THIRD AMENDMENT TO
FIRST AMENDED AND RESTATED REVOLVING LOAN AGREEMENT
This THIRD AMENDMENT TO FIRST AMENDED AND RESTATED REVOLVING LOAN AGREEMENT
(this "AMENDMENT") is entered into as of the 23rd day of October, 1996, by and
among AMRESCO, INC., a Delaware corporation ("AMRESCO") and the other entities
designated as "Borrowers" in SCHEDULE I attached hereto (collectively,
"BORROWERS") and NationsBank of Texas, N.A., a national banking association, as
agent ("AGENT") for the Lenders (as defined in the Loan Agreement (defined
below)).
WITNESSETH:
WHEREAS, on April 25, 1996, Borrowers, Agent and the Initial Lenders
entered into that certain First Amended and Restated Revolving Loan Agreement
(together with the amendments described below, the "LOAN AGREEMENT") which
provided for the Lenders to provide to Borrowers thereunder a revolving credit
facility in the original aggregate principal amount of $200,000,000; and
WHEREAS, the Loan Agreement was amended by First Amendment to First Amended
and Restated Revolving Loan Agreement dated as of June 13, 1996, and Second
Amendment to First Amended and Restated Revolving Loan Agreement dated as of
August 9, 1996, each of which added additional Lenders to the original Loan
Agreement and provided for other technical amendments to the Loan Agreement; and
WHEREAS, by letter dated October 7, 1996, Agent, on behalf of the Required
Lenders, pursuant to Section 8.10(a) of the Loan Agreement, granted its prior
written consent for the acquisition by ARMC (as defined below) of substantially
all assets of Quality Mortgage USA, Inc., for a total purchase price of
$65,000,000; and
WHEREAS, the parties to this Amendment desire to grant certain consents
pursuant to the terms of the Loan Agreement and to amend the terms of the Loan
Agreement as set forth below.
AGREEMENT:
NOW, THEREFORE, KNOW ALL MEN BY THESE PRESENTS: That, for and in
consideration of the covenants and agreements set forth herein, and for other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged and confessed, Borrowers, Agent, and Required Lenders hereby agree
as follows:
1. DEFINED TERMS. All capitalized terms used herein but not otherwise
defined in this Amendment shall be defined as set forth in the Loan
Agreement.
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a. Section 1.1 of the Agreement is amended by adding the following
defined terms:
ACCC means AMRESCO Capital Conduit Corporation, a Delaware
corporation, which is the general partner of ACMF.
ACL means AMRESCO Capital Limited, Inc., a Delaware corporation, which
is a limited partner of ACMF.
ACMF means AMRESCO Commercial Mortgage Funding, L.P., a Delaware
limited partnership whose sole general partner is ACCC and whose
limited partners are ACL and MLQ Investors, L.P..
ACMF TRANSACTION DOCUMENTS means, collectively, (i) the Keepwell
Agreement; (ii) Guaranty dated as of September 3, 1996 executed by
ACCC (the "ACCC GUARANTY"); (iii) Agreement of Limited Partnership
dated as of August 30, 1996 executed by ACCC as general partner, ACL
as one of two limited partners, and MLQ Investors, L.P. as the other
limited partner; (iv) Master Repurchase Agreement dated as of
September 3, 1996 executed by ACMF and Xxxxxxx Xxxxx Mortgage
Corporation ("GSMC"); (v) Mortgage Loan Origination and Sale Agreement
dated as of September 3, 1996, between AMRESCO Capital Corporation and
ACMF; (vi) Custodial Agreement dated as of September 3, 1996, between
ACMF, GSMC, and LaSalle National Bank; (vii) Servicing Agreement dated
as of September 3, 1996, between ACMF and AMRESCO Management, Inc.;
(viii) the letter agreement between ACMF and GSMC dated as of October
__, 1996, with respect to the Master Repurchase Agreement; and (ix)
the Securitization Agreement (herein so called) to be entered into
between ACC and/or ACMF and Xxxxxxx Sachs & Co., which will include an
indemnification of Xxxxxxx Xxxxx & Co. against securities liability
arising from ACC's or ACMF's material misstatements or omissions of
material facts in information provided in the offering materials
related to securities backed by mortgages originated by ACC and sold
by ACMF; as such documents may be amended from time to time subject to
the limitations and conditions contained in the Loan Agreement and
this Amendment.
ADDITIONAL CAPITAL means capital raised by AMRESCO after the date of
this Amendment, whether through issuance of stock, Approved
Subordinated Debt or Approved Senior Debt, or in any other manner
approved by the Required Lenders.
APPROVED ACQUISITIONS means acquisitions of corporate entities or
substantially all assets of a corporate entity or division thereof,
which are approved by the Required Lenders as contemplated by SECTION
8.10(A) of the Loan Agreement.
