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EXHIBIT 10.27
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4/99 AMENDMENT TO
AMENDED AND RESTATED
SENIOR SECURED
CREDIT AGREEMENT
DATED AS OF APRIL 22, 1999
BY AND AMONG
LONG BEACH MORTGAGE COMPANY
AND
CHASE BANK OF TEXAS, NATIONAL ASSOCIATION,
AS AGENT AND AS A LENDER,
AND
THE OTHER LENDER(S) PARTIES HERETO
AMENDING (FOR THE SECOND TIME) THE
4/98 AMENDED AND RESTATED SENIOR SECURED CREDIT AGREEMENT
AMONG THEM
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INDEX OF DEFINED TERMS
"4/98 A&R Credit Agreement".................................................................1
"4/99 Amendment Effective Date".............................................................9
"4/99 Amendment"............................................................................1
"7/98 Amendment"............................................................................1
"Agent".....................................................................................1
"Amendment".................................................................................1
"Broker's Price Opinion"....................................................................9
"Cash Equivalents"..........................................................................9
"Chase Texas"...............................................................................1
"Company"...................................................................................1
"Credit Agreement"..........................................................................1
"Disqualifying Event".......................................................................3
"Lenders"...................................................................................1
"Maximum Aggregate Commitment"..............................................................8
"Xxxxx'x"..................................................................................10
"Primary Residence Loan"...................................................................10
"Qualified Bank"...........................................................................10
"Receivables Collateral Value"..............................................................2
"S&P"......................................................................................10
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TABLE OF CONTENTS
Preamble.....................................................................................1
Recitals.....................................................................................1
Agreements...................................................................................2
1. DEFINITIONS..............................................................................2
1.1 Defined Terms...................................................................2
2. THE LENDERS=COMMITMENTS.................................................................10
5. INTEREST, PRINCIPAL AND FEES PAYMENTS...................................................11
5.6 Commitment Fee...............................................................11
6. COLLATERAL..............................................................................11
6.1 Grant of Security Interest.....................................................11
7. CONDITIONS PRECEDENT....................................................................12
7.4 Advances After April 22, 1999.................................................12
8. REPRESENTATIONS.........................................................................13
10. NEGATIVE COVENANTS.....................................................................14
10.12 The Company's Liquidity......................................................15
10.13 Successive Quarterly Losses..................................................15
13. RELATIONSHIPS AMONG THE AGENT AND THE LENDERS..........................................15
15. MISCELLANEOUS..........................................................................15
15.10 Notice Pursuant to Tex. Bus. & Comm. Code Section 26.02.......................16
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4/99 AMENDMENT TO
AMENDED AND RESTATED
SENIOR SECURED CREDIT AGREEMENT
Preamble
This 4/99 Amendment to Amended and Restated Senior Secured Credit
Agreement (the "4/99 AMENDMENT" or, within itself only, this "AMENDMENT" dated
as of April 22, 1999 (the "4/99 AMENDMENT EFFECTIVE DATE") amending (for the
second time) the 4/98 Amended and Restated Senior Secured Credit Agreement dated
as of April 13, 1998 (the "4/98 A&R CREDIT AGREEMENT", or as amended by the 7/98
Amendment to Amended and Restated Senior Secured Credit Agreement dated as of
July 29, 1998 " the "7/98 AMENDMENT", as amended hereby and as it may be
supplemented, further amended or restated, the "CREDIT AGREEMENT"), among LONG
BEACH MORTGAGE COMPANY (the "COMPANY"), a Delaware corporation with its
principal office at 0000 Xxxx & Xxxxxxx Xxxx, Xxxxx 0000, Xxxxxx, Xxxxxxxxxx
00000, CHASE BANK OF TEXAS, NATIONAL ASSOCIATION ("CHASE TEXAS"), a national
banking association acting as a Lender and agent and Representative of the
Lenders and Eligible Assignees (in that capacity, Chase Texas is called the
"AGENT"), and such other lenders as may from time to time be party to the Credit
Agreement (together with Chase Texas, the "Lenders') recites and states as
follows:
Recitals
Capitalized terms used in these recitals have the meanings assigned to
them in the 4/98 Credit Agreement, as amended by the 7/98 Amendment.
Pursuant to SECTION 2.2 of the Credit Agreement, the Company has
requested that the Maximum Committed Amount be increased and the undersigned
Lenders have agreed to increase the same to Three Hundred Twenty-five Million
Dollars ($325,000,000) and the Company, the Lenders and the Agent hereby further
amend the 4/98 A&R Credit Agreement, as amended by the 7/98 Amendment, to
reflect such increase, upon and subject to the terms and conditions of this
Amendment. If there is any conflict or inconsistency between any of the terms or
provisions of this Amendment and any of the other Facilities Papers, this
Amendment shall govern and control. If there is any conflict between any
provision of this Amendment and any later supplement, amendment, restatement or
replacement of the 4/98 A&R Credit Agreement, then the latter shall govern and
control.
The Sections of this Amendment are numbered to correspond with the
Sections of the 4/98 A&R Credit Agreement amended hereby and are accordingly
often in nonsequential numerical order.
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Agreements
In consideration of the premises, the mutual agreements stated below and
other good and valuable consideration paid by each party to each other party to
this Agreement, the receipt and sufficiency of which each hereby acknowledges,
the parties hereby agree as follows.
