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Exhibit 10.4.j
MODIFICATION AGREEMENT
This Modification Agreement (herein so called), is entered into
effective as of the 30th day of May, 1997, by and among ALLIED MORTGAGE
CORPORATION, a Texas corporation (the "Company"), ALLIED MORTGAGE CAPITAL
CORPORATION, a Texas corporation ("Capital") (the Company and Capital being
called collectively the "Borrowers" and individually, a "Borrower"), ▇▇▇ ▇.
▇▇▇▇▇ ("Guarantor"), and COASTAL BANC ssb ("Lender"). Capitalized terms used
but not defined herein have the meanings assigned to them in that certain Loan
Agreement dated effective as of April 30, 1996, by and among the Borrowers and
Lender, as amended by that certain Modification Agreement dated February 18,
1997 among the Borrower, Guarantor and Lender ("Credit Agreement").
Section 1. Recitals. Borrowers, Guarantor, and Lender desire to amend
certain provisions of the Credit Agreement. Therefore, Borrowers, Guarantor and
Lender hereby agree as follows, intending to be legally bound:
Section 2. Amendments. The Credit Agreement is hereby amended as
follows:
(a) Each reference to $5,000,000.00 found in the Credit
Agreement is hereby amended to read $6,000,000.00
(b) Each reference to $500,000.00 found in Section 2.16
Discretionary Advances of the Credit Agreement is hereby amended to
read $600,000.00.
(c) The Revolving Credit Note ("Credit Note") dated May 30,
1997, in the original principal sum of $6,600,000.00 executed by
Borrowers payable to the order of Lender is given in renewal and
extension of the Revolving Credit Note dated April 30, 1996, in the
original principal sum of $5,500,000.00 executed by Borrowers payable
to the order of Lender and not in novation or discharge thereof. The
definition of the term "Note" in the Credit Agreement is hereby
amended to mean the Credit Note and all renewals, extensions,
modifications, increases, rearrangements, and replacements thereof.
(d) The definition of "Basic Rate" in Section 1.2 of the
Credit Agreement is hereby deleted therefrom and the following is
substituted in lieu thereof for all purposes:
"'Basic Rate' means, for any day, (a) with respect
to Aggregate Advances relating to "A" Mortgage Loans and FHA
Title I Mortgage Loans, the LIBOR Rate for that day plus
2.50%; (b) with respect to Aggregate Advances that are
Receivables Advances, the LIBOR Rate for that day plus 2.75%;
and (c) with respect to Aggregate Advances relating to "B, C,
& D" Mortgage Loans and Repurchased Mortgage Loans, the LIBOR
Rate for that day plus 3.00%."
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(e) The definition of "Collateral Value" in Section 1.2 of
the Credit Agreement is hereby deleted therefrom and the following is
substituted in lieu thereof for all purposes:
"'Collateral Value' means
(a) with respect to each Eligible Mortgage Loan, at
the time of any determination, an amount equal to one hundred
percent (100%) of the least of (1) the actual out-of-pocket
cost of such Mortgage Loan to the Borrower that is pledging
such Mortgage Loan, i.e., the net amount actually funded
against such Mortgage Loan originated by such Borrower or the
net purchase price of such Mortgage Loan purchased by it, (2)
the amount at which an Investor has committed to purchase
such Mortgage Loan pursuant to a Purchase Commitment, (3) the
principal balance of such Mortgage Loan, or (4) the Market
Value of such Mortgage Loan; provided, that the Collateral
Value of such Mortgage Loan originated or acquired by the
pledging Borrower, whether funded as a refinancing of an
existing residential Mortgage Loan or purchased by it for an
amount in excess of Par shall not exceed such Mortgage Loan's
Par, even though the pledging Borrower funded or paid more
than Par for it and even if the Purchase Commitment covering
it specifies a purchase price for it greater than Par.
(b) with respect to all Pledged Mortgage Loans that
are not or cease to be Eligible Mortgage Loans, such Mortgage
Loans shall have a Collateral Value equal to zero;
(c) with respect to each Eligible Mortgage-backed
Security, at the time of any determination, one hundred
percent (100%) of the least of (1) the amount at which an
Investor has committed to purchase such Mortgage-backed
Security pursuant to a Purchase Commitment, (2) the sum of
the principal balance of all Mortgage Loans that support such
Mortgage-backed Security, or (3) the Market Value of such
Mortgage-backed Security;
(d) with respect to Eligible Receivables, an amount
equal to the Receivables Loan Value;
(e) with respect to each Eligible Repurchased
Mortgage Loans, at the time of any determination, an amount
equal to its Repurchased Borrowing Base;
(f) with respect to any Collateral that is not or
ceases to be Eligible Collateral, such Collateral shall have
a Collateral Value equal to zero."
