Exhibit 10.1
FIRST AMENDMENT TO SECOND AMENDED AND RESTATED CREDIT
AGREEMENT AND TO SECOND AMENDED AND RESTATED PLEDGE AND
SECURITY AGREEMENT
This FIRST AMENDMENT TO SECOND AMENDED AND RESTATED CREDIT AGREEMENT AND TO
SECOND AMENDED AND RESTATED PLEDGE AND SECURITY AGREEMENT (this “Amendment”),
made and entered into as of March 30, 2007, is by and between DHI Mortgage
Company, Ltd., a Texas limited partnership (the “Borrower”), and U.S. Bank
National Association, as agent (“Agent” and sometimes, “U.S. Bank”), JPMorgan
Chase Bank, N.A., as syndication agent (“Syndication Agent”), and the Lenders
referred to below (collectively with the Agent and the Syndication Agent, the
“Lenders”), and Lloyds TSB Bank plc, an English banking corporation (the “New
Lender”).
RECITALS
1. The Lenders and the Borrower entered into a Second Amended and Restated
Credit Agreement dated as of April 7, 2006 (as amended, the “Credit Agreement”)
and a Second Amended and Restated Pledge and Security Agreement dated as of
April 7, 2006 (as amended, the “Pledge and Security Agreement”); and
2. The Borrower desires to change certain provisions of the Credit Agreement, to
extend the Drawdown Termination Date, to add a new lender pursuant to the
provisions of Section 10.11(d), and to make certain other changes therein, and
to change certain provisions of the Pledge and Security Agreement and the
Lenders have agreed to make such amendments, subject to the terms and conditions
set forth in this Amendment.
AGREEMENT
NOW, THEREFORE, for good and valuable consideration, the receipt and adequacy of
which are hereby acknowledged, the parties hereto hereby covenant and agree to
be bound as follows:
Section 1. Capitalized Terms. Capitalized terms used herein and not otherwise
defined herein shall have the meanings assigned to them in the Credit Agreement,
unless the context shall otherwise require.
Section 2. Concerning New Lender.
2.1 Addition of New Lender. Subject to Section 4 hereof upon and after the
Effective Date (defined below), the New Lender hereby assumes, adopts and agrees
to become a party, as a Lender, to the Credit Agreement and to each other Loan
Document to which the Lenders are parties and for all purposes thereof, with a
Commitment Amount as stated in the amended Schedule 5 to the Credit Agreement
attached hereto as Schedule 5, and the parties hereto, other than the New
Lender, acknowledge and consent to such actions by the New Lender. Upon and
after the Effective Date, the New Lender shall be a Lender under the Credit
Agreement and the other Loan Documents to which the Lenders are parties and
shall have all of the rights, privileges and benefits of a Lender under the
Credit Agreement and the other Loan Documents, and all of the duties of a Lender
thereunder, in each case as if the New Lender had been initially a party to the
Credit Agreement. Upon the Effective Date (defined below), the New Lender shall
make Loans as calculated by the Agent so that its outstanding Loans are equal to
its respective Percentage Share of all Loans outstanding on such date and the
Agent shall distribute the proceeds of such Loans to the other Lenders in
accordance with their Percentage Share of all Loans outstanding on the Effective
Date, in each case after giving effect to this Amendment, but prior to any
additional Loans requested by the Company to be made on the Effective Date.

 

 

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2.2 Interest and Fees. From and after the Effective Date, all interest, all
Balances Deficiency Fees and all Facility Fees accrued under the Credit
Agreement for the billing period in which the Effective Date falls shall be paid
to the Agent as provided in the Credit Agreement, and distributed by the Agent
(A) with respect to amounts accrued before the Effective Date, to the Lenders
(other than the New Lender) and (B) with respect to amounts accrued on or after
the Effective Date, to the Lenders (including the New Lender) in accordance with
the terms of the Credit Agreement.
2.3 Copies of Loan Documents. The Agent represents and warrants to the New
Lender that the copies of the current versions of the Loan Documents and the
related agreements, certificates, and opinion letters previously delivered to
the New Lender are true and correct copies of the Loan Documents and related
agreements, certificates, and opinion letters executed by and/or delivered in
connection with the closing of the credit facilities contemplated by the Credit
Agreement, other than the letter agreement described in Section 2.05(b) of the
Credit Agreement.
2.4 No Representation or Warranty by Lenders. The New Lender agrees and
acknowledges that none of the other Lenders nor the Agent (a) make any
representation or warranty and assume no responsibility with respect to any
statements, warranties or representations made in or in connection with the Loan
Documents or the execution, legality, validity, enforceability, genuineness,
sufficiency or value of any of the Loan Documents or any other instrument or
document furnished pursuant thereto and (b) make any representation or warranty
and assume no responsibility with respect to the financial condition of any
Borrower, or the performance or observance by any Borrower or any other Person
of any of their respective obligations under the Loan Documents or any other
instrument or document furnished pursuant thereto.
2.5 No Reliance By New Lender. The New Lender (a) confirms to each other Lender
and the Agent that it has received a copy of the Loan Documents together with
such other documents and information as it has deemed appropriate to make its
own credit analysis and decision to enter into this Amendment; and
(b) acknowledges that it has, independently and without reliance upon the Agent
or any other Lender and instead in reliance upon its own review of such
documents and information as such New Lender deems appropriate, made its own
credit analysis and decision to enter into this Amendment and the Loan Documents
and agrees that it will, independently and without reliance upon the Agent or
any other Lender, and based on such documents and information as such New Lender
shall deem appropriate at the time, continue to make its own credit decision in
taking or not taking action under the Loan Documents.

 

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Section 3. Amendments to Credit Agreement. The Credit Agreement is hereby
amended as follows:
3.1 The definitions of “Aged Loans”, “Change of Control”, “Collateral Value”,
“Drawdown Termination Date”, “Hedge Report”, “Nonconforming Mortgage Loan”,
“Subprime Sublimit”, “UCC” and “Wet Warehousing Sublimit” are amended in their
entireties to read as follows:
“Aged Loans” means Mortgage Loans outstanding for more than (i) 90 days if such
Mortgage Loans are Nonconforming Mortgage Loans, Super Jumbo Mortgage Loans or
HELOC Mortgage Loans, and (ii) 120 days for all other types of Mortgage Loans,
and, in all cases, less than 360 days (and in all cases excluding
Underperforming Mortgage Loans and Aged Underperforming Mortgage Loans).
“Change of Control” means the occurrence of the Parent not owning, directly or
indirectly, (1) a majority of the issued and outstanding ownership interests of
the Company or (2) a controlling interest in any other Borrower.
“Collateral Value” means:
(a) except as otherwise provided in (b) or (c) below and thus specifically
excluding the categories of Eligible Mortgage Loans described in (b) and
(c) below, the following percentage with respect to each category of Eligible
Mortgage Loan that is included in the Borrowing Base:
(i) ninety-eight percent (98%) for all categories of Eligible Mortgage Loans not
otherwise listed in (ii) and (iii) of this subsection (a) of this definition;
(ii) ninety-seven percent (97%) for each Eligible Mortgage Loan that is a Super
Jumbo Mortgage Loan or an Uncovered Mortgage Loan; and (iii) ninety-five percent
(95%) for each Eligible Mortgage Loan that is included in the Borrowing Base and
that is an Aged Loan that is outstanding for more than 120 days (90 days in the
case of Nonconforming Mortgage Loans, Super Jumbo Mortgage Loans and HELOC
Mortgage Loans); in each case such percentage shall be applied to the least of:
(A) the outstanding principal balance of the Mortgage Note for such Eligible
Mortgage Loan; (B) the amount at which an Investor has committed to purchase the
Eligible Mortgage Loan pursuant to a Take-out Commitment or the weighted average
commitment price under the applicable Take-Out Commitment (excluding from the
commitment price any stated servicing release premium); or (C) the weighted
average purchase price for such Eligible Mortgage Loan pursuant to any Hedging
Agreement as determined pursuant to the weekly Hedge Report provided by the
Company to the Agent regarding Mortgage Loans to be purchased pursuant to a
Hedging Agreement; provided that, the Agent or the Syndication Agent may
exercise their right, at any time, to mark to market any one or more Mortgage
Loans and the Collateral Value of such Mortgage Loans shall be the lesser of
(x) the Collateral Value determined above, or (y) 97% of the Market Value as
determined by the Agent or the Syndication Agent when marking such Mortgage
Loans to market, or

