Prepared by MERRILL CORPORATION www.edgaradvantage.com Exhibit 10.1 FIRST AMENDMENT TO CREDIT AND SECURITY AGREEMENT THIS FIRST AMENDMENT TO CREDIT AND SECURITY AGREEMENT (this "Amendment") is entered into as of this 23rd day of September 1999, by and...
Prepared by XXXXXXX CORPORATION xxx.xxxxxxxxxxxxxx.xxxExhibit 10.1
FIRST AMENDMENT TO CREDIT AND SECURITY AGREEMENT THIS FIRST AMENDMENT TO CREDIT AND SECURITY AGREEMENT (this "Amendment") is entered into as of this 23rd day of September 1999, by and between THE WMF GROUP, LTD., a Delaware corporation ("WMF Group"); WMF WASHINGTON MORTGAGE CORP., a Delaware corporation ("Washington"); WMF/XXXXXXX, XXXXX ASSOCIATES LIMITED, a Delaware corporation ("Xxxxxxx"); WMF XXXXXXX, LTD., a Michigan corporation ("Xxxxxxx"); THE XXXXXX X. XXXXXX COMPANY, a Texas corporation ("Xxxxxx"); THE XXXXXX X. XXXXXX COMPANY-ARIZONA, an Arizona corporation ("Xxxxxx-Arizona"); and WMF CARBON MESA ADVISORS, INC., a Delaware corporation ("Carbon Mesa"; WMF Group, Washington, Huntoon, Proctor, Wilson, Xxxxxx-Arizona, Carbon Mesa and any other Subsidiary of WMF Group that may at any time hereafter become a party to the Agreement are hereafter collectively referred to as the "Borrowers"), RESIDENTIAL FUNDING CORPORATION, a Delaware corporation ("RFC"), BANK UNITED, a federal savings bank ("Bank United"), LASALLE BANK NATIONAL ASSOCIATION f/k/a LASALLE NATIONAL BANK, a national banking association ("LaSalle"; RFC, Bank United, LaSalle and any Additional Lender that may at any time hereafter become party hereto are hereafter referred to as the "Lenders"), and RFC as credit agent for the Lenders (in such capacity, the "Credit Agent"). WHEREAS, the Borrowers, the Lenders and the Credit Agent have entered into a revolving warehouse facility with a present Warehouse Credit Limit of $150,000,000 (the "Warehousing Commitment"), a servicing facility with a Servicing Facility Credit Limit of $25,000,000 (the "Servicing Facility Commitment"), and a term loan facility with a present Term Loan Credit Limit of $25,000,000 (the "Term Loan Commitment"), as evidenced by a Credit and Security Agreement (Syndicated Agreement) dated February 10, 1999, as the same may have been amended or supplemented (the "Agreement"); WHEREAS, the Borrowers have requested the Lenders to amend certain terms of the Agreement, and the Lenders have agreed to such amendment of the Agreement 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 September 23, 1999, the date on which the Borrowers have complied with all the terms and conditions of this Amendment. 3. The Lenders hereby consent to investments by WMF Group after the Effective Date in an aggregate amount not to exceed $1,750,000 in WMFCC, provided that the Borrowers provide a schedule of amounts owed by WMFCC as of the Effective Date to the Credit Agent before the first such investment, and will deliver updated schedules to the Credit Agent as amounts owed by WMFCC are repaid and at the request of the Credit Agent. 4. For the period from October 25, 1999 through the earlier of (i) the date repayment in full of the Advances against the Mortgage Loan described on Schedule I hereto (the "Scheduled Loan") is required under the Agreement and (ii) November 25, 1999, the Warehousing Credit Limit shall be $250,000,000 and RFC's Maximum Warehousing Commitment shall be $215,500,000. Notwithstanding anything to the contrary set forth in the Agreement: (a) Warehousing Advances during such period shall be made by the Lenders holding Warehousing Commitments (i) ratably, based on (A) in the case of RFC, $115,500,000 ("RFC's Permanent Warehousing Commitment") and (B) in the case of the other Lenders holding Warehousing Commitments, their respective Maximum Warehousing Commitments, until such amounts are fully advanced, and (ii) thereafter, by RFC only up to the amount of its Maximum Warehousing Commitment; and (b) As long as the maturity of the Warehousing Commitments has not been accelerated pursuant to Section 8.2 of the Agreement, payments received by the Credit Agent in respect of the principal amount of Warehousing Advances outstanding shall be applied first, to Warehousing Advances made by RFC to the extent the outstanding principal balance thereof exceeds the RFC Permanent Warehousing Commitment, and thereafter, to the remaining Warehousing Advances outstanding, ratably among the Lenders holding Warehousing Commitments. On the earlier of November 25, 1999 or the date repayment of the Advances against the Scheduled Loans is required