EXHIBIT 10.14
FOURTH AMENDMENT
TO
WAREHOUSING CREDIT AND SECURITY AGREEMENT
THIS FOURTH AMENDMENT TO WAREHOUSING CREDIT AND SECURITY AGREEMENT (the
"Amendment") is dated as of the 29th day of December, 1997 by and among PREMIER
MORTGAGE CORPORATION, d/b/a PMC MORTGAGE ("PMC"), RF PROPERTIES CORP. ("RF
Properties"), 66 PROPERTIES CORP. ("66 Properties"), JERICHO PROPERTIES CORP.
("Jericho"), JSF PROPERTIES CORP. ("JSF"), each a corporation organized and
existing under the laws of New York, each having its principal office at 00
Xxxxx Xxxxx Xxxx, Xxxxxx Xxxxxxx, Xxx Xxxx 00000 (RF Properties, PMC, 66
Properties, Jericho and JS are hereinafter collectively referred to as the
"Company" or the "Borrower"), LASALLE NATIONAL BANK, a national banking
association having its principal office at 000 Xxxxx XxXxxxx Xxxxxx, Xxxxxxx,
Xxxxxxxx ("LaSalle") and PNC BANK, NATIONAL ASSOCIATION, successor in interest
by merger to PNC MORTGAGE BANK, NATIONAL ASSOCIATION, having an office at 000
Xxxx Xxxxxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxx 00000 (LaSalle and PNC are
hereinafter collectively referred to as the "Bank" or the "Banks").
WHEREAS, the Banks have extended a commitment to make a certain credit
facility available to Borrower pursuant to that certain Warehousing Credit and
Security Agreement dated as of July 17, 1997, as amended by a First Amendment to
Warehousing Credit and Security Agreement and Notes dated as of August 29, 1997
as amended by a Second Amendment to Warehousing Credit and Security Agreement
and Notes dated as of September 30, 1997 and by a Third Amendment to Warehousing
Credit and Security Agreement ( as so amended, the "Agreement"); and
WHEREAS, the Borrower and Bank have agreed to amend the Agreement in
order to reset certain borrowing sublimits and to make other revisions as set
forth herein.
NOW THEREFORE, in consideration of the foregoing and for other good and
valuable consideration, the receipt of which are hereby acknowledged, the
parties hereto hereby agree as follows:
I. Defined Terms. Capitalized terms contained in this Amendment shall
have the respective meanings herein as such terms have in the
Agreement.
II. Amendments to Agreement. The Agreement is hereby amended as follows:
1. Sections 2.1(c) through 2.1(g) of the Agreement are hereby replaced
with the following new Sections 2.1(c) through 2.1(h):
"2.1(c) With respect to Advances for the origination of Mortgage Loans,
no Advance shall exceed ninety-eight (98%) of the lowest of (i) the
Mortgage Note Amount; (ii) the committed purchase price set forth in the
Purchase Commitment for the related Mortgage Loan which is originated
with the proceeds of such Advance; or (iii) the book value (net
investment) of such Mortgage Loan. Notwithstanding the immediately
preceding sentence, with respect to Advances for the origination of
Nonconforming Mortgage Loans and second-lien Mortgage Loans, no Advance
shall exceed ninety-six percent (96%) of the lowest of (i) the Mortgage
Note Amount; (ii) the committed purchase price set forth in the Purchase
Commitment for the related. Nonconforming Mortgage Loan or second-lien
Mortgage Loan which is originated with the proceeds of such Advance; or
(iii) the book value (net investment) of such Nonconforming Mortgage
Loan or second-lien Mortgage Loan. With respect to Nonconforming
Mortgage Loans and second-lien Mortgage Loans for which Advances have
been outstanding in excess of one hundred twenty (120) days, no Advance
may exceed eighty percent (80%) of (i) the Mortgage Note Amount; (ii)
the committed purchase price set forth in the Purchase Commitment for
the related Nonconforming Mortgage Loan or second-lien Mortgage Loan
which is originated with the proceeds of such Advance; or (iii) the book
value (net investment) of such Nonconforming Mortgage Loan or
second-lien Mortgage Loan. Notwithstanding the immediately preceding
provisions, with respect to Advances for the purchasing and carrying of
Foreclosure Loans, no Advance shall exceed seventy percent (70%) (such
percentage, as adjusted as hereinafter set forth, is referred to as the
"Foreclosure Advance Rate") of the lesser of (x) the appraised value of
the real property subject to the Mortgage or (y) the current outstanding
principal balance for the related Foreclosure Loan. With respect to
Foreclosure Loans for which Advances have been outstanding in excess of
one hundred fifty (150) days, the Foreclosure Advance Rate shall be
fifty percent (50%) of the appraised value of the real property subject
to the Mortgage. With respect to Advances for Repurchase Loans, no
Advance shall exceed seventy percent (70%) of the Mortgage Note Amount
of such Repurchase Loan.
