EXHIBIT 10.36
SECOND AMENDMENT TO
LOAN AGREEMENT AND
SECOND AMENDMENT TO
PLEDGE AND SECURITY AGREEMENT
THIS SECOND AMENDMENT TO LOAN AGREEMENT AND SECOND AMENDMENT TO PLEDGE AND
SECURITY AGREEMENT (the "Amendment") dated as of September 1, 2000 between NVR
MORTGAGE FINANCE, INC., a Virginia corporation ("Borrower"), the Lenders party
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to the Loan Agreement referred to below ("Lenders"), and U.S. BANK NATIONAL
ASSOCIATION, as agent ("Agent") for the Lenders.
WITNESSETH THAT:
WHEREAS, the Borrower, the Lenders and the Agent are parties to a Loan
Agreement dated as of September 7, 1999, as amended by a Consent, Waiver and
First Amendment to Loan Agreement dated as of November 19, 1999 (as so amended,
the "Loan Agreement"), pursuant to which the Lenders provide the Borrower with a
revolving mortgage warehousing credit facility;
WHEREAS, the Borrower and the Lenders have agreed to amend the Loan
Agreement upon the terms and conditions herein set forth;
NOW, THEREFORE, for value received, the receipt and sufficiency of which
are hereby acknowledged, the Borrower and the Lenders agree as follows:
1. Certain Defined Terms. Each capitalized term used herein without being
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defined herein that is defined in the Loan Agreement shall have the meaning
given to it therein.
2. Amendments to Loan Agreement. The Loan Agreement is hereby amended as
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follows:
(a) The definition of "Eligible Mortgage Loan" in Section 1.1 of the
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Loan Agreement is hereby amended to (i) add "or REO" before the colon at
the end of the second line thereof, (ii) amend clauses (h) and (k) thereof
in their entirety to read as follows:
(h) which, except in the case of an Investment Mortgage Loan or
REO, has not previously been sold to an Investor and repurchased by
Borrower;
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(k) except in the case of an Investment Mortgage Loan or REO,
with respect to which no more than 180 days have elapsed since the
original funding of such Mortgage Loan to the Mortgagor;
(iii) add "or REO" after "Investment Loan" each place it appears therein,
(iv) delete the word "and" at the end of clause (o) thereof, (v) delete the
period at the end of clause (p) thereof and substitute "; and" therefor,
and (vi) add the following clause (q) after clause (p) thereof:
(q) in connection with which, in the case of an Investment
Mortgage Loan that has been converted to REO, the requirements of
Section 4.08 of the Pledge and Security Agreement have been satisfied.
(b) The definition of "Scheduled Termination Date" in Section 1.1 of
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the Loan Agreement is hereby amended in its entirety to read as follows:
"Scheduled Termination Date" means August 31, 2001.
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(c) The definition of Swing Advance Limit" in Section 1.1 of the Loan
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Agreement is hereby amended in its entirety to read as follows:
"Swing Advance Limit" means $45,000,000.
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(d) Section 2.1(g) of the Loan Agreement is hereby amended in its
entirety read as follows:
(g) Increases. Borrower may from time to time request any Lender
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to increase its Commitment, provided that the total Commitment may be
increased to no more than $125,000,000. That increase must be effected
by an amendment executed by Borrower, Agent, and the increasing
Lender. Borrower shall execute and deliver to each such Lender a
Committed Warehouse Note in the stated amount of its new Commitment.
No Lender is obligated to increase its Commitment under any
circumstances, and no Lender's Commitment may be increased except by
its execution of an amendment as stated above. Each new Lender
providing such additional Commitment increase shall be a "Lender"
hereunder, entitled to the rights and benefits, and subject to the
duties, of a Lender under the Loan Documents. All amounts advanced
hereunder pursuant to any such additional Commitment shall be secured
by the Collateral on a pari passu basis with all other amounts
advanced hereunder. In the event the total Commitment is increased,
Borrower shall notify each Lender in writing of such increase. In the
case of a Commitment increase, each Lender's Commitment Percentage
shall be recalculated to reflect the new proportionate share of the
revised total Commitments and the Lender holding an additional
Commitment shall, immediately upon receiving notice from Agent, pay to
the Agent an amount equal to its pro rata share of the Borrowings
outstanding as of such date. All such
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payments shall reduce ratably the outstanding principal balance of the
Committed Warehouse Notes, shall be distributed by the Agent to the
Lenders for application accordingly, and shall represent Borrowings to
Borrower under the new or increasing Lender's Committed Warehouse
Note. The new or increasing Lender shall be entitled to share ratably
in interest accruing on the balances purchased, at the rates provided
herein for such balances, from and after the date of such payment. All
new Borrowings occurring after an increase of the total Commitments
shall be funded in accordance with each Lender's revised Commitment
Percentage.
