EXHIBIT 10.21
THIRD AMENDMENT TO
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SECOND AMENDED AND RESTATED CREDIT AGREEMENT
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AND AMENDMENT TO PLEDGE AND SECURITY AGREEMENT
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THIS THIRD AMENDMENT TO SECOND AMENDED AND RESTATED CREDIT AGREEMENT AND
AMENDMENT TO PLEDGE AND SECURITY AGREEMENT (the "Amendment") dated as of
December 31, 1997 by and among NEW CENTURY MORTGAGE CORPORATION, a California
corporation (the "Company"), FIRST BANK NATIONAL ASSOCIATION, a national
banking association ("First Bank"), GUARANTY FEDERAL BANK, FSB, a federal
savings bank ("GFB"), FIRST UNION NATIONAL BANK, a national banking association
("First Union"), RESIDENTIAL FUNDING CORPORATION, a Delaware corporation
("RFC"), BANK ONE, TEXAS, N.A., a national banking association ("Bank One"), THE
BANK OF NEW YORK, a New York banking corporation ("BNY"), THE FIRST NATIONAL
BANK OF CHICAGO, a national banking association ("First Chicago") (First Bank,
GFB, First Union, RFC, Bank One, BNY, First Chicago being hereinafter referred
to collectively as the "Banks" and individually as a "Bank"), and FIRST BANK
NATIONAL ASSOCIATION, a national banking association, in its capacity as agent
for the Banks (in such capacity, together with any successor agents appointed
hereunder, the "Agent").
WITNESSETH THAT:
WHEREAS, the Company, the Banks and the Agent are parties to a Second
Amended and Restated Credit Agreement dated as of July 31, 1997, as amended by a
First Amendment dated as of November 26, 1997 and by a Second Amendment dated as
of December 22, 1997 (as so amended, the "Credit Agreement"), pursuant to which
the Banks provide the Company with revolving mortgage warehousing and working
capital credit facilities; and
WHEREAS, the Company and the Banks have agreed to amend the Credit
Agreement upon the terms and conditions herein set forth;
NOW, THEREFORE, for value received, the receipt and sufficiency of which
are hereby acknowledged, the Company and the Banks agree as follows:
1. Certain Defined Terms. Each capitalized term used herein without
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being defined herein that is defined in the Credit Agreement shall have the
meaning given to it therein.
2. Amendments to Credit Agreement. The Credit Agreement is hereby
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amended as follows:
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(a) All references to the terms "Bank" or "Banks" are hereby replaced
by the terms "Lender" or "Lenders", respectively.
(b) All references to the term "Revolving Loan" are hereby replaced
by the term "Warehousing Loan".
(c) The definition of "Holding Account" in Section 1.01 is hereby
amended by deleting the last two words thereof and inserting therefor the
words "the Agent and the Lenders".
(d) The definition of "Loan Documents" in Section 1.01 is hereby
amended by inserting after "Pledge and Security Agreement," the words
"Working Capital Security Agreement,".
(e) Section 1.01 is hereby amended by adding the following new
definitions in the correct alphabetical order:
"GEFP": Greenwich Capital Financial Products, Inc., a Delaware
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corporation.
"Hedging Arrangements" means any agreements or other arrangements
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(including, without limitation, interest rate swap agreements,
interest rate cap agreements and forward sale agreements) entered into
to protect the Company against changes in interest rates or in the
value of any assets of the Company.
"Junior Securitization Interest": as defined in the Working
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Capital Security Agreement.
"Junior Securitization Interest Income Value": with respect to
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any Junior Securitization Interest, the present value of the expected
payments under such Junior Securitization Interest, based on
assumptions concerning discount rates, default frequency, severity of
loss, prepayment speeds and other relevant factors determined by the
Agent in its sole discretion.
"SBRC": Salomon Brothers Realty Corp., a Delaware corporation.
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"Working Capital Collateral": property in which the Agent takes
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a security interest, for the benefit of the Lenders, pursuant to the
Working Capital Security Agreement.
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"Working Capital Collateral Value": as of the date of
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determination with respect to the Junior Securitization Interests
included in the Working Capital Collateral, (a) the lesser of (i)
sixty percent (60%) of the value of such Junior Securitization
Interests determined in accordance with GAAP and (ii) seventy-five
percent (75%) of the aggregate Junior Securitization Interest Income
Value of such Junior Securitization Interests, minus (b) the aggregate
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amount of Indebtedness of the type described in Section 4.08(d)
secured by Liens on such Junior Securitization Interests.
