CREDIT INCREASE CONFIRMATION AND
NOTE AMENDMENT No. 1
TO THE
INTERIM WAREHOUSE AND SECURITY AGREEMENT
AND
THE SECURED NOTE
Dated September 27, 1996
Reference is made to (x) the Interim Warehouse and Security
Agreement, dated as of April 25, 1996 (the "Interim Warehouse Agreement")
between Prudential Securities Realty Funding Corporation (the "Lender") and
HomeAmerican Credit, Inc. d/b/a Upland Mortgage (the "Borrower") and (y) the
Secured Note dated as of April 25, 1996 (the "Note") from the Borrower to the
Lender.
Section 1. Amendment of the Interim Warehouse Agreement and Note
(a) The "Maturity Date" referenced in the Interim
Warehouse Agreement and in the Note is hereby amended
to be the earliest of (i) March 31, 1997 and (ii) the
date on which a Securitization occurs (other than the
ABFS Mortgage Loan Trust 1996-2 Securitization (the
"96-2 Securitization")).
(b) Section 4(B) of the Interim Warehouse Agreement is hereby
amended by adding the following representations and
warranties after subsection 11:
12. Every person who has a fee interest in any
property subject to a mortgage given in
connection with such Mortgage Loan has
signed the instrument creating such
mortgage.
13. Every person, upon whose credit the Lender relied in
originating or purchasing a Mortgage Loan, has signed
the related Mortgage Note.
Section 2. Confirmation of the Interim Warehouse Agreement and Note
As amended by Section 1 hereof all provisions of the Interim
Warehouse Agreement and of the Note are reconfirmed as of the date hereof. The
Borrower, in addition, hereby reconfirms and remakes as of the date hereof each
and every of its representations, warranties and covenants set forth in the
Interim Warehouse Agreement.
ATTEST: HOMEAMERICAN CREDIT, INC. D/B/A UPLAND MORTGAGE
___________________________ By: /s/ Xxxxxxx X. Xxxxxxxx
--------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: Chief Executive Officer
ATTEST:
___________________________ PRUDENTIAL SECURITIES REALTY FUNDING
CORPORATION
By: /s/ Xxxxxxx X. Xxxxxx
-------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Vice President
2
Approval as to Legality
I, Xxxxxxx X. Xxxxx, Esq., counsel to the Borrower hereby confirm that:
(c) I delivered, on April 25, 1996, the opinion letter, a
copy of which is attached hereto (the "Opinion
Letter") relating to the Interim Warehouse Agreement
and the Note.
(d) I have represented the Borrower in connection with
its execution and delivery of the Credit Increase
Confirmation and Note Amendment (the "Confirmation")
to which this Approval as to Legality is attached.
(e) I hereby extend, as of the date hereof, the opinions
set forth in the Opinion Letter to cover both the
Confirmation itself as well as the transactions
described on the Confirmation and confirm, as of the
date hereof, and subject to any and all assumptions
and qualifications set forth therein, the opinions
set forth in the Opinion Letter.
Yours truly,
/s/ Xxxxxxx X. Xxxxx
----------------------------------
Xxxxxxx X. Xxxxx, Esq.
Dated: September 27, 1996
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CREDIT INCREASE CONFIRMATION AND
NOTE AMENDMENT NO. 2
TO THE
INTERIM WAREHOUSE AND SECURITY AGREEMENT,
THE SECURED NOTE AND THE GUARANTY
Dated March 13, 1997
Reference is made to (x) the Interim Warehouse and Security
Agreement, dated as of April 25, 1996 (as amended by the Credit Increase
Confirmation and Note Amendment No. 1, dated September 27, 1996 ("Amendment No.
1")) (the "Interim Warehouse Agreement") between Prudential Securities Credit
Corporation (formerly Prudential Securities Realty Funding Corporation) (the
"Lender") and HomeAmerican Credit, Inc. d/b/a Upland Mortgage (the "Borrower"),
(y) the Secured Note dated as of April 25, 1996 (as amended by Amendment No. 1)
(the "Note") from the Borrower to the Lender, and (z) the Guaranty, given as of
April 25, 1996 (the "Guaranty"), by American Business Financial Services, Inc.
("ABFS").
Section 1. Amendment of the Interim Warehouse Agreement and Note
(a) Section 1(A)(1) of the Interim Warehouse Agreement is
hereby deleted and replaced in its entirety by the following paragraph.