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(f) The definition of "Credit Request" is hereby deleted
therefrom and the following is substituted in lieu thereof for all
purposes:
"'Credit Request' means (a) with respect to a
request for an Advance against an "A" Mortgage Loan or FHA
Title I Mortgage Loan, Exhibit "B-1", (b) with respect to a
request for an Advance against a "B, C, & D" Mortgage Loan,
Exhibit "B-2", (c) with respect to a request for a
Receivables Advance, Exhibit "B-3", and (d) with respect to a
request for a Repurchased Advance, Exhibit "B-4"."
(g) The definition of "Eligible Mortgage Loans" in Section
1.2 of the Credit Agreement is hereby deleted therefrom and the
following is substituted in lieu thereof for all purposes:
"'Eligible Mortgage Loans' means, on any day, all
"A" Mortgage Loans, FHA Title I Mortgage Loans, and "B, C, &
D" Mortgage Loans, (a) for which a Borrower holds Purchase
Commitments or with respect to each "B, C, & D" Mortgage
Loans only, a Purchase Agreement and a related Investor
Confirmation, Preclosing Purchase Approval, or if designated
for bulk sale by a Borrower on the Credit Request that such
"B, C, & D" Mortgage Loan complies at all times with all
applicable underwriting guidelines and other requirements of
an Investor relating to such Investor's purchase of such
"B, C, & D" Mortgage Loan under the Purchase Agreement, as
applicable; (b) that are made payable to the order of a
Borrower or have been endorsed payable to such Borrower and
have been endorsed by such Borrower in blank; (c) in which
Lender has been granted and continues to hold an enforceable
perfected first priority security interest; (d) that are not
in default; (e) that conforms in all respects with all the
requirements of the Purchase Commitments or with respect to
each "B, C, & D" Mortgage Loans only, a Purchase Agreement
and a related Investor Confirmation or Preclosing Purchase
Approval, as applicable, to purchase such Mortgage Loans and
are valid and enforceable in accordance with their respective
terms; (f) otherwise satisfactory to Lender in its sole
discretion and all other respects; and (g) as to which none
of the events or conditions described in Section 2.15 has
occurred."
(h) The definition of "Mortgage Loan" in Section 1.2 of the
Credit Agreement is hereby deleted therefrom and the following is
substituted in lieu thereof for all purposes:
"Mortgage Loan" means any loan evidenced by a
Mortgage Note."
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(i) The definition of "Termination Date" in Section 1.2 of
the Credit Agreement is hereby deleted therefrom and the following is
substituted in lieu thereof:
"`Termination Date' means the earlier to occur of
(i) May 3 1, 1998 or (ii) the date that the Commitment is
canceled or terminated in accordance with this Agreement."
(j) The definition of "Warehouse Line Limit" in Section 1.2
of the Credit Agreement is hereby deleted therefrom and the following
is substituted in lieu thereof:
"`Warehouse Line Limit' means (a) with respect to an
"A" Mortgage Loan or a FHA Title I Mortgage Loan that is an
Eligible Mortgage Loan, an amount equal to 100% of the lesser
of (i) the amount at which an Investor has committed to
purchase such "A" Mortgage Loan or FHA Title I Mortgage Loan
pursuant to a Purchase Commitment or (ii) the principal
balance of such "A" Mortgage Loan or FHA Title I Mortgage
Loan; (b) with respect to a "B, C, & D" Mortgage Loan that is
an Eligible Mortgage Loan and is designated by the Borrower
for a pipeline sale on the Credit Request delivered in
connection with such "B, C, & D" Mortgage Loan, an amount
equal to. 97% of the lesser of (i) the amount at which an
Investor has committed to purchase such "B, C, & D" Mortgage
Loan pursuant to a Purchase Agreement and the related
Investor Confirmation or Preclosing Purchase Approval, as
applicable, or (ii) the principal balance of such "B, C, & D"
Mortgage Loan; (c) with respect to a "B, C, & D" Mortgage
Loan that is an Eligible Mortgage Loan and is designated by
the Borrower for bulk sale on the Credit Request delivered in
connection with such "B, C, & D" Mortgage Loan, an amount
equal to 95% of the lesser of (i) the amount at which an
Investor has committed to purchase such "B, C, & D" Mortgage
Loan pursuant to a Purchase Agreement, or (ii) the principal
balance of such "B, C, & D" Mortgage Loan."