1. DEFINITIONS
1.1 Defined Terms.
A. The definition of ?Recoveries Collateral Value? (contained in the
definition of ?Collateral Value?) is hereby amended in its entirety to read as
follows:
- The "RECOVERIES COLLATERAL VALUE" on any day for a
Single-family Residential Mortgage Loan owned by the Company and Pledged
to the Agent that was either (1) originated or purchased by the Company
but either (i) was not subsequently sold to an investor, or (ii) was
sold to an investor but was subsequently repurchased by the Company due
to underwriting errors, delinquencies or breach of representations or
warranties made in connection with such sale or (2) purchased by the
Company out of a pool of Serviced Loans, or from a Whole Loan investor
for whose Mortgage Loans the Company is a Servicer, pursuant to the
Company's (or an Affiliate"s) obligation or election as Servicer to do
so, shall be seventy-five percent (75%) of the lesser of:
(i) such Pledged Loan"s Principal Balance; or
(ii) the net cash amount paid for such Pledged Loan by the
Company (without regard, however, to any servicing release premium paid
by the Company);
provided, that Recoveries Collateral that was first Pledged to the Agent
more than one hundred eighty (180) days before the date for which such
Collateral Value is being determined shall have zero Collateral Value
unless the Company shall have obtained and furnished to the Agent a
current (i.e., made within sixty (60) days of the date of determination)
Broker?s Price Opinion of the value of the real estate securing such
Recoveries Collateral, and the Collateral Value of that Recoveries
Collateral shall be sixty percent (60%) of the least of:
(x) such Pledged Loan?s Principal Balance;
(y) the net cash amount paid for such Pledged Loan by the Company
(without regard, however, to any servicing release premium paid by the
Company); or
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(z) the value of the real estate securing such Pledged Loan as
stated in such current Broker"s Price Opinion;
provided further, that Recoveries Collateral that was first Pledged to
the Agent more than three hundred sixty (360) days before the date for
which its Collateral Value is being determined shall never have
Collateral Value greater than zero " albeit that, as the definition of
"Disqualifying Event" (as amended by the 4/99 Amendment) provides,
Recoveries Collateral that was first Pledged to the Agent more than one
hundred eighty (180) days, but not more than three hundred sixty (360)
days, before the date for which its Collateral Value is being determined
will continue to have Collateral Value (determined as provided in the
immediately preceding proviso by applying a sixty percent (60%) factor
to the least of its principal balance, the Company's net cost to acquire
it or its underlying real estate"s Broker"s Price Opinion value, or as
provided in the immediately following proviso by applying such factor to
its Market Value if the Agent marks it to market), although the maximum
aggregate Collateral Value for such Recoveries Collateral that was so
first Pledged to the Agent between 180 days and 360 days before such
determination date is limited (as provided in the definition of
"Disqualifying Event, as amended by the 4/99 Amendment) to an amount
equal to fifty percent (50%) of the Recoveries Sublimit for that date;
provided further, that if the Agent shall elect to xxxx any such Pledged
Loan to market, its Collateral Value shall be seventy-five percent (75%)
" or sixty percent (60%) in the case of Recoveries Collateral that was
first Pledged to the Agent more than one hundred eighty (180) days but
not more than three hundred sixty (360) days before the date for which
such Collateral Value is being determined " of whichever of (x) the
Market Value of the Pledged Loan itself or (y) the value of the real
estate securing it, the Agent shall determine is the better measure of
its Market Value. Each determination by the Agent of Collateral Value
(and of each element of each such determination, including Market Value)
may be computed using any reasonable averaging, interpolation and
attribution method and, absent manifest error, shall be conclusive and
binding.
B. The definition of "Disqualifying Event" is hereby amended to read as
follows (if the text following any subhead thereof is not hereby amended, that
is indicated by the parenthetical statement, "(No change.)", and only the
changes to the various subheads that are changed hereby are stated below):
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"DISQUALIFYING EVENT" means any of the following events, after
the occurrence of which (i) for so long as the material effects of such
event shall continue and shall not have been waived or declared cured in
writing by the Agent and (ii) except to the extent otherwise specified
in this definition, the Collateral Value of the affected Collateral
shall be zero for Borrowing Base purposes:
(any Collateral)
(No change.)
A new subhead and its single bullet point are hereby added as follows:
(Any Pledged Loan)
- on any day, the sum of the Collateral Values of all pledged
Mortgage Loans that are not Primary Residence Loans shall exceed fifteen
percent (15%) of the Single-family Sublimit on that day " in which event
the aggregate Collateral Value for that day of all Pledged Loans that
are not Primary Residence Loans shall be fifteen percent (15%) of the
Single-family Sublimit on that day.
(Pledged Single-family Mortgage Loans)
The twelfth (12th) and thirteenth (13th) bullet points under this subhead are
hereby amended to henceforth read as follows:
- on any day, the sum of the Collateral Values of all
Single-family Mortgage Loans that were first Pledged to the Agent more
than one hundred twenty (120) days but not more than one hundred eighty
(180) days before the date for which their Collateral Values are being
determined shall exceed an amount equal to five percent (5%) of the
Single-family Sublimit on that day " in which event the aggregate
Collateral Value for that day of all Single-family Mortgage Loans that
were first Pledged to the Agent between 120 and 180 days before such
date shall be the amount that is equal to five percent (5%) of such
Sublimit.
- any Single-family Mortgage Loan shall have been first Pledged
to the Agent more than one hundred eighty (180) days before the date for
which its Collateral Value is being determined.
The following additional bullet point is hereby added under this subhead:
- on any day, the sum of the Collateral Values of all pledged
Single-family Mortgage Loans that have a "D" credit grade under the
Company
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Underwriting Guidelines shall exceed Thirty Million Dollars " in which
event the aggregate Collateral Value for that day of all such pledged
"D" credit grade Single-family Mortgage Loans shall be Thirty Million
Dollars ($30,000,000).