APPROVED SENIOR DEBT means Debt issued by AMRESCO which is unsecured
and
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senior to other unsecured Debt of AMRESCO and the terms of which have
been approved in writing by the Required Lenders and shall include,
without limitation, (i) the Debt evidenced by promissory notes
aggregating $57,500,000 issued pursuant to the terms of the Senior
Indenture as Series 1996-A due 1999, and pursuant to that certain
Officers' Certificate and Company Order dated as of July 19, 1996, and
(ii) any other promissory notes issued pursuant to the Senior
Indenture, provided that (a) the $45,000,000 in outstanding
convertible Approved Subordinated Debt has been converted into equity;
(b) Agent has received projections from AMRESCO showing financial
covenant compliance following issuance of such notes; (c) no Default
or Event of Default has occurred and has not been cured; and (d) Agent
has approved the terms for the issuance of such notes; and further
provided that the total outstanding Approved Senior Debt is not
more than One Hundred Fifteen Million and No/100 Dollars
($115,000,000.00) in the aggregate.
ARMC means AMRESCO Residential Mortgage Corporation, a Delaware
corporation, formerly known as AMRESCO B&C, Inc.
KEEPWELL AGREEMENT means that certain Limited Keepwell Agreement dated
as of September 3, 1996, executed by AMRESCO for the benefit of ACMF.
OTHER PERMITTED INVESTMENTS means, collectively, investments by any
Borrower in bridge loans, non-conventional commercial loans and other
high-yield loans, commercial real estate interests not included as
Assigned Loans, wholly-owned Permitted Foreign Assets not included in
the Borrowing Base, Excluded Subsidiaries (other than ARSC) and
Commercial Residual Interests not held by an Excluded Subsidiary.
RESIDENTIAL CAPITAL MARKETS GROUP means, collectively or individually,
ARMC, ARCC, ARSC and ARCMI.
SENIOR INDENTURE means that certain Indenture dated July 1, 1996,
executed by and between AMRESCO and Comerica Bank, as Trustee.
TOTAL CAPITAL means the sum of Consolidated Tangible Net Worth and the
outstanding balances of (1) Approved Subordinated Debt and (2)
Approved Senior Debt, in all cases calculated as of the end of the
calendar month immediately preceding the investment.
UK SUBSIDIARIES means, collectively, AMRESCO UK Holdings Limited,
AMRESCO UK Limited, AMRESCO UK Ventures Limited, AMRESCO Jersey
Ventures Limited, and Old Midland House Limited.
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b. The definition of BORROWING BASE contained in Section 1.1 of the Loan
Agreement is hereby amended to read as follows:
BORROWING BASE means an amount equal to the lesser of (a) 62.5%
of the Available Commitment, (b) the Net Investment Value
Availability, or (c) the Net Present Value Availability; provided that
the Borrowing Base shall be limited such that the portion of the
Borrowing Base attributable to (A) Wholly-Owned Real Estate Portfolios
shall not exceed 33% of the Wholly-Owned Non-Real Estate Portfolios
and (B) the Foreign Portfolio shall not exceed $75,000,000. In
determining the Net Investment Value Availability, the Net Present
Value Availability or any other calculation required in determining
the Borrowing Base, the Foreign Portfolio and related assets shall be
included based on the Dollar Equivalent.
c. The definition of EXCLUDED SUBSIDIARIES contained in Section 1.1 of
the Loan Agreement is hereby amended to read as follows:
EXCLUDED SUBSIDIARIES means, collectively, (a) Whiterock
Investments, Inc., a Delaware corporation, AMRESCO Advisors, Inc., a
Texas corporation, and any other existing or future Subsidiary of any
Borrower which is subject to the Investment Advisors Act of 1940, as
amended, (b) any non-Borrower special purpose subsidiary which has
been established to acquire loan portfolios and has obtained
Nonrecourse Debt in connection with such acquisitions or indebtedness
where recourse is limited just to such special purpose subsidiary,
and which does not own Eligible Investments or any other Collateral
included in determining the Borrowing Base, (c) AMRESCO-MBS I, Inc., a
Delaware corporation, ARSC, ACCC, and such other Subsidiaries as are
designated in writing to Agent by AMRESCO as Excluded Subsidiaries.
d. The definition of ARMC contained in Section 1.1 of the Loan Agreement
is hereby deleted and the following definition is hereby substituted:
ARCMI means AMRESCO Residential Capital Markets, Inc., a Delaware
corporation, formerly known as AMRESCO Residential Mortgage
Corporation.
e. The definition of ARMC Warehousing Facility contained in Section 1.1
of the Loan Agreement is hereby amended to read as follows:
ARMC WAREHOUSING FACILITY means one or more warehouse lines of
credit made to ARMC or to ARCMI (without recourse or with recourse
only to ARMC and/or ARCMI) from one or more institutional lenders in
order to finance the origination or purchase by ARMC or ARCMI of
various single-family residential real estate loans, as the same may
be renewed, extended, modified, amended or replaced from time to time.