(k) The following definitions are hereby added to Section 1.2
of the Credit Agreement for all purposes:
"Approved Company" means the companies listed on
Exhibit "L" attached hereto for all purposes and any other
Person hereafter approved by Lender in writing at any time
and from time to time; provided that at any time by written
notice to Borrower Lender may disapprove any such company or
Person because it has determined in its sole discretion and
for any reason it is no longer comfortable with such company
or Person, whereupon such company or Person shall no longer
be qualified to be an Approved Company.
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"Borrowing Date" means, for any Advance, the date it
is disbursed.
"Eligible Collateral" means all Eligible Repurchased
Mortgage Loans, Eligible Mortgage Collateral, and Eligible
Receivables.
"Eligible Mortgage-backed Securities" means, on any
day, all Pledged Mortgage-backed Securities for which either
Borrower holds Purchase Commitments and which conform in all
respects with all requirements of such Purchase Commitments
to purchase such Mortgage-backed Securities.
"Eligible Mortgage Collateral" means, on any day,
all Eligible Mortgage Loans and Eligible Mortgage-backed
Securities.
"Eligible Receivables" means, at any time, an amount
equal to the aggregate unpaid amount of Network's accounts
and contract rights for advances made by Network on behalf of
an Approved Company to pay for home purchase closing costs of
an employee of such Approved Company for which invoices have
been issued and payment for which is due within thirty (30)
days; provided, however, there shall be excluded from Eligible
Receivables (a) any amount billed and remaining unpaid more
than 60 days from issuance, (b) any account or contract right
in which Lender does not have a valid and perfected first
priority lien, mortgage or security interest, (c) any account
which is or may be subject to a right of setoff, claim, or
defense, and (d) any account that has aged 25 days or more as
of the Borrowing Date of the Receivables Advance requested in
connection therewith.
"Eligible Repurchased Mortgage Loan" means a
Repurchased Mortgage Loan that, at all times until the full
payment and performance of all Obligations:
(a) is validly pledged to the Lender,
subject to no other Liens; and
(b) has been included in the Collateral no
longer than one (1) year.
"FHA Title I Mortgage Loan" means, on any day, a
Mortgage Loan that is fully insured by FHA under Title I of
the National Housing Act, as amended.
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"Network" means The Mortgage Benefits Network, a
California corporation.
"Receivables" means all accounts and contract rights
now or hereafter owned by Network.
"Receivables Advance" means an Advance by Lender
against Receivables.
"Receivables Loan Value" means at any time the
amount equal to the lesser of (a) $200,000.00 or (b)
eighty-five percent (85%) of the Eligible Receivables of
Network.
"Repurchased Advance" means a disbursement by the
Lender under the Commitment pursuant to this Agreement in
respect of the repurchase of a Repurchased Mortgage Loan.
"Repurchased Borrowing Base" means, with respect to
any Repurchased Advance against an Eligible Repurchased
Mortgage Loan, an amount equal to the lesser of (a) sixty
percent (60%) of the principal balance of such Repurchased
Mortgage Loan, or (b) eighty percent (80%) of the appraised
value of the mortgage property securing such Repurchased
Mortgage Loan.
"Repurchased Mortgage Loan" means a Mortgage Loan
that Company is obligated to repurchase from an Investor
pursuant to the terms and conditions of the Purchase
Commitment covering such Mortgage Loan for any reason
whatsoever other than fraud of the Company or any other
Person in the origination of such Mortgage Loan or the
origination of such Mortgage Loan failed to comply with all
requirements of the Real Estate Settlement Procedures Act,
Equal Credit Opportunity Act, the federal Truth-in-Lending
Act or any other applicable laws and regulations, or out of a
Mortgage Pool pursuant to the applicable Servicing Contract.
"Repurchased Payment" means the unreimbursed
purchase price paid by Company to repurchase a Repurchased
Mortgage Loan.
"Repurchased Receivables" means all receivables
arising due to a Repurchased Payment.
"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.
