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Exhibit 10.16
THIRD AMENDMENT TO
WAREHOUSING CREDIT AND SECURITY AGREEMENT
This Third Amendment to Warehousing Credit and Security Agreement (this
"Amendment"), is entered into as of the 15th day of December 1998, by and
between CONSTRUCTION PORTFOLIO FUNDING, INC., a Texas corporation (the
"Company"), and BANK UNITED, a federal savings bank ("Lender"). Capitalized
terms used but not defined herein have the meanings assigned to them in that
certain Warehousing Credit and Security Agreement (the "Credit Agreement") dated
effective as of December 30, 1997, by and between the Company and Lender, as the
same has been or may be amended or supplemented from time to time.
Section 1. Recitals. The Company and Lender desire to amend the Credit
Agreement, subject to the terms and conditions of this Amendment. Therefore, The
Company and Lender hereby agree as follows, intending to be legally bound:
Section 2. Amendments. The Credit Agreement is hereby amended and
supplemented as follows:
(a) Section 1.1 of the Credit Agreement is hereby amended by the
amendment or addition of the following definitions:
All references to the "Construction Policies and
Procedures Manual" shall hereafter be references to "Credit
and Underwriting Policies for Real Estate Lending," a copy of
which is attached hereto as Exhibit B.
"Aged Loans" means, collectively, (a) any Residential
Construction Loan for any Sold Home and Speculative Home
included in Collateral for a period of more than three hundred
sixty (360) days, (b) any Residential Construction Loan for
Model Homes included in Collateral for a period of more than
six hundred thirty (630) days, (c) any Residential A&D Loan
included in Collateral for a period of more than six hundred
thirty (630) days, and (d) any Commercial Mortgage Loan
included in the Collateral for a period of more than three
hundred sixty-five (365) days.
"Appraisal" means (a) with respect to each Home to be
constructed under any Residential Construction Loan, a current
fair market value appraisal, accepted by the Company in
accordance with the Construction Loan Agreement, that
appraises on a "completed value" basis the Home to be
constructed on a specified Lot; (b) with respect to any Lot
under any Residential Construction Loan or any Residential
Land under any residential A&D Loan, a current fair market
value appraisal of such Lot or Residential Land; (c) with
respect to any Consumer Lot Loan, a current fair market
appraisal of the lot to be acquired with proceeds of such
Consumer Lot Loan; (d) with respect to any Consumer
Construction Loan, a current fair market value appraisal that
appraises on a "completed value" basis the Home to be
constructed from the proceeds of such Consumer Construction
Loan and the lot on which such Home is located; and (e) with
respect to any Commercial Mortgage Loan, a current fair market
value appraisal of the real property (including all
improvements thereon)
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securing such Commercial Mortgage Loan; each of the foregoing
appraisals must satisfy the appraisal requirements of the
Office of Thrift Supervision ("OTS") pertaining to that
particular loan, as amended from time to time, provided,
however, that the Company shall not have any obligation to
conform to any changes in the OTS appraisal requirements
occurring after the effective date herewith unless Lender has
notified the Company in writing of such changes.
"Appraisal Value" means (a) with respect to each Lot
and Home to be constructed thereon under any Residential
Construction Loan, the fair market value of such Lot and Home,
upon one hundred percent (100%) completion of all construction
thereof in accordance with the Plans and Specifications for
such Home plus lot value for such Lot, all as determined by
the Appraisal; (b) with respect to a Lot on which a Home is to
be constructed thereon under any Residential Construction
Loan, the fair market value attributable to such Lot in the
Appraisal; (c) with respect to Residential Land under any
Residential A&D Loan, the fair market value attributable to
such Residential Land in the Appraisal; (d) with respect to
each Lot and Home to be constructed thereon under any Consumer
Construction Loan, the fair market value of such Lot and Home,
upon one hundred percent (100%) completion of all construction
of such Home plus lot value for such Lot, all as determined by
the Appraisal; (e) with respect to a Lot on which a Home is to
be constructed thereon under any Consumer Lot Loan, the fair
market value attributable to such Lot in the Appraisal; and
(f) with respect to the property securing a Commercial
Mortgage Loan, the fair market value of such property and all
improvements thereon, all as determined by the Appraisal.
"Assignment Documents" means originals of such
instruments, documents, agreements, assignments, certificates,
UCC Financing Statements, allonges or endorsements, in form
and substance satisfactory to Lender in Lender's sole
discretion, which Lender reasonably determines are necessary
or appropriate to evidence and/or effectuate the assignment to
Lender of all of the Company's right, title and interest in
and to any and all Residential Construction Loans, Residential
A&D Loans, Consumer Construction Loans, Consumer Lot Loans,
and Commercial Mortgage Loans in respect of which Advances
have been made by the Lender hereunder, including, without
limitation, all Consumer Loan Documents evidencing Consumer
Construction Loans and Consumer Lot Loans, all Construction
Loan Documents evidencing such Residential Construction Loans
and Residential A&D Loans, and all Commercial Loan Documents
evidencing Commercial Mortgage Loans, and the proceeds thereof
and Lender's perfection of a valid first priority lien thereon
or therein, including, without limitation, the UCC Financing
Statement.
