AMENDED AND RESTATED
CREDIT AGREEMENT
(WAREHOUSE FACILITY)
Dated as of June 25, 1999
Between
DORAL FINANCIAL CORPORATION,
DORAL MORTGAGE CORPORATION,
THE LENDERS PARTY HERETO
And
BANKERS TRUST COMPANY,
as Agent
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TABLE OF CONTENTS
PAGE
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ARTICLE 1 DEFINITIONS....................................................................................1
Section 1.1 Defined Terms...................................................................1
Section 1.2 Terms Generally................................................................26
ARTICLE 2 AMOUNTS AND TERMS OF LOANS....................................................................27
Section 2.1 Commitments....................................................................27
Section 2.2 Method of Borrowing and of Conversions/Continuations...........................29
Section 2.3 Conversions/Continuations of Loans.............................................30
Section 2.4 Disbursement of Funds..........................................................31
Section 2.5 Notes..........................................................................33
Section 2.6 Interest.......................................................................34
Section 2.7 Termination of Commitments.....................................................34
Section 2.8 Mandatory Repayments...........................................................35
Section 2.9 Optional Prepayments...........................................................36
Section 2.10 Fees...........................................................................37
Section 2.11 Payments, Etc..................................................................37
Section 2.12 Eurodollar Rate Not Determinable; Illegality or Impropriety....................41
Section 2.13 Reserve Requirements; Change in Circumstances..................................41
Section 2.14 Indemnity......................................................................43
Section 2.15 Taxes..........................................................................43
Section 2.16 Sharing of Setoffs.............................................................44
ARTICLE 3 CONDITIONS TO LOANS...........................................................................45
Section 3.1 Conditions to Loans............................................................45
ARTICLE 4 REPRESENTATIONS AND WARRANTIES................................................................48
Section 4.1 Corporate Existence; Compliance with Law and Contractual Obligations...........48
Section 4.2 Corporate Power; Authorization; Enforceable Obligations........................48
Section 4.3 No Legal or Contractual Bar....................................................48
Section 4.4 Financial Information..........................................................49
Section 4.5 No Material Litigation.........................................................50
Section 4.6 Taxes..........................................................................50
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Section 4.7 Investment Company Act.........................................................50
Section 4.8 Subsidiaries...................................................................50
Section 4.9 Use of Proceeds................................................................51
Section 4.10 ERISA..........................................................................51
Section 4.11 Security Interests.............................................................51
Section 4.12 Agency Approvals...............................................................52
Section 4.13 Solvency.......................................................................52
Section 4.14 Minimum Servicing Portfolio....................................................52
Section 4.15 Year 2000 Compliance...........................................................52
ARTICLE 5 COVENANTS.....................................................................................52
Section 5.1 Affirmative Covenants..........................................................52
Section 5.2 Negative Covenants of Each Borrower............................................58
Section 5.3 Additional Negative Covenants..................................................62
ARTICLE 6 EVENTS OF DEFAULT.............................................................................63
Section 6.1 Events of Default..............................................................63
ARTICLE 7 THE AGENT.....................................................................................65
Section 7.1 Appointment of Agent...........................................................65
Section 7.2 Nature of Duties of Agent......................................................66
Section 7.3 Lack of Reliance on Agent......................................................66
Section 7.4 Certain Rights of Agent........................................................66
Section 7.5 Reliance by Agent..............................................................67
Section 7.6 Indemnification of Agent.......................................................67
