1
EXHIBIT 10.31.1
AMENDMENT NUMBER THREE
to the
Amended and Restated Master Loan and Security Agreement
dated as of March 27, 2000,
Among
HANOVER CAPITAL MORTGAGE HOLDINGS, INC.,
HANOVER CAPITAL PARTNERS, LTD.
and
GREENWICH CAPITAL FINANCIAL PRODUCTS, INC.
This AMENDMENT NUMBER THREE (this "AMENDMENT") is made this 11th day of
April, 2001, among HANOVER CAPITAL MORTGAGE HOLDINGS, INC., HANOVER CAPITAL
PARTNERS, LTD. (each, a "BORROWER" and collectively, the "BORROWERS") and
GREENWICH CAPITAL FINANCIAL PRODUCTS, INC. ("LENDER") to the MASTER LOAN AND
SECURITY AGREEMENT, dated as of March 27, 2000, between Lender and Borrowers, as
otherwise amended (the "LOAN AGREEMENT").
RECITALS
WHEREAS, Borrowers have requested that Lender agree to amend the Loan
Agreement to extend the Termination Date thereunder and the Borrowers and the
Lender have agreed to make such additional modifications as more expressly set
forth below to the Loan Agreement.
WHEREAS, as of the date of this Amendment, Borrowers represent to the
Lender that they are in compliance with all of the representations and
warranties and all of the affirmative and negative covenants set forth in the
Loan Agreement and will not be in default under the Loan Agreement upon the
execution of this Amendment.
NOW THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, and of the mutual covenants herein
contained, the parties hereto hereby agree as follows:
SECTION 1. Effective as of April 11, 2001, the definition of "Applicable
Collateral Percentage" in Section 1 of the Loan Agreement is hereby amended to
read in its entirety as follows:
"APPLICABLE COLLATERAL PERCENTAGE" shall mean, with respect to
Non-Investment Grade Bonds which are rated BB by S&P or Xxxxx'x, 70%; with
respect to Non-Investment Grade Bonds which are rated B by S&P or Xxxxx'x,
60%; and with respect to Non-Investment Grade Bonds which are rated B- by
S&P or Xxxxx'x or which are unrated, 50%.
SECTION 2. Effective as of April 11, 2001, the definition of "Applicable
Margin" in Section 1 of the Loan Agreement is hereby amended to read in its
entirety as follows:
2
-2-
"APPLICABLE MARGIN" shall mean, 1.75% per annum.
SECTION 3. Effective as of April 11, 2001, the definition of "Collateral
Value" in Section 1 of the Loan Agreement is hereby amended to read in its
entirety as follows:
"COLLATERAL VALUE" shall mean, (a) with respect to each Non-Investment
Grade Bond, the Applicable Collateral Percentage of the lesser of (i) the
Market Value of such Non-Investment Grade Bond and (ii) the Purchase Price
Percentage of such Non-Investment Grade Bond multiplied by the outstanding
principal balance of such Non-Investment Grade Bond; provided that the
Collateral Value shall be ZERO for each Non-Investment Grade, as
applicable:
(a) which has a Material Exception with respect thereto which was not
otherwise waived by Lender;
(b) in respect to which there is a breach of any of the representations or
warranties in Schedule 1 hereto; or
(c) which is not an Eligible Bond.
SECTION 4. Effective as of April 11, 2001, the definition of "Maximum
Committed Amount" in Section 1 of the Loan Agreement is hereby amended to read
in its entirety as follows:
"MAXIMUM COMMITTED AMOUNT" shall mean $10,000,000.
SECTION 5. Effective as of April 11, 2001, the definition of "Maximum
Credit" in Section 1 of the Loan Agreement is hereby amended to read in its
entirety as follows:
"MAXIMUM CREDIT" shall mean $10,000,000.
SECTION 6. Effective as of April 11, 2001, the definition of
"Non-Investment Grade Bond Sublimit" in Section 1 of the Loan Agreement is
hereby amended to read in its entirety as follows:
"NON-INVESTMENT GRADE BOND SUBLIMIT" shall mean $10,000,000.
SECTION 7. Effective as of April 11, 2001, the definition of "Termination
Date" in Section 1 of the Loan Agreement is hereby amended to read in its
entirety as follows:
"TERMINATION DATE" shall mean March 28, 2002 or such earlier date on which
this Loan Agreement shall terminate in accordance with the provisions
hereof or by operation of law, as same may be extended in accordance with
Section 2.10 hereof.
SECTION 8. Effective as of April 11, 2001, Section 2.01(e) of the Loan
Agreement is hereby amended to read in its entirety as follows:
3
-3-
(e) Notwithstanding any provision of this Agreement to the contrary, the
Borrowers acknowledge that the Lender shall have no obligation to make any
Advance hereunder which is secured by any Collateral other than
Non-Investment Grade Bonds.
SECTION 9. Effective as of April 11, 2001, Section 3.03 of the Loan
Agreement is hereby amended to read in its entirety as follows:
3.03 COMMITMENT FEE. The Borrowers shall not be required to pay a
Commitment Fee to the Lender pursuant to the terms of this Loan Agreement
for any period following March 27, 2001.