(e) Section 2.4 of the Loan Agreement is hereby amended to add the
following subsection (e) at the end thereof:
(e) Construction/Lot Fee. Borrower shall pay to the Agent, for
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the ratable benefit of Lenders, a fee equal to 0.5% per annum of the
average outstanding balance of the Construction/Lot Tranches. Such
fee, accrued through the end of each calendar month, shall be paid on
the fifth day of the following month. The accrued amount of such fee
shall also be payable on the Termination Date. Such fee shall be
computed on the basis of the actual number of days elapsed and a year
of 360 days.
(f) Sections 2.11(b) and (c) of the Loan Agreement are hereby amended
in their entirety to read as follows:
(b) Balance Funded Rate Segment. A Balance Funded Rate Segment
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consisting of any portion of a Construction/Lot Loan Tranche shall
bear interest at the rate of 1.25% per annum. A Balance Funded Rate
Segment consisting of any portion of a Gestation Loan Tranche shall
bear interest at the rate of 0.65% per annum. A Balance Funded Rate
Segment consisting of any portion of a Regular Tranche shall bear
interest at the rate of 1.25% per annum.
(c) LIBOR Segments. A LIBOR Segment consisting of any portion of
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a Construction/Lot Loan Tranche shall bear interest at a rate per
annum equal to the sum of LIBOR plus 1.25% per annum. A LIBOR Segment
consisting of any portion of a Gestation Loan Tranche shall bear
interest at a rate per annum equal to the sum of LIBOR plus 0.65% per
annum. A LIBOR Segment consisting of any portion of a Regular Tranche
shall bear interest at a rate per annum equal to the sum of LIBOR plus
1.25% per annum.
(g) Section 6.1(b), 6.1(d) and 6.1(e) of the Loan Agreement are
hereby amended in their entirety to read as follows:
(b) Promptly after becoming available, and in any event within
45 days after the end of each March, June, September and December, and
30 days
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after the end of each other month, a consolidated balance sheet of
Borrower and its Subsidiaries, if any, as of the end of such month and
the related consolidated statements of income, stockholders' equity
and cash flows of Borrower and its Subsidiaries, if any, for such
month and the period from the beginning of the current fiscal year of
Borrower through the end of such month, (i) certified by the president
of the Borrower or the chief financial officer of Parent to have been
prepared in accordance with GAAP applied on a basis consistent with
prior periods, subject to normal year-end adjustments, and (ii)
accompanied by a completed Officer's Certificate in the form of
Exhibit I hereto, executed by the president of the Borrower or the
chief financial officer of Parent;
(d) [INTENTIONALLY OMITTED];
(e) Promptly and in any event within 30 days after the end of
each month, management report regarding Borrower's commitment
position, pipeline position and production;
(h) Section 6.22 of the Loan Agreement is hereby amended in its
entirety to read as follows:
6.22 Senior Management. If ▇▇▇▇▇▇▇ ▇▇▇▇▇ or ▇▇▇▇ ▇▇▇▇▇▇▇ shall
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cease to hold his current senior management position, unless the same
results from unsolicited resignation, death, disability, unsolicited
retirement or termination for cause, the Borrower shall promptly
thereafter undertake a search for a replacement officer with
comparable ability, as determined in good faith by the Borrower's
Board of Directors, and shall complete such search within a reasonable
period of time, and during such period of time the Borrower shall
continue to conduct its business in accordance with customary industry
standards.
(i) Section 7.9 and 7.10 of the Loan Agreement are hereby amended in
their entirety to read as follows:
7.9 Adjusted Tangible Net Worth. Adjusted Tangible Net Worth at
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any date shall not be less than $8,000,000.
7.10 Liabilities to Adjusted Tangible Net Worth Ratios. The
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ratio of (a) the Total Liabilities, excluding the Borrower's (i) net
deferred taxes, (ii) Advances to the extent of the aggregate
Collateral Value of all Eligible Gestation Mortgage Loans, and (iii)
obligations in respect of Repurchase Agreements, to (b) Adjusted
Tangible Net Worth, shall not at any time exceed 12.5 to 1.0.
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(j) Section 8.1(m) of the Loan Agreement is hereby amended in its
entirety to read as follows:
(m) [INTENTIONALLY OMITTED];
(k) Schedule 1.1(a) to the Loan Agreement is hereby amended in its
entirety to read as set forth on Schedule 1.1(a) hereto.
(l) Schedule 1.1(b) to the Loan Agreement is hereby amended to add
the Pennsylvania Housing Finance Agency as an Investor.