Section 7.7 Agent in its Individual Capacity...............................................67
Section 7.8 Holders of Notes...............................................................68
Section 7.9 Successor Agent................................................................68
ARTICLE 8 MISCELLANEOUS PROVISIONS......................................................................69
Section 8.1 Notices........................................................................69
Section 8.2 Amendments, Etc................................................................69
Section 8.3 No Waiver; Remedies Cumulative.................................................70
Section 8.4 Payment of Expenses, Etc.......................................................70
Section 8.5 Right of Setoff................................................................71
Section 8.6 Benefit of Agreement...........................................................71
Section 8.7 GOVERNING LAW; SUBMISSION TO JURISDICTION......................................74
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Section 8.8 Counterparts...................................................................75
Section 8.9 Headings Descriptive...........................................................75
Section 8.10 Survival of Representations and Indemnities....................................75
Section 8.11 Severability...................................................................75
Section 8.12 Indemnification of Collateral Agent............................................75
Section 8.13 Joint and Several Nature of the Obligations....................................76
Section 8.14 Certain Waivers................................................................76
Section 8.15 Subrogation, Etc...............................................................77
Section 8.16 Confidentiality................................................................77
Section 8.17 Effectiveness..................................................................78
Section 8.18 Ratification; No Novation......................................................79
Section 8.19 Integration....................................................................79
Section 8.20 WAIVER OF JURY TRIAL...........................................................79
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EXHIBITS
Exhibit A-1 Form of Facility 1 Note Exhibit A-2 Form of Facility 2 Note Exhibit B Amended and Restated Security Agreement (Warehouse Facility) Exhibit C-1 Form of Opinion of Borrowers' New York Counsel Exhibit C-2 Form of Opinion of Borrowers' Puerto Rico Counsel Exhibit D-1 Officer's Certificate (DFC) Exhibit D-2 Officer's Certificate (DMC) Exhibit E-1 Facility 1 Borrowing Base Certificate Exhibit E-2 Facility 2 Tranche A Borrowing Base Certificate Exhibit E-3 Facility 2 Tranche B Borrowing Base Certificate Exhibit F Notice of Borrowing Exhibit G Notice of Conversion/Continuation Exhibit H Approved Investors Exhibit I Addresses for Notices Exhibit J Eligible REO Criteria Exhibit K Material Litigation Exhibit L Form of Confidentiality Agreement Exhibit M Permitted Subordinated Indebtedness Exhibit N-1 REO Demand Note Exhibit N-2 REO Pledge Exhibit N-3 REO Mortgage Exhibit O-1 Form of Pledged Servicing Portfolio Report Exhibit O-2 Form of Recourse Servicing Portfolio Report Exhibit O-3 Form of Recourse Servicing Portfolio Statistics Report Exhibit P Authorized Officers Exhibit Q Form of Additional Lender Agreement Exhibit R Form of Assignment and Acceptance
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AMENDED AND RESTATED CREDIT AGREEMENT
(WAREHOUSE FACILITY)
THIS AMENDED AND RESTATED CREDIT AGREEMENT (WAREHOUSE FACILITY) is made and dated as of June 25, 1999, by and between the Lenders party hereto from time to time, BANKERS TRUST COMPANY, a New York banking corporation, as agent for the Lenders, DORAL FINANCIAL CORPORATION, a corporation organized under the laws of the Commonwealth of Puerto Rico ("DFC"), and DORAL MORTGAGE CORPORATION, a corporation organized under the laws of the Commonwealth of Puerto Rico and a wholly-owned subsidiary of DFC ("DMC", and together with DFC, each a "BORROWER" and collectively, the "BORROWERS") with reference to the Credit Agreement, dated as of June 30, 1995, between the Lenders, the Agent and the Borrowers (as amended to the date hereof, the "ORIGINAL CREDIT Agreement"). Capitalized terms not otherwise defined herein are defined in Article I.
The Lenders, the Agent and the Borrowers wish to amend and restate the Original Credit Agreement in its entirety.
ACCORDINGLY, the parties hereto agree that the Original Credit Agreement is amended and restated in its entirety as follows:
ARTICLE 1
DEFINITIONS
SECTION 1.1 DEFINED TERMS.
For purposes of this Agreement, the terms set forth below shall have the following meanings:
"ACCUMULATED FUNDING DEFICIENCY" shall mean a funding
deficiency described in Section 302 of ERISA.
"ACKNOWLEDGMENT AGREEMENT" shall mean an acknowledgment
agreement in form and substance satisfactory to the Agent pursuant to
which FNMA, FHLMC, GNMA or any other Person which owns Mortgage Loans
or has issued mortgaged-backed securities for which either Borrower
holds direct servicing rights, acknowledges and recognizes the security
interest in such rights granted to the Lenders.