(Pledged Second Lien Mortgage Loans)
The second (2nd) bullet point under this subhead is hereby amended to henceforth
read as follows:
- any Second Lien Mortgage Loan shall have been first Pledged to the
Agent more than ninety (90) days before the date for which its
Collateral Value is being determined.
(Pledged High LTV Mortgage Loans)
The bullet points under this subhead are hereby amended to henceforth read as
follows:
- High LTV Mortgage Loans are not Eligible Collateral.
(P&I Advances Collateral)
The following two (2) additional bullet points are hereby added under this
subhead:
- on any day, the sum of the Collateral Values of all pledged P&I
Receivables that were first Pledged to the Agent more than one hundred
eighty (180) days before the date for which its Collateral Value is
being determined shall exceed an amount equal to fifty percent (50%) of
the P&I Advances Sublimit on that day " in which event the aggregate
Collateral Value for that day of all pledged P&I Receivables that were
first Pledged to the Agent more than one hundred eighty (180) days
before such date shall be the amount that is equal to fifty percent
(50%) of such Sublimit; provided that the Company may elect by written
notice to the Agent to designate as Servicing Advances Collateral
specific P&I Receivables whose Collateral Value has been lost by
application of the provisions of this bullet point, whereupon it shall
automatically become Servicing Advances Collateral, and for the purpose
of the third (3rd) bullet point under the subhead "(Servicing Advances
Collateral)" " amended in the second bullet point following this bullet
point in the 4/99 Amendment " each such P&I Receivable so designated
shall be deemed to have been first Pledged to the Agent on the date when
it so becomes Servicing Advances Collateral.
- any P&I Receivable that is P&I Advances Collateral is not
collected on or before three hundred sixty (360) days after its funding,
or if the Company comes to believe that the prospects for collection of
any P&I Receivable within such
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three hundred sixty (360) day period are materially impaired; provided
that when such uncollected P&I Receivable becomes disqualified to be P&I
Advances Collateral for that reason (unless it has already become
Servicing Advances Collateral by reason of its designation as such by
the Company pursuant to the immediately preceding bullet point), it
shall thereupon automatically become Servicing Advances Collateral and,
for the purpose of the third (3rd) bullet point under the subhead
"(Servicing Advances Collateral)" " amended immediately below this
bullet point in the 4/99 Amendment " such P&I Receivable that has so
automatically become Servicing Advances Collateral shall be deemed to
have been first Pledged to the Agent on the date when it so becomes
Servicing Advances Collateral.
(Servicing Advances Collateral)
The third (3rd) bullet point under this subhead is hereby amended to henceforth
read as follows:
- on any day, the sum of the Collateral Values of all pledged T&I
Receivables, P&I Receivables that are Servicing Advances Collateral and
Enforcement Receivables that were first Pledged to the Agent more than
one hundred eighty (180) days (or longer if and as approved by the Agent
on a case-by-case basis, although in no event longer than three hundred
sixty (360) days) before the date for which its Collateral Value is
being determined shall exceed an amount equal to fifty percent (50%) of
the Servicing Advances Sublimit on that day " in which event the
aggregate Collateral Value for that day of all pledged T&I Receivables,
P&I Receivables that are Servicing Advances Collateral and Enforcement
Receivables that have been Pledged to the Agent for longer than that
shall be the amount that is equal to fifty percent (50%) of such
Sublimit.
The sixth (6th) bullet point under this subhead is hereby amended to henceforth
read as follows:
- any T&I Receivable shall have been first Pledged to the Agent
more than three hundred sixty (360) days before the date for which its
Collateral Value is being determined.
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(Recoveries Collateral)
The following two (2) new bullet points are hereby added under this subhead:
- on any day, the sum of the Collateral Values of all Recoveries
Collateral that was first Pledged to the Agent more than one hundred
eighty (180) days before the date for which its Collateral Value is
being determined shall exceed an amount equal to fifty percent (50%) of
the Recoveries Advances Sublimit on that day " in which event the
aggregate Collateral Value for that day of all Recoveries Collateral
that was first Pledged to the Agent more than one hundred eighty (180)
days before such date shall be the amount that is equal to fifty percent
(50%) of such Sublimit.
- any Recoveries Collateral shall have been first Pledged to the
Agent more than three hundred sixty (360) days before the date for which
its Collateral Value is being determined.
