Exhibit 10.1

 

SECOND AMENDMENT TO

WAREHOUSING CREDIT AGREEMENT

 

THIS SECOND AMENDMENT TO WAREHOUSING CREDIT AGREEMENT (the “Second Amendment”)
is made and entered into as of the 12th day of December, 2008, and is to be
effective as of the 30th day of December, 2008, by and among (i) HOME LOAN
CENTER, INC. D/B/A LENDINGTREE LOANS, a California corporation with its
principal place of business located at 163 Technology Drive, Irvine, California
92618 (the “Company”), (ii) NATIONAL CITY BANK, a national banking association,
with a place of business located at 101 South Fifth Street, Louisville, Kentucky
40202 (“National City” or the “Bank”), and (iii) NATIONAL CITY BANK, a national
banking association, with a place of business located at 101 South Fifth Street,
Louisville, Kentucky 40202, its capacity as Agent for the hereinafter defined
Banks (in such capacity, the “Agent”).

 

P R E L I M I N A R Y   S T A T E M E N T:

 

A.                                   Pursuant to that certain Warehousing Credit
Agreement dated as of November 26, 2007, by and among the Company, the Bank and
the Agent (the “Existing Credit Agreement”), the Bank has heretofore established
in favor of the Company a warehousing line of credit facility in the maximum
principal amount of Fifty Million Dollars ($50,000,000.00) (the “Warehouse
Line”), for the purposes set forth therein. The  Existing Credit Agreement, as
amended by this Second Amendment, is hereinafter referred to as the “Credit
Agreement”.

 

B.                                     The Company, the Agent and the Bank are
willing to and desire to amend the Existing Credit Agreement in order to
(i) extend the stated Maturity Date to December 29, 2009, (ii) delete the Alt A
Advance Sublimit and remove Alt A Loans as Eligible Collateral thereunder,
(iii) delete the HELOC/Second Trust Deed Advance Sublimit and remove HELOC Loans
and Second Trust Deed Loans as Eligible Collateral thereunder, (iv) modify the
definitions of Aged Loan, Collateral Value, Eligible Collateral and Jumbo Loan,
(v) modify the Jumbo Advance Sublimit, (vi) modify the interest rates applicable
to the Warehouse Line, and (vii) implement certain other modifications thereto.

 

NOW, THEREFORE, in consideration of the premises and the mutual covenants and
agreements set forth in the Existing Credit Agreement and herein, and for other
good and valuable consideration, the mutuality, receipt and sufficiency of which
are hereby acknowledged, the parties hereto hereby agree as follows:

 

1.                                       Each capitalized term used herein,
unless otherwise expressly defined herein, shall have the meaning set forth in
the Existing Credit Agreement.

 

2.                                       The following definitions, as contained
in Article 1 of the Existing Credit Agreement, are hereby amended and restated
in their entirety to read as follows:

 

“Aged Loan” shall mean, as of any date:

 

(a)                                  Any Loan, which is not a Wet Loan, which
has been pledged as Collateral for more than sixty (60) calendar days
(calculated from the date upon which the Advance relating to such Loan is made
hereunder); and

 

(b)                                 Any Wet Loan which has been pledged as
Collateral for more than ten (10) calendar days (calculated from the date upon
which the Advance relating to such Loan is made hereunder).

 

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“Collateral Value” shall mean as of any date:

 

(a)                                  With respect to a Loan which constitutes
Eligible Collateral on such date, and which is not a Jumbo Loan, ninety-eight
percent (98%) of the lesser of (i) the face amount of the promissory note
evidencing such Loan, or (ii) the purchase price under the Commitment to which
the applicable Loan has been assigned; and

 

(b)                                 With respect to a Loan which constitutes
Eligible Collateral on such date, and which is a Jumbo Loan, ninety-seven
percent (97%) of the lesser of (i) the purchase price under the Commitment to
which such Loan has been assigned, or (ii) the face amount of the promissory
note evidencing such Loan.

 

Notwithstanding anything contained in (a) or (b) to the contrary:

 

A.                                   The Collateral Value of all Wet Loans shall
not exceed, in the aggregate, the Wet Advance Sublimit;

 

B.                                     The Collateral Value of all Jumbo Loans
shall not exceed, in the aggregate, the Jumbo Advance Sublimit;

 

C.                                     Each Wet Loan in respect to which the
Company shall not have delivered all of the Collateral Documents to the Agent
within the number of days required by the Security Agreement, shall have a
Collateral Value of zero;

 

D.                                    Each Wet Loan which the Agent determines
has not been funded by the Company on the date the Advance in respect of such
Wet Loan is made by the Banks to the Company, shall have a Collateral Value of
zero;

 