under the Agreement, the amount by which the outstanding principal balance of Warehousing Advances exceeds the Warehousing Credit Limit (as reduced by the expiration of the temporary increase provided for in this paragraph 20) shall be due and payable to RFC. 5. Section 1.1 of the Agreement shall be amended to delete the following definition in its entirety, replacing it with the following definition: "Debt Payments" means, as of the last day of any fiscal quarter of WMF Group and its Subsidiaries, the sum of (a) the aggregate amount of scheduled principal payments required under this Agreement on the Term Loan Advances in the 1 or 4, as applicable, fiscal quarters following such date, (b) the aggregate amount of scheduled principal payments on other Debt of WMF Group (and its Subsidiaries, on a consolidated basis) in the 1 or 4, as applicable, fiscal quarters following such date, and (c) the amount of interest expense deducted in calculating net income for the 1 or 4, as applicable, fiscal quarters ending on such date incurred on Debt of WMF Group (and its Subsidiaries, on a consolidated basis), other than (i) the Warehousing Advances and (ii) other Debt secured by Multifamily Mortgage Loans, Commercial Mortgage Loans and/or Mortgage-backed Securities covered by Purchase Commitments issued by Investors, to the extent such Debt does not exceed the Committed Purchase Price of such Mortgage Loans. "Debt Service Coverage Ratio" means, as of the last day of any fiscal quarter of WMF Group and its Subsidiaries, the ratio of Funds From Operations to Debt Payments. "Funds From Operations" means, as of the last day of any fiscal quarter of WMF Group and its Subsidiaries, the sum of (a) the net income of WMF Group (and its Subsidiaries on a consolidated basis) for the 1 or 4, as applicable, fiscal quarters ending on such date, plus(b) the amount of income tax expense deducted in calculating such net income, minus (c) the amount of income taxes actually paid by WMF Group and its Subsidiaries during such 1 or 4, as applicable, fiscal quarters, plus (d) depreciation, amortization and other non-cash items deducted in calculating such net income, minus (e) non-cash revenue included in calculating such net income, minus (f) the amount of dividends paid and other distributions made on the capital stock of WMF Group during such 1 or 4, as applicable, fiscal quarters, plus (g) the amount of interest expense deducted in calculating net income for the 1 or 4, as applicable, fiscal quarters ending on such date incurred on Debt of WMF Group (and its Subsidiaries, on a consolidated basis), other than (i) the Warehousing Advances, and (ii) other Debt secured by Multifamily Mortgage Loans, Commercial Mortgage Loans and/or Mortgage-backed Securities covered by Purchase Commitments issued by Investors, to the extent such Debt does not exceed the Committed Purchase Price of such Mortgage Loans. "Letter of Credit" means a letter of credit issued by LaSalle for the account of the Borrowers, for the benefit of Xxxxxx Xxx with respect to Xxxxxx Mae's Loan Loss Reserve requirement or for any other corporate purpose of the Borrowers, except to the extent (a) LaSalle is holding separate collateral for the Borrowers' reimbursement obligations in respect thereof, or (b) after giving effect to the issuance of such Letter of Credit either (i) the Servicing Secured Obligations would exceed sixty-five percent (65%) of the Servicing Collateral Value or (ii) the sum of the outstanding principal balance of the Servicing Facility Advances, the amount available to be drawn under all Letters of Credit and the Letter of Credit Obligations would exceed the Servicing Facility Credit Limit. No letter of credit issued by LaSalle shall be a "Letter of Credit" hereunder unless the Credit Agent receives (A) within 1 Business Day after such letter of credit is issued, a copy of such letter of credit and a confirmation from LaSalle that LaSalle is not holding any separate collateral therefor, and (B) not less than 2 Business Days prior to the issuance of such letter of credit, a copy of the application for such Letter of Credit, containing such information as may be required to permit the Credit Agent to determine whether the requirements of clause (b) above have been satisfied. "Servicing Collateral Value" means, as of the date of any determination, the sum of (i) with respect to any Servicing Contracts, the Appraisal Value of such Servicing Contracts (adjusted to account for Servicing Contracts sold or Mortgage Loans repaid