C. The definition of "Eligible Single-family Collateral" or "Eligible
Mortgage Loan" is hereby amended by inserting the following six (6) new and
additional bullet points following the clause, "Even though it has been Pledged
to the Agent and is therefore Collateral, no Single-family Mortgage Loan shall
be an Eligible Mortgage Loan":
- if any of its owners-mortgagors is a corporation, partnership,
trust or other entity that is not a natural person;
- if it is secured by a first priority Lien on the real estate
securing it and has a loan-to-value ratio greater than ninety
percent (90%);
- if it is a Second Lien Mortgage Loan and has a cumulative
loan-to-value ratio (i.e., using as the numerator of such ratio,
expressed as a fraction, the sum of the Debt secured by the first
lien and the Debt secured by the second lien against the real
estate securing it) greater than one hundred percent (100%);
- if it is a High LTV Mortgage Loan "HIGH LTV MORTGAGE LOANS ARE
NOT ELIGIBLE COLLATERAL AND ALL REFERENCES TO THEM HEREIN EXCEPT
THIS ONE AND THE REFERENCE THERETO IN THE 4/99 AMENDMENT'S
AMENDMENT TO THE DEFINITION OF "ELIGIBLE RECOVERIES COLLATERAL"
MAY HENCEFORTH BE DISREGARDED;
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- if it was previously Pledged to the Agent and released by the
Agent upon its sale to an investor but that the Company was
subsequently required to repurchase due to underwriting errors,
delinquencies or breach of representations or warranties made in
connection with such sale;
- if it was previously Pledged to the Agent and released by the
Agent upon its sale to an investor but that the Company
subsequently repurchased for a reason or reasons other than
underwriting errors, delinquencies or breach of representations
or warranties made in connection with such sale (such as, for
example, such Single-family Mortgage Loan"s not meeting such
investor"s geographical investment concentration criteria), but
as to which any representation in SECTION 8.16 of this Agreement
is untrue (for example, if the subject Mortgage Loan is subject
to a right of rescission, even though the investor to whom the
Company sold it required no representation or warranty from the
Company that such Mortgage Loan was not subject to a right of
rescission);
D. The definition of "Eligible Recoveries Collateral" is hereby amended
by deleting the first "(i)" and the following words:
and (ii) such unmarketable Single-family Mortgage Loans and other
mortgage banking-related Collateral, if any, as the Agent shall from
time to time approve to be Eligible Recoveries Collateral
and adding the following new sentence and bullet points to the end of such
definition:
Even though it has been Pledged to the Agent and is therefore
Collateral, no Single-family Mortgage Loan shall be Eligible Recoveries
Collateral:
- if any of its owners-mortgagors is a corporation, partnership,
trust or other entity that is not a natural person;
- if it is secured by a first priority Lien on the real estate
securing it and has a loan-to-value ratio greater than ninety
percent (90%);
- if it is a Second Lien Mortgage Loan and has a cumulative
loan-to-value ratio (i.e., using as the numerator of such ratio,
expressed as a fraction, the sum of the Debt secured by the first
lien
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and the Debt secured by the second lien against the real estate
securing it) greater than one hundred percent (100%); or
- if it is a High LTV Mortgage Loan "HIGH LTV MORTGAGE LOANS ARE
NOT ELIGIBLE COLLATERAL.
E. The definition of "Maximum Aggregate Commitment" is hereby amended in
its entirety to henceforth read as follows:
"MAXIMUM AGGREGATE COMMITMENT" means the maximum amount of
principal that the Company may have borrowed and outstanding under this
Agreement on any day, being the amount set forth in SCHEDULE MAC in
effect for that day, but in no event more than the Maximum Committed
Amount contemplated by SECTION 2.2. The Maximum Aggregate Commitment on
the Effective Date is Three Hundred Million Dollars ($300,000,000), the
amount shown on SCHEDULE MAC attached to this Agreement. The Maximum
Aggregate Commitment on the 4/99 Amendment Effective Date is Three
Hundred Twenty-five Million Dollars ($325,000,000), the amount shown on
(the updated) SCHEDULE MAC attached to the 4/99 Amendment. If and when
some or all of the Lenders then party to this Agreement agree in writing
to increase their Committed Sum, new Lenders join this Agreement or
both, so that the Aggregate Committed Sum exceeds the Maximum Aggregate
Commitment then in effect, the Agent shall execute an updated SCHEDULE
MAC reflecting the new Maximum Aggregate Commitment (as an amount equal
to the new Aggregate Committed Sum) (and listing any such new Lenders
and their respective Committed Sums) and deliver it to the Company and
the Lenders, and that updated SCHEDULE MAC shall thereupon be
substituted for and supersede the prior SCHEDULE MAC.
F. The following definitions are hereby added to the 4/98 A&R Credit
Agreement, in alphabetical order:
"4/99 AMENDMENT" means the 4/99 Amendment to Amended and Restated
Senior Secured Credit Agreement dated as of the 4/99 Amendment Effective
Date among the Company, the Lenders and the Agent.
"4/99 AMENDMENT EFFECTIVE DATE" means April 22, 1999.
"BROKER"S PRICE OPINION" means the written opinion of a local
real estate broker selected reasonably and in good faith by the Company
of the probable market sale price of the Mortgaged Premises securing the
relevant Single-family Residential Mortgage Loan.
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"CASH EQUIVALENTS" means and includes the following:
(i) investments in marketable obligations maturing no later than
one hundred eighty (180) days from the date of acquisition thereof and
issued and fully guaranteed, directly, by the full faith and credit of
the Government of the United States of America or any agency thereof;
(ii) investments in certificates of deposit maturing no later
than one hundred eighty (180) days from the date of issuance thereof and
issued by commercial banks in the United States that are either rated by
Xxxxx'x and have received a current rating of Prime-2 or higher on
Xxxxx'x short term debt rating, or rated by S&P and have received a
current rating of AA-/A+ or higher on S&P's short term debt rating;
(iii) investments in prime commercial paper rated P-1 by Xxxxx'x
and/or A-1 by S&P, any such prime commercial paper to mature no later
than ninety (90) days from the date of its acquisition by the Company;
(iv) demand or time deposits with a Qualified Bank;
(v) obligations of any United States corporation or any state of
the United States or of any political subdivision of any such state
which is rated either by Xxxxx'x or S&P and receives a rating by either
of A or higher;
(vi) stock of any United States corporation which is traded on
the New York Stock Exchange or the American Stock Exchange and which
corporation's commercial paper, if any, meets the rating requirements of
clause (ii) above or which corporation's bonds, if any, meet the rating
requirements of clause (iii) above;
(vii) collateralized repurchase agreements with Qualified Banks
having a duration no longer than sixty (60) days (or any extension or
renewal thereof for a period not exceeding the period of the original
agreement) with respect to or secured by any of the types of securities
specified in clause (i) above; and
(ix) shares of any open end investment company, as defined in the
Investment Company Act of 1940, which has assets of not less than Two
Hundred Million Dollars ($200,000,000) and invests primarily in
securities of the types specified in clauses (i) through (iv) above.
"XXXXX'X" means Xxxxx'x Investors Service, Inc.
