EXHIBIT 10.21
THIRD AMENDMENT TO
AMENDED AND RESTATED WAREHOUSING CREDIT AGREEMENT
AND
FIRST AMENDMENT TO
AMENDED AND RESTATED PLEDGE, SECURITY AND
COLLATERAL AGENCY AGREEMENT
THIS THIRD AMENDMENT TO AMENDED AND RESTATED WAREHOUSING CREDIT
AGREEMENT AND FIRST AMENDMENT TO AMENDED AND RESTATED PLEDGE, SECURITY AND
COLLATERAL AGENCY AGREEMENT (the "Third Amendment") is made and entered into
as of the 19th day of December, 2003, by and among (i) (a) UNITED FINANCIAL
MORTGAGE CORP., an Illinois corporation with its principal place of business
located at ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
("United"), and (b) PORTLAND MORTGAGE COMPANY, an Oregon corporation with
its principal place of business located at ▇▇▇▇ ▇.▇. ▇▇▇ ▇▇▇▇▇▇, #▇▇▇▇,
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇ ("Portland") (collectively, the "Company"), (ii) (a)
NATIONAL CITY BANK OF KENTUCKY, a national banking association with a place
of business located at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
("National City"), (b) BANK ONE, NA, a national banking association with
its principal place of business located in Chicago, Illinois ("Bank One"),
(c) COMERICA BANK, a Michigan banking corporation with its principal place
of business located at ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇: 3256, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
▇▇▇▇▇ ("Comerica"), and (d) COLONIAL BANK, N.A., a national banking
association with a principal place of business located at ▇▇▇ ▇. ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇ ("Colonial") (National City, Bank
One, Comerica and Colonial are each individually referred to as a "Bank" and
collectively as the "Banks"), and (iii) NATIONAL CITY BANK OF KENTUCKY, in
its capacity as Agent for the Bank (in such capacity, the "Agent"). WEST
SUBURBAN BANK, an Illinois state banking corporation with its principal
place of business located at ▇▇▇ ▇. ▇▇▇▇▇▇▇▇-▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
▇▇▇▇▇ ("West Suburban"), enters into this Third Amendment for the sole
purposes of (i) consenting to the removal of West Suburban as a "Bank" from
the hereinafter defined Credit Agreement and the other Loan Documents
described therein, and (ii) providing the waiver described in section 15
below.
P R E L I M I N A R Y S T A T E M E N T:
A. Pursuant to that certain Amended and Restated Warehousing Credit
Agreement dated as of August 1, 2003, among the Company, the Banks and the
Agent, as heretofore amended (the "Existing Credit Agreement"), and that
certain Amended and Restated Pledge, Security and Collateral Agency
Agreement dated as of August 1, 2003, among the Company, the Banks and the
Agent (the "Existing Pledge Agreement"), the Banks have established a
warehousing line of credit facility in favor of the Company in the current
maximum principal amount of One Hundred Ten Million Dollars
($110,000,000.00), for the purposes set forth therein.
B. The Company has now requested that the Agent and Banks amend the
Existing Credit Agreement and the Existing Pledge Agreement to (i) extend
the stated Maturity Date to and until the close of business on August 29,
2004, (ii) remove West Suburban as a "Bank" under the Existing Credit
Agreement and the other Loan Documents, (iii) decrease the Total Warehouse
Line Commitment to Eighty-Five Million Dollars ($85,000,000.00), (iv) make
certain modifications to implement the MERS Electronic Tracking Agreement,
and (v) implement certain other amendments described herein.
C. The Company has also requested that the Agent and Banks provide a
waiver for the Company having exceeded the Alternative Lending Advance
Sublimit for the period from December 13, 2003 to and until the close of
business on December 16, 2003.
D. The Agent and the Banks are willing to and desire to amend the
Existing Credit Agreement and the Existing Pledge Agreement in the manner
described above, and to provide the waiver described below, upon the terms
and conditions set forth herein.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements set forth in the Existing Credit Agreement, the
Existing Pledge Agreement and herein, and for other good and valuable
consideration, the mutuality, receipt and sufficiency of which are hereby
acknowledged, the parties hereto hereby agree as follows:
1. Each capitalized term used herein, unless otherwise expressly
defined herein, shall have the meaning set forth in the Existing Credit
Agreement.
