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EXHIBIT 10.2
SIXTH AMENDMENT TO
FIRST AMENDED AND RESTATED
WAREHOUSING CREDIT AND SECURITY AGREEMENT
THIS SIXTH AMENDMENT TO FIRST AMENDED AND RESTATED WAREHOUSING CREDIT
AND SECURITY AGREEMENT (this "Amendment") is entered into as of this 30th
day of March 1998, by and between U.S. HOME MORTGAGE CORPORATION, a Florida
corporation (the "Company") and RESIDENTIAL FUNDING CORPORATION, a Delaware
corporation (the "Lender").
WHEREAS, the Company and the Lender have entered into a single family
revolving warehouse facility with a present Commitment Amount of Sixty-Five
Million Dollars ($65,000,000), to finance the origination and acquisition
of Mortgage Loans as evidenced by a Third Amended and Restated Warehousing
Promissory Note in the principal sum of Sixty-Five Million Dollars
($65,000,000), dated as of June 25, 1997 (the "Note"), and by a First
Amended and Restated Warehousing Credit and Security Agreement dated as of
August 31, 1995, as the same may have been amended or supplemented (the
"Agreement"); and
WHEREAS, the Company has requested the Lender to temporarily increase
the Commitment Amount and certain terms of the Agreement, and the Lender
has agreed to such increase and amendment subject to the terms and
conditions of this Amendment.
NOW, THEREFORE, for and in consideration of the foregoing and of the
mutual covenants, agreements and conditions hereinafter set forth and for
other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto hereby agree as follows:
1. All capitalized terms used herein and not otherwise defined shall
have their respective meanings set forth in the Agreement.
2. The effective date ("Effective Date") of this Amendment shall be
March 30, 1998.
3. Section 1.1 of the Agreement shall be amended by adding the
following definitions in the appropriate alphabetical order:
"Check Disbursement Account" means a demand deposit account
maintained at the Funding Bank in the name of the Company and under
the control of the Lender for the clearing of checks written by the
Company to fund Advances.
"Wire Disbursement Account" means a demand deposit account
maintained at the Funding Bank in the name of the Lender for the
clearing of wire transfers requested by the Company to fund Advances.
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4. Section 1.1 of the Agreement is hereby amended to delete the
definition of "Commitment Amount" in its entirety and to substitute the
following in lieu thereof:
"Commitment Amount" means Sixty-Five Million Dollars
($65,000,000). Notwithstanding the foregoing, during the period from
the Effective Date to and including May 14, 1998, the Commitment
Amount shall be temporarily increased to Eighty Million Dollars
($80,000,000). On the first Business Day following the expiration of
the temporary increase of the Commitment Amount, the Company shall
repay to the Lender the amount by which the outstanding Advances
exceed the Commitment Amount.
5. Sections 2.2(d) and 2.2(e) of the Agreement shall be deleted in
their entirety and the following shall be substituted in lieu thereof:
2.2(d) The Company shall hold in trust for the Lender, and
the Company shall deliver to the Lender promptly upon request, or
if the recorded Collateral Documents have not yet been returned
from the recording office, immediately upon receipt by the
Company of such recorded Collateral Documents and the Pledged
Mortgage is not being held by an Investor for purchase or has not
been redeemed from pledge, the following: (1) the originals of
the Collateral Documents for which copies are required to be
delivered to the Lender pursuant to Exhibit D-SF, Exhibit
D-SF/CONSTRUCTION or Exhibit D-UNI, (2) the original lender's
ALTA Policy of Title Insurance or an equivalent thereto, and (3)
any other documents relating to a Pledged Mortgage which the
Lender may request, including, without limitation, documentation
evidencing the FHA Commitment to Insure or the VA Guaranty of any
Pledged Mortgage which is either FHA insured or VA guaranteed,
the appraisal, Private Mortgage Insurance Certificate, if
applicable, the Regulation Z Statement, certificates of casualty
or hazard insurance, credit information on the maker of each such
Mortgage Note, a copy of a HUD-1 or corresponding purchase advice
and other documents of all kinds which are customarily desired
for inspection or transfer incidental to the purchase of any
Mortgage Note by an Investor and any additional documents which
are customarily executed by the seller of a Mortgage Note to an
Investor.
2.2(e) To make an Advance, the Lender shall cause the
Funding Bank to credit either the Wire Disbursement Account or
the Check Disbursement Account upon compliance by the Company
with the terms of the Loan Documents. The Lender shall determine
in its sole discretion the method by which Advances and other
amounts on deposit in the Wire Disbursement Account or the Check
Disbursement Account are disbursed by the Funding Bank to or for
the account of the Company.