1. The Lender agrees to lend to the Borrower up to $50,000,000
(such borrowing, the "Loan") to be made in one or more advances (each,
an "Advance"); provided, however, that, at any time when funds are on
deposit in a Pre-Funding Account (as defined herein), the amount of the
Loan shall not exceed the amount on deposit in such Pre-Funding
Account. The Borrower agrees that the Loan shall be used to warehouse
fixed and adjustable rate, first or second lien, residential mortgage
loans that are to be included in a Securitization (the "Mortgage
Loans"), as such Mortgage Loans are identified to the Lender in writing
and in electronic form from time to time. Such Mortgage Loans may be
(a) included at the time of closing of the Securitization or (b)
purchased by the Securitization trust subsequent to closing with funds
on deposit in an account (a "Pre-Funding Account") relating to the
Securitization and designated for such purpose. All Mortgage Loans
financed hereunder shall be closed loans; i.e., this facility shall not
be used for "wet" or "table" fundings. The Lender may refuse to lend
against any Mortgage Loan(s) which the Lender reasonably believes will
not be eligible for inclusion in a securitized pool either (x) due to
the characteristics of such Mortgage Loan or (y) due to the expected
aggregate characteristics of the Mortgage Loans.
(b) Section 1(A)(2)(iii) of the Interim Warehouse Agreement is
hereby deleted and replaced in its entirety by the following paragraph.
(iii) the Lender shall have received (A) in connection with
each Advance, no later than 12:00 noon (Eastern Standard Time) on the
related Funding Date, a certificate from the Custodian referred to
below to the effect that it has in its possession and has reviewed the
mortgage files relating to the Mortgage Loans being pledged in
connection with the Advance being made on such Funding Date and has
found no material deficiencies in such mortgage files (the "Custodian's
Certification") and (B) prior to the initial Advance, a legal opinion
from counsel (which may be in-house counsel) to the Borrower in the
form of Exhibit B-1 attached hereto;
(c) Section 9 of the Interim Warehouse Agreement is hereby
amended by adding the following two paragraphs after paragraph B.
C. On the fifth business day of each calendar month, the
Borrower shall provide the Lender with a report both in hardcopy and on
a computer diskette or via electronic transmission, which report shall
contain information concerning the portfolio performance data with
respect to the Pledged Mortgage Loans, including, without limitation,
information regarding any outstanding delinquencies, prepayments in
whole or in part and any repurchases by the Borrower, in a format as
may be agreed upon by the Borrower and the Lender from time to time.
D. In conjunction with the delivery of each of the financial
statements to be delivered by the Borrower pursuant to Section 9(B),
the Borrower shall deliver to the Lender an officer's certificate of
the Borrower certifying that, as of the date of delivery of such
financial statements, the Borrower is in compliance with all the terms
of this Agreement including, without limitation, each of the covenants
set forth in Section 4(C).
Section 2. Amendment of the Guaranty
(a) Paragraph 9 of the Guaranty is hereby deleted and replaced
in its entirety by the following.
9. The Guarantor covenants with the Lender that, during the
term of this Guaranty: (i) the Guarantor's stated net worth less
intangible assets shall not be less than $22,000,000; (ii) the
Guarantor shall maintain a minimum of $15,000,000 of outstanding
subordinated debentures maturing in more than one year; (iii) the
Guarantor's minimum adjusted capital shall not be less than
$37,000,000, such amount being the sum of (x) the Guarantor's stated
net worth less intangible assets and (y) the Guarantor's outstanding
subordinated debentures maturing in more than one year; (iv) the
Guarantor's leverage ratio shall not exceed 3:1, such ratio being the
ratio of (x) the excess of (A) the Guarantor's total liabilities over
(B) outstanding subordinated debentures maturing in more than one year,
to (y) the sum of (A) the Guarantor's stated net worth less intangible
assets and (B) outstanding subordinated debentures
2
maturing in more than one year; and (v) the subordinated debentures
shall be subordinate to the Guarantor's obligations hereunder.
(b) Paragraph 10 of the Guaranty is hereby deleted and
replaced in its entirety by the following.