E.                                      If the Agent shall reasonably determine
that the Collateral Value otherwise assigned to an item of Eligible Collateral
does not accurately reflect the value thereof, then, upon notice to the Company,
the Agent may mark an item of collateral to market at any time to determine the
fair market value thereof; provided, however, in no event shall any mark to
market with respect to any item of Eligible Collateral under this subsection
result in such item of Eligible Collateral having  a Collateral Value higher
than such item would otherwise have;

 

F.                                      In the event that a Loan shall have been
delivered by the Agent to a purchaser under a Commitment as provided in the
Security Agreement, or in the event that such Loan was delivered by the Agent to
an Approved Investor and more than the maximum number of days allowed by the
Security Agreement shall have elapsed since the date of such delivery and no
purchase has taken place or the proceeds thereof have not been received by the
Agent, such Loan shall have a Collateral Value of zero;

 

G.                                     All Aged Loans which do not constitute
Eligible Collateral shall have a Collateral Value of zero;

 

H.                                    All Loans which are under Trust Receipt in
accordance with the terms of the Security Agreement which are not returned to
the Agent within the required number of days specified in the Security
Agreement, shall have a Collateral Value of zero; and

 

I.                                         The Collateral Value of all Loans
which are under Trust Receipt in accordance with the terms of the Security
Agreement shall not exceed, in the aggregate, Two Million Five Hundred Thousand
Dollars ($2,500,000.00).

 

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“Conforming Loan” shall mean a Loan secured by a Conforming Mortgage or
Government Mortgage, and which may be a “Stated Income/Stated Asset Loan” or
“Option ARM Loan”.

 

“Eligible Collateral” shall mean, collectively and as of any date, [A] each Loan
(i) which is a Conforming Loan, Government Loan, a Wet Loan or a Jumbo Loan,
(ii) which is not an Aged Loan, (iii) which constitutes Collateral, (iv) which
no default has occurred and is continuing on such Loan, (v) which is pledged as
Collateral within thirty (30) calendar days of origination, purchase or
conversation, (vi) which has no more than one (1) principal/interest payment
past due, (vii) which has not been under Trust Receipt in accordance with the
terms of the Security Agreement for more than the maximum number of days allowed
under the Security Agreement, (viii) which has not been shipped to an Approved
Investor for more than the maximum number of days allowed by the Security
Agreement and no purchase proceeds have been received by the Agent, (ix) in
respect of which the loan-level representations, warranties and agreements
contained in the Credit Agreement and the Security Agreement are true and
correct, and (x) which is subject to a Firm Commitment or Standby Commitment;
and [B] each Loan (i) that is a Discretionary Loan (as defined in Section 9.20
hereof) without duplication, (ii) that constitutes Collateral, and (iii) that is
not subject to any lien or security interest other than that granted under the
Credit Agreement and the Security Agreement.  Unless specifically provided for
herein, “Stated Income/Stated Asset Loans” and “Option ARM Loans” are not
permitted to be funded under the Warehouse Line and shall not constitute
Eligible Collateral under this Credit Agreement.

 

“Jumbo Advance Sublimit” shall mean an amount equal to ten percent (10%) of the
Total Warehouse Line Commitment.

 

“Government Loan” shall mean a Loan secured by a Government Mortgage (including
any FHA Loan or VA Loan which exceeds the Fannie Mae or FHLMC guidelines for
maximum loan amount).

 

“Jumbo Loan” shall mean a Loan, the amount of which exceeds Fannie Mae or FHLMC
guidelines for maximum eligible amount, but which Loan shall not have a face
amount in excess of One Million Dollars ($1,000,000.00), except as may be
otherwise pre-approved by the Agent in writing in its sole discretion after the
Company has provided the Agent with written notice thereof together with a copy
of the related “clear to close” letter from an Approved Investor and the
applicable appraisal at least two (2) Business Days prior to the funding
thereof, and the entire interest of which is owned by the Company and which is
secured by a First Trust Deed covering a completed one-to-four family
residential property which is either subject to a Firm Commitment or meets the
underwriting guidelines of at least two (2) Approved Investors, provided, that:
(i) such Loan shall have a FICO Score equal to or in excess of six hundred
eighty (680), and (ii) such Loan shall have a combined loan-to-value ratio at
origination of not more than ninety percent (90%).

 

“Maturity Date” shall mean December 29, 2009; provided that the Agent and the
Bank shall have the option, in their absolute discretion, either one time or
from time to time, to extend the Maturity Date for an additional period not to
exceed three hundred and sixty four (364) days.  If the Maturity Date is
extended, the term Maturity Date shall mean the date of expiration of such
extension.