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(l) Section 2.1. Loan. of the Credit Agreement is hereby
deleted therefrom and the following is substituted in lieu thereof for
all purposes:
"Subject to the terms and conditions and relying on
the representations and warranties contained in this
Agreement, Lender agrees to make Advances to either Borrower
at any time, and from time to time, on any Business Day prior
to the Termination Date in such amounts as such Borrower may
request up to but not exceeding the Commitment Limit and each
Borrower may borrow, repay, and reborrow hereunder so long as
the Aggregate Advances at any one time outstanding shall not
exceed the Commitment Limit. No Advance shall be made against
a Mortgage Loan that is not an Eligible Mortgage Loan. The
amount of any Advance made hereunder against an Eligible
Mortgage Loan shall not exceed such Eligible Mortgage Loan's
Warehouse Line Limit. Lender's Commitment shall terminate on
the Termination Date or such earlier date pursuant to the
terms of this Agreement. All revolving loans made pursuant to
this Section 2.1 and all payments of principal with respect
to all loans under the Commitment shall be evidenced by
notations made by Lender in its business records. The
Aggregate Advances reflected by the notations made in
Lender's business records shall be conclusive evidence of the
principal amount owing and unpaid on the Note. The Aggregate
Advances against "B, C, & D" Mortgage Loans outstanding at
any one time shall not exceed $2,000,000.00. The Aggregate
Advances against FHA Title I Mortgage Loans outstanding at
any one time shall not exceed $1,000,000.00. The aggregate
amount of all Receivables Advances outstanding at any one
time shall not exceed the Receivables Loan Value. The
aggregate amount of all Repurchased Advances outstanding at
any one time shall not exceed $100,000.00. Notwithstanding
anything to the contrary contained in this Agreement or
otherwise, Capital shall not be permitted at any time to
receive any Receivable Advance or Repurchased Advance
hereunder"
(m) Section 2.6 Mandatory Prepayments. of the Credit
Agreement is hereby deleted therefrom and the following is substituted
in lieu thereof for all purposes:
Section 2.6 Mandatory Prepayments.
(a) Collateral Value Deficiency.
(1) If at any time the outstanding
principal balance of the Note exceeds the aggregate
Collateral Value of all Eligible Collateral, Lender
may require, in its sole discretion, Borrowers to
prepay, within
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three (3) Business Days after request of Lender, the
amount of such excess for application towards
reduction of the outstanding principal balance of
the Note.
(2) If at any time the Collateral Value of
any Collateral is zero, Borrowers shall immediately
pay to Lender all Aggregate Advances against such
Collateral.
(b) Repurchased Advances.
(1) Company shall pay to the Lender the
aggregate amount of any Repurchased Advance
immediately upon Company's receipt of payment or
reimbursement from any source or sources of all or
any portion of any Repurchased Payment for which
such Repurchased Advance was made, including,
without limitation, the sale of any Repurchased
Mortgage Loan, or the sale of any mortgaged property
securing such Repurchased Mortgage Loan, or payment
of any Repurchased Receivable.
(2) If at any time any obligor of a
Repurchased Receivable refuses, disputes or fails to
pay such Repurchased Receivable, Company shall
immediately pay to the Lender the aggregate amount
of any Repurchased Advance against such Repurchased
Receivable.
(c) Mortgage Loans. Borrowers shall be obligated to
pay to the Lender, without the necessity of prior demand or
notice from the Lender, and each of the Borrowers authorizes
the Lender to charge the Funding Account or any other
accounts of the Borrowers (excluding any monies held by
Borrowers in trust for third parties) in Lender's possession
for, the amount of all outstanding Aggregate Advances against
a specific Mortgage Loan upon the earliest occurrence of any
of the following events:
(1) The expiration of one hundred twenty
(120) days from the Borrowing Date of any Advance
for any "A" Mortgage Loan or FHA Title I Mortgage
Loan;
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(2) The expiration of sixty (60) days from
the Borrowing Date of any Advance for any "B, C, & D"
Mortgage Loan;
(3) The Mortgage Loan is not or ceases to
be an Eligible 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;
(5) The expiration of forty-five (45) days
from the date the Mortgage Loan is delivered to the
certificating custodian acceptable to the Lender for
the issuance of a Mortgage-backed Security;
(6) The expiration of three (3) Business
Days from the date a Wet Advance was made without
receipt of all Collateral Documents relating to such
Mortgage Loan, or such Collateral Documents, upon
examination by the Lender, 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 Borrower for correction or completion, without
being returned to the Lender, corrected or
completed;
(8) The Mortgage Loan is in default; or
(9) Upon sale of the Mortgage Loan.
Upon receipt of such payment by the Lender, such Mortgage
Loan 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 Lender to the Borrower.
