EXHIBIT 10.5.3
FOURTH AMENDMENT TO AMENDED AND RESTATED
SERVICING SECURED CREDIT AGREEMENT
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THIS FOURTH AMENDMENT TO AMENDED AND RESTATED SERVICING SECURED CREDIT
AGREEMENT (the "Amendment") is made and dated as of the 25th day of February,
1998, by and among THE FIRST NATIONAL BANK OF CHICAGO, a national banking
association ("FNBC"), BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION, a
national banking association, THE BANK OF NEW YORK, a banking corporation
organized under the laws of the State of New York, (all of the above
individually a "Lender" and, collectively, the "Lenders"), FNBC, as
administrative agent for the Lenders (in such capacity, the "Administrative
Agent"), and HEADLANDS MORTGAGE COMPANY, a California corporation (the
"Company").
RECITALS
A. Pursuant to that certain Amended and Restated Servicing Secured Credit
Agreement dated as of August 29, 1997 among the Administrative Agent, the
Lenders and the Company (as amended to date, the "Agreement"), the Lenders
agreed to extend credit to the Company on the terms and subject to the
conditions set forth therein. All capitalized terms not otherwise defined
herein shall have the meanings given to such terms in the Agreement.
B. The Company and the Lenders desire to amend certain provisions of the
Agreement as more particularly described 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. Modification of Certain Financial Covenants. To reflect the agreement
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of the parties hereto to modify certain of the financial covenants set forth in
the Agreement, effective as of the Effective Date (as defined in Paragraph 6
below):
(a) Paragraph 8(k) of the Agreement is hereby amended to read in its
entirety as follows:
"8(k) Minimum Net Worth. Permit at any date its consolidated:
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(1) Effective Net Worth to be less than the sum of (i) the
greater of: (A) the amount equal to $40,000,000.00 plus fifty percent
(50%) of the Company's consolidated annual net income (if positive)
earned each calendar year commencing with the year 1998, or (B) the
amount equal to eighty percent (80%) of its consolidated Effective Net
Worth as of the end of the month of occurrence of the initial public
offering of the Company's common stock, minus such
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reductions thereafter that may occur as a result of the final
determination of the exact amount of the Shareholder Distribution,
plus fifty percent (50%) of the Company's consolidated annual net
income (if positive) earned each calendar year (with the first year
being a partial year commencing the month immediately following the
month of occurrence of the initial public offering of the Company's
common stock), plus (ii) following the date of consummation of the
initial public offering of the Company's common stock, eighty percent
(80%) of net proceeds from all subsequent public and private
Subordinated Debt and equity offerings of the Company; or
(2) Adjusted Tangible Net Worth to be less than the sum of
(i) the greater of: (A) the amount equal to $70,000,000.00 plus fifty
percent (50%) of the Company's consolidated annual net income (if
positive) earned each calendar year commencing with the year 1998, or
(B) the amount equal to eighty percent (80%) of its consolidated
Adjusted Tangible Net Worth as of the end of the month of occurrence
of the initial public offering of the Company's common stock, minus
such reductions thereafter that may occur as a result of the final
determination of the exact amount of the Shareholder Distribution,
plus fifty percent (50%) of the Company's consolidated annual net
income (if positive) earned each calendar year (with the first year
being a partial year commencing the month immediately following the
month of occurrence of the initial public offering of the Company's
common stock), plus, (ii) following the consummation of the initial
public offering of the Company's common stock, eighty percent (80%) of
net proceeds from all subsequent public and private Subordinated Debt
and equity offerings of the Company."
(b) Paragraph 8(n) of the Agreement is hereby amended to read in its
entirety as follows:
"8(n) Maximum Total Liabilities. Permit its consolidated Total
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Liabilities at any date to exceed the sum of:
(1) One hundred percent (100%) of Cash and/or cash
equivalents (excluding restricted cash), plus
(2) Ninety-eight percent (98%) of the outstanding principal
balance of all Eligible Mortgage Loans (other than Eligible HELOC
Assets, Eligible High LTV Mortgage Loans, Eligible Non-Conforming
Mortgage Loans with a Loan-to-Value Ratio in excess of eighty
percent (80%), which Eligible Non-Conforming Mortgage Loans are not
covered by private mortgage insurance, and Eligible A- Mortgage
Loans), plus
(3) Ninety-five percent (95%) of the outstanding principal
balance of all Eligible HELOC Assets, plus
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(4) Ninety percent (90%) of the outstanding principal
balance of all Eligible High LTV Mortgage Loans, plus
(5) Ninety-six percent (96%) of the outstanding principal
balance of all Eligible Non-Conforming Mortgage Loans with a Loan-
to-Value Ratio in excess of eighty percent (80%), which Eligible
Non-Conforming Mortgage Loans are not covered by private mortgage
insurance), plus
(6) Ninety-five percent (95%) of the outstanding principal
balance of all Eligible A- Mortgage Loans, plus
(7) Eighty percent (80%) of: (i) the outstanding principal
balance of all Mortgage Loans excluded from the definition of
"Eligible Mortgage Loan," and (ii) REO net of reserves, plus
(8) Eighty percent (80%) of its current advances and
receivables, plus
(9) The lesser of: (i) seventy percent (70%) multiplied by
the Quoted Market Value of the Eligible Servicing Portfolio, and
(ii) one percent (1%) of the outstanding principal balance of the
Eligible Servicing Portfolio, plus
(10) Seventy percent (70%) of all REMIC-related Mortgage-
Backed Securities held for sale and marked to market quarterly (as
shown on the Company's financial statements), plus
(11) Fifty percent (50%) of: (i) all other securities held
for investment (net of reserves), and (ii) excess servicing (as
shown on the Company's financial statements).