2. The Existing Credit Agreement and each of the other Loan Documents
are hereby amended by removing West Suburban Bank as a "Bank" thereunder for
all purposes and all references to "West Suburban Bank" contained in the
Credit Agreement and each of the other Loan Documents shall be deemed to be
deleted in their entirety as of the date hereof. The Warehouse Line
Commitment of West Suburban Bank shall be terminated as of the date hereof.
3. The following definitions, as contained in Article 1 of the
Existing Credit Agreement, are hereby amended and restated in their entirety
to read as follows:
"Bank" and "Banks" shall have the meaning assigned to those terms
in the introduction to this Credit Agreement and shall include, as of the
date hereof, National City, Bank One, Comerica and Colonial, each in its
individual capacity, and, subsequent to the date hereof, any Applicant
Financial Institution which is added as a Bank hereunder by the Company and
the Agent.
"Collateral Value" shall mean as of any date:
(a) With respect to a Loan which constitutes Eligible Collateral
on such date and which is not a Repurchase Loan, an Aged Loan or Extended
Period Shipped Loan, one hundred percent (100%) of the lesser of (i) the
face amount of such Loan, (ii) the unpaid principal balance of the
applicable Loan, or (iii) the purchase price under the Commitment to which
such Loan has been assigned;
(b) With respect to a Loan which constitutes Eligible Collateral
on such date and which is a Repurchase Loan and which has been pledged as
collateral for ninety (90) calendar days or less, eighty-five percent (85%)
of the lesser of (i) the unpaid principal balance of the applicable
Repurchase Loan, and (ii) the Appraised Value of the real estate securing
the applicable Repurchase Loan; and with respect to Repurchase Loan
Receivables related thereto, eighty-five percent (85%) of the amount
thereof;
(c) With respect to a Loan which constitutes Eligible Collateral
on such date and which is a Repurchase Loan and which has been pledged as
collateral for more than ninety (90) calendar days but not more than one
hundred twenty (120) calendar days, eighty percent (80%) of the lesser of
(i) the unpaid principal balance of the applicable Repurchase Loan, and
(ii) the Appraised Value of the real estate securing the applicable
Repurchase Loan; and with respect to Repurchase Loan Receivables related
thereto, eighty percent (80%) of the amount thereof;
(d) With respect to a Loan which constitutes Eligible Collateral on
such date and which is a Repurchase Loan and which has been pledged as
collateral for more than one hundred twenty (120) calendar days but not more
than one hundred fifty (150) calendar days, seventy-five percent (75%) of
the lesser of (i) the unpaid principal balance of the applicable Repurchase
Loan, and (ii) the Appraised Value of the real estate securing the
applicable Repurchase Loan; and with respect to Repurchase Loan Receivables
related thereto, seventy-five percent (75%) of the amount thereof;
(e) With respect to a Loan which constitutes Eligible Collateral
on such date and which is a Repurchase Loan and which has been pledged as
collateral for more than one hundred fifty (150) calendar days but not more
than one hundred eighty (180) calendar days, seventy percent (70%) of the
lesser of (i) the unpaid principal balance of the applicable Repurchase
Loan, and (ii) the Appraised Value of the real estate securing the
applicable Repurchase Loan; and with respect to Repurchase Loan Receivables
related thereto, seventy percent (70%) of the amount thereof;
(f) With respect to a Loan which constitutes Eligible Collateral
on such date and which is an Extended Period Shipped Loan and which has been
shipped to an Approved Investor or the Document Custodian in accordance with
the Security Agreement for more than forty-five (45) calendar days but not
more than fifty-five (55) calendar days (in each case calculated from the
date upon which the related Bailee Letter is delivered pursuant to the
Security Agreement), ninety percent (90%) of the lesser of (i) the face
amount of such Loan, or (ii) the purchase price under the Commitment to
which such Loan has been assigned;
(g) With respect to a Loan which constitutes Eligible Collateral
on such date and which is an Extended Period Shipped Loan and which has been
shipped to an Approved Investor or the Document Custodian in accordance with
the Security Agreement for more than fifty-five (55) calendar days but not
more than sixty (60) calendar days (in each case calculated from the date
upon which the related Bailee Letter is delivered pursuant to the Security
Agreement), eighty percent (80%) of the lesser of (i) the face amount of
such Loan, or (ii) the purchase price under the Commitment to which such
Loan has been assigned;
(h) With respect to a Loan which constitutes Eligible Collateral on
such date which is an Aged Loan and which has been pledged as collateral for
more than one hundred twenty (120) calendar days but not more than one
hundred fifty (150) calendar days, ninety percent (90%) of the lesser of (i)
the face amount of such Loan, or (ii) the purchase price under the
Commitment to which such Loan has been assigned;
(i) With respect to a Loan which constitutes Eligible Collateral
on such date and which is an Aged Loan and which has been pledged as
collateral for more than one hundred fifty (150) calendar days but not more
than one hundred eighty (180) calendar days, eighty percent (80%) of the
lesser of (i) the face amount of such Loan, or (ii) the purchase price under
the Commitment to which such Loan has been assigned;
(j) With respect to Pledged Servicing Rights, an amount equal to
the least of: (i) sixty-five percent (65%) of the Appraised Value of such
Pledged Servicing rights as determined pursuant to the most recent Appraisal
of Pledged Servicing Rights prepared pursuant to Section 7.3(f) hereof, or
(iii) one percent (1.00%) of the unpaid principal balance of the underlying
residential mortgage loan related to the Pledged Servicing Rights.