 

3.                                       Article 1 of the Existing Credit
Agreement is hereby further amended by deleting thereform, each of the following
defined terms:  “Alt A Advance”, “Alt A Advance Sublimit”, “Alt A Loan”, “HELOC
Loan”, “HELOC/Second Trust Deed Advance”, “HELOC/Second Trust Deed Advance
Sublimit”, “Home Equity Mortgage”, “Second Trust Deed” “Second Trust Deed
Loan”,  and the Existing Credit Agreement and each of the other Loan Documents
are hereby further amended by deleting each reference to such terms in their
entirety.

 

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4.                                       Section 2.1 of the Existing Credit
Agreement is hereby amended and restated in its entirety to read as follows:

 

“2.1                           Warehouse Advances. Each Bank severally agrees to
lend to the Company, and the Company agrees to borrow from each Bank, on the
terms and conditions of this Credit Agreement, an aggregate amount not exceeding
such Bank’s respective Warehouse Line Commitment, and the aggregate amount of
all such Warehouse Line Commitments shall equal the Total Warehouse Line
Commitment; provided, however the Total Warehouse Line Commitment includes a Wet
Advance Sublimit and a Jumbo Advance Sublimit.  Subject to the terms and
conditions contained herein, Warehouse Advances may be repaid and reborrowed
until the Termination Date.  Each Bank’s commitment to make Warehouse Advances
under this Section 2.1 is herein called its “Warehouse Line Commitment” and is
set forth opposite its name in Schedule 2.1 attached to this Credit Agreement
and the aggregate maximum amount of the Warehouse Line Commitments is herein
called the “Total Warehouse Line Commitment”. The Total Warehouse Line
Commitment is equal to Fifty Million Dollars ($50,000,000.00), as may be
increased by the Company and the Agent in their sole, joint discretion by adding
one or more Applicant Financial Institutions as a “Bank” or “Banks” hereunder
and as may be decreased in accordance with the requirements of  Section 11.1
hereof.  The principal amount set forth above (as the same may be increased
pursuant to the terms hereof) shall be available to the Company as Warehouse
Advances, Excess Advances and Swing Advances, subject to the terms and
conditions hereof, at such times prior to the Termination Date and in such sums,
as the Company may request.

 

Notwithstanding the foregoing, the Banks shall not be obligated to make a
Warehouse Advance which, (a) when added to the sum of the Aggregate Outstanding
Warehouse Balance plus the Aggregate Outstanding Excess Balance, would cause the
Aggregate Outstanding Warehouse Balance plus the Aggregate Outstanding Excess
Balance to exceed the Warehouse Borrowing Base at such time; (b) when added to
the sum of the Aggregate Outstanding Warehouse Balance plus the Aggregate
Outstanding Excess Balance, would cause or result in a violation of the
financial covenants set forth in Article 5 hereof; (c) if such Warehouse Advance
is a Wet Advance, when added to the aggregate outstanding balance of all Wet
Advances would cause or result in a violation of the Wet Advance Sublimit;
(d) if such Warehouse Advance is a Jumbo Advance, when added to the aggregate
outstanding of all Jumbo Advances would cause or result in a violation of the
Jumbo Advance Sublimit; or (e) if such Warehouse Advance would cause or result
in the Aggregate Outstanding Warehouse Balance plus the Aggregate Outstanding
Excess Balance to exceed the Total Warehouse Line Commitment.  The Agent and the
Banks shall not be obligated to honor any Request for Advance if the
disbursement of funds thereunder would occur on or after the Termination Date,
or if an Event of Default has occurred and is continuing or if such disbursement
would cause or result in an Event of Default or an Unmatured Event of Default.”

 

5.                                       Section 2.8 of the Existing Credit
Agreement is hereby amended and restated in its entirety to read as follows:

 

“2.8                           Rates of Interest.

 

(a)                                  Applicable Rates of Interest.  With respect
to all Advances, the Swing Note and the Warehouse Notes shall bear interest at
the following rates of interest, as applicable:  (a) the per annum rate equal to
LIBOR plus one and one-quarter of one percent (1.25%) for that portion of the
aggregate outstanding principal balance of  each Warehouse Note of each Bank
which is not a Balance Funded Bank and for that portion of the aggregate
outstanding principal balance of the Balance Funded Bank’s Warehouse Note and
the Swing Note which exceeds the Average Monthly Available Deposits maintained
by the Company with the Balance Funded Bank, and (b) the per annum rate equal to
one and one-half of one percent (1.50%) for that portion of the aggregate
outstanding principal balance of the Warehouse Note payable to the Balance
Funded

 

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Bank and the Swing Note which does not exceed the Average Monthly Available
Deposits maintained by the Company with the Balance Funded Bank; and

 

(b)                                 Highest Lawful Rate.  Notwithstanding
anything to the contrary contained in this Credit Agreement or the Notes, at no
time shall the interest rates payable on the Advances, together with all fees
and other amounts payable hereunder to the extent the same constitute or are
deemed to constitute interest, exceed the maximum rate of interest allowed by
applicable law (the “Highest Lawful Rate”).  In respect of any period during the
term of this Credit Agreement, any amount paid to the Agent or any Bank, to the
extent the same shall (but for the provisions of this Section 2.8(b)) constitute
or be deemed to constitute interest, would exceed the maximum amount of interest
permitted by the Highest Lawful Rate during such period (such amount being
hereinafter referred to as an “Unqualified Amount”), then, notwithstanding
anything to the contrary contained in this Section 2.8, such Unqualified Amount
shall be applied or shall be deemed to have been applied as a prepayment on the
Advances.”