"Working Capital Increase Date": the date, if any, on which the
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conditions precedent set forth in Section 5.03 are satisfied.
"Working Capital Security Agreement": a Security Agreement by
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and between the Company and the Agent, in form and substance
satisfactory to First Bank and reasonably satisfactory to the other
Lenders, as the same may be amended, supplemented, restated or
otherwise modified and in effect from time to time, and any other
agreement under which the Agent takes a security interest in the
property of NCFC, the Company or any Affiliate of NCFC, other than the
Warehousing Collateral, to secure the Obligations.
(f) Section 2.01(b) is hereby amended by deleting the words
"Warehousing Advance" where they appear therein and inserting therefor the
words "Warehousing Loan".
(g) Section 2.01(c) is hereby amended by deleting the second
reference to "2:30 P.M." therein and inserting therefor "3:30 P.M."
(h) Section 2.01(c) is hereby further amended by inserting the words
"in the Working Capital Security Agreement" after the words "Pledge and
Security Agreement," where they appear in the last sentence thereof.
(i) The second sentence Section 2.01(d)(iii) is hereby amended by
deleting the words "to the extent amounts received from the other Lenders
are not sufficient to repay in full the principal of the outstanding
Swingline Loans requested or required to be refinanced" and inserting the
following therefor:
to the extent Advances made by the Lenders are not sufficient to repay
in full the principal of the outstanding Swingline Loans requested or
required to be refinanced
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(j) The fourth sentence of Section 2.01(d)(iii) is hereby amended in
its entirety to read as follows:
If any portion of any Warehousing Loan made by the Lenders pursuant to
this Section 2.01(d)(iii) should be recovered by or on behalf of the
Company from First Bank in bankruptcy or otherwise, the loss of the
amount so recovered shall be ratably shared among all the Lenders in
the manner contemplated by Section 7.11.
(k) The first sentence of Section 2.01(g)(i) is hereby amended by
inserting after "provided," the words "(i) that the amount by which the
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Warehousing Commitment Amounts are reduced be shared ratably among all the
Lenders on the basis of each Lender's Pro Rata Share, and (ii)".
(l) The first sentence of Section 2.02(a) is hereby amended by
deleting the words after "provided," and inserting the following therefor:
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that no Lender shall be obligated to make any Working Capital Loan
under the Working Capital Commitment if (i) the sum of the aggregate
principal amount of such Lender's Working Capital Loans which would be
outstanding as a result of making such Working Capital Loan plus such
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Lender's Pro Rata Share of the Letter of Credit Obligations would
exceed such Lender's Working Capital Commitment Amount, or (ii) the
sum of the aggregate principal amount of all Working Capital Loans
which would be outstanding as a result of making such Working Capital
Loan and any other Working Capital Loans to be made on such day plus
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the Letter of Credit Obligations would exceed (A) the sum of the
Working Capital Commitment Amounts of all the Lenders, or (B) from and
after the Working Capital Increase Date, if less, the Working Capital
Collateral Value of all Junior Securitization Interests included in
the Working Capital Collateral.
(m) Section 2.02(b) is hereby amended by inserting the words "in the
Working Capital Security Agreement" after the words "Pledge and Security
Agreement," where they appear in the last sentence thereof.
(n) Section 2.02(d) is hereby amended by renumbering subsections (ii)
and (iii) to be subsections (iii) and (iv), respectively, and by adding a
new subsection (ii) which reads as follows:
(ii) Mandatory Prepayments. If, at any time from and after the
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Working Capital Increase Date, the aggregate principal amount of all
Working Capital Loans outstanding plus the Letter of Credit
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Obligations
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exceeds the aggregate Working Capital Collateral Value of the Junior
Securitization Interests included in the Working Capital Collateral,
the Company shall immediately make principal prepayments on the
Working Capital Notes in an aggregate amount equal to the amount of
such excess, which aggregate amount shall be paid to the Agent and
distributed to each Lender ratably on the basis of its Pro Rata Share
thereof.
(o) The first sentence of Section 2.02(e)(i) is hereby amended by
inserting after "provided," the words "(i) that the amount by which the
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Working Capital Commitment Amounts are reduced be shared ratably among all
the Lenders on the basis of each Lender's Pro Rata Share, and (ii)".
