Exhibit 10.04

 

Eleventh Amendment To
Mortgage Warehouse Loan And Security Agreement,
Waiver and Consent

This Eleventh Amendment to Mortgage Warehouse Loan and Security Agreement,
Waiver and Consent (this "Amendment"), made by and between FIRST PREFERENCE
MORTGAGE CORP., a Texas corporation  ("Borrower"), COLONIAL BANK, N.A. (f/k/a
Colonial Bank), a national banking association, as lender ("Lender"), is dated
as of the 13th day of December, 2005.

R  E  C  I  T  A  L  S:

Pursuant to that certain Mortgage Warehouse Loan and Security Agreement dated as
of December 28, 2000, as amended by that certain First Amendment to Mortgage
Warehouse Loan and Security Agreement dated as of February 20, 2001, that
certain Second Amendment to Mortgage Warehouse Loan and Security Agreement dated
as of April 10, 2001, that certain Third Amendment to Mortgage Warehouse Loan
and Security Agreement dated as of August 29, 2001, that certain Fourth
Amendment to Mortgage Warehouse Loan and Security Agreement dated as of October
31, 2002, that certain Fifth Amendment to Mortgage Warehouse Loan and Security
Agreement dated as of April 30, 2003, that certain Sixth Amendment to Mortgage
Warehouse Loan and Security Agreement dated as of August 29, 2003, that certain
Seventh Amendment to Mortgage Warehouse Loan and Security Agreement dated as of
December 10, 2003, that certain Eighth Amendment to Mortgage Warehouse Loan and
Security Agreement dated as of December 31, 2004, and that certain Ninth
Amendment to Mortgage Warehouse Loan and Security Agreement dated as of March
31, 2005, and that certain Tenth Amendment to Mortgage Warehouse Loan and
Security Agreement dated as of September 28, 2005 (as heretofore amended, the
"Agreement"), Lender made available to Borrower, subject to the terms and
conditions thereof, a revolving line of credit loan in the maximum aggregate
principal amount not to exceed $5,000,000.00 (the "Line of Credit"). 

Pursuant to the provisions of the Agreement, the Line of Credit matures on
December 31, 2005.  Borrower has requested that Lender agree to waive certain
financial covenant violations under the Agreement, consent to certain
transactions involving Borrower and its Affiliates, and extend the scheduled
maturity date of the Line of Credit to March 31, 2006 and make certain other
changes to the Agreement, and Lender is willing to do so, but only on the
express condition, among others, that Borrower enters into this Amendment,
pursuant to which the Agreement shall be amended and modified.

NOW, THEREFORE, in consideration of the premises and agreements contained
herein, and for good and valuable consideration, the receipt and sufficiency of
which are acknowledged by the parties hereto, the parties hereto do hereby
agree, each with the other, as follows:

1.                   If not otherwise defined herein or the context shall not
expressly indicate otherwise, all capitalized terms which are used herein shall
have their respective meanings given to them in the Agreement.

2.                   Section 1.1 (Defined Terms) of the Agreement is hereby
amended as follows:

          (A)               By amending and restating the definition of
"Adjusted Tangible Net Worth" to read in its entirety as follows:

 

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"Adjusted Tangible Net Worth" shall mean GAAP Net Worth, minus loans and
advances owing to Borrower from officers, directors, stockholders and other
Affiliates and employees of Borrower (if any), minus investments in Affiliates
of Borrower, minus (without duplication to the extent not already deducted in
the calculation of GAAP Net Worth) the lesser of (x) the outstanding balance of
any indebtedness which is secured by an accommodation Lien on property owned by
Borrower and (y) the book value of such property as reflected on Borrower's
balance sheet, unless the holder(s) of the Lien(s) on such property have entered
into an intercreditor or other agreement in favor of Lender in form and
substance satisfactory to Lender in its sole discretion and such agreement
remains in full force and effect, plus that portion of Subordinated Debt (if
any) that is not due within one (1) year, all as of the applicable date of
determination.

           (B)               By amending and restating the definition of "Change
of Control" to read in its entirety as follows:

                  "Change of Control" shall mean the occurrence of any one or
more of the following events without the prior written consent of Lender: (a)
First Financial Corporation ceases to own 100% of the outstanding capital stock
of Borrower or David W. Mann and his immediate family members, collectively,
cease to control (which control may be held directly or indirectly) Borrower,
(b) the sale or other transfer of all or substantially all of Borrower's assets,
voluntarily, by operation of law or otherwise, (c) Borrower is a party to any
merger, consolidation or similar transaction in which it is not the surviving
entity, or (d) David W. Mann  ceases for any reason to be the Chairman of the
Board of Borrower or Charles LaCombe ceases for any reason to be the President
and Chief Executive Officer of Borrower, each with substantially the same
responsibilities and job functions as he has as of December 12, 2005.

