) in
favor of the Agent for the benefit of the Lenders to secure the Obligations,
all as reasonably requested from time to time by the Agent.

 

42

 

7.            NEGATIVE COVENANTS.

 

The
Company hereby covenants and agrees with the Agent and the Lenders that, so
long as the Commitment is outstanding or there remain any Obligations of the
Company to be paid or performed under this Agreement or any other Loan
Document, the Company shall not, either directly or indirectly, without the
prior written consent of the Agent:

 

7.1           Contingent Liabilities.   Assume, incur, create,
guarantee, endorse, or otherwise become or be liable for the obligation of any
Person other than the Company except by endorsement of negotiable instruments
for deposit or collection in the ordinary course of business and excluding the
sale of Mortgage Loans with recourse in the ordinary course of the company’s
business.

 

7.2           Pledge of Servicing Contracts/Mortgage Loans.   
Except for Mortgage Loans pledged to lenders described on Exhibit “B hereto, pledge or grant a
security interest in any existing or future Mortgage Loans or Servicing Rights
acquired by the Company other than to the Agent, for the benefit of the
Lenders, except as otherwise expressly permitted in this Agreement; provided,
however, that if no Default or Event of Default has occurred and is continuing,
servicing on individual Mortgage Loans may be sold concurrently with and
incidental to the sale of such Mortgage Loans (with servicing released) in the
ordinary course of the Company’s business.

 

7.3           Merger; Acquisitions.   Liquidate, dissolve,
consolidate or merge, or acquire any substantial part of the assets of another,
except for transactions involving not more than FIFTY THOUSAND AND NO/100
DOLLARS ($50,000.00) each.

 

7.4           Loss of Eligibility.  Take any action that would
cause the Company to lose all or any part of its status as an eligible lender,
seller/servicer and issuer as described under Section 5.11 hereof.

 

7.5           Adjusted Tangible Net Worth.   Permit the sum of the
Adjusted Tangible Net Worth of Company (and its Subsidiaries, on a consolidated
basis) to be less than an amount equal to the sum of THREE MILLION AND NO/100
DOLLARS ($3,000,000.00) plus fifty percent of the Company’s net income for each
calendar month on a cumulative basis (in no event shall the foregoing amount be
reduced by any net loss of the Company realized at any time), computed as of
the end of each calendar month.

 

7.6           Debt to Adjusted Tangible Worth Ratio.   Permit
the ratio of Debt to Adjusted Tangible Worth of the Company (and its
Subsidiaries, on a consolidated basis) to exceed 15:1, such ratio to be
computed as of the end of each calendar month.

 

7.7           Minimum Current Ratio.  Permit the Current Ratio of
the Company to be less than 1.05 to 1.0 computed as of the end of each calendar
month.

 

7.8           Transactions with Affiliates.   Directly or indirectly (a)
make any loan, advance, extension of credit or capital contribution to any of
its Affiliates except as permitted by Section 7.11 hereof, (b) transfer, sell,
pledge, assign or otherwise dispose of any of its assets to or on behalf of
such Affiliates, (c) merge or consolidate with or purchase or acquire assets
from such

 

43

 

Affiliates, or (d) transfer,
pledge, or assign or otherwise pay to or on behalf of such Affiliates
management fees; provided, however, Company may pay to its
Affiliates management fees not to exceed THREE MILLION AND NO/100 DOLLARS
($3,000,000.00) per annum in the aggregate; provided that, no Default, Event of
Default or violation of Sections 7.5, 7.6, or 7.7 hereof exists at the time of
any payment of such management fees or would result after the payment of such
management fees and provided further that the payment of such management fees
would not result in a net loss for the Company for any calendar quarter or
fiscal year.

 

7.9           Limits on Corporate Distributions. 
Pay, make or declare or incur any liability to pay, make or declare any
dividend (excluding stock dividends) or other distribution, direct or indirect,
on or on account of any shares of its stock or any redemption or other
acquisition, direct or indirect, of any shares of its stock or of any warrants,
rights or other options to purchase any shares of its stock nor purchase,
acquire, redeem or retire any stock or ownership interest in itself whether now
or hereafter outstanding except that so long as no Default, Event of Default or
violation of Sections 7.5, 7.6, and 7.7 hereof exists at such time, or would
exist immediately thereafter, the Company may declare and pay cash dividends to
its shareholders; provided, that (a) such cash dividends must be declared and
paid within twenty (20) days after delivery to Agent of the financial statements
described in Section 6.2(a) hereof; and (b) provided further that such
dividends shall not exceed, in the aggregate during any fiscal year, fifty
percent (50%) of the Company’s net income for such fiscal year.

 

7.10         RICO.  
Violate any laws, statutes or regulations, whether federal or state, for
which forfeiture of its properties is a potential penalty, including, without
limitations, RICO.

 

7.11         No Loans or Investments Except Approved
Investments.   
Without the prior written consent of Agent, make or permit to remain
outstanding any loans or advances to, or investments in, any Person, except
that the foregoing restriction shall not apply to:

 

(a)           investments
in marketable obligations maturing no later than one hundred eighty (180) days
from the date of acquisition thereof by the Company and issued and fully
guaranteed, directly, by the full faith and credit of the Government of the
United States of America or any agency thereof; and

 

(b)           investments
in certificates of deposit maturing no later than one hundred eighty (180) days
from the date of issuance thereof and issued by commercial banks in the United
States and such banks rated by Moody’s Investor Service, Inc. and receiving a
rating of Prime-2 or higher on Moody’s short term debt rating or rated by
Standard & Poor’s Corporation and receiving a rating of AA-/A1+ or higher
on S&P’s short term debt rating, it being acknowledged and agreed that the
foregoing requirements shall pertain to certificates of deposit issued and/or
received on a date on or after the date of this Agreement);

 

(c)           investments
not to exceed FIVE HUNDRED THOUSAND AND NO/100 DOLLARS ($500,000.00) in the
aggregate;

 

(d)           investments
in the acquisition or origination of Mortgage Loans in the ordinary course of
business;

 

44

 

(e)           marketable
direct obligations issued by any state of the United States of America or any
political subdivision of any such state or any public instrumentality thereof
maturing within one year from the date of acquisition thereof and, at the time
of acquisition, having a rating of AA-/A1 + or higher from Standard &
Poor’s Rating Group, a Division of McGraw, Hill, Inc., or rated P-l or higher
by Moody’s Investors Service, Inc.;

 

(f)            commercial
paper maturing no more than one year from the date of creation thereof and, at
the time of acquisition, having a rating of AA-/A1+ or higher from Standard
& Poor’s Rating Group, a Division of McGraw, Hill, Inc., or rated P-l by
Moody’s Investors Service, Inc.;

 

(g)           investments
in mutual funds that invest substantially all of their assets in Investments of
the types described in subsections (a), (b), (c) and (e) of this Section 7.11;

 

(h)           Investments
consisting of loans, advances or extensions of credit to Affiliates made in the
ordinary course of business; and

 

(i)            Investments
made pursuant to Hedging Arrangements.

 

7.12         Charter Documents and Business Termination.

 

(a)           Issue,
sell or commit to issue or sell any shares of its capital stock of any class,
or other equity or investment security,

 

(b)           Amend
or otherwise modify its corporate charter or otherwise change its corporate
structure in any manner which will have a materially adverse effect on the
Company’s condition, financial or otherwise, or which will have a material
adverse effect upon the Company’s ability to perform, promptly and fully, its
obligations hereunder or under any of the other Loan Documents, or

 

(c)           Take
any action with a view toward its dissolution, liquidation or termination, or,
in fact, dissolve, liquidate or terminate its existence.

 

7.13         Changes in Accounting Methods.   Make any change in its
accounting method as in effect on the date of this Agreement or change its
fiscal year ending date from December 31, unless such changes (a) are required
for conformity with generally accepted accounting principles and, in such
event, the Company will give prior written notice of each such change to the
Agent or (b) or if not so required, are in conformity with generally accepted
accounting principles and have the prior written approval of the Agent which
approval shall not be unreasonably withheld.

 

7.14         No Sales, Leases or Dispositions of Property. 
Except in the ordinary course of its business, sell, lease, transfer or
otherwise dispose of all or any material portion or portions or integral part
of its properties or assets, whether now owned or hereafter acquired (whether
in a single transaction or in a series of transactions), or enter into any
arrangement, directly or indirectly, with any person, whereby it shall sell or
transfer any of its properties or assets, whether now owned or hereafter
acquired, and thereafter rent or lease as lessee such property or

 

45

 

any part thereof which it
intends to use for substantially the same purpose or purposes as the property
sold or transferred.

 

7.15         Changes in Business or Assets.  Make any substantial change
(a) in the nature of its business as now conducted, or (b) in the use of its
property as now used and proposed to be used.

 

7.16         Changes in Office or Inventory Location.  
Change the address and/or location of its chief executive office or
principal place of business or the place where it keeps its books and records
or its inventory to a location outside the State of Ohio unless, prior to any
such change, the Company shall execute and cause to be executed such additional
agreements and/or lien instruments as the Agent may reasonably request to
conform with the provisions hereof and the transactions and perfected Liens in
the Collateral contemplated under this Agreement and the other Loan Documents.

 

7.17         Special Negative Covenants Concerning
Collateral.

 

(a)           Amend
or modify, or waive any of the terms and conditions of, or settle or compromise
any claim in respect of, any Pledged Mortgages or Pledged Securities.

 

(b)           Sell,
assign, transfer or otherwise dispose of, or grant any option with respect to,
or pledge or otherwise encumber any of the Collateral or any interest therein.

 

(c)           Make
any compromise, adjustment or settlement in respect of any of the Collateral or
accept other than cash in payment or liquidation of the Collateral.

 

7.18         No Indebtedness.  Except for the Indebtedness
described in Exhibit “B”
hereto, incur, create, assume or guarantee or in any manner become or be liable
or permit to be outstanding any Indebtedness (including obligations for the
payment of rentals other than provided for herein) nor guarantee any contract
or other obligation, and will not in any way become or be responsible for
obligations of any Person, whether by agreement to purchase the Indebtedness of
any other Person or agreement for the furnishing of funds to any other Person
through the purchase of goods, supplies or services (or by way of stock
purchase, capital contribution, advance or loan) for the purpose of paying or
discharging the Indebtedness of any other Person or otherwise, except that the
foregoing restrictions shall not apply to:

 

(a)           the
Obligations.

 

(b)           liabilities
for taxes, assessments, governmental charges or levies which are not yet due
and payable or which are being contested in good faith by appropriate
proceedings diligently conducted if reserves adequate under generally accepted
accounting principles have been established therefor.

 

(c)           endorsements
of negotiable instruments for collection in the ordinary course of business.

 

(d)           indebtedness
incurred in the ordinary course of business in connection with normal trade or
business obligations which are payable within ninety (90) days of

 

46

 

the
occurrence thereof, provided, however, that no such Indebtedness
shall be incurred by the Company to any Affiliate unless it is subordinated in
all respects to the Obligations in a form and substance acceptable to the
Lenders, and is incurred in the ordinary course of business and upon
substantially the same or better terms as it could obtain in an arm’s length
transaction with a Person who is not an Affiliate,

 

(e)           Indebtedness
of less than TWO HUNDRED FIFTY THOUSAND AND NO/100 DOLLARS ($250,000.00), in
the aggregate, incurred in the ordinary course of business.

 

(f)            Indebtedness
incurred in the ordinary course of business for the purpose of leasing office
space or equipment to be used in the conduct of the business of the Company.

 

7.19         Ownership of the Company.    Permit any change in the
legal or beneficial ownership of any capital stock, instruments convertible to
same, or other equity instruments, of the Company that results or would result
in a Change of Control.

 

7.20         Payments of Subordinated Debt.     Make any payment of any
kind on any Subordinated Debt until the Commitments have terminated, all
Obligations have been paid and performed in full, and any applicable preference
period has expired.

 

8.             DEFAULTS; REMEDIES.

 

8.1           Events of Default.   The occurrence of any of the
following conditions or events shall be an event of default (“Event of
Default”):

 

(a)           Failure
to pay the principal of any Advance when due, whether at stated maturity, by
acceleration, or otherwise; or failure to pay any installment of interest on
any Advance or any other amount due under this Agreement within ten (10) days
after the due date (other than any amounts due under Section 3.4 hereof which
shall be due and payable on its due date); or failure to pay, beyond any
applicable grace period, the principal or interest on any other indebtedness
due any Lender; or

 

(b)           Failure
of the Company or any of its Subsidiaries to pay, or any default in the payment
of any principal or interest on, any other Indebtedness or in the payment of
any contingent obligation beyond any period of grace provided; or breach or
default with respect to any other material term of any other Indebtedness of
any loan agreement, mortgage, indenture or other agreement relating thereto, if
the effect of such failure, default or breach is to cause, or to permit the
holder or holders thereof (or a trustee on behalf of such holder or
holders)  to cause, Indebtedness of the Company
or its Subsidiaries in the aggregate amount of TWO HUNDRED FIFTY THOUSAND AND
NO/100 DOLLARS ($250,000.00) or more to become or be declared due prior to its
stated maturity (upon the giving or receiving of notice, lapse of time, both,
or otherwise) or failure of the Company to perform or comply with any term or
condition applicable to it contained in Sections 6.3, 6.11, and any Section in
Article 7 hereof; or

 

47

 

(c)           Any
of the Company’s representations or warranties made or deemed made herein or in
any other Loan Document, or in any statement or certificate at any time given
by the Company in writing pursuant hereto or thereto shall be inaccurate or
incomplete in any materially adverse respect on the date as of which made or
deemed made; or

 

(d)           The
Company shall default in the performance of or compliance with any term or
covenant contained in this Agreement and such default shall not have been
remedied or waived within thirty (30) days after receipt of written notice from
the Agent of such default other than those referred to above in Subsections 8.1
(a), 8.1(b), or 8.l(c); or

 

(e)           (1) A
court having jurisdiction shall enter a decree or order for relief in respect
of the Company or any of Company’s Subsidiaries in an involuntary case under
any applicable bankruptcy, insolvency or other similar law now or hereafter in
effect in respect of the Company or any of Company’s Subsidiaries, which decree
or order is not stayed; or a filing of an involuntary case under any applicable
bankruptcy, insolvency or other similar law in respect of the Company or any of
Company’s Subsidiaries has occurred; or (2) any other similar relief shall be
granted under any applicable federal or state law; or a decree or order of a
court having jurisdiction for the appointment of a receiver, liquidator,
sequestrator, trustee, custodian or other officer having similar powers over
the Company or any of Company’s Subsidiaries, or over all or a substantial part
of their respective property, shall have been entered; or the involuntary
appointment of an interim receiver, trustee or other custodian of the Company
or any of Company’s Subsidiaries, for all or a substantial part of their
respective property; or the issuance of a warrant of attachment, execution or
similar process against any substantial part of the property of the Company or
any of Company’s Subsidiaries, and the continuance of any such events in
Subsections (1) and (2) above for sixty (60) days unless dismissed or
discharged; or

 

(f)            The
Company or any of Company’s Subsidiaries shall have an order for relief entered
with respect to it or commence a voluntary case under any applicable
bankruptcy, insolvency or other similar law now or hereafter in effect, or
shall consent to the entry of an order for relief in an involuntary case, or to
the conversion to an involuntary case, under any such law, or shall consent to
the appointment of or taking possession by a receiver, trustee or other
custodian for all or a substantial part of its property; the making by the Company
or any of Company’s Subsidiaries of any assignment for the benefit of
creditors; or the failure of the Company or any of Company’s Subsidiaries, or
the admission by any of them of its inability, to pay its debts as such debts
become due; or

 

(g)           Any
money judgment, writ or warrant of attachment, or similar process involving in
any case an amount in excess of TWO HUNDRED FIFTY THOUSAND AND NO/100 DOLLARS
($250,000.00) shall be entered or filed against the Company or any of its
Subsidiaries or any of their respective assets and shall remain undischarged,
unvacated, unbonded or unstayed for a period of thirty (30) days or in any
event no later than five (5) days prior to the date of any proposed sale
thereunder; or

 

48

 

(h)           Any
order, judgment or decree shall be entered against the Company decreeing the
dissolution or split up of the Company and such order shall remain undischarged
or unstayed for a period in excess of twenty (20) days; or

 

(i)            Any
Plan maintained by the Company or any of Company’s Subsidiaries shall be
terminated within the meaning of Title IV of ERISA or a trustee shall be
appointed by an appropriate United States district court to administer any
Plan, or the Pension Benefit Guaranty Corporation (or any successor thereto)
shall institute proceedings to terminate any Plan or to appoint a trustee to
administer any Plan if as of the date thereof the Company’s or any Subsidiary’s
liability (after giving effect to the tax consequences thereof) to the Pension
Benefit Guaranty Corporation (or any successor thereto) for unfunded guaranteed
vested benefits under the Plan exceeds the then current value of assets
accumulated in such Plan by more than FIFTY THOUSAND AND NO/100 DOLLARS
($50,000.00) (or in the case of a termination involving the Company or any of
Company’s Subsidiaries as a “substantial employer” (as defined in Section 4001
(a)(2) of ERISA) the withdrawing employer’s proportionate share of such excess
shall exceed such amount); or

 

(j)            The
Company or any of Company’s Subsidiaries as employer under a Multiemployer Plan
shall have made a complete or partial withdrawal from such Multiemployer Plan
and the plan sponsor of such Multiemployer Plan shall have notified such
withdrawing employer that such employer has incurred a withdrawal liability in
an annual amount exceeding FIFTY THOUSAND AND NO/100 DOLLARS ($50,000.00); or

 

(k)           The
Company shall purport to disavow, in writing, its obligations hereunder or
shall contest, in writing, the validity or enforceability hereof, or the
Agent’s security interest on any portion of the Collateral shall become
unperfected, of less than a first priority, unenforceable or otherwise
impaired; or

 

(l)            The
Company dissolves or terminates its existence, or discontinues its usual
business; or

 

(m)          Any
court shall find or rule, or the Company shall assert or claim, in writing, (i)
that the Agent does not have a valid, first priority perfected, enforceable
Lien and security interest in the Collateral as represented in this Agreement
or in any other Loan Document, or (ii) that this Agreement or any of the Loan
Documents does not or will not constitute the legal, valid, binding and
enforceable obligations of the party or parties (as applicable) thereto, or
(iii) that any Person has a conflicting or adverse Lien, claim or right in, or
with respect to, the Collateral and the Company is unable within ten (10) days
to have such finding or ruling reversed or to have such adverse Lien, claim or
right removed; or

 

(n)           The
Company shall have concealed, removed, or permitted to be concealed or removed,
any part of its property, with intent to hinder, delay or defraud its creditors
or any of them, or made or suffered a transfer of any of its property which may
be fraudulent under any bankruptcy, fraudulent conveyance or similar law; or
shall have

 

49

 

made any transfer of its property to or for the benefit of a creditor
at a time when other creditors similarly situated have not been paid; or shall
have suffered or permitted, while insolvent, any creditor to obtain a Lien upon
any of its property through legal proceedings or other process which is not
vacated within sixty (60) days from the date thereof; or

 

(o)           There
shall be a material adverse change in the financial condition, business or
operations of the Company; or

 

(p)           A
Change of Control occurs.