(p) Section 2.08(b) is hereby amended in its entirety to read as
follows:
(b) Increased Cost. If, after the date hereof, any Regulatory
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Change or compliance with any request or directive (whether or not
having the force of law) of any governmental authority, central bank
or comparable agency:
(i) shall subject any Lender to any tax, duty or other
charge with respect to Eurodollar Advances or Fixed Rate
Advances, its Warehousing Note, its Working Capital Note or its
obligation to make Eurodollar Advances or Fixed Rate Advances, or
shall change the basis of taxation of payment to such Lender of
the principal of or interest on Eurodollar Advances or Fixed Rate
Advances or any other amounts due under this Agreement in respect
of Eurodollar Advances or Fixed Rate Advances or its obligation
to make Eurodollar Advances or Fixed Rate Advances (except for
changes in the rate of tax on the overall net income of such
Lender imposed by the laws of the United States or any
jurisdiction in which such Lender's principal office is located);
or
(ii) shall impose, modify or deem applicable any reserve,
special deposit, capital requirement or similar requirement
(including, without limitation, any such requirement imposed by
the Board of Governors of the Federal Reserve System, but
excluding any such requirement to the extent included in
calculating the applicable Adjusted Eurodollar Rate) against
assets of, deposits with or for the account of, or credit
extended by, any Lender or shall impose on any Lender or on the
interbank Eurodollar market any other condition affecting
Eurodollar Advances or Fixed Rate Advances, such Lender's
Warehousing
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Note, its Working Capital Note or its obligation to make
Eurodollar Advances or Fixed Rate Advances;
and the result of any of the foregoing is to increase the cost to such
Lender of making or maintaining any Eurodollar Advance or Fixed Rate
Advance, or to reduce the amount of any sum received or receivable by
such Lender under this Agreement or under its Warehousing Note or its
Working Capital Note, then, within 30 days after written demand by
such Lender, the Company shall pay to such Lender such additional
amount or amounts as will compensate such Lender for such increased
cost or reduction; provided, that the Company shall not be obligated
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to pay any such additional amount (i) unless such Lender shall first
have notified the Company in writing that it intends to seek such
compensation pursuant to this Section, or (ii) to the extent such
additional amount is attributable to the period ending 91 days prior
to the date of the first such notice with respect to such Regulatory
Change (the "Excluded Period"), except to the extent any amount is
attributable to the Excluded Period as a result of the retroactive
application of the applicable Regulatory Change. A certificate of any
Lender claiming compensation under this Section 2.08, setting forth
the additional amount or amounts to be paid to it hereunder and
stating in reasonable detail the basis for the charge and the method
of computation, shall be conclusive in the absence of manifest error.
In determining such amount, such Lender may use any reasonable
averaging and attribution methods. Failure on the part of any Lender
to demand compensation for any increased costs or reduction in amounts
received or receivable with respect to any period shall not constitute
a waiver of such Lender's rights to demand compensation for any
increased costs or reduction in amounts received or receivable in any
subsequent period.
(q) Section 2.08(d) is hereby amended in its entirety to read as
follows:
(d) Discretion of Lenders as to Manner of Funding. Each Lender
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shall be entitled to fund and maintain its funding of Eurodollar
Advances in any manner it may elect, it being understood, however,
that for the purposes of this Agreement all determinations hereunder
(excluding determinations of the Eurodollar Rate that the Agent elects
to make from the Reuters screen) shall be made as if such Lender had
actually funded and maintained each Eurodollar Advance through the
purchase of deposits having an interest rate equal to the Eurodollar
Rate.
(r) Section 2.09(a) is hereby amended in its entirety to read as
follows:
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(a) Letters of Credit. Upon the terms and subject to the
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conditions of this Agreement, First Bank agrees to issue Letters of
Credit for the account of the Company; provided that First Bank shall
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be under no obligation to issue any Letter of Credit if, after giving
effect to such issuance, (i) the Company's Letter of Credit
Obligations would exceed $1,250,000 or (ii) the sum of the aggregate
principal amount of Working Capital Loans outstanding plus the
Company's Letter of Credit Obligations would exceed the lesser of (A)
the sum of the Working Capital Commitment Amounts or (B) the aggregate
Working Capital Collateral Value of the Junior Securitization
Interests included in the Working Capital Collateral.
(s) Section 2.09(b) is hereby amended by inserting the words "in the
Working Capital Security Agreement" after the words "Pledge and Security
Agreement," where they appear in the last sentence thereof.