Notwithstanding anything contained in (a), (b), (c), (d), (e), (f), (g),
(h), (i) and (j) to the contrary:
A. The Collateral Value of all Wet Loans shall not exceed,
in the aggregate, the Wet Advance Sublimit;
B. The Collateral Value of all Jumbo Loans and Super Jumbo
Loans shall not exceed, in the aggregate, the Jumbo/Super Jumbo Advance
Sublimit, and further, the Collateral Value of all Super Jumbo Loans
shall not exceed, in the aggregate, the Super Jumbo Advance Sublimit;
C. The Collateral Value of all Alternative Lending Loans
shall not exceed, in the aggregate, the Alternative Lending Advance
Sublimit;
D. The Collateral Value of all ALT A Loans shall not
exceed, in the aggregate, the ALT A Advance Sublimit;
E. The Collateral Value of all Repurchase Loans and
Repurchase Loan Receivables shall not exceed, in the aggregate, the
Repurchase Advance Sublimit;
F. The Collateral Value of all Aged Loans and Extended
Period Shipped Loans shall not exceed, in the aggregate, the Aged
Loan/Extended Period Shipped Loan Advance Sublimit;
G. Each Wet Loan in respect of which the Company shall not
have delivered all of the Collateral Mortgage Documents to the Agent
within seven (7) calendar days, shall have a Collateral Value of zero;
H. Each Wet Loan which the Agent determines has not been
funded by the Company on the date the Advance in respect of such Wet
Loan is made by the Banks to the Company, shall have a Collateral Value
of zero;
I. If the Agent shall reasonably determine that the
Collateral Value otherwise assigned to an item of Eligible Collateral
does not accurately reflect the value thereof, then, upon notice to the
Company such item of Collateral (i) if it is a Loan which constitutes
Eligible Collateral which is not a Repurchase Loan, an Aged Loan or an
Extended Period Shipped Loan shall instead have a collateral value
equal to one hundred percent (100%) of the market value as determined
by the Agent, (ii) if it is a Loan which constitutes Eligible
Collateral which is a Repurchase Loan which has been pledged as
collateral for ninety (90) calendar days or less, shall instead have a
Collateral Value equal to eighty-five percent (85%) of the market value
as determined by the Agent, (iii) if it is a Loan which constitutes
Eligible Collateral which is a Repurchase Loan which has been pledged
as collateral for more than ninety (90) calendar days but not more than
one hundred twenty (120) calendar days, shall instead have a Collateral
Value equal to eighty percent (80%) of the market value as determined
by the Agent, (iv) if it is a Loan which constitutes Eligible
Collateral which is a Repurchase Loan which has been pledged as
collateral for more than one hundred twenty (120) calendar days but not
more than one hundred fifty (150) calendar days, shall instead have a
Collateral Value equal to seventy-five percent (75%) of the market
value as determined by the Agent, (v) if it is a Loan which constitutes
Eligible Collateral which is a Repurchase Loan which has been pledged
as collateral for more than one hundred fifty (150) calendar days but
not more than one hundred eighty (180) calendar days, shall instead
have a Collateral Value equal to seventy percent (70%) of the market
value as determined by the Agent, (vi) if it is a Loan which
constitutes Eligible Collateral which is an Extended Period Shipped
Loan which has been shipped to an Approved Investor or the Document
Custodian in accordance with the Security Agreement for more than
forty-five (45) calendar days but not more than fifty-five (55)
calendar days (in each case calculated from the date upon which the
related Bailee Letter is delivered pursuant to the Security Agreement),
shall instead have a Collateral Value equal to ninety percent (90%) of
the market value as determined by the Agent, (vii) if it is a Loan
which constitutes Eligible Collateral which is an Extended Period
Shipped Loan which has been shipped to an Approved Investor or the
Document Custodian in accordance with the Security Agreement for more
than fifty-five (55) calendar days but not more than sixty-five (65)
calendar days (in each case calculated from the date upon which the