"Commercial Loan Documents" shall mean, with respect
to any Commercial Mortgage Loan, any and all agreements or
instruments now or hereafter executed and delivered by any
Person in connection with, or as security for the payment or
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performance of such Commercial Mortgage Loan, as such
Commercial Loan Documents may be supplemented, modified, or
amended.
"Commercial Loan Guidelines" means guidelines for
commercial loans set forth in the "Credit and Underwriting
Policies for Real Estate Lending," a copy of which is attached
hereto as Exhibit B.
"Commercial Mortgage Loan" shall mean any Mortgage
Loan that (a) is evidenced by a Mortgage Note secured by a
First Mortgage covering improved commercial real property, (b)
has closed not more than ninety (90) days prior to the date of
any determination, (c) is not in default in the payment of
principal and interest or in the performance of any obligation
under the note or mortgage evidencing or securing such loan
for a period greater than thirty (30) days, (d) is not in
foreclosure or subject to any claim for any credit, allowance,
or adjustment, and (e) complies with the Commercial Loan
Guidelines and the requirements of the Credit and Underwriting
Policies in all material respects.
"Commercial Note" means a promissory note executed by
any Person to the Company (or otherwise payable to the
Company) to evidence a Commercial Mortgage Loan, as such note
may be from time to time renewed, extended, rearranged,
modified, amended, restated, or replaced.
"Eligible Commercial Loan" means a Commercial
Mortgage Loan that, at all times during the term of this
Agreement, (a) is evidenced by Commercial Loan Documents that
are substantially in the forms previously approved, in
writing, by the Lender in its reasonable discretion; (b) is
validly pledged to the Lender, subject to no other Liens; (c)
is not in default in the payment of principal and interest for
a period of more than thirty (30) days; (d) is not in default
in the performance of any obligation under the Commercial Loan
Documents evidencing or securing such Eligible Commercial
Loan, that has not been cured by the borrower; (e) is not
subject to a bankruptcy or an act of fraud by the borrower
under such Eligible Commercial Loan, as the case may be; (f)
complies with all applicable Commercial Loan Guidelines in all
material respects, (g) is for a loan amount that does not
exceed its Loan Value; and (h) may not comply with all of the
foregoing terms but is otherwise on terms acceptable to the
Lender in its sole discretion as indicated by Lender's
specific written or oral waiver of non-compliance with such
foregoing terms.
"The definition of "Loan Value" is supplemented by
the addition of the following subsection (f):
"(f) with respect to each Commercial Mortgage Loan,
the least of (i) the Appraisal Value of the real
property (including all improvements thereon)
securing such Commercial Mortgage Loan; (ii) the
original principal amount of the Commercial Note
evidencing such Commercial Mortgage Loan; or (iii)
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the outstanding principal balance of the Commercial
Note evidencing such Commercial Mortgage Loan."
"Pledged Mortgage" means any Residential Construction
Loan, Residential A&D Loan, Aged Loan, Consumer Construction
Loan, Consumer Lot Loan or Commercial Mortgage Loan, included
in the Collateral.
"Request for Advance" means, for Mortgage Loans that
are not Commercial Mortgage Loans, a disbursement request
summary accompanied by a Warehouse Loan Balance Summary,
substantially in the form of Exhibits "L", "M" and "R",
respectively, attached hereto, specifying the amount of the
requested Advance, the Residential Construction Loans,
Residential A&D Loans, Consumer Construction Loans, Consumer
Lot Loans, and Commercial Mortgage Loans, and (if not a
Commercial Mortgage Loan) the construction costs specified in
the applicable Construction Costs Schedule relating to such
loans that will be funded with the proceeds of such Advance
and a request that Lender make such Advance in accordance with
the terms of this Agreement. Notwithstanding the foregoing, if
the Advance is to be made against a Commercial Mortgage Loan,
"Request for Advance" shall mean the Form attached hereto as
Exhibit R, accompanied by documentation set forth in Exhibit
A-1 attached hereto.
"Termination Date" shall mean June 14, 1999, or such
earlier date upon which Lender's obligation to fund shall be
terminated pursuant to the terms of this Agreement.