10. As long as this Guaranty is in effect, Guarantor shall (i)
promptly upon preparation, but in no event later than 45 days following
the end of its first three fiscal quarters, deliver to Lender its
unaudited company-prepared financial statements as of the end of such
fiscal quarter, prepared in accordance with GAAP, and (ii) promptly
upon preparation, but in no event later than 90 days following the end
of its fourth fiscal quarter, deliver to Lender its audited and
certified financial statements, prepared in accordance with GAAP, as of
the end of and for the most recently ended fiscal year, which audits
and certification shall be prepared by a nationally recognized
independent accounting firm or by a regionally recognized independent
accounting firm with the prior written consent of Lender, which consent
shall not be unreasonably withheld. In all cases, financial statements
shall include, without limitation, a balance sheet, a profit and loss
statement and a statement of cash flows. In conjunction with the
delivery of each of the financial statements to be delivered by the
Guarantor pursuant to this Paragraph 10, the Guarantor shall deliver to
the Lender an officer's certificate of the Guarantor certifying that,
as of the date of delivery of such financial statements, the Guarantor
is in compliance with all the terms of this Guaranty including, without
limitation, each of the covenants set forth in Paragraph 9.
Section 3. Confirmation of the Interim Warehouse Agreement, Note and Guaranty
(a) As amended by Section 1 hereof all provisions of the
Interim Warehouse Agreement and of the Note are reconfirmed as of the date
hereof. The Borrower, in addition, hereby reconfirms and remakes as of the date
hereof each and every of its representations, warranties and covenants set forth
in the Interim Warehouse Agreement.
(b) As amended by Section 2 hereof all provisions of the
Guaranty are reconfirmed as of the date hereof. ABFS, in addition, hereby
reconfirms and remakes as of the date hereof each and every of its
representations, warranties and covenants set forth in the Guaranty.
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HOMEAMERICAN CREDIT, INC. D/B/A UPLAND
MORTGAGE, as Xxxxxxxx
By:/s/ Xxxxxxx X. Xxxxxxxx, Xx.
-----------------------------------------
Name: Xxxxxxx X. Xxxxxxxx, Xx.
Title Chairman
AMERICAN BUSINESS FINANCIAL SERVICES, INC.,
as Guarantor
By:/s/ Xxxxxxx X. Xxxxxxxx, Xx.
-----------------------------------------
Name: Xxxxxxx X. Xxxxxxxx, Xx.
Title Chairman
PRUDENTIAL SECURITIES CREDIT CORPORATION,
as Lender
By: /s/ Xxxxxxxxx X. Xxxxxxxx
---------------------------------------
Name: Xxxxxxxxx X. Xxxxxxxx
Title: Treasurer
Approval as to Legality
I, Xxxxxxx X. Xxxxx, Esq., counsel to the Borrower and ABFS
hereby confirm that:
(A) I delivered, on April 25, 1996, (i) the opinion
letter, a copy of which is attached hereto (the
"Borrower Opinion Letter") relating to the Interim
Warehouse Agreement and the Note and (ii) the opinion
letter, a copy of which is attached hereto (the "ABFS
Opinion Letter") relating to the Guaranty.
(B) I have represented the Borrower and ABFS in
connection with their execution and delivery of the
Credit Increase Confirmation and Note Amendment (the
"Confirmation") to which this Approval as to Legality
is attached.
(C) I hereby extend, as of the date hereof, the opinions
set forth in the Borrower Opinion Letter and the ABFS
Opinion Letter to cover both the Confirmation itself
as well as the transactions described on the
Confirmation and confirm, as of the date hereof, and
subject to any and all assumptions and qualifications
set forth therein, the opinions set forth in both the
Borrower Opinion Letter and the ABFS Opinion Letter.
Yours truly,
/s/ Xxxxxxx X. Xxxxx
--------------------------------
Xxxxxxx X. Xxxxx, Esq.
Dated: March 13, 1997
CREDIT INCREASE CONFIRMATION AND
NOTE AMENDMENT NO. 3
TO THE
INTERIM WAREHOUSE AND SECURITY AGREEMENT,
THE SECURED NOTE AND THE GUARANTY
Dated March 27, 1997
Reference is made to (x) the Interim Warehouse and Security
Agreement, dated as of April 25, 1996 (as amended by the Credit Increase
Confirmation and Note Amendment No. 1, dated September 27, 1996 ("Amendment No.
1") and Credit Increase Confirmation and Note Amendment No. 2, dated March 13,
1997 ("Amendment No. 2")) (the "Interim Warehouse Agreement") between Prudential
Securities Credit Corporation (formerly Prudential Securities Realty Funding
Corporation) (the "Lender") and HomeAmerican Credit, Inc. d/b/a Upland Mortgage
(the "Borrower"), (y) the Secured Note dated as of April 25, 1996 (as amended by
Amendment No. 1 and Amendment No. 2) (the "Note") from the Borrower to the
Lender, and (z) the Guaranty, given as of April 25, 1996 (as amended by
Amendment No. 2) (the "Guaranty"), by American Business Financial Services, Inc.
