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EXHIBIT 10.4.k
MODIFICATION AGREEMENT
This Modification Agreement (herein so called), is entered into
effective as of the 18th day of February, 1997, by and among ALLIED MORTGAGE
CORPORATION, a Texas corporation (the "Company"), ALLIED MORTGAGE CAPITAL
CORPORATION, a Texas corporation ("Capital") (the Company and Capital being
called collectively the "Borrowers" and individually, a "Borrower"), XXX X.
XXXXX ("Guarantor"), and COASTAL BANC ssb ("Lender"). Capitalized terms used but
not defined herein have the meanings assigned to them in that certain Loan
Agreement (such agreement as heretofore amended is hereinafter called the
"Credit Agreement") dated effective as of April 30, 1996, by and among the
Borrowers and Lender.
Section 1. Recitals. Borrowers, Guarantor, and Lender desire to amend
certain provisions of the Credit Agreement. Therefore, Borrowers, Guarantor and
Lender hereby agree as follows, intending to be legally bound:
Section 2. Amendments. The Credit Agreement is hereby amended as
follows:
(a) The definition of "Basic Rate" in Section 1.2 of the Credit
Agreement is hereby deleted therefrom and the following is substituted
in lieu thereof:
"'Basic Rate' means, for any day, (a) with respect to
Aggregate Advances relating to "A" Mortgage Loans, the LIBOR
Rate for that day plus 2.50%; and (b) with respect to Aggregate
Advances relating to "B, C, & D" Mortgage Loans, the LIBOR Rate
for that day plus 3.00%."
(b) The definition of "Eligible Mortgage Loans" in Section 1.2
of the Credit Agreement is hereby deleted therefrom and the following is
substituted in lieu thereof:
"'Eligible Mortgage Loans' means, on any day, all "A"
Mortgage Loans and "B, C, & D" Mortgage Loans, (a) for which a
Borrower holds Purchase Commitments or with respect to each "B,
C, & D" Mortgage Loans only, a Purchase Agreement and a related
Investor Confirmation, Preclosing Purchase Approval, or if
designated for bulk sale by a Borrower on the Credit Request
that such "B, C, & D" Mortgage Loan complies at all times with
all applicable underwriting guidelines and other requirements of
an Investor relating to such Investor's purchase of such "B, C,
& D" Mortgage Loan under the Purchase Agreement, as applicable;
(b) that are made payable to the order of a Borrower or have
been endorsed payable to such Borrower and have been endorsed by
such Borrower in blank; (c) in which Lender has been granted and
continues to hold an enforceable perfected first priority
security interest; (d) that are not in default; (e) that
conforms in all respects with all the requirements
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of the Purchase Commitments or with respect to each "B, C, & D"
Mortgage Loans only, a Purchase Agreement and a related Investor
Confirmation or Preclosing Purchase Approval, as applicable, to
purchase such Mortgage Loans and are valid and enforceable in
accordance with their respective terms; (f) otherwise
satisfactory to Lender in its sole discretion and all other
respects; and (g) as to which none of the events or conditions
described in Section 2.13 has occurred."
(c) The following definition of ""A" Mortgage Loans" is hereby
added to Section 1.2 of the Credit Agreement for all purposes:
""A' Mortgage Loans' means, on any day, all fully
amortizing Mortgage Loans (a) that have original terms to their
stated maturity of 30 years or less; (b) that are (i) eligible
either for guaranty or insurance by the VA or FHA or for
insurance (as to the portion of the Mortgage Loan which
initially exceeds an 80% loan-to-collateral value ratio) by a
private mortgage insurance by an insurer rated "A" or better by
a nationally recognized rating agency, or (ii) uninsured
conventional mortgage loans conforming to the maximum loan
amounts and loan-to-collateral value ratios standards for
guaranty by FNMA or FHLMC and with both an initial and a current
loan-to-collateral value ratios no greater than 80%; (c) that
are eligible for purchase by FNMA, FHLMC, or GNMA; (d) dated not
more than 60 days before the date on which a Borrower has
requested the Advance in connection with such Mortgage Loan to
be funded; and (e) are, in the judgment of Lender, consistent in
all respects with traditional standards imposed by relevant
rating agencies and pool insurers for classification as "A"
Mortgage Loans."
