Exhibit 10.29
FIRST AMENDMENT TO AMENDED AND RESTATED
MORTGAGE LOAN WAREHOUSING AGREEMENT
FIRST AMENDMENT TO AMENDED AND RESTATED MORTGAGE LOAN WAREHOUSING
AGREEMENT (the "Amendment"), dated as of _____________, 1997 by and among
EMERGENT MORTGAGE CORP. ("Borrower"), EMERGENT GROUP, INC. ("Guarantor") the
Lenders party to the Credit Agreement (as defined below) (the "Lenders") and
FIRST UNION NATIONAL BANK (formerly known as First Union National Bank of North
Carolina) as administrative agent for the Lenders (in such capacity, the
"Administrative Agent").
STATEMENT OF PURPOSE
WHEREAS, the Borrower, the Lenders and the Administrative Agent are
parties to an Amended and Restated Mortgage Loan Warehousing Agreement dated as
of March 20, 1997, as modified by that certain letter agreement dated as of May
31, 1997 (as so modified, the "Credit Agreement"); and
WHEREAS, the parties hereto wish to amend the Credit Agreement as set
forth below; and
WHEREAS, subject to and upon the terms and conditions herein set forth,
the Lenders and the Administrative Agent are willing to continue to make
available to the Borrower the credit facilities provided for in the Credit
Agreement; and
WHEREAS, a specific condition to the willingness of the Lenders and the
Administrative Agent to continue to make available to the Borrower the credit
facilities provided for in the Credit Agreement, is the reaffirmation by the
Guarantor of the Guaranty to which the Guarantor is a party; and
WHEREAS, the Guarantor will derive a material benefit from the
continued availability to the Borrower of the credit facilities provided for in
the Credit Agreement and therefore the Guarantor is willing to reaffirm the
Guaranty to which the Guarantor is a party;
NOW, THEREFORE, in consideration of the premises and agreements
contained herein, and for good and valuable consideration, the receipt and
sufficiency of which are acknowledged by the parties hereto, the parties hereto
hereby agree as follows:
1. All capitalized terms used herein and not otherwise defined shall
have the respective meanings provided to such terms in the Credit Agreement, as
amended hereby.
2. Amendment to the Credit Agreement.
a. Paragraph 7(j) of the Credit Agreement is hereby deleted in its
entirety and the following paragraph is hereby substituted in lieu thereof:
"7(j) Maximum Leverage Ratio. Permit its ratio at any date of
Adjusted Total Liabilities to Consolidated Net Worth to be more than
(i) during the period from July 31, 1997 through and including October
31, 1997, 12.0:1.0, and (ii) at all times thereafter, 9.0:1.0, in each
case as measured, in the case of both the numerator and the
denominator, as the average of the month-end balance for each of the
last three completed calendar months, on a rolling basis."
b. Paragraph 7(k) of the Credit Agreement is hereby deleted in its
entirety and the following paragraph is hereby substituted in lieu thereof:
"7(k) Minimum Net Worth. Permit its Book Net Worth to be less
than the sum of:
(i) $16,000,000, plus
(ii) (A) for the period from the date hereof up to
and including December 31, 1997, fifty percent (50%) of its
cumulative positive Net Income after July 1, 1997 (said amount
to be calculated on a monthly basis and to take into account
both months in which there is a net profit and months in which
there is a net loss), and (B) for the period beginning January
1, 1998, the sum of (1) fifty percent (50%) of its cumulative
positive Net Income for the period from July 1, 1997 to
December 31, 1997, plus (2) fifty percent (50%) of its
cumulative positive Net Income after December 31, 1997 (said
amounts to be calculated on a monthly basis and to take into
account both months in which there is a net profit and months
in which there is a net loss), plus
(iii) eighty percent (80%) of all capital
contributions made to the Company after July 1, 1997."
c. Subsection (k)(2) of the definition of "Eligible Mortgage
Loan" contained in the Credit Agreement is hereby amended by deleting the phrase
"twenty-one (21) days" therefrom and substituting the phrase "forty-five (45)
days" in lieu thereof.
d. Subsection (k)(3) of the definition of "Eligible Mortgage
Loan" contained in the Credit Agreement is hereby amended by deleting the phrase
"twenty-one (21) days" therefrom and substituting the phrase "ninety (90) days"
in lieu thereof.
e. The Form of Borrowing Base Schedule attached as Exhibit G
to the Credit Agreement is hereby deleted in its entirety and the Form of
Borrowing Base Schedule attached as Annex I hereto is hereby substituted in lieu
thereof.
