FIRST AMENDMENT
TO
MORTGAGE LOAN WAREHOUSING AGREEMENT
First Amendment, dated as of August 24, 1998 to the Mortgage Loan
Warehousing Agreement, dated as of June 30, 1998 (the "Loan Agreement"), by and
among HomeGold, Inc., a South Carolina corporation (the "HomeGold"), Carolina
Investors, Inc., a South Carolina corporation ("Carolina" and together with
HomeGold, each a "Borrower" and collectively, the "Borrowers"), the lenders
listed on Schedule I hereto under the captions "Continuing Lenders" (the
"Continuing Lenders") and "Additional Lenders" (the "Additional Lenders" and
together with the Continuing Lenders, each a "Lender" and collectively the
"Lenders"), and The CIT Group/Business Credit, Inc., as administrative agent for
the Lenders (in such capacity, the "Agent").
The Borrowers, the Lenders and the Agent desire to (i) add the
Additional Lenders as parties to the Loan Agreement and (ii) amend certain other
terms and conditions hereafter set forth. In addition, the Continuing Lenders
wish to assign a portion of their interests in the Total Commitment and the
Loans outstanding under the Loan Agreement to the Additional Lenders and the
Additional Lenders wish to accept such assignments.
Accordingly, the Borrowers, the Agent and the Lenders hereby
agree as follows:
1. Definitions. All capitalized terms used herein and not
otherwise defined herein are used herein as defined in the Loan Agreement.
2. Wet Mortgage Loan Sublimit. Article XI to the Loan Agreement
is hereby amended to include a defined term of "Wet Mortgage Loan Sublimit"
therein to read as follows:
"'Wet Mortgage Loan Sublimit' shall mean, at the time of
determination, the maximum amount of Wet Mortgage Loans that qualify for
inclusion in the Borrowing Base, as determined in accordance with the
proviso to subparagraph (n) of the definition of 'Eligible Mortgage
Loan'."
3. Majority Lenders. The definition of the term "Majority
Lenders" set forth in Article XI to the Loan Agreement is hereby amended in its
entirety to read as follows:
"'Majority Lenders' shall mean (i) prior to the occurrence
of an Event of Default, those Lenders holding sixty-six and two-thirds
percent (66-2/3%) of the Total Commitment, and (ii) after the occurrence
and during the continuance of an Event of Default, those Lenders holding
sixty-six and two-thirds percent (66-
2/3%) of the Loans outstanding under the Agreement, provided that, with
respect to (i) and (ii) above, until such time as the Pro Rata Share of
CIT is less than sixty-six and two-thirds percent (66-2/3%), CIT shall
not constitute the Majority Lender without being joined by one
additional Lender.
4. Amendments and Waivers. Section 10.03 of the Loan Agreement is
hereby amended by deleting the reference to "Section 10.08" set forth in clause
(v) of Section 10.03 and substituting in its place a reference to "Section
9.08".
5. Confidentiality. Section 10.15 of the Loan Agreement is hereby
amended by deleting the third sentence thereof and substituting in its place the
following:
"Subject to the other provisions of this Section 10.15,
each Lender and the Administrative Agent may disclose confidential
information to its Affiliates or any of its officers, directors,
employees, attorneys, accountants or other professionals engaged by any
Lender, its Affiliates or the Administrative Agent only after
determining that such third party has been instructed to hold such
information in confidence to the same extent as if it were a Lender."
6. Assignments. (a) On and as of the Amendment Effective Date (as
hereinafter defined), each of the Continuing Lenders shall assign and each of
the Additional Lenders shall purchase, at the principal amount thereof, such
interests in the Loans outstanding on such date as shall be necessary in order
that, after giving effect to all such assignments and purchases, the Loans
outstanding will be held by the Lenders ratably in accordance with their Pro
Rata Shares in the Total Commitment, as set forth in Annex I to this Amendment.