(d) The definition of "'B, C, & D' Loans" is hereby added to
Section 1.2 of the Credit Agreement for all purposes:
""'B, C, & D" Loans' means all fully amortizing Mortgage
Loans that (a) are, in the judgment of Lender, consistent in all
respects with traditional standards imposed by whole loan
purchasers, relevant rating agencies and pool insurers for
classifications as "B" or "C" or "D" Mortgage Loans; and (b)
dated not more than 25 days before the date on which a Borrower
has requested the Advance in connection with such Mortgage Loan
to be funded."
(e) The definition of "Warehouse Line Limit" in Section 1.2 of
the Credit Agreement is hereby deleted therefrom and the following is
substituted in lieu thereof:
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"'Warehouse Line Limit' means (a) with respect to an "A"
Mortgage Loan that is an Eligible Mortgage Loan, an amount equal
to 100% of the lesser of (i) the amount at which an Investor has
committed to purchase such "A" Mortgage Loan pursuant to a
Purchase Commitment or (ii) the principal balance of such "A"
Mortgage Loan; (b) with respect to a "B, C, & D" Mortgage Loan
that is an Eligible Mortgage Loan and is designated by the
Borrower for a pipeline sale on the Credit Request delivered in
connection with such "B, C, & D" Mortgage Loan, an amount equal
to 97% of the lesser of (i) the amount at which an Investor has
committed to purchase such "B, C, & D" Mortgage Loan pursuant to
a Purchase Agreement and the related Investor Confirmation or
Preclosing Purchase Approval, as applicable, or (ii) the
principal balance of such "B, C, & D" Mortgage Loan; (c) with
respect to a "B, C, & D" Mortgage Loan that is an Eligible
Mortgage Loan and is designated by the Borrower for bulk sale on
the Credit Request delivered in connection with such "B, C, & D"
Mortgage Loan, an amount equal to 95% of the lesser of (i) the
amount at which an Investor has committed to purchase such "B,
C, & D" Mortgage Loan pursuant to a Purchase Agreement, or (ii)
the principal balance of such "B, C, & D" Mortgage Loan."
(f) The definition of "Aged Mortgage Loans" in Section 1.2 of
the Credit Agreement is hereby deleted therefrom and the following is
substituted in lieu thereof for all purposes:
"'Aged Mortgage Loans' means (a) "A" Mortgage Loans that
have been Pledged Mortgaged Loans for more than 90 days; and (b)
"B, C, & D" Mortgage Loans that have been Pledged Mortgage Loans
for more than 60 days."
(g) Exhibit "B" to the Credit Agreement is hereby deleted
therefrom and Exhibits "B-1" and "B-2" to this Agreement are hereby
substituted in lieu thereof for all purposes.
(h) Exhibit "D" to the Credit Agreement is hereby deleted
therefrom and Exhibit "D" to this Agreement is hereby substituted in
lieu thereof for all purposes.
(i) The definition of "Credit Request" is hereby deleted
therefrom and the following is substituted in lieu thereof for all
purposes:
"'Credit Request' means (a) with respect to a request
for an Advance against an "A" Mortgage Loan, Exhibit "B-1"
and (b) with respect to a request for an Advance against a "B,
C, & D" Mortgage Loan, Exhibit "B-2"."
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(j) The definition of "Purchase Agreement" is hereby added to
Section 1.2 of the Credit Agreement for all purposes:
"'Purchase Agreement' means a legal, valid, binding and
enforceable agreement from an Investor in favor of a Borrower to
purchase "B, C, & D" Mortgage Loans upon terms and conditions
and in form and substance acceptable to Lender, in its sole
discretion."
(k) The definition of "Investor Confirmation" is hereby added to
Section 1.2 of the Credit Agreement for all purposes:
"'Investor Confirmation' means written confirmation from
an Investor that has granted to a Borrower delegated
underwriting authority confirming Investor's agreement to
purchase specific "B, C, & D" Mortgage Loans pursuant to a
Purchase Agreement between such Investor and such Borrower, such
delegated underwriting authority and confirmation must be in
form and substance acceptable to the Lender in its sole
discretion."
(1) The following definition of "Preclosing Purchase Approval"
is hereby added to Section 1.2 of the Credit Agreement for all purposes:
"'Preclosing Purchase Approval' means a written approval
from an Investor, in form and substance acceptable to Lender in
its sole discretion, approving the purchase of a "B, C, & D"
Mortgage Loan by such Investor pursuant to a Purchase Agreement,
such approval must be in form and substance acceptable to the
Lender, in its sole discretion.."
(m) Any reference in the Credit Agreement to Purchase Commitment
will continue to have the same force and effect as therein provided,
except with respect to "B, C, & D" Mortgage Loans, Purchase Commitment
shall be deemed to mean a Purchase Agreement and a related Investor
Confirmation or Preclosing Purchase Approval, as applicable.