2
3. This Amendment shall become effective as of the date
hereof, provided that the Administrative Agent shall have received by such date
the following items:
a. A copy of this Amendment executed by the Borrower, the
Guarantor, each of the Lenders, and the Administrative Agent (whether
such parties shall have signed the same or different copies);
b. A First Amendment to Amended and Restated Security and
Collateral Agency Agreement of even date herewith in form and substance
satisfactory to the Administrative Agent, executed by the Borrower, the
Administrative Agent, and the Collateral Agent (whether such parties
shall have signed the same or different copies);
c. A Reaffirmation and Modification of Guaranty of even date
herewith in form and substance satisfactory to the Administrative
Agent, executed by the Guarantor;
d. A certificate of even date herewith signed by the President
or any Vice President of the Borrower and attested to by the Secretary
or any Assistant Secretary of the Borrower certifying that (i) the
Articles, Bylaws and resolutions of the Borrower previously delivered
to the Administrative Agent remain in full force and effect except as
provided therein, (ii) the Borrower remains in good standing, (iii) all
representations and warranties of the Borrower previously made to the
Lenders remain true, complete and accurate, and (iv) no Event of
Default or Potential Default has occurred and is continuing; and
e. Resolutions of the Borrower and of the Guarantor
authorizing the execution of this Amendment.
4. This Amendment is limited and, except as set forth herein, shall not
constitute a modification, acceptance or waiver of any other provision of the
Credit Agreement, or any other document or instrument entered into in connection
therewith.
5. This Amendment may be executed in any number of counterparts by the
different parties hereto on separate counterparts, each of which counterparts
when executed and delivered shall be an original, but all of which together
shall constitute one and the same instrument. A complete set of counterparts
shall be lodged with the Borrower and the Administrative Agent.
6. This Amendment and the rights and obligations of the parties
hereunder shall be construed in accordance with and governed by the laws of the
State of North Carolina.
3
7. From and after the date hereof, all references in the Credit
Agreement, and any other document or instrument entered into in connection
therewith, to the Credit Agreement shall be deemed to be references to the
Credit Agreement as amended hereby.
8. The Guarantor joins in the execution and delivery of this Amendment
to acknowledge and consent to the terms hereof and hereby reaffirms its
obligations under the Guaranty (as modified by the Reaffirmation and
Modification of Guaranty) and agrees that the Guaranty (as modified by the
Reaffirmation and Modification of Guaranty) shall remain in full force and
effect with respect to the Obligations.
9. EACH OF THE LENDERS, THE ADMINISTRATIVE AGENT, THE GUARANTOR AND THE
BORROWER HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES, TO THE FULLEST
EXTENT PERMITTED BY LAW, THE RIGHT ANY OF THEM MAY HAVE TO A TRIAL BY JURY IN
RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER OR IN
CONNECTION WITH THIS AMENDMENT AND ANY AGREEMENT CONTEMPLATED TO BE EXECUTED IN
CONJUNCTION HEREWITH, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS
(WHETHER VERBAL OR WRITTEN) OR ACTIONS OF ANY PARTY RELATING HERETO OR THERETO.
THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE LENDERS AND THE ADMINISTRATIVE
AGENT TO ENTER INTO THIS AMENDMENT.
4
IN WITNESS WHEREOF, each of the parties hereto has caused a counterpart
of this Amendment to be duly executed and delivered as of the date first above
written.
EMERGENT MORTGAGE CORP., a
South Carolina corporation
By: ______________________________
Name: ____________________________
Title: ___________________________
EMERGENT GROUP, INC., a South
Carolina corporation, as a Guarantor
By: ______________________________
Name: ____________________________
Title: ___________________________
FIRST UNION NATIONAL BANK
(formerly known as First Union
National Bank of North Carolina), a
national banking association, as
Administrative Agent and as a Lender
By: ______________________________
Name: ____________________________
Title: ___________________________
BANKBOSTON, N.A. (formerly known
as The First National Bank of
Boston), a national banking
association
By: ______________________________
Name: ____________________________
Title: ___________________________
5
BANK ONE TEXAS,
N.A., a national banking association
By: ______________________________
Name: ____________________________
Title: ___________________________
BANK UNITED, a federal savings bank
By: ______________________________
Name: ____________________________
Title: ___________________________
COMERICA BANK, a Michigan
banking corporation
By: ______________________________
Name: ____________________________
Title: ___________________________
COMPASS BANK, a
By: ______________________________
Name: ____________________________
Title: ___________________________
THE FIRST NATIONAL BANK OF
CHICAGO, a national banking
association
By: ______________________________
Name: ____________________________
Title: ___________________________
6
GUARANTY FEDERAL BANK FSB, a
federal savings bank
By: ______________________________
Name: ____________________________
Title: ___________________________
NATIONAL CITY BANK OF
KENTUCKY, a national banking
association
By: ______________________________
Name: ____________________________
Title: ___________________________
SOUTHTRUST BANK OF
ALABAMA, NATIONAL ASSOCIATION,
a national banking association
By: ______________________________
Name: ____________________________
Title: ___________________________
7
ANNEX I
EXHIBIT G
TO
AMENDED AND RESTATED MORTGAGE LOAN WAREHOUSING AGREEMENT
DATED AS OF MARCH 20, 1997
BY AND BETWEEN EMERGENT MORTGAGE CORP.,
FIRST UNION NATIONAL BANK
AS ADMINISTRATIVE AGENT,
THE FIRST NATIONAL BANK OF BOSTON AS CO-AGENT
AND THE LENDERS PARTY THERETO
Form of Borrowing Base Schedule
This Borrowing Base Schedule is furnished pursuant to the Amended and
Restated Mortgage Loan Warehousing Agreement dated as of March 20, 1997, as
amended from time to time, among the Company, Administrative Agent, Co-Agent and
the Lenders party thereto (the "Agreement"). Unless otherwise defined herein,
the terms used in this Borrowing Base Schedule have the meanings ascribed
thereto in the Agreement.
