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EXHIBIT 10.4.i
MODIFICATION AGREEMENT
This Modification Agreement (herein so called), is entered into
effective as of the 8th day of September, 1997, by and among ALLIED MORTGAGE
CORPORATION, a Texas corporation (the "Company"), ALLIED MORTGAGE CAPITAL
CORPORATION, a Texas corporation ("Capital") (the Company and Capital being
called collectively the "Borrowers" and individually, a "Borrower"), XXX X.
XXXXX ("Guarantor"), and COASTAL BANC ssb ("Lender"). Capitalized terms used but
not defined herein have the meanings assigned to them in that certain Loan
Agreement dated effective as of April 30, 1996, by and among the Borrowers and
Lender, as amended by those certain Modification Agreements dated February 18,
1997 and May 30, 1997, respectively, among the Borrower, Guarantor and Lender
("Credit Agreement").
Section 1. Recitals. Borrowers, Guarantor, and Lender desire to amend
certain provisions of the Credit Agreement. Therefore, Borrowers, Guarantor and
Lender hereby agree as follows, intending to be legally bound:
Section 2. Amendments. The Credit Agreement is hereby amended as
follows:
(a) Each reference to $6,000,000.00 found in the Credit
Agreement is hereby amended to read $9,000,000.00
(b) Each reference to $600,000.00 found in Section 2.16
Discretionary Advances of the Credit Agreement is hereby amended to
read $900,000.00.
(c) The Revolving Credit Note ("Credit Note") dated September
8, 1997, in the original principal sum of $9,900,000.00 executed by
Borrowers payable to the order of Lender is given in renewal and
extension of the Revolving Credit Note dated May 30, 1997, in the
original principal sum of $6,600,000.00 executed by Borrowers payable
to the order of Lender and not in novation or discharge thereof. The
definition of the term "Note" in the Credit Agreement is hereby
amended to mean the Credit Note and all renewals, extensions,
modifications, increases, rearrangements, and replacements thereof.
(d) Section 2.1. Loan. of the Credit Agreement is hereby
deleted therefrom and the following is substituted in lieu thereof for
all purposes:
"Subject to the terms and conditions and relying on the
representations and warranties contained in this Agreement,
Lender agrees to make Advances to either Borrower at any time,
and from time to time, on any Business Day prior to the
Termination Date in such amounts as such Borrower may request
up to but not exceeding the Commitment Limit and each Borrower
may borrow, repay, and reborrow hereunder so long as the
Aggregate Advances at any one time outstanding shall not
exceed the Commitment Limit. No
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Advance shall be made against a Mortgage Loan that is not an
Eligible Mortgage Loan. The amount of any Advance made
hereunder against an Eligible Mortgage Loan shall not exceed
such Eligible Mortgage Loan's Warehouse Line Limit. Lender's
Commitment shall terminate on the Termination Date or such
earlier date pursuant to the terms of this Agreement. All
revolving loans made pursuant to this Section 2.1 and all
payments of principal with respect to all loans under the
Commitment shall be evidenced by notations made by Lender in
its business records. The Aggregate Advances reflected by the
notations made in Lender's business records shall be
conclusive evidence of the principal amount owing and unpaid
on the Note. The Aggregate Advances against "B,C, & D"
Mortgage Loans outstanding at any one time shall not exceed
$4,000,000.00. The Aggregate Advances against FHA Title I
Mortgage Loans outstanding at any one time shall not exceed
$1,000,000.00. The aggregate amount of all Receivables
Advances outstanding at any one time shall not exceed the
Receivables Loan Value. The aggregate amount of all
Repurchased Advances oustanding at any one time shall not
exceed $4,000.00. Notwithstanding anything to the contrary
contained in this Agreement or otherwise, Capital shall not be
permitted at any time to receive any Receivable Advance or
Repurchased Advance hereunder"
Section 3. Representations. Borrowers represent and warrant that all
of the representations and warranties contained in the Credit Agreement and all
instruments and documents executed pursuant thereto or contemplated thereby are
true and correct in all material respects on and as of this date.
Section 4. Continued Force and Effect. Except as specifically amended
herein, all of the terms and conditions of the Credit Agreement and all other
Loan Documents are and remain in full force and effect in accordance with their
respective terms. All of the terms used herein have the same meanings as set out
in the Credit Agreement, unless amended hereby or unless the context clearly
requires otherwise. References in the Credit Agreement to the "Agreement," the
"Loan Agreement," "hereof," "herein" and words of similar import shall be
deemed to be references to the Credit Agreement as amended through the date
hereof. Any reference in the other Loan Documents to the "Agreement," the "Line
of Credit Agreement", "Warehouse Agreement", or the "Loan Agreement" shall be
deemed to be references to the Credit Agreement as amended through the date
hereof. Any reference in the Credit Agreement or the other Loan Documents to
the "Note" shall be deemed references to the Credit Note.