(t) Section 3.04 is hereby amended by adding the following at the end
thereof:
The grant of a security interest pursuant to the Working Capital
Security Agreement creates a valid security interest in the Working
Capital Collateral, and the Lien on the Working Capital Collateral
created by the Working Capital Security Agreement will be a second
priority Lien thereon, free and clear of any other Liens except the
interests of the Person providing financing for any Junior
Securitization Interests included in the Working Capital Collateral on
such Junior Securitization Interests.
(u) Section 4.01(e) is hereby amended by deleting the word "and" at
the end of clause (iii) thereof, adding the word "and" at the end of clause
(iv) thereof, and adding the following after such clause (iv):
(v) any event that would reduce the aggregate Working Capital
Collateral Value of the Junior Subordination Interests included in the
Working Capital Collateral;
(v) Section 4.01 is hereby further amended by deleting the word "and"
at the end of subsection (h) thereof, relettering subsection (i) thereof as
subsection (j), and adding the following as a new subsection (i):
(i) simultaneously with any request to the Agent to approve a
new Investor, notice of the identity of such Investor, and promptly
upon the request of any Lender, additional information concerning any
such proposed Investor; and
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(w) Section 4.08 is hereby amended in its entirety to read as
follows:
4.08 Indebtedness. The Company and NCFC will not, directly or
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indirectly, (i) create, incur, assume, guarantee, or otherwise become
or remain directly or indirectly liable with respect to, any
Indebtedness, except:
(a) the Obligations and the Letter of Credit Obligations;
(b) current liabilities not more than 90 days overdue,
unless contested in good faith by appropriate proceedings and any
reserves required by GAAP have been established, incurred by NCFC
or the Company in the ordinary course of business otherwise than
for money borrowed; and
(c) Indebtedness incurred to finance the purchase of
equipment and secured solely by Liens on such equipment, in an
aggregate amount not to exceed $5,000,000;
(d) Indebtedness incurred to finance interest-only or
residual interests in Mortgage-backed Securities issued by the
Company and which Indebtedness is secured only by such residual
interests, provided, such Indebtedness is (i) either (A) secured
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by interests in Mortgage-backed Securities that do not constitute
Working Capital Collateral, or (B) owed exclusively to SBRC or
another Person that has entered into an intercreditor agreement
with the Agent on terms satisfactory to the Agent, and (ii) does
not exceed 75% of the value of such interestonly or residual
interests determined in accordance with GAAP;
(e) intercompany Indebtedness of NCFC to the Company in an
aggregate amount not to exceed $1,000,000; and
(f) obligations under gestation repurchase agreements or
similar arrangements of the type described in Section 4.09(f);
or (ii) permit (A)the Leverage Ratio of the Company be greater than 8
to 1 as of the last day of each fiscal quarter of the Company, (B)the
Quarterly Average Leverage Ratio for any period of measurement be
greater than 9 to 1, or (C)the Daily Leverage Ratio on any date be
greater than 12 to 1.
(x) A new Section 4.09(h) is hereby added, which reads as follows:
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(h) Liens arising under Hedging Arrangements.
(y) Section 4.10 is hereby amended by deleting the "and" at the end
of subsection (g) thereof, by replacing the period at the end of subsection
(h) thereof with "; and" and by adding the following new clause (i): "(i)
investments arising under the Hedging Arrangements".
(z) Section 4.13(b) is hereby amended by deleting the words "other
than Mortgage Loans" at the end thereof.
(aa) Section 4.16 is hereby amended in its entirety to read as
follows:
4.16 Subsidiaries. (a) The Company will not create or acquire
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any Subsidiaries, and (b) NCFC will not create or acquire any
Subsidiaries other than (i) the Company and (ii) Subsidiaries engaged
solely in any business involving the origination, acquisition,
servicing and sale of consumer obligations.
