EXHIBIT 10.7
FOURTH AMENDMENT TO
-------------------
CREDIT AND SECURITY AGREEMENT
-----------------------------
THIS FOURTH AMENDMENT TO CREDIT AND SECURITY AGREEMENT (this "Amendment") is
entered into as of this 15th day of November 1998, by and between THE WMF GROUP,
LTD., a Delaware corporation ("WMF Group"); WMF WASHINGTON MORTGAGE CORP., a
Delaware corporation ("Washington"); WMF/XXXXXXX, XXXXX ASSOCIATES LIMITED, a
Delaware corporation ("Xxxxxxx"); WMF XXXXXXX, LTD., a Michigan corporation
("Xxxxxxx"); THE XXXXXX X. XXXXXX COMPANY, a Texas corporation ("Xxxxxx"); THE
XXXXXX X. XXXXXX COMPANY-ARIZONA, an Arizona corporation ("Xxxxxx-Arizona"); and
WMF CARBON MESA ADVISORS, INC., a Delaware corporation ("Carbon Mesa"); (WMF
Group, Washington, Huntoon, Proctor, Wilson, Xxxxxx-Arizona, Carbon Mesa and any
other Subsidiary of WMF Group that may at any time hereafter become a party to
the Agreement are hereafter collectively referred to as the "Borrowers"),
RESIDENTIAL FUNDING CORPORATION, a Delaware corporation ("RFC"), BANK UNITED, a
federal savings bank ("Bank United"), PNC BANK, N.A., a national banking
association ("PNC"); (RFC, Bank United, PNC and any Additional Lender that may
at any time hereafter become party hereto are hereafter referred to as the
"Lenders"), and RFC as credit agent for the Lenders (in such capacity, the
"Credit Agent").
WHEREAS, the Borrowers, the Lenders and the Credit Agent have entered into a
revolving warehouse facility with a present Warehouse Commitment Limit of One
Hundred Fifty Million Dollars ($150,000,000) (the "Warehousing Commitment") and
a Servicing Facility Credit Limit of Fifty Million, Seven Hundred Eleven
Thousand Seven Hundred Forty-Four Dollars ($50,711,744) (the "Servicing Facility
Commitment"), as evidenced by a Credit and Security Agreement (Syndicated
Agreement) dated December 5, 1997, as the same may have been amended or
supplemented (the "Agreement");
WHEREAS, the Borrowers have requested the Lenders to temporarily increase the
Warehousing Commitment and amend certain terms of the Agreement, and the Lenders
have agreed to such temporary increase and amendment subject to the terms and
conditions of this Amendment;
NOW, THEREFORE, for and in consideration of the foregoing and of the mutual
covenants, agreements and conditions hereinafter set forth and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto hereby agree as follows:
1. All capitalized terms used herein and not otherwise defined shall have
their respective meanings set forth in the Agreement.
2. The effective date ("Effective Date") of this Amendment shall be November
15, 1998, provided that the Borrowers have complied with all the terms and
conditions of this Amendment.
3. Section 1.1 of the Agreement shall be amended by adding the following
definition in the appropriate alphabetical order:
"Temporary Increase Rate" means a floating rate of interest which is
-----------------------
equal to 1.50% per annum over LIBOR. The Temporary Increase Rate will be
adjusted as of the effective date of each weekly change in LIBOR. The
Credit Agent's determination of the Temporary Increase Rate as of any date
of determination shall be conclusive and binding, absent manifest error.
4. Section 1.1 of the Agreement shall be amended to delete the following
definition in its entirety, replacing it with the following
-1-
definition:
"Ordinary Warehousing Rate" means a floating rate of interest which is
-------------------------
equal to 1.00% per annum over LIBOR. The Ordinary Warehousing Rate will be
adjusted as of the effective date of each weekly change in LIBOR. The
Credit Agent's determination of the Warehousing Rate as of any date of
determination shall be conclusive and binding, absent manifest error.