           (C)               By amending and restating the definition of
"Maturity Date" to read in its entirety as follows:

                   "Maturity Date" shall mean March 31, 2006 (or if such day is
not a Banking Day, on the next succeeding Banking Day) or, if earlier, the date
of the termination of the Commitment, in accordance with Section 2.6 or Section
7.2; provided, that upon the written request of Borrower to Lender, Lender may
elect to extend the Maturity Date on such terms and conditions as it deems
appropriate in its sole discretion

3.                   Section 4.10 (Negative Pledge) of the Agreement is hereby
amended and restated in its entirety to read as follows:

Section 2.6  Negative Pledge.

            As long as any Obligations remain unpaid or the Commitment hereunder
is outstanding, except for the pledge of up to 100% of the outstanding capital
stock of Borrower by First Financial Corporation to JRPM Investments, Ltd.
pursuant to that certain Pledge Agreement dated on or about December ___, 2005,
none of Borrower's shareholders or owners shall pledge, assign, transfer or
encumber any capital stock or other ownership interest such Person holds of
Borrower to any third party.

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4.                   Section 5.8 (Subsidiaries; Capitalization) of the Agreement
is hereby amended and restated in its entirety to read as follows:

          5.8               Subsidiaries; Capitalization.

                     Borrower has no Subsidiaries, except for (1) First
Financial Information Services, Inc. which is a wholly-owned Subsidiary that
predominately holds licenses to computer software and provides data processing
services to Borrower, (2) First Preference Properties, Inc. which is a
wholly-owned Subsidiary of Borrower that predominately owns, manages and
disposes of repossessed properties securing residential mortgage loans
originated by Borrower, and (3) Tri-Triangle Insurance Agency, Inc. which is a
wholly-owned Subsidiary that solicits homeowners insurance on mortgage loans
originated by Borrower.  The issued and outstanding capital stock or other
ownership interests of Borrower is owned, beneficially and of record, by the
shareholders or other owners listed in Schedule 3 in the amounts and percentage
interests set forth opposite such Person's name.

5.                    Schedule 3 (List of Shareholders and Ownership Interests)
to the Agreement is hereby amended and restated in the form of Schedule 3
attached hereto.

6.                   Waiver of Certain Defaults and Reservation of all Other
Rights and Remedies.  Upon the effectiveness of this Amendment, Lender hereby
waives Borrower's breach of and noncompliance with the covenants of the
Agreement set out on Schedule A hereto solely with respect to the period(s) set
forth on Schedule A hereto, and Lender waives any Event of Default under the
Agreement as a result of any such breach and/or noncompliance that occurred
solely during the period(s) set forth on Schedule A hereto.  Lender hereby
expressly reserves, and Borrower hereby agrees that Lender does not and has not
waived, its right to require strict performance of all terms of the Agreement,
except as expressly herein waived, and all of its rights and remedies resulting
from any breach of or noncompliance with any covenant or other term of the
Agreement occurring or existing on or after October 1, 2005.

7.                   Certain Consents.  Borrower's parent First Financial
Corporation ("FFC") on or before December 15, 2005 will obtain loans totaling
$1,200,000 (the "FFC Loans") from Bluebonnet Investments, Ltd. ("Bluebonnet")
and JRPM Investments, Ltd. ("JRPM"), both of whom are Affiliates of Borrower,
and FFC will use not less than $1,000,000.00 of the proceeds of the FFC Loans to
make a cash capital contribution to Borrower on or before December 15, 2005 (the
"December 2005 Transaction").  Borrower will not be a guarantor or borrower of
the FFC Loans.  The December 2005 Transaction will involve:  (i) an
accommodation mortgage of Borrower's "Highway 77" real property by Borrower to
Bluebonnet and JRPM as security for the FFC Loans, (ii) an accommodation pledge
by Borrower of stock in its subsidiaries First Financial Information Services,
Inc. and First Preference Properties, Inc. to JRPM as security for the FFC
Loans, and (iii) a transfer by Borrower of asset #61101 (901 Columbus Avenue,
Farm Lot 17, 3 12 D) and asset #61201 (325 9th Street, Farm Lot 43, 8A10 6 7 43)
to First Preference Properties, Inc. (items (i) thru (iii) are hereinafter
called the "Affiliate Transfers").  Upon the effectiveness of this Agreement,
Lender hereby gives its consent to the Affiliate Transfers for purposes of
Section 6.2(f) (Transactions with Affiliates) and Section 6.2(j) (Transactions
to Affiliates) of the Agreement.  Further, Lender hereby confirms its consent to
the existing loan to Borrower and related first mortgage lien on the "Highway
77" real property by Borrower in favor of Bluebonnet (as the assignee of
Citizens State Bank) (outstanding principal balance of approximately $675,000 as
of the date hereof).