Capitalized terms used in this Paragraph 8(n) and not otherwise
defined herein shall have the meanaings given such terms in the
Warehousing Agreement."
2. Permitted Other Debt. To reflect the agreement of the parties hereto
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to eliminate any dollar restriction on the amount of Indebtedness which the
Company may owe under repurchase agreements, effective as of the Effective Date,
Exhibit K to the Agreement is hereby replaced by Replacement Exhibit K attached
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hereto.
3. Approved Repo Lenders. To reflect the agreement of the parties hereto
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to approve the inclusion of an additional Approved Repo Lender and to reflect
certain name changes of existing Approved Repo Lenders, effective as of the
Effective Date, the current schedule of Approved Repo Lenders is hereby amended
and restated in its entirety in the form attached hereto as Amendment Exhibit A.
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4. Reaffirmation of Other Loan Documents. The Company hereby affirms and
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agrees that (a) the execution and delivery by the Company of and the performance
of its obligations under this Amendment shall not in any way amend, impair,
invalidate or otherwise affect any of the obligations of the Company or the
rights of the Administrative Agent, the Collateral Agent or the Lenders under
the Agreement, the Security Agreement or any other Loan Document, (b) the term
"Obligations" as defined in Paragraph 12 of the Agreement includes, without
limitation, the Obligations of the Company under the Agreement as amended by
this Amendment, (c) the Security Agreement remains in full force and effect and
such agreement constitutes a continuing first priority security interest in and
lien upon the Collateral, and (d) for any and all purposes, any reference to the
Agreement following the effective date of this Amendment shall constitute a
reference to the Agreement as amended to date, including, without limitation, by
this Amendment.
5. Modification of Related Documents. All reports and other forms
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utilized in connection with the day-to-day operations of the credit facility
evidenced by the Agreement shall be deemed modified consistent with the
provisions of this Amendment.
6. Effective Date. The amendments set forth above shall be effective on
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the earliest date (the "Effective Date") upon which the Administrative Agent has
received (a) duly executed copies of this Amendment from each of the Lenders,
the Administrative Agent, the Collateral Agent and the Company, (b) such board
resolutions, incumbency certificates and other additional documentation as the
Administrative Agent may request in connection herewith, and (c) for
distribution to each of the Lenders an amendment fee of one thousand five
hundred dollars ($1,500) per Lender.
7. Representations and Warranties. The Company hereby represents and
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warrants to the Administrative Agent and the Lenders as follows:
(a) The Company has the corporate power and authority and the legal
right to execute, deliver and perform this Amendment and has taken all necessary
corporate action to authorize the execution, delivery and performance of this
Amendment. This 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 its terms. The execution,
delivery and performance of this Amendment will not violate any Requirement of
Law or Contractual Obligation or require any consent, approval or authorization
of, or registration, declaration or filing with, any Governmental Authority.
(b) At and as of the date of execution hereof and at and as of the
Effective Date of this Amendment and both prior to and after giving effect
hereto: (1) the representations and warranties of the Company contained in the
Loan Documents are accurate and complete in all respects, and (2) there has not
occurred an Event of Default or Potential Default.
8. No Other Amendment. Except as expressly amended herein, the Loan
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Documents shall remain in full force and effect as currently written.
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9. Counterparts. This Amendment may be executed in any number of
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counterparts, each of which when so executed shall be deemed to be an original
and all of which when taken together shall constitute one and the same
agreement.
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed as of the day and year first above written.
HEADLANDS MORTGAGE COMPANY,
a California corporation
By:
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Name:
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Title:
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THE FIRST NATIONAL BANK OF CHICAGO,
a national banking association, as Administrative
Agent and a Lender
By:
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Name:
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Title:
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BANK OF AMERICA NATIONAL TRUST AND SAVINGS
ASSOCIATION,
a national banking association, as a Lender
By:
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Name:
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Title:
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THE BANK OF NEW YORK,
a banking corporation organized under
the laws of the State of New York, as a Lender
By:
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Name:
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Title:
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REPLACEMENT EXHIBIT K
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SCHEDULE OF
PERMITTED OTHER DEBT
AND
(*) PERMITTED OTHER SECURED DEBT
(AS OF FEBRUARY 25, 1998)
1. Indebtedness owed under repurchase agreements and gestation repurchase
credit facilities entered into by the Company from time to time with
Approved Repo Lenders.
2. Indebtedness owed under any servicing secured facility (including the
Servicing Secured Credit Agreement) in an aggregate amount not to exceed at
any one time outstanding $30,000,000.00.*
3. Indebtedness owed under credit facilities entered into by and between the
Company and Residential Funding Corporation ("RFC") from time to time
secured by Mortgage Loans that are delinquent or in foreclosure or subject
to a Take-Out Commitment issued by RFC, manufactured housing loans and REO
properties in an aggregate amount not to exceed at any one time outstanding
$15,000,000.00.*
4. Indebtedness owed under any deposit-backed interest rate exchange
agreements and/or investment arbitrage lines, entered into in the ordinary
course of business.*
5. Indebtedness of HMSI to third party lenders in an amount not to exceed
$5,000,000.00 in the aggregate at any time outstanding, the proceeds of
which Indebtedness shall be used by HMSI to finance advance receivables.*
6. Indebtedness of HMSI secured by liens on the retained interests in
securitizations of HMSI in connection with yield maintenance arrangements
on securities issued through HMSI.
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AMENDMENT EXHIBIT A
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SCHEDULE OF
APPROVED REPO LENDERS
[To be provided by the Company and approved by the Majority Lenders]
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