related Bailee Letter is delivered pursuant to the Security Agreement),
shall instead have a Collateral Value equal to eighty percent (80%) of
the market value as determined by the Agent, (viii) if it is a Loan
which constitutes Eligible Collateral which is an Aged Loan which has
been pledged as collateral for more than one hundred twenty (120)
calendar days but not more than one hundred fifty (150) calendar days,
shall instead have a Collateral Value equal to ninety percent (90%) of
the market value as determined by the Agent, (ix) if it is a Loan which
constitutes Eligible Collateral which is an Aged Loan which has been
pledged as collateral for more than one hundred fifty (150) calendar
days but not more than one hundred eighty (180) calendar days, shall
instead have a Collateral Value equal to eighty percent (80%) of the
market value as determined by the Agent; provided, however, that in no
event shall any ▇▇▇▇ to market with respect to any item of Eligible
Collateral under this subsection result in such item of Eligible
Collateral having a higher Collateral Value than such item would
otherwise have;
J. In the event that a Loan shall have been delivered by
the Agent to a purchaser under a Commitment as provided in the Security
Agreement, or in the event that such Loan was delivered by the Agent to
FHLMC or a custodian for the Mortgage-backed Securities programs at
GNMA, ▇▇▇▇▇▇ ▇▇▇ or FHLMC, and more than the maximum number of days
allowed by the Security Agreement shall have elapsed since the date of
such delivery and no purchase has taken place or the proceeds thereof
have not been received by the Agent, such Loan shall have a Collateral
Value of zero;
K. All Aged Loans which have been pledged as collateral for
more than one hundred eighty (180) calendar days shall have a
Collateral Value of zero;
L. All Loans which are under Trust Receipt in accordance
with the terms of the Security Agreement which are not returned to the
Agent within ten (10) calendar days, shall have a Collateral Value of
zero;
M. The Collateral Value of all Loans which are under Trust
Receipt in accordance with the terms of the Security Agreement shall
not exceed, in the aggregate, One Million Dollars ($1,000,000.00);
N. The Collateral Value of all Pledged Servicing Rights
shall not exceed the Working Capital Advance Sublimit; and
O. The Collateral Value of any Jumbo Loan constituting
Eligible Collateral shall not exceed Nine Hundred Thousand Dollars
($900,000.00).
Notwithstanding anything contained herein to the contrary, the Agent
shall have the right, at the Agent's sole and exclusive judgment and
discretion, to extend any time periods required hereunder relating to Wet
Loans by up to seven (7) calendar days and any other warehouse periods
described hereunder by up to thirty (30) calendar days; provided, however
the warehouse period for Extended Period Shipped Loans may not be extended
and the Collateral Value of all Loans which are subject to an extended
warehouse period at the discretion of the Agent under this provision shall
not exceed, in the aggregate, Five Million Dollars ($5,000,000.00).
"Intercreditor Agreement" shall mean that certain Amended and
Restated Intercreditor Agreement dated as of December 19, 2003 among the
Company, the Agent, Credit Suisse First Boston Mortgage Capital, LLC, and
Austin Bank of Chicago, as the same may be amended, modified, supplemented
and restated from time to time.
"Loan Documents" shall mean, collectively, this Credit Agreement,
the Warehouse Notes, the Swing Note, the Security Agreement, any
Hypothecation Agreement executed pursuant to Section 5.6 hereof, the
Intercreditor Agreement, the other Collateral Documents and any and all
other documents executed in connection therewith, each as may be amended,
modified, supplemented and restated from time to time.
"Maturity Date" shall mean August 29, 2004; provided that the
Agent and the Banks shall have the option, in their sole, absolute
discretion, either one time or from time to time, to extend the Maturity
Date for an additional period not to exceed three hundred sixty four (364)
days. If the Maturity Date is extended, the term "Maturity Date" shall mean
the date of expiration of such extension.