(n) Section 2.20 Non-Usage Fee of the Credit Agreement is
hereby deleted therefrom and the following is substituted in lieu
thereof for all purposes:
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"Section 2.20 Non-Usage Fee. At the end of each month during the term
of this Agreement (i.e., from its effective date through the Termination
Date), the Lender shall determine average usage of the Commitment by
calculating the arithmetic daily average of the outstanding balance of
Advances in that month. The Lender shall then subtract the average usage
(the "Used Portion") from the Commitment (the result being called the
"Unused Portion") and the Company shall pay 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 Lender's ▇▇▇▇ for such
monthly period, a Non-Usage Fee equal to 0.125% per annum on the total
amount of the Unused Portion of the Commitment, as compensation to the
Lender for its 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 more than $2,000,000.00. Each calculation by
the Lender of the amount of any Non-Usage Fee shall be conclusive and
binding on the Company, absent manifest error."
(o) Section 2.21 Miscellaneous Charges of the Credit Agreement is hereby
deleted therefrom and the following is substituted in lieu thereof for all
purposes:
"Section 2.21 Miscellaneous Charges. At the end of each month during
the term of this Agreement, the Company shall pay to the Lender 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 Lender's ▇▇▇▇ for such monthly
period, a transaction fee equal to $25.00 per Pledged Mortgage Loan and
$75.00 per Repurchased Mortgage Loan held by Lender during such month and
for which Lender has not previously received a transaction fee, for the
handling and administration of Advances and Collateral. For the purposes
hereof, each Borrower shall, at its sole cost and expense, pay all
miscellaneous charges and expenses such as charges for security delivery
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 Lender."
(p) The following Section 2.22 Conditions Precedent to All Receivables
Advances is hereby added to the Credit Agreement for all purposes:
"Section 2.22 Conditions Precedent to All Receivables Advances. The
obligation of Lender to make each Receivables
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Advance pursuant to this Agreement is subject to the following conditions
precedent:
(a) Prior to 2:00 p.m. (Houston, Texas time) on the day of the
requested funding, Lender shall have received a Credit Request
together with all documents and other items ("Receivables Collateral
Documents") required in connection with such Receivables Advance as
set forth in the Credit Request. All terms, conditions, and procedures
set forth in this Section, Sections 2.3, 2.4, and 2.5 of this
Agreement and Exhibit "D" to the Agreement have been satisfied in the
sole discretion of the Lender.
(b) The amount of the Receivables Advance requested, when added
to all outstanding and unpaid Receivables Advances, does not exceed
the Receivables Loan Value.
(c) The representations and warranties of Borrowers contained in
this Agreement or any Security Instrument (other than those
representations and warranties which are by their terms limited to the
date of the agreement in which they are initially made) shall be true
and correct in all material respects on and as of the date of such
Advance.
(d) No Default or Event of Default shall have occurred and be
continuing as of the date of such Receivables Advance.
(e) Company shall cause the Network to execute and deliver to the
Lender, in form and substance satisfactory to the Lender, a commercial
security agreement together with a financing statement covering all
Receivables of Network.
(f) ▇▇▇▇▇ ▇▇▇▇▇ shall execute and deliver to the Lender a
guaranty agreement, in form and substance satisfactory to the Lender,
guaranteeing the repayment of all outstanding and unpaid Receivables
Advances under this Agreement.
(g) Company shall cause Network to deliver a letter, in form and
substance acceptable to the Lender, from each Approved Company
acknowledging it will pay directly to the Lender all amounts owed by
it in connection with its accounts with the Network.
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(h) If requested by Lender, Lender shall receive, in respect of
any Financing Statement filed with any filing officer under the Code
and showing Network as debtor and any Person other than Lender as
secured party and a collateral description which is determined by
Lender to conflict with the description of Receivables to be pledged
in connection with such Receivables Advance, either (a) a termination
thereof executed by such secured party in proper form for filing by
Lender, or (b) an amendment to such Financing Statement, in such form
as Lender may reasonably require, executed by such secured party in
proper form for filing by Lender.
(i) A tax, lien and judgment search of the appropriate public
records for the Network, including a search of Uniform Commercial Code
financing statements, which search shall not have disclosed the
existence of any prior Lien on the Receivables of the Network other
than in favor of the Lender or as permitted hereunder.
(j) Company shall provide to the Lender an agreement between the
Company and Network, in form and substance acceptable to the Lender,
governing the obligations of the Company and Network relating to the
financing of Receivables of Network.
