EXHIBIT 10-6
SEVENTH AMENDMENT TO AMENDED AND RESTATED MORTGAGE LOAN WAREHOUSING AGREEMENT
This Seventh Amendment to Amended and Restated Mortgage Loan Warehousing
Agreement (the "Amendment") is dated as of March 1, 1998, by and among BANK OF
AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION, a national banking association
("BOA"), and the other banks signatory hereto from time to time (each a "Lender"
and, collectively, the "Lenders"), BOA as agent for the Lenders (in such
capacity, the "Agent") and FIRST MORTGAGE CORPORATION, a California corporation
(the "Company").
RECITALS
A. Pursuant to that certain Amended and Restated Mortgage Loan Warehousing
Agreement dated as of September 1, 1995 by and among BOA, the Agent and the
Company (as amended from time to time, the "Agreement"), BOA agreed to extend
credit to the Company on the terms and subject to the conditions set forth
therein. All capitalized terms not otherwise defined herein shall have the
meanings given to such terms in the Agreement.
B. The Company and the Lenders desire to amend the Agreement in certain
respects, all as set forth more particularly herein.
NOW, THEREFORE, in consideration of the foregoing Recitals and for other
good and valuable consideration, the receipt and adequacy of which are hereby
acknowledged, the parties hereto hereby agree as follows:
AGREEMENT
1. Change in Definition of Credit Limit. To reflect the agreement of the
parties to increase the Credit Limit, the definition of "Credit Limit" in
Paragraph 11 of the Agreement is amended by replacing "40,000,000" with
"$70,000,000."
2. Elimination of Right to Elect Reference Rate Loans. To reflect the
agreement of the parties hereto to eliminate the right of the Company to elect
Reference Rate Loans, Paragraphs l (b), (1 (c) and 1(d) of the Agreement are
hereby amended to read in their entirety as follows:
"1(b) Interest Rates Applicable to Loans. All Regular Advances shall be
maintained, at the election of the Company made from time to time as permitted
herein, as Federal Funds Rate Loans, Eurodollar Rate Loans and/or Established
Rate Loans or any combination thereof. All Gestation Advances shall be
maintained, at the election of the Company made from time to time as permitted
herein, as Federal Funds Rate Loans and/or Established Rate Loans.
1(c) Calculation of Interest. The Company shall pay interest on Loans
outstanding hereunder from the date disbursed to but not including the date of
payment calculated on such Lender's Percentage Share of the principal amount of
such Loans outstanding during the interest calculation period, at a rate per
annum equal to, at the option of and as selected by the Company from time to
time (subject to the provisions of Paragraphs 1(e), 1(f), 1(g) and 1(h) below):
(1) with respect to each Loan which is an Established Rate Loan, at the
Applicable Established Rate for the applicable computation period, (2) with
respect to each Loan which is a Eurodollar Loan, at the Applicable Eurodollar
Rate for the applicable Interest Period, and (3) with respect to each Loan which
is a Federal Funds Rate Loan, the Applicable Federal Funds Rate.
1(d) Payment of Interest. Interest accruing on Loans outstanding hereunder
shall be payable directly to each Lender immediately following receipt by the
Company from such Lender of an interest billing therefor. Interest accruing on
Federal Funds Rate Loans and Established Rate Loans shall be payable monthly, in
arrears, as provided in Paragraph 2(d) below; interest accruing on Eurodollar
Loans shall be payable at the end of the applicable Interest Period."
3. Change in Certain Definitions. To reflect the agreement of the
parties, the following definitions set forth in Paragraph 11 of the Agreement
are amended by restating such specified definitions in their respective
entireties as follows:
"Applicable Federal Funds Rate shall mean the Federal Funds Rate plus one
and four-tenths of one percent (1.40%) except that with respect to Gestation
Advances it shall mean the Federal Funds Rate plus three-quarters of one percent
(0.75%).
Eurodollar Spread shall mean, with respect to Loans which are made and/or
maintained as Eurodollar Loans, one and four-tenths of one percent (1.40%).
Federal Funds Rate shall mean the rate per annum on overnight Federal funds
transactions with members of the Federal Reserve arranged by Federal funds
brokers, as made available to and quoted by the Agent on the Business Day and at
the time the Regular Advance or the Gestation Advance to be borrowed at a rate
based on the Federal Funds Rate is requested.
Federal Funds Rate Loans shall mean Regular Advances and/or Gestation
Advances during such time as they are being made and/or maintained at the
Applicable Federal Funds Rate."