(bb) A new Section 5.03 is hereby added, which reads as follows:
5.03 Conditions Precedent to Working Capital Commitment Amount
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Increase. The Working Capital Increase Date shall occur on the date
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on which each and every of the following conditions is satisfied:
(a) the following shall have been delivered to the Agent,
each duly executed or certified, as the case may be, and dated as
of the date of delivery thereof:
(i) ten (10) counterparts of the Working Capital
Security Agreement, duly executed by the Company and the
Agent, together with such financing statements and other
instruments as the Agent may request to create and perfect
the security interests granted under the Working Capital
Security Agreement;
(ii) a copy of any notifications to or agreements with
SBRC, GEFP or any other Person that has a Lien on or
possession of any Junior Securitization Interest that the
Agent may request, duly executed or acknowledged by the
appropriate Persons;
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(iii) a new Working Capital Note payable to each
Lender holding a Working Capital Commitment, in the amount
of such Lender's respective Working Capital Commitment
Amount after giving effect to any increase thereof (the "New
Note"), duly executed by the Company;
(iv) completed responses to requests for information
or other evidence satisfactory to the Agent that the
financing statements and other instruments delivered to the
Agent pursuant to Section 5.03(a)(i) above have been filed
in all appropriate filing offices and that such filed
financing statements perfect a security interest in favor of
the Agent for the benefit of the Lenders in the Working
Capital Collateral;
(v) a favorable opinion of ▇▇▇▇▇ ▇▇▇▇▇▇▇, General
Counsel to NCFC and Senior Legal Counsel to the Company,
addressed to the Banks, as to such matters as the Agent may
reasonably request.
(b) The Company shall have paid to each Lender a Working
Capital Commitment fee in respect of the increase in such
Lender's Working Capital Commitment Amount as of the Working
Capital Increase Date, as separately agreed between the Company
and such Lender.
(cc) Section 6.01(c) is hereby amended by inserting after the words
"Pledge and Security Agreement" a comma and the words "in the Working
Capital Security Agreement".
(dd) Section 6.01(d) is hereby amended by deleting "Section
4.01(f)(ii)" and inserting "Section 4.01(e)(ii)" therefor.
(ee) Section 6.01(k) is hereby amended in its entirety to read as
follows:
(k) The Pledge and Security Agreement, the Working Capital
Security Agreement or the Guaranty shall, at any time, cease to be in
full force and effect or shall be judicially declared null and void,
or the validity or enforceability thereof shall be contested by the
Company or NCFC, or the Agent shall cease to have, for the benefit of
the Lenders, a valid and perfected security interest having the
priority contemplated under the Pledge and Security Agreement or the
Working Capital Security Agreement in any part of the collateral
described therein, other than by
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action or inaction of the Agent, unless the Company shall, within two
Business Days after the earlier of the date it receives notice thereof
from the Agent or the date an officer of the Company has knowledge
thereof, repay the outstanding Swingline Loans and Warehousing Loans
in an amount sufficient to reduce the aggregate outstanding principal
balance of the Swingline Loans and Warehousing Loans to the aggregate
Warehousing Collateral Value of the Warehousing Collateral, and repay
the outstanding Working Capital Loans in an amount sufficient to
reduce the aggregate outstanding principal balance thereof to the
aggregate Working Capital Collateral Value of the Junior
Securitization Interests included in the Working Capital Collateral;
or
(ff) Section 7.09 is hereby amended by deleting "clause (e)" in the
third line thereof and inserting therefor "clause (i)".
(gg) Section 7.10 is hereby amended by deleting the last sentence
thereof and inserting the following therefor:
Notwithstanding any of the foregoing or any other provision of this
Agreement, upon and after the occurrence of an Event of Default or
Unmatured Event of Default, (a) all proceeds received by the Agent
from the sale or other disposition of the Warehousing Collateral shall
be applied in accordance with Section 17 of the Pledge and Security
Agreement, (b) all proceeds received by the Agent from the sale or
other disposition of the Working Capital Collateral shall be applied
in accordance with the Working Capital Security Agreement, and (c) all
payments made by the Guarantor to the Agent under the Guaranty shall
be applied in the same order of priority as is set forth in Section 17
of the Pledge and Security Agreement with respect to application of
the proceeds of Warehousing Collateral.
(hh) Section 7.12 is hereby amended by deleting the words "reasonably
acceptable to the Company" in the third sentence thereof and inserting the
following after the fourth sentence thereof:
Upon any determination by the Lenders under the second preceding
sentence to appoint a custodian, the Lenders making such determination
shall have the right to appoint a custodian, which custodian shall
(unless an Event of Default has then occurred and is continuing) be
reasonably acceptable to the Company.
(ii) A new Section 7.14 is added after Section 7.13, which reads as
follows:
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7.14 Notice of New Investors. The Agent shall use reasonable
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efforts to provide prompt notice to each Lender (which notice may be
telephonic) of its approval of any new Investor after December 31,
1997; provided, however, that the Agent shall have no liability to any
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Lender or other Person for its failure to provide the notice described
in this Section 7.14.