(k) There shall have been, in the sole opinion of Lender, no
Material Adverse Effect since the date of this Agreement.
(l) All legal matters incident to the transactions herein
contemplated shall be satisfactory to legal counsel to Lender.
(m) All other conditions precedent have been satisfied including,
without limitation, the conditions set forth in Section 2.4 hereof.
Each condition precedent in this Agreement is material to the transactions
contemplated in this Agreement and time is of the essence in respect of
each thereof. Lender may make any Receivables Advance without all
conditions being satisfied, but, to the extent permitted by law, the same
shall not be deemed a waiver of the requirement that each such condition
precedent be satisfied as a prerequisite for any subsequent Receivables
Advance."
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(q) The following Section 2.23 Repurchased Advances is hereby
added to the Credit Agreement for all purposes:
"Section 2.23 Repurchased Advances. Company may obtain a
Repurchased Advance hereunder, subject to the satisfaction of the
conditions set forth in Sections 2.3, 2.4 and 2.5 of this
Agreement and the terms, conditions and procedures set forth in
Exhibit "D". A request for a Repurchased Advance shall be
initiated by Company delivering to the Lender a properly
completed and executed Credit Request together with all documents
and other items ("Repurchased Collateral Documents") required in
connection with such Repurchased Advance as set forth in Exhibit
"D" hereto. The Credit Request and the Repurchased Collateral
Documents must be received by the Lender no later than 2:00 p.m.
Houston, Texas time in order for funding to occur the same day.
The amount of any Repurchased Advance shall not exceed the lesser
of (i) sixty percent (60%) of the unpaid principal balance of the
Mortgage Note evidencing the Repurchased Mortgage Loan pledged to
Lender in connection with such Repurchased Advance or (ii) eighty
percent (80%) of the appraised value of the mortgaged property
securing the Mortgage Note evidencing the Repurchased Mortgage
Loan pledged to the Lender in connection with such Repurchased
Advance. Lender may reject, at any time and from time to time,
any Repurchased Mortgage Loan borrowed against hereunder and the
Repurchased Collateral Documents delivered in connection
therewith as unacceptable and ineligible and Company shall pay to
Lender in immediately available funds an amount equal to the
aggregate amount of all Advances made hereunder against such
Repurchased Mortgage Loan designated by Lender as unacceptable
and ineligible. Neither failure to exercise nor delay in
exercising on the part of Lender, of its right to reject or
designate any Repurchased Mortgage Loan or any Repurchased
Collateral Documents as unacceptable and ineligible shall operate
as a waiver of such right or Lender's right to exercise such
right at any time."
(r) Exhibit "B" to the Credit Agreement is hereby deleted therefrom
for all purposes. Exhibits "B-1", "B-2", "B-3", and "B-4" to this
Agreement are hereby added to the Credit Agreement for all purposes.
(s) Exhibit "D" to the Credit Agreement is hereby deleted therefrom
and Exhibit "D" to this Agreement is hereby substituted in lieu thereof for
all purposes.
(t) Exhibit "L" to this Agreement is hereby added to the Credit
Agreement for all purposes.
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Section 3. Representations. Borrowers represent and warrant that all of the
representations and warranties contained in the Credit Agreement and all
instruments and documents executed pursuant thereto or contemplated thereby are
true and correct in all material respects on and as of this date.
Section 4. Continued Force and Effect. Except as specifically amended
herein, all of the terms and conditions of the Credit Agreement and all other
Loan Documents are and remain in full force and effect in accordance with their
respective terms. All of the terms used herein have the same meanings as set out
in the Credit Agreement, unless amended hereby or unless the context clearly
requires otherwise. References in the Credit Agreement to the "Agreement," the
"Loan Agreement," "hereof," "herein" and words of similar import shall be deemed
to be references to the Credit Agreement as amended through the date hereof. Any
reference in the other Loan Documents to the "Agreement", the "Line of Credit
Agreement", "Warehouse Agreement", or the "Loan Agreement" shall be deemed to be
references to the Credit Agreement as amended through the date hereof. Any
reference in the Credit Agreement or the other Loan Documents to the "Note"
shall be deemed references to the Credit Note.