"Year 2000 Issue" shall mean the failure of computer
software, hardware, and firmware systems and equipment
containing embedded computer chips to properly receive,
transmit, process, manipulate, store, retrieve, re-transmit,
or in any other way utilize data and information due to the
occurrence of the year 2000 or the inclusion of dates before,
on, or after January 1, 2000 (including, without limitation,
September 9, 1999, and February 29, 2000.
(b) Section 2.1 of the Credit Agreement is deleted in its entirety, and
the following is substituted therefor:
"2.1. The Commitment.
"(a) Subject to the terms and conditions of this Agreement and
provided no Default or Event of Default has occurred and is
continuing, the Lender agrees, from time to time during the
period from the date hereof to and including the Termination
Date, to make Advances to the Company, provided the total
aggregate principal amount outstanding at any one time of all
such Advances shall not exceed FORTY MILLION DOLLARS
($40,000,000.00) at any time after the date hereof. The
obligation of the Lender to make Advances hereunder up to such
limit is
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hereinafter referred to as the "Commitment." Within the
Commitment, the Company may borrow, repay, and reborrow. All
Advances under this Agreement shall constitute a single
indebtedness, and all of the Collateral shall be security for
the Note and for the performance of all the Obligations of the
Company to the Lender.
"(b) Advances shall be used by the Company solely for the
purpose of funding or purchasing and/or funding Residential
Construction Loans, Residential A&D Loans, Consumer
Construction Loans, Consumer Lot Loans, and Commercial
Mortgage Loans, as specified in the Request for Advance, and
none other, and shall be made at the request of the Company in
the manner hereinafter provided in Section 2.2, against the
pledge of such Residential Construction Loans, Residential A&D
Loans, Consumer Construction Loans, Consumer Lot Loans, and
Commercial Mortgage Loans, as the case may be, and such other
collateral as is set forth in section 3.1 hereof as Collateral
therefor. Advances shall also be subject to the following
restrictions:
"(1) No Advance shall be made against a Residential
Construction Loan, a Residential A&D Loan, an Aged
Loan, a Consumer Construction Loan, or a Consumer Lot
Loan that is not an Eligible Construction Loan.
"(2) No Advance shall be made against a Commercial
Mortgage Loan that is not an Eligible Commercial
Loan.
"(3) The aggregate amount of all Advances against
Residential Construction Loans outstanding at any one
time shall not exceed FORTY MILLION AND NO/100
DOLLARS ($40,000,000/00). The aggregate face amount
of all Residential Construction Loans in respect of
which an Advance has been made by the Lender
hereunder shall not exceed in the aggregate Eighty
Million and No/100 Dollars ($80,000,000.00).
"(4) The aggregate amount of all Advances against
Model Homes under all Residential Construction Loans
outstanding at any one time shall not exceed Six
Million and No/100 Dollars ($6,000,000.00). The
aggregate face amount of all Residential Construction
Loans for Model Homes in respect of which an Advance
has been made by the Lender hereunder shall not
exceed in the aggregate Twelve Million and No/100
Dollars ($12,000,000.00).
"(5) The aggregate amount of all Advances against
Speculative Homes under all Residential Construction
Loans outstanding at any one time shall not exceed
Sixteen Million and No/100 Dollars ($16,000 000.00).
The aggregate face amount of all Residential
Construction Loans for Speculative Homes in respect
of which an Advance has been made by the Lender
hereunder shall not exceed in the aggregate
Thirty-two Million and No/100 Dollars
($32,000,000.00).
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"(6) The aggregate amount of all Advances against
Residential A&D Loans and Commercial Mortgage Loans
outstanding at any one time shall not exceed Eight
Million and No/100 Dollars ($8,000,000.00); provided,
however, that in no event shall the aggregate amount
of Advances outstanding against Commercial Mortgage
Loans exceed Four Million Dollars ($4,000,000). The
aggregate face amount of all Residential A&D Loans
and Commercial Mortgage Loans in respect of which an
Advance has been made by the Lender hereunder shall
not exceed in the aggregate Sixteen Million and
No/100 Dollars ($16,000,000.00); provided, however,
that in no event shall the aggregate face amount of
all Commercial Mortgage Loans in respect of which an
Advance has been made by lender exceed in the
aggregate Eight Million Dollars ($8,000,000).
"(7) The aggregate amount of all Advances against
Residential A&D Loans, Model Homes, and Speculative
Homes outstanding at any one time shall not exceed
Twenty Million and No/100 Dollars ($20,000,000.00).
The aggregate face amount of all Residential A&D
Loans in respect of which an Advance has been made by
the Lender hereunder shall not exceed in the
aggregate Forty Million and No/100 Dollars
($40,000,000.00).