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f. The definition of Permitted Investments contained in Section 1.1 of
the Loan Agreement is hereby amended to read as follows:
PERMITTED INVESTMENTS means (a) time deposits or certificates of
deposit in any Lender or other investments or securities offered by
any Lender (including eurodollar deposits), (b) obligations backed by
the full faith and credit of the United States of America,
(c) commercial paper rated P-1 by Xxxxx'x Investors Service, Inc. or
A-1 by Standard & Poor's Corporation on the date of acquisition, (d)
subject to any limitations contained in this Agreement, including,
without limitation, the limitations set forth in SECTION 8.5,
participations in any Interest and Foreign Exchange Hedge Agreements
or (e) subject to any limitations contained in this Agreement,
including, without limitation, the limitations set forth in SECTION
8.10, (i) acquisitions of corporate entities, (ii) investments in
Related Investments, (iii) amounts advanced by AMRESCO or AMRESCO
Capital Corporation in connection with Warehouse Line Loans and/or
Residential Funding Loans, (iv) investments in Asset Portfolios, or
Persons acquiring an Asset Portfolio, that will be managed by a
Borrower or an Affiliate of a Borrower, including, without limitation
Eligible Investments, (v) purchases of Residential Residual Interests
(including those from net interest margin trusts) located in the
United States, (vi) amounts advanced by ARMC or ARCMI with respect to
any ARMC Warehousing Loans located in the United States, or (vii)
Invested Capital in the Residential Capital Markets Group and Other
Permitted Investments.
f. The definition of Collateral in Section 1.1 of the Loan Agreement is
hereby amended to read as follows:
COLLATERAL means all property, assets and interests of any kind
securing the Credit Facility (including, without limitation, all
Advances and the Letters of Credit) pursuant to this Agreement or any
of the other Loan Documents, which shall include, without limitation,
all Assigned Loans, all Commercial Residual Interests and Residential
Residual Interests, all fixtures, furniture and equipment owned by any
of the Borrowers, all general inventory of any of the Borrowers, and
any material asset of any Borrower (provided that, for this purpose,
"material assets" shall be deemed to be those assets with an
acquisition cost in excess of $5,000,000).
2. REQUIRED CONSENTS/APPROVALS
a. AMRESCO CAPITAL CORPORATION/GOLDMAN JOINT VENTURE: Pursuant to SECTION
8.10(B) of the Loan Agreement, Borrowers are prohibited from investing
in Related Investments in excess of $10,000,000 without the prior
written consent of Agent and the Required Lenders. Upon execution
hereof, this Amendment shall constitute such
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prior written consent for the investment evidenced by the ACMF
Transaction Documents in an amount up to $25,000,000 (the "ACMF CAP
AMOUNT"). In addition, AMRESCO, ACL and ACCC may advance additional
amounts (such additional advances not to exceed $35,000,000 in the
aggregate outstanding at any time) to ACMF if required to do so under
the terms of the Keepwell Agreement, ACCC Guaranty or the Limited
Partnership Agreement of ACMF without additional consents; provided,
however, that (i) the obligations of AMRESCO and ACCC under such
agreements shall be limited to obligations under the Master Repurchase
Agreement dated as of September 3, 1996 executed by ACMF and GSMC and
the Securitization Agreement to be executed between ACMF and Xxxxxxx
Sachs & Co., and (ii) such $35,000,000 limitation shall in no way limit
the liability of AMRESCO to the extent that the Keepwell Agreement
includes a guaranty otherwise permitted by Section 8.5(h) of the Loan
Agreement. Any investments made pursuant to the terms of this consent
shall be Related Investments and shall not increase any limitations
contained in SECTION 8.10 concerning Related Investments.
b. NIM TRUSTS. To the extent required by the Loan Agreement, the
Required Lenders consent to the creation by ARSC of one or more net
interest margin trusts, and authorize Agent to release their security
interest in Residential Residual Interests as may be necessary to
facilitate creation of such trusts, provided that (i) no Default or
Event of Default has occurred and remains uncured, and (2) the
proceeds to ARSC from the creation of such trusts are used to reduce
the outstanding balance of the Credit Facility.
