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Exhibit 10.52
AMENDMENT TO CREDIT AGREEMENT
THIS AMENDMENT TO CREDIT AGREEMENT (the "Amendment") is made as of the
5th day of September, 1997, by and among MEGO MORTGAGE CORPORATION, a Delaware
corporation ("Borrower"), THE FIRST NATIONAL BANK OF CHICAGO, a national banking
association ("First Chicago"), in First Chicago's capacity as Agent and Lender
under the "Credit Agreement" (as defined below), BANK UNITED, a federal savings
bank ("Bank United") (First Chicago and Bank United in their capacities as
Lenders being referred to as the "Initial Lenders") and GUARANTY FEDERAL BANK,
F.S.B., a federal savings bank (the "New Lender").
RECITALS
A. Borrower and the Initial Lenders entered into a certain Credit
Agreement dated as of June 20, 1997, as amended by letter agreements dated July
1, 1997 and August 26, 1997 (the "Credit Agreement"). All capitalized terms used
in this Amendment and not otherwise defined herein shall have the meanings
ascribed to such terms in the Credit Agreement.
B. Pursuant to the terms of the Credit Agreement, the Initial Lenders
agreed to provide Borrower with a revolving credit facility in the maximum
amount of $40,000,000. The parties hereto desire to amend the Credit Agreement
in order to, among other things, (i) admit the New Lender as a "Lender" under
the Credit Agreement and increase the maximum amount of the Facility to
$55,000,000, (ii) adjust the respective Percentages of the Lenders, and (iii)
change certain reporting requirements.
NOW, THEREFORE, in consideration of the foregoing Recitals and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as follows:
AGREEMENTS
1. The foregoing Recitals to this Amendment hereby are incorporated into
and made a part of this Amendment.
2. From and after the "Effective Date", as defined below, each of the
Initial Lenders and the New Lender shall be considered a "Lender" under the
Credit Agreement and the Loan Documents. Borrower and the Initial Lenders hereby
consent to the addition of the New Lender as a Lender. From and after the
Effective Date, the New Lender's Commitment and Percentage shall be as shown
below the New Lender's signature block on this Amendment and the Aggregate
Commitment shall be $55,000,000. The adjusted Percentages for the Initial
Lenders are also shown on the signature pages to this Amendment.
3. The "Effective Date" shall be the date on which all of the following
conditions shall have been fulfilled (or waived by the Initial Lenders and New
Lender):
(i) no Default or Event of Default then exists;
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(ii) Borrower shall have executed and delivered to the
Agent or its counsel for delivery to the New Lender a Note in the
amount of such New Lender's Commitment;
(iii) either the Effective Date shall take place on the
last day of an Interest Period or the only Advances outstanding on the
Effective Date shall be Alternate Base Rate Advances or Fed Funds
Advances;
(iv) Borrower shall have executed and delivered, or
caused to be executed and delivered, to the Agent or its counsel (and,
upon receipt from Borrower, the Agent or its counsel shall deliver to
the other Lenders) a certificate dated as of the Effective Date signed
by Borrower (i) confirming that no Default or Event of Default exists
under the Loan Documents; and (ii) representing and warranting that the
Loan Documents are then in full force and effect and that, to the best
of its knowledge, Borrower then has no defenses or offsets to, or
claims or counterclaims relating to, its obligations under the Loan
Documents; and
(v) Borrower shall have paid to the New Lender an
upfront fee equal to one-twentieth of one percent (0.05%) of the New
Lender's Commitment.
If the Effective Date has not occurred by October 1, 1997, any Initial Lender or
the New Lender may, by written notice to all other parties hereto, elect to
terminate this Amendment which thereupon shall have no further force or effect
and the Credit Agreement shall continue as if this Amendment had not been
executed.
4. New Lender, on the Effective Date, agrees to purchase from First
Chicago and Bank United, in equal shares, and First Chicago and Bank United
hereby agree to sell to New Lender in equal shares, without recourse, a portion
of the Obligations equal to the New Lender's Percentage of the then outstanding
principal balance of all Advances then outstanding and held by the Initial
Lenders on the Effective Date prior to the purchase by the New Lender. Such
purchase by the New Lender shall not change the aggregate principal amount of
all Advances outstanding on the Effective Date. Such purchase shall be effected
by wire transfer of immediately available funds in the appropriate amounts to
the Agent for remittance to the Initial Lenders on the Effective Date. Borrower
irrevocably and unconditionally agrees that from and after the Effective Date
the portion of the Obligations so funded by the New Lender shall be evidenced by
and shall be deemed to be an Advance by the New Lender under such New Lender's
Note as of the date of such purchase and shall be treated as such for purposes
of calculating interest and fees accruing from and after the date of such
purchase under the Credit Agreement (as amended by this Amendment). All interest
and fees accruing on such portion of the Obligations prior to the date of such
purchase shall be paid when due to the Agent for remittance to the Initial
Lenders in equal shares.