"Total Warehouse Line Commitment" shall mean the total aggregate
principal amount of all Warehouse Line Commitments as determined from time
to time in accordance with the provisions of Article 2 and Article 11 of
this Credit Agreement, and shall mean Eighty-Five Million Dollars
($85,000,000.00), subject to the right of the Company and the Agent in their
sole, joint discretion to increase such amount by adding one or more
Applicant Financial Institutions as a "Bank" or "Banks" hereunder, or as
otherwise permitted under Section 11.1 hereof.
"Warehouse Notes" shall mean, collectively, (i) that certain
Amended and Restated Warehouse Promissory Note dated as of August 1, 2003,
jointly and severally made by United and Portland, payable to the order of
National City, in the current principal amount of Twenty-Five Million
Dollars ($25,000,000.00), a form of which is attached hereto as Exhibit C-1
and made a part hereof by this reference, as the same may hereafter be
amended, modified, renewed, replaced and/or restated from time to time, (ii)
that certain Warehouse Promissory Note dated as of August 1, 2003, jointly
and severally made by United and Portland, payable to the order of Bank One,
and in the face principal amount of Twenty-Five Million Dollars
($25,000,000.00), a form of which is attached hereto as Exhibit C-2 and made
a part hereof by this reference, as the same may hereafter be amended,
modified, renewed, replaced and/or restated from time to time, (iii) that
certain Warehouse Promissory Note dated as of August 1, 2003, jointly and
severally made by United and Portland, payable to the order of Comerica, and
in the face principal amount of Ten Million Dollars ($10,000,000.00), a form
of which is attached hereto as Exhibit C-4 and made a part hereof by this
reference, as the same may hereafter be amended, modified, renewed, replaced
and/or restated from time to time, (iv) that certain Warehouse Promissory
Note dated as of August 1, 2003, jointly and severally made by United and
Portland, payable to the order of Colonial, and in the face principal amount
of Twenty-Five Million Dollars ($25,000,000.00), a form of which is attached
hereto as Exhibit C-5 and made a part hereof by this reference, as the same
may hereafter be amended, modified, renewed, replaced and/or restated from
time to time, and (v) when executed and delivered, any such additional
Warehouse Promissory Note, made by the Company, payable to the order of any
respective Applicant Financial Institution as shall be added as a "Bank"
hereunder, and in the face principal amount of such Applicant Financial
Institution's Warehouse Line Commitment, substantially in the form of the
Warehouse Promissory Note attached hereto as Exhibit C-1 (other than the
amount thereof), as the same may thereafter be amended, modified, renewed,
replaced and/or restated from time to time."
"Working Capital Advance Sublimit" shall mean the least of: (i)
sixty-five percent (65%) of the appraised value of the Pledged Servicing
Rights as determined pursuant to the most recent Appraisal of Pledged
Servicing Rights prepared pursuant to Section 7.3(f) hereof, (ii) one
percent (1.00%) of the unpaid principal balance of the residential mortgages
related to the Pledged Servicing Rights, or (iii) an amount equal to Two
Million Dollars ($2,000,000.00).
4. Article 1 of the Existing Credit Agreement is further amended by
adding the following definitions to read in their entirety as follows:
"Electronic Tracking Agreement" shall mean an Electronic Tracking
Agreement by and among the Company, the Agent, MERS and MERSCORP,
substantially in the form of Exhibit M attached hereto and made a part
hereof by this reference.
"Hypothecation Agreement" shall mean a hypothecation agreement
made by the Company, granting a security interest in the account or accounts
described therein and held or maintained by the Agent, substantially in the
form attached hereto as Exhibit N and made a part hereof by this reference.
"MERS" shall mean the Mortgage Electronic Registration System, Inc
"MERSCORP" shall mean MERSCORP, Inc.
"MERS Loan" shall mean any Loan made by the Company that is
secured by a MERS Mortgage.
"MERS Member" shall mean any entity which is a member of MERS, in
good standing and in compliance with all rules, regulations, procedures and
requirements set forth by MERS, including, but not limited to the payment of
membership dues.
"MERS Mortgage" shall mean any First Mortgage or Second Mortgage
registered by the Company on the MERS System.
"MERS System" shall mean the Mortgage Electronic Registration
System established by MERS.