5. For the period from November 15, 1998 through the earlier of (i) the date
of repayment in full of the Advances against the Mortgage Loans described on
Schedule I hereto (the "Scheduled Loans") is required under the Agreement and
(ii) January 15, 1999, the Warehousing Credit Limit shall be $400,000,000 and
RFC's Maximum Warehousing Commitment shall be $366,600,000. Notwithstanding
anything to the contrary set forth in the Agreement:
(a) Warehousing Advances during such period shall be made by the Lenders
holding Warehousing Commitments (i) ratably, based on (A) in the case of
RFC, $116,600,000 ("RFC's Permanent Warehousing Commitment") and (B) in the
case of the other Lenders holding Warehousing Commitments, their respective
Maximum Warehousing Commitments, until such amounts are fully advanced, and
(ii) thereafter, by RFC only up to the amount of its Maximum Warehousing
Commitment; and
(b) As long as the maturity of the Warehousing Commitments has not been
accelerated pursuant to Section 8.2 of the Agreement, payments received by
the Credit Agent in respect of the principal amount of Warehousing Advances
outstanding shall be applied first, to Warehousing Advances made by RFC to
the extent the outstanding principal balance thereof exceeds the RFC
Permanent Warehousing Commitment, and thereafter, to the remaining
Warehousing Advances outstanding, ratably among the Lenders holding
Warehousing Commitments.
On the earlier of January 16, 1999 or the date repayment of the Advances against
the Scheduled Loans is required under the Agreement, the amount by which the
outstanding principal balance of Warehousing Advances exceeds the Warehousing
Credit Limit (as reduced by the expiration of the temporary increase provided
for in this paragraph 5 shall be due and payable to RFC.
6. As of the Effective Date of this Amendment, no further Warehousing
Advances shall be made against Uncommitted Mortgage Loans, and no further
Servicing Facility Advances shall be made.
7. Notwithstanding anything in Section 2.8(a) of the Agreement to the
contrary, except as provided in Section 2.8(f) or Section 2.8(g) of the
Agreement, all outstanding Warehousing Advances against Mortgage Loans covered
by a Purchase Commitment shall bear interest at a rate equal to (a) in an amount
up to the sum of RFC's Permanent Warehousing Commitment plus the Maximum
Warehousing Commitments of the other Lenders holding Warehousing Commitments
minus the aggregate amount of Warehousing Advances outstanding against
Uncommitted Mortgage Loans (the "Combined Warehousing Commitments"), at the
Ordinary Warehousing Rate, and (b) to the extent the aggregate amount of such
Advances exceed the Combined Warehousing Commitments, at the Temporary Increase
Rate. All Warehousing Advances bearing interest at the Temporary Increase Rate
shall be deemed to have been made by RFC.
8. Section 2.9(k) shall be deleted in its entirety and the following section
shall be substituted in lieu thereof:
2.9(k) If at any time the aggregate outstanding principal balance of all
Servicing Facility Advances exceeds the lesser of (i) seventy percent (70%)
of the Servicing Collateral Value of the
-2-
Pledged Servicing Contracts or (ii) sixty percent (60%) of the Appraisal
Value of the Pledged Servicing Contracts, adjusted to account for Servicing
Contracts sold, created or acquired since the date of the most recent
Appraisal in accordance with the methodology of such Appraisal, the
Borrowers shall prepay the outstanding Servicing Facility Advances in the
amount of such excess.
9. The Second Amended and Restated Promissory Note payable to RFC is amended
and restated in its entirety as set forth in the Third Amended and Restated
Warehousing Promissory Note, in the form of Exhibit A-1 attached to this
-----------
Amendment. All references in this Amendment and in the Agreement to the
Warehousing Promissory Note payable to RFC shall be deemed to refer to the Third
Amended and Restated Warehousing Promissory Note delivered in connection with
this Amendment.
10. The Borrowers shall deliver to the Credit Agent (a) an original of this
Amendment, executed by the Borrowers and all of the Lenders; (b) an executed
Third Amended and Restated Warehousing Promissory Note payable to RFC; (c) an
executed Certificate of Secretary with corporate resolutions for each Borrower;
(d) the minimum amendment fee required pursuant to Section 13.5(b) of the
Agreement for each Lender; (e) for the account of RFC, a Warehousing Commitment
Fee on the temporary increase in the amount of $51,370; (f) for the account of
RFC, a temporary increase fee of $250,000; and (g) a $500 document production
fee.