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5. Article VI of the Credit Agreement is hereby amended as follows:
(i) the words "As soon as available . . .
Qualifying Loan, (ii)" in lines 1-5 of Section 6.1(v) are deleted and
replaced with "Not later than 45 days after the end of each month, a
certificate from an Authorized Officer, with respect to the last day
of such month, as to";
(ii) Section 6.1(vii) is deleted;
(iii) the words ", including a listing of these specific
Eligible Qualifying Loans which become Ineligible Collateral during
such month (or partial month, if requested by the Agent as set forth
above) due to the existence of a past due payment exceeding the time
limit set forth in clause (ii) of the definition of Eligible Qualifying
Loan" are added at the end of Section 6.1(ix); and
(iv) the words ", as of the end of any calendar month,"
are deleted from lines 1-2 of Section 6.17.1 and replaced with the
words ", at any time".
6. Article IX of the Credit Agreement is hereby amended by adding the
following Section at the end thereof:
"9.16 MAXIMUM INTEREST. Notwithstanding the foregoing
paragraphs and all other provisions of this Agreement and the Notes,
none of the terms and provisions of this Agreement or the Notes shall
ever be construed to create a contract to pay to the Lenders for the
use, forbearance or detention of money, interest in excess of the
maximum amount of interest permitted to be charged by the Lenders to
the Borrower under applicable state or federal law from time to time in
effect, and the Borrower shall never be required to pay interest in
excess of such maximum amount. If, for any reason interest is paid
hereon in excess of such maximum amount, then promptly upon any
determination that such excess has been paid the Lenders will, at their
option, either refund such excess to the Borrower or apply such excess
to the principal owing under the Notes."
7. Exhibit G to the Credit Agreement, BORROWING BASE CERTIFICATE, is
hereby amended by deleting the words "except for ineligibility due to
delinquencies which is addressed on an aggregated basis by an adjustment to the
Borrowing Base" from footnote 1 thereto.
8. Except as specifically modified hereby, the Credit Agreement is and
remains unmodified and in full force and effect and is hereby ratified and
confirmed. All references in the Loan Documents to the "Agreement" or the
"Credit Agreement" henceforth shall be deemed to refer to the Credit Agreement
as amended by this Amendment.
9. This Amendment may be executed in any number of counterparts, all of
which taken together shall constitute one agreement, and any of the parties
hereto may execute this Amendment by signing any such counterpart. This
Amendment shall be construed in accordance with the internal laws (and not the
law of conflicts) of the State of Illinois, but giving effect to federal laws
applicable to national banks. This Amendment shall be effective when it has been
executed by Borrower, the Initial Lenders and the New Lender and each party has
notified the Agent by telecopy or telephone that it has taken such action.
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IN WITNESS WHEREOF, the Borrower, the Initial Lenders and the New
Lender have executed this Amendment as of the date first above written.
MEGO MORTGAGE CORPORATION, a
DELAWARE CORPORATION
By:
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Print Name:
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Title:
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0000 Xxxxxxxx Xxxxxx, Xxxxx Xxxxx
Xxxxxxx, Xxxxxxx 00000
Phone: (000) 000-0000
Fax: (000) 000-0000
Attention: Xxxx X. Xxxxx, President
Commitment: $20,000,000 THE FIRST NATIONAL BANK OF CHICAGO,
Commitment Percentage: 36.3636% INDIVIDUALLY AND AS AGENT
Primary Commitment: $15,000,000
Swingline Commitment: $5,000,000
Primary Commitment By:
Percentage: 30.0000% -------------------------------------
Print Name:
------------------------------
Title:
----------------------------------
Xxx Xxxxx Xxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Phone: (000) 000-0000
Fax: (000) 000-0000
Attention:Xxx X. Xxxxxxxxx
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Commitment: $20,000,000 BANK UNITED
Commitment Percentage: 36.3636%
Primary Commitment: $20,000,000
Swingline Commitment: -0- By:
Primary Commitment -------------------------------------
Percentage: 40.0000%
Print Name:
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Title:
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000 Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Phone: (000) 000-0000
Fax: (000) 000-0000
Attention: Xxxx X. Xxxx
Regional Director
Commitment: $15,000,000 GUARANTY FEDERAL BANK, F.S.B.
Commitment Percentage: 27.2728%
Primary Commitment: $15,000,000
Swingline Commitment: -0- By:
Primary Commitment --------------------------------------
Percentage: 30.0000%
Print Name:
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Title:
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0000 Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxx, Xxxxx 00000
Phone: (000) 000-0000
Fax: (000) 000-0000
Attention: Xxxxx Xxxxxxxx
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