(m) Schedule 5.22 to the Loan Agreement is hereby amended to add the
following:
14. Payment of intercompany advances made by the Parent to the
Company from time to time under the Subordinated Demand Revolving Note
of the Company dated September 7, 1999.
3. Amendment to Pledge and Security Agreement. The Pledge and Security
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Agreement is hereby amended as follows:
(a) A new Section 4.08, which reads as follows, is added to the
Pledge and Security Agreement after Section 4.07:
4.08 REO. If an Investment Mortgage Loan is foreclosed, the
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resulting REO will remain an Eligible Mortgage Loan if the following
documents are delivered to the Agent:
(a) if the purchaser at foreclosure is the Borrower and a
redemption period is applicable to the sale:
(i) a certified copy of the certificate of sale;
(ii) an assignment of the certificate of sale from
the Borrower, in blank; and
(iii) a copy of a recent appraisal (i.e., not more
than 60 days old) of the REO.
(b) if the purchaser at foreclosure is the Borrower and
either no redemption period is applicable to the sale or such
redemption period has expired:
(i) a certified copy of the deed conveying the REO
to the Borrower;
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(ii) a deed conveying the REO, executed in blank by
the Borrower;
(iii) an original owner's title insurance policy
showing the Borrower as owner, subject only to such
exceptions as may be acceptable to the Agent;
(iv) a copy of a recent appraisal (i.e., not more
than 60 days old) of the REO; and
(v) if requested by the Agent, a Mortgage on the REO
in favor of the Agent, executed by the Borrower.
4. Exiting Lenders. On the Effective Date, the aggregate unpaid principal
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amount of the Loans made by The Bank of New York and Chase Bank of Texas, N.A.
(the "Exiting Lenders") under the Loan Agreement and related Note, together with
all interest, fees and other amounts, if any, payable to each Exiting Lender
thereunder as of the Effective Date (the "Payoff Amount"), shall be repaid in
full from the proceeds of Loans made by the remaining Lenders, and the
Commitments of the Exiting Lenders under the Loan Agreement shall terminate. The
Agent shall distribute to the Exiting Lenders by not later than 3:00 P.M.
(Minneapolis time) on the Effective Date out of the proceeds of the Loans made
for such purpose the amount required to pay each Exiting Lender's Payoff Amount
in full, whereupon such Exiting Lender shall no longer be a party to the Loan
Agreement other than in respect of rights relating to indemnities and similar
rights (including, without limitation, pursuant to Sections 2.10(a), 2.10(b) and
10.1 of the Loan Agreement) for events occurring or matters relating to the
period prior to the Effective Date.
5. New Lender. On the Effective Date, Comerica Bank ("Comerica") shall be
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a Lender under the Loan Agreement and shall have all of the rights, privileges
and benefits of a Lender under the Loan Agreement and the Loan Documents, and
shall have all of the duties of a Lender thereunder, as if Comerica had
initially been a party to the Loan Agreement as a Lender. Comerica shall make
Advances on the Effective Date, as requested by the Agent, so that its
outstanding Advances of each Tranche and Segment are equal to its Commitment
Percentage of such Advances outstanding on the Effective Date.
6. Conditions to Effectiveness of this Amendment. This Amendment shall
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become effective on September 1, 2000 (the "Effective Date"), provided the Agent
shall have received at least eight (8) counterparts of this Amendment, duly
executed by the Borrower and all of the Lenders (including the Existing Lenders
and Comerica), and the following conditions are satisfied:
(a) Before and after giving effect to this Amendment, the
representations and warranties of the Borrower in Section 5 of the Loan
Agreement and Section 5 of the
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Pledge and Security Agreement shall be true and correct as though made on
the date hereof, except to the extent such representations and warranties
by their terms are made as of a specific date and except for changes that
are permitted by the terms of the Loan Agreement.
(b) Before and after giving effect to this Amendment, no Event of
Default and no Default shall have occurred and be continuing.
(c) Except as disclosed in the Parent's quarterly report on form 10-Q
filed with the Securities and Exchange Commission for the fiscal quarter
ended March 31, 2000, no material adverse change in the business, assets,
financial condition or prospects of the Borrower shall have occurred since
December 31, 1999.