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6. Section 2.4(g) of the Agreement shall be deleted in its entirety
and the following shall be substituted in lieu thereof:
2.4(g) Upon Notice to the Company, after the occurrence and
during the continuation of an Event of Default, the unpaid amount
of each Advance shall bear interest until paid in full at a per
annum rate of interest (the "Default Rate") equal to four percent
(4%) in excess of the rate of interest otherwise applicable to
such Advance pursuant to any other subsection of this Section 2.4
or, if no rate is applicable, the highest rate then applicable to
any outstanding Advances.
7. Sections 2.5(d), (e), (f), (g) and (h) of the Agreement shall be
deleted in their entirety and the following shall be substituted in lieu
thereof:
2.5(d) The Company shall pay the Lender, without the
necessity of prior demand or notice from the Lender, and the
Company authorizes the Lender to cause the Funding Bank to charge
the Company's account for, the amount of any outstanding Advance
against a specific Pledged Mortgage, upon the earliest occurrence
of any of the following events:
(1) One (1) Business Day elapses from the date an
Advance was made and the Pledged Mortgage which was to have
been funded by such Advance is not closed and funded.
(2) Ten (10) Business Days elapse from the date a
Collateral Document was delivered to the Company for
correction or completion under a Trust Receipt, without
being returned to the Lender.
(3) On the date on which a Pledged Mortgage is
determined to have been originated based on untrue,
incomplete or inaccurate information, whether or not the
Company had knowledge of such misrepresentation or incorrect
information, or the Pledged Mortgage is in the case of an
Unimproved Mortgage Loan delinquent (without giving effect
to any grace period) and remains delinquent for a period of
thirty (30) days or (ii) in all other cases, defaulted and
remains in default for a period of sixty (60) days or more.
(4) If the outstanding Advances against Pledged
Mortgages of a specific Mortgage Loan type exceed the
aggregate Purchase Commitments for such Mortgage Loan type.
(5) Three (3) Business Days after the mandatory
delivery date of the related Purchase Commitment and the
specific Pledged Mortgage was not delivered under the
Purchase Commitment prior to such mandatory delivery date,
or the Purchase Commitment is terminated; unless in each
case, such Pledged Mortgage is eligible for delivery to an
Investor under a comparable Purchase Commitment acceptable
to the Lender.
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(6) Upon sale, maturity or other disposition of the
Pledged Mortgage.
(7) If the Pledged Mortgage is included in a Mortgage
Pool, then, if the Mortgage Pool is an Eligible Mortgage
Pool, upon sale of the Mortgage-backed Security, or if the
Mortgage Pool is not an Eligible Mortgage Pool, within two
(2) Business Days after delivery of the Pledged Mortgages to
the pool custodian.
(8) On the date on which the Company knows, or has
reason to know, or receives notice from the Lender, that one
or more of the representations and warranties set forth in
Section 5.15 were inaccurate or incomplete in any material
respect on any date when made or deemed made.
(9) For a Construction/Perm Mortgage Loan, a lien is
filed against the premises and not removed within fifteen
(15) days of the filing, or an inspection report indicates
that the improvements to the premises encumbered by the
Pledged Mortgage are not being constructed in accordance
with the approved plans and specifications.
2.5(e) Upon Notice to the Company by the Lender, the Company
shall pay to the Lender, and the Company authorizes the Lender to
cause the Funding Bank to charge the Lender's account for, the
amount of any outstanding Advance against a specific Pledged
Mortgage upon the earliest occurrence of any of the following
events:
(1) For a Pledged Mortgage, other than an Unimproved
Mortgage Loan, with respect to which a longer or shorter
period is not prescribed elsewhere in the Section 2.5(e),
one hundred twenty (120) days elapse from the date of the
initial Advance made by the Lender against such Pledged
Mortgage, whether or not such Pledged Mortgage is included
in an Eligible Mortgage Pool.
(2) Forty-five (45) days elapse from the date the
Pledged Mortgage was delivered to an Investor or an Approved
Custodian for examination and purchase or inclusion in an
Eligible Mortgage Pool, without the purchase being made or
the Eligible Mortgage Pool being initially certified, or
upon rejection of the Pledged Mortgage as unsatisfactory by
an Investor or an Approved Custodian.