Such assignments and purchases shall be without recourse, representation or
warranty, except that (i) each Continuing Lender represents that it is the legal
and beneficial owner of the interests assigned by it free and clear of any Lien
and (ii) paragraphs 2 (other than clauses (i) and (v) of the first paragraph
thereof), 4 and 5 of Exhibit F to the Loan Agreement are hereby incorporated by
reference as if set forth herein and each Continuing Lender shall be deemed to
have made the representations, warranties and statements of Assignor in such
paragraphs and each Additional Lender shall be deemed to have made the
representations, warranties and statements of Assignee in such paragraphs.
(b) On the Amendment Effective Date (i) the Additional
Lenders shall pay the purchase price for the Loans purchased by it pursuant to
paragraph (a) of this Section 6 by wire transfer of immediately available funds
to the Agent in New York, New York, not later than 12:00 noon, New York City
time, and (ii) the Agent shall promptly pay to each Continuing Lender, out of
the amounts received by it pursuant to clause (i) of this paragraph (b), the
purchase price for the interests assigned by it pursuant to such paragraph (a)
by wire transfer of immediately available funds to an account designated by such
Lender.
(c) The Borrowers hereby consent to the assignments and
purchases provided for in paragraphs (a) and (b) of this Section 6 and agree
that each Additional Lender shall have all of the rights of a Lender under the
Loan Agreement with respect to the interests purchased by it pursuant to such
paragraphs. Commencing on the Amendment Effective Date, each Additional Lender
will be a party to the Loan Agreement, agrees to be bound by the terms
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and conditions of the Loan Agreement and the Loan Documents and will have all of
the rights and obligations of a Lender under the Loan Agreement and the Loan
Documents.
6. Delivery of Notes. The Continuing Lenders shall deliver to the
Agent, for delivery to and cancellation by the Borrowers, all Notes issued by
the Borrowers and held by the Continuing Lenders under the Loan Agreement
(collectively, the "Old Notes"), which Old Notes are hereby deemed cancelled
effective from delivery of the New Notes to the Agent. The Borrowers shall
execute and deliver to the Agent for the account of each Lender the Notes which
such Lender is entitled to receive pursuant to Section 2.02 of the Loan
Agreement, in the form of Exhibit A thereto and in the principal amount for each
Lender equal to its Pro Rata Share of the Total Commitment, as set forth in
Annex I to this Amendment (the "New Notes"). The Agent shall release and deliver
the Old Notes to the Borrowers for cancellation and deliver the New Notes to the
Lenders.
7. Accrued Interest and Fees. At the times and pursuant to the
terms contained in the Loan Agreement, the Agent will pay all accrued interest
and all fees payable pursuant to Section 2.07(e) of the Loan Agreement to the
Lenders entitled thereto after giving effect to the assignments and purchases
made pursuant to Section 6 above.
8. Schedule. Schedule I to the Loan Agreement is hereby amended
in its entirety to read as set forth in Annex I to this Amendment.
9. Conditions to Effectiveness. This Amendment shall become
effective only upon satisfaction in full of the following conditions precedent
(the first date upon which all such conditions shall have been satisfied being
herein called the "Amendment Effective Date"):
(i) The representations and warranties contained in
this Amendment and in Article V of the Loan Agreement shall be true and
correct on and as of the Amendment Effective Date as though made on and
as of such date (except where such representations and warranties relate
to an earlier date in which case such representations and warranties
shall be true and correct as of such earlier date); no Event of Default
or Default shall have occurred and be continuing on the Amendment
Effective Date, or result from this Amendment becoming effective in
accordance with its terms.
(ii) The Agent shall have received counterparts of
this Amendment which bear the signatures of the Borrowers and each of
the Lenders.
(iii) The Agent shall have received the New Notes,
duly executed by each of the Borrowers.
(iv) The Agent shall have received an
acknowledgment and consent to this Amendment, substantially in the form
of Annex II attached hereto, duly executed by EGI and EMC-TN.