(jj) Section 8.04(d) is hereby amended by deleting the words "Agent's
counsel" and inserting therefor the words "any Lender's counsel".
(kk) Section 8.05 is hereby amended in its entirety to read as
follows:
8.05 Releases, Amendments, Waivers, Consents and Exercise of
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Remedies. Except as otherwise provided in this Section 8.05, any
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provision of this Agreement or any other Loan Document may be amended
or modified only by an instrument or instruments in writing signed by
the Required Lenders and the Company. Any amendment, waiver or
consent reducing any principal of, or the amount of or rate of
interest on or fees with respect to, the Loans or the Commitments,
postponing any date fixed for the payment of any principal of,
interest on or fees with respect to the Loans or Commitments,
extending the Warehousing Termination Date or the Working Capital
Termination Date, releasing or subordinating any of the Warehousing
Collateral (except as provided in the Pledge and Security Agreement)
or the Working Capital Collateral (except as provided in the Working
Capital Security Agreement), releasing the Guaranty, amending the
definition of "Delivered Mortgage Loans," "Pro Rata Share," "Required
Lenders," "Warehousing Borrowing Base" or "Warehousing Collateral
Value," or amending Section 2.01, this Section 8.05 or any other
provision hereof specifically requiring the consent or approval of all
of the Lenders for any modification or waiver, as applicable, may only
be made by an instrument or instruments in writing signed by all of
the Lenders and the Company. Any amendment, waiver or consent
amending the definition of "Working Capital Collateral Value,"
amending Section 2.02 or affecting the Working Capital Security
Agreement shall only be made by an instrument in writing signed by all
of the Lenders that have Working Capital Loans or Working Capital
Commitments outstanding. In addition to the foregoing requirements,
(A) no amendment, waiver or consent shall, unless in writing and
signed by the Agent in addition to the requisite Lenders indicated
above to take such action, affect the rights or duties of the Agent
under this Agreement or any Loan Document, and (B) no amendment may
increase any Lender's Commitment or Commitments unless it is in
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writing and signed by such Lender. No waiver of any provision of this
Agreement or any other Loan Document or consent to any departure by
the Company therefrom shall in any event be effective unless the same
shall be in writing and signed or consented to in writing by the
requisite Lenders indicated above and then such waiver or consent
shall be effective only in the specific instance and for the purpose
for which given.
(ll) Section 8.06(a) is hereby amended by deleting the words "the
Required Lenders" in the first sentence thereof and inserting therefor the
words "all of the Lenders".
(mm) Exhibit A is hereby amended in its entirety to read as set forth
on Exhibit A hereto.
(nn) Schedule 1.01(b) is hereby amended in its entirety to read as set
forth on Schedule 1.01(b) hereto.
3. Amendments to Pledge and Security Agreement. The Pledge and Security
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Agreement is hereby amended as follows:
(a) Section 2 is hereby amended to delete "and" at the end of
subsection (k), reletter subsection (l) as subsection (m) and add the
following new subsection (l):
(l) All right, title and interest of the Company in and to any
Hedging Arrangements entered into to protect the Company against
changes in the value of any of the Pledged Mortgage Loans or changes
in the interest rate applicable to the Advances, including, without
limitation, all rights to payment arising under such Hedging
Arrangements; and
(b) Section 18 of the Pledge and Security Agreement is hereby amended
by inserting the words "ANY LENDER OR THE LESSOR," after the clause
"WHETHER OR NOT THE SAME ARE CAUSED BY THE SIMPLE NEGLIGENCE OF THE
AGENT,".
(c) Attachment 1 to the Pledge and Security Agreement is hereby
amended in its entirety to read as set forth on Attachment 1 hereto.
4. Amendment to Guaranty; Working Capital Security Agreement. The
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Lenders hereby authorize the Agent to execute and deliver the Amendment to the
Guaranty in the form of Exhibit C hereto, the Working Capital Security Agreement
and all documents and instruments that the Agent, in its discretion, determines
to be appropriate to perfect or protect its security interest, for the benefit
of the Lenders, in
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the Working Capital Collateral. Each provision of the Working Capital Security
Agreement and such documents and instruments which is contemplated to be binding
upon the Lenders shall be binding upon the Lenders and each of them. The Agent
shall not waive, amend or otherwise modify any provision of the Working Capital
Security Agreement without the written consent of the Lenders that have Working
Capital Loans or Working Capital Commitments outstanding.