2.1(d) The aggregate amount of Advances made by each Bank for purchasing
and carrying Foreclosure Loans shall not exceed such Bank's Pro Rata
Share of Seven Million Dollars ($7,000,000), at any time, provided,
however, that the aggregate amount of Advances for all Foreclosure Loans
which have been outstanding for in excess of one hundred fifty (150)
days shall not exceed Two Million Dollars ($2,000,000).
2.1(e) Intentionally Omitted.
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2.1(f) The aggregate amount of Advances made by each Bank for Wet
Settlement shall not exceed such Bank's Pro Rata Share of Fifteen
Million Dollars ($15,000,000) at any one time.
2.1(g) The aggregate amount of Advances made by each Bank for
Nonconforming Mortgage Loans and second-lien Mortgage Loans shall not
exceed such Bank's Pro Rata Share of Fifteen Million Dollars
($15,000,000), provided that the aggregate amount which for all such
Mortgage Loans which have been outstanding for in excess of one hundred
twenty (120) days shall not exceed Two Million Dollars ($2,000,000).
2.1(h) The aggregate amount of Advances made by each Bank for purchasing
Repurchase Loans shall not exceed each Bank's Pro-Rata Share of One
Million Dollars ($1,000,000)."
2. Section 2.1(i) of the Agreement is hereby deleted.
3. Section 2.2(c) of the Agreement is hereby amended by replacing the
phrase "five (5) Business Days" the first time it appears with the phrase "seven
(7) Business Days".
4. Section 2.8 of the Agreement is hereby replaced with the following
new Section 2.8.
"Section 2.8 Principal Payments - Advances.
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2.8(a) The outstanding principal amount of each Advance shall be payable
in full upon the earliest to occur of (i) demand, (ii) the occurrence of
any event described in this Section 2.8(c) hereof with respect to such
Advance or (iii) expiration or termination of the Commitment.
2.8(b) The Company shall have the right to prepay the outstanding
Advances in whole or in part, from time to time, without premium or
penalty or advance notice.
2.8(c) The Company shall be obligated to pay to the Banks, without the
necessity of prior demand or notice from the Banks, and the Company
authorizes the Banks to charge its account for, the amount of any
outstanding Advance against a specific Mortgage Loan, upon the
occurrence of any of the following events:
(1) Sixty (60) calendar days elapse from the date the Mortgage Loan
with respect to which the Advance was made was delivered to an Investor
for examination and purchase, without the purchase being made unless an
extension of an additional thirty (30) calendar days is granted by the
Banks in its sole discretion, in which case repayment shall be required
ninety (90) calendar days from the time of the Advance;
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(2) Ten (10) calendar days elapse from the date the Investor rejects
for purchase the Mortgage Loan with respect to which the Advance was made;
(3) One (1) Business Day elapses from the date the Collateral
Documents relating to a Mortgage Loan against which an Advance was made,
were required to be received by the Banks without the actual receipt
thereof, or such Collateral Documents, upon examination by the Banks, are
found not to be in compliance with the requirements of this Agreement or
the related Purchase Commitment;
(4) Ten (10) Business Days elapse from the date a Collateral Document
was delivered to the Company for correction or completion, without being
returned to the Agent;
(5) Except for Foreclosure Loans, a default occurs under the Mortgage
Loan with respect to which such Advance was made and remains uncured for a
period of thirty (30) days;
(6) One hundred twenty (120) days elapse from the date an Advance was
made with respect to a Nonconforming Mortgage Loan or a second-lien
Mortgage Loan, except for up to $2,000,000 in Nonconforming Mortgage Loans
and Second-Lien Mortgage Loans as set forth in Section 2.1(g), in which
case repayment shall be required one hundred fifty (150) days after the
Advance;
(7) One hundred fifty (150) days elapse from the date an Advance was
made with respect to a Foreclosure Loan, except for up to $2,000,000 in
Foreclosure Loans as set forth inSection 2.1(d), in which case repayment
shall be required one hundred eighty (180) days after the Advance;
(8) Two hundred seventy (270) days elapse from the date an Advance was
made with respect to a Repurchase Loan;
(9) There is any amount outstanding with respect to any Mortgage Loan
in excess of the advance rates set forth in Section 2.1(c) or the
sublimits set forth in Sections 2.1(d) through 2.1(h) hereof; or
(10) Upon sale of the Mortgage Loan.