3. Section 7.1(c) of the Loan Agreement is hereby amended to read as follows:
(c) Simultaneously with the delivery of each set of financial
statements referred to in SECTIONS 7.1(a) AND (b), a certificate of an
Authorized Officer of AMRESCO, (i) setting forth in reasonable detail the
calculations required to establish whether Borrowers were in compliance
with the requirements of SECTIONS 8.1 through and including SECTION 8.4,
and SECTION 8.10 (c), (i) AND (j) on the date of such financial statements,
and (ii) with respect to only the financial statements delivered pursuant
to SECTIONS 7.1(a) AND (b), stating, to the best of such Authorized
Officer's knowledge and belief, whether or not such financial statements
fairly reflect the financial condition of AMRESCO and its Subsidiaries and
results of AMRESCO's and its Subsidiaries' operations as of the date of the
delivery of such financial statements.
4. Section 8.1 of the Loan Agreement is hereby amended to read as follows:
SECTION 8.1. MINIMUM CONSOLIDATED TANGIBLE NET WORTH. Borrowers
shall not permit Consolidated Tangible Net Worth to be less than the sum of
(a) One Hundred Ten Million and No/100 Dollars ($110,000,000.00) PLUS (b)
fifty percent (50%) of the cumulative
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Consolidated Net Income for each calendar quarter commencing on April 1,
1996, through the quarter ending immediately prior to, or on, the date as
of which compliance with this covenant is being measured, PLUS (c) the
amount of any proceeds (less reasonable and customary transaction costs)
received by AMRESCO from the issuance of any additional shares of stock or
other equity instruments, LESS (d) intangible assets shown on the financial
statements of Borrower as prepared in accordance with GAAP (net of
amortization) attributed to Approved Acquisitions.
5. Section 8.5 of the Loan Agreement is hereby amended to read as follows:
SECTION 8.5. LIMITATION ON DEBT AND FOREIGN EXCHANGE EXPOSURE. No
Borrower shall, and no Borrower shall permit any of its Subsidiaries to,
incur any Debt, except
(a) the Credit Facility (including the Letters of Credit);
(b) the Residential Capital Markets Group or an Excluded Subsidiary
may have liability under unsecured Interest and Foreign Exchange Hedge
Agreements in an aggregate notional amount not to exceed $500,000,000,
so long as (i) there is no recourse to AMRESCO or any Subsidiary under
any such Interest and Foreign Exchange Hedge Agreements, other than
the Residential Capital Markets Group or an Excluded Subsidiary, (ii)
each such Interest and Foreign Exchange Hedge Agreement has a maturity
of no more than 18 months, other than Interest and Foreign Exchange
Hedge Agreements in an aggregate notional amount not to exceed
$100,000,000, which can have a maturity of no more than seven years,
(iii) the purpose of each such Interest and Foreign Exchange Hedge
Agreement is to hedge the Borrowers' interest rate or foreign exchange
or other business risk, and is not speculative in nature, and (iv) the
Borrowers do not deviate from their current practices and policies
related to obtaining Interest and Foreign Exchange Hedge Agreements;
(c) obligations under secured Interest and Foreign Exchange Hedge
Agreements, so long as the provider of any such Interest and Foreign
Exchange Hedge Agreements is a Lender and such Lender's Liens are
evidenced by the Security Documents;
(d) the Investment Line of Credit, the Warehouse Line of Credit, the
Residential Funding Warehousing Facility, and the ARMC Warehousing
Facility; provided, however, that at no time shall the outstanding
principal balance of the ARMC Warehousing Facility exceed One Billion
and No/100 Dollars ($1,000,000,000.00);
(e) Debt of any Borrower owed to any other Borrower;
(f) Debt secured by purchase money security interests not to exceed
$250,000.00 in the aggregate at any time;
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(g) Guaranties in connection with Debt otherwise permitted by this
SECTION 8.5 other than in connection with the Residential Funding
Warehousing Facility or the ARMC Warehousing Facility (provided,
however, that ARCMI may guarantee loans made to ARMC under an ARMC
Warehousing Facility);
(h) Guaranties in the form of indemnity obligations or typical
repurchase obligations related to the sale by any Borrower of assets
in the ordinary course of its business;
(i) Leases of office space used by any Borrower in the ordinary course
of its business;
(j) Debt in respect of current accounts payable incurred in the
ordinary course of any Borrower's business;
(k) Approved Subordinated Debt or Approved Senior Debt; provided that
no Borrower or Subsidiary shall make payments on or redeem, or approve
by board of director action or otherwise the payment of any amounts
on, or redemption of, the Approved Subordinated Debt or Approved
Senior Debt after the occurrence of a Default or, prior to the
occurrence of a Default, which would exceed the scheduled payments due
under the documents evidencing the Approved Subordinated Debt or the
Approved Senior Debt, such prohibited payments including any payments
made under Article 11 or Article 14 of that certain Indenture dated as
of November 21, 1995, by and between AMRESCO and First Interstate Bank
of Texas, N.A., as Trustee or Article 11 of that certain Indenture,
dated January 15, 1996, by and between AMRESCO and Bank One, Columbus,
N.A., as Trustee;
(l) Excluded Subsidiary Debt in an aggregate amount not to exceed One
Hundred Million and No/100 Dollars ($100,000,000.00);
(m) Guaranties of AMRESCO, AMRESCO CAPITAL CORPORATION, ACCC and ACL
as evidenced by the ACMF Transaction Documents, as amended, copies of
which have previously been provided to Agent; PROVIDED, HOWEVER, that
except as expressly provided in Section 2(a) of this Amendment, any
payments under the ACMF Transaction Documents or investment in ACMF
under the ACMF Transaction Documents which at any one time would
aggregate in excess of the ACMF Cap Amount are subject to the prior
written consent of the Required Lenders and Agent;
(n) Debt of ARMC to DLJ Mortgage Capital, Inc., as evidenced by a
Master Repurchase Agreement dated October 25, 1996, and secured by
subordinate certificates from DLJ 1996-QB and DLJ 1996-QJ; and
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(o) Debt of the UK Subsidiaries (or any of them) not to exceed
$1,000,000 in the aggregate, provided that such Debt is nonrecourse
and secured only by one or more Letter(s) of Credit issued pursuant to
the Credit Facility.