 

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(b) (i) ninety-five percent (95%) of the amount otherwise determined in
(a) above, for any category of Mortgage Loan that is shipped by the Agent to a
permanent investor for purchase or to a custodian for the formation of a pool if
the full purchase price therefore has not been received by the Agent within
45 days of the date of shipment and for up to 90 days from the date of shipment,
(ii) ninety percent (90%) of the amount otherwise determined in (a) above for
all categories of Mortgage Loans so shipped by the Agent and for which full
payment has not been received within 90 days from the date of shipment and for
up to 120 days from the date of shipment and (iii) zero percent (0%) of the
amount otherwise determined in (a) above for all categories of Mortgage Loans so
shipped by the Agent and for which full payment has not been received within
120 days of shipment, or
(c) fifty-five percent (55%) of the unpaid principal balance for Underperforming
Mortgage Loans, and fifty-five percent (55%) of the lesser of (i) the unpaid
principal balance or (ii) the most recent BPO Value for properties that are Aged
Underperforming Mortgage Loans.
“Drawdown Termination Date”: means the earlier of March 28, 2008, or the day on
which the Notes first become due and payable in full.
“Hedge Report”: A report substantially in the form of Exhibit H-1, H-2 or H-3
hereto submitted pursuant to Section 5.01(h) hereof with respect to any Mortgage
Loans included in Eligible Mortgage Loans that are subject to a Hedging
Agreement which shows as of the close of business on the previous Business Day,
all Hedging Agreements with respect to such Eligible Mortgage Loans and
includes, in addition to the information with respect to such Hedging Agreements
set out on Exhibit H-1, H-2 or H-3, as applicable, such other information as the
Agent may request. For purposes of determining the weighted average price
(expressed as a percentage of par) that Approved Investors are obligated to pay,
pursuant to Hedging Agreements, for all Eligible Mortgage Loans, as shown on the
most recent applicable Hedge Report (and any adjustments made by the Agent, for
purposes of calculating the related Collateral Value, with respect to Mortgage
Loans that subsequently were covered by loan specific Take-Out Commitments) in
determining the weighted average purchase price for making any adjustments as
referenced above, the Agent shall, with respect to the Alt-A Portfolio Profile
reported on Exhibit H-1, use the value that is the “Portfolio Total” with
respect to the column “Market under “Alt-A Portfolio Profile in Exhibit H-1,
with respect to Conforming Mortgage Loans, use the value that is the “Total”
with respect to the column “Value” under “Portfolio Hedge Position — Market
Value Analysis” in Exhibit H-3, and with respect to Mortgage Loans with investor
code 8751, use the value that is the “Hedge Portfolio Total” with respect to the
column “Market” under “Builder Hedge Portfolio” in the Builder Forward Portfolio
Report, Exhibit H-2.
“Nonconforming Mortgage Loan” means a Mortgage Loan that (a) is neither a
Conforming Mortgage Loan nor a Jumbo Mortgage Loan nor a Super Jumbo Mortgage
Loan, (b) generally meets Standard & Poor’s Ratings Group (a division of McGraw
Hill, Inc.) underwriting guidelines for Subprime Mortgage Loans, (c) has a FICO
score equal to or in excess of the requirements of the Investor under the
applicable Take-Out Commitment for such Mortgage Loan, (d) has a combined
loan-to-value ratio of not more than 100%, and (e) has a face amount of no more
than $100,000, in the case of a HELOC Mortgage Loan (except for a HELOC Mortgage
Loan in California, in which case the face amount shall be no more than
$500,000), and no more than $400,000, in the case of any other Mortgage Loan
except for Alt A Mortgage Loans and Forty Year Mortgage Loans (which are subject
to the limitations on amount set forth in the definition of such respective
categories of Mortgage Loans).

 

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“Subprime Sublimit”: means seventeen and one-half percent (17.5%) of the
Aggregate Commitment Amounts.
“UCC” means the New York Uniform Commercial Code, as the same may hereafter be
amended.
“Wet Warehousing Sublimit”: means (i) fifty-five percent (55%) of the Aggregate
Commitment Amounts for the last four Business Days of each calendar month and
the first four Business Days in the next succeeding calendar month (increasing
to sixty-five percent (65%) for the last two Business Days in any calendar
quarter and the first Business Day of the next succeeding calendar quarter) and
(ii) thirty percent (30%) of the Aggregate Commitment Amounts at any other time.
The definitions of “Forty/Thirty Year Mortgage Loans” and “Forty/Thirty Year
Sublimit” are deleted from the Credit Agreement.
The following new definitions are added to Section 1.01 of the Credit Agreement
in appropriate alphabetical order:
“Aged Underperforming Mortgage Loan”: means a Mortgage Loan that otherwise would
be an Underperforming Mortgage Loan that is (i) delinquent for a period in
excess of 90 days (including REO Property) or (ii) is in the process of
foreclosure.
“Aged Underperforming Mortgage Loan Sublimit”: means 20% of the Underperforming
Mortgage Loan Sublimit up to a maximum of 2% of the Aggregate Warehousing
Commitments.
“BPO Value”: means, with respect to the real property securing a Mortgage Loan,
the lowest fair market value for such real property and the improvements thereon
as set forth in an opinion of a real estate broker acceptable to Agent in its
sole discretion as to the value of such real property and improvements if sold
within a 60 day marketing period. Each such broker price opinion must be written
by a real estate broker with substantial experience in the purchase and sale of
similar properties in the local area in which the real property and improvements
to be valued are located and be as of a date not more than 90 days prior to the
date of the related Loan against such property.
“Forty Year Mortgage Loans” means Mortgage Loans that are the subject of a
Hedging Agreement or a Takeout Commitment and that would be Conforming Mortgage
Loans except that the loan amortizes over a period greater than 30 years but not
to exceed 40 years with a maturity date of not greater than 40 years, where such
Mortgage Loan does not exceed $1,000,000 and the mortgagor thereunder has a FICO
score of no less than 620.
“Forty Year Sublimit”: means 20% of the Aggregate Commitment Amounts.

