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EXHIBIT 10.4.g
MODIFICATION AGREEMENT
This Modification Agreement (herein so called), is entered into effective
as of the 8th day of January, 1998, 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, May 30, 1997, September
8, 1997, and October 1, 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) The definition of "Commitment Limit" in Section 1.2 of the Credit
Agreement is hereby deleted in its entirety therefrom and the following is
substituted in lieu thereof:
""Commitment Limit" means $15,000,000.00."
(b) Section 2.16 Discretionary Advances. of the Credit Agreement is
hereby deleted therefrom and the following is substituted in lieu thereof
for all purposes:
"Section 2.16. Discretionary Advances. Notwithstanding the
Commitment Limit, the Lender shall have the right, but shall not be
obligated, to make Advances requested by either Borrower, which when
added to all Aggregate Advances as of the date of any request are in
excess of the Commitment Limit, in such amounts as such Borrower may
request prior to the Termination Date up to the maximum amount
hereinafter stated and each Borrower may borrow, pay, prepay, in whole
or in part, and reborrow in respect thereof; provided, however, the
aggregate principal amount of all such discretionary Advances shall
not exceed at any one time outstanding the sum of $1,500,000.00
("Discretionary Advances"). Any request for an Advance hereunder by
either Borrower, which when added to all Aggregate Advances as of the
date of such request is in excess of the Line of Credit Commitment,
shall be deemed to be a request for a Discretionary Advance. Each
request for a Discretionary Advance
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made by either Borrower may be approved or denied, with or without
cause, by the Lender in its sole and absolute discretion. Lender's
approval of any request for a Discretionary Advance shall not be
deemed to be a waiver of its right to deny any subsequent request for
a Discretionary Advance, with or without cause, regardless of whether
or not the same circumstances and factors which existed at the time of
Lender's approval of any previous request exist at the time of any
subsequent request. Each Discretionary Advance and all Mortgage Loans
pledged in connection therewith shall be subject to all terms,
conditions, representations, warranties, covenants, and agreements
contained in this Agreement applicable to any Advance hereunder and
any Mortgage Loan pledged to secure the Obligations. Discretionary
Advances, and interest thereon, shall be evidenced by the Note and
shall be due and payable in accordance with the Loan Documents.
Discretionary Advances shall be secured by the Security Instruments
and any and all Collateral heretofore, now or hereafter given by the
Borrowers to secure any of the Obligations."
(c) The Revolving Credit Note ("Credit Note") dated January 8, 1998,
in the original principal sum of $16,500,000.00 executed by Borrowers
payable to the order of Lender is given in renewal and extension of the
Revolving Credit Note dated October 31, 1997, in the original principal sum
of $12,100,000.00 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) The definition of "Aged Mortgage Loan" in Section 1.2 of the
Credit Agreement is hereby deleted in its entirety and the following is
substituted in lieu thereof:
""Aged Mortgage Loan" means (a) an "A" Mortgage Loan or FHA Title
I Mortgage Loan that has been a Pledged Mortgage Loan for more than
120 days; (b) a "B, C, & D" Mortgage Loan that has been a Pledged
Mortgage Loan for more than 60 days; and (c) a Repurchased Mortgage
Loan that has been a Pledged Mortgage Loan for more than 365 days.
(e) The definition of "Collected Balances" is hereby added to Section
1.2 of the Credit Agreement for all purposes:
""Collected Balances" means, for each day during any calendar
month, that month's average daily collected balances of immediately
available sums of money on deposit with Lender in noninterest bearing
trust account or accounts maintained by the Borrowers with Lender for
that month as determined by Lender less
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amounts necessary (a) to satisfy reserve and deposit insurance
requirements allocable to that month and (b) to compensate Lender for
services rendered to the Borrowers for that month, with each element
calculated in accordance with Lender's system of allocating reserve
and deposit insurance requirements and charges for services and as
that system may be changed from time to time without notice. Lender's
determination of the Collected Balances for each day during any month
shall be conclusive and binding on the Borrowers, absent manifest
error."
(f) The definition of "Collected Balances Credit" is hereby added to
Section 1.2 Certain Definitions of the Credit Agreement for all purposes:
""Collected Balances Credit" means, for any month, an amount
equal to the interest that would have been earned by the Borrowers for
the actual days during that month if the Collected Balances for that
month had earned interest during that month equal to the average
weekly interest rate established or quoted by the Lender to be paid on
its commercial money market investment accounts for that month."