"PRIMARY RESIDENCE LOAN" means a Single-family Mortgage Loan one
of whose mortgagors has answered "yes" to Question "l" in Section VIII
(Declarations)
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of the Uniform Residential Loan Application for such Mortgage Loan ("Do
you intend to occupy the property as your primary residence?"), is shown
as an owner of record in the recorded deed to such property and has
executed the promissory note and the Mortgage evidencing and securing
that Single-family Residential Mortgage Loan and, to the best knowledge
of the Company, currently resides in the single-family residence" or in
one of the dwelling units of the two-, three- or four-family residence "
that is the subject matter of such mortgage loan, as his or her
principal and primary residence.
"QUALIFIED BANK" means a commercial bank operating in the United
States that is a member of the Federal Reserve System and that has (or
is owned by a bank holding company whose subsidiary banks have, in the
aggregate) a combined capital and unimpaired surplus and undivided
profits of not less than Two Hundred Million Dollars ($200,000,000).
"S&P" means Standard & Poor"s Ratings Services, a division of
the XxXxxx-Xxxx Companies, Inc.
2. THE LENDERS' COMMITMENTS
The Agent is hereby authorized to execute updating SCHEDULES LC, FS and
MAC in the forms attached to this Amendment, the parties stipulating that the
amounts set forth therein are true and correct as of the 4/99 Amendment
Effective Date.
5. INTEREST, PRINCIPAL AND FEES PAYMENTS
5.6 Commitment Fee. The second sentence of SECTION 5.6 is hereby amended
in its entirety to henceforth read as follows (to reflect and confirm the
parties" existing practice):
The Commitment fee shall be due and payable quarterly in advance on the
Effective Date and on the fifteenth (15th) day of each July, October,
January and April thereafter before the Termination Date.
And a new third sentence is hereby added to SECTION 5.6 reading as follows:
In addition thereto, the Company agrees also to pay to the Agent for the
account of the Lenders (and for the Agent to distribute to them in
accordance with the following table), as a separate and additional part
of the Commitment Fee, the following amounts for the Lenders' increased
commitments as provided in the 4/99 Amendment:
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LENDER 4/99 FEE AMOUNT
--------------------------------- -----------------------
Chase Texas $25,000
--------------------------------- -----------------------
Guaranty Federal Bank, F.S.B. 0
--------------------------------- -----------------------
Bank One, Texas, N.A. 0
--------------------------------- -----------------------
Bank United $12,500
--------------------------------- -----------------------
Hibernia National Bank 0
--------------------------------- -----------------------
The Bank of New York 0
--------------------------------- -----------------------
BankBoston, N.A. 0
--------------------------------- -----------------------
Comerica Bank, California $25,000
--------------------------------- -----------------------
Bank of Scotland 0
--------------------------------- -----------------------
National City Bank of Kentucky 0
--------------------------------- -----------------------
Total $62,500
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6. COLLATERAL
6.1 Grant of Security Interest. Without affecting or impairing the grant
of a security interest made by the Company to the Agent in SECTION 6 of the 4/98
A&R Credit Agreement, as security for the payment of the Loan and for the
payment and performance of all of the Obligations, the Company hereby GRANTS to
the Agent, as agent and Representative of the Lenders, a first priority security
interest in all of the Company's present and future estate, right, title and
interest in and to the Collateral (although neither the Lenders nor the Agent
assumes any of the Company's or any other liability or obligation under or in
respect of any Collateral).
7. CONDITIONS PRECEDENT.
SECTION 7 of the 4/98 A&R Credit Agreement is hereby amended by adding
the following new SECTION 7.4 to the end of it:
7.4 Advances After April 22, 1999. The obligations of the Lenders
to fund their respective Funding Shares of any Advance requested to be
made on or after April 22, 1999 are also subject to the Company's
fulfillment of the following conditions precedent:
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a. the Agent shall have received counterparts of the 4/99 Amendment
duly executed by all parties;
b. the Agent shall have received for distribution to each of Chase
Texas, Bank United and Comerica Bank-California a new Senior
Credit Note dated as of April 22, 1999 and duly executed by the
Company in a face principal amount equal to such Lender's
current Committed Sum (as such sum is set forth on the updated
SCHEDULE LC that is dated as of April 22, 1999 and has been duly
executed by the Agent), renewing, increasing and rearranging
(but not extinguishing) the Senior Credit Note payable to the
order of such Lender and dated as of April 13, 1998 (because the
other Lenders' Committed Sums have not changed and the Swing
Line Limit has not changed, each Senior Credit Note dated as of
April 13, 1998 made payable to a Lender other than Chase Texas,
Bank United and Comerica Bank-California will continue to
evidence the Company's obligation to repay to the order of that
note"s Lender-payee all Advances funded by that Lender and
outstanding from time to time, plus accrued interest on that
principal, and the Swing Line Note dated as of April 13, 1998
will likewise continue to evidence all Swing Line Advances and
accrued interest thereon);
c. the Agent shall have received a written consent to this
Amendment and confirmation that the Guaranty remains in full
force and effect notwithstanding this Amendment, duly executed
by the Guarantor;
4. the Agent shall have received original resolutions of the
Company's board of directors, certified on or about April 22,
1999 by the Company's corporate secretary, authorizing the
execution, delivery and performance by the Company of this
Amendment and the Senior Credit Notes described in CLAUSE (B) of
this Section;
d. the Agent shall have received a certificate of the Company's
corporate secretary as to (i) the incumbency of the officers of
the Company executing this Amendment and said Senior Credit
Notes and (ii) the authenticity of their signatures "and
specimens of their signatures shall be included in such
certificate or set forth on an exhibit attached to it" (the
Agent and the Lenders shall be entitled to rely on that
certificate until the Company has furnished a new certificate to
the Agent);
e. the Agent shall have received original resolutions of the
Guarantor's board of directors, certified on or about April 22,
1999 by the Guarantor's corporate secretary, authorizing the
execution, delivery and performance by the Guarantor of the
consent and ratification of the Guaranty described in CLAUSE (C)
of this Section; and
13
17
f. the Agent shall have received a certificate of the Guarantor's
corporate secretary as to (i) the incumbency of the officer(s)
of the Guarantor executing said consent and ratification and
(ii) the authenticity of their signatures "and specimens of
their signatures shall be included in such certificate or set
forth on an exhibit attached to it" (the Agent and the Lenders
shall be entitled to rely on that certificate until the
Guarantor has furnished a new certificate to the Agent).