(d) The Agent shall have received the following, each duly executed
or certified, as the case may be, and dated as of the date of delivery
thereof::
(i) a new Committed Warehousing Promissory Note payable to
each Lender holding a Commitment from and after the Effective Date, in
the amount of such Lender's respective Commitment Amount after giving
effect to this Amendment (each, a "New Note"), duly executed by the
Company;
(ii) copy of resolutions of the Board of Directors of the
Borrower, certified by its respective Secretary or Assistant
Secretary, authorizing or ratifying the execution, delivery and
performance of this Amendment;
(iii) a certified copy of any amendment or restatement of the
Articles of Incorporation or the By-laws of the Borrower made or
entered following the date of the most recent certified copies thereof
furnished to the Lenders;
(iv) certified copies of all documents evidencing any necessary
corporate action, consent or governmental or regulatory approval (if
any) with respect to this Amendment;
(v) a certificate of good standing for the Borrower in the
jurisdiction of its incorporation, certified by the appropriate
governmental official as of a date not more than 10 days prior to the
Effective Date; and
(vi) such other documents, instruments and approvals as the
Agent may reasonably request.
7. Acknowledgments. The Borrower and each Lender acknowledges that, as
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amended hereby, the Loan Agreement and the Pledge and Security Agreement each
remains in full force and effect with respect to the Borrower and the Lenders,
and that each reference to the Loan Agreement, the Pledge and Security Agreement
or the Notes in the Loan Documents shall
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refer to the Loan Agreement or the Pledge and Security Agreement, as amended
hereby, or the New Notes. The Borrower confirms and acknowledges that it will
continue to comply with the covenants set out in the Loan Agreement and the
other Loan Documents, as amended hereby, and that its representations and
warranties set out in the Loan Agreement and the other Loan Documents, as
amended hereby, are true and correct as of the date of this Amendment, except to
the extent such representations and warranties by their terms are made as of a
specific date and except for changes that are permitted by the terms of the Loan
Agreement. The Borrower represents and warrants that (i) the execution, delivery
and performance of this Amendment is within its corporate powers and has been
duly authorized by all necessary corporate action; (ii) this Amendment has been
duly executed and delivered by the Borrower and constitutes the legal, valid and
binding obligation of the Borrower, enforceable against the Borrower in
accordance with its terms (subject to limitations as to enforceability which
might result from bankruptcy, insolvency, or other similar laws affecting
creditors' rights generally and general principles of equity) and (iii) no
Events of Default or Default exist.
8. General.
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(a) The Borrower agrees to reimburse the Agent upon demand for all
reasonable expenses (including reasonable attorneys fees and legal
expenses) incurred by the Agent in the preparation, negotiation and
execution of this Amendment and any other document required to be furnished
herewith, and to pay and save the Lenders harmless from all liability for
any stamp or other taxes which may be payable with respect to the execution
or delivery of this Amendment, which obligations of the Borrower shall
survive any termination of the Loan Agreement.
(b) This Amendment may be executed in as many counterparts as may be
deemed necessary or convenient, and by the different parties hereto on
separate counterparts, each of which, when so executed, shall be deemed an
original but all such counterparts shall constitute but one and the same
instrument.
(c) Any provision of this Amendment which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining portions hereof or affecting the validity or
enforceability of such provisions in any other jurisdiction.
(d) This Amendment shall be governed by, and construed in accordance
with, the internal law, and not the law of conflicts, of the State of
Minnesota, but giving effect to federal laws applicable to national banks.
(e) This Amendment shall be binding upon the Borrower, the Lenders,
the Agent and their respective successors and assigns, and shall inure to
the benefit of the Borrower, the Lenders, the Agent and the successors and
assigns of the Lenders and the Agent.
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be executed as of the day and year first above written.
NVR MORTGAGE FINANCE, INC.
By: _________________________
Its: _________________________
U.S. BANK NATIONAL ASSOCIATION,
as Agent and Lender
By: _________________________
Its: _________________________
FLEET NATIONAL BANK
By: _________________________
Its: _________________________
GUARANTY FEDERAL BANK, F.S.B.
By: _________________________
Its: _________________________
NATIONAL CITY BANK OF
KENTUCKY
By: _________________________
Its: _________________________
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COMERICA BANK
By: _________________________
Its: _________________________
THE BANK OF NEW YORK,
as Exiting Lender
By: _________________________
Its: _________________________
CHASE BANK OF TEXAS,
NATIONAL ASSOCIATION,
as Exiting Lender
By: _________________________
Its: _________________________
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SCHEDULE 1.1(a)
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Commitment
Lender Amount
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U.S. Bank National Association $ 45,000,000
Mortgage Banking Services
U.S. Bank Place
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
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Guaranty Federal Bank,F.S.B. $ 20,000,000
▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇/▇▇/ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
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Fleet Bank, N.A. $ 10,000,000
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
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Comerica Bank $ 15,000,000
Comerica Tower at Detroit Center
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
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National City Bank of Kentucky $ 10,000,000
▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇ ▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
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TOTAL $100,000,000
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