(n) Section 2.1. Loan. of the Credit Agreement is hereby
amended by adding the following to the end of such section for all
purposes:
"The Aggregate Advances against "B, C, & D" Mortgage
Loans outstanding at any one time shall not exceed
$2,000,000.00."
Section 3. Representations. Borrowers represent and warrant that all of
the representations and warranties contained in the Credit Agreement and all
instruments and documents
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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 through the date hereof. 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.
Section 5. ADDITIONAL REPRESENTATIONS. Except as otherwise specified
herein, the terms and provisions hereof shall in no manner impair, limit,
restrict or otherwise affect the obligations of Borrowers, Guarantor, or any
third party to Lender, as evidenced by the Loan Documents. Borrowers and
Guarantor hereby acknowledge, agree, and represent that (i) Borrowers are
indebted to Lender pursuant to the terms of the 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 Borrowers to Lender under the Note, the Credit Agreement, 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 Borrowers nor the Guarantor have 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 Borrowers, as of the date hereof; (vi)
Borrowers promise to pay to the order of Lender the indebtedness evidenced by
the Note according to the terms thereof, as amended hereby; and (vii) Lender 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 Lender of Lender'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 BORROWERS AND GUARANTOR HEREUNDER,
BORROWERS 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 BORROWERS AND
GUARANTOR, OR ANY ONE OR MORE OF THEM, HAVE, OR MAY HAVE AGAINST LENDER RELEASED
PARTIES, ARISING OUT OF OR WITH RESPECT TO ANY AND ALL TRANSACTIONS RELATING TO
THE CREDIT AGREEMENT, 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
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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. GUARANTOR
(i) CONSENTS TO THE TERMS AND PROVISIONS OF THIS MODIFICATION AGREEMENT, (ii)
RATIFIES AND CONFIRMS HIS GUARANTY IS IN FULL FORCE AND EFFECT IN ACCORDANCE
WITH ITS TERMS, AND (iii) ACKNOWLEDGES THAT THE GUARANTY AND ALL OTHER GUARANTY
AGREEMENTS OF THE GUARANTOR EXECUTED IN CONNECTION WITH THE CREDIT AGREEMENT ARE
NOT SUBJECT TO ANY CLAIMS, OFFSETS, DEFENSES, OR COUNTERCLAIMS OF ANY NATURE
WHATSOEVER.
Section 6. Severability. In the event any one or more provisions
contained in the Credit Agreement or this Modification Agreement 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 7. Expenses. Borrowers agree to pay all out-of-pocket costs and
expenses of Lender in connection with the preparation, operation, administration
and enforcement of this Modification Agreement.
Section 8. Acknowledgment. Except as amended hereby, Borrowers ratify
and confirm that the Security Instruments and all other Loan Documents are and
remain in full force and effect in accordance with their respective terms and
that all Collateral is unimpaired by this Modification Agreement and secures the
payment and performance of all indebtedness and obligations of Borrowers under
the Note, the Credit Agreement, and all other Loan Documents, as modified
hereby. Each of the undersigned officers of Borrowers executing this
Modification Agreement represents and warrants that he has full power and
authority to execute and deliver this Modification Agreement on behalf of
Borrowers that such execution and delivery 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 9. No Waiver. Borrowers agree that no Event of Default and no
Default has been waived or remedied by the execution of this Modification
Agreement by Lender, and any such Default or Event of Default heretofore arising
and currently continuing shall continue after the execution and delivery hereof.
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Section 10. Governing Law. This Modification Agreement 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 11. Counterparts. This Modification Agreement 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 12. NO ORAL AGREEMENTS. THIS WRITTEN MODIFICATION AGREEMENT, THE
CREDIT AGREEMENT, THE NOTE, THE GUARANTY, AND THE OTHER LOAN DOCUMENTS, 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.
BORROWERS:
ALLIED MORTGAGE CORPORATION,
a Texas corporation
By: /s/ XXX X. XXXXX
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XXX X. XXXXX, President
ALLIED MORTGAGE CAPITAL CORPORATION,
a Texas corporation
By: /s/ XXX X. XXXXX
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XXX X. XXXXX, Vice President
GUARANTOR:
By: /s/ XXX X. XXXXX
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XXX X. XXXXX
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LENDER:
COASTAL BANC ssb
By: /s/ X.X. XXXXXXXX
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X.X. XXXXXXXX, Senior Vice President
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