 

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“REO Property”: means an improved real property on which is located a 1 to 4
family residence that previously secured an Underperforming Mortgage Loan on
which a Loan had been made that is now owned by a Borrower that was acquired by
such Borrower through foreclosure of the Mortgage on such property or by
acceptance of a deed in lieu of foreclosure and that is subject to a mortgage
from the Borrower in favor of the Agent.
“Underperforming Mortgage Loan”: means a Mortgage Loan that is delinquent more
than 30 days and up to and including 90 days or a Mortgage Loan repurchased from
an Approved Investor or a Mortgage Loan that covered a property that is now an
REO Property and with respect to Mortgage Loans repurchased from an Approved
Investor or that covered property that is now an REO Property, such Mortgage
Loan was originally warehoused under this Agreement and was never warehoused
under any other warehousing or repurchase facility (other than the initial
pledge of Underperforming Mortgage Loans listed in Schedule X.).
“Underperforming Mortgage Loan Sublimit”: means 10% of the Aggregate Commitment
Amounts.
3.2 Global Change. All references in the Credit Agreement to Forty/Thirty Year
Mortgage Loans are changed to references to Forty Year Mortgage Loans and all
references in the Credit Agreement to Forty/Thirty Year Sublimit are changed to
Forty Year Sublimit.
3.3 Section 2.07(a) of the Credit Agreement is amended in its entirety to read
as follows:
(a) first, for the payment of all Obligations which are then due, and if such
money is insufficient to pay all such Obligations, (i) first to any
reimbursements due Agent under Section5.05, (ii) second, to the payment of any
Swingline Loans then outstanding, (iii) third, to the payment of interest then
due on the Loans, (iv) fourth, to the payment of the Loans then due, and
(v) then to the partial payment of all other Obligations then due in proportion
to the amounts thereof, or as Lenders shall otherwise agree;
3.4 Section 7.01 of the Credit Agreement is amended in its entirety to read as
follows:
7.01 Nature of Event. An Event of Default shall exist if any one or more of the
following occurs:
(a) The Company and the applicable Co-Borrowers fail to make any payment of
(i) principal on any Note on the Drawdown Termination Date, (ii) except as
provided in immediately preceding clause (i), principal on any Note in
accordance with Section 2.06 within one (1) Business Day of when required to be
paid to Agent or any Lender pursuant to this Agreement or any other Loan
Document, or (iii) interest on any Note or any fee or other amount required to
be paid to Agent or any Lender pursuant to this Agreement or any other Loan
Document within five (5) calendar days after notice of such failure is given by
Agent to the Company and the applicable Co-Borrowers;

 

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(b) Default is made in any of the covenants contained in Section 6.13, 6.14 or
6.15 and such default continues unremedied for ten (10) calendar days;
(c) Default is made in the due observance or performance by the Company and the
applicable Co-Borrowers or any Restricted Subsidiaries of any other covenant or
agreement set forth in Article VI (excluding Sections 6.13, 6.14 and 6.15) or
Section 5.01 and such default continues unremedied for thirty (30) calendar
days;
(d) Default is made in the due observance or performance by the Company and the
applicable Co-Borrowers or any Restricted Subsidiaries of any covenant or
agreement set forth in any Loan Document (other than as referred to in
subsections (a) (b) or (c) above) and such default continues unremedied for
thirty (30) calendar days after notice of such default is given by Agent to the
Company and the applicable Co-Borrowers;
(e) Any (i) warranty or representation by or on behalf of the Company and the
applicable Co-Borrowers contained in any Loan Document or in any borrowing
request, proves to have been incorrect or misleading, in any case in any
material respect as of the date made or deemed made or (ii) written statement by
or on behalf of the Company or the applicable Co-Borrowers contained in any Loan
Document or in any borrowing request, proves to have been incorrect or
misleading, in any case in any material respect as of the date made or deemed
made; provided that if, in the reasonable judgment of the Agent, the statement
was the result of an unintentional error or mistake in business judgment or
transcription, or of ordinary negligence, and the Company or the applicable
Co-Borrower corrects the statement on or before 5 calendar days after notice of
the error from the Agent, then such incorrect or misleading statement will not
be a Default or an Event of Default;
(f) Any Borrower or any Restricted Subsidiary:
(i) suffers the entry against it of a judgment, decree or order for relief by a
court of competent jurisdiction in an involuntary proceeding commenced under any
applicable bankruptcy, insolvency or other similar law of any jurisdiction now
or hereafter in effect, including the federal Bankruptcy Code, as from time to
time amended, or has any such proceeding commenced against it which remains
undismissed for a period of ninety (90) calendar days; or
(ii) commences a voluntary case under any applicable bankruptcy, insolvency or
similar law now or hereafter in effect, including the federal Bankruptcy Code,
as from time to time amended; or applies for or consents to the entry of any
order for relief in an involuntary case under any such law; or makes a general
assignment for the benefit of creditors; or fails generally to pay (or admits in
writing its inability to pay) its debts as such debts become due; or takes
partnership action, corporate action or other action to authorize any of the
foregoing; or
(iii) suffers the appointment of or taking possession by a receiver, liquidator,
assignee, custodian, trustee, sequestrator, or similar official of all or a
substantial part of its assets or of any part of the Mortgage Collateral in a
proceeding brought against or initiated by it, and such appointment or taking
possession is neither made ineffective nor discharged within ninety
(90) calendar days after the making thereof, or such appointment or taking
possession is it any time consented to, requested by, or acquiesced to by it; or

 

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(iv) suffers the entry against it of a final judgment for the payment of money
in excess of $1,000,000 (not covered by insurance satisfactory to Agent in its
discretion), unless (A) the same is discharged within thirty (30) calendar days
after the date thereof or no less than five (5) days prior to any proposed sale
thereunder, or (B) an appeal or appropriate proceeding for review thereof is
taken within such period and a stay of execution pending such appeal is
obtained; or
(v) suffers a writ or warrant of attachment or any similar process to be issued
by any court against all or any substantial part of its assets or any part of
the Mortgage Collateral;
provided, however, if any event set forth in this Section 7.01(f) occurs with
respect to any Restricted Subsidiary, the occurrence of such event shall not
constitute an Event of Default unless it could have a Material Adverse Effect;
(g) The Company or any Restricted Subsidiary fails to make when due (whether by
acceleration or otherwise) or within any applicable grace period (after giving
effect to any applicable notice requirement), any payment due in an amount
greater than $5,000,000 on any GAAP Indebtedness and Contingent Indebtedness
(other than the Obligations) and such failure allows the holder thereof to
accelerate such GAAP Indebtedness or Contingent Obligation; or any event or
condition occurs under any provision contained in any agreement under which such
obligation is governed, evidenced or secured (or any other material breach or
default under such obligation or agreement occurs);
(h) Any Loan Document shall for any reason cease to be in full force and effect,
or be declared null and void or unenforceable in whole or in part as the result
of any action initiated by any Person other than Agent or any Lender; or the
validity or enforceability of any such document shall be challenged or denied by
any Person other than Agent or any Lender; or
(i) A Change of Control occurs.
3.5 The last sentence of Section 10.02 of the Credit Agreement is amended to
read as follows:
Notwithstanding the foregoing or anything to the contrary herein, Agent shall
not, (a) without the prior consent of the Majority Lenders waive any of the
conditions specified in Article III (provided that Agent may in its discretion
withdraw any request it has made under Section 3.02(g)), (b) without the prior
consent of each individual Lender, execute and deliver on behalf of such Lender
any waiver or amendment which would: (i) increase the Percentage Share of the
Commitment of such Lender or subject such Lender to any additional obligations,
(ii) reduce any fees hereunder, or the principal of, or interest on, such
Lender’s Note, (iii) release any Borrower from its obligation to pay such
Lender’s Note, (iv) amend the definitions of “Collateral Value,” “Drawdown
Termination Date,” and “Mortgage Collateral,” (v) release any Collateral except
in accordance with and pursuant to the Loan Documents, or (vi) change the date
on which any payments of principal, interest or fees are due hereunder,
(c) without the prior written consent of all Lenders, (i) amend the definition
herein of “Majority Lenders” or otherwise change the aggregate amount of
Percentage Shares which is required for Agent, Lenders or any of them to take
any particular action under the Loan Documents, or (ii) change any of the
provisions of this Section 10.02.