5. Conditions to Effectiveness of this Amendment. This Amendment shall
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become effective when the Agent shall have received at least eight (8)
counterparts of this Amendment, duly executed by the Company and each Bank and
acknowledged by NCFC, provided the following conditions are satisfied:
(a) Before and after giving effect to this Amendment, the
representations and warranties of the Company in Section 3 of the Credit
Agreement and Section 5 of the Pledge and Security Agreement, and of NCFC
in Section 15 of the Guaranty, shall be true and correct as though made on
the date hereof, except for changes that are permitted by the terms of the
Credit Agreement.
(b) Before and after giving effect to this Amendment, no Event of
Default and no Unmatured Event of Default shall have occurred and be
continuing under the Credit Agreement.
(c) No material adverse change in the business, assets, financial
condition or prospects of the Company or NCFC shall have occurred since the
Effective Date.
(d) The following shall have been delivered to the Agent, each duly
executed or certified, as the case may be, and dated as of the date of
delivery thereof:
(i) an amendment to the Guaranty, in the form of Exhibit C
hereto, duly executed by the Guarantor;
(ii) certified copies of resolutions of the Board of Directors
of the Company authorizing or ratifying the execution, delivery and
performance of this Amendment, the Working Capital Security Agreement,
the New Note(s) and the amendment to the Guaranty described in clause
(i) above;
(iii) a certified copy of any amendment or restatement of the
Articles of Incorporation or the By-laws of the Company made or
entered
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following the date of the most recent certified copies thereof
furnished to the Banks;
(iv) certified copies of all documents evidencing any necessary
corporate action, consent or governmental or regulatory approval (if
any) with respect to this Amendment, the Working Capital Security
Agreement, the New Note(s) and the amendment to the Guaranty described
in clause (i) above;
(v) a favorable opinion of ▇▇▇▇▇ ▇▇▇▇▇▇▇, General Counsel to
NCFC and senior legal counsel to the Company, addressed to the Banks,
as to the matters and to the effect set forth on Exhibit B hereto; and
(vi) such other documents, instruments, opinions and approvals
as the Agent may reasonably request.
6. Acknowledgments. The Company and each Bank acknowledge that, as
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amended hereby, the Credit Agreement and the Pledge and Security Agreement
remain in full force and effect with respect to the Company and the Banks, that
each reference to the Credit Agreement or the Pledge and Security Agreement in
the Loan Documents shall refer to the Credit Agreement or the Pledge and
Security Agreement, respectively, as amended hereby, and that each reference to
the Guaranty in the Loan Documents shall refer to the Guaranty, as amended in
connection with this Amendment. The Company confirms and acknowledges that it
will continue to comply with the covenants set out in the Credit Agreement and
the other Loan Documents, as amended hereby, and that its representations and
warranties set out in the Credit Agreement and the other Loan Documents, as
amended hereby, are true and correct as of the date of this Amendment. The
Company further 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 Company and constitutes the legal, valid and
binding obligation of the Company enforceable against the Company in accordance
with its respective 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 Unmatured Events of Default exist.
7. General.
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(a) The Company 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
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pay and save the Banks 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 Company shall survive any
termination of the Credit 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 Company, the Banks, the
Agent and their respective successors and assigns, and shall inure to the
benefit of the Company, the Banks, the Agent and the successors and assigns
of the Banks and the Agent.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]
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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.
NEW CENTURY MORTGAGE CORPORATION
By
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Its
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FIRST BANK NATIONAL ASSOCIATION
By
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Its
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GUARANTY FEDERAL BANK, FSB
By
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Its
---------------------------------
FIRST UNION NATIONAL BANK
By
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Its
---------------------------------
[Signature Page for Third Amendment to
Second Amended and Restated Credit Agreement]
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RESIDENTIAL FUNDING CORPORATION
By
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Its
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BANK ONE, TEXAS, N.A.
By
--------------------------------
Its
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COMERICA BANK CALIFORNIA, INC.