Section 5. ADDITIONAL REPRESENTATIONS. Except as otherwise specified
herein, the terms and provisions hereof shall in no manner impair, limit,
restrict or otherwise affect the obligations of Borrowers, Guarantor, or any
third party to Lender, as evidenced by the Loan Documents. Borrowers and
Guarantor hereby acknowledge, agree, and represent that (i) Borrowers are
indebted to Lender pursuant to the terms of the Credit Note; (ii) the liens,
security interests and assignments created and evidenced by the Loan Documents
are, respectively, first, prior, valid and subsisting liens, security interests
and assignments against the Collateral and secure all indebtedness and
obligations of Borrowers to Lender under the Credit Note, the Credit Agreement,
all other Loan Documents, as modified herein; (iii) there are no claims or
offsets against, or defenses or counterclaims to, the terms or provisions of the
Loan Documents, and the other obligations created or evidenced by the Loan
Documents; (iv) neither the Borrowers nor the Guarantor have any claims,
offsets, defenses or counterclaims arising from any of the Lender's acts or
omissions with respect to the Loan Documents, or the Lender's performance under
the Loan Documents; (v) the representations and warranties contained in the Loan
Documents are true and correct representations and warranties of Borrowers, as
of the date hereof; (vi) Borrowers promise to pay to the order of Lender the
indebtedness evidenced by the Credit Note according to the terms thereof; and
(vii) Lender is not in default and no event has occurred which, with the passage
of time, giving of notice, or both, would constitute a default by Lender of
Lender's obligations under the terms and provisions of the Loan Documents. IN
CONSIDERATION OF THE MODIFICATION OF CERTAIN PROVISIONS OF THE LOAN DOCUMENTS,
ALL AS HEREIN PROVIDED, AND THE OTHER BENEFITS RECEIVED BY BORROWERS AND
GUARANTOR HEREUNDER, BORROWERS AND GUARANTOR HEREBY RELEASE, RELINQUISH AND
FOREVER DISCHARGE LENDER, ITS PREDECESSORS, SUCCESSORS, ASSIGNS, SHAREHOLDERS,
PRINCIPALS, PARENTS, SUBSIDIARIES, AGENTS, OFFICERS, DIRECTORS, EMPLOYEES,
ATTORNEYS AND REPRESENTATIVES (COLLECTIVELY, THE "LENDER RELEASED PARTIES"), OF
AND FROM ANY AND ALL CLAIMS, DEMANDS, ACTIONS AND CAUSES OF ACTION OF ANY AND
EVERY KIND OR CHARACTER, WHETHER KNOWN OR UNKNOWN, PRESENT OR FUTURE, WHICH
BORROWERS AND GUARANTOR, OR ANY ONE OR MORE OF THEM, HAVE, OR MAY HAVE AGAINST
LENDER RELEASED PARTIES, ARISING OUT OF OR WITH RESPECT TO ANY AND ALL
TRANSACTIONS RELATING TO THE CREDIT AGREEMENT, AND THE OTHER LOAN DOCUMENTS
OCCURRING PRIOR TO THE DATE HEREOF, INCLUDING ANY OTHER LOSS,
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EXPENSE AND/OR DETRIMENT, OF ANY KIND OR CHARACTER, GROWING OUT OF OR IN ANY WAY
CONNECTED WITH OR IN ANY WAY RESULTING FROM THE ACTS, ACTIONS OR OMISSIONS OF
THE LENDER RELEASED PARTIES, AND INCLUDING ANY LOSS, COST OR DAMAGE IN
CONNECTION WITH ANY BREACH OF FIDUCIARY DUTY, BREACH OF ANY DUTY OF FAIR
DEALING, BREACH OF COMPETENCE, BREACH OF FUNDING COMMITMENT, UNDUE INFLUENCE,
DURESS, ECONOMIC COERCION, CONFLICT OF INTEREST, NEGLIGENCE, BAD FAITH,
MALPRACTICE, VIOLATIONS OF THE RACKETEER INFLUENCE AND CORRUPT ORGANIZATIONS
ACT, INTENTIONAL OR NEGLIGENT INFLICTION OF EMOTIONAL OR MENTAL DISTRESS,
TORTIOUS INTERFERENCE WITH CORPORATE GOVERNMENTS OR PROSPECTIVE BUSINESS
ADVANTAGE, TORTIOUS INTERFERENCE WITH CONTRACTUAL RELATIONS, BREACH OF CONTRACT,
DECEPTIVE TRADE PRACTICES, LIBEL, SLANDER, CONSPIRACY, THE CHARGING, CONTRACTING
FOR, TAKING, RESERVING, COLLECTING OR RECEIVING OF INTEREST IN EXCESS OF THE
HIGHEST LAWFUL RATE APPLICABLE TO THE LOAN DOCUMENTS (I.E., USURY), ANY
VIOLATIONS OF FEDERAL OR STATE LAW, ANY VIOLATIONS OF FEDERAL OR STATE BANKING
RULES, LAWS OR REGULATIONS, INCLUDING, BUT NOT LIMITED TO, ANY VIOLATIONS OF
REGULATION B, EQUAL CREDIT OPPORTUNITY, BANK TYING ACT CLAIMS, ANY VIOLATION OF
THE TEXAS FREE ENTERPRISE ANTITRUST ACT OR ANY VIOLATION OF FEDERAL ANTITRUST
ACTS. GUARANTOR (i) CONSENTS TO THE TERMS AND PROVISIONS OF THIS MODIFICATION
AGREEMENT, (ii) RATIFIES AND CONFIRMS HIS GUARANTY IS IN FULL FORCE AND EFFECT
IN ACCORDANCE WITH ITS TERMS, AND (iii) ACKNOWLEDGES THAT THE GUARANTY AND ALL
OTHER GUARANTY AGREEMENTS OF THE GUARANTOR EXECUTED IN CONNECTION WITH THE
CREDIT AGREEMENT ARE NOT SUBJECT TO ANY CLAIMS, OFFSETS, DEFENSES, OR
COUNTERCLAIMS OF ANY NATURE WHATSOEVER.