5. The fourth sentence in the first paragraph of Section 2.1 of the
Existing Credit Agreement is hereby amended and restated in its entirety to
read as follows:
"The Total Warehouse Line Commitment is equal to Eighty-Five
Million Dollars ($85,000,000.00), and as may be increased by the Company and
the Agent in their sole, joint discretion by adding one or more Applicant
Financial Institutions as a "Bank" or "Banks" hereunder, or as further
permitted under Section 11.1 hereof."
6. Section 2.14(b) of the Existing Credit Agreement is hereby amended
and restated in its entirety to read as follows:
(b) Usage Fee. United and Portland jointly and severally agree
to pay to the Agent and the Banks the following usage fees (the "Usage
Fees"): (i) a usage fee computed at the rate of one-quarter of one percent
(.25%) per annum times the average monthly aggregate unpaid principal
balance for all Repurchase Loan Advances and all Aged Loan/Extended Period
Shipped Loan Advances, (ii) a usage fee computed at the rate of one-half of
one percent (.50%) per annum times the average monthly aggregate unpaid
principal balance for all Subprime Loan Advances, and (iii) a usage fee
computed at the rate of three-quarters of one percent (.75%) per annum times
the average monthly aggregate unpaid principal balance for all Working
Capital Loan Advances."
7. Sections 5.5 and 5.6 of the Existing Credit Agreement are hereby
amended and restated in their entirety to read as follows:
"5.5 Dividends. The Company shall not (i) declare or pay cash or
stock dividends upon any of the stock of the Company, (ii) make any
incentive compensation payments, or (iii) make any distributions of the
property or assets of the Company, except that the Company may (w) make
reasonable and customary incentive compensation payments to its senior
officers, and (x) declare and pay dividends to its stockholders, so long as
such dividend or payment shall not cause the aggregate amount for all such
dividends and payments to exceed fifty percent (50%) of the sum of the Net
Income during the current fiscal year of the Company."
"5.6 Eurodollar Account. As consideration for the advance rates
allowed by the Agent and Banks hereunder, the Company and/or its Affiliates
shall pledge to the Agent for the pro-rata benefit of the Banks a eurodollar
account maintained by the Agent or any of its affiliates in the name of the
Company and/or such Affiliates, which account shall at all times have a
principal balance of not less than the greater of (i) one percent (1%) of
the Total Warehouse Line Commitment, or (ii) One Million One Hundred
Thousand Dollars ($1,100,000.00). The Company or Affiliate pledging such
eurodollar account to the Agent for the pro-rata benefit of the Banks must
execute and deliver to the Agent a Hypothecation Agreement."
8. Section 7.1 of the Existing Credit Agreement is hereby amended by
adding new subsections (t) and (u) thereto in their entirety to read as
follows:
"(t) Field Exam. The Company shall cause a field exam to be
conducted of its operations by ▇▇▇▇▇▇▇▇ & Associates or such other field
examiner acceptable to the Agent on or before February 29, 2004, such exam
to be conducted at the sole cost and expense of the Company up to an amount
of $3,000.00 with any excess amount to be borne by the Banks in aaccordance
with their Pro Rata Shares."
"(u) MERS. During any time during which the Company is using the
MERS System, the Company shall (a) at all times, maintain its status as a
MERS Member, (b) at all times, employ officers who have the authority,
pursuant to a corporate resolution from MERS, to execute assignments of
mortgage in the name of MERS in the event deregistration from the MERS
System is necessary or desirable, (c) at all times remain in full compliance
all terms and conditions of membership in MERS, including the MERSCORP, Inc.
"Rules of Membership" most recently promulgated by MERSCORP, Inc., the "MERS
Procedures Manual" most recently promulgated by MERS, and any and all other
guidelines or requirements set forth by MERS or MERSCORP, as each of the
foregoing may be modified from time to time, including, but in no way
limited to compliance with guidelines and procedures set forth with respect
to technological capabilities, drafting and recordation of mortgages,
registration of mortgages on the MERS System, including registration of the
interest of the Agent and the Banks in such mortgages and membership
requirements, (d) promptly, upon the request of the Agent, execute and
deliver to the Agent an assignment of mortgage, in blank, with respect to
any MERS Mortgage that the Agent determines shall be removed from the MERS
System, and (e) at all times maintain the Electronic Tracking Agreement in
full force and effect. The Company shall not de-register or attempt to de-
register any mortgage from the MERS System unless the Company has complied
with the requirements set forth in the Electronic Tracking Agreement and the
requirements hereof and the Security Agreement relating to a release of
Collateral."