A. Aggregate Unit Collateral Values of
Eligible Mortgage Loans in
Borrowing Base as of previous
Borrowing Base Schedule delivered
by the Company $_____________
B. Aggregate Unit Collateral Values of
Eligible Mortgage Loans submitted
for inclusion in Borrowing Base
since previous Borrowing Base
Schedule delivered by the Company $____________
C. Sum of (A plus B) $____________
D. Aggregate Unit Collateral Values of
Eligible Mortgage Loans previously
released by the Collateral Agent for which
the full purchase price has been
received by the Administrative Agent since
previous Borrowing Base Schedule
delivered by the Company $____________
E. Amount by which Aggregate Unit Collateral
8
Values of Eligible Mortgage Loans
withdrawn from the possession of the
Collateral Agent under a trust receipt
and not returned to the Collateral
Agent exceeds $5,000,000 $____________
F. Aggregate Unit Collateral Values of Eligible
Mortgage Loans withdrawn from the
possession of the Collateral Agent under a trust
receipt more than 10 days prior to the date
of this schedule and not returned to
the Collateral Agent $____________
G. Aggregate Unit Collateral Values of
Eligible Mortgage Loans withdrawn from
the possession of the Collateral Agent and
shipped to an investor for purchase more than
45 days prior to the date of this schedule or to a
custodian for pool formation more than 90
days prior to the date of this schedule and
not returned to the Collateral Agent or for
which the full purchase price has not been
received by the Administrative Agent $___________
H. Aggregate Unit Collateral Value of Eligible
Mortgage Loans with an outstanding principal
balance in excess of $350,000 $___________
I. Amount by which the Aggregate Unit Collateral
Value of all Eligible Mortgage Loans with an
outstanding principal balance in excess of
$200,000, but less than or equal to $350,000
exceeds 10% of the Aggregate Facility
Commitment $___________
J. Aggregate Unit Collateral Value of all
Eligible Mortgage Loans where payments
are more than 30 days delinquent $___________
K. Aggregate Unit Collateral Value of all
Eligible Mortgage Loans which have been
included in the Borrowing Base for more
than 180 days $___________
9
L. Aggregate Unit Collateral Value of all
Eligible Mortgage Loans for which the
Required Documents have not been received
within 14 days of inclusion in
the Borrowing Base $___________
M. Amount by which the Aggregate Unit
Collateral Value of all Eligible Mortgage
Loans which have been included in the
Borrowing Base for less than 14 days and
for which the Required Documents
have not been received exceeds 35% of the
Aggregate Facility Commitment during the
first 7 and last 5 days of a month and 15%
of the Aggregate Facility Commitment at
any time $___________
N. Amount by which the Aggregate Unit Collateral
Value of all Eligible Mortgage Loans (other
than High-LTV Mortgage Loans) which have been included in the
Borrowing Base for more than 120 days but less than or equal
to 180 days exceeds 20% of the Aggregate Facility
Commitment $___________
O. Aggregate Unit Collateral Value of all Eligible
Mortgage Loans which are High-LTV Mortgage
Loans and which have been included in the
Borrowing Base for more than 60 days $___________
P. Amount by which the Aggregate Unit Collateral
Value of all Eligible Mortgage Loans which
are High-LTV Mortgage Loans exceeds 15% of
the Aggregate Facility Commitment $__________
10
Q. Sum of (D plus E plus F plus G plus H plus I
plus J plus K plus L plus M plus N plus O plus P)
$___________
R. Adjusted Collateral Value of the
Borrowing Base (C minus Q) $___________
S. Aggregate principal amount of Loans
outstanding $___________
T. Borrowing Base availability (R minus S;
must equal or exceed zero) $___________
The undersigned hereby certifies that, as of the date hereof:
(1) I am the duly elected _______________ of the Company;
(2) The above schedule accurately states the Collateral Value of the Borrowing Base and the
aggregate principal amount of Loans outstanding;
(3) All Mortgage Loans included in the Borrowing Base as Eligible
Mortgage Loans comply in all respects with the requirements of the
definition of "Eligible Mortgage Loan"; and
(4) I have no knowledge of the existence of any condition or event
which constitutes an Event of Default under the Agreement.
Certified on behalf of the undersigned this _____ day of _________, 19___.
EMERGENT MORTGAGE CORP.
By: ______________________________
Name: ____________________________
Title:____________________________
11