6. Section 8.7 of the Loan Agreement is hereby amended to read as follows:
SECTION 8.7. LIMITATIONS ON LIENS. No Borrower shall, and no
Borrower shall permit any of its Subsidiaries to, create, incur, assume or
suffer to exist any Lien upon any of its assets (including, without
limitation, the stock of any Subsidiary incorporated outside of the United
States and not pledged to Lenders) or to give a negative pledge to any
Person with respect to any of its assets, except for
(a) the Lenders' Liens;
(b) the Permitted Encumbrances;
(c) with respect to equipment or inventory, (i) landlord's Liens
arising in the ordinary course of any Borrower's business and (ii)
Liens on equipment or supplies hereafter acquired by any Borrower in
the ordinary course of such Borrower's business to secure the purchase
price of such equipment or supplies and any such Lien existing on such
equipment or supplies at the time of acquisition by such Borrower
(individually, a "PURCHASE MONEY LIEN"), provided that (1) no Purchase
Money Lien shall cover any property other than the equipment or
supplies so acquired, and (2) the Debt secured by such Purchase Money
Lien shall not exceed one hundred percent (100%) of the purchase price
of such equipment or supplies;
(d) Liens on the Collateral to secure obligations under Interest and
Foreign Exchange Hedge Agreements, so long as the provider of any such
Interest and Foreign Exchange Hedge Agreement is a Lender and such
Liens are evidenced by the Security Documents;
(e) Liens to secure permitted Excluded Subsidiary Debt, provided that
(i) no such Lien shall cover any property other than property
purchased or refinanced with proceeds of permitted Excluded Subsidiary
Debt, and (ii) the Excluded Subsidiary Debt secured by such Lien shall
not exceed one hundred percent (100%) of the purchase price of such
property;
(f) the six percent (6%) net profits interest granted by AMRESCO New
Hampshire, Inc. to Xxxxxx Financial, Inc. pursuant to Section 3.6 of
that certain Term Loan Agreement, dated as of December 31, 1993, among
AMRESCO New Hampshire, Inc., AMRESCO Holdings, Inc. and Xxxxxx
Financial, Inc.;
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(g) Liens involuntarily filed against any asset of any Borrower or
Subsidiary, provided, that within fifteen (15) days after such filing,
the applicable Borrower or Subsidiary has obtained a release of any
such Lien or is contesting the filing of such Lien in good faith and
an adequate bond has been obtained to satisfy in full any claim which
such Lien secures;
(h) Liens securing the Investment Line of Credit, the Warehouse Line
of Credit, the Residential Funding Warehousing Facility or the ARMC
Warehousing Facility; and
(i) Lien in favor of DLJ Mortgage Capital, Inc. against certain
subordinate certificates issued to Quality Mortgage USA, Inc. and
purchased by ARMC from DLJ Series 1996-QB and 1996-QJ.