By
--------------------------------
Its
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THE BANK OF NEW YORK
By
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Its
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THE FIRST NATIONAL BANK OF CHICAGO
By
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Its
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[Signature Page for Third Amendment to
Second Amended and Restated Credit Agreement]
THE UNDERSIGNED, NEW CENTURY FINANCIAL CORPORATION, HEREBY (1) AGREES
THAT EACH REFERENCE TO THE CREDIT AGREEMENT, OR WORDS OF SIMILAR IMPORT,
CONTAINED IN THE SECOND AMENDED AND RESTATED GUARANTY DATED AS OF JULY 31, 1997
(THE "GUARANTY") BY THE UNDERSIGNED TO THE BANKS AND THE AGENT, SHALL BE A
REFERENCE TO THE CREDIT AGREEMENT AS AMENDED BY THE FOREGOING AMENDMENT, (2)
CONFIRMS THAT THE GUARANTY SHALL REMAIN IN FULL FORCE AND EFFECT AFTER GIVING
EFFECT TO THE FOREGOING AMENDMENT, AND (3) CONFIRMS AND ACKNOWLEDGES THAT ITS
REPRESENTATIONS AND WARRANTIES SET FORTH IN SECTION 15 OF THE GUARANTY ARE TRUE
AND CORRECT AS OF THE DATE OF THE FOREGOING AMENDMENT.
NEW CENTURY FINANCIAL CORPORATION
By
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Its
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SCHEDULE 1.01(b)
BANK COMMITMENTS
----------------
Working
Warehousing Capital
Banks Commitment Commitment
----- ----------- -----------
First Bank National Association $60,000,000 $4,000,000*
Guaranty Federal Bank, F.S.B. $50,000,000 0
Comerica Bank California, Inc. $15,000,000 0
First Union National Bank $25,000,000 0
Residential Funding Corporation $25,000,000 0
Bank One, Texas, N.A. $30,000,000 ▇
▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇ $25,000,000 0
The First National Bank of Chicago $30,000,000 0
* Increased as of the Working Capital Increase Date to $11,500,000
Attachment 1 to
Pledge and Security Agreement
AGREEMENT TO PLEDGE
(Security Agreement as provided for
by the Uniform Commercial Code of Minnesota)
For new value this day received, and as collateral security for the
payment of any and all indebtedness and liability of the undersigned under that
certain Second Amended and Restated Credit Agreement dated as of July 31, 1997
(as the same may be amended, restated, modified or supplemented and in effect
from time to time, the "Credit Agreement") between New Century Mortgage
Corporation, a California corporation (the "Company"), the lenders party thereto
(the "Lenders") and First Bank National Association, a national banking
association ("First Bank"), as agent for the Lenders, and that certain Pledge
and Security Agreement dated as of July 31, 1997 (as the same may be amended,
restated, modified or supplemented and in effect from time to time (the "Pledge
and Security Agreement") between the Company and First Bank, as collateral agent
(in such capacity, the "Collateral Agent") for itself, the Agent, the Lenders
and FBS Business Finance Corporation (the "Lessor") (together with any successor
collateral agent under the Pledge and Security Agreement, the "Collateral
Agent"), and consistent with the terms of the Pledge and Security Agreement, the
Company hereby creates and grants in favor of the Collateral Agent, for the
benefit of the Collateral Agent, the Agent, the Lenders and the Lessor, a
security interest in and to the documents described in each Collateral
Identification Letter and Loan Detail Listing attached to this Agreement to
Pledge and all proceeds thereof.
Capitalized terms used herein which are defined in the Credit
Agreement or the Pledge and Security Agreement and not otherwise defined herein
shall have the meanings ascribed to such terms in the Credit Agreement or the
Pledge and Security Agreement.
The Company agrees to deliver the instruments and documents described
in Section 4.02 of the Pledge and Security Agreement to the Collateral Agent
within seven Business Days following the date hereof, as provided in said
Section 4.02. The Company further agrees to deliver the instruments and
documents described in Section 4.03 of the Pledge and Security Agreement to the
Collateral Agent within five Business Days after the Company's receipt of the
Collateral Agent's written request therefor.
The Company further agrees that the Collateral Agent does not assume
any duty or responsibility in respect of any of the documents described in each
attached Collateral Identification Letter, and that the Collateral Agent does
not waive any right
of possession to any of such documents for the failure to demand or receive such
possession.
The Company further agrees that this Agreement to Pledge shall be
binding upon and inure to the benefit of the legal representatives, successors
or assigns of the Company.
The Company further agrees that all rights, interests, duties and
liabilities arising hereunder shall be determined according to the laws of the
State of Minnesota, without giving effect to conflict of laws principles
thereof.
Dated as of ___________________________, 199_.
NEW CENTURY MORTGAGE CORPORATION
By
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Its
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