8. REPRESENTATIONS.
The Company hereby republishes all of its representations and warranties
made in SECTION 8 of the 4/98 A&R Credit Agreement and represents and warrants
to the Agent and the Lenders, that all of such representations and warranties
(except those that relate to a specific date) are true as of the 4/99 Amendment
Effective Date. In addition, the following new SECTION 8.16(e)(5) is hereby
added to SECTION 8.16 (Special Representations Concerning Collateral):
(5) the Company believes that such Pledged Loan can and will be
sold to an investor in the regular secondary mortgage loan market within
such period of time after its origination as is normal and customary for
Pledged Loans that have substantially the same coupon and lien priority,
collateral type and loan-to-collateral value ratio, for a purchase price
at least equal to the outstanding balance of such Pledged Loan on the
date of such sale to such investor and is free of underwriting errors,
delinquencies or other defects that would materially impair the
Company's ability to so sell it.
10. NEGATIVE COVENANTS
SECTION 10.4(c) of the 4/98 A&R Credit Agreement is hereby amended in
its entirety to henceforth read as follows:
14
18
(c) Other warehouse financing Debt of to up to Four Hundred
Million Dollars ($400,000,000) at any time outstanding provided to the
Company by one or more nationally-recognized securities broker-dealers
(or their Affiliates), the collateral for which is held by the Agent, as
documents custodian and collateral agent for such lender(s) "which
other warehouse financing Debt may be outstanding either on a committed
basis or pursuant to agreements that the creditor will consider making
financing available to the Company (i.e. on an uncommitted basis) in
aggregate amounts of up to Five Hundred Million Dollars ($500,000,000),
PROVIDED that as to any such other warehousing financing Debt incurred
after the 4/99 Amendment Effective Date, at least Two Hundred Million
Dollars ($200,000,000) thereof must be committed to be available for
borrowing by the Company for a term of at least three hundred sixty-four
(364) days and on other terms and conditions that are commercially
reasonable (the "COMMITTED FINANCING"), and PROVIDED FURTHER that the
Committed Financing must be in addition to Two Hundred Million Dollars
($200,000,000) of uncommitted warehouse financing other than that
provided for in this Agreement which is already available to the Company
as of March 31, 1999 (such existing other uncommitted warehouse
financing, as it may be renewed, extended or rearranged, is herein
called the "3/99 EXISTING WAREHOUSE DEBT"), but the 3/99 Existing
Warehouse Debt shall be included in determining both the Four Hundred
Million Dollars ($400,000,000) of warehousing credit first described in
this SECTION 10.4(c) and the Five Hundred Million Dollars ($500,000,000)
of warehousing credit next described above in this SECTION 10.4(c);
SECTION 10.6 of the 4/98 A&R Credit Agreement is hereby amended in its
entirety to henceforth read as follows:
10.6 The Company's Minimum Tangible Net Worth. On any day after the 4/99
Amendment Effective Date, permit the Tangible Net Worth of the Company
(on a consolidated basis with its Subsidiaries) to be less than the
greater of (x) Forty Million Dollars ($40,000,000) or (y) the sum of
Forty Million Dollars ($40,000,000) plus twenty-five percent (25%) of
the Company's cumulative positive net income for each calendar month
(i.e., specifically excluding any net loss for any month) from the
Effective Date to the date of determination of Tangible Net Worth for
purposes of this covenant; provided that if the Company shall issue any
capital stock in addition to its stock that has been issued and is
outstanding on the Effective Date (or increase its equity capital
through any other means except retention of earnings), the Forty Million
Dollar ($40,000,000) base amount specified in CLAUSES (x) and (y) above
shall be reset upward to such amount as the Lenders shall approve in
writing "based on the Agent's recommendation to the Lenders following
the Agent's reasonable negotiations with the Company of the adjusted
base amount in light of such change in the Company's equity capital "
such adjusted base amount to be effective as of the date of issuance of
such additional stock (or the date of such increase through other means
in the Company's equity capital) or such later date as
15
19
shall be specified in the Agent's written statement of such new amount
and the effective date of such change, which statement the Agent agrees
to deliver to the Company and the Lenders promptly after such new base
amount shall have been so set following such negotiations with the
Company and approval of such new base amount by the Lenders.
SECTION 10 of the 4/98 A&R Credit Agreement is hereby further amended by
adding the following new SECTIONS 10.12 and 10.13 to the end of such SECTION 10:
10.12 The Company's Liquidity. On any day, permit the sum of the
Company's cash on hand, cash on deposit in banks and Cash Equivalents to
be less than Five Million Dollars ($5,000,000).
10.13 Successive Quarterly Losses. Have a net loss (determined on
a consolidated basis with the Company's Subsidiaries and in accordance
with GAAP) for any two (2) consecutive quarters of its fiscal year,
regardless of whether such quarters are in the same fiscal year or in
consecutive fiscal years.