 

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3.6 Schedule 1 to the Credit Agreement is deleted and Schedule 1 attached hereto
is inserted in its place as Schedule 1 to the Credit Agreement.
3.7 Schedule 2 to the Credit Agreement is deleted and Schedule 2 attached hereto
is inserted in its place as Schedule 2 to the Credit Agreement.
3.8 Schedule 5 to the Credit Agreement is deleted and Schedule 5 attached hereto
is inserted in its place as Schedule 5 to the Credit Agreement.
3.9 Exhibit C to the Credit Agreement is deleted and Exhibit C hereto is
inserted in its place as Exhibit C to the Credit Agreement.
3.10 Exhibit H to the Credit Agreement is deleted and Exhibits H-1, H-2 and H-3
hereto are inserted in its place as Exhibits H-1, H-2 and H-3 to the Credit
Agreement.
3.11 Schedule X is added to the Agreement in the form of Schedule X attached
hereto.
Section 4. Amendments to Pledge and Security Agreement. The Pledge and Security
Agreement is hereby amended as follows:
4.1 Section 3 of the Pledge and Security Agreement is amended by adding the
following at the end thereof:
In addition to the other reports required by this Section, the Company will
provide to the Agent, no later than the twentieth day of each month, a report in
form and substance satisfactory to the Agent detailing the following information
regarding each Underperforming Mortgage Loan and each Aged Underperforming
Mortgage Loan: Borrower name, loan number, date of start of delinquency, unpaid
principal balance, date of repurchase if applicable, and such other information
as the Agent may reasonably request. Such information shall be provided on
Schedule X to the Credit Agreement.
4.2 Section 4 of the Pledge and Security Agreement is amended by adding the
following new Section 4.08 at the end thereof:
4.08 REO Documentation. For REO Property the Company will provide the following
documentation to the Agent prior to the funding of any Loan against such REO
Property (Wet Warehousing Loans will not be made against an REO Property):

 

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a. If the REO Property was or is being acquired by foreclosure and the Company
is the purchaser at such sale and a redemption period is applicable to the sale:
(i) a certified copy of the certificate of sale;
(ii) an assignment of the certificate of sale in recordable form from the
Company, in blank; and
(iii) documentation establishing the BPO Value of such property.
b. If the REO Property was or is being acquired by foreclosure (or was acquired
by deed in lieu of foreclosure) and the Company is the purchaser at such sale
and the redemption period has expired or there is no redemption period:
(i) a certified copy of the deed conveying the REO Property to the Company;
(ii) a deed conveying the REO Property, executed in blank, by the Company;
(iii) an original owner’s title insurance policy showing the Company as the
owner subject only to exceptions approved by the Agent;
(iv) documentation establishing the BPO Value of such property; and
(v) if requested by the Agent, a mortgage on the REO Property in favor of the
Agent, in form and substance satisfactory to the Agent, executed by the Company.
4.3 Section 14 of the Pledge and Security Agreement is amended by deleting
therefrom the reference to the “State of Minnesota” and inserting in its place
the “State of New York”.
4.4 Attachments 1(A) and 1(B) to the Pledge and Security Agreement are amended
by changing the reference in the last paragraph of Attachment 1(A) and the
penultimate paragraph of 1(B) to the “State of Minnesota” to the “State of New
York”.
Section 5. Effectiveness of Amendments. The amendments contained in this
Amendment shall be deemed to be effective as of March 30, 2007 (the “Effective
Date”) upon execution by the Borrower and Lenders and upon receipt by the Agent
of the following:
(a) This Amendment and a Note in the principal amount of each Lender’s
Commitment Amount from the Borrower to each such Lender substantially in the
form of Exhibit A to the Credit Agreement (together with this Amendment, the
“Amendment Documents”); and
(b) A copy of the resolutions of the Board of Directors of the General Partner
of the Borrower authorizing the execution, delivery and performance of this
Amendment and the Notes certified as true and accurate by its Secretary or
Assistant Secretary, along with a certification by such Secretary or Assistant
Secretary (i) certifying that there has been no amendment to the Articles of
Organization or operating agreement of the Borrower since true and accurate
copies of the same were delivered to the Lender with a certificate of the
Secretary of the Borrower dated April 7, 2006, and (ii) identifying each officer
of the general partner of the Borrower authorized to execute this Amendment, the
Notes and any other instrument or agreement executed by the Borrower in
connection with this Amendment, and certifying as to specimens of such officer’s
signature and such officer’s incumbency in such offices as such officer holds.

 

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Section 6. Representations, Warranties, Authority, No Adverse Claim.
6.1 Reassertion of Representations and Warranties, No Default. The Borrower
hereby represents that on and as of the date hereof and after giving effect to
this Amendment (a) all of the representations and warranties contained in the
Credit Agreement are true, correct and complete in all respects as of the date
hereof as though made on and as of the date hereof, except for changes permitted
by the terms of the Credit Agreement (other than any representation or warranty
that expressly relates to an earlier date), and (b) there will exist no Default
or Event of Default under the Credit Agreement as amended by this Amendment on
such date which has not been waived by the Lenders.
6.2 Authority, No Conflict, No Consent Required. The Borrower represents and
warrants that the Borrower has the power and legal right and authority to enter
into this Amendment and has duly authorized as appropriate the execution and
delivery of this Amendment and other agreements and documents executed and
delivered by the Borrower in connection herewith by proper partnership action,
and none of the Amendment Documents nor the agreements contained herein or
therein contravenes or constitutes a default under any agreement, instrument or
indenture to which the Borrower is a party or a signatory or a provision of the
Borrower’s partnership agreement or any other agreement or requirement of law,
or result in the imposition of any Lien on any of its property under any
agreement binding on or applicable to the Borrower or any of its property
except, if any, in favor of the Lenders. The Borrower represents and warrants
that no consent, approval or authorization of or registration or declaration
with any Person, including but not limited to any governmental authority, is
required in connection with the execution and delivery by the Borrower of the
Amendment Documents or other agreements and documents executed and delivered by
the Borrower in connection therewith or the performance of obligations of the
Borrower therein described, except for those which the Borrower has obtained or
provided and as to which the Borrower has delivered certified copies of
documents evidencing each such action to the Lenders.
6.3 No Adverse Claim. The Borrower warrants, acknowledges and agrees that no
events have taken place and no circumstances exist at the date hereof which
would give the Borrower a basis to assert a defense, offset or counterclaim to
any claim of the Lenders with respect to the Obligations.
Section 7. Affirmation of Credit Agreement, Further References, Affirmation of
Security Interest. The Agent on behalf of the Lenders and the Borrower each
acknowledge and affirm that the Credit Agreement, as hereby amended, is hereby
ratified and confirmed in all respects and all terms, conditions and provisions
of the Credit Agreement, except as amended by this Amendment, shall remain
unmodified and in full force and effect. All references in any document or
instrument to the Credit Agreement are hereby amended and shall refer to the
Credit Agreement as amended by this Amendment. The Borrower confirms to the
Lenders that the Obligations are and continue to be secured by the security
interest granted by the Borrower in favor of the Lenders under the Security
Agreement, and all of the terms, conditions, provisions, agreements,
requirements, promises, obligations, duties, covenants and representations of
the Borrower under such documents and any and all other documents and agreements
entered into with respect to the obligations under the Credit Agreement are
incorporated herein by reference and are hereby ratified and affirmed in all
respects by the Borrower. This Amendment is a Loan Document executed pursuant to
the Credit Agreement and shall (unless otherwise expressly indicated therein) be
construed, administered and applied in accordance with all of the terms and
provisions of the Credit Agreement, as amended hereby.