 

8.2
          Remedies.

 

(a)           Upon
the occurrence of any Event of Default described in Sections 8.1(e), 8.1(f),
8.1(h) or 8.1(k), the Commitment shall automatically terminate and all unpaid
and accrued Obligations of the Company shall automatically become due and
payable, without presentment for payment, demand, notice of non-payment,
protest, notice of protest, notice of intent to accelerate, notice of
acceleration, maturity, or any other notices or requirements of any kind to the
Company or any other Person liable thereon or with respect thereto, all of
which are hereby expressly waived by the Company.

 

(b)           Upon
the occurrence of any Event of Default, other than those described in Sections
8.1(e), 8.1(f), 8.1(h) or 8.1(k), the Agent may, by written notice to the
Company, terminate the Commitment and/or declare all unpaid and accrued
Obligations of the Company to be immediately due and payable, whereupon the
same shall forthwith become due and payable, together with all accrued and
unpaid interest thereon, and the obligation of the Lenders to make any Advances
shall thereupon terminate.

 

(c)           Upon
the occurrence of any Event of Default, the Agent may also do any of the
following:

 

(1)           Foreclose
upon or otherwise enforce its security interest in and Lien on the Collateral
to secure all payments and performance of Obligations of the Company in any
manner permitted by law or provided for hereunder.

 

(2)           Notify
all obligors, servicers or other Persons in respect of the Collateral that the
Collateral has been assigned to the Agent, for the benefit of the Lenders, and
that all payments thereon are to be made directly to the Agent, for the benefit
of the Lenders, or such other party as may be designated by the Agent; settle,
compromise, or release, in whole or in part, any amounts owing on the
Collateral, any such obligor or any Investor or any portion of the Collateral,
on terms acceptable to the Agent; enforce payment and prosecute any action or
proceeding with respect to any and all Collateral; and where any such
Collateral is in default, foreclose on and enforce security interests in, such
Collateral by any available judicial procedure or without judicial process and
sell property acquired as a result of any such foreclosure.

 

50

 

(3)           Act,
or contract with a third Person to act, as servicer or subservicer of each item
of Collateral requiring servicing and perform all obligations required in
connection with Purchase Commitments, such third party’s fees to be paid by the
Company.

 

(4)           Require
the Company to assemble the Collateral and/or books and records relating
thereto and make such available to the Agent at a place to be designated by the
Agent.

 

(5)           Enter
onto property where any Collateral or books and records relating thereto are
located and take possession thereof with or without judicial process.

 

(6)           Prior
to the disposition of the Collateral, prepare it for disposition in any manner
and to the extent the Agent deems appropriate.

 

(7)           Exercise
all rights and remedies of a secured creditor under the Uniform Commercial Code
of Texas or other applicable law, including, but not limited to, selling or
otherwise disposing of the Collateral, or any part thereof, at one or more
public or private sales, whether or not such Collateral is present at the place
of sale, for cash or credit or future delivery, on such terms and in such
manner as the Agent may determine, including, without limitation, sale pursuant
to any applicable Purchase Commitment. 
If notice is required under such applicable law, the Agent will give the
Company not less than ten (10) days’ notice of any such public sale or of the
date after which private sale may be held. The Company agrees that ten (10)
days’ notice shall be reasonable notice.  
The Agent may, without notice or publication, adjourn any public or
private sale or cause the same to be adjourned from time to time by announcement
at the time and place fixed for the sale, and such sale may be made at any time
or place to which the same may be so adjourned. The Agent is authorized at any
such sale, if the Agent deems it advisable so to do, to restrict the
prospective bidders or purchasers to Persons who will represent and agree that
they are purchasing the Collateral for their own account for investment and not
with a view to the distribution or resale of any of the Collateral.  The Company specifically agrees that any
such sale, whether public or private, of any Collateral pursuant to the
commitment of any investor to purchase such Collateral that was obtained by (or
with the approval of) the Company will be commercially reasonable, and if such
sale is for the price provided for in such commitment, then such sale shall be
held to be for value reasonably equivalent to the value of the Collateral so
sold. Upon any such sale, the Agent shall have the right to deliver, assign and
transfer to the purchaser thereof the Collateral so sold.   Each purchaser at any such sale shall hold
the property sold absolutely free from any claim or right of whatsoever kind,
including any equity or right of redemption, stay or appraisal which the
Company has or may have under any rule of law or statute now existing or
hereafter adopted. In any case of any sale of all or any part of the Collateral
on credit or for future delivery, the Collateral so sold may be retained by the
Agent until the selling price is paid by the purchaser, but the Agent shall not
incur any liability in

 

51

 

case
of such purchaser’s failure to take up and pay for the Collateral so sold and,
in case of any such failure, such Collateral may again be sold upon like
notice. In case of any sale of all or any part of the Collateral on credit or
for future delivery, the Collateral so sold may be retained by the Agent until
the selling price is paid by the purchaser thereof, but the Agent shall not
incur any liability in case of the failure of such purchaser to take up and pay
for the Collateral so sold and, in case of any such failure, such Collateral
may again be sold upon like notice. The Agent may, however, instead of
exercising the power of sale herein conferred upon it, proceed by a suit or
suits at law or in equity to collect all amounts due upon the Collateral or to
foreclose the pledge and sell the Collateral or any portion thereof under a
judgment or decree of a court or courts of competent jurisdiction, or both.

 

(8)           Proceed
against the Company on the Notes.

 

(9)           Exercise
any or all of its rights, remedies or recourses under any other Loan Documents,
at law, in equity, or otherwise.

 

The
Agent shall follow the instructions of the Majority Lenders in exercising or
not exercising its rights under this Section 8.2(c), but (i) the Agent shall
have no obligation to take or not to take any action which it reasonably
believes may expose it to any liability unless the Agent shall be first
indemnified to its satisfaction by the Lenders against any and all liability
and expense which may be incurred by it by reason of taking or continuing to
take any such action, and (ii) the Agent may, but shall be under no obligation
to, await instructions from the Majority Lenders before exercising or not exercising
its rights under this Section 8.2(c).

 

(d)           Neither
the Agent nor any Lender shall incur any liability as a result of the sale or
other disposition of the Collateral, or any part thereof, at any public or
private sale or disposition.  The
Company hereby waives (to the extent permitted by law) any claims it may have
against the Agent and the Lenders arising by reason of the fact that the price
at which the Collateral may have been sold at such private sale was less than
the price which might have been obtained at a public sale or was less than the
aggregate amount of the outstanding Advances and the unpaid interest accrued
thereon, even if the Agent accepts the first offer received and does not offer
the Collateral to more than one offeree and none of the actions described
herein shall render Agent’s disposition of the Collateral in such a manner as
commercially unreasonable.  Any sale of
Collateral pursuant to the terms of a Purchase Commitment, or any other disposition
of collateral arranged by the Company, whether before or after the occurrence
of an Event of Default, shall be deemed to have been made in a commercially
reasonable manner.

 

(e)           The
Company specifically waives (to the extent permitted by law) any equity or
right of redemption, all rights of redemption, stay or appraisal which the
Company has or may have under any rule of law or statute now existing or
hereafter adopted, and any right to require the Agent to (1) proceed against
any Person, (2) proceed against or exhaust any of the Collateral or pursue its
rights and remedies as against the Collateral in any particular order, or (3)
pursue any other remedy in its power. The Agent shall not be required to take
any steps necessary to preserve any rights of the Company

 

52

 

against
holders of mortgages prior in lien to the Lien of any Mortgage included in the
Collateral or to preserve rights against prior parties.

 

(f)            The
Agent and the Lenders may, but shall not be obligated to, advance any sums or
do any act or thing necessary to uphold and enforce the Lien and priority of,
or the security intended to be afforded by, any Mortgage included in the
Collateral, including, without limitation, payment of delinquent taxes or
assessments and insurance premiums.  All
advances, charges, costs and expenses, including reasonable attorneys’ fees and
disbursements, incurred or paid by the Lenders in exercising any right, power
or remedy conferred by this Agreement, or in the enforcement hereof, together
with interest thereon, at the Default Rate, from the time of payment until
repaid, shall become a part of the principal balance outstanding hereunder and
under the Notes.

 

(g)           No
failure on the part of the Agent to exercise, and no delay in exercising, any
right, power or remedy provided hereunder, at law or in equity shall operate as
a waiver thereof; nor shall any single or partial exercise by the Agent of any
right, power or remedy provided hereunder, at law or in equity preclude any
other or further exercise thereof or the exercise of any other right, power or
remedy.  Without intending to limit the
foregoing, all defenses based on the statute of limitations are hereby waived
by the Company to the extent permitted by law.   The remedies herein provided are cumulative and are not
exclusive of any remedies provided at law or in equity.

 

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

 

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

 

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

 

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

 

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

 

Fifth, to the payment of all other Obligations - payable ratably to
Lenders in the proportion that each Lender’s share of those amounts bears to
the total of those amounts for all Lenders; and

 

Finally, to the payment to the Company, or to its successors or
assigns, or as a court of competent jurisdiction may direct, of any surplus
then remaining from such proceeds.

 

53

 

If
the proceeds of any such sale, disposition or other enforcement are
insufficient to cover the costs and expenses of such sale, as aforesaid, and
the payment in full of all Obligations of the Company, the Company shall remain
liable for any deficiency and shall be obligated to pay it without notice or
demand.

 

8.4
          Agent
Appointed Attorney-in-Fact. The Agent is hereby appointed the
attorney-in-fact of the Company, with full power of substitution, for the
purpose of carrying out the provisions hereof and taking any action and
executing any instruments which the Agent may deem necessary or advisable to
accomplish the purposes hereof, which appointment as attomey-in-fact is
irrevocable and coupled with an interest and shall remain in full force and
effect until the full and final payment and performance of all Obligations.
Without limiting the generality of the foregoing, the Agent shall have the
right and power, either in the name of the Company or in its own name, to (a)
give notices of its security interest in the Collateral to any Person, (b)
endorse in blank, to itself, or to a nominee all items of Collateral that are
transferable by endorsement and are payable to the order of the Company,
including canceling, completing or supplying any needed or incomplete or
missing endorsement of the Company and any related assignment, (c) change or
cause to be changed the book-entry registration or name of subscriber or
Investor on any Pledged Security, and (d) receive, endorse and collect all
checks made payable to the order of the Company representing any payment on
account of the principal of or interest on, or the proceeds of sale of, any of
the Pledged Mortgages or Pledged Securities and to give full discharge for the
same.

 

8.5           Right of Offset.   Company hereby grants to Agent and to each
Lender a right of offset, to secure the repayment of the Obligations, upon any
and all monies, securities, or other property of Company, and the proceeds
therefrom now or hereafter held or received by or in transit to Agent or such
Lender from or for the account of Company, whether for safekeeping, custody,
pledge, transmission, collection, or otherwise, and also upon any and all
deposits (general or special, time or demand, provisional or final) and credits
of Company, and any and all claims of Company against Agent or such Lender, at
any time existing. Upon the occurrence of any Default, Agent and each Lender
are authorized at any time and from time to time, without notice to Company, to
offset, appropriate, and apply any and all of those items against the
Obligations.   Notwithstanding anything
in this section or elsewhere in this Agreement to the contrary, neither Agent
nor any other Lender shall have any right to offset, appropriate, or apply any
accounts of Company which consist of escrowed funds (except and to the extent
of any beneficial interest which Company have in such escrowed funds) which
have been so identified by Company in writing at the time of deposit thereof.

 

8.6           Waivers.  Company waives any right to require Agent to
(a) proceed against any Person, (b) proceed against or exhaust any of the
Collateral or pursue its rights and remedies as against the Collateral in any
particular order, or (c) pursue any other remedy in its power. Agent shall not
be required to take any steps necessary to preserve any rights of Company
against any Person from which Company purchased any Mortgage Loans or to
preserve rights against prior parties.  
Company and each surety, endorser, guarantor, pledgor, and other party
ever liable or whose property is ever liable for payment of any of the
Obligations jointly and severally waive presentment and demand for payment,
protest, notice of intention to accelerate, notice of acceleration, and notice
of protest and on payment, and agree that their or their property’s liability
with respect to the Obligations, or any part thereof, shall not be affected by
any renewal

 

54

 

or extension in the time of
payment of the Obligations, by any indulgence, or by any release or change in
any security for the payment of the Obligations, and hereby consent to any and
all renewals, extensions, indulgences, releases, or changes, regardless of the
number thereof.

 

8.7           Performance
by Agent.  
Should any covenant, duty, or agreement of Company fail to be performed
in accordance with the terms of this Agreement or of any document delivered
under this Agreement, Agent may, at its option, after notice to Company, as the
case may be, perform, or attempt to perform, such covenant, duty, or agreement
on behalf of the Company and shall notify each Lender that it has done so. In
such event, Company shall jointly and severally, at the request of Agent,
promptly pay any amount expended by Agent in such performance or attempted performance
to Agent at its principal place of business, together with interest thereon at
the Maximum Rate from the date of such expenditure by Agent until paid.
Notwithstanding the foregoing, it is expressly understood that Agent does not
assume and shall never have, except by express written consent of Agent, any
liability or responsibility for the performance of any duties of Company under
this Agreement or under any other document delivered under this Agreement.

 

8.8           No
Responsibility.   
Except in the case of fraud, gross negligence, or willful misconduct,
neither Agent nor any of its officers, directors, employees, or attorneys shall
assume or ever have any liability or responsibility for, any diminution in the
value of the Collateral or any part of the Collateral.

 

8.9           No Waiver.  The acceptance by Agent or any Lender at any
time and from time to time of partial payment or performance by Company of any
of their respective obligations under this Agreement or under any Loan Document
shall not be deemed to be a waiver of any Default then existing.  No waiver by Agent or any Lender shall be
deemed to be a waiver of any other then existing or subsequent Default. No
delay or omission by Agent or any Lender in exercising any right under this
Agreement or under any other document required to be executed under or in
connection with this Agreement shall impair such right or be construed as a
waiver thereof or any acquiescence therein, nor shall any single or partial
exercise of any such right preclude other or further exercise thereof, or the
exercise of any other right under this Agreement or otherwise.

 

8.10         Cumulative Rights.   All rights available to
Agent and the Lenders under this Agreement or under any other document
delivered under this Agreement shall be cumulative of and in addition to all
other rights granted to Agent and the Lenders at law or in equity, whether or
not the Notes be due and payable and whether or not Agent shall have instituted
any suit for collection, foreclosure or other action in connection with this
Agreement or any other document delivered under this Agreement.

 

8.11         Costs.   All court costs, reasonable attorneys’
fees, other costs of collection, and other sums spent by Agent or any Lender in
the exercise of any right provided in any Loan Document is payable to Agent or
that Lender, as the case may be, on demand, is part of the Obligations, and
bears interest at the Default Rate from the date paid by Agent or any Lender to
the date repaid by Company.

 

55

 

9.             NOTICES.

 

All
notices, demands, consents, requests and other communications required or
permitted to be given or made hereunder (collectively, “Notices”) shall, except
as otherwise expressly provided hereunder, be in writing addressed to the
respective parties hereto at their respective addresses hereinafter set forth
and shall be either (a) delivered in person, or (b) mailed, by certified,
registered, or express mail, postage prepaid, or (c) delivered by overnight
courier, or (d) telecopied to their respective telecopy numbers (with a paper
copy mailed the same day as aforesaid) as hereinafter set forth; provided any
party may change its address for notice by designating such party’s new address
in a Notice to the sending party given at least five (5) Business Days before
it shall become effective. All Notices shall be conclusively deemed to have
been properly given or served when duly received, in person regardless of how
sent. Regardless of when received, all Notices shall be conclusively deemed
given or served if addressed in accordance with this Section and (1) if by
overnight courier, on the next Business Day or (2) if mailed, on the third
Business Day after being deposited in the mails, or (3) if telecopied, when
telecopied to the telecopy number set forth below (provided a paper copy is
mailed the same day):

 

	
  If to the Company:

  	
   

  	
  SIRVA MORTGAGE, INC.

  
	
   

  	
   

  	
  Attn: Paul Klemme,
  President

  
	
   

  	
   

  	
  6070 Parkland Boulevard

  
	
   

  	
   

  	
  Mayfield Heights, Ohio
  44124

  
	
   

  	
   

  	
  Fax No.: (440) 646-1835

  
	
   

  	
   

  	
   

  
	
  If to Washington Mutual

  Bank, FA as Agent:

  	
   

  	
  Washington Mutual Bank, FA

  
	
   

  	
   

  	
  Attn:    Ms. Leticia Ruiz

  
	
   

  	
   

  	
  Syndicated Finance

  
	
   

  	
   

  	
  3200 Park Center Drive

  
	
   

  	
   

  	
  Costa Mesa, California
  92626

  
	
   

  	
   

  	
  Fax No.: (714) 800-2492

  
	
   

  	
   

  	
   

  
	
  If to Washington Mutual

  Bank, FA as Lender:

  	
   

  	
  Washington Mutual Bank, FA

  
	
   

  	
   

  	
  Attn:   Ms. Leticia Ruiz

  
	
   

  	
   

  	
  Syndicated Finance

  
	
   

  	
   

  	
  3200 Park Center Drive

  
	
   

  	
   

  	
  Costa Mesa, California
  92626

  
	
   

  	
   

  	
  Fax No.: (714) 800-2492

  
	
   

  	
   

  	
   

  
	
  with a copy to:

  	
   

  	
  Washington Mutual Bank, FA

  
	
   

  	
   

  	
  Attn:   Michael D. McAuley

  
	
   

  	
   

  	
  Mortgage Banker Finance

  
	
   

  	
   

  	
  3200 Southwest Freeway,
  Suite 1922

  
	
   

  	
   

  	
  Houston, Texas 77027

  
	
   

  	
   

  	
  Fax No.: (713)543-4292

  

 

56

 

	
  If
  to National City

  Bank of Kentucky as

  Lender:

  	
   

  	
  NATIONAL
  CITY BANK OF KENTUCKY

  
	
   

  	
   

  	
  Attn: Mary Jo Reiss, Vice
  President, Mortgage Banking

  
	
   

  	
   

  	
  421
  West Market Street

  
	
   

  	
   

  	
  Louisville, Kentucky 40202

  
	
   

  	
   

  	
  Tel: (502) 581.4197

  
	
   

  	
   

  	
  Fax: (502) 581.4154

  

 

10.
          REIMBURSEMENT OF EXPENSES; INDEMNITY.

 