Section 6. Severability. In the event any one or more provisions contained
in the Credit Agreement or this Modification Agreement should be held to be
invalid, illegal or unenforceable in any respect, the validity, enforceability
and legality of the remaining provisions contained herein and therein shall not
be affected in any way or impaired thereby and shall be enforceable in
accordance with their respective terms.
Section 7. Expenses. Borrowers agree to pay all out-of-pocket costs and
expenses of Lender in connection with the preparation, operation, administration
and enforcement of this Modification Agreement.
Section 8. Acknowledgment. Except as amended hereby, Borrowers ratify and
confirm that the Security Instruments and all other Loan Documents are and
remain in full force and effect in accordance with their respective terms and
that all Collateral is unimpaired by this Modification Agreement and secures the
payment and performance of all indebtedness and obligations of Borrowers under
the Note, the Credit Agreement, and all other Loan Documents, as modified
hereby. Each of the undersigned officers of Borrowers executing this
Modification Agreement represents and warrants that he has full power and
authority to execute and deliver this Modification Agreement on behalf of
Borrowers that such execution and delivery has been duly authorized and that the
resolutions and affidavits previously delivered to Lender, in connection with
the execution and delivery of the Credit Agreement, are and remain in full force
and effect and have not been altered, amended or repealed in anywise.
Section 9. No Waiver. Borrowers agree that no Event of Default and no
Default has been waived or remedied by the execution of this Modification
Agreement by Lender, and any such
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Default or Event of Default heretofore arising and currently continuing shall
continue after the execution and delivery hereof.
Section 10. Governing Law. This Modification Agreement shall be governed by
and construed in accordance with the laws of the State of Texas and, to the
extent applicable, by federal law.
Section 11. Counterparts. This Modification Agreement may be executed in
any number of counterparts and all of such counterparts taken together shall be
deemed to constitute one and the same instrument.
SECTION 12. NO ORAL AGREEMENTS. THIS WRITTEN MODIFICATION AGREEMENT, THE
CREDIT AGREEMENT, THE CREDIT NOTE, THE GUARANTY, AND THE OTHER LOAN DOCUMENTS,
AS MODIFIED HEREBY, REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY
NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR ORAL AGREEMENTS OF
THE PARTIES.
THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
EXECUTED and effective as of the dates first written above.
BORROWERS:
ALLIED MORTGAGE CORPORATION,
a Texas corporation
By: /s/ ▇▇▇ ▇. ▇▇▇▇▇
-------------------------------------
▇▇▇ ▇. ▇▇▇▇▇, President
ALLIED MORTGAGE CAPITAL CORPORATION,
a Texas corporation
By: /s/ ▇▇▇ ▇. ▇▇▇▇▇
-------------------------------------
▇▇▇ ▇. ▇▇▇▇▇, Vice President
GUARANTOR:
/s/ ▇▇▇ ▇. ▇▇▇▇▇
-----------------------------------------
▇▇▇ ▇. ▇▇▇▇▇
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LENDER:
COASTAL BANC ssb
By: /s/ ▇▇▇ ▇▇▇▇
-------------------------------------
▇▇▇ ▇▇▇▇, Vice President
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