since the date of the most recent Appraisal in accordance with the methodology of such Appraisal), (ii) the sum of the Net Aggregate Shortfalls against which P&I Advances are outstanding, and (iii) the outstanding balance of Receivables against which Liquidity Advances are outstanding; provided, that for purposes of calculating the Servicing Collateral Value, the following Mortgage Loans shall be excluded: (i) Mortgage Loans on which any payment is more than sixty (60) days past due, (ii) Mortgage Loans in respect of which the borrowers have commenced foreclosure proceedings, (iii) Mortgage Loans in respect of which any obligor is the subject of a bankruptcy proceeding, (iv) Mortgage Loans serviced pursuant to Servicing Contracts with Affiliates of the Borrowers, including without limitation, WMFCC, or with special purpose entities created by Affiliates in connection with the securitization of Mortgage Loans; and (v) Servicing Contracts excluded in calculating the Adjusted Servicing Portfolio, other than pursuant to clause (b) of the definition thereof. 6. Section 2.1(c)(8) of the Agreement shall be deleted in its entirety and the following shall be substituted in lieu thereof: (8) No P&I Advance or Liquidity Advance shall be made hereunder if, after giving effect to such Advance, the aggregate outstanding principal balance of the Servicing Secured Obligations would exceed sixty-five (65%) of the Servicing Collateral Value. The Credit Agent shall specifically confirm whether this requirement has been met prior to any P&I Advance or Liquidity Advance being made. 7. Section 2.3(a) of the Agreement shall be deleted in its entirety and the following shall be substituted in lieu thereof: 2.3(a) The Borrowers may obtain Warehousing Advances hereunder, subject to the satisfaction of the conditions set forth in Sections 4.1 and 4.2 hereof, upon compliance with the procedures set forth in this Section 2.3 and in the following described Exhibits, attached hereto and made a part hereof including the delivery of all documents listed in the following described Exhibits (the "Collateral Documents") to the Collateral Agent, as applicable to the type of Collateral being financed: (1) Conventional Mortgage Loans, Xxxxxx Xxx DUS Mortgage Loans and Commercial Mortgage Loans, as set forth inExhibit D-MF/CONV/DUS hereto. (2) FHA Project Mortgage Loans, FHA Construction Mortgage Loans and HUD 241 Mortgage Loans, as set forth in Exhibit D-MF/FHAhereto. (3) Special Xxxxxx Mae Mortgage Loans, as set forth in Exhibit D-MF/SFNMAL hereto. Requests for Warehousing Advances shall be initiated by the Borrowers by delivering to the Credit Agent, with a copy to the Collateral Agent (unless the Credit Agent is also the Collateral Agent), no later than one (1) Business Day prior to any Business Day that the Borrowers desire to borrow hereunder, a completed and signed request for a Warehousing Advance (a "Warehousing Advance Request") on the then current form approved by the Credit Agent. The current forms in use by the Credit Agent are Exhibit C-MF for Warehousing Advances, other than P&I Advances and Liquidity Advances, and Exhibit C-P&I for P&I Advances and Liquidity Advances. The Credit Agent shall have the right, on not less than three (3) Business Days' prior Notice to the Borrowers, to modify any of said Exhibits to conform to current legal requirements or Collateral Agent practices, and, as so modified, said Exhibits shall be deemed a part hereof. 8. Section 2.3(d) of the Agreement shall be deleted in its entirety and the following shall be substituted in lieu thereof: 2.3(d) Neither the Credit Agent nor any Lender shall incur any liability to the Borrowers in acting upon any telephonic notice referred to in this Agreement which the Credit Agent or such Lender believes in good faith to have been given by a duly authorized officer or other Person authorized to borrow on behalf of the Borrowers or for otherwise acting in good faith under this Section. Upon the funding of Warehousing Advances by the Lenders in accordance with this Agreement pursuant to any telephonic notice, the Borrowers shall have effected borrowings hereunder. A Warehousing Advance Request shall be irrevocable and the Borrowers shall be bound to accept a Warehousing Advance in accordance herewith, if such Warehousing Advance Request is not revoked prior to 10:00 a.m. on the date the Warehousing Advance is to be disbursed; provided, however, that in the case of a Swingline Advance, a Warehousing Advance Request may be revoked until 12:00 noon on the date the Swingline Advance is to be disbursed. 