10.1         Reimbursement of Expenses and Indemnification by Company. The Company shall: (a) pay all
out-of-pocket costs and expenses of the Agent, including, without limitation,
reasonable attorneys’ fees in connection with the preparation, negotiation,
documentation, enforcement and administration of this Agreement, the Notes, and
other Loan Documents and the making and repayment of the Advances and the
payment of interest thereon; (b) pay, and hold the Agent and the Lenders and
any owners or holders of the Notes harmless from and against, any and all
present and future stamp, documentary and other similar taxes with respect to
the foregoing matters and save them each harmless from and against any and all
liabilities with respect to or resulting from any delay or omission to pay such
taxes; (c) INDEMNIFY, PAY AND HOLD HARMLESS
THE AGENT, EACH LENDER, AND ANY OF THEIR RESPECTIVE OFFICERS, DIRECTORS,
EMPLOYEES OR AGENTS AND ANY SUBSEQUENT OWNERS OR HOLDERS OF THE NOTES
(COLLECTIVELY, THE “INDEMNIFIED PARTIES”) FROM AND AGAINST ANY AND ALL
LIABILITIES, OBLIGATIONS, LOSSES, DAMAGES, PENALTIES, JUDGMENTS, SUITS, COSTS,
EXPENSES  AND DISBURSEMENTS OF ANY
KIND WHATSOEVER (THE “INDEMNIFIED LIABILITIES”) (INCLUDING, WITHOUT LIMITATION,
INDEMNIFIED LIABILITIES RESULTING, IN WHOLE OR IN PART, FROM ANY INDEMNIFIED
PARTY’S OWN NEGLIGENCE OR STRICT LIABILITY) WHICH MAY BE IMPOSED UPON, INCURRED
BY OR ASSERTED AGAINST SUCH INDEMNIFIED PARTY IN ANY WAY RELATING TO OR ARISING
OUT OF THIS AGREEMENT, THE NOTES, OR ANY OTHER LOAN DOCUMENT OR ANY OF THE
TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY TO THE EXTENT  THAT ANY SUCH INDEMNIFIED LIABILITIES RESULT (DIRECTLY
OR INDIRECTLY) FROM ANY CLAIMS MADE, OR ANY ACTIONS, SUITS OR PROCEEDINGS
COMMENCED OR THREATENED, BY OR ON BEHALF OF ANY CREDITOR (EXCLUDING THE LENDERS
AND THE HOLDER OR HOLDERS OF THE NOTES), SECURITY HOLDER, SHAREHOLDER, CUSTOMER
(INCLUDING, WITHOUT LIMITATION, ANY PERSON HAVING ANY DEALINGS OF ANY KIND WITH
THE COMPANY), TRUSTEE, DIRECTOR, OFFICER, EMPLOYEE AND/OR AGENT OF THE COMPANY
ACTING IN SUCH CAPACITY, THE COMPANY OR ANY GOVERNMENTAL REGULATORY BODY OR
AUTHORITY. THE FOREGOING INDEMNITY SHALL NOT APPLY TO THE EXTENT  THE INDEMNIFIED LIABILITIES RESULT FROM THE GROSS
NEGLIGENCE OR WILLFUL MISCONDUCT OF ANY INDEMNIFIED PARTY OR ANY INDEMNIFIED
PARTY’S OWN VIOLATIONS OF REGULATIONS APPLICABLE TO IT. THE AGREEMENT OF THE
COMPANY CONTAINED IN THIS SUBSECTION (c) SHALL

 

57

 

SURVIVE THE EXPIRATION OR TERMINATION OF THIS AGREEMENT AND
THE PAYMENT IN FULL OF THE NOTES. ATTORNEYS’ FEES AND DISBURSEMENTS INCURRED IN
ENFORCING, OR ON APPEAL FROM, A JUDGMENT PURSUANT HERETO SHALL BE RECOVERABLE
SEPARATELY FROM AND IN ADDITION TO ANY OTHER AMOUNT INCLUDED IN SUCH JUDGMENT,
AND THIS CLAUSE IS INTENDED TO BE SEVERABLE FROM THE OTHER PROVISIONS OF THIS
AGREEMENT AND TO SURVIVE AND NOT BE MERGED INTO SUCH JUDGMENT. WITHOUT LIMITING
ANY OF THE FOREGOING, THE COMPANY SHALL UPON DEMAND PROMPTLY REIMBURSE THE
AGENT FOR ALL EXTRAORDINARY SERVICING EXPENSES INCURRED BY IT.

 

10.2         INDEMNIFICATION BY THE LENDERS.   WHETHER OR NOT ANY ADVANCE IS MADE HEREUNDER, THE LENDERS AGREE TO
INDEMNIFY, PAY, DEFEND, AND HOLD HARMLESS THE AGENT IN ITS RESPECTIVE CAPACITY
AS SUCH (TO THE EXTENT NOT REIMBURSED BY THE COMPANY AND WITHOUT LIMITING THE
OBLIGATION OF THE COMPANY TO DO SO), RATABLY ACCORDING TO THEIR RESPECTIVE
COMMITMENT PERCENTAGES, FROM AND AGAINST ANY AND ALL LIABILITIES, OBLIGATIONS,
LOSSES, DAMAGES, PENALTIES, ACTIONS, JUDGMENTS, SUITS, COSTS, EXPENSES OR
DISBURSEMENTS OF ANY KIND WHATSOEVER, INCLUDING WITHOUT LIMITATION LIABILITIES
RESULTING IN WHOLE OR PART FROM THE AGENT’S OWN ORDINARY NEGLIGENCE OR STRICT
LIABILITY, WHICH MAY AT ANY TIME (INCLUDING WITHOUT LIMITATION AT ANY TIME
FOLLOWING THE PAYMENT OF THE OBLIGATIONS) BE IMPOSED ON, INCURRED BY OR
ASSERTED AGAINST THE AGENT IN ANY WAY RELATING TO OR ARISING OUT OF THE LOAN
DOCUMENTS OR ANY DOCUMENTS CONTEMPLATED BY OR REFERRED TO HEREIN OR THEREIN OR
THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY OR ANY ACTION TAKEN OR OMITTED
BY THE AGENT UNDER OR IN CONNECTION WITH ANY OF THE FOREGOING; PROVIDED THAT NO
LENDER SHALL BE LIABLE FOR THE PAYMENT OF ANY PORTION OF SUCH LIABILITIES,
OBLIGATIONS, LOSSES, DAMAGES, PENALTIES, ACTIONS, JUDGMENTS, SUITS, COSTS,
EXPENSES OR DISBURSEMENTS RESULTING FROM THE AGENT’S GROSS NEGLIGENCE OR
WILLFUL MISCONDUCT. WITHOUT LIMITATION OF THE FOREGOING, EACH LENDER SHALL
REIMBURSE THE AGENT UPON DEMAND FOR ITS RATABLE SHARE OF ANY COSTS OR
OUT-OF-POCKET EXPENSES (INCLUDING ATTORNEY COSTS) INCURRED BY THE AGENT IN
CONNECTION WITH THE PREPARATION, EXECUTION, DELIVERY, ADMINISTRATION,
MODIFICATION, AMENDMENT OR ENFORCEMENT (WHETHER THROUGH NEGOTIATION, LEGAL
PROCEEDINGS OR OTHERWISE) OF, OR LEGAL ADVICE IN RESPECT OF RIGHTS OR
RESPONSIBILITIES UNDER, THIS AGREEMENT, ANY OTHER LOAN DOCUMENT, OR ANY DOCUMENT
CONTEMPLATED BY OR REFERRED TO HEREIN, AND ALL EXTRAORDINARY SERVICING
EXPENSES, TO THE EXTENT THAT THE AGENT IS NOT REIMBURSED FOR SUCH EXPENSES BY
OR ON BEHALF OF BORROWER. THE AGREEMENTS IN THIS SECTION SHALL SURVIVE THE
PAYMENT OF THE OBLIGATIONS AND THE TERMINATION OF THIS AGREEMENT. ATTORNEYS’
FEES AND DISBURSEMENTS INCURRED IN

 

58

 

ENFORCING, OR ON APPEAL FROM, A JUDGMENT PURSUANT HERETO
SHALL BE RECOVERABLE SEPARATELY FROM AND IN ADDITION TO ANY OTHER AMOUNT
INCLUDED IN SUCH JUDGMENT, AND THIS CLAUSE IS INTENDED TO BE SEVERABLE FROM THE
OTHER PROVISIONS OF THIS AGREEMENT AND TO SURVIVE AND NOT BE MERGED INTO SUCH
JUDGMENT.

 

TO THE EXTENT THAT, AFTER THE LENDERS HAVE MADE PAYMENTS TO
AGENT PURSUANT TO THIS SECTION 10.2, AGENT RECEIVES FROM THE COMPANY, THE
COLLATERAL OR ANY OTHER SOURCE (OTHER THAN THE LENDERS) ANY AMOUNT ON ACCOUNT
OF THE LIABILITIES SO PAID BY THE LENDERS, AGENT SHALL REIMBURSE SUCH AMOUNT
RECEIVED FROM THE COMPANY, THE COLLATERAL OR SUCH OTHER SOURCE TO THE LENDERS,
RATABLY IN ACCORDANCE WITH THE AMOUNTS RECEIVED FROM THEM PURSUANT TO SECTION
10.2 FOR PURPOSES OF THE FOREGOING SENTENCE, AGENT MAY APPLY ANY AMOUNT
RECEIVED FROM THE COMPANY OR ANY SUCH OTHER SOURCE TO ANY OBLIGATIONS OWING TO
IT UNDER ANY LOAN DOCUMENT.

 

11.           FINANCIAL INFORMATION.

 

All
financial statements and reports furnished to the Agent hereunder shall be
prepared in accordance with GAAP, applied on a basis consistent with that
applied in preparing the financial statements as at, and for the period ended,
the Interim Date (except to the extent otherwise required to conform to good
accounting practice).

 

12.          AGREEMENTS CONCERNING THE
AGENT AND THE LENDERS.

 

12.1         Appointment.  Each of the Lenders hereby irrevocably
appoints Washington Mutual Bank, FA as the Agent under this Agreement and the
other Loan Documents and authorizes the Agent to act on such appointing
Lender’s behalf and to exercise such powers under this Agreement and all other
Loan Documents as are specifically delegated to or required of the Agent by
their terms, together with all reasonably incidental powers. Notwithstanding
any provision to the contrary elsewhere in this Agreement, the Agent shall not
have any duties or responsibilities except those expressly set forth herein or
in another Loan Document, nor shall the Agent have or be deemed to have any
fiduciary relationship with any Lender or any participant. No implied
covenants, functions, responsibilities, duties, obligations or liabilities shall
be read into this Agreement or any other Loan Document or otherwise exist
against the Agent. Without limiting the generality of the foregoing, the use of
the term “agent” in this Agreement or the other Loan Documents with reference
to the Agent is not intended to connote any fiduciary or other implied (or
express) obligations arising under agency doctrine of any applicable law.
Instead, such term is used merely as a matter of market custom and is intended
to create or reflect only an administrative relationship between independent
contracting parties. Each Lender hereby agrees to assert no claim against the
Agent on any agency thereof or any other theory of liability for breach of
fiduciary duty, all of which claims are hereby expressly waived by each Lender.

 

59

 

12.2         Employment
of Others by the Agent.  The
Agent may execute and perform any of its duties under the Loan Documents by or
through employees, agents and attorneys other than (a) the Company or (b) any
of the Company’s Affiliates or (c) any of the Company’s attorneys or other
agents, and the Agent shall be entitled to rely (and shall be protected in
reasonably relying) on the advice of such employees, agents and attorneys
concerning all matters pertaining to its duties under the Loan Documents.   The Agent shall not be responsible for the
negligence or misconduct of any agent or attorney selected by it in the absence
of gross negligence, fraud or willful misconduct by the Agent.   Each Lender recognizes and understands that
if, after the occurrence of any Default under this Agreement, the Agent
services any Collateral consisting of loans secured by mortgages and the Agent
does not have adequate facilities (and the Agent shall have no obligation to develop
adequate facilities) to service such Collateral, it will be necessary for the
Agent to contract with a third party to service such Collateral and the fees to
be paid for such services will be treated as expenses payable out of the income
and proceeds realized from such Collateral having priority over other
applications of such income and proceeds pursuant to the Loan Documents. The
Agent will identify any such servicing agent selected by the Agent for such
purpose by written notice to the Lenders, and may engage and continue to employ
such servicing agent unless and until the other Lenders notify the Agent in
writing that they disapprove of such servicing agent so selected, in which
event the Agent shall promptly engage such other servicing agent as shall be
approved in writing by all of the Lenders and replace the servicing agent so
originally selected.

 

12.3         Exculpatory
Provisions. Except in the case of its, his or her own
(or own agent’s) fraud, gross negligence, or willful misconduct, it being specifically intended that the Released
Persons  (as defined below) be hereby
released from liability for their own simple negligence, the “Agent,
et al.” (Meaning the Agent, its
Affiliates and its  - and each of its
Affiliates’  - officers, shareholders,
directors, employees and agents), (collectively, the “Released Persons”) shall
not be (a) liable for any action taken or omitted to be taken by such Released
Person (1) in the exercise of the discretion or power conferred upon such
Released Person by the Loan Documents or (2) with the consent or at the request
of all Lenders or the Majority Lenders (as applicable), or (b) responsible for
consequences of any error of judgment. It is specifically intended that each
Released Person is hereby released from liability for his, her, or its own
negligence to the maximum extent permitted by law.   The Agent, et al., shall
not be responsible in any manner to anyone for (l) the effectiveness,
enforceability, legality, genuineness, sufficiency, validity, due execution,
filing, registration or recording of any of the Loan Documents, (2) any
representation, warranty, document, certificate, report or statement made or
furnished in, under or in connection with the Loan Documents other than its own
representation, warranty, certificate, report or statement furnished to one or
more Lenders in or pursuant to any Loan Document, whether deemed given pursuant
to Article 4 of this Agreement or given in a separate writing (and no
certificate, report or statement so furnished that is prepared in reliance upon
information furnished by the Company or any source other than the Agent itself
shall be construed to be a certification, confirmation, guaranty or undertaking
of any kind by the Agent of the correctness or completeness of any of the information
so relied upon by the Agent), (3) the value of any of the Collateral, (4)
except to the extent the Agent is required to hold Collateral or take or
perform any other action with respect to it in accordance with this Agreement
and which action is required of such perfection, the perfection of any Lien on
any Collateral, (5) any delay, error, omissions or default of any third party
mail, telegraph, telecopy, electronic mail, cable or wireless agency or
operator or (6) any failure of the Company to

 

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perform its obligations
hereunder or under any other Loan Document. The Agent, et al, shall not be under any obligation
to anyone to (a) ascertain or to inquire as to the performance or observation
of any of the terms, covenants, or conditions of any of the Loan Documents on
the part of the Company or any other Person or (b) inspect the property
(including the books and records) of the Company.

 

12.4         Defaults.  Should any Event of Default or Default occur
and be continuing, any Lender having actual knowledge thereof shall notify
Agent and Company of the existence thereof, but the failure of any Lender to
provide that notice shall not prejudice that Lender’s rights under this
Agreement. The Agent shall not be deemed to have knowledge or notice of the
occurrence of any Default or Event of Default unless a Vice President or more
senior officer of the Mortgage Banker Finance Group of the Agent has actual
knowledge of it or such an officer shall have received notice from the Company
or a Lender referring to this Agreement, describing such Default or Event of
Default and stating that such notice is a “Notice of Default”. The Agent shall
take such action with respect to an Event of Default as shall be reasonably directed
by the Majority Lenders; provided that unless and until the Agent shall have
received such directions, the Agent may (but shall not be obligated to) take
such action, or refrain from taking such action, with respect to such Event of
Default, as the Agent, in its sole discretion, may deem necessary or
appropriate to protect the rights and interest of the Agent and the Lenders and
to realize the benefits of the Collateral. The Agent shall be fully justified
in failing or refusing to take any action under this Agreement and the other
Loan Documents unless it shall first receive such advice or concurrence of the
Majority Lenders as it deems appropriate and, if it so requests, it shall first
be indemnified to its satisfaction by the Lenders against any and all liability
and expense which may be incurred by it by reason of taking or continuing to
take any such action. The Agent shall in all cases be fully protected in
acting, or in refraining from acting, under this Agreement or any Loan Document
in accordance with a request of the Majority Lenders, and such request and any
action taken or failure to act pursuant thereto shall be binding upon the
Lenders, all participants, and all future holders of the Obligations owing by
Borrower hereunder. Where this Agreement expressly permits or prohibits an
action unless the Majority Lenders otherwise determine, the Agent shall, and in
all other instances the Agent may but shall not be required to, initiate any
solicitation for the consent or a vote of the Lenders. Notwithstanding the
foregoing, the Agent shall not be required to take any action that it
reasonably believes may expose it to personal liability or be contrary to this
Agreement or applicable law.

 

12.5         Reliance.  The Agent, et
al., shall be entitled to rely -
and shall be fully protected in reasonably relying - upon any writing,
resolution, notice, consent, certificate, affidavit, letter, cablegram,
telegram, telex or teletype message, statement, order or other document or
conversation believed by it, him or her to be genuine and correct and to have
been signed or made by the proper Person. The Agent shall not be required in
any way to determine the identity or authority of any Person delivering or
executing the same. If any order, writ, judgment or decree (an “Order”) shall
be made or entered by any court affecting the rights, duties and obligations of
the Agent under the Loan Documents, then and in any of such events the Agent is
authorized, in its sole discretion, to rely upon and comply with such Order; and
if the Agent complies with any such Order, then the Agent, et al., shall not be liable to any Lender
or to any other Person by reason of such compliance, even though such Order may
be subsequently reversed, modified, annulled, set aside, held inapplicable or
vacated.

 

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12.6         Resignation
of the Agent.  The
Agent, or any Agent or agents hereafter appointed, at any time may resign by
giving written notice of resignation to the Company and the Lenders and complying
with the applicable provisions of this Section.   The Agent may be removed in accordance with the applicable
provisions of Section 12.7 and with written notice to the Company.   Upon receiving such notice of resignation
or removal, a successor Agent shall be promptly appointed by unanimous action
of the Lenders by written instrument, in duplicate, one copy of which
instrument shall be delivered to the resigning Agent and one copy to the
successor Agent.   If no successor Agent
shall have been so appointed and have accepted the appointment within thirty
(30) days after such notice of resignation, then the resigning Agent may
appoint a successor Agent, which shall itself be subject, however, to removal
by the Lenders (other than any Lender which is then the Agent) without cause (i.e.,
notwithstanding the conditions to removal of the Agent stated in Section 12.7)
upon thirty (30) days’ written notice, provided that the removing Lenders
designate another successor Agent in such notice   -   or in a separate
written notice given on or before five (5) days thereafter -  to the Agent being removed.   If the resigning Agent does not appoint a
successor Agent as provided in the preceding sentence, then the resigning Agent
or the Lenders (other than any Lender which is then the Agent) may petition any
appropriate court for the appointment of a successor Agent.  After such notices, if any, as it may deem
proper and prescribe, such court may appoint a successor Agent.

 

12.7         Removal of
the Agent.  If
(a) a receiver shall be appointed by any Governmental Authority of competent
jurisdiction and shall take charge or control of the Agent or of its Property
or affairs for the purpose of rehabilitation, conservation or liquidation, or
(b) the Agent shall be grossly negligent in the performance of its material
duties and obligations under this Agreement or engage in willful misconduct
concerning any such material duties and obligations, then, in any such case,
the Lenders (other than any Lender which is then the Agent) may remove the
Agent and appoint a successor by written instrument, in duplicate, one copy of
which shall be delivered to the Agent so removed and one copy to the successor
Agent; or the Lenders (other than any Lender which is then the Agent) may
petition any court of competent jurisdiction for the removal of the Agent and
the appointment of a successor Agent. After such notice, if any, as it may deem
proper and prescribe, such court may remove the Agent and appoint a successor
Agent.