9. Section 7.2 of the Existing Credit Agreement is hereby amended by
adding a new subsection (m) thereof to read in its entirety as follows:
"(m) Goodwill. The Company shall not initiate any transaction, or
series of related transactions, that would create goodwill to the Company in
excess of One Million Dollars ($1,000,000.00) without the prior written
consent of the Agent, which consent shall not be unreasonably withheld
except in the event of a separate covenant violation, a covenant violation
that would result from such transaction, or in the event that the proposed
transaction would significantly alter the risk profile of the Warehouse
Line."
10. The Existing Credit Agreement is hereby amended by amending and
restating ▇▇▇▇▇▇▇▇ ▇, ▇-▇, ▇-▇ ▇▇▇ ▇-▇ and Schedules 1.1, 2.1 and 6.1
thereof to read in their entirety as set forth on ▇▇▇▇▇▇▇▇ ▇, ▇-▇, ▇-▇ ▇▇▇
▇-▇ and Schedules 1.1, 2.1 and 6.1 attached to this Third Amendment and made
a part hereof by this reference.
11. Article 3 of the Existing Pledge Agreement is hereby amended by
adding a new Section 3.3 thereof to read in its entirety as follows:
"3.3 MERS. The Agent, the Banks and the Company hereby confirm
the appointment of the Agent as collateral agent on behalf of the Banks with
respect to MERS Loans. The Agent hereby confirms that it is a MERS member
in good standing and in compliance with all rules, regulations, procedures
and requirements set forth by MERS, including without limitation, the
payment of membership fees."
12. The Existing Pledge Agreement is hereby further amended by
amending and restating Section 4.1(b)(i) to read in its entirety as
follows:
"(b) (i) A duly executed appropriate assignment of the
Mortgage securing the Mortgage Note by the Company executed in recordable
form in blank, (ii) a MERS assignment of the Mortgage securing the Mortgage
Note by the Company, in the format as may be prescribed by MERS from time to
time, executed by MERS, as nominee of the Company, in recordable form in
blank, or (iii) where the Agent, the Company and MERS have executed an
Electronic Tracking Agreement, evidence in form and substance satisfactory
to the Agent, of (a) all assignments of the Mortgage Loan to such Company
(including all intervening assignments), and (b) the designation of the
Agent as the "Warehouse/Gestation Lender" in the Associated Member category
for the subject Mortgage, all of which occurred on the MERS System. If
appropriate filing and recording information regarding such Mortgage,
including the MERS Identification Number ("MIN"), has not been inserted into
the assignment and the Agent has determined that such information is
necessary to perfect its Security Interest in such Mortgage, the Company
shall promptly provide such information to the Agent when available and
hereby authorizes the Agent to insert such information as appropriate
(whether or not such information is supplied to the Agent by the Company);
however, the Agent shall not have any obligation to insert such information,
and may require the missing information to be completed by the Company;"
13. The Existing Pledge Agreement is hereby further amended by
relettering existing Section 12.2(k) to read as Section 12.2(l) and to add a
new Section 12.2(k) to read in its entirety as follows:
"(k) With respect to MERS Loans, direct MERS, pursuant to the
Electronic Tracking Agreement, to remove the Company from the "Servicer"
category on the MERS System and insert in place thereof, the Agent or its
designee, or direct MERS to take such other action with respect to the MERS
Loans as the Agent deems advisable; and"
14. Article 13 of the Existing Pledge Agreement is hereby further
amended by adding a new Section 13.12 to read in its entirety as follows:
"13.12 MERS. With respect to the MERS System, the Agent shall:
(i) at all times be a MERS Member, (ii) at all times possess the
technological capability to fully utilize the MERS System, (iii) maintain on
its data base the information, which shall be updated on a daily basis,
which identifies and segregates the MERS Loans in which the Agent has a
security interest from any other MERS Loans in which the Agent may have an
interest separate and apart from that of the Agent, and (iv) comply with all
of its obligations under the Electronic Tracking Agreement, possess at all
times a valid and effective corporate consent from MERS permitting officers
of the Agent to execute written assignments of mortgage as officers of MERS,
as more particularly set forth in the Electronic Tracking Agreement, and
execute such written assignments of MERS Loans as the Agent may require from
time to time."