11. The Borrowers represent, warrant and agree that (a) except as set forth
in the Lenders' letters to the Borrowers dated August 31, 1998, October 13, 1998
and November 13, 1998, and the Borrowers' letter to the Lenders dated September
3, 1998, there exists no Default or Event of Default under the Loan Documents,
(b) the Loan Documents continue to be the legal, valid and binding agreements
and obligations of the Borrowers enforceable in accordance with their terms, as
modified herein, (c) the Lenders are not in default under any of the Loan
Documents and the Borrowers have no offset or defense to their performance or
obligations under any of the Loan Documents, (d) the representations contained
in the Loan Documents remain true and accurate in all respects, and (e) there
has been no material adverse change in the financial condition of the Borrowers
from the date of the Agreement to the date of this Amendment.
12. Except as hereby expressly modified, the Agreement shall otherwise be
unchanged and shall remain in full force and effect, and the Borrowers ratify
and reaffirm all of its obligations thereunder.
13. The Borrowers shall pay all reasonable out-of-pocket costs and expenses
of the Credit Agent (including, without limitation, the reasonable fees and
service charges of Xxxxxx & Whitney LLP, counsel to the Credit Agent) in
connection with this Amendment.
14. This Amendment may be executed in any number of counterparts and by the
different parties hereto on separate counterparts, each of which when so
executed and delivered shall be an original, but all of which shall together
constitute one and the same instrument.
-3-
IN WITNESS WHEREOF, the Borrowers and the Lenders have caused this Amendment
to be duly executed on their behalf by their duly authorized officers as of the
day and year above written.
BORROWERS:
THE WMF GROUP, LTD.,
a Delaware corporation
By:/s/ Xxxxxxx X. Xxxxxxx
----------------------
Its: Executive Vice President
-------------------------
WMF WASHINGTON MORTGAGE CORP.,
a Delaware corporation
By:/s/ Xxxxxxx X. Xxxxxxx
----------------------
Its: Executive Vice President
-------------------------
WMF/XXXXXXX, XXXXX ASSOCIATES
LIMITED, a Delaware corporation
By:/s/ Xxxxxxx X. Xxxxxxx
----------------------
Its: Executive Vice President
-------------------------
WMF XXXXXXX, LTD.,
a Michigan corporation
By:/s/ Xxxxxxx X. Xxxxxxx
----------------------
Its: Executive Vice President
-------------------------
THE XXXXXX X. XXXXXX COMPANY,
a Texas corporation
By:/s/ Xxxxxxx X. Xxxxxxx
----------------------
Its: Executive Vice President
-------------------------
-4-
THE XXXXXX X. XXXXXX COMPANY-ARIZONA
an Arizona corporation
By:/s/ Xxxxxxx X. Xxxxxxx
----------------------
Its: Executive Vice President
-------------------------
WMF CARBON MESA ADVISORS, INC.,
a Delaware corporation
By:/s/ Xxxxxxx X. Xxxxxxx
----------------------
Its: Executive Vice President
-------------------------
STATE OF Virginia )
) ss
COUNTY OF Fairfax )
On December 3, 1998, before me, a Notary Public, personally appeared
Xxxxxxx X. Xxxxxxx, the Executive Vice President of THE WMF GROUP, LTD., a
Delaware corporation, personally known to me (or proved to me on the basis of
satisfactory evidence) to be the person whose name is subscribed to the within
instrument and acknowledged to me that he/she executed the same in his/her
authorized capacity, and that by his/her signature on the instrument the person,
or the entity upon behalf of which the person acted, executed the instrument.
WITNESS my hand and official seal.
/s/ Xxxxxx X. Xxxx
------------------------------
Notary Public
(SEAL) My Commission Expires: 2-28-99
-5-
STATE OF Virginia )
) ss
COUNTY OF Fairfax )
On December 3, 1998, before me, a Notary Public, personally appeared Xxxxxxx
X. Xxxxxxx, the Executive Vice President of WMF WASHINGTON MORTGAGE CORP., a
Delaware corporation, personally known to me (or proved to me on the basis of
satisfactory evidence) to be the person whose name is subscribed to the within
instrument and acknowledged to me that he/she executed the same in his/her
authorized capacity, and that by his/her signature on the instrument the person,
or the entity upon behalf of which the person acted, executed the instrument.