 

12.8         Effective Date of Resignation or Removal.   No
resignation or removal of the Agent shall be effective until (a) a successor
Agent is appointed pursuant to the provisions of this Agreement and has
accepted the appointment as provided in this Agreement, with a copy of such
acceptance to be provided by the successor Agent to the predecessor Agent, the
Company and the Lenders (but no notice to any other Person shall be required),
and (b) the resigning or removed Agent has taken such actions (including the
deliver to the successor Agent of Collateral and the execution and delivery to
the successor Agent of assignments) as may be necessary or appropriate to cause
the successor Agent to have a perfected Lien in the collateral for the benefit
of the Lenders (provided, that the Lenders may elect to waive the requirements
of this clause (b) to facilitate succession, although no such waiver shall
excuse the resigning or removed Agent from its obligations under this clause
(b) or otherwise), and the Agent agrees to take any and all such actions as the
successor Agent may reasonably request.  
Each Lender shall be responsible, ratably, for its share of all
reasonable expenses of the resigning or removed Agent and of the successor
Agent incurred in connection with the actions to be taken in accordance with
the provisions of this Section.

 

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12.9         Successor Agent.  Any successor Agent appointed
as provided in this Article shall execute and deliver to the Company and to its
predecessor Agent an instrument accepting such appointment, and thereupon the
resignation or removal of the predecessor Agent shall become effective and such
successor Agent, without any further act, deed or conveyance, shall become
vested with all the rights and obligations of its predecessor, with like effect
as if originally named as the Agent; provided, that upon the written
request of the Company or the successor Agent, the Agent ceasing to act shall
execute and deliver (a) an instrument transferring to such successor Agent all
of the rights of the Agent so ceasing to act and (b) to such successor Agent
such instruments as are necessary to transfer the Collateral to such successor
Agent (including assignments of all Collateral or Collateral Documents). Upon
the request of any such successor Agent made from time to time, the Company
shall execute any and all papers which the successor Agent shall request or
require to more fully and certainly vest in and confirm to such successor Agent
all such rights.

 

12.10       Credit
Decisions.  The
Lenders expressly acknowledge that neither the Agent nor any of its officers,
directors, employees, agents, attorneys-in-fact or Affiliates has made any
representations or warranties to them and that no act by the Agent hereinafter
taken, including any consent to or acceptance of any assignment or any review
of the affairs of Borrower, shall be deemed to constitute any representation or
warranty by the Agent to any Lender.  
Each Lender acknowledges and agrees that it has, independently and
without reliance upon the Agent or any other Lender and based upon the
Financial Statements of the Company and such other documents and information as
it has deemed appropriate (and such Lender represents and agrees that it has
received and reviewed all of the information which it requested and that it
requested all information which it considered material to its credit decision),
made its appraisal of and investigation into the business, operations,
property, financial and other condition and creditworthiness of Borrower and
into all applicable banking regulatory laws relating to the transactions
contemplated by the Loan Documents, and such Lender has made its own decision
to make Advances hereunder and enter into this Agreement.   Each Lender also acknowledges and agrees
that it will, independently and without reliance upon the Agent, et al. or any
other Lender and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit analysis, appraisals
and decisions in taking or not taking action under this Agreement and the other
Loan Documents, and to make such investigation as it deems necessary to inform
itself as to the business, operations, property, financial and other condition
and creditworthiness of Borrower.   Except
for notices, reports and other documents expressly required to be furnished to
the Lenders by the Agent hereunder, the Agent shall not have any duty or
responsibility to provide any Lender with any credit or other information
concerning the business, operations, property, condition (financial or
otherwise), prospects or creditworthiness of Borrower which may come into the
possession of the Agent or any of its officers, directors, employees, agents,
attorneys-in-fact or Affiliates.

 

12.11       Merger of the
Agent.  Any
Person into which the Agent may be merged or converted or with which it may be
consolidated, or any Person surviving or resulting from any merger, conversion
or consolidation to which the Agent shall be a party or any Person succeeding
to the commercial banking business of the Agent, shall be the successor Agent
without the execution or filing of any paper or any further act on the part of
any of the parties.

 

63

 

12.12       Agent and
Affiliates.   With respect to its own Notes, the Agent
shall have the same rights and powers under the Loan Documents as any other
Lender and may exercise the same as though it were not the Agent. Each of the
Agent and its Affiliates may accept deposits from, lend money to, act as
trustee under indentures of, and generally engage in any kind of business with
the Company, any of its Affiliates and any Person who may do business with or
own securities of any of them, all as if it was not the Agent and without any
duty to account therefor to the Lenders. The Lenders acknowledge that, pursuant
to such activities, the Agent or its affiliates or subsidiaries may receive
information regarding Borrower or its affiliates or subsidiaries (including
information that may be subject to confidentiality obligations in favor of
Borrower or such affiliate or subsidiary) and acknowledge that the Agent shall
be under no obligation to provide such information to them.  With respect to the Advances made by it as a
Lender, the Agent shall have the same rights and powers under this Agreement
and the other Loan Documents as any Lender and may exercise the same as though
it were not the Agent, and the terms “Lender” and “Lenders” shall include the
Agent in its individual capacity.

 

12.13       Lender’s
Cooperation.  
The Lenders agree to cooperate among themselves and with the Agent and
from time to time upon the Agent’s request, to execute and deliver such papers
as may be reasonably necessary to enable the Agent, in its capacity as lead
lender and servicer, to effectively administer and service the Loan and each
Lender’s Senior Credit Note in the manner contemplated by this Agreement.

 

12.14       Withholding Tax.

 

(a)           If any Lender is a “foreign corporation,
partnership or trust” within the meaning of the Code and such Lender claims
exemption from, or a reduction of, United States withholding tax under Sections
1441 or 1442 of the Code, such Lender agrees with and in favor of the Agent, to
deliver to the Agent:

 

(i)            if such Lender claims an exemption from, or a
reduction of, withholding tax under a United States tax treaty, properly
completed IRS Forms 1001 and W-8 before the payment of any interest in the
first calendar year and before the payment of any interest in each third
succeeding calendar year during which interest may be paid under this
Agreement;

 

(ii)           if such Lender claims that interest paid
under this Agreement is exempt from United States withholding tax because it is
effectively connected with a United States trade or business of such Lender,
two properly completed and executed copies of IRS Form 4224 before the payment
of any interest is due in the first taxable year of such Lender and in each
succeeding taxable year of such Lender during which interest may be paid under
this Agreement, and IRS Form W-9; and

 

(iii)          such other form or forms as may be required
under the Code or other laws of the United States as a condition to exemption
from, or reduction of, United States withholding tax.

 

64

 

Such Lender agrees to notify the Agent and Borrower promptly of any
change in circumstances which would modify or render invalid any claimed
exemption or reduction.

 

(b)           If any Lender claims exemption from, or
reduction of, withholding tax under a United States tax treaty by providing IRS
Form 1001 and such Lender sells, assigns, grants a participation in, or
otherwise transfers all or part of its Commitment Percentage to any other
Person, such Lender agrees to notify the Agent and Borrower of the Commitment
Percentage so assigned.   To the extent
of such assigned Commitment Percentage, the Agent will treat such Lender’s IRS
Form 1001 as no longer valid.

 

(c)           If any Lender claiming exemption from United
States withholding tax by filing IRS Form 4224 with the Agent sells, assigns,
grants a participation in, or otherwise transfers all or part of its Commitment
Percentage to any other Person, such Lender agrees to undertake sole
responsibility for complying with the withholding tax requirements imposed by
Sections 1441 and 1442 of the Code.

 

(d)           If any Lender is entitled to a reduction in
the applicable withholding tax, the Agent may withhold from any interest
payment to such Lender an amount equivalent to the applicable withholding tax
after taking into account such reduction. If the forms or other documentation
required by subsection (a) of this Section are not delivered to the Agent, then
the Agent may withhold from any interest payment to such Lender not providing
such forms or other documentation in an amount equivalent to the applicable
withholding tax.

 

(e)           If the IRS or any other taxing authority
asserts a claim that the Agent did not properly withhold tax from amounts paid
to or for the account of any Lender (because the appropriate form was not
delivered, was not properly executed, or because such Lender failed to notify
the Agent of a change in circumstances which rendered the exemption from, or
reduction of, withholding tax ineffective, or for any other reason) such Lender
shall indemnify the Agent fully for all amounts paid, directly or indirectly,
by the Agent as tax or otherwise, including penalties and interest, and
including any taxes imposed by any jurisdiction on the amounts payable to the
Agent under this Section, together with all costs and expenses (including
attorneys’ fees and costs). The obligations of the Lenders under this
subsection shall survive the payment of all amounts owing by Borrower under
this Agreement, termination of the Commitments, and the resignation or
replacement of the Agent.

 

12.15       Sharing.   If
any Lender obtains any amount - whether voluntary, involuntary, or otherwise,
including, without limitation, as a result of exercising its rights under
Section 8.5 - that exceeds the portion of that amount it is otherwise entitled
under the Loan Documents to receive, then that Lender shall purchase from the
other Lenders participations that result in the purchasing Lender’s sharing the
excess amount ratably with each Lender in accordance with the portion it is
entitled to receive under the Loan Documents. 
If all or any of that excess amount is subsequently recovered from that
purchasing Lender, then the purchase of participations in it is automatically
rescinded and the purchase price restored to that purchasing Lender to the extent
of the recovery. Any Lender purchasing a participation from another Lender
under this Section

 

65

 

may, to the extent lawful,
exercise all of its rights of payment (including the right of offset) with respect
to that participation as fully as if that Lender were the direct creditor of
Company in the amount of that participation.

 

12.16       Commitment
Increases.

 

(a)           At any time and from time to time after the
date hereof, the Commitment may be increased either by an Additional Lender
establishing a Commitment Amount or by one or more then existing Lenders
(“Increase Lender”) increasing its Commitment Amount (each such increase by
either means, a “Commitment Increase”) provided that no Commitment Increase shall
become effective unless and until (i) the Company, the Agent and the Additional
Lender or the Increase Lender shall have executed and delivered an amendment
with respect to such Commitment Increase, and (ii) such Commitment Increase
shall have been consented to by each of the other Lenders. Prior to the
effective date of any Commitment Increase, the Company shall issue a Note to
the Additional Lender or, against surrender of its existing Note to an Increase
Lender, in the amount of such Lender’s Commitment Amount after giving effect to
such Commitment Increase. Such new promissory notes shall constitute a “Note”
for the purpose of the Loan Documents.

 

(b)           On the effective date of any Commitment
Increase, the Agent shall recompute the Commitment Percentage for each Lender
following the Commitment Increase, and within in two (2) Business Days, the
Agent shall request Advances of the affected category from or shall direct
prepayments of such Advances to, each Lender so that the total amount of all
then outstanding Advances of the affected category of each category are shared
pro rata with each Lender, pursuant to Section 2.1 hereof.

 

12.17       Participation.   Each Lender reserves the rights, with prior
notice to and consent of the Agent, to sell to any bank, savings and loan,
savings bank, credit union, other deposit-taking financial institution or
commercial lending institution, participations in all or any part of such
Lender’s Advances, Note or Commitment. 
Participants shall have no rights under the Loan Documents other than
certain voting rights as provided below. 
Each Lender shall be entitled to obtain (on behalf of its participants)
the benefits of this Agreement with respect to all participants in its Advances
outstanding from time to time; provided that the Company shall not be obligated
to pay any amount in excess of the amount that would be due to such Lender
calculated as though no participation had been made.   No Lender shall sell any participating interest of less than
FIVE MILLION AND NO/100 DOLLARS ($5,000,000.00) or under which the participant
shall have any rights to approve any amendment, modification or waiver of any
Loan Documents.   Except in the case of
the sale of a participating interest to a Lender, the relevant participation
agreement shall not permit the participant to transfer, pledge, assign, sell
any subparticipation in or otherwise alienate or encumber its participation
interest in the Loan.

 

12.18       Amendments
and Modifications.

 

(1)           Without the written consent of all of the
Lenders, including Washington Mutual Bank, FA, the Agent shall not agree to any
amendments or modifications to the Loan Documents, or grant a written waiver of
any provision

 

66

 

of
them, the effect of which would be to (a) change the amount or the due date of
any required payment other than in accordance with the express provisions of
the Loan Documents, (b) change the interest rate provisions of this Agreement,
(c) change the provisions of Sections 2.1 (a) of this Agreement; (d) extend the
maturity date of any Note on the Termination Date, (e) change any sharing ratio
applicable to the Lenders under this Agreement except pursuant to the express
provisions of this Agreement, (f) change the several nature of the Lenders’
respective obligations to make Advances this Agreement, (g) change the
conditions precedent to any Advance in any material respect, (h) release
Collateral other than pursuant to the express provisions of this Agreement, (i)
amend this Section or the definition of “Majority Lenders”, (j) amend the
definition of “Eligible Mortgage Loan” or amend any defined term used within
the definition of “Eligible Mortgage Loan” (provided that, (x) with the
approval of the Majority Lenders, the Agent may temporarily waive or suspend
one or more of this Agreement’s eligibility requirements or conditions for a
particular grouping of Mortgage Loans to qualify as Eligible Mortgage Loans
where their failure to so qualify is beyond the Company’s reasonable control
and if the Agent believes at the time of such temporary waiver or suspension
that the factors which apparently caused such disqualification will be
eliminated in a reasonably short time and (y) in addition to the provisions of
the foregoing subclause (x) Agent may, in its sole discretion, warehouse or
continue to warehouse Mortgage Loans (“Ineligible Mortgage Loans”) which fail
to qualify as Eligible Mortgage Loans or waive or temporarily suspend or delay
any obligation of the Company hereunder in connection with such Ineligible
Mortgage Loans, including, without limitation, suspension of any mandatory
prepayment due in connection with such Ineligible Mortgage Loans, so long as
the aggregate Advances outstanding at any one time against such Ineligible
Mortgage Loans shall not exceed FIVE MILLION AND NO/100 DOLLARS
($5,000,000.00), or (k) increase the amount of any Lender’s Commitment Amount.

 

(2)           Agent may agree to any amendments or
modifications of the Loan Documents or grant a written waiver of any provision
therein provided that it shall not, without the written consent of the Majority
Lenders, agree to any amendment or modification of the Loan Documents or grant
a written waiver of any provision therein the effect of which would be to (a)
change the provisions of Section 2.1(b) of this Agreement; (b) waive any
material Event of Default under the Loan Documents; or (c) change or modify any
other provision of this Agreement in any material respect.

 

13.          MISCELLANEOUS.

 

13.1         Assignment.  Any Lender may, in the ordinary course of
its business and in accordance with applicable law, at any time and from time
to time assign to any Lender or any Affiliate thereof or, with the consent of
the Agent (which shall not unreasonably be withheld), to any other Person
(collectively, “Purchasing Lenders”) all or any part of its rights and
obligations under this Agreement and the other Loan Documents pursuant to an
Assignment and Acceptance, substantially in the form of Exhibit “Q” (an “Assignment and
Acceptance”)

 

67

 

executed by such Purchasing Lender (and, in the case of a Purchasing
Lender that is not then a Lender or an Affiliate thereof, by the Agent) and
delivered to the Agent for its acceptance and recording in the Register (as
defined in Section 13.2); provided, that, (a) assigning Lender shall pay to the
Agent an assignment fee in the amount of FIVE THOUSAND AND NO/100 DOLLARS
($5,000.00), and except in the case of an assignment of all of a Lender’s
rights and obligations under this Agreement, (b) the amount of the Commitment
of the assigning Lender being assigned pursuant to each such assignment shall
equal at least TEN MILLION AND NO/100 DOLLARS ($10,000,000.00) and (c) after
giving effect to each such assignment, the amount of the remaining Commitment
of the assigning Lender shall equal at least TEN MILLION AND NO/100 DOLLARS
($10,000,000.00) (or, in each case, such lesser amount to which the Agent may
consent). Upon such execution, delivery, acceptance and recording, from and
after the effective date determined pursuant to such Assignment and Acceptance,
(x) the Purchasing Lender thereunder shall be a party hereto and, to the extent
provided in such Assignment and Acceptance, have the rights and obligations of
a Lender hereunder with a Commitment Percentage as set forth therein, and (y)
the assigning Lender thereunder shall to the extent provided in such Assignment
and Acceptance, be released from its obligations under this Agreement (and, in
the case of an Assignment and Acceptance covering all or the remaining portion
of such assigning Lender’s rights and obligations under this Agreement, such
assigning Lender shall cease to be a party hereto). Such Assignment and
Acceptance shall be deemed to amend this Agreement to the extent, and only to
the extent, necessary to reflect the addition of such Purchasing Lender and the
resulting adjustment of Commitment Percentages arising from the purchase by
such Purchasing Lender of all or a portion of the rights and obligations of
such assigning Lender.

 

13.2         The
Register.  The Agent, on behalf
of Borrower, shall maintain at the office of the Agent a copy of each
Assignment and Acceptance delivered to it and a register (the “Register”) for
the recordation of the names and addresses of the Lenders and the Commitment
Percentage of, and principal amount of the Advances owing to, each Lender from
time to time. The entries in the Register shall be conclusive, in the absence
of manifest error, and Borrower, the Agent and the Lenders shall treat each
Person whose name is recorded in the Register as the percentage owner of an
Advance or other Obligation hereunder as the owner thereof for all purposes of
this Agreement and the other Loan Documents, notwithstanding any notice to the
contrary.  The Register shall be
available for inspection by Borrower or any Lender at any reasonable time and
from time to time upon reasonable prior notice.  Upon its receipt of an Assignment and Acceptance executed by an
assigning Lender and a Purchasing Lender (and, in the case of a Purchasing
Lender that is not then a Lender or an Affiliate thereof, by the Agent and the
$5,000.00 assignment fee), the Agent shall (i) promptly accept such Assignment
and Acceptance and (ii) on the effective date determined pursuant thereto record
the information contained therein in the Register and give notice of such
acceptance and recordation to the Lenders and Borrower.

 

13.3         Disclosures.  Borrower authorizes each Lender to disclose
to any Purchasing Lender or to any participant (each, a “Transferee”), and any
prospective Transferee, any and all financial information in such Lender’s
possession concerning Borrower and its Affiliates which has been delivered to
such Lender by or on behalf of Borrower pursuant to this Agreement or which has
been delivered to such Lender by or on behalf of Borrower in connection with
such Lender’s credit evaluation of Borrower and its Affiliates prior to
becoming a party to this

 

68

 

Agreement; provided, however, that such prospective
Transferee agrees it shall be subject to the same confidentiality requirements
as any Lender hereunder with respect to such information.

 

13.4         Pledges. Nothing herein shall
prohibit any Lender from pledging or assigning all or any portion of its
interest in Advances to any Federal Reserve Bank in accordance with applicable
law.

 

13.5         Governing
Law.  This Agreement and the
other Loan Documents shall be governed by the laws of the State of Texas,
without reference to its principles of conflicts of laws.