"ADJUSTED TANGIBLE NET WORTH" shall mean, as of any date, (a)
the sum of: (i) Book Net Worth as of such date, (ii) one percent (1.0%)
of the outstanding principal balance of Mortgage Loans in the Servicing
Portfolio as of such date, and (iii) the aggregate principal amount of
Permitted Subordinated Indebtedness outstanding as of such date, less
(b)(i) fifty percent (50%) of the amount of "interest only strip
securities", (ii) all purchased loan administration contracts and (iii)
all other assets that would be classified as intangible assets under
GAAP, including purchased and capitalized value of
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servicing rights, goodwill (whether representing the excess cost over
book value of assets acquired or otherwise), patents, trademarks, trade
names, copyrights, franchises, deferred charges (including unamortized
debt discount and expense, organization and acquisition costs and
research and product development costs), and in accordance with FASB
65, as amended by FASB 122, by the Financial Accounting Standards
Board, any originated mortgage servicing rights.
"ADJUSTMENT DATE" shall have the meaning given such term in
Section 8.6(h).
"AFFILIATE" shall mean, as to any Person, any other Person
directly or indirectly Controlling, Controlled by or under direct or
indirect common Control with, such Person, whether through the
ownership of voting securities, by contract or otherwise. "Control" as
used herein (and all forms of the word) means the power to direct the
management and policies of a Person.
"AGENCY" shall mean FHA, FHLMC, FNMA, GNMA or VA.
"AGENCY CUSTODIAL AGREEMENT" shall mean the agreement, as
amended, modified or supplemented from time to time, between FHLMC,
FNMA or GNMA, as applicable, and the Borrowers and any Person meeting
the eligibility requirements set forth in the FHLMC Guide, FNMA Guide
or GNMA Guide, as applicable, to serve as a "custodian," "certificating
custodian," or as "document custodian", as applicable, pursuant to
which such Person is authorized to act as Certificating Custodian.
"AGENCY GUIDES" shall mean the FHLMC Guide, the FNMA Guide and
the GNMA Guide.
"AGENT" shall mean Bankers Trust Company, in its capacity as
agent for the Lenders hereunder, and any successor agent appointed
pursuant to Section 7.9.
"AGREEMENT" shall mean this Agreement, as amended, modified or
supplemented from time to time.
"AMENDMENT EFFECTIVE DATE" shall have the meaning given such
term in Section 8.17.
"APPLICANT LENDER" shall have the meaning given such term in
Section 8.6(g).
"APPROVED INVESTOR" shall mean FNMA, FHLMC or any Person
listed on Exhibit H. At the request of the Borrowers, the Required
Facility 1 Lenders may from time to time agree in writing to add
Persons to the list set forth on Exhibit H. By written notice to the
Borrowers, the Required Facility 1 Lenders or the Agent may in their or
its reasonable discretion, based on their or its evaluation of the
creditworthiness or funding ability of any Approved Investor listed on
Exhibit H, remove such Approved Investor from such list. Such removal
shall become effective immediately upon written notice from the Agent.
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"AUTHORIZED OFFICERS" shall mean those officers identified on
Exhibit P attached hereto; provided that DFC or DMC, as the case may
be, may, with respect to its Authorized Officers, by notice to the
Agent in accordance with Section 8.1, add or delete any person from the
list of Authorized Officers set forth above.
"BANKERS TRUST" shall mean Bankers Trust Company, in its
capacity as a Lender hereunder.
"BASE EURODOLLAR RATE" shall mean, with respect to any
Eurodollar Loan, a rate per annum equal to the offered rate for U.S.
Dollar deposits, in an amount equal to amount of the Eurodollar Loan
proposed to be subject to such rate and with maturities comparable to
such Eurodollar Interest Period, that appears on Telerate Page 3750 as
of approximately 11:00 a.m., London time, two (2) Eurodollar Business
Days prior to the commencement of such Eurodollar Interest Period;
provided that if such rate does not appear on Telerate Page 3750, the
"Base Eurodollar Rate" applicable to a particular Eurodollar Interest
Period shall mean a rate per annum equal to the rate at which U.S.