 

- 11 -

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

 

Section 8. Merger and Integration, Superseding Effect. This Credit Agreement as
amended by this Amendment, from and after the date hereof, embodies the entire
agreement and understanding between the parties hereto and supersedes and has
merged into the Credit Agreement as amended by this Amendment all prior oral and
written agreements on the same subjects by and between the parties hereto with
the effect that the Credit Agreement as amended by this Amendment, shall control
with respect to the specific subjects hereof and thereof.
Section 9. Severability. Whenever possible, each provision of this Amendment and
the other Amendment Documents and any other statement, instrument or transaction
contemplated hereby or thereby or relating hereto or thereto shall be
interpreted in such manner as to be effective, valid and enforceable under the
applicable law of any jurisdiction, but, if any provision of this Amendment, the
other Amendment Documents or any other statement, instrument or transaction
contemplated hereby or thereby or relating hereto or thereto shall be held to be
prohibited, invalid or unenforceable under the applicable law, such provision
shall be ineffective in such jurisdiction only to the extent of such
prohibition, invalidity or unenforceability, without invalidating or rendering
unenforceable the remainder of such provision or the remaining provisions of
this Amendment, the other Amendment Documents or any other statement, instrument
or transaction contemplated hereby or thereby or relating hereto or thereto in
such jurisdiction, or affecting the effectiveness, validity or enforceability of
such provision in any other jurisdiction.
Section 10. Successors. The Amendment Documents shall be binding upon the
Borrower and the Lenders and their respective successors and assigns, and shall
inure to the benefit of the Borrower and the Lenders and the successors and
assigns of the Lenders.
Section 11. Legal Expenses. The Borrower agrees to pay or reimburse the Agent,
upon execution of this Amendment, for all reasonable out-of-pocket expenses paid
or incurred by the Agent, including filing and recording costs and fees, charges
and disbursements of outside counsel to the Agent (determined on the basis of
such counsel’s generally applicable rates, which may be higher than the rates
such counsel charges the Agent in certain matters) and/or the allocated costs of
in-house counsel incurred from time to time, in connection with the Credit
Agreement, including in connection with the negotiation, preparation, execution,
collection and enforcement of the Amendment Documents and all other documents
negotiated, prepared and executed in connection with the Amendment Documents,
and in enforcing the obligations of the Borrower under the Amendment Documents,
and to pay and save the Agent harmless from all liability for, any stamp or
other taxes which may be payable with respect to the execution or delivery of
the Amendment Documents, which obligations of the Borrower shall survive any
termination of the Credit Agreement.

 

- 12 -

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Section 12. Headings. The headings of various sections of this Amendment have
been inserted for reference only and shall not be deemed to be a part of this
Amendment.
Section 13. Counterparts. The Amendment Documents may be executed in several
counterparts as deemed necessary or convenient, each of which, when so executed,
shall be deemed an original, provided that all such counterparts shall be
regarded as one and the same document, and either party to the Amendment
Documents may execute any such agreement by executing a counterpart of such
agreement.
Section 14. Governing Law. THE AMENDMENT DOCUMENTS SHALL BE GOVERNED BY THE
INTERNAL LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO CONFLICT OF LAW
PRINCIPLES THEREOF, BUT GIVING EFFECT TO FEDERAL LAWS APPLICABLE TO NATIONAL
BANKS, THEIR HOLDING COMPANIES AND THEIR AFFILIATES.
[Signature Pages follow.]

 

- 13 -

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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed
as of the date and year first above written.
BORROWER:

     
 
  DHI MORTGAGE COMPANY, LTD.
 
  By: DHI Mortgage Company GP, Inc.
 
  Its: General Partner
 
   
 
  By: /s/Mark C. Winter
 
   
 
  Title: C.F.O. and V.P.

STATE OF TX
COUNTY OF Travis
On this the 27 day of March, 2007, personally appeared Mark C. Winter, as C.F.O.
and V.P. of DHI Mortgage Company, GP, Inc., a Delaware corporation, as general
partner of DHI Mortgage Company , Ltd., a Texas limited partnership (the
“Company”), and before me executed this First Amendment to Amended and Restated
Credit Agreement, on behalf of the Company.
IN WITNESS WHEREOF, I have hereunto set my hand and official seal.

                  /s/ Melody A. Hansen     Signature of Notary Public, State of
Texas
 
           
 
                      (Print, Type or Stamp Commissioned Name of Notary Public)
    Personally known X ; OR Produced Identification    
 
           
 
  Type of ID produced                  
 
                (NOTARIAL SEAL)

[Signature Page 1 to First Amendment to
Second Amended and Restated Credit Agreement]

 

 

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

 

            U.S. BANK NATIONAL ASSOCIATION,
as Agent and Lender
      By:   /s/ Edwin D. Jenkins         Edwin D. Jenkins        Senior Vice
President     

[Signature Page 2 to First Amendment to
Second Amended and Restated Credit Agreement]

 

 

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

 

            COMERICA BANK
      By:   /s/ Robert W. Marr         Robert W. Marr        Vice President     

[Signature Page 3 to First Amendment to
Second Amended and Restated Credit Agreement]

 

 

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

 

            NATIONAL CITY BANK, a national banking association,
successor by merger to NATIONAL CITY BANK OF KENTUCKY
      By:   /s/ Michael A. Johnson         Name:   Michael A. Johnson       
Title:   Vice President     

[Signature Page 4 to First Amendment to
Second Amended and Restated Credit Agreement]

 

 

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

 

            BANK OF AMERICA, N.A.
      By:   /s/Alexa Bradford         Alexa Bradford        Senior Vice
President     

[Signature Page 5 to First Amendment to
Second Amended and Restated Credit Agreement]

 

 

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

 

            BNP PARIBAS
      By:   /s/ Duane Helkowski         Duane Helkowski        Vice President   
          By:   /s/ Angela Arnold         Angela Arnold        Director     

[Signature Page 6 to First Amendment to
Second Amended and Restated Credit Agreement]

 

 

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

 

            WASHINGTON MUTUAL BANK, FA
      By:   /s/ Brad Johnson         Brad Johnson        Vice President     

[Signature Page 7 to First Amendment to
Second Amended and Restated Credit Agreement]

 

 

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

 

            JPMORGAN CHASE BANK
      By:   /s/ Cynthia E. Crites         Cynthia E. Crites        Executive
Director     

[Signature Page 8 to First Amendment to
Second Amended and Restated Credit Agreement]

 

 

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

 

                  SCOTIABANC, INC.    
 
           
 
  By:   /s/ William E. Zarrett
 
   
 
      William E. Zarrett    
 
           
 
  Its:   Managing Director    
 
     
 
   

[Signature Page 9 to First Amendment to
Second Amended and Restated Credit Agreement]

 

 

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

 

              SOCIETE GENERALE
 
       
 
  By   /s/ Milissa A. Goeden
 
  Its   Director

[Signature Page 10 to First Amendment to
Second Amended and Restated Credit Agreement]

 

 

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

 

              LLOYDS TSB BANK PLC
 
       
 
  By   /s/ Daniela Chun
 
       
 
      Daniela Chun
 
      Assistant Vice President
 
      Structured Finance, USA
 
      C-D31
 
       
 
  By   /s/ Peter Hart
 
       
 
      Peter Hart
 
      Vice President
 
      Structured Finance
 
      H002

[Signature Page 11 to First Amendment to
Second Amended and Restated Credit Agreement]

 

 

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

 