 

6.                                       Section 7.2(i) of the Existing Credit
Agreement is hereby amended and restated in its entirety to read as follows:

 

“(i)                               Use of Funds.  The Company shall not use any
funds provided by the Banks under this Credit Agreement, or by any Warehouse
Advance, Swing Advance or Excess Advance for any purpose other than funding or
purchasing Loans.  The Company shall not use the proceeds of any Wet Advance or
Jumbo Advance for any purpose other than the purposes encompassed by the
definition of those terms in Article 1 of this Credit Agreement.  In addition to
the foregoing, the Company shall not use any funds provided by the Banks under
this Credit Agreement or by any Warehouse Advance for the purpose of making any
Loan that would be subject to the provisions of the Home Ownership and Equity
Protection Act of 1994 or other federal or state legislation relating to “high
cost” mortgage lending.”

 

7.                                       The Existing Credit Agreement is hereby
amended by amending and restating Exhibit A and Schedule 6.1 thereof to read in
their entirety as set forth on Exhibit A and Schedule 6.1 attached to this
Second Amendment and made a part hereof by this reference.

 

8.                                       The Company represents and warrants
that no Event of Default has occurred to date or will result herefrom under the
Existing Credit Agreement or any other Loan Document and that no Unmatured Event
of Default currently exists or will result herefrom under any of the Loan
Documents.

 

9.                                       This Second Amendment may be executed
in one or more counterparts, each of which shall constitute an original and all
of the same shall constitute one and the same instrument.

 

10.                                 The Company further represents and warrants
that there have been no changes made to the Certificate of Incorporation or
Bylaws of the Company since November 26, 2007.

 

11.                                 This Second Amendment shall be effective as
of the date of delivery to the Agent of each of the following:  (i) this Second
Amendment duly executed by all parties hereto, (ii) an amended and restated fee
letter, a letter from the Company indicating that the current authorized signer
letter has not been amended, updated disclosures, updated UCC search results and
an authorizing resolution, and (iii) all such other security documents,
opinions, instruments and certificates as may be required by the Bank or its
counsel in order to consummate the transactions contemplated herein.

 

12.                                 This Second Amendment and the related
writings and the respective rights and obligations of the parties shall be
governed by, and construed and enforced in accordance with, the laws of the
Commonwealth of Kentucky.

 

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13.                                 This Second Amendment shall be binding upon,
and shall inure to the benefit of, the Company, the Bank and the Agent and their
respective successors and assigns.

 

14.                                 This Second Amendment and the agreements,
instruments and other documents referred to herein, constitute the entire
agreement of the parties with respect to, and supersede all prior understandings
of the parties with respect to the subject matter hereof.  No change,
modification, addition or termination of this Second Amendment shall be
enforceable unless in writing signed by the party against whom enforcement is
sought.

 

15.                                 Except to the extent expressly amended or
modified hereby, the Company hereby ratifies and reaffirms all of its
representations, warranties, covenants, agreements and obligations set forth in
the Existing Credit Agreement and each of the other Loan Documents.

 

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IN WITNESS WHEREOF, the parties hereto have caused this Second Amendment to
Warehousing Credit Agreement to be duly executed as of the day and year first
above written.

 

 

 

 

 

HOME LOAN CENTER, INC. D/B/A
LENDINGTREE LOANS

 

 

 

 

 

 

 

 

 

 

 

 

 

By:

/s/ Rian Furey

 

 

 

 

 

 

 

 

 

Title:

Senior Vice President

 

 

 

 

 

 

 

 

 

 

(the “Company”)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NATIONAL CITY BANK

 

 

 

 

 

 

 

 

 

 

 

 

 

 

By:

/s/ Scott Goodwin

 

 

 

 

 

 

 

 

 

Title:

Vice President

 

 

 

 

 

 

 

 

 

 

(the “Bank”)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NATIONAL CITY BANK

 

 

 

 

in its capacity as Agent for the Banks

 

 

 

 

 

 

 

 

 

 

 

 

 

 

By:

/s/ Scott Goodwin

 

 

 

 

 

 

 

 

 

Title:

Vice President

 

 

 

 

 

 

 

 

 

 

(the “Agent”)

 

 

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