WITNESS my hand and official seal.
/s/ Xxxxxx X. Xxxx
------------------------------
Notary Public
(SEAL) My Commission Expires: 0-00-00
XXXXX XX Xxxxxxxx )
) ss
COUNTY OF Fairfax )
On December 3, 1998, before me, a Notary Public, personally appeared Xxxxxxx
X. Xxxxxxx, the Executive Vice President of WMF/XXXXXXX, XXXXX ASSOCIATES
LIMITED, a Delaware corporation, personally known to me (or proved to me on the
basis of satisfactory evidence) to be the person whose name is subscribed to the
within instrument and acknowledged to me that he/she executed the same in
his/her authorized capacity, and that by his/her signature on the instrument the
person, or the entity upon behalf of which the person acted, executed the
instrument.
WITNESS my hand and official seal.
/s/ Xxxxxx X. Xxxx
------------------------------
Notary Public
(SEAL) My Commission Expires: 2-28-99
-6-
STATE OF Virginia )
) ss
COUNTY OF Fairfax )
On December 3, 1998, before me, a Notary Public, personally appeared Xxxxxxx
X. Xxxxxxx, the Executive Vice President of WMF XXXXXXX, LTD., a Michigan
corporation, personally known to me (or proved to me on the basis of
satisfactory evidence) to be the person whose name is subscribed to the within
instrument and acknowledged to me that he/she executed the same in his/her
authorized capacity, and that by his/her signature on the instrument the person,
or the entity upon behalf of which the person acted, executed the instrument.
WITNESS my hand and official seal.
/s/ Xxxxxx X. Xxxx
------------------------------
Notary Public
(SEAL) My Commission Expires: 0-00-00
XXXXX XX Xxxxxxxx )
) ss
COUNTY OF Fairfax )
On December 3, 1998, before me, a Notary Public, personally appeared Xxxxxxx
X. Xxxxxxx, the Executive Vice President of THE XXXXXX X. XXXXXX COMPANY, a
Texas corporation, personally known to me (or proved to me on the basis of
satisfactory evidence) to be the person whose name is subscribed to the within
instrument and acknowledged to me that he/she executed the same in his/her
authorized capacity, and that by his/her signature on the instrument the person,
or the entity upon behalf of which the person acted, executed the instrument.
WITNESS my hand and official seal.
/s/ Xxxxxx X. Xxxx
------------------------------
Notary Public
(SEAL) My Commission Expires: 2-28-99
-7-
STATE OF Virginia )
) ss
COUNTY OF Fairfax )
On December 3, 1998, before me, a Notary Public, personally appeared Xxxxxxx
X. Xxxxxxx, the Executive Vice President of THE XXXXXX X. XXXXXX COMPANY-
ARIZONA, an Arizona corporation, personally known to me (or proved to me on the
basis of satisfactory evidence) to be the person whose name is subscribed to the
within instrument and acknowledged to me that he/she executed the same in
his/her authorized capacity, and that by his/her signature on the instrument the
person, or the entity upon behalf of which the person acted, executed the
instrument.
WITNESS my hand and official seal.
/s/ Xxxxxx X. Xxxx
-----------------------------------
Notary Public
(SEAL) My Commission Expires:2-28-99
STATE OF Virginia )
) ss
COUNTY OF Fairfax )
On December 3, 1998, before me, a Notary Public, personally appeared Xxxxxxx
X. Xxxxxxx, the Executive Vice President of WMF CARBON MESA ADVISORS, INC., a
Delaware corporation, personally known to me (or proved to me on the basis of
satisfactory evidence) to be the person whose name is subscribed to the within
instrument and acknowledged to me that he/she executed the same in his/her
authorized capacity, and that by his/her signature on the instrument the person,
or the entity upon behalf of which the person acted, executed the instrument.
WITNESS my hand and official seal.
