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EXHIBIT 10.4.b
MODIFICATION AGREEMENT
This Modification Agreement (herein so called), is entered into effective
as of the 1st day of June, 1999, 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, October 31, 1997, January 8, 1998, February 1, 1998, April 2, 1998,
and May 28, 1998 respectively, among the Borrower, Guarantor and Lender ("Credit
Agreement").
Section 1. Recitals. Borrowers, Guarantor, and Lender desire to renew and
extend the Commitment and amend certain other 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, at the time of any determination, the
lesser of (a) the Legal Loan Limit or (b) $25,000,000.00; provided,
however that such amount shall increase up to but not exceeding
$30,000,000.00 to the extent and only to the extent that Lender sells
(it being agreed that Lender has no obligation to sell) up to
$5,000,000.00 in participation interests in the Commitment to one or
more Persons acceptable to the Lender in it sole discretion."
(b) The Revolving Credit Note ("Credit Note") dated June 1, 1999, in
the original principal sum of $30,000,000.00 executed by Borrowers payable
to the order of Lender is given in renewal and extension of the Revolving
Credit Note dated May 28, 1998, in the original principal sum of
$23,000,000.00 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.
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(c) Section 5.13 Net Worth of the Credit Agreement is hereby deleted
in is entirety therefrom and the following is substituted in lieu thereof:
"Section 5.13 Net Worth. Borrowers will maintain a combined
positive Net Worth of not less than (a) $1,200,000.00 from the date
hereof through and including June 29, 1999 and (b) $1,500,000.00 from
June 30, 1999 and thereafter."
(d) The definition of "Termination Date" in Section 1.2 of the Credit
Agreement is hereby deleted in its entirety therefrom and the following is
substituted in lieu thereof:
"'Termination Date' means the earlier to occur of (i) May 31,
2000 or (ii) the date that the Commitment is canceled or terminated
in accordance with this Agreement."
(e) The following sentence is hereby added to Section 4.8 Accounts
and Records. of the Credit Agreement for all purposes:
"Commencing with the fiscal year 1999, Borrowers shall take
whatever steps or actions are necessary to make their respective
fiscal year ending dates end on the same date."
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, 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 Documents. Borrowers and
Guarantor hereby acknowledge, agree, and represent that (i) Borrowers are
indebted to Lender pursuant to the terms of the 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
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 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 (IE., 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 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 may be 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 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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Name: XXX X. XXXXX
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Title: President
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GUARANTOR:
/s/ XXX X. XXXXX
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XXX X. XXXXX
LENDER:
COASTAL BANC, ssb
By:
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XXX XXXX, Vice President
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