SCHEDULE 1
ELIGIBLE MORTGAGE LOAN
“Eligible Mortgage Loan” means a Mortgage Loan with respect to which each of the
following statements is accurate and complete (and the Borrowers by including
such Mortgage Loan in any computation of the Borrowing Base shall be deemed to
so represent and warrant to Agent and Lenders at and as of the date of such
computation):
(i) Such Mortgage Loan is a binding and valid obligation of the Obligor thereon,
in full force and effect and enforceable in accordance with its terms, except as
enforceability may be limited by bankruptcy, insolvency, reorganization or other
similar terms affecting creditor’s rights in general and by general principles
of equity;
(ii) Such Mortgage Loan is genuine in all respects as appearing on its face and
as represented in the books and records of the Borrowers, and all information
set forth therein is true and correct;
(iii) Such Mortgage Loan is free of any default (other than as permitted by
subparagraph (iv) below) of any party thereto (including the Borrowers),
counterclaims, offsets and defenses, including the defense of usury, and from
any rescission, cancellation or avoidance, and all right thereof, whether by
operation of law or otherwise;
(iv) Except for Underperforming Mortgage Loans and Aged Underperforming Mortgage
Loans, no payment under such Mortgage Loan is more than thirty (30) days past
due the payment due date set forth in the underlying Mortgage Note and Mortgage;
(v) Such Mortgage Loan contains the entire agreement of the parties thereto with
respect to the subject matter thereof, has not been modified or amended in any
respect not expressed in writing therein and is free of concessions or
understandings with the Obligor thereon of any kind not expressed in writing
therein;
(vi) Such Mortgage Loan is in all respects in accordance with all Requirements
of Law applicable thereto, including, without limitation, the federal Consumer
Credit Protection Act and the regulations promulgated thereunder and all
applicable usury laws and restrictions, and all notices, disclosures and other
statements or information required by law or regulation to be given, and any
other act required by law or regulation to be performed, in connection with such
Mortgage Loan have been given and performed as required;
(vii) All advance payments and other deposits on such Mortgage Loan have been
paid in cash, and no part of said sums has been loaned, directly or indirectly,
by the Borrowers to the Obligor, and, other than as disclosed to Agent in
writing, there have been no prepayments;

 

Sch 1-1

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(viii) Except for Aged Loans, Underperforming Mortgage Loans and Aged
Underperforming Mortgage Loans, such Mortgage Loan was originated, purchased by
the Borrowers or converted from a variable rate Mortgage Loan to a fixed rate
Mortgage Loan, whichever is latest not more than ninety (90) days prior to the
inclusion of such Mortgage Loan in any computation of the Borrowing Base and,
except for Forty Year Mortgage Loans, matures within 30 years after such date of
origination;
(ix) At all times such Mortgage Loan will be free and clear of all Liens, except
in favor of Agent for the benefit of Lenders and any other Lien which has been
disclosed to Agent in writing and is permitted hereunder;
(x) The Property covered by such Mortgage Loan is insured against loss or damage
by fire and all other hazards normally included within standard extended
coverage in accordance with the provisions of such Mortgage Loan with the
Borrowers named as a loss payee thereon;
(xi) The loan to value ratio for such Mortgage Loan does not exceed 100% except
for Mortgage Loans qualifying for purchase by Fannie Mae or Freddie Mac, FHA
insured loans and VA guaranteed loans and to the extent the loan to value ratio
exceeds 80%, such Mortgage Loan is covered by mortgage insurance.
(xii) On origination of the Mortgage Loan no policy of single-premium life
insurance on the life of a mortgagor, borrower or guarantor was purchased.
(xiii) No characteristic of the Mortgage Loan or its origination (A) triggers
the thresholds of Section 32 of Regulation Z of the Federal Reserve Board
(12.C.F.R. 226.32) or is a “high cost”, “predatory”, “covered”, “high risk” or
“threshold” loan, as the case may be, under any applicable state, county or
municipal law, but only to the extent that such law expressly exposes assignees
of Mortgage Loans to possible civil or criminal liability or damages, or exposes
any Lender, the Agent or Syndication Agent to regulatory action or enforcement
proceedings, penalties or other sanctions, or would materially impair the
enforceability, or the marketability to Approved Investors, of the Mortgage
Loan, or (B) contains any term or condition, or involves any loan origination
practice, that has been defined as “predatory” under any such applicable
federal, state, county or municipal law, or that has been expressly categorized
as an “unfair” or “deceptive” term, condition or practice in any such applicable
federal, state, county or municipal law.
(xiv) The Required Mortgage Documents have been delivered to Agent prior to the
inclusion of such Mortgage Loan in any computation of the Borrowing Base or, if
such items have not been delivered to Agent on or prior to the date such
Mortgage Loan is first included in any computation of the Borrowing Base,
(1) the Borrower has agreed to pledge and deliver all Required Mortgage
Documents pursuant to an Agreement to Pledge delivered to Agent prior to such
inclusion, and (2) the Collateral Value of such Mortgage Loan when added to the
Collateral Value of all other Mortgage Loans for which Agent has not received
the Required Mortgage Documents does not exceed the Wet Warehousing Sublimit,
provided that, all Required Documents with respect to such Mortgage Loan shall
be delivered to Agent within seven (7) Business Days after the date of the
borrowing request with respect thereto and all other documents requested by
Agent pursuant to Section 4.02 of the Security Agreement shall be delivered to
Agent within five Business Days after such request.

 

Sch 1-2

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(xv) If such Mortgage Loan is included in the Borrowing Base and has been
withdrawn from the possession of Agent on terms and subject to conditions set
forth in the Security Agreement:
(1) If such Mortgage Loan was withdrawn by the Borrowers for purposes of
correcting clerical or other non-substantive documentation problems, the
promissory note and other documents relating to such Mortgage Loan are returned
to Agent within nineteen (19) calendar days from the date of withdrawal; and the
Collateral Value of such Mortgage Loan when added to the Collateral Value of
other Mortgage Loans which have been similarly released to the Borrowers and
have not been returned does not exceed $10,000,000;
(2) If such Mortgage Loan was shipped by Agent directly to a permanent investor
for purchase or to a custodian for the formation of a pool, the full purchase
price therefor has been received by Agent (or such Mortgage Loan has been
returned to Agent) within forty-five (45) days of the date of shipment;
provided, however, that the time for receipt of payment by Agent or return of
such Mortgage Loan is extended to ninety (90) days from the date of shipment by
Agent so long as the principal amount of such Mortgage Loans does not exceed 10%
of the Aggregate Commitment Amounts; and provided, further, that the time for
receipt of payment by Agent or return of such Mortgage Loan is extended to one
hundred (120) days from the date of shipment by Agent so long as the principal
amount of such Mortgage Loans does not exceed 2% of the Aggregate Commitment
Amounts.
(xvi) If such Mortgage Loan is a Jumbo Mortgage Loan, the Collateral Value of
such Mortgage Loan when added to the Collateral Value of all other Jumbo
Mortgage Loans does not exceed the Jumbo Sublimit.
(xvii) If such Mortgage Loan is a Super Jumbo Mortgage Loan, the Collateral
Value of such Mortgage Loan when added to the Collateral Value of all other
Super Jumbo Mortgage Loans does not exceed the Super Jumbo Sublimit;
(xviii) If such Mortgage Loan is a HELOC Mortgage Loan or Second Lien Mortgage
Loan, the Collateral Value of such Mortgage Loan when added to the Collateral
Value of all other HELOC Mortgage Loans and Second Lien Mortgage Loans does not
exceed the HELOC and Second Lien Mortgage Loan Sublimit and if such HELOC
Mortgage Loan or Second Lien Mortgage Loan is a Subprime Mortgage Loan, it is
subject to a Take-Out Commitment and is accompanied by a first lien Mortgage
Loan (as specifically represented and warranted by the Borrower).