 

13.6         Relationship of the Parties. This
Agreement provides for the making of Advances by the Lenders, in their capacity
as lenders, to the Company, in its capacity as a borrower, and for the payment
of interest, repayment of principal by the Company to the Lenders, and for the
payment of certain fees by the Company to the Lenders and the Agent. The
relationship between the Lenders and the Company is limited to that of
creditor/secured party, on the one hand, and debtor, on the other hand.  The provisions herein for compliance with
financial covenants and delivery of financial statements are intended solely
for the benefit of the Lenders to protect their interests as lenders in
assuring payments of interest and repayment of principal and payment of certain
fees, and nothing contained in this Agreement shall be construed as permitting
or obligating the Agent or the Lenders to act as a financial or business
advisor or consultant to the Company, as permitting or obligating the Agent or
the Lenders to control the Company or to conduct the Company’s operations, as
creating any fiduciary obligation on the part of the Agent or the Lenders to
the Company, or as creating any joint venture, agency, or other relationship
between the parties hereto other than as explicitly and specifically stated in
this Agreement. The Company acknowledges that it has had the opportunity to
obtain the advice of experienced counsel of its own choosing in connection with
the negotiation and execution of this Agreement and to obtain the advice of
such counsel with respect to all matters contained herein, including, without
limitation, the provision for waiver of trial by jury. The Company further
acknowledges that it is experienced with respect to financial and credit matters
and has made its own independent decisions to apply to the Lenders for credit
and to execute and deliver this Agreement.

 

13.7         Severability. If any
provision of this Agreement shall be declared to be illegal or unenforceable in
any respect, such illegal or unenforceable provision shall be and become
absolutely null and void and of no force and effect as though such provision
were not in fact set forth herein, but all other covenants, terms, conditions
and provisions hereof shall nevertheless continue to be valid and enforceable.

 

13.8         Usury.  It is the intent of Lenders and the Company
in the execution and performance of this Agreement and the Notes or any Loan
Document to remain in strict compliance with Applicable Law from time to time
in effect.  In furtherance thereof,
Lenders and the Company stipulate and agree that none of the terms and
provisions contained in the Notes, this Agreement or any Loan Document shall
ever be construed to create a contract to pay for the use, forbearance or
detention of money with interest at a rate or in an amount in excess of the
Maximum Rate or amount of interest permitted to be charged under Applicable
Law.  For purposes of this Agreement,
the Notes and any other Loan Document, “interest” shall include the

 

69

 

aggregate of all charges which constitute interest under Applicable Law
that are contracted for, taken, charged, reserved, or received under this
Agreement, the Notes or any other Loan Document. The Company shall never be
required to pay unearned interest or interest at a rate or in an amount in
excess of the Maximum Rate or amount of interest that may be lawfully charged
under Applicable Law, and the provisions of this paragraph shall control over
all other provisions of this Agreement and the Notes or any Loan Document,
which may be in actual or apparent conflict herewith. If the Notes are prepaid,
or if the maturity of the Notes is accelerated for any reason, or if under any
other contingency the effective rate or amount of interest which would
otherwise be payable under the Notes would exceed the Maximum Rate or amount of
interest any Lender or any other holder of the Notes is allowed by Applicable
Law to charge, contract for, take, reserve or receive, or in the event any
Lender or any holder of the Notes shall charge, contract for, take, reserve or
receive monies that are deemed to constitute interest which would, in the
absence of this provision, increase the effective rate or amount of interest
payable under the Notes to a rate or amount in excess of that permitted to be
charged, contracted for, taken, reserved or received under Applicable Law then
in effect, then the principal amount of the Notes or the amount of interest
which would otherwise be payable under the Notes or both shall be reduced to
the amount allowed under Applicable Law as now or hereinafter construed by the
courts having jurisdiction, and all such moneys so charged, contracted for,
taken, reserved or received that are deemed to constitute interest in excess of
the Maximum Rate or amount of interest permitted by Applicable Law shall
immediately be returned to or credited to the account of the Company upon such
determination. Lenders and the Company further stipulate and agree that,
without limitation of the foregoing, all calculations of the rate or amount of
interest contracted for, charged, taken, reserved or received under the Notes
which are made for the purpose of determining whether such rate or amount
exceeds the Maximum Rate, shall be made to the extent not prohibited by
Applicable Law, by amortizing, prorating, allocating and spreading during the
period of the full stated term of the Notes, all interest at any time
contracted for, charged, taken, reserved or received from the Company or otherwise
by any Lender or any other holder of the Notes.

 

13.9         Consent to Jurisdiction.  Subject to the provisions of Section 13.10
of this Agreement, the Company hereby agrees that any action or proceeding
under this Agreement, the Notes or any document delivered pursuant hereto may
be commenced against it in any court of competent jurisdiction within the State
of Texas, by service of process upon the Company by first class registered or
certified mail, return receipt requested, addressed to the Company at its
address last known to the Agent.  The
Company agrees that any such suit, action or proceeding arising out of or
relating to this Agreement or any other such document may be instituted in
Harris County, State District Court or in the United States District Court for
the District of Texas at the option of the Agent; and the Company hereby waives
any objection to the venue, or any claim as to inconvenient forum, of any such
suit, action or proceeding.  Nothing
herein shall affect the right of the Agent to accomplish service of process in
any other manner permitted by law or to commence legal proceedings or otherwise
proceed against the Company in any other jurisdiction or court.

 

13.10       Arbitration.  To the maximum extent not prohibited by law,
any controversy, dispute or claim arising out of, in connection with, or
relating to the Commitment or the Loan Documents or any transaction provided
for therein, including but not limited to any claim based on or arising from an
alleged tort or an alleged breach of any agreement contained in any of the

 

70

 

Loan Documents, shall, at the request of any party to the Loan
Documents (either before or after the commencement of judicial proceedings), be
settled by arbitration pursuant to Title 9 of the United States Code, which the
parties hereto acknowledge and agree applies to the transaction involved
herein, and in accordance with the Commercial Arbitration Rules of the American
Arbitration Association (the “AAA”). If Title 9 of the United States Code is
inapplicable to any such claim, dispute or controversy for any reason, such
arbitration shall be conducted pursuant to the Texas General Arbitration Act
and in accordance with the Commercial Arbitration Rules of the AAA. In any such
arbitration proceeding: (i) all statutes of limitations which would otherwise
be applicable shall apply; and (ii) the proceeding shall be conducted in
Houston, Texas, by a single arbitrator, if the amount in controversy is ONE
MILLION AND NO/100 DOLLARS ($1,000,000.00) or less, or by a panel of three
arbitrators if the amount in controversy is over ONE MILLION AND NO/100 DOLLARS
($1,000,000.00). All arbitrators shall be selected by the process of
appointment from a panel pursuant to Section 13 of the AAA Commercial
Arbitration Rules and each arbitrator shall be either an active attorney, a
mortgage banker or retired judge with an AAA acknowledged expertise in the
subject matter of the controversy, dispute or claim. Any award rendered in any
such arbitration proceeding shall be final and binding, and judgment upon any
such award may be entered in any court having jurisdiction.

 

If any party to any Loan Document files a
proceeding in any court to resolve any such controversy, dispute or claim, such
action shall not constitute a waiver of the right of such party or a bar to the
right of any other party to seek arbitration under the provisions of this
Section of that or any other claim, dispute or controversy, and the court
shall, upon motion of any party to the proceeding, direct that such
controversy, dispute or claim be arbitrated in accordance with this Section.

 

Notwithstanding any of the foregoing, the
parties hereto agree that no arbitrator or panel of arbitrators shall possess
or have the power to (i) assess punitive damages, (ii) dissolve, rescind or
reform (except that the arbitrator may construe ambiguous terms) any Loan
Document, (iii) enter judgment on the debt, (iv) exercise equitable powers or
issue or enter any equitable remedies with respect to matters submitted to
arbitration, or (v) allow discovery of attorney/client privileged information.
The Commercial Arbitration Rules of the AAA are hereby modified to this extent
for the purpose of arbitration of any dispute, controversy or claim arising out
of, in connection with, or relating to the Loan or any Loan Document. The
parties hereby further agree to waive, each to the other, any claims for
punitive damages and agree neither an arbitrator nor any court shall have the
power to assess such damages.

 

No provision of, or the exercise of any
rights under, this Section shall limit or impair the right of any party to any
Loan Document before, during or after any arbitration proceeding to: (i)
exercise self-help remedies such as setoff or repossession; (ii) foreclose
(judicially or otherwise) any Lien on or security interest in any real or
personal Collateral; or (iii) obtain emergency relief from a court of competent
jurisdiction to prevent the dissipation, damage, destruction, transfer,
hypothecation, pledging or concealment of assets or of Collateral securing any
Indebtedness, obligation or guaranty referenced in any Loan Document. Such
emergency relief may be in the nature of, but is not limited to: pre-judgment
attachments, garnishments, sequestrations, appointments of receivers, or other
emergency injunctive relief to preserve the status quo.

 

71

 

13.11      ADDITIONAL INDEMNITY.  IN ADDITION TO THE INDEMNITY PROVIDED IN
SECTION 10, THE COMPANY SHALL INDEMNIFY AND HOLD AGENT, LENDER, AND THEIR
RESPECTIVE SUCCESSORS, ASSIGNS, AGENTS, AND EMPLOYEES (COLLECTIVELY, THE
“INDEMNIFIED PARTIES”), HARMLESS FROM AND AGAINST ANY AND ALL CLAIMS, ACTIONS,
SUITS, PROCEEDINGS, COSTS, EXPENSES, DAMAGES, FINES, PENALTIES, AND
LIABILITIES, INCLUDING, WITHOUT LIMITATION, ATTORNEYS’ FEES AND COSTS, ARISING
OUT OF, CONNECTED WITH, OR RESULTING FROM (A) THE OPERATION OF THE COMPANY’S
BUSINESSES, (B) ANY INDEMNIFIED PARTY’S PRESERVATION OR ATTEMPTED PRESERVATION
OF COLLATERAL, AND (C) ANY FAILURE OF THE SECURITY INTERESTS AND LIENS IN THE
COLLATERAL GRANTED TO THE AGENT FOR THE BENEFIT OF THE LENDERS PURSUANT TO THIS
AGREEMENT TO BE OR TO REMAIN PERFECTED OR TO HAVE THE PRIORITY AS CONTEMPLATED
THEREIN REGARDLESS OF WHETHER THE CLAIM IS CAUSED BY OR ARISES OUT OF, IN WHOLE
OR IN PART, THE NEGLIGENCE OF ANY INDEMNIFIED PARTY OR MAY BE BASED ON THE
STRICT LIABILITY OF ANY INDEMNIFIED PARTY. THIS INDEMNITY SHALL NOT APPLY TO
THE EXTENT THE SUBJECT OF THE INDEMNIFICATION IS CAUSED BY OR ARISES OUT OF THE
GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF ANY INDEMNIFIED PARTY. AT THE REQUEST
OF ANY INDEMNIFIED PARTY, 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 ANY INDEMNIFIED PARTY AND, IN ANY EVENT, SHALL SATISFY, PAY, AND
DISCHARGE ANY AND ALL JUDGMENTS, AWARDS, PENALTIES, COSTS, AND FINES THAT MAY
BE RECOVERED AGAINST ANY INDEMNIFIED PARTY IN ANY SUCH ACTION, PLUS ALL
ATTORNEYS’ FEES AND COSTS RELATED THERETO TO THE EXTENT PERMITTED BY APPLICABLE
LAW; PROVIDED, HOWEVER, THAT SUCH INDEMNIFIED PARTY SHALL GIVE THE COMPANY (TO
THE EXTENT SUCH INDEMNIFIED PARTY SEEKS INDEMNIFICATION THEREFOR FROM THE
COMPANY UNDER THIS SECTION 13.10) WRITTEN NOTICE OF ANY SUCH CLAIM, DEMAND, OR
SUIT AFTER SUCH INDEMNIFIED PARTY HAS RECEIVED WRITTEN NOTICE THEREOF, AND SUCH
INDEMNIFIED PARTY SHALL NOT SETTLE ANY SUCH CLAIM, DEMAND, OR SUIT, IF SUCH
INDEMNIFIED PARTY SEEKS INDEMNIFICATION THEREFOR FROM THE COMPANY, WITHOUT
FIRST GIVING NOTICE TO THE COMPANY OF THE INDEMNIFIED PARTY’S DESIRE TO SETTLE
AND OBTAINING THE CONSENT OF THE COMPANY TO THE SAME, WHICH CONSENT THE COMPANY
HEREBY AGREES NOT TO UNREASONABLY WITHHOLD. ALL OBLIGATIONS OF THE COMPANY
UNDER THIS SECTION 13.10 SHALL SURVIVE THE PAYMENT OF THE NOTES AND THE
OBLIGATIONS.

 

13.12       No Waivers Except in Writing.  No failure or delay on the part of the Agent
in exercising any power or right hereunder or under any other Loan Document
shall operate as a waiver thereof, nor shall any single or partial exercise of
any such right or power, or any abandonment or discontinuance of steps to
enforce such a right or power, preclude any other or further exercise thereof
or the exercise of any other right or power. No notice to or demand on

 

72

 

the Company or any other Person in any case shall entitle the Company
or such other Person to any other or further notice or demand in similar or
other circumstances.

 

13.13      WAIVER OF JURY
TRIAL.  AS TO THIS AGREEMENT THE
COMPANY, THE AGENT AND EACH OF THE LENDERS HEREBY (a) COVENANTS AND AGREES NOT
TO ELECT A TRIAL BY JURY OF ANY ISSUE TRIABLE OF RIGHT BY A JURY, AND (b)
WAIVES ANY RIGHT TO TRIAL BY JURY FULLY TO THE EXTENT THAT ANY SUCH RIGHT SHALL
NOW OR HEREAFTER EXIST. THIS WAIVER OF RIGHT TO TRIAL BY JURY IS SEPARATELY
GIVEN, KNOWINGLY AND VOLUNTARILY, BY THE COMPANY, THE AGENT AND EACH OF THE
LENDERS, AND THIS WAIVER IS INTENDED TO ENCOMPASS INDIVIDUALLY EACH INSTANCE
AND EACH ISSUE AS TO WHICH THE RIGHT OF A JURY TRIAL WOULD OTHERWISE ACCRUE.
THE AGENT, THE LENDERS AND THE COMPANY ARE HEREBY AUTHORIZED AND REQUESTED TO
SUBMIT THIS AGREEMENT TO ANY COURT HAVING JURISDICTION OVER THE SUBJECT MATTER
AND THE PARTIES HERETO, SO AS TO SERVE AS CONCLUSIVE EVIDENCE OF THE FOREGOING
WAIVER OF THE RIGHT TO JURY TRIAL. FURTHER THE AGENT, THE COMPANY AND EACH OF
THE LENDERS HEREBY CERTIFIES THAT NO REPRESENTATIVE OR AGENT OF ANY OF THEM,
RESPECTIVELY, HAS REPRESENTED, EXPRESSLY OR OTHERWISE, TO ANY OF THE
UNDERSIGNED THAT EITHER OF THE AGENT, THE COMPANY OR ANY OF THE LENDERS WILL
NOT SEEK TO ENFORCE THIS WAIVER OF RIGHT TO JURY TRIAL PROVISION.

 

13.14       Multiple Counterparts.  This Agreement may be executed in any number
of counterparts, all of which, taken together, shall constitute one and the
same instrument.

 

13.15       No Third Party
Beneficiaries.  This Agreement
is for the sole and exclusive benefit of the Company, the Agent, and
Lenders.  This Agreement does not
create, and is not intended to create, any rights in favor of or enforceable by
any other Person.  This Agreement may be
amended or modified by the agreement of the Company, the Agent, and Lenders,
without any requirement or necessity for notice to, or the consent of or
approval of any other Person.

 

13.16      RELEASE OF
LIABILITY.  TO THE MAXIMUM
EXTENT NOT PROHIBITED BY LAW FROM TIME TO TIME IN EFFECT, THE COMPANY HEREBY
KNOWINGLY, VOLUNTARILY AND INTENTIONALLY (AND AFTER IT HAS CONSULTED WITH ITS
OWN ATTORNEY) IRREVOCABLY AND UNCONDITIONALLY AGREES THAT NO CLAIM MAY BE MADE
BY THE COMPANY AGAINST THE AGENT, EACH LENDER, OR ANY OF THEIR RESPECTIVE
DIRECTORS, OFFICERS, EMPLOYEES, ATTORNEYS, ACCOUNTANTS, AGENTS OR INSURERS, OR
ANY OF THEIR SUCCESSORS AND ASSIGNS, FOR ANY SPECIAL, INDIRECT, CONSEQUENTIAL
OR PUNITIVE DAMAGES IN RESPECT OF ANY BREACH OR WRONGFUL CONDUCT (WHETHER THE
CLAIM IS BASED ON CONTRACT OR TORT OR DUTY IMPOSED BY LAW) ARISING OUT OF, OR
RELATED TO, THE TRANSACTIONS CONTEMPLATED BY ANY OF THIS AGREEMENT, THE NOTES,
OR ANY OTHER LOAN DOCUMENTS, OR ANY ACT, OMISSION, OR EVENT OCCURRING IN

 

73

 

CONNECTION HEREWITH OR THEREWITH. IN
FURTHERANCE OF THE FOREGOING, THE COMPANY HEREBY WAIVES, RELEASES AND AGREES
NOT TO SUE UPON ANY CLAIM FOR ANY SUCH DAMAGES, WHETHER OR NOT ACCRUED AND
WHETHER OR NOT KNOWN OR SUSPECTED TO EXIST IN ITS FAVOR.

 

13.17       Entire Agreement;
Amendment.  This Agreement, the
Notes, and the other Loan Documents referred to herein embody the final, entire
Agreement among the parties hereto and supersede any and all prior commitments,
agreements, representations, and understandings, whether written or oral,
relating to the subject matter hereof. 
The provisions of this Agreement and the other Loan Documents to which
the Company is a party may be amended or waived only by an instrument in
writing signed by the parties hereto.

 

13.18      NOTICE
PURSUANT TO TX. BUS. & COMM. CODE § 26.02.  THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS
TOGETHER CONSTITUTE A WRITTEN LOAN AGREEMENT WHICH REPRESENTS THE FINAL
AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO
UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

 

[Signature Pages Follow]

 

74

 

IN WITNESS WHEREOF, the parties hereto have
caused this Agreement to be duly executed as of the date first above written.

