Amendment No. 1 to Senior Secured Credit Agreement

EX-10.2 7 dex102.htm AMENDMENT NO. 1 TO SENIOR SECURED CREDIT AGREEMENT Amendment No. 1 to Senior Secured Credit Agreement

EXHIBIT 10.2

3/04 AMENDMENT TO CREDIT AGREEMENT

Preamble

This 3/04 Amendment to Credit Agreement (the “3/04 Amendment” or, within itself, this “Amendment“) dated as of March 8, 2004 (the “3/04 Amendment Effective Date”) amending (for the first time) the 12/03 Amended and Restated Senior Secured Credit Agreement dated as of December 3, 2003 (the “12/03 A&R Credit Agreement”, and as it may be supplemented, amended or restated from time to time, the “Current Credit Agreement”), among HOMEBANC MORTGAGE CORPORATION. (the “Company“), a Delaware corporation with its principal office at 2002 Summit Blvd., Suite 100, Atlanta, Georgia 30319, JPMORGAN CHASE BANK (“JPMorgan“), a New York banking corporation, acting herein as a lender and as agent and representative of the other Lenders (in that capacity JPMorgan is called the “Agent“), and the other lenders party to the 12/03 A&R Credit Agreement (being U.S. Bank National Association (“U.S. Bank”), Credit Lyonnais New York Branch (“CL“), Commerzbank Aktiengesellschaft New York Branch and Grand Cayman Branch (“Commerzbank“), Washington Mutual Bank, F.A. (“WaMu”), Colonial Bank, N.A. (“Colonial”), KeyBank National Association (“KeyBank”), National City Bank of Kentucky (“NCBK”) and Bank Hapoalim, B.M. (“Hapoalim”) and collectively with JPMorgan being herein called the “Lenders“), recites and provides as follows:

Recitals

The Company has requested that the Lenders amend the 12/03 A&R Credit Agreement to (i) reduce the minimum required Adjusted Tangible Net Worth of the Company and its consolidated Subsidiaries by monthly stepdowns to $33,000,000 for February 2004, $30,000,000 for March 2004, $27,000,000 for April 2004 and $24,000,000 thereafter; (ii) add a definition of “Seasoned Performing Loans” to include Single-family Collateral that are performing loans with documentation flaws as Eligible Collateral for up to 364 days from their origination dates and with an 85% Advance Rate for such Collateral and (iii) revise the Repurchased Loan sublimit to include Seasoned Performing Loans and increase such sublimit from 2.5% to 5.0% of the Aggregate Committed Sum, comprised of a sub-sublimit for Seasoned Performing Loans of up to 4.0% of the Aggregate Committed Sum and a sub-sublimit for Repurchased Loans of up to 1.0% of the Aggregate Committed Sum, and the Lenders are willing to do so on the terms and subject to the conditions hereinafter provided.

All capitalized terms used in the 12/03 A&R Credit Agreement and used but not defined differently in this Amendment have the same meanings here as there.

The Sections of this Amendment are numbered to correspond with the numbers of the Sections of the 12/03 A&R Credit Agreement amended hereby and are accordingly often nonsequential.

In the event of a conflict between the foregoing recitals and the following agreements, the latter will govern and control.

Agreements

In consideration of the premises, the mutual agreements stated below and other good and valuable consideration paid by each party to each other party to this Agreement, the receipt and sufficiency of which each hereby acknowledges, the parties hereby agree as follows.

1. DEFINITIONS

1.2 Definitions of General Application. Effective from and after the 3/04 Amendment Effective Date:

A. The following new definitions are hereby added to Section 1.2 of the Current Credit Agreement, in alphabetical order (except where otherwise specified).

“3/04 Amendment” means the 3/04 Amendment to Credit Agreement dated as of March 8, 2004, amending this Agreement.

“3/04 Amendment Effective Date” is defined in the preamble to the 3/04 Amendment (as March 8, 2004).

“Book Seasoned Performing Loan Collateral Value” is defined in clause (f) of the definition of “Collateral Value”.