Upon making such payment to the Banks, the Company shall be deemed to have
redeemed such Mortgage Loan from pledge, and the Collateral Documents
relating thereto shall be released by the Agent to the Company or to the
Investor."
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III. Conditions to Effectiveness. The amendments to the Agreement set forth
in Section II of this Amendment shall become effective, as of the date
set forth above, upon satisfaction of each of the following conditions
precedent:
1. The Company and the Banks shall have executed and delivered
counterparts of this Amendment.
2. Xxxxxx Xxxxxxxx and Xxxxxx Xxxxxxxx shall each have delivered to the
Banks a duly executed Acknowledgment of Guarantors in the form attached hereto
as Exhibit A, and otherwise in form and substance satisfactory to the Bank.
3. Each of PMC, RF Properties, 66 Properties, Jericho and JSF shall
have delivered to the Bank an original resolution of each of the Board of
Directors of PMC, RF Properties, 66 Properties, Jericho and JS, authorizing the
execution, delivery and performance of this Amendment, and all other instruments
or documents to be delivered by the Company pursuant to this Amendment, all in
form and substance satisfactory to the Bank.
4. Each of PMC, RF Properties, 66 Properties, Jericho and JSF shall
have delivered to the Bank a Certificate of each of PMC, RF Properties, 66
Properties, Jericho and JSF's secretary or assistant secretary as to the
incumbency and authenticity of the signatures of the officers executing this
Amendment and all other documents to be delivered pursuant hereto.
5. Each of the representations and warranties set forth in Section IV
of this Amendment shall be true and correct on, and as of, the effective date of
this Amendment.
6. The Borrower shall have delivered to the Banks all other
instruments, documents or agreements reasonably necessary or desirable in
connection with this Amendment.
IV. Representations and Warranties. As an inducement to the Banks to enter
into this Amendment, the Company hereby represents and warrants as
follows:
1. After giving affect to this Amendment, each of the representations
and warranties contained in Article V of the Agreement are true and correct.
2. No Event of Default or event which with the giving of notice, the
passage of time, or both, would become an Event of Default has occurred and is
continuing or would result from the execution, delivery and performance by the
Company of this Amendment or the Agreement, as amended hereby.
VII. Miscellaneous.
1. Governing Law. This Amendment shall be a contract made under, and
governed by, the internal laws of the State of Illinois.
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2. Counterparts. This Amendment may be executed in any number of
counterparts, and each such counterpart shall be deemed to be an original, but
all such counterparts shall together constitute but one and the same Amendment.
3. References to Agreement. Except as herein amended, the Agreement and
the shall remain in full force and effect and are hereby ratified in all
respects. On and after the effectiveness of the amendment to the Agreement
contemplated hereby, each reference in the Agreement to "this Agreement,"
"hereunder," "hereof," "herein" or words of like import, shall mean and be a
reference to the Agreement, as amended by this Amendment.
4. Successors, and Assigns. This Amendment shall be binding upon
Company and the Banks and their respective permitted successors and assigns.
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IN WITNESS WHEREOF, the Company and the Banks have executed this
Amendment as of the date and year written above.
PNC BANK, NATIONAL ASSOCIATION
By:_______________________________
Title:____________________________
LASALLE NATIONAL BANK
By:_______________________________
Its:______________________________
PREMIER MORTGAGE CORPORATION
d/b/a PMC MORTGAGE
By: /s/
-------------------------------
Title: President
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RF PROPERTIES CORP.
By: /s/
------------------------------
Title: Vice President
---------------------------
66 PROPERTIES CORP.
By: /s/
------------------------------
Title: Vice President
---------------------------
JERICHO PROPERTIES CORP.
By: /s/
------------------------------
Title: Vice President
---------------------------
JSF PROPERTIES CORP.
By: /s/
------------------------------
Title: Vice President
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