 

	
   

  	
  COMPANY:

  
	
   

  	
   

  
	
   

  	
  SIRVA MORTGAGE, INC.,

  
	
   

  	
  an Ohio corporation f/k/a

  
	
   

  	
  COOPERATIVE MORTGAGE
  SERVICES, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Paul Klemme

  
	
   

  	
   

  	
  Paul Klemme, President

  
				

 

75

 

	
   

  	
  AGENT:

  
	
   

  	
   

  
	
   

  	
  WASHINGTON MUTUAL BANK,
  FA,

  
	
   

  	
  a federal association, as
  Agent for the Lenders

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Craig A. Moyer

  
	
   

  	
  Name:

  	
  CRAIG A. MOYER

  
	
   

  	
  Title:

  	
  FVP

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  DOCUMENTATION
  AGENT:

  
	
   

  	
   

  
	
   

  	
  NATIONAL CITY BANK OF
  KENTUCKY,

  
	
   

  	
  as Documentation Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/  Mary Jo Reiss

  
	
   

  	
  Name:

  	
   

  	
  Mary Jo Reiss

  
	
   

  	
  Title:

  	
   

  	
  Vice President

  
								

 

76

 

	
   

  	
  LENDERS:

  
	
   

  	
   

  
	
   

  	
  WASHINGTON MUTUAL BANK,
  FA,

  
	
   

  	
  a federal association, as
  a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/  Benson R. Culver

  
	
   

  	
  Name:

  	
   

  	
  BENSON R. CULVER

  
	
   

  	
  Title:

  	
   

  	
  V.P

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  NATIONAL CITY BANK OF
  KENTUCKY,

  
	
   

  	
  as a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/  Mary Jo Reiss

  
	
   

  	
  Name:

  	
   

  	
  Mary Jo Reiss

  
	
   

  	
  Title:

  	
   

  	
  Vice President

  
								

 

EXHIBITS:

 

	
  A

  	
   

  	
  -

  	
   

  	
  Advance Request (Single Family Mortgage
  Loans)

  
	
  B

  	
   

  	
  -

  	
   

  	
  Existing Company Indebtedness

  
	
  C

  	
   

  	
  -

  	
   

  	
  Collateral Procedures and Documentation

  
	
  D

  	
   

  	
  -

  	
   

  	
  Shipping Instructions

  
	
  E

  	
   

  	
  -

  	
   

  	
  Trust Receipt

  
	
  F

  	
   

  	
  -

  	
   

  	
  Officer’s Certificate

  
	
  G

  	
   

  	
  -

  	
   

  	
  Subsidiaries

  
	
  H

  	
   

  	
  -

  	
   

  	
  Litigation

  
	
  I

  	
   

  	
  -

  	
   

  	
  Trade Names

  
	
  J

  	
   

  	
  -

  	
   

  	
  Certificate of Corporate Resolutions

  
	
  K

  	
   

  	
  -

  	
   

  	
  Bailee Letter

  
	
  L

  	
   

  	
  -

  	
   

  	
  Investors

  
	
  M

  	
   

  	
  -

  	
   

  	
  Legal Opinion

  
	
  N

  	
   

  	
  -

  	
   

  	
  Promissory Note

  
	
  O

  	
   

  	
  -

  	
   

  	
  Lenders, Aggregate Commitment Amount, and
  Commitment Amount

  
	
  P

  	
   

  	
  -

  	
   

  	
  Intentionally deleted

  
	
  Q

  	
   

  	
  -

  	
   

  	
  Form of Assignment and Acceptance

  

 

77

 

EXHIBIT A

 

ADVANCE
REQUEST FOR SINGLE-FAMILY MORTGAGE LOAN

 

	
  Warehouse

  	
   

  
	
  Company:

  	
  SIRVA MORTGAGE, INC.

  
	
  Sublimit:

  	
  o REGL

  	
  o WAMU

  

 

 

	
   

  	
  Loan ID#:

  	
   

  
	
   

  	
  Mortgagor Name:

  	
   

  
	
   

  	
  Address:

  	
   

  
	
   

  	
  City/State/Zip:

  	
   

  
	
   

  	
  County:

  	
   

  
	
   

  	
  Social Security #:

  	
   

  
	
   

  	
   

  	
   

  

 

	
   

  	
  Product: 

  	
  Note $:

  	
   

  	
  Wh $:

  
	
   

  	
  Prps- Units:

  	
   

  	
  Check or Wire

  
	
   

  	
  Rate:

  	
   

  	
   

  
	
   

  	
  Closing Agent:

  	
   

  	
   

  
	
   

  	
  Clos. Agnt Contact:

  	
   

  	
  Contact

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Mortgage Date:

  	
  Investor:

  	
   

  	
   

  
	
   

  	
  Loan Closing Date:

  	
  Price:

  	
   

  	
   

  
	
   

  	
   

  	
  Commitment #:

  	
   

  	
   

  
	
   

  	
   

  	
  Expiration Date:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Prop Type:

  	
  Orig. LTV:

  	
   

  	
   

  	
  FICO Score:

  
	
   

  	
  Lien Type:

  	
  Orig CLTV:

  	
   

  	
   

  	
  Cred Grade:

  
							

 

	
  Company:
  

  	
   

  	
  SIRVA MORTGAGE, INC.

  
	
  By
  (signature):

  	
   

  	
   

  
	
  Name
  (printed or typed):

  	
   

  	
   

  
	
  Phone
  (with area code)

  	
   

  	
   

  
	
   

  	
   

  	
   

  

 

	
  Funding Method Details (if Wire, complete all sections)

  
	
   

  	
  Wireo

  	
  Checko             Check
  #:

  	
  Cashier’s Checko

  
	
   

  	
  Bank:

  	
   

  	
  ABA #:

  	
   

  
	
   

  	
  City & State :

  	
   

  	
  Account #:

  	
   

  
	
   

  	
  Closing

  	
   

  	
   

  
	
   

  	
  Agent/Beneficiary

  	
   

  	
   

  
	
   

  	
  Clos. Agnt/Benef.

  	
   

  	
   

  
	
   

  	
  Address:

  	
   

  	
   

  

 

78

 

EXHIBIT B

 

LIST OF
EXISTING INDEBTEDNESS OF COMPANY

 

	
  LENDER

  	
   

  	
  TYPE OF

  FINANCING

  	
   

  	
  COMMITMENT

  AMOUNT

  	
   

  	
  SECURITY

  	
   

  	
  BALANCE

  OUTSTANDING AS

  OF

  March 31, 2001

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Washington Mutual

  	
   

  	
  Warehouse
  Line

  	
   

  	
  $

  	
  40,000,000.00

  	
   

  	
  Whole Loans

  	
   

  	
  $

  	
  28,669,800

  
											

 

79

 

EXHIBIT C

 

PROCEDURES
AND DOCUMENTATION FOR WAREHOUSING

SINGLE-FAMILY MORTGAGE LOANS

 

The following collateral procedures and
documentation requirements must be observed in all respects by SIRVA MORTGAGE,
INC. (the “Company”). All documents must be satisfactory to Agent in its sole
discretion. Terms used below, which are not otherwise defined, shall have the
meanings given them in the Third Amended and Restated Warehousing Credit and
Security Agreement, as amended, modified or renewed from time to time.

 

I.                                         Warehouse Advance against
Single-family Mortgage Loans (Dry Advance). Prior to Lenders making an Advance that is
not a Wet Advance, the Agent must receive the following, by 11:00 a.m. Houston,
Texas time for an Advance to be funded the same day:

 

(a)                                  Request for Advance against Single-Family
Mortgage Loans (Exhibit “A”)
by fax or electronic means.

 

(b)                                 Original signed Mortgage Note with an
endorsement “in blank” on or attached to the Mortgage Note.

 

(c)                                  Copy of Mortgage (including, if requested by
Agent and at the Agent’s sole discretion, the original certification of closing
agent that such photocopy is a true copy of the original that has been sent for
recording),

 

(d)                                 Original Assignment of the Mortgage “in
blank,” in recordable form.

 

(e)                                  Copy of the intervening Assignment of the
Mortgage, whether recorded or unrecorded.

 

II.                                     Warehouse Advance against
Single-family Mortgage Loans (Wet Advances). Prior to Lenders making a Wet Advance, the
Agent must receive the following, by 11:00 a.m. Houston, Texas time for an
Advance to be funded the same day:

 

(a)                                  Request for Advance against Single-Family
Mortgage Loans (Exhibit “A”).
(Form may be sent by facsimile or by electronic means.)

 

The Mortgage Note and other supporting documents described in Section I
must be received by the Agent within five (5) Business Days of the date of the
Wet Advance.

 

III.                                 Delivery of Mortgage Loans
and Mortgage-backed Securities.
The Agent exclusively shall deliver pledged Mortgage Notes or Pledged
Securities held by the Agent, if any, to an Investor or Approved Custodian
unless otherwise agreed in writing. The HUD, FNMA and FHLMC forms referred to
herein are for convenience only and the Company shall use the equivalent forms
required at the time of delivery of the pledged Mortgage Notes or Pledged
Securities.

 

A.                                   The following procedures are to be followed
for deliveries of pledged Mortgage Notes to Investors:

 

80

 

No
later than 2:00 p.m. Houston, Texas time one (1) Business Day prior to the
expiration date of the Purchase Commitment, the Agent must receive the
following:

 

(1)                                  Signed shipping instructions for the delivery
of the pledged Mortgage Note including the following (such shipping
instructions to be substantially in the form of Exhibit “D” to this Agreement):

 

(a)                                  Name and address of the office of the
Investor to which the Mortgage Note is to be shipped and the preferred method
of delivery;

 

(b)                                 Instructions for endorsement of the Mortgage
Note;

 

(c)                                  Name of Mortgagor or Mortgage Loan number and
Mortgage Note Amount.

 

(2)                                  For deliveries of pledged Mortgage Notes to
FNMA for cash purchase, the following additional documents are required:

 

Original
Loan Schedule (FNMA approved form) showing the Agent’s designated FNMA payee
code as recipient of the loan purchase proceeds.

 

(3)                                  For deliveries of pledged Mortgage Notes to
FHLMC for cash purchase, the following additional documents are required:

 

(a)                                  Original completed Warehouse Lender Release
of Security Interest (FHLMC approved form ) to be executed by the Agent.

 

(b)                                 Original Wire Transfer Authorization for a
Cash Warehouse Delivery (FHLMC approved form), designating the Agent as the
Warehouse Lender and showing the cash collateral account designated by the
Agent as the receiving account for loan purchase proceeds.

 

B.                                     The following procedures are to be followed
for deliveries of pledged Mortgage Notes to Approved Custodians for the
issuance of Mortgage-backed Securities:

 

No
later than one (1) Business Day prior to required delivery date to the Approved
Custodian, the Agent must receive the following:

 

(1)                                  Signed shipping instructions for the delivery
of the Mortgage Notes within the Collateral to the Approved Custodian including
the following (such shipping instructions to be in the form of Exhibit “D” to this Agreement):

 

81

 

(a)                                  Name and address of the office of the
Approved Custodian to which the Mortgage Notes are to be shipped and the
preferred method of delivery;

 

(b)                                 Instructions for endorsement of the Mortgage
Note; and

 

(c)                                  Names of Mortgagor or Mortgage Loan number
and Mortgage Note Amounts of pledged Mortgage Notes.

 

(2)                                  For FNMA Mortgage-backed Securities issuance,
the following additional documents are required:

 

(a)                                  Original Schedule of Mortgages (FNMA approved
form).

 

(b)                                 Original executed Security Release
Certification (FNMA approved form) to be executed by the Agent.

 

(c)                                  Original Delivery Schedule (FNMA approved
form), instructing FNMA to issue the Mortgage-backed Securities in the name of
the Company with the Agent as pledgee and to deliver the Mortgage-backed
Securities to the Agent’s custody account and bearing the following
instructions:  These instructions may
not be changed without the prior written consent of Washington Mutual Bank, FA.

 

(3)                                  For FHLMC Mortgage-backed Securities
issuance, the following additional documents are required:

 

Original
Settlement Information and Delivery Authorization (FHLMC approved form),
designating the Agent as the Warehouse Lender and instructing FHLMC to deliver
the Mortgage-backed Securities to the Agent’s custody account.

 

(4)                                  For GNMA Mortgage-backed Securities issuance,
the following additional documents are required:

 

(a)                                  Signed original Schedule of Mortgages (HUD
approved form).

 

(b)                                 Signed original Schedule of Subscribers (HUD
approved form) instructing GNMA to issue the Mortgage-backed Securities in the
name of the Company and designating Washington Mutual Bank, FA as Agent for the
Lenders as the subscriber.  The
following instructions must also be included on the form: “These instructions
may not be changed without the prior written consent of Washington Mutual Bank,
FA.”

 

(c)                                  Completed original Release of Security
Interest (HUD approved form) to be executed by the Agent.

 

(5)                                  No later than two (2) Business Days prior to
the Settlement Date for the Mortgage-backed Securities, the Agent must receive
signed securities delivery instructions in a form acceptable to the Agent.

 

82

 

Upon instruction by the
Company, the Agent will complete the endorsement of the pledged Mortgage Note
and make arrangements for the delivery of the Mortgage Note with the
appropriate Bailee Letter to the Investor or Approved Custodian.  Upon receipt of Mortgage-backed Securities,
the Agent will cause such Mortgage-backed Securities to be delivered to the
Investor which issued the Purchase Commitment. Mortgage-backed Securities will
be released to the Investor only upon payment of the purchase proceeds to the Agent.
Cash proceeds of sales of Mortgage Loans and Mortgage-backed Securities within
the Collateral shall be applied to related Advances outstanding under the
Commitment.

 

83

 

SCHEDULE II

 

CONFIRMATION
LETTER

 

[On Take-out Investor’s
Letterhead]

Sent via
facsimile to (713) 543-6022

 

[Date]

Attn: Kay Thomas

Washington Mutual Bank, FA

3200 Southwest Freeway

PT1922

Houston TX 77027

Phone: (713) 543-6408

 

 

	
  Re:

  	
   

  	
   

  	
   

  
	
  Mortgagor Name:

  	
   

  	
   

  	
   

  
	
  Mortgage Note Date:

  	
   

  	
   

  	
   

  
	
  Mortgage Note Amount:

  	
   

  	
  $

  	
   

  
					

 

[Investor
Name] is in possession of the Mortgage Note(s) identified above [or on the
attached schedule] and has been asked to ship the Mortgage Note(s) to
Washington Mutual Bank, FA upon receipt of a wire greater than or equal to the Mortgage
Note Amount(s) stated herein.

 

Please wire funds to the following:

 

	
  Receiving Bank:

  	
   

  	
   

  	
   

  
	
  Bank City & State:

  	
   

  	
   

  	
   

  
	
  ABA Number:

  	
   

  	
   

  	
  -

  	
   

  	
  -

  	
   

  	
   

  
	
  Account Name:

  	
   

  	
   

  	
   

  
	
  Account Number:

  	
   

  	
   

  	
   

  
	
  Reference:

  	
   

  	
   

  	
   

  
								

 

Upon the receipt of funds pursuant to the above instructions, we will
deliver the Mortgage Note to you at the above address. Please contact the
undersigned with any questions.

 

Sincerely,

 

 

	
  Signature:

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  
	
  Phone:

  	
   

  	
   

  

 

84

 

EXHIBIT D

 

FORM OF SHIPPING REQUEST AND AUTHORIZATION

 

	
  Date:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Attn: Loan Administrator

  	
   

  	
  Fax:
  (713) 543-6022

  
	
  Washington Mutual Bank, FA

  	
   

  	
  Mortgage
  Banker Finance

  
	
  3200 Southwest Freeway, HOU 1922

  	
   

  	
  Houston
  TX 77027

  

 

This letter serves as authorization for Washington Mutual Bank, FA as
Agent to endorse and ship the Mortgage Note(s) listed below or on the attached
schedule:

 

	
  Mortgagor Name

  	
   

  	
  Loan Number

  	
   

  	
  Mortgage Note

  Amount

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  

 

Insert
the following take-out investor name in the endorsement or allonge:

 

 

 

Deliver
the Mortgage Note(s) as follows, using our overnight delivery account mentioned
below:

 

	
  Date to be
  shipped:

  	
   

  
	
  Ship to this
  company:

  	
   

  
	
  Attn (person or dept.):

  	
   

  
	
  Street Address:

  	
   

  
	
  City/State/Zip

  	
   

  
	
  Telephone:

  	
   

  
	
  Overnight
  delivery provider:

  	
   

  
	
  Our overnight account
  #:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Company:

  	
  SIRVA MORTGAGE, INC.

  
	
  By:  (signature)

  	
   

  
	
  Name:  (printed)

  	
   

  
	
  Phone:  (printed)

  	
   

  

 

Requests
received after 2:00 p.m. Central will be processed the next Business Day.

 

85

 

EXHIBIT E

 

TRUST
RECEIPT

 

	
  Date:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Attn: Loan Administrator

  	
   

  	
  Fax:
  (713) 543-6022

  
	
  Washington Mutual Bank, FA

  	
   

  	
  Mortgage
  Banker Finance

  
	
  3200 Southwest Freeway, HOU 1922

  	
   

  	
  Houston
  TX 77027

  

 

The undersigned, SIRVA MORTGAGE, INC., an
Ohio corporation (the “Company”), hereby requests that WASHINGTON MUTUAL BANK,
FA, a federal association (“Agent”) return to the Company the original mortgage
note(s) for the mortgage loan(s) listed below, for the reason(s) set forth
below:

 

	
  Mortgagor Name

  (or Loan Number)

  	
   

  	
  Mortgage Note

  Amount

  	
   

  	
  Reason(s)

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  

 

The Company hereby acknowledges that (a) a
security interest pursuant to the Uniform Commercial Code in the Mortgage Notes
and proceeds thereof has been granted to the Agent; (b) the Company will hold
these Mortgage Notes in trust for Agent and Lenders as provided under and in
accordance with all provisions of the Third Amended and Restated Warehousing
Credit and Security Agreement as same may be amended from time to time (the
“Agreement”); (c) the Company will return the corrected Mortgage Notes to Agent
no later than the close of business on the tenth calendar day following the
date of this letter; and (d) the aggregate principal sum of all Mortgage Notes
released to Company in trust does not exceed $500,000. All capitalized terms
appearing herein have the same meanings ascribed to them in the Agreement.

 

 

	
  COMPANY:

  	
  SIRVA MORTGAGE, INC.

  
	
  By:  (signature)

  	
   

  
	
  Name:  (printed)

  	
   

  
	
  Phone:  (printed)

  	
   

  

 

***For optional Washington Mutual Bank, FA use only***

 

	
  Date
  Washington Mutual Bank, FA

  Delivers Mortgage Note to Company for

  correction/completion

  	
   

  	
  Initials

  	
   

  	
  Date Loan Administrator receives

  corrected/completed Mortgage Note from

  Company

  	
   

  	
  Initials

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

86

 

EXHIBIT F

 

COMPLIANCE
CERTIFICATE

 

 

	
  COMPANY:

  	
   

  	
  SIRVA MORTGAGE, INC.

  
	
  LENDER:

  	
   

  	
  WASHINGTON MUTUAL BANK,
  FA,

  
	
  TODAY’S DATE:

  	
   

  	
                                       ,
  20    

  
	
  REPORTING PERIOD ENDED:

  	
   

  	
                                              ended                                    ,
  20    

  

 

This certificate is delivered to Lender under the Third Amended
Warehousing Credit and Security Agreement dated effective as of September 30,
2002 between the Company and the Lender (the “Agreement”), all the defined terms
of which have the same meanings when used herein.