13. RELATIONSHIPS AMONG THE AGENT AND THE LENDERS.
Each of SECTIONS 13.2(c) and 13.2(d) is hereby amended in its entirety
to henceforth read as follows:
(c) agree to any decrease or reduction in the interest rate or
fee provisions "excluding the Agent's Fee or the Custodian's Fees" of
this Agreement.
(d) increase the Aggregate Committed Sum other than as
contemplated by the express provisions of the Facilities Papers
(including SECTION 2.2 of the 4/98 A&R Credit Agreement) or increase the
maximum principal amount of the Loan above the Aggregate Committed Sum
A new CLAUSE (l) is hereby added to SECTION 13.3 as follows:
(l) xxxx any Collateral to market.
15. MISCELLANEOUS.
SECTION 15.10 of the 4/98 A&R Credit Agreement, as amended by the 7/98
Amendment, is hereby reamended in its entirety to henceforth read as follows:
15.10 Notice Pursuant to Tex. Bus. & Comm. Code "26.02. THIS
AGREEMENT, AS AMENDED BY THE 7/98 AMENDMENT AND THE 4/99 AMENDMENT, AND
THE OTHER FACILITIES PAPERS TOGETHER
16
20
CONSTITUTE A WRITTEN LOAN AGREEMENT WHICH REPRESENTS THE FINAL AGREEMENT
BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE
NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
17
21
EXECUTED as of the 4/99 Amendment Effective Date.
LONG BEACH MORTGAGE COMPANY
By:
--------------------------------
Xxxxx X. Xxxxxxxx
Senior Vice President and
Chief Financial Officer
Unnumbered counterpart signature
page for Long Beach Mortgage
Company's 4/99 Amendment to A&R
Credit Agreement
00
XXXXX XXXX XX XXXXX, NATIONAL ASSOCIATION,
as the Agent and as a Lender
By:
--------------------------------------
Name:
-------------------------------------
Title:
-------------------------------------
Unnumbered counterpart signature
page for Long Beach Mortgage
Company's 4/99 Amendment to A&R
Credit Agreement
23
GUARANTY FEDERAL BANK, F.S.B.,
as a Lender
By:
--------------------------------------
Name:
-------------------------------------
Title:
-------------------------------------
Unnumbered counterpart signature
page for Long Beach Mortgage
Company's 4/99 Amendment to A&R
Credit Agreement
24
BANK UNITED,
as a Lender
By:
--------------------------------------
Name:
-------------------------------------
Title:
-------------------------------------
Unnumbered counterpart signature
page for Long Beach Mortgage
Company's 4/99 Amendment to A&R
Credit Agreement
25
BANKBOSTON, N.A.
as a Lender
By:
--------------------------------------
Name:
-------------------------------------
Title:
-------------------------------------
Unnumbered counterpart signature
page for Long Beach Mortgage
Company's 4/99 Amendment to A&R
Credit Agreement
26
THE BANK OF NEW YORK,
as a Lender
By:
--------------------------------------
Name:
-------------------------------------
Title:
-------------------------------------
Unnumbered counterpart signature
page for Long Beach Mortgage
Company's 4/99 Amendment to A&R
Credit Agreement
27
BANK ONE, TEXAS, N.A.
as a Lender
By:
--------------------------------------
Name:
-------------------------------------
Title:
-------------------------------------
Unnumbered counterpart signature
page for Long Beach Mortgage
Company's 4/99 Amendment to A&R
Credit Agreement
28
COMERICA BANK-CALIFORNIA,
as a Lender
By:
--------------------------------------
Name:
-------------------------------------
Title:
-------------------------------------
Unnumbered counterpart signature
page for Long Beach Mortgage
Company's 4/99 Amendment to A&R
Credit Agreement
29
BANK OF SCOTLAND,
as a Lender
By:
--------------------------------------
Name:
-------------------------------------
Title:
-------------------------------------
Unnumbered counterpart signature
page for Long Beach Mortgage
Company's 4/99 Amendment to A&R
Credit Agreement
30
HIBERNIA NATIONAL BANK,
as a Lender
By:
--------------------------------------
Name:
-------------------------------------
Title:
-------------------------------------
Unnumbered counterpart signature
page for Long Beach Mortgage
Company's 4/99 Amendment to A&R
Credit Agreement
31
NATIONAL CITY BANK OF KENTUCKY
as a Lender
By:
--------------------------------------
Name:
-------------------------------------
Title:
-------------------------------------
Unnumbered counterpart signature
page for Long Beach Mortgage
Company's 4/99 Amendment to A&R
Credit Agreement
32
Attached:
Schedule LC (updated April 22, 1999) - the Lenders' Committed Sums and
Subline Funding Limits
Schedule FS (updated April 22, 1999) - the Lenders' Funding Share fractions
Schedule MAC (updated April 22, 1999) - the Maximum Aggregate Commitment
33
SCHEDULE LC
TO 4/98 A&R CREDIT AGREEMENT, AS AMENDED
The Lenders' Committed Sums and
Subline Funding Limits,
(in dollars)
(Updates of this Schedule are effective only if signed by a Vice
President or more senior officer of Chase Bank of Texas, National
Association, Agent)
Single-family
Warehouse Servicing Recoveries
Subline P&I Advances Advances Advances
Funding Subline Subline Subline
Lender Committed Sum Limit Funding Limit Funding Limit Funding Limit
----------------- --------------- -------------- --------------- -------------- ---------------
Chase Texas 60,000,000 60,000,000 6,000,000 3,000,000.00 3,000,000.00
----------------- --------------- -------------- --------------- -------------- ---------------
Guaranty 45,000,000 45,000,000 4,500,000 2,250,000.00 2,250,000.00
Federal Bank,
F.S.B.