"(8) The aggregate amount of all Advances against
Aged Loans (that are not Commercial Mortgage Loans)
outstanding at any one time shall not exceed Six
Million and No/100 Dollars ($6,000,000.00). The
aggregate face amount of all Aged Loans (that are not
Commercial Mortgage Loans) in respect of which an
Advance has been made by the Lender hereunder shall
not exceed in the aggregate Twelve Million and No/100
Dollars ($12,000,000.00).
"(9) The aggregate amount of all Advances against
Aged Loans (that are Commercial Mortgage Loans)
outstanding at any one time shall not exceed One
Million and No/100 Dollars ($1,000,000.00). The
aggregate face amount of all Aged Loans (that are
Commercial Mortgage Loans) in respect of which an
Advance has been made by the Lender hereunder shall
not exceed in the aggregate Two Million and No/100
Dollars ($2,000,000.00).
"(10) The aggregate amount of all Advances against
Consumer Construction Loans and Consumer Lot Loans
outstanding at any one time shall not exceed Four
Million and No/100 Dollars ($4,000,000.00). The
aggregate face amount of all Consumer Construction
Loans and Consumer Lot Loans in respect of which an
Advance has been made by the Lender hereunder shall
not exceed in the aggregate Eight Million and No/100
Dollars ($8,000,000.00).
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"(c) No Advance shall exceed the following amounts applicable
to the type of Collateral acquired with proceeds of the
Advance, determined as of the date the Collateral is pledged
to Lender:
"(1) with respect to Residential Construction Loans,
no Advance shall exceed an amount equal to ninety
percent (90%) of the amount of the Construction Loan
Advance under such residential Construction Loan to
be funded from the proceeds of the Advance.
"(2) with respect to any Residential A&D Loans that
has a loan-to-value ratio equal to or less than 70%
and a loan-to-cost ratio equal to or less than 90%,
no Advance shall exceed an amount equal to ninety
percent (90%) of the amount of the Construction Loan
Advance under such Residential A&D Loan to be funded
from the proceeds of the Advance.
"(3) with respect to Residential A&D Loans that
exceed the ratios set forth in Section 2.1(c)(2)
above, no Advance shall exceed an amount equal to
eighty percent (80%) of the amount of the
Construction Loan Advance under such Residential A&D
Loan to be funded from the proceeds of the Advance.
"(4) with respect to Commercial Mortgage Loans, no
Advance shall exceed an amount equal to 75% of the
Loan Value of such Commercial Mortgage Loan.
"(5) with respect to Aged Loans that are not
Commercial Mortgage Loans, no Advance shall exceed an
amount equal to sixty-five percent (65%) of the
principal amount outstanding of such Aged Loan prior
to any principal reductions required and received by
the Company from its borrower.
"(6) with respect to Aged Mortgage Loans that are
Commercial Mortgage Loans, no Advance shall exceed an
amount equal to sixty-five percent (65%) of the Loan
Value of such Commercial Mortgage Loan, prior to any
principal reductions required and received by the
Company from its borrower.
"(7) with respect to Consumer Lot Loans, no Advance
shall exceed an amount equal to eighty percent (80%)
of the amount of the Advance made by the Company
under such Consumer Lot Loan to be funded from the
proceeds of the Advance.
"(8) with respect to Consumer Construction Loans, no
Advance shall exceed an amount equal to ninety
percent (90%) of the amount of the Advance made by
the Company under such Consumer Construction Loan to
be funded from the proceeds of the Advance.
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"(9) with respect to Aged Loans that are Acquired
Loans and that have been included in Collateral for
more than 450 days but less than 720 days, no Advance
shall exceed an amount equal to 50% of the principal
amount outstanding of such Aged Loan as of December
30, 1997.
(c) Section 2.4(a)(3) is amended to read as follows:
"(3) The unpaid amount of each advance outstanding against an
Aged Loan (that is not a Commercial Mortgage Loan) shall bear
interest from the later to occur of the date such Aged Loan
became an Aged Loan hereunder or the date of such Advance
until paid in full at a rate of interest equal to the lesser
of (a) the Maximum Rate, or (b) a floating rate of interest
(the "Floating Rate") which is equal to 275 basis points
(2.75%) per annum over the Monthly Average LIBOR Rate.
(d) Section 2.4(a) is amended by the addition of the following
subsections (5) and (6):
"(5) The unpaid amount of each Advance outstanding against a
Commercial Mortgage Loan that is not an Aged Loan shall bear
interest from the date of such Advance until paid in full, at
a rate of interest equal to the lesser of (i) the Maximum
Rate, or (ii) a floating rate of interest which is equal to
325 basis points (3.25%) per annum over the Monthly Average
LIBOR Rate.