 

I hereby certify that: (a) I am, and at all
times mentioned herein have been, the duly elected, qualified, and acting
officer of Company designated below; (b) to the best of my knowledge, the
Financial Statements of Company from the period shown about (the “Reporting
Period”) and which accompany this certificate were prepared in accordance with
GAAP and present fairly the financial condition of Company as f the end of the
Reporting Period and the results of its operations for Reporting Period; (c) a
review of the Agreement and of the activities of the Company during the
Reporting Period has been made under my supervision with a view to determining
Company’s compliance with the covenants, requirements, terms, and conditions of
the Agreement, and such review has not disclosed the existence during or at the
end of the Reporting Period (and I have no knowledge of the existence as of the
date hereof) of any Default or Event of Default, except as disclosed herein
(which specifies the nature a d period of existence of each Default or Event of
Default, if any, and what action Company has taken, is taking, and proposes to
take with respect to each); (d) the calculations described herein evidence that
the Company is in compliance with the requirements of the Agreement at the end
of the Reporting Period (or if Company is not in compliance, showing the extent
of non-compliance and specifying the period of non-compliance and what actions
the Company proposes to take with respect thereto); (e) the company was, as of
the end of the Reporting Period, in compliance and good standing with
applicable FNMA, GNMA, FHLMC, and HUD net worth requirements.

 

	
  SIRVA MORTGAGE, INC.

  
	
  By:

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  

 

87

 

	
  COMPANY:

  	
  SIRVA MORTGAGE, INC.

  	
   

  
	
  REPORTING PERIOD ENDED:

  	
   

  	
   

  

 

All financial calculations set forth herein are as of the end of the
Reporting Period.

 

I.                                         TANGIBLE NET WORTH

 

	
  The Tangible Net Worth of
  the Company is:

  	
   

  	
   

  
	
  Shareholder’s Equity:

  	
   

  	
  $

  
	
  Minus: Intangible Assets,
  including Capitalized Servicing Rights:

  	
   

  	
  $

  
	
  Minus: Advances of loans
  to shareholders, officers or Affiliates:

  	
   

  	
  $

  
	
  Minus: Investments in
  Affiliates:

  	
   

  	
  $

  
	
  Minus: Assets pledged to
  secure liabilities not included in Debt:

  	
   

  	
  $

  
	
  Minus: Net Investment in
  Real Estate

  	
   

  	
  $

  
	
  Minus: Any other HUD
  nonacceptable assets:

  	
   

  	
  $

  
	
  TANGIBLE NET WORTH:

  	
   

  	
  $

  

 

II.                                     ADJUSTED TANGIBLE NET WORTH

 

	
  The Adjusted Tangible Net
  Worth of the Company is:

  	
   

  	
   

  
	
  Tangible Net Worth (from
  above):

  	
   

  	
  $

  
	
  Plus: Subordinated Debt:

  	
   

  	
  $

  
	
  Plus: 1.00% times UPB of
  Servicing Rights:

  	
   

  	
  $

  
	
  ADJUSTED
  TANGIBLE NET WORTH:

  	
   

  	
  $

  
	
  REQUIRED MINIMUM through [insert covenant date change]

  	
   

  	
  $

  	
  x,xxx,xxx

  
	
  REQUIRED MINIMUM after [insert covenant date change]

  	
   

  	
  $

  	
  x,xxx,xxx

  
	
  In
  compliance?

  	
   

  	
  [Yes or
  No]

  

 

88

 

III.                                 DEBT OF THE COMPANY

 

	
  Total Liabilities

  	
   

  	
  $

  
	
  Minus: Loan loss reserves:

  	
   

  	
  $

  
	
  Minus: Deferred taxes
  arising from capitalized excess servicing fees:

  	
   

  	
  $

  
	
  DEBT:

  	
   

  	
  $

  

 

IV.                                DEBT TO ADJUSTED TANGIBLE
NET WORTH

 

	
  Debt (from above):

  	
   

  	
  $

  
	
  Adjusted Tangible Net
  Worth

  	
   

  	
  $

  
	
  RATIO OF
  ADJUSTED TANGIBLE NET WORTH:

  	
   

  	
     :1

  
	
  Maximum permitted through [insert covenant date change]

  	
   

  	
  xx:1

  
	
  Maximum permitted after [insert covenant date change]

  	
   

  	
  xx:l

  
	
  In
  compliance?

  	
   

  	
  [Yes or
  No]

  

 

V.                                    CURRENT RATIO

 

	
  Current Assets (assets that are now cash or will be by their terms or
  disposition be to cash within one year of the date of calculation)

  	
   

  	
  $

  
	
  Current Liabilities (liabilities due upon demand or within one year
  from the date of calculation)

  	
   

  	
  $

  
	
  RATIO OF
  CURRENT ASSETS TO CURRENT LIABILITIES

  	
   

  	
     :1

  
	
  Minimum required through [insert covenant date change]

  	
   

  	
  xx:1

  
	
  Minimum required after [insert covenant date change]

  	
   

  	
  xx:1

  
	
  In
  compliance?

  	
   

  	
  [Yes or
  No]

  

 

VI.                                OWNER/OFFICER COMPENSATION

	
   

  	
   

  	
  Current
  Month

  	
   

  	
  Year-to-Date

  	
   

  
	
  Expensed Compensation

  	
   

  	
  $

  	
   

  	
  $

  	
   

  
	
  Plus: Dividends

  	
   

  	
  $

  	
   

  	
  $

  	
   

  
	
  Plus: Loans to Owners

  	
   

  	
  $

  	
   

  	
  $

  	
   

  
	
  Plus: Loans to Other Officers

  	
   

  	
  $

  	
   

  	
  $

  	
   

  
	
  TOTAL

  	
   

  	
  $

  	
   

  	
  $

  	
   

  

 

89

 

VII.                            PRODUCTION

 

	
   

  	
   

  	
  Current
  Month

  	
   

  	
  Year-to-Date

  	
   

  
	
  Total Mortgage Loans Funded

  	
   

  	
  $

  	
   

  	
  $

  	
   

  
	
  Wholesale as % of Total

  	
   

  	
   

  	
  %

  	
   

  	
  %

  
	
  Retail as% of Total

  	
   

  	
   

  	
  %

  	
   

  	
  %

  

 

	
  By Category

  	
   

  	
  Current
  Month

  	
   

  	
  Year-to-Date

  	
   

  
	
  Government as % of Total

  	
   

  	
   

  	
  %

  	
   

  	
  %

  
	
  Conventional as % of Total

  	
   

  	
   

  	
  %

  	
   

  	
  %

  
	
  Jumbo as % of Total

  	
   

  	
   

  	
  %

  	
   

  	
  %

  
	
  Subprime as % of Total

  	
   

  	
   

  	
  %

  	
   

  	
  %

  
	
  Second Mortgages as %

  	
   

  	
   

  	
  %

  	
   

  	
  %

  
	
  Other (Describe)

  	
   

  	
   

  	
  %

  	
   

  	
  %

  
	
  Total (Must = 100%)

  	
   

  	
   

  	
  %

  	
   

  	
  %

  

 

VIII.                        TRANSACTIONS WITH AFFILIATES

 

	
  Transactions with Affiliates (year-to-date)

  	
   

  	
  $

  	
   

  
	
  Maximum permitted

  	
   

  	
  $

  	
  [$ from credit agreement]

  	
   

  
	
  In compliance?

  	
   

  	
  [Yes or
  No]

  	
   

  
					

 

IX.                                THIRD PARTY REPORTS

 

All reports received from third parties (such as the SEC, FNMA, GNMA,
FHLMC) subsequent to the last reporting period are attached hereto. These
reports include the following (if none, write “None”):

 

X.                                    DEFAULTS OR EVENTS OF DEFAULT

 

Disclose nature and period of existence and
action being taken in connection therewith; if none, write “None”:

 

90

 

EXHIBIT G

 

LIST OF
SUBSIDIARIES

 

	
  NAME

  	
   

  	
  ADDRESS OF

  PRINCIPAL OFFICE

  	
   

  	
  STATE OF

  ORGANIZATION

  	
   

  	
  WHERE

  QUALIFIED

  FOREIGN CO.

  	
   

  	
  COMPANY’S

  PERCENTAGE

  OWNERSHIP

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  None.

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

91

 

EXHIBIT H

 

DISCLOSURE
OF PENDING LITIGATION

 

(Include the caption of the case, including
styling, cause number, and court in which it is pending, date filed, status of
the proceedings, and description of claims, counterclaims and damages
asserted.)

 

None.

 

92

 

EXHIBIT I

 

TRADE NAMES
OF COMPANY

 

 

	
  Trade Name

  	
   

  	
  Jurisdiction Used

  
	
   

  	
   

  	
   

  
	
  Cooperative Mortgage
  Services, Inc.

  	
   

  	
  AL; AK; AR; AZ; CA; CT;
  DE; FL; HI; ID;

  
	
   

  	
   

  	
  IN; IA; KS; KY; LA; MD;
  ME; MN; MI; MIT;

  
	
   

  	
   

  	
  NE; NV; NH; NM; ND; OH; O;
  PA; RI; SC;

  
	
   

  	
   

  	
  SD; TN; TX; UT; VT; WA;
  WV; WY

  
	
  CMS Mortgage Services,
  Inc.

  	
   

  	
  DC; GA; NY; MI; MO; NJ;
  NC; OK; IL; VA

  
	
  CMS Mortgage Services

  	
   

  	
  MA; WI

  

 

93

 

EXHIBIT J

 

CERTIFICATE OF CORPORATE RESOLUTIONS

AND INCUMBENCY OF OFFICERS

(BORROWING AUTHORITY)

 

I, the undersigned, hereby certify that I am
the Secretary of SIRVA MORTGAGE, INC., a corporation duly organized and
existing under the laws of the State of Ohio (the “Company”).

 

I further certify that true and correct
copies of the Articles of Incorporation and Bylaws of the Company together with
all amendments thereto are attached hereto as Exhibits “A” and “B”, respectively, and that such articles
and bylaws remain unaltered and in full force and effect.

 

I further certify that the following
resolutions were duly adopted by the Board of Directors of the Company at a
meeting of the Board of Directors of the Company, duly and legally called and
held in accordance with the Articles of Incorporation and Bylaws of the Company
on the        day
of             ,
2002, at which meeting a quorum was present and voting throughout, or (if the
foregoing date was not completed) pursuant to a written consent signed by all
of the Directors of the Company in accordance with the Articles of
Incorporation and Bylaws of the Company, and that such resolutions are now in
full force and effect and have not been amended, modified or revoked:

 

“RESOLVED, that the President, any Vice President (Senior, Executive,
Assistant, or otherwise) or Secretary of this Company acting alone without the
joinder of any other officer, is hereby authorized in the name and on behalf of
this Company (i) to borrow from and to otherwise incur liabilities to
WASHINGTON MUTUAL BANK, F.A. and NATIONAL CITY BANK OF KENTUCKY (collectively
“Lenders”) from time to time, in such amounts, for such periods of time, at
such rates of interest and payable in such manner as such officers may deem
necessary or proper, and (ii) as evidence of such indebtedness so incurred, to
execute and deliver to Lenders such promissory notes, loan agreements, credit
and security agreements, and other instruments, documents and agreements,
including, but not limited to that certain Third Amended and Restated
Warehousing Credit and Security agreement to be dated September 30, 2002 among
the Company and the Lenders and any other documents to be executed or required
in connection therewith, containing such terms and provisions as may be
acceptable or agreeable to any one of such officers, such acceptance and
agreement to be conclusively evidenced by the execution and delivery thereof by
any one of such officers;

 

FURTHER RESOLVED, that this Company grant to Lenders a lien and/or
security interest upon such assets of this Company as may be agreed upon
between any one of the above named officers and Lenders, as security for all
present and future indebtedness, obligations and liabilities of this Company to
Lenders and that each of said officers, acting alone without the joinder of any
other officer, is hereby authorized in the name and on behalf of this Company
to execute and deliver such security agreements, deeds of trust and other
instruments, documents and agreements as may be required by Lenders in

 

94

 

connection with each such grant of a lien and/or security interest and
containing such terms and provisions as may be acceptable or agreeable to any
one of such officers, such acceptance and agreement to be conclusively
evidenced by the execution and delivery thereof by any one of such officers;

 

FURTHER RESOLVED, that any one of the above
named officers, acting alone without the joinder of any other officer, is
hereby authorized in the name and on behalf of this Company to take such
further action and to do all things that any one of such officers deems necessary
in connection with any (i) increases, renewals, extensions, rearrangements,
retirements or compromises of any indebtedness, obligations and liabilities
owing to Lenders from time to time by this Company, either directly or by
assignment, and (ii) amendments to any of the provisions contained in any
instruments, documents or agreements evidencing, securing, governing and/or
pertaining to any indebtedness, obligations and liabilities owing to Lenders by
this Company from time to time;

 

FURTHER RESOLVED, that any one of the above
named officers or any other person or representative now or hereafter
designated by the Company or any officers of the Company acting alone without
the joinder of any other officer or representative, is hereby authorized in the
name and on behalf of this Company to (i) make requests for advances under any
credit facility that this Company may have with Lenders from time to time, and
(ii) do or cause to be done all such acts or things and to sign and deliver, or
cause to be signed and delivered, all such instruments, documents, agreements,
requests, and certificates (including without limitation, any and all shipping
requests, trust receipts, notices, and certificates required or permitted to be
given or made to Lenders under the terms of any of the instruments, documents
or agreements executed on behalf of this Company in connection with these
resolutions), as any and all of such officers or representatives may deem
necessary, advisable or appropriate to effectuate and carry out the purposes
and intent of the foregoing resolutions and to perform the obligations of this
Company under all instruments, documents, and agreements executed on behalf of
this Company in connection with any indebtedness, obligations or liabilities
incurred by this Company to Lenders from time to time;

 

FURTHER RESOLVED, that all acts, transactions
or agreements with Lenders undertaken prior to the adoption of the foregoing
resolutions by any one or more of the officers and/or representatives of this
Company in its name and on its behalf in connection with the. foregoing matters
are hereby ratified, confirmed and adopted by this Company; and

 

FURTHER RESOLVED, that each of the officers
of this Company is hereby authorized and directed to certify these resolutions
to Lenders;

 

FURTHER RESOLVED, the foregoing resolutions
shall continue in full force and effect, and the Lenders is authorized to rely
upon the foregoing resolutions unless and until (i) countermanded by resolution
of the Board of Directors of this Company, and (ii) a copy of such resolution,
properly certified by an officer of this Company, has actually been received by
Lenders.”

 

95

 

I further certify that the foregoing
resolutions do not conflict with the Articles of Organization or Operating
Agreement of the Company, or any amendments thereto.

 

I further certify that neither the seal of
the Company, nor the attestation by the Secretary, Assistant Secretary or any
other officer of the Company, is necessary to make any instruments, documents
or agreements executed by the officers or representatives of this Company
pursuant to the foregoing resolutions, enforceable against the Company, unless
such seal is affixed to, or such attestation is provided on, such instruments,
documents or agreements.

 

I further certify that the officers of the
Company set forth below have been duly elected and qualified and as of the date
hereof hold the specified offices with the Company, that the signature set
forth beside each officer’s name is the true signature of such officer, and
that the signature set forth beside the name of each of the representatives
specified in the foregoing resolutions is the true signature of such
representative:

 

	
  TITLE

  	
   

  	
  TYPED NAME

  	
   

  	
  SIGNATURE

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  

 

 

IN WITNESS WHEREOF, I hereunto subscribe my
name this    day of September, 2002.

 

 

	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  individually
  and as Secretary of

  Sirva Mortgage, Inc.

  
				

 

96

 

EXHIBIT K

 

BAILEE
LETTER

 

[Washington Mutual Bank, FA to insert date and Investor name/address]

 

Re:          Purchase
of Mortgage Loans from Sirva Mortgage, Inc.

 

Ladies and Gentlemen:

 

Pursuant to the terms and conditions set forth below, we hereby deliver
to you with this letter, the Mortgage Note evidencing each Mortgage Loan listed
on the attached schedule, to facilitate your purchase of these Mortgage Loans.
Each Mortgage Loan comprises a portion of the Collateral under that certain
Third Amended and Restated Warehousing Credit and Security Agreement dated
September 30, 2002 among Sirva Mortgage, Inc. (the “Company”) , Washington
Mutual Bank, FA, a federal savings bank (the “Agent”), and The Lenders Party
Thereto, as the same may be amended, modified, extended, or renewed from time
to time (the “Credit Agreement”). Each capitalized term used herein has the
meaning ascribed to it in the Credit Agreement.

 

By taking physical
possession of this letter and the Mortgage Notes attached hereto, you hereby
agree to each of the following:

You will hold the attached Mortgage Note(s) and all related Mortgage
Loan files in trust as custodian, agent, and bailee on behalf of Washington
Mutual Bank, FA until your status as bailee is terminated as set forth below;

You agree not to release or deliver the Mortgage Note or any other
Mortgage Loan document to any party except Washington Mutual Bank, FA, without
Washington Mutual Bank, FA’s written consent; 

You will not take any action that may jeopardize the security interest
of Washington Mutual Bank, FA in the Collateral;

Within thirty (30) days of the date on this letter, you will either:

 

	
  Wire the purchase funds as follows:

  
	
  Receiving
  Bank:

  	
   

  	
  Washington
  Mutual Bank, FA

  
	
  Location:

  	
   

  	
  Houston
  TX

  
	
  ABA
  Number:

  	
   

  	
  111-993-776

  
	
  Account
  Name:

  	
   

  	
  Sirva
  Mortgage, Inc.

  
	
  Account
  Number:

  	
   

  	
  93100000674646

  
	
  Reference:

  	
   

  	
  [Investor:
  Input Mortgagor Last Name or Loan Number]

  

 

OR

 

return the Mortgage Note and Mortgage Loan file to Teresa Earley,
Washington Mutual Bank, FA, Mortgage Banker Finance, 3200 Southwest Freeway,
PT-1922, Houston TX 77027, phone: (713) 543-6886. Washington Mutual Bank, FA
hereby agrees that upon receipt of the warehouse amount specified on the
attached schedule, remitted as specified above, our security interest in the
Mortgage Loan shall be fully released automatically and your responsibilities
as bailee shall terminate.

 

Sincerely,

 

WASHINGTON MUTUAL BANK, FA,
a federal association

 

97

 

EXHIBIT L

 

LIST OF
INVESTORS

 

98

 

EXHIBIT M

 

OPINION
LETTER

 

                   ,
2002

 

Washington Mutual Bank, FA

3200 Southwest Freeway

Suite 1922

Houston, Texas 77027

 

Re: 
Third Amended and Restated Warehousing Credit and Security Agreement
(Single-Family Mortgage Loans)

 

Gentlemen:

 

We
have acted as special counsel for SIRVA MORTGAGE, INC., an Ohio corporation
(the “Company”), in connection with the negotiation and execution of the
following documents (collectively, the “Credit Documents”):

 

1.             the Third Amended and Restated Warehousing
Credit and Security Agreement (Single-Family Mortgage Loans) dated effective as
of September 30, 2002 (the “Loan Agreement”), among the Company, the lenders
identified therein (“Lenders”) and Washington Mutual Bank, FA as Agent for the
Lenders (the “Agent”);

 

2.             the Promissory Note dated effective
as of September 30, 2002, executed and delivered by the Company payable to the
order of Washington Mutual Bank, FA in the original principal amount of
$35,000,000.00; and

 

3.             the Promissory Note dated effective
as of September 30, 2002, executed and delivered by the Company payable to the
order of National City Bank of Kentucky in the original principal amount of
$21,000,000.00.