9. Section 2.10(k) of the Agreement shall be deleted in its entirety and the following shall be substituted in lieu thereof: 2.10(k) For a period of not less than seven (7) consecutive days in each calendar month, there shall be no Liquidity Advances outstanding; and the Borrowers shall make such prepayments of the Liquidity Advances, and shall refrain from requesting Liquidity Advances, as necessary to comply with the foregoing requirement. 10. Section 7.12 of the Agreement shall be deleted in its entirety and the following shall be substituted in lieu thereof: 7.1 Debt Service Coverage Ratio. (a) Permit the Debt Service Coverage Ratio, measured as of the last day of any fiscal quarter ending on or after December 31, 1999, for the prior fiscal quarters ended on such date, to be less than the amount for the last day of such fiscal quarter set forth below:
| Fiscal Quarter Ending | Minimum Debt Service
Coverage Ratio | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| December 31, 1999 | 0.50 to 1.00 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| March 31, 2000 | 0.75 to 1.00 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Thereafter | 1.50 to 1.00
(b) Permit
the Debt Service Coverage Ratio, measured as of December 31, 1999 for the fiscal quarter ended on such date, to be less than 1.00 to 1.00.
11. The
address for Notices to Bank United under the Agreement shall be amended to read as follows:
Bank
United
000 Xxxxxx Xxxxxx
0000 Xxxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, XX 00000
Attention: Xxxx X. Xxxx, Director
with
a copy to:
Bank
United
0000 Xxxxxxxxx Xxxxxxx
Xxxxx 0000
Xxxxxxx, XX 00000
Attn: Xxxxx Xxxxx
Associate General Counsel
12. Upon
execution of this Amendment, the Borrowers agree to pay to RFC its Warehousing Commitment Fee on the increased portion of RFC's Maximum Commitment Amount for
the time period from October 25, 1999 to and including November 25, 1999.
13. The
Warehousing Promissory Note executed by the Borrowers in favor of RFC is amended and restated in its entirety as set forth in the First Amended and Restated
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 Notes shall be deemed to refer to the First Amended and Restated Promissory Note of RFC delivered in connection with this Amendment.
14. Exhibit D-MF/FNMA to the Agreement is deleted in its entirety and replaced with the newExhibit D-MF/FNMAL attached to this Amendment. All references in this
Amendment and the Agreement toExhibit D-MF/FNMA shall be deemed to refer to the newExhibit D-MF/FNMAL.
15. Exhibit I-MF to the Agreement is deleted in its entirety and replaced with the newExhibit I-MF attached to this Amendment. All references in this Amendment and
the Agreement toExhibit I-MF shall be deemed to refer to the new Exhibit I-MF.
16. The
Borrowers shall deliver to the Credit Agent (a) an original of this Amendment, executed by the Borrowers and all of the Lenders; (b) an executed Certificate of
Secretary with corporate resolutions for each Borrower; (c) the schedule of amounts owed by WMFCC; (d) a modification fee in
the amount of $15,000 each payable to Bank United and LaSalle; and (e) a modification fee in the amount of $20,000 payable to RFC.
17. The
Borrowers represent, warrant and agree that (a) the Loan Documents continue to be the legal, valid and binding agreements and obligations of the Borrowers
enforceable in accordance with their terms, as modified herein, (b) the Lenders are not in default under any of the Loan Documents and the Borrowers have no offset or defense to their performance or
obligations under any of the Loan Documents, (c) the representations contained in the Loan Documents remain true and accurate in all respects, and (d) there has been no material adverse change in the
financial condition of the Borrowers from the date of the Agreement to the date of this Amendment.
18. Except
as hereby expressly modified, the Agreement shall otherwise be unchanged and shall remain in full force and effect, and the Borrowers ratify and reaffirm all
of its obligations thereunder.
19. 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.
IN
WITNESS WHEREOF, the Borrowers and the Lenders have caused this Amendment to be duly executed on their behalf by their duly authorized officers as of the day and year above
written.
BORROWERS:
THE
WMF GROUP, LTD.,
a Delaware corporation
By:
/s/ Xxxxxxxxx Xxxxxxxx-Xxxxxx
Its:
EVP & CFO
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