(3) Seven (7) Business Days elapse from the date a Wet
Settlement Advance was made without receipt by the Lender of
all Collateral Documents relating to such Pledged Mortgage,
or such Collateral Documents, upon examination by the
Lender, are found not to be in compliance with the
requirements of this Agreement or the related Purchase
Commitment.
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(4) With respect to any Pledged Mortgage, any of the
items described in Section 2.2(d), upon examination by the
Lender, are found not to be in compliance with the
requirements of this Agreement or the related Purchase
Commitment.
(5) For a Construction/Perm Mortgage Loan two hundred
seventy (270) days elapse from the date of the initial
Construction Advance made by the Lender against such Pledged
Mortgage, without such Construction/Perm Mortgage Loan being
converted to a Permanent Mortgage Loan. Notwithstanding the
above, the Company may request and the Lender may approve a
ninety (90) day extension of the construction period for any
Construction/Perm Mortgage Loan. Within fifteen (15) days
after the final Construction Advance, a Construction/Perm
Mortgage Loan shall be converted to a Permanent Mortgage
Loan and the date of such final Construction Advance shall
be deemed to be the initial Advance date of the Permanent
Mortgage Loan and the provisions of Section 2.5(d)(1) shall
apply to such Permanent Mortgage Loan.
2.5(f) The outstanding amount of any Advance made pursuant
to Section 2.2(g) shall be payable in full within one (1)
Business Day after the date of such Advance.
2.5(g) In addition to the payments required pursuant to
Section 2.5(d), the Company shall be obligated to pay to the
Lender, without the necessity of prior demand or notice from the
Lender, and the Company authorizes the Lender to cause the
Funding Bank to charge the Company's account if the principal
amount of (i) any Unimproved Mortgage Loan is paid or prepaid, or
(ii) any other Pledged Mortgage is prepaid, in either case in
whole or in part, while an Advance is outstanding against such
Pledged Mortgage, for the amount of such payment or prepayment,
to be applied to such Advance.
2.5(h) The Company shall give Notice to the Lender
(telephonically, to be followed by written notice) of the Pledged
Mortgages or Pledged Securities for which proceeds have been
received. Upon receipt of such Notice the Advances against such
Pledged Mortgages or Pledged Securities shall be repaid and such
Pledged Mortgages or Pledged Securities shall be considered to
have been redeemed from pledge. The Lender is entitled to rely
upon the Company's affirmation that deposits in the Cash
Collateral Account represent payment from Investors for the
purchase of Pledged Mortgages or Pledged Securities as specified
by the Company. In the event that the payment from an Investor
for the purchase of Pledged Mortgages or Pledged Securities is
less than the outstanding Advances against such Pledged Mortgages
or the Mortgage Loans backing Pledged Securities, the Lender is
authorized to cause the Funding Bank to charge the Company's
account for an amount equal to such deficiency. Provided no
Default or Event of Default exists, the Lender shall return any
excess payment from an Investor for Pledged Mortgages or Pledged
Securities to the Company.
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2.5(i) The Company may, from time to time, prepay a portion
of the Advances pursuant to this Section 2.5(h) (any such
prepayment is hereafter referred to as a "Buydown"). A Buydown
shall not, except as set forth below, be deemed a prepayment of
any particular Advances, and shall not entitle the Company to the
release of any Collateral. If a Default or an Event of Default
has occurred and is continuing, the Lender shall be entitled to
retain as additional Collateral any portion of the Buydown which
has been funded by the Company. Any portion of the Buydown which
has been funded to the Company by its Parent and/or Affiliates
shall be refunded to and at the direction of the Company. All or
any portion of a Buydown may be reborrowed hereunder, provided no
Default or Event of Default has occurred and is continuing, upon
written notice to the Lender no later than 9:30 a.m. on the
Business Day that the Company desires to reborrow such amount.
The Lender shall use its best efforts to apply Buydown to reduce
the interest on Advances in the following order: first,
Unimproved Advances; second, Construction Advances; third,
Nonconforming Advances; and fourth, Ordinary Warehousing
Advances; provided, however, that no portion of any Buydown may
be or remain applied to Unimproved Advances unless, after giving
effect to such application, the outstanding principal balance of
the Unimproved Advances (net of the portion of the Buydown
applied thereto) would be greater than or equal to Two Million
Five Hundred Thousand Dollars ($2,500,000). In the event the
Lender receives a payment of Advances that would, as a result of
the Buydown, reduce the outstanding principal balance of the
Unimproved Advances to an amount less than Two Million Five
Hundred Thousand Dollars ($2,500,000), or the outstanding
principal balance of the other Advances to an amount less than
zero, unless an Event of Default shall have occurred and be
continuing, the Buydowns, or a portion thereof equal to such
excess, shall be re-advanced to the Company.