----------------- --------------- -------------- --------------- -------------- ---------------
Bank United 40,000,000 40,000,000 4,000,000 2,000,000.00 2,000,000.00
----------------- --------------- -------------- --------------- -------------- ---------------
BankBoston, N.A. 30,000,000 30,000,000 3,000,000 1,500,000.00 1,500,000.00
----------------- --------------- -------------- --------------- -------------- ---------------
The Bank of 30,000,000 30,000,000 3,000,000 1,500,000.00 1,500,000.00
New York
----------------- --------------- -------------- --------------- -------------- ---------------
Bank One, 25,000,000 25,000,000 2,500,000 1,250,000.00 1,250,000.00
Texas, N.A.
----------------- --------------- -------------- --------------- -------------- ---------------
Comerica 35,000,000 35,000,000 3,500,000 1,750,000.00 1,750,000.00
Bank-California
----------------- --------------- -------------- --------------- -------------- ---------------
Bank of Scotland 20,000,000 20,000,000 2,000,000 1,000,000.00 1,000,000.00
----------------- --------------- -------------- --------------- -------------- ---------------
Hibernia 20,000,000 20,000,000 2,000,000 1,000,000.00 1,000,000.00
National Bank
----------------- --------------- -------------- --------------- -------------- ---------------
34
Single-family
Warehouse Servicing Recoveries
Subline P&I Advances Advances Advances
Funding Subline Subline Subline
Lender Committed Sum Limit Funding Limit Funding Limit Funding Limit
----------------- --------------- -------------- --------------- -------------- ---------------
National City 20,000,000 20,000,000 2,000,000 1,000,000.00 1,000,000.00
Bank, Kentucky,
Inc.
----------------- --------------- -------------- --------------- -------------- ---------------
Aggregate 325,000,000
Committed Sum
----------------- --------------- -------------- --------------- -------------- ---------------
Sublimit 325,000,000 32,500,000 16,250,000 16,250,000
----------------- --------------- -------------- --------------- -------------- ---------------
X (check if applicable) This is an update of SCHEDULE LC, effective from and
after April 22, 1999.
CHASE BANK OF TEXAS, NATIONAL ASSOCIATION,
as Agent
By:
-------------------------------------------
Name:
-------------------------------------------
Title:
-------------------------------------------
35
SCHEDULE FS
TO 4/98 A&R CREDIT AGREEMENT, AS AMENDED (Updates of
this Schedule are effective only if signed by a Vice President or more
senior officer of Chase Bank of Texas, National Association, Agent)
---------------------- -------------- ------------- ------------- ----------------
Single-family P&I Servicing
Warehouse Advances Advances Recoveries
Subline Subline Subline Advances
Funding Funding Funding Subline
Share Share Share Funding Share
decimal decimal decimal decimal
Lender fraction fraction fraction fraction
---------------------- -------------- ------------- ------------- ----------------
Chase Texas 0.1846153846 0.1846153846 0.1846153846 0.1846153846
---------------------- -------------- ------------- ------------- ----------------
Guaranty Federal 0.0000000000 0.0000000000 0.0000000000 0.0000000000
Bank, F.S.B.
---------------------- -------------- ------------- ------------- ----------------
Bank United 0.1230769231 0.1230769231 0.1230769231 0.1230769231
---------------------- -------------- ------------- ------------- ----------------
BankBoston, N.A. 0.0923076923 0.0923076923 0.0923076923 0.0923076923
---------------------- -------------- ------------- ------------- ----------------
The Bank of New York 0.0923076923 0.0923076923 0.0923076923 0.0923076923
---------------------- -------------- ------------- ------------- ----------------
Bank One, Texas, N.A. 0.0769230769 0.0769230769 0.0769230769 0.0769230769
---------------------- -------------- ------------- ------------- ----------------
Comerica 0.1076923077 0.1076923077 0.1076923077 0.1076923077
Bank-California
---------------------- -------------- ------------- ------------- ----------------
Bank of Scotland 0.0615384615 0.0615384615 0.0615384615 0.0615384615
---------------------- -------------- ------------- ------------- ----------------
Hibernia National 0.0615384615 0.0615384615 0.0615384615 0.0615384615
Bank
---------------------- -------------- ------------- ------------- ----------------
National City Bank 0.0615384615 0.0615384615 0.0615384615 0.0615384615
of Kentucky
---------------------- -------------- ------------- ------------- ----------------
Totals 1.0000000000 1.0000000000 1.0000000000 1.0000000000
---------------------- -------------- ------------- ------------- ----------------
36
X (check if applicable) This is an update of SCHEDULE FS, effective from and
after April 22, 1999.
CHASE BANK OF TEXAS, NATIONAL ASSOCIATION,
as Agent
By:
-------------------------------------------
Name:
-------------------------------------------
Title:
-------------------------------------------
37
SCHEDULE MAC
TO 4/98 A&R CREDIT AGREEMENT, AS AMENDED
(This Schedule MAC is attached to the 4/99 Amendment. Updates of this Schedule
are effective only if signed by a Vice President or more senior officer of
Chase Bank of Texas, National Association, Agent)
The Maximum Aggregate Commitment from and after the following date is as
follows:
===============================================================================================
MAXIMUM UPDATE CERTIFIED EFFECTIVE BY THE UNDERSIGNED
AGGREGATE OFFICER OF CHASE BANK OF TEXAS, NATIONAL
COMMITMENT FROM AND AFTER ASSOCIATION, AGENT
------------------------------------------------------------------------------------------------
$325,000,000 April 22, 1999, the By:_________________________________________
4/99 Amendment Name:_______________________________________
Effective Date Title:______________________________________
===============================================================================================