(v) All legal matters incident to this Amendment
shall be satisfactory to the Agent and its counsel.
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10. Representations and Warranties. Each of the Borrowers
represents and warrants to the Lenders as follows:
(a) Each Borrower (i) is duly organized, validly existing
and in good standing under the laws of the state of its organization and (ii)
has all requisite power, authority and legal right to execute, deliver and
perform this Amendment, the New Notes, all other documents executed by it in
connection with this Amendment, and to perform the Loan Agreement, as amended
hereby.
(b) The execution, delivery and performance by the
Borrowers of this Amendment and all other documents executed by it in connection
with this Amendment, the execution, delivery and performance by each Borrower of
the New Notes and the performance by the Borrowers of the Loan Agreement as
amended hereby (i) have been duly authorized by all necessary action, (ii) do
not and will not violate or create a default under any Borrower's organizational
documents, any applicable law or any contractual restriction binding on or
otherwise affecting any Borrower or any of such Borrower's properties, and (iii)
except as provided in the Loan Documents, do not and will not result in or
require the creation of any Lien, upon or with respect to any Borrower's
property.
(c) No authorization or approval or other action by, and
no notice to or filing with, any Governmental Authority or other regulatory body
is required in connection with the due execution, delivery and performance by
any of the Borrowers of this Amendment and all other documents executed by it in
connection with this Amendment, the execution, delivery and performance by each
Borrower of the New Notes and the performance by the Borrowers of the Loan
Agreement as amended hereby.
(d) This Amendment and the Loan Agreement, as amended
hereby, and all other documents executed in connection with this Amendment
constitute the legal, valid and binding obligations of the Borrowers party
thereto, enforceable against such Persons in accordance with their terms except
to the extent the enforceability thereof may be limited by any applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws from time to
time in effect affecting generally the enforcement of creditors' rights and
remedies and by general principles of equity.
(e) The representations and warranties contained in
Article V of the Loan Agreement are correct on and as of the Amendment Effective
Date as though made on and as of the Amendment Effective Date (except to the
extent such representations and warranties expressly relate to an earlier date),
and no Event of Default or Default, has occurred and is continuing on and as of
the Amendment Effective Date.
11. Continued Effectiveness of Loan Agreement. Each of the
Borrowers hereby (i) confirms and agrees that each Loan Document to which it is
a party is, and shall continue to be, in full force and effect and is hereby
ratified and confirmed in all respects except that on and after the Amendment
Effective Date of this Amendment all references in any such Loan Document to
"the Loan Agreement", "thereto", "thereof", "thereunder" or words of like import
referring to the Loan Agreement shall mean the Loan Agreement as amended by this
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Amendment, and (ii) confirms and agrees that to the extent that any such Loan
Document purports to assign or pledge to the Agent, or to grant to the Agent a
Lien on any collateral as security for the Obligations of the Borrowers from
time to time existing in respect of the Loan Agreement and the Loan Documents,
such pledge, assignment and/or grant of a Lien is hereby ratified and confirmed
in all respects.
12. Miscellaneous.
a. This Amendment may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which shall be deemed to be an original, but all of which taken together shall
constitute one and the same agreement.
b. Section and paragraph headings herein are included for
convenience of reference only and shall not constitute a part of this Amendment
for any other purpose.
c. This Amendment shall be governed by, and construed in
accordance with, the laws of the State of New York.
d. The Borrowers will pay on demand all reasonable
out-of-pocket costs and expenses of the Agent in connection with the
preparation, execution and delivery of this Amendment, including, without
limitation, the reasonable fees, disbursements and other charges of Xxxxxxx Xxxx
& Xxxxx LLP, counsel to the Agent.
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment
to be executed by their respective officers thereunto duly authorized as of the
day and year first above written.
HOMEGOLD, INC.
By:
--------------------------------
Name:
------------------------------
Title:
------------------------------
CAROLINA INVESTORS, INC.