(g) Section 4.1(a) Monthly Financial Statements of Borrowers and
Section 4.1(b) Annual Financial Statements of the Company are hereby
deleted in their entirety and the following is substituted in lieu thereof
for all purposes:
"(a) Monthly Financial Statements of Borrowers. As soon as
available but in any event within thirty (30) days after the end of
each calendar month, a Compliance Certificate and the balance sheet of
each Borrower as of the close of such calendar month and the
statements of income, changes in financial position, and surplus of
each Borrower for such calendar month, setting forth, in each case in
comparative form, the figures for the corresponding periods in the
previous fiscal year as well as year-to-date figures, all in such
detail as Lender may reasonably request and accompanied by a statement
of the President or the principal financial officer of each Borrower
certifying that such statements present fairly the financial position
of such Borrower at the close of such period and the results of its
operations for such period.
(b) Annual Financial Statements of Borrowers. As soon as
available but in any event within one hundred twenty (120) days after
the close of each fiscal year of each Borrower, a Compliance
Certificate and the annual audited financial statements of each
Borrower (consisting of at least audited balance sheets of each
Borrower as at the end of such fiscal year and the audited statements
of income, cash flow, retained earnings, and surplus of each Borrower
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for such fiscal year, setting forth, in each case in comparative form,
the figures for the previous fiscal year and accompanied by the report
thereon of independent certified public accountants acceptable to
Lender, which report shall state that such financial statements have
been prepared in accordance with GAAP consistently applied and that
the audit by such accountants in connection with such financial
statements has been made in accordance with generally accepted
auditing standards."
(h) Section 2.20 Non-Usage Fee of the Credit Agreement is hereby
deleted in is entirety therefrom and the following is substituted in lieu
thereof:
"Section 2.20 Non-Usage Fee. At the end of each month during the
term of this Agreement (i.e., from its effective date through the
Termination Date), the Lender shall determine average usage of the
Commitment by calculating the arithmetic daily average of the
outstanding balance of Advances in that month. The Lender shall then
subtract the average usage (the "Used Portion") from the Commitment
Limit (the result being called the "Unused Portion") and the Borrowers
shall pay in arrears (without duplication of payment), on or before
five (5) days after the later of (a) the end of each month or (b) the
Borrowers' receipt of the Lender's xxxx for such monthly period, a
Non-Usage Fee equal to 0.125% per annum on the total amount of the
Unused Portion of the Commitment, as compensation to the Lender for
its agreement to make the Commitment available to the Borrowers during
that month and not as compensation for the use, forbearance or
detention of money (i.e. as a "true commitment fee" under Texas law);
provided that such fee shall be waived for any month if the Used
Portion for such month is equal to or more than $5,000,000.00. Each
calculation by the Lender of the amount of any Non-Usage Fee shall be
conclusive and binding on the Borrowers, absent manifest error."
(i) Section 5.14 Warehouse Borrowings to Net Worth Ratio of the
Credit Agreement is hereby deleted in is entirety therefrom and the
following is substituted in lieu thereof:
"Section 5.14 Warehouse Borrowings to Net Worth Ratio. Borrowers
shall not permit at any time the ratio of their combined Warehouse
Borrowings to their combined Net Worth to exceed 15.0 to 1.0, computed
as of the end of each calendar month."
(j) Section 5.13 Net Worth of the Credit Agreement is hereby deleted
in is entirety therefrom and the following is substituted in lieu thereof:
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"Section 5.13 Net Worth. Borrowers will maintain a combined
positive Net Worth of not less than the greater of (i) the minimum net
worth requirements of FNMA, FHLMC, GNMA, an FHA or (ii)
$1,000,000.00."
(k) The definition of "Basic Rate" in Section 1.2 of the Credit
Agreement is hereby deleted therefrom and the following is substituted in
lieu thereof:
"Basic Rate" means, for any day, (a) with respect to Aggregate
Advances relating to "A" Mortgage Loans and FHA Title I Mortgage Loans
that are not Aged Mortgage Loans, the LIBOR Rate for that day plus
2.50%; (b) with respect to Aggregate Advances relating to "B, C, & D"
Mortgage Loans and Repurchased Mortgage Loans that are not Aged
Mortgage Loans, the LIBOR Rate for that day plus 3.00%; and (c) with
respect to Aggregate Advances relating to Aged Mortgage Loans, the
LIBOR Rate for that day plus 4.00%; PROVIDED, that, for each calendar
month, Borrowers shall receive a credit against interest due and
payable on the Note for any calendar month equal to the Collected
Balances Credit, if any, for such month.
Lender's determination of the Basic Rate on any day shall be
conclusive and binding on the Borrowers, absent manifest error."
(l) Lender shall not be obligated to make Receivables Advances from
and after the date hereof.
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
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, this Modification 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
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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 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
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AGREEMENT ARE NOT SUBJECT TO ANY CLAIMS, OFFSETS, DEFENSES, OR COUNTERCLAIMS OF
ANY NATURE WHATSOEVER.
Section 6. Severability. In the event any one or more provisions contained
in the Credit Agreement or this Modification Agreement should be held to be
invalid, illegal or unenforceable in any 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 Waiver. 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.
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THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
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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