The following definition of “Seasoned Performing Loan Collateral Value” follows clause (e) in the definition of “Collateral Value” and the clause that follows it is relettered as clause (g):

(f) The “Seasoned Performing Loan Collateral Value“ on any day for a pledged Seasoned Performing Loan shall be its “Book Seasoned Performing Loan Collateral Value“, which is the least of:

(i) eighty-five percent (85%) of such pledged Seasoned Performing Loan’s Principal Balance;

(ii) eighty-five percent (85%) of such pledged Seasoned Performing Loan’s Mortgage Note amount; or

(iii) eighty-five percent (85%) of the value of the Single-family residential real property securing such pledged Seasoned Performing Loan as determined by a Current Appraisal or a Current Broker’s Price Opinion, net of any senior Lien;

provided, that if the Agent shall elect (in its sole and absolute discretion) to mark such pledged Seasoned Performing Loan to market, or if the Required Lenders direct the Agent to mark it to market, whichever of the Market Value of the pledged Seasoned Performing Loan itself or of the Single-family real property securing it the Agent shall determine is the better measure of its Market Value shall establish its Market Value for purposes hereof, and its Collateral Value shall

be the lesser of (i) its Book Seasoned Performing Loan Collateral Value or (ii) eighty-five percent (85%) of its Market Value on that day.

“MBS Debt” means Debt evidenced by MBS.

“Seasoned Performing Loan“ means a Pledged Loan that would be Eligible Single-family Collateral except that it has one or more uncorrected deficiencies in its documentation, as determined by either the Custodian or the Company, but no other Disqualifiers, and that satisfies in all other respects the requirements of Schedule EC of this Agreement to be Eligible Single-family Collateral; provided that Borrowings to finance Seasoned Performing Loans shall be included in the Repurchased Loans Class of Borrowings for interest calculation and accrual purposes.

“Seasoned Performing Loan Collateral Value” is defined in clause (f) of the definition of “Collateral Value”.

B. Schedule 3/04-DQ attached to this Amendment is hereby substituted for Schedule DQ to the 12/03 A&R Credit Agreement.

C. The following definitions are hereby amended in their entirety to henceforth read as follows:

“Book Collateral Value“ means the Book Prime Loan Collateral Value, the Book Repurchased Loan Collateral Value, the Book Seasoned Performing Loan Collateral Value, the Book Construction/Permanent Loan Collateral Value or the Book Subprime Loan Collateral Value, whichever the context requires.

“Debt” means, with respect to any Person, on any day, the sum of the following (without duplication):

(a) all of that Person’s debt or other obligations which, in accordance with GAAP, should be included in determining total liabilities as shown on the liabilities side of that Person’s balance sheet for that day;

(b) all of that Person’s debt or other obligations for borrowed money or for the deferred purchase price of property or services, excluding MBS Debt — or, in the case of partial recourse MBS Debt, the nonrecourse portion thereof — that is nonrecourse to the subject Person and is not secured by a Lien on the subject Person’s Property;

(c) all of any other Person’s debt or other obligations for borrowed money or for the deferred purchase price of property or services in respect of which such Person is liable — contingently or otherwise — to pay or advance money or property as guarantor, surety, endorser or otherwise (excluding such Person’s contingent liability as endorser of negotiable instruments for collection

in the ordinary course of business), or which such Person has agreed to purchase or otherwise acquire; and

(d) all debt for borrowed money or for the deferred purchase price of property or services secured by a Lien on any property owned or being purchased by that Person (even though that Person has not assumed or otherwise become liable for the payment of such debt) to the extent that such debt would not be otherwise counted as a liability for purposes of determining that Person’s net worth and to the extent that such debt is less than or equal to the net book value of such property;

provided that, for purposes of this Agreement, there shall be excluded from the calculation of Debt for that day both (i) such Person’s obligations to pay to another Person any sums collected and held by the subject Person (as loan servicer, escrow agent or collection agent or in a similar capacity) for the account of such other Person, and (ii) the portion of Qualified Subordinated Debt that is not due within one (1) year of that day.

“Long Warehoused (Aged) Loan“ or “Aged Loan“ means a Mortgage Loan, other than a Construction/Permanent Loan or a Seasoned Performing Loan, whose Original Pledge Date was more than ninety (90) days, but not more than one hundred eighty (180) days, before the relevant Determination Date (being the date on or for which such Mortgage Loan’s Collateral Value is being determined). A Pledged Loan (other than a Construction/Permanent Loan or a Seasoned Performing Loan) whose Original Pledge Date was more than one hundred eighty (180) days before the relevant Determination Date shall have zero Collateral Value.