By:
--------------------------------
Name:
------------------------------
Title:
------------------------------
AGENT AND LENDER
----------------
THE CIT GROUP/BUSINESS CREDIT, INC.,
as Agent
By:
--------------------------------
Name:
------------------------------
Title:
-----------------------------
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LENDERS
DEUTSCHE FINANCIAL SERVICES CORPORATION
By:
--------------------------------------
Name:
-------------------------------------
Title:
-----------------------------------
Address:
0000 Xxxxxxxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxxx, XX 00000
Attn: Xxxxxxx X. Xxxxxxx
Senior Vice President
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
Wiring Instructions:
SunTrust Bank, N.A. (Atlanta, GA)
ABA #: 000-000-000
AC#: 8801873384
REF: HomeGold
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BNY FINANCIAL CORPORATION
By:
--------------------------------------
Name:
-------------------------------------
Title:
-----------------------------------
Address:
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxx Xxxxxxxx
Vice President
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
Wiring Instructions:
The Bank of New York
000 Xxxxxxx Xxxxxx, Xxx Xxxx, XX
ABA #: 000-000-000
AC#: 8090653114
REF: HomeGold, Inc.
ATTN: Xxxxx Xxxxxxxx
Vice President
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SCHEDULE I
CONTINUING LENDERS:
-------------------
The CIT Group/Business Credit, Inc.
ADDITIONAL LENDERS:
-------------------
Deutsche Financial Services Corporation
BNY Financial Corporation
ANNEX I
SCHEDULE I
TO
MORTGAGE LOAN WAREHOUSING AGREEMENT
DATED AS OF JUNE 30, 1998
Commitment Schedule
-------------------
Lender Maximum Commitment Percentage Share
------ ------------------ ----------------
The CIT Group/Business Credit, $150,000,000.00 75.00%
Inc.
Deutsche Financial Services 25,000,000.00 12.50%
Corporation
BNY Financial Corporation 25,000,000.00 12.50%
============= ======
TOTAL COMMITMENT $200,000,000.00 100.00%
ANNEX II
ACKNOWLEDGMENT AND CONSENT
--------------------------
The undersigned (each a "Loan Party"), each as a party to one or
more Loan Documents, as defined in the Mortgage Loan Warehousing Agreement dated
as of June 30, 1998 (the "Loan Agreement"), by and among HomeGold, Inc.,
Carolina Investors, Inc., the lenders parties thereto (the "Lenders"), and The
CIT Group/Business Credit, Inc., as administrative agent for the Lenders (in
such capacity, the "Agent"), each hereby (i) acknowledges and consents to the
First Amendment dated the date hereof (the "Amendment", all terms defined
therein being used herein as defined therein) to the Loan Agreement; (ii)
confirms and agrees that each Loan Document to which it is a party is, and shall
continue to be, in full force and effect and is hereby ratified and confirmed in
all respects except that on and after the Amendment Effective Date all
references in any such Loan Documents to "the Loan Agreement", "thereto",
"thereof", "thereunder" or words of like import referring to the Loan Agreement
shall mean the Loan Agreement as amended by the Amendment; and (iii) confirms
and agrees that to the extent that any such Loan Document purports to assign or
pledge to the Agent, or to grant to the Agent a security interest in or lien on,
any collateral as security for the obligations of the Loan Party from time to
time existing in respect of the Loan Documents, such pledge, assignment and/or
grant of a security interest or lien is hereby ratified and confirmed in all
respects as security for, in addition to the other obligations secured thereby,
all obligations of such Loan Party outstanding upon the taking effect of the
Amendment.
Dated: August __, 1998
HOMEGOLD FINANCIAL, INC.
(f/k/a Emergent Group, Inc.)
By: ________________________
Title: _______________________
EMERGENT MORTGAGE CORPORATION
OF TENNESSEE
By: ________________________
Title: _______________________