Section 5. ADDITIONAL REPRESENTATIONS. Except as otherwise specified
herein, the terms and provisions hereof shall in no manner impair, limit,
restrict or otherwise affect the obligations of Borrowers, Guarantor, or any
third party to Lender, as evidenced by the Loan Documents. Borrowers and
Guarantor hereby acknowledge, agree, and represent that (i) Borrowers are
indebted to Lender pursuant to the terms of the Credit Note; (ii) the liens,
security interests and assignments created and evidenced by the Loan Documents
are, respectively, first, prior, valid and
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subsisting liens, security interests and assignments against the Collateral and
secure all indebtedness and obligations of Borrowers to Lender under the Credit
Note, the Credit Agreement, all other Loan Documents, as modified herein; (iii)
there are no claims or offsets against, or defenses or counterclaims to, the
terms or provisions of the Loan Documents, and the other obligations created or
evidenced by the Loan Documents; (iv) neither the Borrowers nor the Guarantor
have any claims, offsets, defenses or counterclaims arising from any of the
Lender's acts or omissions with respect to the Loan Documents, or the Lender's
performance under the Loan Documents; (v) the representations and warranties
contained in the Loan Documents are true and correct representations and
warranties of Borrowers, as of the date hereof; (vi) Borrowers promise to pay to
the order of Lender the indebtedness evidenced by the Credit Note according to
the terms thereof; and (vii) Lender is not in default and no event has occurred
which, with the passage of time, giving of notice, or both, would constitute a
default by Lender of Lender's obligations under the terms and provisions of the
Loan Documents. IN CONSIDERATION OF THE MODIFICATION OF CERTAIN PROVISIONS OF
THE LOAN DOCUMENTS, ALL AS HEREIN PROVIDED, AND THE OTHER BENEFITS RECEIVED BY
BORROWERS AND GUARANTOR HEREUNDER, BORROWERS AND GUARANTOR HEREBY RELEASE,
RELINQUISH AND FOREVER DISCHARGE LENDER, ITS PREDECESSORS, SUCCESSORS, ASSIGNS,
SHAREHOLDERS, PRINCIPALS, PARENTS, SUBSIDIARIES, AGENTS, OFFICERS, DIRECTORS,
EMPLOYEES, ATTORNEYS AND REPRESENTATIVES (COLLECTIVELY, THE "LENDER RELEASED
PARTIES"), OF AND FROM ANY AND ALL CLAIMS, DEMANDS, ACTIONS AND CAUSES OF ACTION
OF ANY AND EVERY KIND OR CHARACTER, WHETHER KNOWN OR UNKNOWN, PRESENT OR FUTURE,
WHICH BORROWERS AND GUARANTOR, OR ANY ONE OR MORE OF THEM, HAVE, OR MAY HAVE
AGAINST LENDER RELEASED PARTIES, ARISING OUT OF OR WITH RESPECT TO ANY AND ALL
TRANSACTIONS RELATING TO THE CREDIT AGREEMENT, AND THE OTHER LOAN DOCUMENTS
OCCURRING PRIOR TO THE DATE HEREOF, INCLUDING ANY OTHER LOSS, EXPENSE AND/OR
DETRIMENT, OF ANY KIND OR CHARACTER, GROWING OUT OF OR IN ANY WAY CONNECTED WITH
OR IN ANY WAY RESULTING FROM THE ACTS, ACTIONS OR OMISSIONS OF THE LENDER
RELEASED PARTIES, AND INCLUDING ANY LOSS, COST OR DAMAGE IN CONNECTION WITH ANY
BREACH OF FIDUCIARY DUTY, BREACH OF ANY DUTY OF FAIR DEALING, BREACH OF
COMPETENCE, BREACH OF FUNDING COMMITMENT, UNDUE INFLUENCE, DURESS, ECONOMIC
COERCION, CONFLICT OF INTEREST, NEGLIGENCE, BAD FAITH, MALPRACTICE, VIOLATIONS
OF THE RACKETEER INFLUENCE AND CORRUPT ORGANIZATIONS ACT, INTENTIONAL OR
NEGLIGENT INFLICTION OF EMOTIONAL OR MENTAL DISTRESS, TORTIOUS INTERFERENCE WITH
CORPORATE GOVERNMENTS OR PROSPECTIVE BUSINESS ADVANTAGE, TORTIOUS INTERFERENCE
WITH CONTRACTUAL RELATIONS, BREACH OF CONTRACT, DECEPTIVE TRADE PRACTICES,
LIBEL, SLANDER, CONSPIRACY, THE CHARGING, CONTRACTING FOR, TAKING, RESERVING,
COLLECTING OR RECEIVING OF INTEREST IN EXCESS OF THE HIGHEST LAWFUL RATE
APPLICABLE TO THE LOAN DOCUMENTS (I.E., USURY), ANY VIOLATIONS OF FEDERAL OR
STATE LAW, ANY VIOLATIONS OF FEDERAL OR STATE BANKING RULES, LAWS OR
REGULATIONS, INCLUDING, BUT NOT LIMITED TO, ANY VIOLATIONS OF REGULATION B,
EQUAL CREDIT OPPORTUNITY, BANK TYING ACT CLAIMS, ANY VIOLATION OF THE TEXAS FREE