Dollar deposits, in an amount equal to the principal amount of the
Eurodollar Loans proposed to be subject to such rate and with
maturities comparable to such Eurodollar Interest Period, are offered
in immediately available funds in the London Interbank Market to the
London office of the Agent by leading banks in the London Interbank
Market as of approximately 11:00 a.m., London time, two (2) Eurodollar
Business Days prior to the commencement of the Eurodollar Interest
Period to which such Base Eurodollar Rate is applicable.
"BOARD" shall mean the Board of Governors of the Federal
Reserve System of the United States and any successor thereto.
"BOOK-ENTRY MBS" shall mean a Mortgage-Backed Security (a)
that is not represented by an instrument (other than the physical
security issued to GNMA's nominee, MBSCC & Co., evidencing a GNMA
Mortgage-Backed Security) and (b) the ownership and transfer of which
are entered upon books maintained for that purpose by a depository.
"BOOK NET WORTH" shall mean (a) the sum of (i) the net worth,
determined in accordance with GAAP consistently applied, of (A) DFC on
a non-consolidated basis, (B) DMC, (C) Centro Hipotecaro de Puerto
Rico, Inc. and (D) other Subsidiaries of DFC engaged primarily in the
business of mortgage banking (as reasonably determined by the Agent,
but excluding Doral Bank, Doral Securities, Inc., Doral Bank FSB and
Doral Money, Inc.) and (ii) the amount of intercompany payables between
DFC and DMC, less (b) the sum of (i) the amount of intercompany
receivables between DFC and DMC and (ii) investments by DFC and/or DMC
in any Subsidiaries, which investments are listed under the account
titled "Other Assets" (as such term is used in the consolidated
statement of financial condition of DFC dated as of December 31, 1998)
or which are listed under other accounts. Notwithstanding the
foregoing, if at any time any of the entities listed in clauses (B),
(C) or (D) above become businesses engaged primarily in
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activities other than mortgage banking (as reasonably determined by the
Agent), then the net worth of such entity shall not be included in
clause (i) for the purposes of calculating Book Net Worth.
"BORROWER" and "BORROWERS" shall have the meaning given such
terms in the introductory paragraph of this Agreement.
"BORROWING" shall mean a Facility 1 Borrowing, a Facility 2
Borrowing or a Swing-Line Borrowing.
"BORROWING DATE" shall mean any date on which Bankers Trust
makes a Swing-Line Loan or the Lenders make Facility 1 Loans or
Facility 2 Loans at the Borrowers' request pursuant to Section 2.2.
"BUSINESS DAY" shall mean any day other than (i) a Saturday,
Sunday and any other day on which banks in New York City are required
or authorized to close or (ii) any public or bank holiday in the
Commonwealth of Puerto Rico.
"CERTIFICATING CUSTODIAN" shall mean any Person acting as the
Borrowers' "document custodian," "custodian" or "certificating
custodian," as such terms are used in the Agency Guides, for purposes
of (a) certifying that the documentation relating to Mortgage Loans
received by such Person from the Borrowers (or the Collateral Agent) is
complete and acceptable under an applicable Agency Guide for purposes
of including such Mortgage Loan in a pool of Mortgage Loans in which
Mortgage-Backed Securities will represent interests and (b) holding
such documentation following formation of such pools and issuance of
such Mortgage-Backed Securities. The Certificating Custodian shall at
all times be party to the Agency Custodial Agreements. The
Certificating Custodian shall be initially Banco Popular de Puerto
Rico.
"CODE" shall mean the Internal Revenue Code of 1986, as
amended from time to time, and the rules and regulations issues
thereunder as from time to time in effect.
"COLLATERAL" shall mean the Warehouse Collateral, the REO
Notes and the REO Property encumbered by the REO Mortgages.
"COLLATERAL AGENT" shall mean initially Banco Popular de
Puerto Rico, and any successor collateral agent thereto acceptable to
the Required Facility 1 Lenders and the Borrowers and designated as the
"Collateral Agent" under the Security Agreement.