 

Sch 1-3

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(xix) If such Mortgage Loan is an Aged Loan, the Collateral Value of such
Mortgage Loan when added to the Collateral Value of all Mortgage Loans that are
Aged Loans does not exceed the Aged Loan Sublimit;
(xx) If such Mortgage Loan is an Uncovered Mortgage Loan, the Collateral Value
of such Mortgage Loan when added to the Collateral Value of all Mortgage Loans
that are Uncovered Mortgage Loans does not exceed the Uncovered Mortgage Loan
Sublimit;
(xxi) If such Mortgage Loan is an Alt A Mortgage Loan, the Collateral Value of
such Mortgage Loan when added to the Collateral Value of all Mortgage Loans that
are Alt A Mortgage Loans does not exceed the Alt A Loan Sublimit.
(xxii) If such Mortgage Loan is a Subprime Mortgage Loan, the Collateral Value
of such Mortgage Loan when added to the Collateral Value of all Mortgage Loans
that are Subprime Mortgage Loans does not exceed the Subprime Sublimit.
(xxiii) If such Mortgage Loan is a Non-Owner Occupied Mortgage Loan, the
Collateral Value of such Mortgage Loan when added to the Collateral Value of all
Mortgage Loans that are Non-Owner Occupied Mortgage Loans does not exceed the
Non-Owner Occupied Sublimit.
(xxiv) If such Mortgage Loan is a Negatively Amortizing Mortgage Loan or Pay
Option ARM, the Collateral Value of such Mortgage Loan when added to the
Collateral Value of all Mortgage Loans that are Negatively Amortizing Mortgage
Loans or Pay Option ARMs does not exceed the Negatively Amortizing Mortgage Loan
or Pay Option ARM Sublimit.
(xxv) If such Mortgage Loan is a Forty Year Mortgage Loan, the Collateral Value
of such Mortgage Loan when added to the Collateral Value of all Mortgage Loans
that are Forty Year Mortgage Loans does not exceed the Forty Year Sublimit (as
specifically represented and warranted by the Borrower).
(xxvi) If such Mortgage Loan is an Underperforming Mortgage Loan, the Collateral
Value of such Mortgage Loan when added to the Collateral Value of all Mortgage
Loans that are Underperforming Mortgage Loans does not exceed the
Underperforming Mortgage Loan Sublimit and if such Mortgage Loan is an Aged
Underperforming Mortgage Loan, the Collateral Value of such Mortgage Loan when
added to the Collateral Value of all Mortgage Loans that are Aged
Underperforming Loans does not exceed the Aged Underperforming Loans Sublimit.
(xxvii) Such Mortgage Loan has not been included in the Borrowing Base for more
than (A) ninety (90) days, if such Mortgage Loan is a Nonconforming Mortgage
Loan, (including Alt A Mortgage Loans, Second Lien Loans, Forty Year Mortgage
Loans, Subprime Mortgage Loans, Negatively Amortizing Mortgage Loans or Pay
Option ARMs), a Super Jumbo Mortgage Loan or a HELOC Mortgage Loan (excluding
HELOC Mortgage Loans that are Uncovered Mortgage Loans), (B) one hundred twenty
(120) days, if such Mortgage Loan is a Jumbo Mortgage Loan, (C) one hundred
twenty (120) days, if such Mortgage Loan is a Conforming Mortgage Loan or
Uncovered Mortgage Loan (D) one hundred eighty days if such Mortgage Loan is
made in connection with a bond program, or (E) three hundred sixty (360) days,
if such Mortgage Loan is an Aged Loan, an Underperforming Mortgage Loan or an
Aged Underperforming Mortgage Loan;

 

Sch 1-4

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(xxviii) Except as otherwise provided above and unless such Mortgage Loan is an
Uncovered Mortgage Loan, an Underperforming Mortgage Loan or an Aged
Underperforming Mortgage Loan, such Mortgage Loan is covered by a Hedging
Agreement or Take-Out Commitment reasonably acceptable to the Agent and the
Syndication Agent which is in full force and effect, and the Borrowers and such
Mortgage Loan are in full compliance therewith;
(xxix) Such Mortgage Loan is secured by a first or second Mortgage on Property
consisting of a completed one-to-four unit single family residence (other than a
mobile home, a manufactured home or a cooperative) which is not used for
commercial purposes and which is not a construction loan; and
(xxx) The face amount of the Mortgage Note underlying such Mortgage Loan does
not exceed $1,000,000 ($1,500,000 for Super Jumbo Mortgage Loans) or the other
applicable limits contained in the definitions of Alt A Mortgage Loans and
Nonconforming Mortgage Loan.
Agent may, in its discretion, waive one or more of the foregoing eligibility
requirements with respect to any Mortgage Loan, provided that the aggregate
Collateral Value of all Mortgage Loans with respect to which such eligibility
requirements have been waived shall not at any time exceed $3,000,000.

 

Sch 1-5

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SCHEDULE 2
Approved Investors
(to be provided)

 

Sch 2-1

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SCHEDULE 5
COMMITMENT AMOUNTS AND PERCENTAGE SHARES

                      Commitment     Percentage   LENDER   Amount     Share  
U.S. Bank
               
JP Morgan Chase Bank
               
Bank of America
               
BNP Paribas
               
Comerica Bank
               
Scotiabanc, Inc.
               
Societe Generale
               
Lloyds TSB Bank
               
Washington Mutual
               
National City Bank
               
 
           
Total
  $ 540,000,000       100%  
 
          (rounded)

 

Sch 5-1

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EXHIBIT C
TO CREDIT AGREEMENT
FORM OF
BORROWING BASE CERTIFICATE
[On the Company’s Letterhead]
U.S. Bank National Association, as Agent
800 Nicollet Mall
Minneapolis, Minnesota 55402
Attention: Mortgage Banking Services Division BC-MN-HO3B
Ladies and Gentlemen:
We submit this certificate to you in accordance with the terms of the Second
Amended and Restated Credit Agreement dated as of April 7, 2006 (as amended and
as the same may be amended, supplemented or restated from time to time, the
“Credit Agreement”) between DHI Mortgage Company, Ltd., the lenders party
thereto (the “Lenders”), U.S. Bank National Association, as Agent for the
Lenders (in such capacity, the “Agent”) and JPMorgan Chase Bank, N.A. as
Syndication Agent. Each capitalized term used herein and not defined herein has
the same meaning ascribed to such term in the Credit Agreement or the Security
Agreement.
The undersigned hereby certifies the following as of the close of business on
                    , ___the Borrowing Base was calculated as follows:
Collateral Value

             
 
  (a)   Pledged Mortgage Loan   $                    

             
 
  Conforming Mortgage Loans   $                        
 
           
 
  Conforming Non-Agency Loans   $                        
 
           
 
  Jumbo Mortgage Loans   $                        
 
           
 
  Super Jumbo Mortgage Loans   $                        
 
           
 
  Alt A Mortgage Loans   $                        
 
           
 
  Subprime Mortgage Loans   $                        
 
           
 
  HELOC Mortgage Loans   $                        
 
           
 
  Second Lien Loans   $                        

 

Ex C-1

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  Non-Owner Occupied Mortgage Loans   $                        
 
           
 
  Aged Loans   $                        
 
           
 
  Uncovered Mortgage Loans   $                        
 
           
 
  Negatively Amortizing or Pay Option        
 
  ARM Mortgage Loans   $                        
 
           
 
  Forty Year Mortgage Loans   $                        
 
           
 
  Underperforming Mortgage Loans   $                        
 
           
 
  Aged Underperforming Mortgage Loans   $                        

                  Less:    
 
           
 
  (b)   Pledged Mortgage Loans with No    
 
      Collateral Value (i.e., not    
 
      Eligible Mortgage Loans)   $                    

     
 
  Conforming Mortgage Loans
 
  — 121 days or more since
 
  date of pledge; $                    
 
   
 
  Jumbo Mortgage Loans — 121 days
 
  or more since date of pledge; $                    
 
   
 
  Uncovered Mortgage Loans
 
  — 121 days or more since
 
  date of pledge; $                    
 
   
 
  HELOC Mortgage Loans-91 days or more
 
  since date of pledge; $                    
 
   
 
  Second Lien Mortgage Loans-91 days or more
 
  since date of pledge; $                    
 
   
 
  Alt A Mortgage Loans-91 days or more
 
  since date of pledge $                    
 
   
 