"(6) The unpaid amount of each Advance outstanding against an
Aged Loan that is a Commercial Mortgage Loan shall bear
interest from the date of such Advance until paid in full, at
a rate of interest equal to the lesser of (i) the Maximum
Rate, or (ii) a floating rate of interest which is equal to
375 basis points (3.75%) per annum over the Monthly Average
LIBOR Rate."
(e) Section 2.5(a) is deleted in its entirety, and the following is
substituted therefor:
"(a) The outstanding unpaid principal amount of all Advances
shall be payable in full upon June 14, 1999."
(f) Section 2.5(c) of the Credit Agreement is hereby deleted in its
entirety, and the following is substituted therefor:
"2.5. Principal Payments.
(c) The Company shall be obligated to pay to the
Lender, without the necessity of prior demand or notice from
the Lender, and the Company authorizes the Lender to charge
the Funding Account or any accounts of the Company in Lender's
possession for the amount of any outstanding Advance against a
specific Residential Construction
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Loan, Residential A&D Loan, Aged Loan, Consumer Construction
Loan, Consumer Lot Loan, or Commercial Mortgage Loan, as the
case may be, upon the earliest occurrence of any of the
following events:
"(1) Any Residential Construction Loan that has been
included in Collateral for more than three hundred
sixty (360) days; except for any Residential
Construction Loan that continued to be an Eligible
Construction Loan at the end of such period and in
such event shall automatically be deemed an Aged
Loan;
"(2) Any Residential Construction Loan for Model
Homes has been included in Collateral for more than
six hundred thirty (630) days; except for any
Residential Construction Loan for any Model Home that
continues to be an Eligible Construction Loan at the
end of such period and in such event shall
automatically be deemed an Aged Loan;
(3) Any Residential A&D Loan has been included in
Collateral for more than six hundred thirty (630)
days; except for any such Residential A&D Loan that
continues to be an Eligible Construction Loan at the
end of such period and in such event shall
automatically be deemed an Aged Loan;
(4) Any Consumer Construction Loan or Consumer Lot
Loan has been included in Collateral for more than
five hundred forty (540) days;
"(5) Any Commercial Mortgage Loan has been included
in Collateral for more than the three hundred
sixty-five (365) days; except for any Commercial
Mortgage Loan that continues to be an Eligible
Commercial Loan at the end of such period and in such
event shall automatically be deemed an Aged Mortgage
Loan;
"(6) Any Aged Loan has been included in Collateral
(as an Aged Loan) for more than ninety (90) days,
unless such Aged Loan is a Residential A&D Loan or a
Residential Construction Loan for a Model Home, in
which case such Aged Loan has been included in the
Collateral (as an Aged Loan) for more than one
hundred eighty (180) days;
"(7) Such Residential Construction Loan, Residential
A&D Loan, Aged Loan, Consumer Construction Loan,
Consumer Lot Loan, or Commercial Mortgage Loan, is
not or ceases to be an Eligible Construction Loan or
Eligible Commercial Loan;
"(8) Upon receipt by Company of payment by the
Builder of such Residential Construction Loan,
Residential A&D Loan or Aged Loan in full;
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"(9) Upon receipt by Company of payment by the
Borrower of any such Consumer Construction Loan,
Consumer Lot Loan, Commercial Mortgage Loan, or Aged
Loan, in full;
"(10) Notwithstanding the foregoing, any Aged Loan
that is an Acquired Loan may remain in the Collateral
for a period greater than 450 days but no more than
720 days, subject to the provisions of Section
2.1(c)(7) hereof. All amounts advanced against such
Aged Loans that are Acquired Loans shall be due and
payable when such Aged Loans have been included in
the Collateral for more than 720 days.
(g) Section 2.9 is deleted in its entirety, and the following is
substituted therefor:
"2.9 Commitment Fee. In consideration of Lender's agreement to
make Advances available to Company under the Commitment and to
extend the term of the Credit Agreement, subject to the terms
of this Agreement, Company shall pay to Lender a commitment
fee equal to $100,000 per annum, or $50,000 for six months
(the "Commitment Fee"). The Commitment Fee shall be due in two
(2) equal quarterly installments of $25,000 each. The first
installment of $25,000 shall be due and payable on the
execution date hereof and a like installment of $25,000.00
shall be due and payable on April 1, 1999. The Commitment Fee
shall be deemed fully earned and non-refundable upon the
execution and delivery of this Agreement by the parties,
notwithstanding the Commitment is never fully funded during
the term of this Agreement.
(h) Sections 3.1(a) is deleted in its entirety, and the following is
substituted therefor:
"(a) All Residential Construction Loans and all Commercial
Mortgage Loans and all Residential A&D Loans, including all
Commercial Notes, Construction Notes, Construction Loan
Agreements, Deeds of Trust, and all other Construction Loan
Documents or Commercial Loan Documents, as applicable,
evidencing and/or securing such Residential Construction
Loans, Residential A&D Loans or Commercial Mortgage Loans in
respect of which an Advance has been made by the Lender
hereunder."