15. The Company has informed the Agent and the Banks that during the
period from December 13, 2003 to and until the close of business on December
16, 2003, the Company's outstanding borrowings under the Warehouse Line
exceeded the Warehouse Borrowing Base as a result of the Collateral Value of
outstanding Alternative Lending Advances exceeding the Alternative Lending
Advance Sublimit specified in the Existing Credit Agreement. Each of the
Banks and the Agent hereby agrees to waive its default rights with respect
to the Company having borrowings under the Warehouse Line in excess of
Warehouse Borrowing Base as a result of the Collateral Value of outstanding
Alternative Lending Advances exceeding the Alternative Lending Advance
Sublimit during the period beginning December 13, 2003 and ending at the
close of business on December 16, 2003. This waiver only applies to the
specific instance described herein. It is not a waiver of any subsequent
breach of the same provision of the Credit Agreement, nor is it a waiver of
any prior, current or subsequent breach of any other provisions of the
Credit Agreement. Notwithstanding the foregoing, each of the Banks and the
Agent reserves all of the rights, powers and remedies presently available to
it under the Credit Agreement and the Notes, including the right to cease
making Advances to the Company and the right to accelerate any of the
indebtedness owing
16. Other than with respect to the default described in that certain
Second Amendment to Amended and Restated Warehousing Credit Agreement dated
as of December 15, 2003 and the default described in section 15 above, for
which the Banks and the Agent have in each case provided a waiver, the
Company represents and warrants that no Event of Default has occurred to
date under the Existing Credit Agreement or any other Loan Document and that
no Unmatured Event of Default currently exists under any of the Loan
Documents.
17. This Third Amendment may be executed in one or more counterparts,
each of which shall constitute an original and all of the same shall
constitute one and the same instrument.
18. This Third Amendment shall be effective as of the date of delivery
to the Agent of each of the following: (i) this Third Amendment and each of
the other agreements and instruments referred to herein or related hereto,
each duly executed by each of the parties thereto, (ii) an updated covenant
compliance certificate, insurance certificates, UCC search results,
authorized signed letter, approved investor list, representation and
warranty disclosures and authorizing resolution, (iii) the Intercreditor
Agreement duly executed by all necessary parties thereto, (iv) a
Hypothecation Agreement duly executed by the Company relating to the pledged
eurodollar account, (v) a UCC amendment removing West Suburban as a secured
party under the Warehouse Line, (vi) the Electronic Tracking Agreement duly
executed by all necessary parties thereto, and (vii) all such other security
documents, opinions, instruments and certificates as may be required by the
Agent or its counsel in order to consummate the transactions contemplated
herein.
19. This Third Amendment and the related writings and the respective
rights and obligations of the parties shall be governed by, and construed
and enforced in accordance with, the laws of the Commonwealth of Kentucky.
20. This Third Amendment shall be binding upon, and shall inure to the
benefit of, the Company, the Banks and the Agent and their respective
successors and assigns.
21. This Third Amendment and the agreements, instruments and other
documents referred to herein, constitute the entire agreement of the parties
with respect to, and supersede all prior understandings of the parties with
respect to the subject matter hereof. No change, modification, addition or
termination of this Third Amendment shall be enforceable unless in writing
signed by the party against whom enforcement is sought.
22. Each of United and Portland hereby makes, declares, ratifies
and/or reaffirms, as applicable, all of the representations, warranties,
covenants, agreements and obligations set forth in the Existing Credit
Agreement and each of the other Loan Documents, as amended and modified
hereby, as each of the same apply to United and Portland individually or
collectively as the Company (as redefined herein), as applicable.
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IN WITNESS WHEREOF, the parties hereto have caused this Third Amendment
to Warehousing Credit Agreement and First Amendment to Pledge, Security and
Collateral Agency Agreement to be duly executed as of the day and year first
above written.
UNITED FINANCIAL MORTGAGE CORP.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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Title: President and Chief Executive Officer
PORTLAND MORTGAGE COMPANY
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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Title: President and Chief Executive Officer
(collectively, the "Company")
NATIONAL CITY BANK OF KENTUCKY
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Title: Vice President
BANK ONE, NA
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
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Title: Commercial Banking Officer
COMERICA BANK
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇
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Title: Vice President
COLONIAL BANK, N.A.
By: /s/ ▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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Title: Senior Vice President
(collectively, the "Banks")
NATIONAL CITY BANK OF KENTUCKY
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Title: Vice President
(the "Agent")
WEST SUBURBAN BANK
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
--------------------------------------------
Title: Senior Vice President
("West Suburban")