 

Unless
otherwise provided herein, terms used herein which are defined in the Credit
Documents (including schedules and exhibits thereto) and not defined herein
shall have the meanings attributed thereto in the Credit Documents.

 

A.            Basis of Opinion.

 

As
the basis for the conclusions expressed in this opinion letter, we have examined,
considered and relied upon the following:

 

1.             A copy of each of the Credit
Documents executed by the Company;

 

2.             Recent Certificates of Domestic
Status of the Company issued by the Secretary of State of the State of Ohio;

 

3.             A copy of the Articles of
Incorporation and amendments thereto, and a copy of the Bylaws of the Company,
in each case as certified to us by the Company Certificate;

 

99

 

4.             Such other documents and records as
we have deemed relevant, necessary or appropriate in connection with or as a
basis for the opinions hereafter set forth; and

 

5.             Such matters of law as we have
considered necessary or appropriate for the expression of the opinions
contained herein.

 

For
the purposes of this opinion letter, the documents and information referred to
in this Section A are herein collectively referred to as the “Documents”.

 

B.            Opinions.

 

Based
upon our examination and consideration of the foregoing Documents, and subject
to the comments, assumptions, exceptions, qualifications and limitations set
forth in Section C below, we are of the opinion that:

 

1.             The Company (i) is a corporation
duly organized, validly existing, and in good standing under the laws of the
State of Ohio (ii) has the full legal power and authority and all necessary
licenses, permits, franchises, and other authorizations to own and operate its
property and assets and to transact the business in which it is engaged, and
(iii) is duly qualified to transact business in each jurisdiction where the
nature of the business it transacts or the property it owns requires such
qualification or licensing except in such jurisdictions where the failure to be
in good standing or be licensed (as the case may be) would have no material
adverse effect on the Company.

 

2.             The Company has the requisite
corporate power to execute, deliver, and perform the terms and provisions of
each of the Credit Documents and has taken all necessary corporate action to
authorize the execution, delivery, and performance by it of each such Credit
Document.  The Company has duly executed
each of the Credit Documents, and each such Credit Document constitutes its
legal, valid, and binding obligation enforceable in accordance with its terms,
except as the enforceability of the rights and remedies of the Lender under
each of the Credit Documents may be limited by applicable bankruptcy,
insolvency, reorganization or other similar laws affecting the enforcement of
creditors’ rights generally and by general equitable principles (regardless of
whether the issue of enforceability is considered in a proceeding in equity or
at law) including requirements of reasonableness and good faith in the exercise
of rights and remedies under the Credit Documents.

 

3.             Neither the execution, delivery, or
performance by the Company of the Credit Documents, nor compliance by it with
the terms and provisions thereof, (i) will contravene any law, statute, rule,
or regulation; (ii) to the best of our knowledge, will contravene any order,
writ, injunction, or decree of any court or governmental instrumentality; (iii)
to the best of our knowledge, will conflict or be inconsistent with or result
in any breach of any of the material terms, covenants, conditions, or
provisions of, or constitute a default under, or result in the creation or
imposition of (or the obligation to create or impose) any lien upon any of the
property or assets of the Company pursuant to the terms of any agreement of the
Company; (iv) will violate any provision of the Articles of Incorporation or
Bylaws of the Company.

 

4.             No order, consent, approval,
license, authorization or validation of, or filing, recording or registration
with, or exemption by, any governmental or public body or authority, or any
subdivision thereof, is required to authorize, or is required in connection
with,

 

100

 

(i)
the execution, delivery and performance of any Credit Document, or (ii) the
legality, validity, binding effect or enforceability of any such Credit
Document.

 

5.             To the best of our knowledge, there
are no actions, suits, or proceedings pending or threatened (i) with respect to
any Credit Document or (ii) that could materially and adversely affect the
business, operations, property, assets, condition (financial or otherwise) or
prospects of the Company.

 

6.             The Company is not an “investment
company” within the meaning of the Investment Company Act of 1940, as amended.

 

7.             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.

 

8.             The execution and delivery of the
Loan Agreement by the Company is effective to create a valid and enforceable
security interest in favor of the Agent in the Collateral and the proceeds
thereof.

 

9.             The Agent will have a valid and
duly perfected security interest, without further requirements for perfection,
in (a) the Pledged Mortgages and Pledged Securities upon the delivery thereof
to the Agent and (b) the other Collateral described in the Financing Statements
to the extent that a security interest therein may be perfected under Article 9
of the UCC solely by filing a financing statement with the Secretary of State
of Ohio, which lien shall be superior to any other interests therein.

 

C.             Comments,
Assumptions, Limitation, Qualifications and Exceptions.

 

The
opinions expressed in Section B above are based upon, and subject to, the
further comments, assumptions, limitations, qualifications and exceptions set
forth below:

 

Respectfully submitted,

 

101

 

EXHIBIT N

 

PROMISSORY NOTE

 

	
  $                     .00

  	
   

  	
  Houston,
  Texas

  	
   

  	
   

  

 

FOR VALUE RECEIVED, the undersigned, SIRVA
MORTGAGE, INC., an Ohio corporation (herein called the “Borrower”), hereby
promises to pay to the order
of                                                                 
(the “Lender” or, together with its successors and assigns, the “Holder”) whose
principal place of business
is                                                                                             ,
or at such other place as the Holder may designate from time to time, the
principal sum of                              ($             .00)
or so much thereof as may be outstanding from time to time pursuant to the
Third Amended and Restated Warehousing Credit and Security Agreement (the
“Agreement”) dated September 30, 2002 among the Borrower and Washington Mutual
Bank, FA, in its capacity as one of the lenders and as Agent for the other lenders
party thereto and the lenders party thereto (including the Lender), as the same
may be amended, supplemented, or restated from time to time, and to pay
interest on said principal sum or such part thereof as shall remain unpaid from
time to time, from the date of each Advance until repaid in full, and all other
fees and charges due under the Agreement, at the rate and at the times set
forth in the Agreement. All payments hereunder shall be made in lawful money of
the United States and in immediately available funds. Capitalized terms used
herein, unless otherwise defined herein, shall have the meanings given them in
the Agreement.

 

This Note is issued and delivered under the
Agreement and is a Note as defined therein and is entitled to the benefits thereof.  Reference is hereby made to the Agreement
(which is incorporated herein by reference as fully and with the same effect as
if set forth herein at length) for a description of the Collateral, a statement
of the covenants and agreements, a statement of the rights and remedies and
securities afforded thereby and other matters contained therein.

 

[This Note is given in renewal and extension,
but not extinguishment, of that certain promissory note (“Prior Note”)
dated                                in
the original principal amount of
                              ($                )
executed by the Borrower payable to the order of Lender. All liens, security
interests, and assignments securing the Prior Note are hereby ratified,
confirmed, renewed, extended, and carried forward as security for the repayment
of this Note, in addition to and cumulative of all other security.]

 

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

 

This Note may be prepaid in whole or in part
at any time without premium or penalty.

 

102

 

Should this Note be placed in the hands of
attorneys for collection, the Borrower agrees to pay, in addition to principal
and interest, fees and charges due under the Agreement, and all costs of
collecting this Note, including reasonable attorneys’ fees and expenses.

 

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

 

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

 

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

 

It is the intention of the parties hereto to
conform strictly to usury laws applicable to the Lender. Accordingly, if the
transactions contemplated hereby would be usurious under applicable law
(including the laws of the United Stales of America and the State of Texas),
then, in that event, notwithstanding anything to the contrary herein or in the
Agreement or in any other Loan Document or agreement entered into in connection
with or as security for this Note, it is agreed as follows: (i) the aggregate
of all consideration which constitutes interest under law applicable to the
Lender that is contracted for, taken, reserved, charged, or received herein or
under the Agreement or under any of the other aforesaid Loan Documents or
agreements or otherwise in connection herewith shall under no circumstances
exceed the maximum amount allowed by such applicable law, and any excess shall
be credited by the Lender on the principal amount of the Obligations (or, if
the principal amount of the Obligations shall have been paid in full, refunded
by the Lender to the Borrower, as required); and (ii) in the event that the
maturity of this Note is accelerated by reason of an election of the Lender
resulting from any Event of Default under the Agreement or otherwise, or in the
event of any required or permitted prepayment, then such consideration that
constitutes interest under law applicable to the Lender may never include more
than the maximum amount allowed by such applicable law, and excess interest, if
any, provided for in the Agreement or otherwise shall be canceled automatically
as of the date of such acceleration or prepayment and, if theretofore paid,
shall be credited by the Lender on the principal amount of the Obligations (or,
if the principal amount of the Obligations shall have been paid in full,
refunded by the Lender to the Borrower, as required). Without limiting the
foregoing, all calculations of the rate of interest taken, reserved, contracted
for, charged, received or provided for under this Note or any of the Loan
Documents which are made for the purpose of determining whether the interest
rate exceeds the Maximum Rate shall be

 

103

 

made, to the extent allowed
by law, by amortizing, prorating, allocating and spreading in equal parts
during the period of the full stated term of the loan evidenced hereby, all
interest at any time taken, reserved, contracted for, charged, received, or
provided for under this Note of any of the Loan Documents. To the extent that
Section 303 of the Texas Finance Code is relevant for purposes of determining
the Maximum Rate, the Lender hereby elects to determine the applicable rate
ceiling under such statute by the weekly rate ceiling from time to time in
effect, subject to the Lender’s right subsequently to change such method in
accordance with applicable law.

 

	
   

  	
  BORROWER:

  
	
   

  	
   

  
	
   

  	
  SIRVA MORTGAGE, INC.,

  an Ohio corporation f/k/a

  Cooperative Mortgage Services, Inc.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
						

 

104

 

EXHIBIT O

 

LENDERS,
AGGREGATE COMMITMENT AMOUNT,

AND COMMITMENT AMOUNT

 

	
   

  	
   

  	
  COMMITMENT
  AMOUNT

  	
   

  
	
  NAME OF LENDER

  	
   

  	
  Prior to

  July 30, 2003

  	
   

  	
  On and
  After

  July 31, 2003

  	
   

  
	
  Washington
  Mutual Bank, FA

  3200 Southwest Freeway, Suite 1922

  Houston, Texas 77027

  	
   

  	
  Tranche A Commitment:

  	
   

  	
  $

  	
  17,500,000.00 

  	
   

  	
  -0

  	
  -

  
	
   

  	
  Tranche B Commitment:

  	
   

  	
  $

  	
  17,500,000.00

  	
   

  	
  $

  	
  17,500,000.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  National
  City Bank of Kentucky

  101 South Fifth Street, T06K

  Louisville, Kentucky 40202

  	
   

  	
  Tranche A Commitment:

  	
   

  	
  $

  	
  10,500,000.00 

  	
   

  	
  -0

  	
  -

  
	
   

  	
  Tranche B Commitment:

  	
   

  	
  $

  	
  10,500,000.00

  	
   

  	
  $

  	
  10,500,000.00

  	
   

  
	
  Aggregate Commitment Amount

  	
   

  	
  $

  	
  56,000,000.00

  	
   

  	
  $

  	
  28,000,000.00

  	
   

  

 

105

 

EXHIBIT P

 

(Intentionally deleted)

 

106

 

EXHIBIT “Q”

 

FORM OF
ASSIGNMENT AND ACCEPTANCE

 

Reference is made to the Third Amended and
Restated Warehousing Credit and Security Agreement (Single Family Home Loans)
dated as of September 30, 2002 (as the same may be further amended,
supplemented or otherwise modified from time to time, the “Credit Agreement”),
by and among SIRVA MORTGAGE, INC., an Ohio corporation (“Borrower”), WASHINGTON
MUTUAL BANK, FA, a federal association, successor by merger to Bank United, a
federal savings bank, and the other entities from time to time parties thereto
as lenders (collectively, the “Lenders”), WASHINGTON MUTUAL BANK, FA, a federal
association, successor by merger to Bank United, a federal savings bank, as
agent for the Lenders (in such capacity, the “Agent”) and NATIONAL CITY BANK OF
KENTUCKY, as Documentation Agent and a Lender. Unless otherwise defined herein,
terms defined in the Credit Agreement and used herein shall have the meanings
given to them in the Credit Agreement.

 

             (the
“Assignor”)
and                   (the
“Assignee”) agree as follows:

 

1.             The
Assignor hereby irrevocably sells and assigns to the Assignee without recourse
to the Assignor, and the Assignee hereby irrevocably purchases and assumes from
the Assignor without recourse to the Assignor, as of the Assignment Effective
Date (as defined below), an interest (the “Assigned Interest”), as specified on
SCHEDULE 1, in and to the Assignor’s rights and obligations under the Credit
Agreement with respect to the credit facilities contained in the Credit
Agreement as are set forth on SCHEDULE 1 (individually, an “Assigned Facility”;
collectively, the “Assigned Facilities”), in a principal amount for each
Assigned Facility as set forth on SCHEDULE 1.

 

2.             The
Assignor (a) makes no representation or warranty and assumes no responsibility
with respect to any statements, warranties or representations made in or in
connection with the Credit Agreement or with respect to the execution, legality,
validity, enforceability, genuineness, sufficiency or value of the Credit
Agreement, the other Loan Documents or any other instrument or document
furnished pursuant thereto, other than that the Assignor has not created any
adverse claim upon the interest being assigned by it hereunder and that such
interest is free and clear of any such adverse claim; and (b) makes no
representation or warranty and assumes no responsibility with respect to the
financial condition of Borrower, any of its Affiliates or any other obligor or
the performance or observance by Borrower, any of its Affiliates or any other
obligor of any of their respective obligations under the Credit Agreement or
any of the other Loan Documents or any other instrument or document furnished
pursuant hereto or thereto.

 

3.             The
Assignee (a) represents and warrants that it is legally authorized to enter
into this Assignment and Acceptance; (b) confirms that it has received a copy
of the Credit Agreement, together with copies of such of the financial
statements delivered pursuant to Section 6.2 thereof as it has requested and
such other documents and information as it has deemed appropriate to make its
own credit analysis and decision to enter into this Assignment and Acceptance;
(c) agrees that it will, independently and without reliance upon the Assignor,
the Agent, or any other Lender 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 Credit Agreement, the other
Loan Documents or any other instrument or document

 

107

 

furnished
pursuant hereto or thereto; (d) appoints and authorizes the Agent to take such
action as agent on its behalf and to exercise such powers and discretion under
the Credit Agreement, the other Loan Documents or any other instrument or
document furnished pursuant hereto or thereto as are delegated to the Agent by
the terms thereof, together with such powers as are incidental thereto; and (e)
agrees that it will be bound by the provisions of the Credit Agreement and will
perform in accordance with its terms all the obligations which by the terms of
the Credit Agreement are required to be performed by it as a Lender.

 

4.             The
effective date of this Assignment and Acceptance shall
be               ,                          
(the “Assignment Effective Date”). 
Following the execution of this Assignment and Acceptance, it will be
delivered to the Agent for acceptance by it and recording by the Agent pursuant
to the Credit Agreement, effective as of the Assignment Effective Date (which
shall not, unless otherwise agreed to by the Agent, be earlier than five
Domestic Business Days after the date of such acceptance and recording by the
Agent).

 

5.             Upon
such acceptance and recording, from and after the Assignment Effective Date,
the Agent shall make all payments in respect of the Assigned Interest
(including payments of principal, interest, fees and other amounts) to the Assignee
whether such amounts have accrued prior to the Assignment Effective Date or
accrue subsequent to the Assignment Effective Date. The Assignor and the
Assignee shall make all appropriate adjustments in payments by the Agent for
periods prior to the Assignment Effective Date or with respect to the making of
this assignment directly between themselves.

 

6.             From
and after the Assignment Effective Date, (a) the Assignee shall be a party to
the Credit Agreement and, to the extent provided in this Assignment and
Acceptance, have the rights and obligations of a Lender thereunder and under
the other Loan Documents and shall be bound by the provisions thereof and (b)
the Assignor shall, to the extent provided in this Assignment and Acceptance,
relinquish its rights and be released from its obligations under the Credit
Agreement.

 

7.             This
Assignment and Acceptance shall be governed by and construed in accordance with
the laws of the State of Texas without giving effect to provisions or
principles thereof relating to conflict of laws or choice of law.

 

8.             This
Assignment and Acceptance may be executed by one or more of the parties to this
Assignment and Acceptance on any number of separate counterparts (including by
facsimile transmission), and all of said counterparts taken together shall be
deemed to constitute one and the same instrument.

 

IN WITNESS WHEREOF, the parties hereto have
caused this Assignment and Acceptance to be executed as of the date first above
written by their respective duly authorized officers on SCHEDULE 1 hereto.

 

108

 

SCHEDULE I

 

TO ASSIGNMENT AND ACCEPTANCE

RELATING TO THE CREDIT AGREEMENT,

DATED AS OF SEPTEMBER 30, 2002

AMONG

SIRVA MORTGAGE, INC., AS BORROWER

THE LENDERS PARTY THERETO (THE “LENDERS”)

AND

WASHINGTON MUTUAL BANK, FA, A FEDERAL
ASSOCIATION, SUCCESSOR BY MERGER

TO BANK UNITED, A FEDERAL SAVINGS BANK,

AS AGENT FOR THE LENDERS

(IN SUCH CAPACITY, THE “AGENT”)

 

Name of Assignor:

 

Name of Assignee:

 

Effective Date of Assignment:

 

	
  Credit

  Facility Assigned

  	
   

  	
  Principal

  Amount Assigned

  	
   

  	
  Commitment Percentage Assigned(1)

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  $

  	
            

  	
   

  	
      .                   

  	
  %

  
							

 

 

	
  [NAME OF ASSIGNEE]

  	
  [NAME OF ASSIGNOR]

  
	
   

  	
   

  
	
   

  	
   

  
	
  By

  	
   

  	
   

  	
  By

  	
   

  	
   

  
	
  Name:

  	
  Name:

  
	
  Title:

  	
  Title:

  
						

 

 

(1)  Calculate the Commitment Percentage that is
assigned to at least 15 decimal places and show as a percentage of the
Aggregate Commitment of all Lenders.

 

109

 

	
  Accepted for Recordation
  in the Register:

  	
  Consented To:

  
	
   

  	
   

  
	
  Washington Mutual Bank,
  FA, successor

  by merger to Bank United, as the Agent

  	
  Sirva Mortgage, Inc., an
  Ohio corporation

  f/k/a Cooperative Mortgage Services, Inc.

  as Borrower

  
	
   

  	
   

  
	
   

  	
   

  
	
  By

  	
   

  	
   

  	
   

  
	
  Name:

  	
  By

  	
   

  	
   

  
	
  Title:

  	
  Name: 

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Washington Mutual Bank,
  FA, successor by

  merger to Bank United, as the Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
  Name: 

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
  National City Bank of
  Kentucky,

  as Document Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
  Name: 

  
	
   

  	
  Title:

  
						

 

110

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