EXHIBIT 10.35
FIRST AMENDMENT TO
CREDIT AGREEMENT
THIS FIRST AMENDMENT TO CREDIT AGREEMENT (the "Amendment") dated as of
August 14, 2000 between CH Mortgage Company I, Ltd., a Texas limited partnership
("Borrower"), U.S. Bank National Association, as agent ("Agent") and Lenders
referred to below ("Lenders").
WITNESSETH THAT:
WHEREAS, the Borrower, the Lenders and the Agent are parties to a
Credit Agreement dated as of August 13, 1999 (the "Credit Agreement"), pursuant
to which the Lenders provide the Borrower with a revolving mortgage warehousing
credit facility;
WHEREAS, the Borrower and the Lenders have agreed to amend the 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 Borrower and the Lenders agree as follows:
1. Certain Defined Terms. Each capitalized term used herein without
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
amended as follows:
(a) The following definitions in Section 1.01 of the Credit
Agreement are hereby amended in their entirety to read as follows:
"Borrower's Consolidated Tangible Net Worth" means, as of
any date, the remainder of (a) all assets of Borrower and the
Restricted Subsidiaries on a Consolidated basis minus (b) the sum
of (i) all GAAP Indebtedness and all Contingent Indebtedness of
Borrower and the Restricted Subsidiaries, (ii) all assets of
Borrower and the Restricted Subsidiaries which would be classified
as intangible assets under GAAP, including Capitalized Servicing
Rights, goodwill (whether representing the excess cost over book
value of assets acquired or otherwise), patents, trademarks, trade
names, copyrights, franchises, deferred charges and intercompany
receivables, (iii) investments in and advances to Unrestricted
Subsidiaries, and (iv) investments in and advances (other than
loans permitted pursuant to Section 6.05(f)) to JV's plus (c) the
Market Value of Borrower's servicing rights.
"Drawdown Termination Date" means the earlier of
August 14, 2001, or the day on which the Notes first become
due and payable in full.
"Majority Lenders" means (i) if there are less than
three Lenders, Lenders collectively having Percentage Shares
totaling in the aggregate one hundred percent (100%); and (ii)
if there are three or more Lenders, Lenders collectively
having Percentage Shares totaling in the aggregate at least
sixty percent (60%).
(b) Section 1.01 of the Credit Agreement is further amended
to add the following definition in the appropriate alphabetical order:
"JV" means a joint venture (whether structured as a
corporation, partnership, limited liability company, or other
entity or arrangement) between the Borrower and one or more
builders, developers, title companies, or other service
providers in the residential real estate industry for the
purpose of making Mortgage Loans.
(c) Section 6.05 of the Credit Agreement is hereby amended
in its entirety to read as follows:
Section 6.05 Loans, Advances, and Investments. Neither
Borrower nor any Restricted Subsidiary shall make any loan
(other than Mortgage Loans), advance, or capital contribution
to, or investment in (including any investment in any
Restricted Subsidiary, joint venture or partnership), or
purchase or otherwise acquire any of the capital stock,
securities, ownership interests, or evidences of indebtedness
of, any Person (collectively, "Investment"), or otherwise
acquire any interest in, or control of, another Person, except
for the following:
(a) Cash Equivalents;
(b) Any acquisition of securities or evidences of
indebtedness of others when acquired by Borrower in settlement
of accounts receivable or other debts arising in the ordinary
course of its business, so long as the aggregate amount of any
such securities or evidences of indebtedness is not material
to the business or condition (financial or otherwise) of
Borrower;
(c) Mortgage Notes acquired in the ordinary course of
Borrower's business;
(d) Investment in any Subsidiary or JV; provided that
at the time any such investment is made and immediately
thereafter, Borrower and the Restricted Subsidiaries are in
compliance with all covenants set forth in the Loan Documents
and no Default or Event of Default shall have occurred and be
continuing;
(e) Loans to officers or employees in an aggregate
amount not to exceed $300,000; and
(f) Loans made to JV's in an amount not to exceed
$10,000,000 at any one time outstanding, secured by Mortgage Loans
originated with the proceeds of such loans and covered by a bona
fide current, unused and unexpired whole loan commitment issued in
favor of and held by such JV made by an Approved Investor or the
Borrower.
(d) Schedule 5 to the Credit Agreement is hereby amended in its
entirety to read as set forth on Schedule 5 hereto.