7. Section 8.10 of the Loan Agreement is hereby amended to read as follows:
SECTION 8.10. INVESTMENTS. No Borrower shall, and no Borrower shall
permit any of its Subsidiaries to, directly or indirectly, make any loans,
advances, extensions of credit or capital contributions to, make any
investment in, or purchase any stock or securities of, or interest in, any
Person (including, without limitation, a Subsidiary of any Borrower unless
such Subsidiary has become a "Borrower" under this Agreement as required
hereby), except for Permitted Investments; provided, that
(a) with respect to any acquisition of corporate entities for which
the aggregate purchase price and all the consideration for such
acquisition is in excess of Five Million Dollars ($5,000,000.00),
Borrowers must obtain the prior written consent of the Required
Lenders to make such acquisition;
(b) with respect to Related Investments, if the aggregate amount of
any such Related Investment exceeds five percent (5%) of Total
Capital, AMRESCO shall provide to Agent all information regarding such
Related Investment as Agent shall request, and Borrowers must obtain
the prior written consent of the Required Lenders and Agent prior to
making such Related Investment;
(c) in no event shall the aggregate Related Investments made by
Borrowers during the Credit Period exceed Thirty-five Million and
No/100 Dollars ($35,000,000.00) (based on Borrowers' costs);
(d) in no event shall the sum of (i) any advances, extensions of
credit, or other investments made by AMRESCO or AMRESCO Capital
Corporation in connection with Warehouse Line Loans or Residential
Funding Loans (excluding, however, any investment in any Warehouse
Line Loans or Residential Funding Loans not covered by clause (ii)
below representing the amount required to be funded by AMRESCO
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or AMRESCO Capital Corporation to enable such loans to be initially
funded under the terms of any warehouse facility established to fund
such Warehouse Line Loans or Residential Funding Loans) plus (ii) the
aggregate amount of Warehouse Line Loans and Residential Funding Loans
which continue to be held by AMRESCO, AMRESCO Capital Corporation or
any Subsidiary 360 days (in the case of Warehouse Line Loans) or 80
days (in the case of Residential Funding Loans) after the origination
thereof exceed Fifteen Million and No/100 Dollars ($15,000,000.00) at
any time;
(e) without the prior written consent of the Required Lenders, no
Borrower and no Subsidiary of a Borrower (other than the Residential
Capital Markets Group) shall acquire or invest in any Asset Portfolio
if more than twenty-five percent (25%) of the purchase price of such
Asset Portfolio is attributable to loans secured by single family
residences or duplexes;
(f) in no event shall the Residential Capital Markets Group acquire or
invest in any asset or Person, other than (i) amounts advanced by
ARMC, ARCMI or ARCC to purchase Residential Residual Interests located
in the United States (including net interest margin trusts), (ii)
amounts advanced by ARMC or ARCMI with respect to any ARMC
Warehousing Loans located in the United States or (iii) amounts
advanced by ARMC, ARCMI or ARCC to acquire or invest in any
Residential Asset Portfolio located in the United States or to
originate loans secured by 1-to-4 family residences;
(g) without the prior written consent of the Required Lenders, no
Borrower shall acquire or invest in any Asset Portfolio if the amount
of such investment exceeds fifteen percent (15%) of Total Capital;
(h) without the prior written consent of the Required Lenders, no
Borrower shall acquire or invest in any Acquired Loan which has a
purchase price allocation greater than five percent (5%) of Total
Capital; and
(i) in no event shall the aggregate Invested Capital in the
Residential Capital Markets Group (exclusive however of the cost of
acquisition of Quality Mortgage USA, Inc.) and Other Permitted
Investments exceed an amount equal to the sum of (A) Adjusted
Consolidated Tangible Net Worth, plus (B) the amount of Approved
Subordinated Debt; nor shall (i) the aggregate Invested Capital in the
Residential Capital Markets Group (exclusive however of the cost of
acquisition of Quality Mortgage USA, Inc.) exceed 75% of the sum of
(A) Adjusted Consolidated Tangible Net Worth, plus (B) the amount of
Approved Subordinated Debt, or (ii) the aggregate Invested Capital in
Other Permitted Investments exceed 60% of the sum of (A) Adjusted
Consolidated Tangible Net Worth, plus (B) the amount of Approved
Subordinated Debt; and
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(j) with respect to Residential Residual Interests which are part of a
net interest margin trust, such investments by Borrowers shall not
exceed 10% of Adjusted Consolidated Tangible Net Worth plus
outstanding principal balance of Approved Subordinated Debt;
provided that, the outstanding proceeds from issuance of Approved Senior
Debt may be applied to increase the amount allocated to (c) of this
paragraph, OR to increase the Adjusted Consolidated Net Worth for purposes
of (i) or (j) of this paragraph, or both (provided that the total
adjustment does not exceed the aggregate Approved Senior Debt outstanding),
from time to time in Borrower's sole discretion.