(i) Section 3.2 is deleted in its entirety, and the following is
substituted therefor:
"3.2 Right of Redemption from Pledge. So long as no Event of
Default has occurred, the Company may redeem a Residential
Construction Loan, Residential A&D Loan, Aged Loan, Consumer
Construction Loan, Consumer Lot Loan or Commercial Mortgage
Loan by notifying the Lender of its intention to redeem such
Residential Construction Loan, Residential A&D Loan, Aged
Loan, Consumer Loan, Consumer Lot Loan, or Commercial Mortgage
Loan from pledge and by paying to Lender, for application to
prepayment of the principal balance of the Note, an amount
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equal to the amount of all Advances outstanding with respect
to or relating to such Residential Construction Loan,
Residential A&D Loan, Aged Loan, Consumer Construction Loan,
Consumer Lot Loan, or Commercial Mortgage Loan."
(j) Sections 4.2(d), 5.13, 5.18, and 6.10 are deleted in their
entirety, and the following are substituted therefor:
"4.2(d) Lender shall not be obligated to fund all or any
portion of any Advance to be used to fund any Residential
Construction Loan, Residential A&D Loan, Consumer Construction
Loan, Consumer Lot Loan, or Commercial Mortgage Loan, unless
such Residential Construction Loan, Residential A&D Loan,
Consumer Construction Loan, or Consumer Lot Loan is an
Eligible Construction Loan or such Commercial Mortgage Loan is
an Eligible Commercial Loan."
"5.13 Direct Benefit From Loans. The Company has received, or,
upon the execution and funding thereof, will receive (a)
direct benefit from the making and execution of this Agreement
and the other Loan Documents to which it is a party, and (b)
fair and independent consideration for the entry into, and
performance of, this Agreement and the other Loan Documents to
which it is a party. Contemporaneously with the disbursements
of each Advance by the Lender to the Company, all such
proceeds will be used to fund or purchase and/or fund
Residential Construction Loans, Residential A&D Loans,
Consumer Construction Loans, Consumer Lot Loans, or Commercial
Mortgage Loans in accordance with the applicable Request for
Advance and none other."
"5.18 Use of Proceeds; Business Loans. The Company will use
the proceeds of the Advances made pursuant to the Commitment
solely as follows, and for no other purpose: finance the
funding of Residential Construction Loans, Residential A&D
Loans, Consumer Construction Loans, Consumer Lot Loans, and
Commercial Mortgage Loans. All loans evidenced by the Note are
and shall be "business loans" as such term is used in the
Depository Institutions Deregulation and Monetary Control Act
of 1980, as amended, and such loans are for business or
commercial purposes and not primarily for personal, family,
household or agricultural use, as such terms are used or
defined in chapter 1D, Texas Credit Title, Regulation Z
promulgated by the Board of Governors of the Federal Reserve
System, and Titles I and V of the Consumer Credit Protection
Act. The provisions of the Texas Credit Title which regulate
revolving loans and revolving triparty accounts) shall not
apply to this Agreement."
"6.10 Use of Proceeds of Advances. Use the proceeds of each
Advance solely for the purpose of financing the origination,
purchase, and/or funding of Residential Construction Loans,
Residential A&D Loans, Aged Loans, Consumer Construction
Loans, Consumer Lot Loans, and Commercial Mortgage Loans in
accordance with the applicable Request for Advance, and none
other.
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(k) The Credit Agreement is amended by the addition of the following
Sections 5.23 and 6.12:
"5.23 Year 2000 Review. Borrower represents and warrants to
the Lender that (a) it and its Subsidiaries have reviewed the
effect of the Year 2000 Issue on the computer software,
hardware, and firmware systems and equipment containing
embedded microchips owned or operated by or for Borrower and
its Subsidiaries or used or relied upon in the conduct of
their business (including systems and equipment supplied by
others or with which such computer systems of Borrower and its
Subsidiaries interface) and (b) the costs to Borrower and its
Subsidiaries of any reprogramming required as a result of the
Year 2000 Issue to permit the proper functioning of such
systems and equipment and the proper processing of data, and
the testing of such reprogramming, and of the reasonably
foreseeable consequences of the Year 2000 Issue to Borrower or
any of its subsidiaries (including reprogramming errors and
the failure of systems or equipment supplied by others), are
not reasonably expected to result in a Default or Event of
Default or to have a material adverse effect on the business,
assets, operations, prospects, or condition (financial or
otherwise) of Borrower or its Subsidiaries.
