Exhibit 10.4

 

AMENDMENT NO. 10 TO

COMMITMENT LETTER

 

This AMENDMENT NO. 10 TO COMMITMENT LETTER (the “Amendment”) is made and entered
into as of February 23, 2005 by and between Countrywide Warehouse Lending
(“Lender”), Encore Credit Corp., Bravo Credit Corporation and ECC Capital
Corporation (collectively “Borrower”). This Amendment amends that certain
Commitment Letter by and between Lender and Borrower dated as of November 14,
2003 (the “Commitment Letter”), which supplements that certain Revolving Credit
and Security Agreement by and between Lender and Borrower dated as of May 13,
2002 (as may be amended from time to time, the “Credit Agreement”).

 

RECITALS

 

Lender and Borrower have previously entered into the Commitment Letter and
Credit Agreement pursuant to which Lender may, from time to time, provide
Borrower credit in the form of a warehouse line secured by residential mortgage
loans. Lender and Borrower hereby agree that the Commitment Letter shall be
amended as provided herein.

 

In consideration of the mutual promises contained herein, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Lender and Borrower hereby agree as follows:

 

1. Term. Lender and Borrower agree to amend the Term of the Credit Agreement
through April 30, 2005.

 

2. Credit Off Feature. Lender and Borrower agree to delete the Credit Off
Feature in its entirety and replace it with the following:

 

Credit Off Feature:

   Additional uncommitted $1,100,000,000 through the earlier of March 8, 2005 or
the settlement of the securitization transaction with CSC, and $300,000,000
thereafter, but subject to the terms and conditions of the Agreement. In order
to qualify for Credit Off Feature, a loan must:     

1.      Be in Tranche A or B of Schedule 1;

 

2.      Advance Rate shall be the lower of 100.00%; or 97.50% of mark-to-market;
or 97.50% of Commitment price through March 8, 2005, thereafter, lower of
100.75%; or 97.50% of mark-to-market; or 97.50% of Commitment price;

 

3.      Have collateral delivered and accepted by Lender;

 

4.      Borrower to identify these loans in the CDR as ‘CHL Conforming’

 

5.      Be allocated to a security(ies) to be underwritten by Countrywide
Securities Corporation (“CSC”);

 

6.      Borrower has provided Lender with a current whole loan market price from
CSC;

 

7.      Borrower has provided Lender with evidence of a hedge instrument on the
financed loans, in a form acceptable to Lender;

 

8.      Have other documents delivered to Lender or its designee as may be
required by Lender;

 

9.      In addition, interest and all other fees will continue to accrue until
the final purchase price is paid. Margin over 30 day LIBOR shall be .75%.
Noncompliant and default loans are not eligible for the Credit Off Feature.

 

Further, with respect to loans which are allocated to a security(ies)
underwritten and priced by CSC, the following conditions precedent shall also
apply:

 

1.      Any related due diligence by CSC has been completed;

 

Page 1 of 2

--------------------------------------------------------------------------------

3. Loans Allocated to a Security. Buyer and Seller agree to add a new heading
titled “Additional Rights of Buyer” as follows:

 

Loans Allocated to a Security:    In the event any loan allocated to a
security(ies) underwritten and priced by CSC is removed from such allocation for
adverse investment quality for the related security, Borrower shall be required
to payoff such loan from Lender’s line of credit. If Borrower fails to comply
with such obligations, Lender shall not be required or deemed to have released
its security interest in such loan(s) and Lender shall have the right to direct
CSC to offset from the purchase proceeds from such security(ies) any amounts
required to be paid by Borrower under this section.

 

4. No Other Amendments; Conflicts with Previous Amendments. Other than as
expressly modified and amended herein, the Commitment Letter shall remain in
full force and effect and nothing herein shall affect the rights and remedies of
Lender as provided under the Commitment Letter and Credit Agreement. To the
extent any amendments to the Commitment Letter contained herein conflict with
any previous amendments to the Commitment Letter, the amendments contained
herein shall control.

 

5. Capitalized Terms. Any capitalized term used herein and not otherwise defined
herein shall have the meaning ascribed to such term in the Credit Agreement.

 

6. Facsimiles. Facsimile signatures shall be deemed valid and binding to the
same extent as the original.

 

IN WITNESS WHEREOF, Lender and Borrower have caused their names to be signed
hereto by their respective officers thereunto duly authorized as of the date
first written above.

 

COUNTRYWIDE WAREHOUSE LENDING

     

ENCORE CREDIT CORP.

By:  

/s/ Blair Kenny

      By:  

/s/ William E. Moffatt

   

Signature

         

Signature

Name:

 

Blair Kenny

     

Name:

 

William E. Moffatt

Title:

 

Executive Vice President / C.O.O.

     

Title:

 

Treasurer

       

BRAVO CREDIT CORPORATION

            By:  

/s/ John Kentoulis

               

Signature

           

Name:

 

John Kentoulis

           

Title:

 

Executive Vice President

       

ECC CAPITAL CORPORATION

            By:  

/s/ John Kohler

               

Signature

           

Name:

 

John Kohler

           

Title:

 

Executive Vice President

 

Page 2 of 2