8. ADDITIONAL CAPITAL; ACQUISITION FEE. It is the intention of AMRESCO
to raise Additional Capital in an amount not less than $45,000,000
within ninety (90) days of the acquisition of the assets of Quality
Mortgage USA, Inc. (the "QUALITY CLOSING DATE"). Notwithstanding
anything in the Loan Agreement to the contrary, if such Additional
Capital has not been raised on or prior to the 90th day following the
Quality Closing Date, then the interest rate charged on all LIBOR Rate
Advances shall increase to the applicable LIBOR Rate plus 200 basis
points until such Additional Capital has been raised, at which time the
interest rate shall be reduced to the amount set forth in the Loan
Agreement. If $45,000,000 in Additional Capital has not been raised by
March 31, 1997, then a fee (the "ACQUISITION FEE") equal to 25 basis
points times the net purchase price for the assets of Quality Mortgage
USA, Inc. shall be payable to the Lenders hereunder; likewise, on June
30, 1997, September 30, 1997 and/or December 31, 1997, an additional 25
basis point Acquisition Fee shall be payable to the Lenders at the close
of the Business Day on each of such dates unless the additional
$45,000,000 in Additional Capital has been raised.
9. REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF BORROWERS. Each
Borrower hereby represents and warrants to, and agrees with, Agent and
Required Lenders as follows:
(a) AUTHORIZATION. The execution and delivery of this Amendment and each
other document executed herewith and the performance of all covenants
contemplated herein and therein have been duly authorized by each Borrower
and will not violate the articles of incorporation, bylaws or partnership
agreement, as applicable, of any Borrower or any other material agreement
to which any Borrower is a party, and the consent of no other party or
parties is required.
(b) NO CLAIMS OR DEFENSES. No Borrower has any offsets, claims,
counterclaims, defenses or other causes of action against Agent or any
Lender arising out of the Credit Facility, the Loan Documents, the
modifications of the Credit Facility pursuant to this Amendment, any
document executed in connection herewith or otherwise.
(c) BINDING OBLIGATION. This Amendment and each other document executed
in connection herewith has been duly and validly executed and delivered by
each Borrower and
Page 12
constitutes a valid and legally binding obligation of each Borrower
enforceable in accordance with its terms, except as enforcement may be
limited by equitable principles or by bankruptcy, insolvency, reorganization
or other similar laws relating to or affecting enforcement of creditors'
rights generally.
10. NON-WAIVER OF RIGHTS OR REMEDIES. Except as otherwise set forth
herein, neither this Amendment nor any other document executed in
connection herewith constitutes or shall be deemed (a) a waiver of, or
consent by Agent or any Lender to any default or event of default which
may exist or hereafter occur under any of the Loan Documents, (b) a
waiver by Agent or any Lender of any of Borrowers' obligations under the
Loan Documents, or (c) a waiver by Agent or any Lender of any rights,
offsets, claims, or other causes of action that Agent or any Lender may
have against any Borrower.
11. MODIFICATION EXPENSES. Borrowers agree to pay all reasonable legal
fees and other expenses of the Agent incurred in connection with the
preparation and negotiation of this Amendment and each other document
executed in connection herewith, as well as an Amendment Fee to the
Lenders equal to $200,000 in the aggregate.
12. VALIDITY OF EXISTING DOCUMENTS. The Notes, the Loan Agreement and
all other Loan Documents, as modified hereby and by the other documents
executed in connection herewith, are each legal, valid, binding and
enforceable in accordance with their respective terms, are each in full
force and effect, and shall continue to inure to the benefit of and be
binding upon each Borrower, Agent and each Lender, and their respective
successors and assigns.
13. SUCCESSORS AND ASSIGNS. This Amendment shall inure to the benefit
of and be binding upon the parties hereto and their respective
successors and assigns.
14. CONFORMING PROVISIONS. Any and all of the terms and provisions of
the Notes, the Loan Agreement, the Security Documents and all of the
other Loan Documents are hereby amended and modified wherever necessary,
and even though not specifically addressed herein, so as to conform to
the amendments and modifications thereto set forth in this Amendment and
each other document executed in connection herewith.
15. CAPTIONS. The captions, headings and arrangements used in this
Amendment are for convenience only and do not in any way affect, limit,
amplify, or modify the terms and provisions hereof.
16. GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF TEXAS.
17. COUNTERPARTS. This Amendment may be executed in a number of
duplicate counterparts, each of which shall be deemed an original for
all purposes, and all of which, collectively, shall constitute one
agreement.
Page 13
18. NO ORAL AGREEMENTS. THIS AMENDMENT TOGETHER WITH EACH OTHER
DOCUMENT EXECUTED IN CONNECTION HEREWITH AND EACH OTHER LOAN DOCUMENT,
REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES HERETO CONCERNING THE
MATTERS SET FORTH HEREIN, 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.
(intentionally left blank)
Page 14
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers effective as of the
Closing Date.