3. Exiting Lender. On the Effective Date, the aggregate unpaid
principal amount of the Loans made by Hibernia Bank ("Hibernia") under the
Credit Agreement and related Note together with all interest, fees and other
amounts, if any, payable to Hibernia hereunder as of the Effective Date (the
"Payoff Amount"), shall be repaid in full from the proceeds of Loans made by the
remaining Lenders, and the Commitment of Hibernia under the Credit Agreement
shall terminate. The Agent shall distribute to Hibernia by not later than 3:00
P.M. (Minneapolis time) on the Effective Date out of the proceeds of the Loans
made for such purpose, the amount required to pay Hibernia's Payoff Amount in
full, whereupon Hibernia shall no longer be a party to the Credit Agreement.
4. Conditions to Effectiveness of this Amendment. This Amendment
shall become effective when the Agent shall have received at least eight (8)
counterparts of this Amendment, duly executed by the Borrower and all of the
Lenders, provided the following conditions are satisfied:
(a) Before and after giving effect to this Amendment, the
representations and warranties of the Borrower in Article IV of the
Credit Agreement and Section 5 of the Pledge and Security Agreement
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 Default shall have occurred and be continuing.
(c) No material adverse change in the business, assets, financial
condition or prospects of the Borrower shall have occurred since May
31, 1999.
(d) The Agent shall have received the following, each duly
executed or certified, as the case may be, and dated as of the date of
delivery thereof::
(i) a new Note payable to each Lender holding a Commitment
from and after the Effective Date, in the amount of such Lender's
respective Commitment Amount after giving effect to the increase
thereof pursuant to this Amendment (each, a "New Note"), duly
executed by the Company;
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(ii) copy of resolutions of the Board of Directors
of the Borrower, certified by its respective Secretary or
Assistant Secretary, authorizing or ratifying the execution,
delivery and performance of this Amendment;
(iii) a certified copy of any amendment or
restatement of the Articles of Incorporation or the By-laws
of the Borrower made or entered following the date of the most
recent certified copies thereof furnished to the Lenders;
(iv) certified copies of all documents evidencing
any necessary corporate action, consent or governmental or
regulatory approval (if any) with respect to this Amendment;
(v) a certificate of good standing for the Borrower
in the jurisdiction of its incorporation, certified by the
appropriate governmental official as of a date not more than
10 days prior to the Effective Date; and
(vi) such other documents, instruments, opinions and
approvals as the Agent may reasonably request.
(e) The Agent shall have received the amendment fee
required by Section 10.02 of the Credit Agreement.
5. Acknowledgments. The Borrower and each Lender acknowledge
that, as amended hereby, the Credit Agreement remains in full force and effect
with respect to the Borrower and the Lenders, and that each reference to the
Credit Agreement in the Loan Documents shall refer to the Credit Agreement as
amended hereby. The Borrower 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 Borrower represents and
warrants that (i) the execution, delivery and performance of this Amendment is
within its corporate powers and has been duly authorized by all necessary
corporate action; (ii) this Amendment has been duly executed and delivered by
the Borrower and constitutes the legal, valid and binding obligation of the
Borrower, enforceable against the Borrower in accordance with its terms (subject
to limitations as to enforceability which might result from bankruptcy,
insolvency, or other similar laws affecting creditors' rights generally and
general principles of equity) and (iii) no Events of Default or Unmatured Events
of Default exist.
6. General.
(a) The Borrower agrees to reimburse the Agent upon demand for
all reasonable expenses (including reasonable attorneys fees and legal
expenses) incurred by the Agent in the preparation, negotiation and
execution of this Amendment and any other document required to be
furnished herewith, and to pay and save the Lenders harmless from all
liability for any stamp or other taxes which may be payable with
respect to the
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execution or delivery of this Amendment, which obligations of the
Borrower 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 Borrower, the
Lenders, the Agent and their respective successors and assigns, and shall
inure to the benefit of the Borrower, the Lenders, the Agent and the
successors and assigns of the Lenders and the Agent.
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed as of the day and year first above written.
CH MORTGAGE COMPANY I, LTD.
By: CH Mortgage Company GP, Inc.,
its General Partner
By: /s/ James D. Dolph
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James D. Dolph
Senior Vice President
U.S. BANK NATIONAL ASSOCIATION,
as Agent and Lender
By: /s/ Kathleen M. Connor
--------------------------------
Kathleen M. Connor
Vice President
RESIDENTIAL FUNDING CORPORATION
By: /s/ Sam Bryan
--------------------------------
Sam Bryan
Director
HIBERNIA BANK
By: /s/ Susan H. Robinson
--------------------------------
Susan H. Robinson
Senior Vice President
Signature Page to First Amendment to Credit Agreement
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FIRST UNION NATIONAL BANK
By: /s/ Anthony J. Alfieri
----------------------------
Anthony J. Alfieri
Vice President
NATIONAL CITY BANK OF KENTUCKY
By: /s/ Gary W. Sieveking
----------------------------
Gary W. Sieveking
Vice President
Signature Page to First Amendment to Credit Agreement
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