4. Change in Definition of Eligible Committed Non-Conforming Mortgage
Loan. To reflect the agreement of the parties to increase the original principal
balance cap from $750,000 to $1,000,000 and to increase the Collateral Value of
Eligible Committed Non-Conforming Mortgage Loans which may be included in the
Borrowing Base, the definition "Eligible Committed Non-Conforming Mortgage Loan"
is hereby amended to restate subparagraphs (e), (f) and (g) of such definition
in their respective entireties as follows:
"(e) The original principal balance of said Mortgage Loan did not exceed
$1,000,000;
(f) If the original principal balance of said Mortgage Loan was greater
than $750,000, the inclusion of said Mortgage Loan in the Borrowing Base was
preapproved in writing by the Agent;
(g) The Collateral Value of said Mortgage Loan when added to the
Collateral Value of all Eligible Committed Non-Conforming Mortgage Loans
included in the Borrowing Base does not exceed one hundred percent (100%) of the
Credit Limit and, if the original principal balance of said Mortgage Loan is
greater than $750,000, the Collateral Value of said Mortgage Loan, when added to
the Collateral Value of all Eligible Committed Non-Conforming Mortgage Loans
whose respective original principal balances are greater than $750,000 and are
included in the Borrowing Base, does not exceed ten percent (10%) of the Credit
Limit; and"
5. Change in Definition of Collateral Value. To reflect the agreement of
the parties to reduce the advance rate applicable to Eligible Committed Non-
Conforming Mortgage Loans whose respective original principal balances are
greater than $750,000 but not in excess of $1,000,000, the definition of
"Collateral Value" is hereby amended to restate subparagraph (a) of such
definition as follows:
"(a) If such Eligible Mortgage Loan is an Eligible Committed Conforming
Mortgage Loan (other than an Eligible Committed HLTV Loan), an Eligible
Committed Non-Conforming Mortgage Loan or an Eligible Gestation Mortgage Loan,
ninety-eight percent (98%), and if such Eligible Mortgage Loan is an Eligible
Committed HLTV Loan, ninety-five percent (95%), and if such Eligible Mortgage
Loan is an Eligible Committed Non-Conforming Mortgage Loan whose original
balance is greater than $750,000 but not in excess of $1,000.000, ninety percent
(90%) of the lesser of: (1) the unpaid principal balance thereof, (2) the
Applicable Take-Out Price multiplied by the unpaid principal balance thereof,
(3) the acquisition price thereof (net of discount and fees associated with
yield), and (4) but only if said Mortgage Loan is an Eligible Committed HLTV
Loan, an Eligible Committed Non-Conforming Mortgage Loan whose original
principal balance is greater than $750,000 but not in excess of $1,000,000, or
is secured by a second priority deed of trust (or mortgage), the Fair Market
Value of said Mortgage Loan:"
6. Year 2000 Compliance. To reflect the agreement of the parties to add a
representation and warranty regarding year 2000 compliance, a new Paragraph 5(m)
is hereby added as follows:
"5(m) Year 2000 Compliance. The Company, has conducted a comprehensive
review and assessment of the Company's computer applications (and made inquiry,
of the Company's key suppliers and vendors with respect to the 'year 2000
problem' (that is, the risk that computer applications may not be able to
properly perform date-sensitive functions after December 31, 1999) and, based on
that review and inquiry, the Company does not believe the year 2000 problem will
result in a material adverse change in the Company's business condition
(financial or otherwise), operations, properties or prospects, or ability to
repay the credit."
7. Additional Event of Default. To reflect the agreement of the parties to
add an additional Event of Default, a new Paragraph 8(1) is hereby added as
follows:
"8(1) A material adverse change occurs, or is reasonably likely to occur,
in the Company's business condition (financial or otherwise), operations,
properties or prospects, or ability to repay the credit."
8. Reaffirmation of Security Agreement. The Company hereby affirms and
agrees that (a) the execution, delivery, and performance by the Company of its
obligations under this Amendment shall not in any way amend, impair, invalidate
or otherwise affect any of the obligations of the Company or the rights of the
Secured Parties under the Security Agreement or any other document or instrument
made or given by the Company in connection therewith, (b) the term "Obligations"
as used in the Security Agreement includes, without limitation, the Obligations
of the Company under the Agreement as amended hereby, and (c) the Security
Agreement remains in full force and effect in that such agreement constitutes a
continuing first priority security interest in and lien upon the Collateral.
Effective Date. This Amendment shall be effective as of the date (the "Effective
Date") upon which:
(a) All parties signatory hereto have executed and delivered this
Amendment to the Agent; and
(b) The Agent has received such board resolutions, incumbency certificates
and other additional documentation as it may' request in connection herewith.
10. No Other Amendment Except as expressly amended herein, the Agreement
and the other Loan Documents (as amended from time to time) shall remain in full
force and effect as currently written.
11. Counterparts. This Amendment may be executed in any number of
counterparts, each of which when so executed shall be deemed to be an original
and all of which when taken together shall constitute one and the same
agreement.
12. Representations and Warranties. The Company hereby represents and
warrants to the Agent, the Lenders and the Collateral Agent as follows:
(a) The Company has the corporate power and authority and the legal
right to execute, deliver and perform this Amendment and all documents,
instruments and agreements executed and delivered by the Company in connection
therewith (collectively, the "Amendment Documents") and has taken all necessary
corporate action to authorize the execution, delivery and performance of the
Amendment Documents. The Amendment Documents have been duly executed and
delivered on behalf of the Company and constitute legal, valid and binding
obligations of the Company, enforceable against the Company in accordance with
their respective terms.
(b) At and as of the date of execution hereof and at and as of the
Effective Date of this Amendment and both prior to and after giving effect to
the Amendment Documents: (1) the representations and warranties of the Company
contained in the Agreement are accurate and complete in all respects, and (2)
there has not occurred an Event of Default or Potential Default under the
Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed as of the day and year first above written.
FIRST MORTGAGE CORPORATION
A California Corporation
By:
Name: Clement Ziroli
Title: President
Percentage Shares: 100%
BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION,
A national banking association as Agent and Lender
By:
Name: Thomas A. Pizurie
Title: Vice President