"COLLATERAL AGREEMENTS" shall mean all REO Demand Notes, all
REO Mortgages, all REO Pledges, the Security Agreement, the Servicing
Security Agreement, and any other documents or certificates creating or
evidencing security interests granted to the Secured Parties in
connection with this Agreement and the other Loan Documents.
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"COLLATERAL VALUE OF THE FACILITY 1 BORROWING BASE" shall
mean, at any time, the sum of the Collateral Value of the Facility 1
Tranche A Borrowing Base and the Collateral Value of the Facility 1
Tranche B Borrowing Base.
"COLLATERAL VALUE OF THE FACILITY 1 TRANCHE A BORROWING BASE"
shall mean, at the time of determination thereof, the aggregate
collateral value of all Eligible Gestation Mortgage Loans and Eligible
Mortgage-Backed Securities included in the Facility 1 Tranche A
Borrowing Base. For purposes hereof, the collateral value of (x) each
Eligible Gestation Mortgage Loan shall be an amount equal to
ninety-eight percent (98%) of the current unpaid principal balance
thereof, and (y) each Eligible Mortgage-Backed Security shall be an
amount equal to ninety-eight percent (98%) of the face amount thereof;
provided, that if the Agent, in its sole discretion, at any time
believes that the collateral value of any Mortgage Loan or
Mortgage-Backed Security included in the Facility 1 Tranche A Borrowing
Base is greater than the Fair Market Value thereof, then the collateral
value of any such Mortgage Loan or Mortgage-Backed Security shall,
until further notice from the Agent, be equal to (I) in the case of
each Eligible Gestation Mortgage Loan, ninety-eight percent (98%) of
the lesser of (i) the Fair Market Value of such Eligible Gestation
Mortgage Loan and (ii) the current unpaid principal balance of such
Eligible Gestation Mortgage Loan, and (II) in the case of each Eligible
Mortgage-Backed Security, ninety-eight percent (98%) of the lesser of
(i) the Fair Market Value of such Eligible Mortgage-Backed Security and
(ii) the face amount of such Eligible Mortgage-Backed Security. The
Collateral Value of the Facility 1 Tranche A Borrowing Base shall be
determined by reference to the most recent Facility 1 Borrowing Base
Certificate delivered by the Borrowers to the Agent absent any error in
such Facility 1 Borrowing Base Certificate as of the date delivered. By
adding any Eligible Gestation Mortgage Loan or Eligible Mortgage-Backed
Security to the Facility 1 Tranche A Borrowing Base in accordance with
the Security Agreement, each Borrower shall be deemed to represent and
warrant to the Agent and each Lender at and as of the date of such
addition that, with respect to such Mortgage Loans or Mortgage-Backed
Securities, each of the statements set forth in the definition of
Eligible Gestation Mortgage Loan or Eligible Mortgage-Backed Security,
as the case may be, is true and correct. If any such statement proves
to be untrue or incorrect in any respect at any time, such then
Mortgage Loan or Mortgage-Backed Security, as the case may be, shall be
deemed to have no collateral value for purposes of computing the
Collateral Value of the Facility 1 Tranche A Borrowing Base.
"COLLATERAL VALUE OF THE FACILITY 1 TRANCHE B BORROWING BASE"
shall mean, at the time of determination thereof, the aggregate
collateral value of all Eligible Conforming Mortgage Loans and Eligible
Non-Conforming Mortgage Loans included in the Facility 1 Tranche B
Borrowing Base. For purposes hereof, the collateral value of (x) each
Eligible Conforming Mortgage Loan shall be an amount equal to
ninety-eight percent (98%) of the current unpaid principal balance
thereof, and (y) each Eligible Non-Conforming Mortgage Loan shall be in
an amount equal to ninety-five percent (95%) of the current unpaid
principal balance thereof; provided that if the Agent, in its sole
discretion, at any time believes that the collateral value of any
Mortgage Loan included in the Facility 1 Tranche B Borrowing Base is
greater than the Fair M ...
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