BORROWERS:
AMRESCO, INC., a Delaware corporation, for itself
and as agent and attorney-in-fact for each of the
Borrowers listed on Schedule 1
By:
-----------------------------------------
Xxxxxx X. Xxxxxx,
Vice President and Treasurer
NEW BORROWERS:
AMRESCO RESIDENTIAL MORTGAGE CORPORATION
f/k/a AMRESCO B&C, INC.
By:
-----------------------------------------
Printed Name: Xxxxxxx X. Xxxxxxx
Title: Sr. Vice President
AMRESCO PRINCIPAL MANAGERS I, INC.
AMRESCO CAPITAL LIMITED, INC.
By:
----------------------------------------
Xxxxxx X. Xxxxxx, as
Treasurer for each of the
above companies
AMRESCO PORTFOLIO INVESTMENTS, INC.
By:
----------------------------------------
Printed Name: Xxxxxxx X. Xxxxxxx
Title: Vice President
Page 15
AGENT:
NATIONSBANK OF TEXAS, N.A.,
a national banking association, as
Agent for Lenders
By:
----------------------------------------
Xxxxx X. Xxxxxxxxx,
Vice President
LENDERS:
NATIONSBANK OF TEXAS, N.A., a
national banking association
By:
----------------------------------------
Xxxxx X. Xxxxxxxxx,
Vice President
BANK ONE, TEXAS, NA,
a national banking association
By:
----------------------------------------
Name:
Title:
XXXXX FARGO BANK (TEXAS), N.A.,
a national banking association
By:
----------------------------------------
Name:
Title:
XXXXXX GUARANTY TRUST COMPANY OF
NEW YORK, a New York state bank
By:
---------------------------------------
Name:
Title:
Page 16
COMERICA BANK - TEXAS,
a state banking association
By:
----------------------------------------
Name: Xxxxx Xxxxx
Title: Assistant Vice President
BANK UNITED,
a federal savings bank
By:
----------------------------------------
Name:
Title:
THE BANK OF NEW YORK,
a national banking association
By:
----------------------------------------
Name:
Title:
THE NIPPON CREDIT BANK, LTD.,
a national banking association
By:
----------------------------------------
Name:
Title:
Page 17
SCHEDULE 1
BORROWERS
AMRESCO ATLANTA INDUSTRIAL, INC.
AMRESCO CANADA INC.
AMRESCO CAPITAL CORPORATION
AMRESCO CONSOLIDATION CORP. f/k/a AMRESCO
MORTGAGE CAPITAL, INC.
AMRESCO EQUITIES CANADA INC.
AMRESCO FINANCIAL I, L.P.
AMRESCO FUNDING CORPORATION
AMRESCO INSTITUTIONAL, INC.
AMRESCO JERSEY VENTURES LIMITED
AMRESCO MANAGEMENT, INC. f/k/a BEI
MANAGEMENT, INC.
AMRESCO NEW ENGLAND II, L.P.
AMRESCO NEW HAMPSHIRE, L.P.
AMRESCO NEW ENGLAND II, INC.
AMRESCO NEW HAMPSHIRE, INC.
AMRESCO NEW ENGLAND, L.P.
AMRESCO OVERSEAS, INC. f/k/a AMRESCO
SERVICES, INC.
AMRESCO PRINCIPAL MANAGERS II, INC.
AMRESCO RESIDENTIAL CAPITAL MARKETS, INC.
f/k/a AMRESCO RESIDENTIAL MORTGAGE
CORPORATION
AMRESCO RESIDENTIAL CREDIT CORPORATION
AMRESCO RHODE ISLAND, INC.
AMRESCO SERVICES CANADA INC.
AMRESCO UK HOLDINGS LIMITED
AMRESCO UK LIMITED
AMRESCO UK VENTURES LIMITED
AMRESCO VENTURES, INC. f/k/a AMRESCO GENERAL
PARTNERS, INC.
AMRESCO 1994-N2, INC.
ASSET MANAGEMENT RESOLUTION COMPANY
BEI 1992 - N1, INC.
BEI 1993 - N3, INC.
BEI 1994 - N1, INC.
BEI MULTI-POOL, INC.
Page 18
BEI PORTFOLIO INVESTMENTS, INC.
BEI PORTFOLIO MANAGERS, INC.
BEI REAL ESTATE SERVICES, INC.
BEI SANJAC, INC.
ENT MIDWEST, INC.
ENT NEW JERSEY, INC.
ENT SOUTHERN CALIFORNIA, INC.
GRANITE EQUITIES, INC.
XXXXXXXX XXXXXXXX, INC.
LIFETIME HOMES OF NEW JERSEY, INC.
OAK CLIFF FINANCIAL, INC.
OLD MIDLAND HOUSE LIMITED
PRESTON HOLLOW ASSET HOLDINGS, INC.
Page 19