"6.12 Year 2000 Compliance. Borrower covenants and agrees with
Lender that it shall take all necessary action to complete in
all material respects by September 30, 1999, the reprogramming
of computer software, hardware, and firmware systems used or
relied upon in the conduct of its business (including systems
and equipment supplied by others or with which such systems of
Borrower interface) required as a result of the Year 2000
Issue to permit the proper functioning of such computer
systems and other equipment and testing of such systems and
equipment, as so reprogrammed. At the request of the Lender,
Borrower shall provide to the Lender reasonable assurance of
its compliance with the preceding sentence."
(l) Section 7.4 is deleted in its entirety, and the following is
substituted therefor:
"7.4 Minimum Tangible Net Worth. Permit Minimum
Tangible Net Worth of the Company (and its
Subsidiaries, on a consolidated basis) to be less
than SIX MILLION AND NO/100 DOLLARS ($6,000,000.00),
computed as of the end of each calendar month.
(m) The promissory note ("Credit Note") dated as of December 15, 1998,
in the original principal amount of $40,000,000, executed by Borrower
and payable to the order of Lender, is given to Lender in replacement
of that certain promissory note dated as of December 31, 1997, in the
original principal amount of $75,000,000, executed by Borrower and
payable to the order of Lender (the "Original Note"), and not in
novation or discharge thereof. The definition of the term "Note" in the
Credit Agreement is hereby amended to mean the Credit
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Note and all renewals, extensions, modifications, increases,
rearrangements, and replacements thereof.
Section 3. Representations. The Company represents and warrants that
all of the representations and warranties contained in the Credit Agreement and
all instruments and documents executed pursuant thereto or contemplated thereby
are true and correct in all material respects on and as of this date.
Section 4. Continued Force and Effect. Except as specifically amended
herein, all of the terms and conditions of the Credit Agreement and all other
Loan Documents are and remain in full force and effect in accordance with their
respective terms. All of the terms used herein have the same meanings as set out
in the Credit Agreement, unless amended hereby or unless the context clearly
requires otherwise. References in the Credit Agreement to the "Agreement," the
"Loan Agreement," "hereof," "herein" and words of similar import shall be deemed
to be references to the Credit Agreement as amended hereby. Any reference in the
other Loan Documents to the "Agreement," the "Line of Credit Agreement,"
"Warehouse Agreement," or the "Loan Agreement" shall be deemed to be references
to the Credit Agreement as amended through the date hereof. Any references in
the Credit Agreement or any of the Loan Documents to the Note or the Credit Note
shall be deemed to be references to the Credit Note.
Section 5. Guarantor. NAB Asset Corporation joins in the execution of
this Amendment for, among other things, the purpose of ratifying its Guaranty
dated December 30, 1997 (the "Guaranty"), which guarantees the payment of the
indebtedness evidenced by the Credit Agreement and the Credit Note. GUARANTOR
(I) CONSENTS TO THE TERMS OF THIS AMENDMENT, (II) RATIFIES AND CONFIRMS THE
GUARANTY, WHICH IS IN FULL FORCE AND EFFECT IN ACCORDANCE WITH ITS TERMS, AND
(III) ACKNOWLEDGES THAT THE GUARANTY IS NOT SUBJECT TO ANY CLAIMS, OFFSETS,
DEFENSES, OR COUNTERCLAIMS OF ANY NATURE WHATSOEVER.