8. Section 3.2(d) of the Agreement shall be deleted in its entirety
and the following shall be substituted in lieu thereof:
3.2(d) The Lender shall have the exclusive right to the
possession of the Pledged Securities or, if the Pledged
Securities are issued in book-entry form or issued in
certificated form and delivered to a clearing corporation (as
such term is defined in the Uniform Commercial Code of Minnesota)
or its nominee, the Lender shall have the right to have the
Pledged Securities registered in the name of a securities
intermediary (as such term is defined in the Uniform Commercial
Code of Minnesota) in an account containing only customer
securities and credited to an account of the Lender. The Lender
shall have the right to cause delivery of the Pledged Securities
to be made to the Investor or the Pledged Securities credited to
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the account of the Investor or the Investor's designee only
against payment therefor. The Company acknowledges that the
Lender may enter into one or more standing arrangements with
other financial institutions with respect to Pledged Securities
issued in book entry form or issued in certificated form and
delivered to a clearing corporation, pursuant to which such
Pledged Securities are registered in the name of such financial
institution, as agent or securities intermediary for the Lender,
and the Company agrees upon request of the Lender to execute and
deliver to such other financial institutions the Company's
written concurrence in any such standing arrangements.
9. The Third Amended and Restated Warehousing Promissory Note is
amended and restated in its entirety as set forth in the Fourth Amended and
Restated Warehousing Promissory Note, in the form of Exhibit A-1 attached
to this Amendment. All references in this Amendment and in the Agreement to
the Warehousing Promissory Note shall be deemed to refer to the Third
Amended and Restated Warehousing Promissory Note delivered in connection
with this Amendment.
10. The Company shall deliver to the Lender (a) an executed original
of this Amendment; (b) an executed original of the Fourth Amended and
Restated Warehousing Promissory Note; (c) a Certificate of Secretary with
Corporate Resolutions; and (d) a Two Hundred
Fifty Dollar ($250) document production fee.
11. The Company represents, warrants and agrees that (a) there exists
no Default or Event of Default under the Loan Documents, (b) the Loan
Documents continue to be the legal, valid and binding agreements and
obligations of the Company enforceable in accordance with their terms, as
modified herein, (c) the Lender is not in default under any of the Loan
Documents and the Company has no offset or defense to its performance or
obligations under any of the Loan Documents, (d) the representations
contained in the Loan Documents remain true and accurate in all respects,
and (e) there has been no material adverse change in the financial
condition of the Company from the date of the Agreement to the date of this
Amendment.
12. Except as hereby expressly modified, the Agreement shall otherwise
be unchanged and shall remain in full force and effect, and the Company
ratifies and reaffirms all of its obligations thereunder.
13. This Amendment may be executed in any number of counterparts and
by the different parties hereto on separate counterparts, each of which
when so executed and delivered shall be an original, but all of which shall
together constitute one and the same instrument.
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IN WITNESS WHEREOF, the Company and the Lender have caused this
Amendment to be duly executed on their behalf by their duly authorized
officers as of the day and year above written.
U.S. HOME MORTGAGE CORPORATION
By: /s/ Xxxxxxx X. Xxxxxxxx
-------------------------
Xxxxxxx X. Xxxxxxxx
Its: Vice President
RESIDENTIAL FUNDING CORPORATION,
a Delaware corporation
By: /s/ Xxx Xxxxx
--------------------------
Xxx Xxxxx
Its: Director
STATE OF Texas)
) ss
COUNTY OF Xxxxxx )
On April 2, 1998, before me, a Notary Public, personally appeared,
Xxxxxxx X. Xxxxxxxx, the Vice President of U.S. HOME MORTGAGE CORPORATION,
a Florida corporation, personally known to me (or proved to me on the basis
of satisfactory evidence) to be the person whose name is subscribed to the
within instrument and acknowledged to me that he/she executed the same in
his/her authorized capacity, and that by his/her signature on the instrument
the person, or the entity upon behalf of which the person acted, executed
the instrument.
WITNESS my hand and official seal.