  Super Jumbo Mortgage Loans-91 days or more
 
  since date of pledge; $                    
 
   
 
  Forty Year Mortgage Loans-91 days or more
 
  since date of pledge; $                    

 

Ex C-2

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  Subprime Mortgage Loans-91 days or more
 
  since date of pledge; $                    
 
   
 
  Negatively Amortizing or
 
  Pay Option ARM Mortgage Loans-91 days or more
 
  since date of pledge; $                    

             
 
  Pledged more than 91 to 120 days   $                        
 
           
 
  (120/360 days for Aged Loans)   $                       (less than 121 days)
 
      $                       (from 121 to 360 days)
 
           
 
  Underperforming Mortgage Loans and        
 
  Aged Underperforming Mortgage Loans        
 
  pledged more than 360 days   $                        
 
           
 
  Collateral Document not returned (19 days)   $                        
 
           
 
  In default (one full reporting period)   $                        
 
  Requested documents not delivered        
 
  (5 Business Days) $___        
 
           
 
  Promissory Note and/or Collateral Documents        
 
  not delivered (wet funding loans;        
 
  7 Business Days) $___        
 
           
 
  Wet funding loans in excess of sublimit   $                        
 
           
 
  Wet funding loans not closed   $                        
 
           
 
  Jumbo Mortgage Loans in excess        
 
  of applicable sublimit $___        
 
                HELOC Mortgage Loans and Second Lien Loans in excess of    
 
  applicable sublimit $                            
 
           
 
  Alt A Mortgage Loans in excess of        
 
  applicable sublimit $                            
 
           
 
  Super Jumbo Mortgage Loans in excess of        
 
  applicable sublimit $                            
 
           
 
  Forty Year Mortgage Loans in excess of        
 
  applicable sublimit $                            

 

Ex C-3

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  Subprime Mortgage Loans in excess of        
 
  applicable sublimit $                            
 
           
 
  Negatively Amortizing or Pay Option ARM        
 
  Mortgage Loans in excess of        
 
  applicable sublimit $                            
 
           
 
  Aged Loans in excess of Aged Loan Sublimit $                            
 
           
 
  Uncovered Mortgage Loans in excess        
 
  of applicable sublimit $                            
 
           
 
  Underperforming Mortgage Loans and        
 
  Aged Underperforming Mortgage Loans        
 
  in excess of applicable sublimit $                            
 
           
 
  Not marketable   $                        
 
           
 
  Agent does not have perfected, first        
 
  priority security interest   $                        
 
           
 
  Other ineligible   $                        

             
 
  (c)   Eligible Mortgage Loans ((a) – (b))   $                    
 
           
 
  (d)   2% of (c) (after deduction of Super Jumbo, Uncovered, and    
 
      Aged Loans)   $                    
 
           
 
  (e)   5% of loans included in Aged Loan Sublimit    
 
      and included in Borrowing Base 121 or more days   $                    
 
           
 
  (f)   3% of Loans included in Super Jumbo and Uncovered    
 
      Mortgage Loan Sublimits   $                    
 
           
 
  (g)   further deduction for loans shipped to investors for    
 
      which purchase price    
 
      not received within 45 days (para. (b) of Collateral Value)  
$                    
 
           
 
  (h)   further deduction for loans shipped to investors for    
 
      which purchase price    
 
      not received within 90 days (para. (b) of Collateral Value)  
$                    
 
           
 
  (i)   100% of loans shipped to investors for which purchase price    
 
      not received within 120 days   $                    

 

Ex C-4

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  (j)   45% of loans that are Underperforming or Aged Underperforming    
 
      Mortgage Loans   $                    
 
           
 
  (k)   Total deductions from Eligible Loans (sum of (d) through (j))  
$                    
 
           
 
  (j)   Total Collateral Value (Borrowing Base)    
 
      ((c) minus (j))   $                    

Attached hereto is a schedule of the “Pledged Mortgage Loans” (as defined in the
Security Agreement) that have no Collateral Value at the date hereof.
Dated:                     , 20__

              DHI MORTGAGE COMPANY, LTD.
 
       
 
  By    
 
       
 
  Its    
 
       

 

Ex C-5

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EXHIBIT H-1
(TABLE GRAPHIC) [c70338c7033801.gif]

 

Ex H-1 -1

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EXHIBIT H-2
(TABLE GRAPHIC) [c70338c7033802.gif]

 

Ex H-2 -1

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EXHIBIT H-3
(TABLE GRAPHIC) [c70338c7033803.gif]

 

Ex H-3 -1

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Schedule X
Underperforming Mortgage Loans

 

Sch X -1

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FORM OF
PROMISSORY NOTE

     
$                    
  Minneapolis, Minnesota
 
  March 30, 2007

FOR VALUE RECEIVED, DHI MORTGAGE COMPANY, LTD., (formerly known as CH MORTGAGE
COMPANY I, LTD.), a Texas limited partnership (the “the Company”), hereby
promises to pay to the order of U.S. BANK NATIONAL ASSOCIATION (the “Lender”) at
the main office of the Agent (as such term and each other capitalized term used
herein are defined in the Credit Agreement hereinafter referred to) in
Minneapolis, Minnesota, in lawful money of the United States of America in
Immediately Available Funds, the principal sum of
                                         DOLLARS ($                    ) or the
aggregate unpaid principal amount of all Loans and Swingline Loans made by the
Lender pursuant to the Credit Agreement described below, whichever is less, and
to pay interest in like funds from the date hereof on the unpaid balance thereof
at the rates per annum and at such times as are specified in the Credit
Agreement. Interest (computed on the basis of actual days elapsed and a year of
360 days) shall be payable at said office at the times specified in the Credit
Agreement.
Principal hereof shall be payable in the amounts and at the times set forth in
the Credit Agreement.
This note is one of the Notes referred to in the Second Amended and Restated
Credit Agreement dated as of April 7, 2006, between the Company, the Lender, the
other lenders party thereto and U.S. Bank National Association, as Agent (as
amended and as the same may be amended, modified or restated from time to time,
the “Credit Agreement”). Unless otherwise defined herein, capitalized terms used
herein shall have the meanings given to such terms in the Credit Agreement. This
Note is subject to certain mandatory and voluntary prepayments and its maturity
is subject to acceleration, in each case upon the terms provided in the Credit
Agreement. This Note is issued in substitution and replacement, but not in
payment, of a note dated as of                                          in the
original principal amount of $                    .
The Company hereby waives diligence, presentment, demand, protest, and notice
(except such notice as is required under the Loan Documents) of any kind
whatsoever. The nonexercise by the Lender of any of its rights hereunder or
under the other Loan Documents in any particular instance shall not constitute a
waiver thereof in any subsequent instance.
The Company reserves the right to prepay the outstanding principal balance of
this Note, in whole or in part at any time and from time to time without premium
or penalty in accordance with the terms of the Credit Agreement.

 

Sch X - 1

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This note is entitled to the benefit of the Security Agreement and the other
Loan Documents.
THIS NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE OF NEW
YORK, WITHOUT GIVING EFFECT TO CONFLICT OF LAWS PRINCIPLES THEREOF BUT GIVING
EFFECT TO FEDERAL LAWS APPLICABLE TO NATIONAL BANKS. In the event of default
hereunder, the undersigned agrees to pay all costs and expenses of collection,
including but not limited to reasonable attorneys’ fees.

     
 
  DHI MORTGAGE COMPANY, LTD.,
 
  (FORMERLY KNOWN AS CH MORTGAGE COMPANY I, LTD.)
 
   
 
  By: DHI Mortgage Company GP, Inc.,
 
  (formerly known as CH Mortgage Company GP, Inc.),
 
  its General Partner

         
 
  By    
 
            Mark C. Winter, Chief Financial Officer and     Vice President

 

EX C-2