ENTERPRISE ANTITRUST ACT OR ANY VIOLATION OF FEDERAL ANTITRUST ACTS. GUARANTOR
(i) CONSENTS TO THE TERMS AND PROVISIONS OF THIS MODIFICATION AGREEMENT, (ii)
RATIFIES AND CONFIRMS HIS GUARANTY IS IN FULL FORCE AND EFFECT IN ACCORDANCE
WITH ITS TERMS, AND (iii) ACKNOWLEDGES THAT THE GUARANTY AND ALL OTHER GUARANTY
AGREEMENTS OF THE GUARANTOR EXECUTED IN CONNECTION WITH THE CREDIT AGREEMENT ARE
NOT SUBJECT TO ANY CLAIMS, OFFSETS, DEFENSES, OR COUNTERCLAIMS OF ANY NATURE
WHATSOEVER.
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Section 6. Severability. In the event anyone or more provisions
contained in the Credit Agreement or this Modification Agreement should be
held to be invalid, illegal or unenforceable in an respect, the validity,
enforceability and legality of the remaining provisions contained herein and
therein shall not be affected in any way or impaired thereby and shall be
enforceable in accordance with their respective terms.
Section 7. Expenses. Borrowers agree to pay all out-of-pocket costs
and expenses of Lender in connection with the preparation, operation,
administration and enforcement of this Modification Agreement.
Section 8. Acknowledgment. Except as amended hereby, Borrowers ratify
and confirm that the Security Instruments and all other Loan Documents are and
remain in full force and effect in accordance with their respective terms and
that all Collateral is unimpaired by this Modification Agreement and secures
the payment and performance of all indebtedness and obligations of Borrowers
under the Note, the Credit Agreement, and all other Loan Documents, as modified
hereby. Each of the undersigned officers of Borrowers executing this
Modification Agreement represents and warrants that he has full power and
authority to execute and deliver this Modification Agreement on behalf of
Borrowers that such execution and delivery has been duly authorized and that
the resolutions and affidavits previously delivered to Lender, in connection
with the execution and delivery of the Credit Agreement, are and remain in full
force and effect and have not been altered, amended or repealed in anywise.
Section 9. No Waive. Borrowers agree that no Event of Default and no
Default has been waived or remedied by the execution of this Modification
Agreement by Lender, and any such Default or Event of Default heretofore
arising and currently continuing shall continue after the execution and
delivery hereof.
Section 10. Governing Law. This Modification Agreement shall be
governed by and construed in accordance with the laws of the State of Texas
and, to the extent applicable, by federal law.
Section 11. Counterparts. This Modification Agreement maybe executed
in any number of counterparts and all of such counterparts taken together shall
be deemed to constitute one and the same instrument.
Section 12. NO ORAL AGREEMENTS. THIS WRITTEN MODIFICATION AGREEMENT,
THE CREDIT AGREEMENT, THE CREDIT NOTE, THE GUARANTY, AND THE OTHER LOAN
DOCUMENTS, AS MODIFIED HEREBY, REPRESENT THE FINAL AGREEMENT BETWEEN THE
PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR
ORAL AGREEMENTS OF THE PARTIES.
THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
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EXECUTED and effective as of the dates first written above.
BORROWERS:
ALLIED MORTGAGE CORPORATION,
a Texas corporation
By: /s/ XXX X. XXXXX
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XXX X. XXXXX, President
ALLIED MORTGAGE CAPITAL CORPORATION,
a Texas corporation
By: /s/ XXX X. XXXXX
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XXX X. XXXXX, Vice President
GUARANTOR:
/s/ XXX X. XXXXX
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XXX X. XXXXX
LENDER:
COASTAL BANC ssb
By: /s/ XXX XXXX
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XXX XXXX, Vice President
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