/s/ Xxxxx Xxxxxx
----------------------------
Xxxxx Xxxxxx
Notary Public
(SEAL) My Commission Expires: 3/26/99
35
STATE OF Maryland)
) ss
COUNTY OF Xxxxxxxxxx )
On April 7, 1998, before me, a Notary Public, personally appeared
Xxx Xxxxx, the Director of RESIDENTIAL FUNDING CORPORATION, a Delaware
corporation, personally known to me (or proved to me on the basis of
satisfactory evidence) to be the person whose name is subscribed to the
within instrument and acknowledged to me that he/she executed the same in
his/her authorized capacity, and that by his/her signature on the instrument
the person, or the entity upon behalf of which the person acted, executed the
instrument.
WITNESS my hand and official seal.
/s/ S. Von Dem Xxxxx
------------------------------
S. von dem Xxxxx
Notary Public
(SEAL) My Commission Expires: 10/15/01
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EXHIBIT A-1
FOURTH AMENDED AND RESTATED WAREHOUSING PROMISSORY NOTE
$80,000,000 Date: March 30, 1998
FOR VALUE RECEIVED, the undersigned, U.S. HOME MORTGAGE CORPORATION, a
Florida corporation, (herein called the "Company"), hereby promises to pay
to the order of RESIDENTIAL FUNDING CORPORATION, a Delaware corporation
(the "Lender" or, together with its successors and assigns, the "Holder")
whose principal place of business is 0000 Xxxxxxxxxx Xxxx Xxxx., Xxxxx 000,
Xxxxxxxxxxx, Xxxxxxxxx 00000, or at such other place as the Holder may
designate from time to time, the principal sum of Eighty Million Dollars
($80,000,000) or so much thereof as may be outstanding from time to time
pursuant to the First Amended and Restated Warehousing Credit and Security
Agreement described below, and to pay interest on said principal sum or
such part thereof as shall remain unpaid from time to time, from the date
of each Advance until repaid in full, and all other fees and charges due
under the Agreement, at the rate and at the times set forth in the
Agreement. All payments hereunder shall be made in lawful money of the
United States and in immediately available funds.
This Note is given to evidence an actual warehouse facility in the
above amount and is the Warehousing Promissory Note referred to in that
certain First Amended and Restated Warehousing Credit and Security
Agreement (the "Agreement") dated August 31, 1995, between the Company and
the Lender, as the same may be amended or supplemented from time to time,
and is entitled to the benefits thereof. Reference is hereby made to the
Agreement (which is incorporated herein by reference as fully and with the
same effect as if set forth herein at length) for a description of the
Collateral, a statement of the covenants and agreements, a statement of the
rights and remedies and securities afforded thereby and other matters
contained therein. Capitalized terms used herein, unless otherwise defined
herein, shall have the meanings given them in the Agreement.
This Note is given in replacement for, and not in satisfaction of,
that certain Third Amended and Restated Warehousing Promissory Note dated
June 25, 1997, and issued by the Company to evidence its Obligations under
the Agreement (the "Existing Note"). All amounts owed by the Company under
the Existing Note (including, without limitation, the unpaid principal
thereunder, interest accrued thereon and fees accrued under the Agreement,
whether or not yet due and owing) as of the date hereof, shall be owed
hereunder.
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This Note may be prepaid in whole or in part at any time without
premium or penalty.
Should this Note be placed in the hands of attorneys for collection,
the Company agrees to pay, in addition to principal and interest, fees and
charges due under the Agreement, any and all costs of collecting this Note,
including reasonable attorneys' fees and expenses.
The Company hereby waives demand, notice, protest and presentment.
This Note shall be construed and enforced in accordance with the laws
of the State of Minnesota, without reference to its principles of conflicts
of law.
IN WITNESS WHEREOF, the Company has executed this Note as of the day
and year first above written.
U.S. HOME MORTGAGE CORPORATION
By: /s/ Xxxxxxx X. Xxxxxxxx
-----------------------
Xxxxxxx X. Xxxxxxxx
Its: Vice President
STATE OF Texas )
) ss
COUNTY OF Xxxxxx)
On April 2, 1998, before me, a Notary Public, personally appeared
Xxxxxxx X. Xxxxxxxx, the Vice President of U.S. HOME MORTGAGE CORPORATION,
a Florida corporation, personally known to me (or proved to me on the
basis of satisfactory evidence) to be the person whose name is subscribed
to the within instrument and acknowledged to me that he/she executed the
same in his/her authorized capacity, and that by his/her signature on the
instrument the person, or the entity upon behalf of which the person acted,
executed the instrument.
WITNESS my hand and official seal.
/s/ Xxxxx Xxxxxx
--------------------------------
Xxxxx Xxxxxx
Notary Public
(SEAL) My Commission Expires: 03/26/99