Section 6. Representations and Release of Claims. Except as otherwise
specified herein, the terms and provisions hereof shall in no manner impair,
limit, restrict or otherwise affect the obligations of the Company, Guarantor,
or any third party to Lender, as evidenced by the Loan Documents. The Company
and Guarantor hereby acknowledge, agree, and represent that (i) the Company is
indebted to Lender pursuant to the terms of the Credit Note; (ii) the liens,
security interests and assignments created and evidenced by the Loan Documents
are, respectively, first, prior, valid and subsisting liens, security interests
and assignments against the Collateral and secure all indebtedness and
obligations of the Company to Lender under the Credit Note, the Credit
Agreement, and all other Loan Documents, as modified herein; (iii) there are no
claims or offsets against, or defenses or counterclaims to, the terms or
provisions of the Loan Documents, and the other obligations created or evidenced
by the Loan Documents; (iv) neither the Company nor the Guarantor has any
claims, offsets, defenses or counterclaims arising from any of the Lender's acts
or omissions with respect to the Loan Documents, or the Lender's performance
under the Loan Documents; (v) the representations and warranties contained in
the Loan Documents are true and correct representations and warranties of the
Company, as of the date hereof; (vi) the Company promises to pay to the order of
Lender the indebtedness evidenced by the Credit Note according to
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the terms thereof; and (vii) the Company is not in default and no event has
occurred which, with the passage of time, giving of notice, or both, would
constitute a default by the Company of the Company's obligations under the terms
and provisions of the Loan Documents. In consideration of the modification of
certain provisions of the Loan Documents, all as herein provided, and the other
benefits received by the Company hereunder, the Company and Guarantor hereby
RELEASE, RELINQUISH and forever DISCHARGE Lender, its predecessors, successors,
assigns, shareholders, principals, parents, subsidiaries, agents, officers,
directors, employees, attorneys and representatives (collectively, the "Lender
Released Parties"), of and from any and all claims, demands, actions and causes
of action of any and every kind or character, whether known or unknown, present
or future, which the Company has, or may have against Lender Released Parties,
arising out of or with respect to any and all transactions relating to the
Credit Agreement, the Credit Note, the Original Note, the Guaranty, and the
other Loan Documents occurring prior to the date hereof, including any other
loss, expense and/or detriment, of any kind or character, growing out of or in
any way connected with or in any way resulting from the acts, actions or
omissions of the Lender Released Parties, and including any loss, cost or damage
in connection with any breach of fiduciary duty, breach of any duty of fair
dealing, breach of competence, breach of funding commitment, undue influence,
duress, economic coercion, conflict of interest, negligence, bad faith,
malpractice, violations of the Racketeer Influence and Corrupt Organizations
Act, intentional or negligent infliction of emotional or mental distress,
tortious interference with corporate governments or prospective business
advantage, tortious interference with contractual relations, breach of contract,
deceptive trade practices, libel, slander, conspiracy, the charging, contracting
for, taking, reserving, collecting or receiving of interest in excess of the
highest lawful rate applicable to the Loan Documents (i.e., usury), any
violations of federal or state law, any violations of federal or state banking
rules, laws or regulations, including, but not limited to, any violations of
Regulation B, Equal Credit Opportunity, bank tying act claims, any violation of
the Texas Free Enterprise Antitrust Act or any violation of federal antitrust
acts.
Section 7. Severability. In the event any one or more provisions
contained in the Credit Agreement, this Amendment, or any of the Loan Documents
should be held to be invalid, illegal or unenforceable in any respect, the
validity, enforceability and legality of the remaining provisions contained
herein and therein shall not be affected in any way or impaired thereby and
shall be enforceable in accordance with their respective terms.
Section 8. Expenses. The Company agrees to pay all out-of-pocket costs
and expenses (including reasonable fees and expenses of legal counsel) of Lender
in connection with the preparation, operation, administration and enforcement of
this Amendment.
Section 9. Acknowledgment. Except as amended hereby, the Company and
Guarantor ratify and confirm that the Loan Documents are and remain in full
force and effect in accordance with their respective terms and that all
Collateral is unimpaired by this Amendment and secures the payment and
performance of all indebtedness and obligations of the Company under the Credit
Note, the Credit Agreement, and all other Loan Documents, as modified hereby.
The undersigned
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officer of the Company executing this Amendment represents and warrants that he
has full power and authority to execute and deliver this Amendment on behalf of
the Company. The undersigned officer of the Company represents and warrants that
his execution and delivery of this Amendment has been duly authorized, and that
the resolutions and affidavits previously delivered to Lender, in connection
with the execution and delivery of the Credit Agreement, are and remain in full
force and effect and have not been altered, amended or repealed in anywise.
Section 10. No Waiver. The Company and Guarantor agree that no Event of
Default and no Default has been waived or remedied by the execution of this
Amendment by Lender, and any such Default or Event of Default heretofore arising
and currently continuing shall continue after the execution and delivery hereof.
Section 11. Governing Law. This Amendment shall be governed by and
construed in accordance with the laws of the State of Texas and, to the extent
applicable, by federal law.
Section 12. Counterparts. This Amendment may be executed in any number
of counterparts and all of such counterparts taken together shall be deemed to
constitute one and the same instrument.
SECTION 13. NO ORAL AGREEMENTS. THIS WRITTEN AMENDMENT, THE CREDIT
AGREEMENT, THE CREDIT NOTE, THE GUARANTY, AND THE OTHER LOAN DOCUMENTS, ALL AS
MODIFIED HEREBY, REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT
BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR ORAL AGREEMENTS OF THE
PARTIES.
THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
EXECUTED and effective as of the dates first written above.
COMPANY: GUARANTOR:
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CONSTRUCTION PORTFOLIO
FUNDING, INC., NAB ASSET CORPORATION,
a Texas corporation a Texas corporation
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ Name: ▇▇▇▇ ▇▇▇▇▇▇
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ Title: Senior Vice-President
Title: President
LENDER:
BANK UNITED,
a federal savings bank
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Regional Director
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