6. COLLATERAL

6.1 Grant of Security Interest. The provisions of Section 6.1 of the 12/03 A&R Credit Agreement are not amended hereby. Cumulative of such existing provisions, as security for the payment of the Loan and for the payment and performance of all of the Obligations, the Company hereby GRANTS to the Agent (as agent and representative of the Lenders) a first priority security interest in all of the Company’s present and future estate, right, title and interest in and to the Collateral, in addition to and cumulative of the security interest in the Collateral granted to the Agent in the 12/03 A&R Credit Agreement, and the parties hereby declare and confirm that all such security interests were and are granted to and held by the Agent (as agent and representative of the Lenders.)

7. CONDITIONS PRECEDENT

Section 7 of the 12/03 A&R Credit Agreement is hereby amended by adding the following new Section 7.3 to the end of Section 7, viz.:

7.3 Borrowings After 3/04 Amendment Effective Date. In addition to the conditions precedent stated in Sections 7.1 and 7.2 above, the obligations of

the Lenders to fund and the Agent to disburse any Advances under this Agreement after the 3/04 Amendment Effective Date is subject to the condition precedent that the Agent shall have received:

(1) the 3/04 Amendment, duly executed by the Company;

(2) payment of a cash amendment fee equal to $5,000 for each Lender that executes this Amendment; and

(3) a certificate of the Company’s corporate secretary (i) as to the incumbency of the officers of the Company executing this Amendment and all other Facilities Papers executed or to be executed by or on behalf of the Company in connection with this Amendment, (ii) as to the authenticity of their signatures (specimens of their signatures shall be included in such certificate or set forth on an exhibit attached to it, and the Agent and the Lenders shall be entitled to rely on that certificate until the Company has furnished a new certificate to the Agent) and (iii) that there have been no amendments to the Company’s certificate of incorporation or bylaws since December 1, 2003.

8. REPRESENTATIONS

The Company hereby republishes its warranties and representations made in the 12/03 A&R Credit Agreement effective (except as to those specified to relate only to a specific date) as of the 3/04 Amendment Effective Date.

9. AFFIRMATIVE COVENANTS

Section 9.4 is hereby amended by adding the following after its clause (k):

(l) Weekly, a schedule of all Pledged Loans that are Seasoned Performing Loans.

10. NEGATIVE COVENANTS

Section 10.7 is hereby amended in its entirety to henceforth read as follows:

10.7 The Company’s Minimum Adjusted Tangible Net Worth. Permit the Adjusted Tangible Net Worth of the Company (on a consolidated basis with its wholly-owned Subsidiaries) to be less on any day than:

(i) Thirty-six Million Dollars ($36,000,000) for any day on or before January 31, 2004;

(ii) Thirty-three Million Dollars ($33,000,000) for any day after January 31, 2004 and before March 1, 2004;

(iii) Thirty Million Dollars ($30,000,000) for any day after February 29, 2004 and before April 1, 2004;

(iv) Twenty-seven Million Dollars ($27,000,000) for any day after March 31, 2004 and before May 1, 2004;

(v) Twenty-four Million Dollars ($24,000,000) for any day after April 30, 2004 and before July 1, 2004; or

(vi) Thirty-seven Million Dollars ($37,000,000) plus One Million Dollars ($1,000,000) for each calendar quarter elapsed following the quarter ending June 30, 2004.

11. DEFAULTS AND REMEDIES

Section 11.1(b) is hereby amended by deleting therefrom the following parenthetical:

(other than nonrecourse MBS Debt of any Subsidiary formed for the purpose of issuing such Debt)

14. MISCELLANEOUS

Notice Pursuant to Tex. Bus. & Comm. Code §26.02. THE 12/03 A&R CREDIT AGREEMENT, AS AMENDED BY THE 3/04 AMENDMENT TO CREDIT AGREEMENT DATED AS OF MARCH 8, 2004, AND THE OTHER FACILITIES PAPERS TOGETHER CONSTITUTE A WRITTEN LOAN AGREEMENT WHICH REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

(The remainder of this page is intentionally blank; unnumbered counterpart signature pages follow.)

EXECUTED as of the 3/04 Amendment Effective Date.


HOMEBANC MORTGAGE CORPORATION

By:		/s/ James L. Krakau

Name:		James L. Krakau

Title:		Senior Vice Presient

Unnumbered counterpart signature page to 3/04 Amendment to Credit Agreement among HomeBanc Mortgage