/s/ Xxxxxx X. Xxxx
-----------------------------------
Notary Public
(SEAL) My Commission Expires:2-28-99
-8-
CREDIT AGENT:
RESIDENTIAL FUNDING CORPORATION,
a Delaware corporation
By:/s/ Xxxx X. Xxxxxxx
--------------------------------
Its: Director
LENDERS:
Permanent Warehousing RESIDENTIAL FUNDING CORPORATION,
Commitment: $116,600,000
Temporary Maximum Warehousing By:/s/ Xxxx X. Xxxxxxx
Commitment: $366,600,000 -------------------------------
Its: Director
Maximum Servicing Facility
Commitment: $22,313,167
STATE OF Maryland )
) ss
COUNTY OF Xxxxxxxxxx )
On December 7th, 1998 before me, a Notary Public, personally appeared Xxxx
X. Xxxxxxx, the Director of RESIDENTIAL FUNDING CORPORATION, a Delaware
corporation, personally known to me (or proved to me on the basis of
satisfactory evidence) to be the person whose name is subscribed to the within
instrument and acknowledged to me that he/she executed the same in his/her
authorized capacity, and that by his/her signature on the instrument the person,
or the entity upon behalf of which the person acted, executed the instrument.
WITNESS my hand and official seal.
/s/ Xxxxxx X. Xxxxx
-----------------------------------
Notary Public
(SEAL) My Commission Expires:11/01/00
-9-
STATE OF Maryland )
) ss
COUNTY OF Xxxxxxxxxx )
On December 7th, 1998, before me, a Notary Public, personally appeared
Xxxx X. Xxxxxxx the Director of RESIDENTIAL FUNDING CORPORATION, a
Delaware corporation, personally known to me (or proved to me on the basis of
satisfactory evidence) to be the person whose name is subscribed to the within
instrument and acknowledged to me that he/she executed the same in his/her
authorized capacity, and that by his/her signature on the instrument the person,
or the entity upon behalf of which the person acted, executed the instrument.
WITNESS my hand and official seal.
/s/ Xxxxxx X. Xxxxx
-----------------------------------
Notary Public
(SEAL) My Commission Expires: 11/01/00
-10-
Maximum Warehousing BANK UNITED, a federal savings bank
Commitment: $33,400,000
Maximum Servicing Facility By: /s/ Xxxxxxx Hatteman
Commitment: $10,613,701 --------------------------------
Its: ______________________________
STATE OF Texas )
) ss
COUNTY OF Xxxxxx )
On November 30, 1998, before me, a Notary Public, personally appeared
Xxxxxxx Hatteman, the _________________ of BANK UNITED, a federal
savings bank, personally known to me (or proved to me on the basis of
satisfactory evidence) to be the person whose name is subscribed to the within
instrument and acknowledged to me that he/she executed the same in his/her
authorized capacity, and that by his/her signature on the instrument the person,
or the entity upon behalf of which the person acted, executed the instrument.
WITNESS my hand and official seal.
/s/ Xxxxxxxx X. X'Xxxxx
-----------------------------------
Notary Public
(SEAL) My Commission Expires: 9-30-00
-11-
Maximum Warehousing PNC BANK, N.A.,
Commitment: $0.00 a national banking association
By: /s/ Xxxxxx Xxxxxxx
---------------------------------
Maximum Servicing Facility Its: Vice President
Commitment: $16,734,875 --------------------------------
Notice Address:
000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxxxxx, XX 00000
Attention: Xxxxxx Xxxxxxx,
Vice President
Telecopier No.: (000) 000-0000
STATE at Large )
--------------
) ss
COUNTY OF ______________ )
On December 3, 1998, before me, a Notary Public, personally appeared Xxxxxx
Xxxxxxx, the V.P. of PNC BANK, N.A., a national banking association personally
known to me (or proved to me on the basis of satisfactory evidence) to be the
person whose name is subscribed to the within instrument and acknowledged to me
that he/she executed the same in his/her authorized capacity, and that by
his/her signature on the instrument the person, or the entity upon behalf of
which the person acted, executed the instrument.
WITNESS my hand and official seal.
/s/ Xxx X. Xxxxx
-----------------------------------
Notary Public
(SEAL) My Commission Expires: 6-30-02
-12-