Exhibit 10-7
SECOND AMENDMENT
TO
MORTGAGE LOAN WAREHOUSING AGREEMENT
THIS SECOND AMENDMENT TO MORTGAGE LOAN WAREHOUSING AGREEMENT
(the "Second Amendment") is made and dated as of the 15th day of
October, 1999 by and among FIRST MORTGAGE CORPORATION, a
California corporation (the "Company"), the Lenders, SANWA BANK
CALIFORNIA, as collateral agent for the Lenders (in such
capacity, the "Collateral Agent"), and BANK OF AMERICA, N.A.
(formerly NationsBank, N.A.), as administrative agent for the
Lenders (in such capacity, the "Administrative Agent").
RECITALS
A. Pursuant to that certain Mortgage Loan Warehousing
Agreement dated as of July 22, 1999 among the Company, the
Lenders and the Administrative Agent (as amended, extended and
replaced from time to time, the "Credit Agreement," and with
capitalized terms used herein and not otherwise defined used with
the meanings given such terms in the Credit Agreement), the
Lenders agreed to extend credit to the Company on the terms and
subject to the conditions set forth therein.
B. The parties hereto have agreed to amend the Credit
Agreement in certain respects, as set forth more particularly
below.
NOW, THEREFORE, in consideration of the foregoing Recitals
and for other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the parties hereto
hereby agree as follows:
AGREEMENT
1. Amendments.
(a) Eligible Mortgage-Backed Security. To reflect the
agreement of the parties hereto to change the definition of the
term "Eligible Mortgage-Backed Security," effective as of the
Second Amendment Effective Date (as defined in Paragraph 3
below), the definition of the term "Eligible Mortgage-Backed
Security" set forth in the Glossary is hereby amended by deleting
subparagraph (g) set forth therein.
(b) Unit Collateral Value. To reflect the agreement of
the parties hereto to change the Unit Collateral Value of
Eligible Mortgage-Backed Securities, effective as of the Second
Amendment Effective Date, subparagraph (f) of the definition of
the term "Unit Collateral Value" set forth in the Glossary is
hereby amended to read in its entirety as follows:
"(f) With respect to each Eligible Mortgage-Backed Security
that has been included in the Warehouse Borrowing Base for not
more than sixty (60) days, ninety-nine percent (99%) of the least
of: (1) the face amount thereof, (2) the Applicable Take-Out
Price therefor, if any, and (3) the Fair Market Value thereof;
and with respect to each Eligible Mortgage-Backed Security that
has been included in the Warehouse Borrowing Base for more than
sixty (60) days, ninety-two percent (92%) of the least of: (1)
the face amount thereof, (2) the Applicable Take-Out Price
therefor, if any, and (3) the Fair Market Value thereof."
(c) Fair Market Value. To reflect the agreement of the
parties hereto to add certain provisions regarding the Fair
Market Value, effective as of the Second Amendment Effective
Date, the term "Fair Market Value" set forth in the Glossary is
hereby amended to read in its entirety as follows:
"'Fair Market Value' shall mean at any date with respect to
any Mortgage Loan or Mortgage-Backed Security, the fair market
value thereof as of such date as determined by the Administrative
Agent in its reasonable business judgment in conformity with
standard industry practice for valuing similar Mortgage Loans and
Mortgage-Backed Securities; provided, however, that the
Administrative Agent may rely on information provided by the
Company to the Administrative Agent pursuant to Paragraph 9(b)(4)
of the Agreement; and provided further, that the Fair Market
Value of any Mortgage-Backed Security shall not exceed at any
date the lowest Fair Market Value determined prior to such date
for such Mortgage-Backed Security during the term it is included
in the Warehouse Borrowing Base."
(d) Applicable Eurodollar Rate. To reflect the agreement
of the parties hereto to modify the Eurodollar Spread in
connection with the Applicable Eurodollar Rate, effective as of
the Second Amendment Effective Date, the definition of the term
"Eurodollar Spread" set forth in the Glossary is hereby amended
to read in its entirety as follows:
"'Eurodollar Spread' shall mean: (a) with respect to
Standard Loans up to a principal amount equal to the Collateral
Value of the Warehouse Borrowing Base consisting of Eligible
Mortgage-Backed Securities, three-quarters of one percent
(0.75%), (b) with respect to any remaining Standard Loans, one
and one-quarter of one percent (1.25%), and (c) with respect to
Gestation Loans, three-quarters of one percent (0.75%)."
(e) Applicable Effective Fed Funds Rate. To reflect the
agreement of the parties hereto to modify the Applicable
Effective Fed Funds Rate, effective as of the Second Amendment
Effective Date, the term "Applicable Effective Fed Funds Rate"
set forth in the Glossary is hereby amended to read in its
entirety as follows:
"'Applicable Effective Fed Funds Rate' shall mean on any day
the Effective Fed Funds Rate on such day plus, (a) with respect
to Standard Loans and Swing Line Loans up to a principal amount
equal to the Collateral Value of the Warehouse Borrowing Base
consisting of Eligible Mortgage-Backed Securities, three-quarters
of one percent (0.75%), (b) with respect to any remaining
Standard Loans and Swing Line Loans, one and one-quarter of one
percent (1.25%), and (c) with respect to Gestation Loans, three-
quarters of one percent (0.75%)."
2. Reaffirmation of Loan Documents. The Company affirms and
agrees that (a) the execution and delivery by the Company of and
the performance of its obligations under this Second Amendment
shall not in any way amend, impair, invalidate or otherwise
affect any of the obligations of the Company or the rights of the
Lenders under the Credit Agreement and the other Loan Documents
or any other document or instrument made or given by the Company
in connection therewith, (b) the terms "Obligations" as used in
the Loan Documents include, without limitation, the Obligations
of the Company under the Credit Agreement as amended hereby, and
(c) except as expressly amended hereby, the Loan Documents remain
in full force and effect as written.
3. Second Amendment Effective Date. This Second Amendment
shall be effective as of July 22, 1999 (the "Second Amendment
Effective Date") upon the receipt by the Administrative Agent of
this Second Amendment duly executed by all parties hereto.
4. No Other Amendment. Except as expressly amended herein,
the Credit Agreement and other Loan Documents shall remain in
full force and effect as currently written.
5. Counterparts. This Second Amendment may be executed in
any number of counterparts, each of which when so executed shall
be deemed to be an original and all of which when taken together
shall /p constitute one and the same agreement.
6. Representations and Warranties. The Company hereby
represents and warrants to the Lender as follows:
(a) The Company has the corporate power and authority and
the legal right to execute, deliver and perform this Second
Amendment and has taken all necessary corporate action to
authorize the execution, delivery and performance of this Second
Amendment. This Second Amendment has been duly executed and
delivered on behalf of the Company and constitutes the legal,
valid and binding obligation of the Company, enforceable against
the Company in accordance with their respective terms.
(b) At and as of the date of execution hereof and at and
as of the effective date of this Second Amendment and both prior
to and after giving effect to this Second Amendment: (1) the
representations and warranties of the Company contained in the
Credit Agreement and the other Loan Documents are accurate and
complete in all respects, and (2) there has not occurred an Event
of Default or Potential Default under the Credit Agreement.