SECTION 10. Effective as of April 11, 2001, Section 3.05 of the Loan
Agreement is hereby amended to read in its entirety as follows:
3.05 NON-USAGE FEE. The Borrowers agree to pay to the Lender, on June 30,
2001, September 30, 2001, December 30, 2001 and March 27, 2002, in addition
to any other fees then payable, a non-usage fee equal to (a) 12.5 basis
points (0.125%) multiplied by (b)(i) the number of days from and including
March 27, 2001 or the previous payment date of such Non-usage Fee up to but
not including the related payment date of such Non-Usage Fee or the
Termination Date, as applicable, during which the unused portion of the
Maximum Committed Amount exceeded $5,000,000, divided by (ii) 360,
multiplied by (c) the average daily amount of the entire unused portion of
the Maximum Committed Amount for the applicable days on which the unused
portion of the Maximum Committed Amount exceeded $5,000,000, such payment
to be made in Dollars, in immediately available funds, without deduction,
set-off, or counterclaim. The Lender may, in its sole discretion, net such
non-usage fee from the proceeds of any Advance made to a Borrower
hereunder.
SECTION 11. Effective as of April 11, 2001, Section 3.06 of the Loan
Agreement is hereby amended to read in its entirety as follows:
3.06 FACILITY FEE. On April 11, 2001, the Borrowers shall pay to the Lender
a facility fee in connection with the extension of the Termination Date
hereunder, equal to $150,000. Such facility fee shall not be subject to
offset or credit against any underwriting fees earned by the Lender at any
time. The extension of the Termination Date to March 28, 2002 shall become
effective upon receipt by the Lender of such facility fee.
SECTION 12. Effective as of April 11, 2001, Section 7.09 of the Loan
Agreement is hereby amended to read in its entirety as follows:
7.09 FINANCIAL CONDITION COVENANTS.
4
-4-
(a) MAINTENANCE OF TANGIBLE NET WORTH. Hanover Capital Holdings shall at
all times maintain Tangible Net Worth of not less than $30,000,000.
(b) MAINTENANCE OF RATIO OF INDEBTEDNESS TO TANGIBLE NET WORTH. With
respect to Hanover Capital Holdings or its Subsidiaries, the ratio of
Indebtedness to Tangible Net Worth shall not at any time be greater
than 9:1.
(c) MAINTENANCE OF LIQUIDITY. Hanover Capital Holdings shall ensure that,
as of the end of each calendar month, it has Cash Equivalents and
unpledged and unencumbered mortgage-backed securities guaranteed by an
agency of the federal government, with an aggregate market value equal
to not less than $5,000,000.
SECTION 13. FEES AND EXPENSES. Borrower agrees to pay to Lender all fees
and out of pocket expenses incurred by Lender in connection with this Amendment
(including all reasonable fees and out of pocket costs and expenses of the
Lender's legal counsel incurred in connection with this Amendment Number Three),
in accordance with Section 11.03 of the Loan Agreement
SECTION 14. DEFINED TERMS. Any terms capitalized but not otherwise defined
herein shall have the respective meanings set forth in the Loan Agreement.
SECTION 15. REPRESENTATIONS. In order to induce the Lender to execute and
deliver this Amendment Number Three, the Borrowers hereby represent to the
Lender that as of the date hereof, after giving effect to this Amendment Number
Three, the Borrowers are in full compliance with all of the terms and conditions
of the Loan Agreement.
SECTION 16. LIMITED EFFECT. Except as expressly amended and modified by
this Amendment, the Loan Agreement shall continue in full force and effect in
accordance with its terms. Reference to this Amendment Number Three need not be
made in the Loan Agreement or any other instrument or document executed in
connection therewith, or in any certificate, letter or communication issued or
made pursuant to, or with respect to, the Loan Agreement, any reference in any
of such items to the Loan Agreement being sufficient to refer to the Loan
Agreement as amended hereby.
SECTION 17. GOVERNING LAW. THIS AMENDMENT NUMBER THREE SHALL BE CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK AND THE OBLIGATIONS,
RIGHTS, AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE
WITH SUCH LAWS WITHOUT REGARD TO CONFLICT OF LAWS DOCTRINE APPLIED IN SUCH
STATE.
SECTION 18. COUNTERPARTS. This Amendment Number Three may be executed by
each of the parties hereto on any number of separate counterparts, each of which
shall be an original and all of which taken together shall constitute one and
the same instrument.
5
-5-
[SIGNATURE PAGE FOLLOWS]
6
IN WITNESS WHEREOF, Borrowers and Lender have caused this amendment to be
executed and delivered by their duly authorized officers as of the day and year
first above written.
HANOVER CAPITAL MORTGAGE
HOLDINGS, INC.
BORROWER
By:
--------------------------------
Name:
------------------------------
Title:
-----------------------------
HANOVER CAPITAL PARTNERS, LTD.
BORROWER
By:
--------------------------------
Name:
------------------------------
Title:
-----------------------------
GREENWICH CAPITAL FINANCIAL
PRODUCTS, INC.,
LENDER
By:
--------------------------------
Name:
------------------------------
Title:
-----------------------------