("ABFS").
Section 1. Amendment of the Interim Warehouse Agreement and Note
(a) The "Maturity Date" referenced in the Interim Warehouse
Agreement and in the Note is hereby amended to be the earliest of (i) September
30, 1997 and (ii) the date on which a Securitization closes (other than the ABFS
Mortgage Loan Trust 1997-1 Securitization (the "97-1 Securitization").
Section 2. Amendment of the Guaranty
(a) Paragraph 9 of the Guaranty is hereby deleted and replaced
in its entirety by the following.
9. The Guarantor covenants with the Lender that, during the
term of this Guaranty: (i) the Guarantor's stated net worth less
intangible assets shall not be less than $22,000,000; (ii) the
Guarantor shall maintain a minimum of $15,000,000 of outstanding
subordinated debentures maturing in more than one year; (iii) the
Guarantor's minimum adjusted capital shall not be less than
$37,000,000, such amount being the sum of (x) the Guarantor's stated
net worth less intangible assets and (y) the Guarantor's outstanding
subordinated debentures maturing in more than one year; (iv) the
Guarantor's leverage ratio shall not exceed (a) 3.5:1 for the period
from April 1, 1997 through June 30, 1997 and (b) 3.75:1 for the period
from July 1, 1997 through September 30, 1997, such ratio being the
ratio of (x) the excess of (A) the Guarantor's total liabilities over
(B) outstanding subordinated debentures maturing in more than one year,
to (y) the sum of (A) the Guarantor's stated net worth less intangible
assets and (B) outstanding subordinated debentures maturing in more
than one year; and (v) the subordinated debentures shall be subordinate
to the Guarantor's obligations hereunder.
Section 3. Confirmation of the Interim Warehouse Agreement, Note and Guaranty
(a) As amended by Section 1 hereof all provisions of the
Interim Warehouse Agreement and of the Note are reconfirmed as of the date
hereof. The Borrower, in addition, hereby reconfirms and remakes as of the date
hereof each and every of its representations, warranties and covenants set forth
in the Interim Warehouse Agreement.
(b) As amended by Section 2 hereof all provisions of the
Guaranty are reconfirmed as of the date hereof. ABFS, in addition, hereby
reconfirms and remakes as of the date hereof each and every of its
representations, warranties and covenants set forth in the Guaranty.
2
HOMEAMERICAN CREDIT, INC. D/B/A UPLAND
MORTGAGE, as Xxxxxxxx
By:/s/ Xxxxxxx X. Xxxxxxxx, Xx.
-----------------------------------------
Name: Xxxxxxx X. Xxxxxxxx, Xx.
Title Chairman
AMERICAN BUSINESS FINANCIAL SERVICES, INC.,
as Guarantor
By:/s/ Xxxxxxx X. Xxxxxxxx, Xx.
-----------------------------------------
Name: Xxxxxxx X. Xxxxxxxx, Xx.
Title Chairman
PRUDENTIAL SECURITIES CREDIT CORPORATION,
as Lender
By: /s/ Xxxxxxxxx X. Xxxxxxxx
---------------------------------------
Name: Xxxxxxxxx X. Xxxxxxxx
Title: Treasurer
Approval as to Legality
I, Xxxxxxx X. Xxxxx, Esq., counsel to the Borrower and ABFS
hereby confirm that:
(D) I delivered, on April 25, 1996, (i) the opinion
letter, a copy of which is attached hereto (the
"Borrower Opinion Letter") relating to the Interim
Warehouse Agreement and the Note and (ii) the opinion
letter, a copy of which is attached hereto (the "ABFS
Opinion Letter") relating to the Guaranty.
(E) I have represented the Borrower and ABFS in
connection with their execution and delivery of the
Credit Increase Confirmation and Note Amendment (the
"Confirmation") to which this Approval as to Legality
is attached.
(F) I hereby extend, as of the date hereof, the opinions
set forth in the Borrower Opinion Letter and the ABFS
Opinion Letter to cover both the Confirmation itself
as well as the transactions described on the
Confirmation and confirm, as of the date hereof, and
subject to any and all assumptions and qualifications
set forth therein, the opinions set forth in both the
Borrower Opinion Letter and the ABFS Opinion Letter.
Yours truly,
/s/ Xxxxxxx X. Xxxxx
--------------------------------
Xxxxxxx X. Xxxxx, Esq.
Dated: March 27, 1997