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8.                   Conditions Precedent to Effectiveness.  This Amendment
shall become effective as of the date first written above, provided that the
Lender shall have received by such date the following items, all of which must
be in form and content satisfactory to Lender in its sole discretion:

          (A)               This Amendment executed by Borrower and Lender
(whether such parties shall have signed the same or different counterparts);

          (B)               An executed affidavit, in form satisfactory to
Lender, regarding the execution of this Agreement by Borrower outside the State
of Florida;

          (C)               Certificates of even date herewith signed by the
President and Chief Executive Officer and/or Secretary or Assistant Secretary of
Borrower, as appropriate, certifying (1) the authorizing resolutions of
Borrower, (2) that the organizational documents of Borrower previously delivered
to the Lender remain in full force and effect with no modification or amendments
except as disclosed in said Certificate, (3) that all representations and
warranties previously made to Lender remains true, complete and accurate, and
(4) that no Event of Default or Potential Default has occurred and is
continuing;

          (D)              A confirmation of even date herewith from Guarantor
with respect to his Guaranty;

          (E)               Proof satisfactory to Lender that Borrower has
received a cash capital contribution from FFC in the amount of not less than
$1,000,000.00;

          (F)               True, correct and complete copies of the executed
documentation evidencing the December 2005 Transaction;

         (G)              An executed Intercreditor Agreement among Bluebonnet,
JRPM, FFC, Borrower and Lender (whether such parties have signed the same or
different counterparts); and

         (H)               Such other certificates, instruments, opinions and
documents (if any) that Lender shall reasonably request.

9.                   Notwithstanding the execution of this Amendment, all of the
indebtedness evidenced by the Note shall remain in full force and effect, and
any collateral described in any agreement providing security for any obligation
of Borrower so defined to include the Note shall remain subject to the liens,
pledges, security interests and assignments of any such agreements as security
for the indebtedness evidenced by the Note and all other indebtedness described
therein.  Nothing herein in this Amendment shall be construed to constitute a
novation of the indebtedness evidenced by the Note or to release, satisfy,
discharge or otherwise affect or impair in any manner whatsoever (1) the
validity or enforceability of the indebtedness evidenced by the Note; (2) the
liens, pledges, security interests, assignments and conveyances affected by the
Agreement, the other Loan Documents and any other agreement securing such Note,
or the priority thereof; (3) the liability of any maker, endorser, surety,
guarantor or other Person that may now or hereafter be liable under or on
account of the Note or any agreement securing such Note; or (4) any other
security or instrument now or hereafter held by Lender as security for as
evidence of any of the above-described indebtedness.  In no way limiting the
foregoing, Borrower acknowledges and agrees that the indebtedness evidenced by
the Note is and shall remain secured by the collateral described in the
Agreement and the other Loan Documents.

 

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10.               In order to induce Lender to enter into this Amendment,
Borrower represents, warrants and covenants to Lender that:

       (A)               The execution, delivery and performance by Borrower of
this Amendment and the other documents contemplated hereby to which Borrower is
a party are within its corporate powers, has been duly authorized by all
necessary corporate action and is not in contravention of any law, rule or
regulation, or any judgment, decree, writ, injunction, order to award of any
arbitrator, court or governmental authority, or of the terms of Borrower's
certificate of incorporation or bylaws, or of any contract or undertaking to
which Borrower is a party or by which Borrower or its property is or may be
bound or affected.

       (B)               Each of this Amendment and the other documents
contemplated hereby to which Borrower is a party is a legal, valid and binding
obligation of Borrower, enforceable against Borrower in accordance with its
terms.

       (C)               No consent, approval or authorization of or
declaration, registration or filing with any governmental authority or any
nongovernmental person or entity, including without limitation any creditor or
stockholder of Borrower, is required on the part of Borrower in connection with
the execution, delivery and performance of this Amendment or the other documents
or the transactions contemplated hereby or as a condition to the legality,
validity or enforceability of this Amendment.

       (D)              After giving effect to the amendments to the Agreement,
waiver and consents contained in this Amendment, the representations and
warranties contained in Article 5 of the Agreement and in the other Loan
Documents are true and correct on and as of the date hereof with the same force
and effect as if made on and as of the date hereof, no Event of Default or
Potential Default exists or has occurred and is continuing on the date hereof,
and no material adverse change has occurred in the financial condition of
Borrower since the date of the last financial statements submitted by Borrower
to Lender pursuant to the Agreement.

11.               If Borrower shall fail to perform or observe any term,
covenant or agreement in this Amendment, or any representation or warranty made
by Borrower in this Amendment shall prove to have been incorrect in any material
respect when made, such occurrence shall be deemed to constitute an Event of
Default.

12.               This Amendment shall be governed by and construed in
accordance with the laws of the State of Florida.

13.               Borrower agrees to pay the reasonable fees and expenses of
counsel for Lender, in connection with the negotiation and preparation of this
Amendment and the documents referred to herein and the consummation of the
transactions contemplated hereby, and in connection with advising Lender as to
its rights and responsibilities with respect thereto.

14.               Unless otherwise expressly modified or amended hereby, all
terms and conditions of the Agreement shall remain in full force and effect, and
the same, as amended hereby, are hereby ratified and confirmed in all respects. 
From and after the effective date hereof, all references in the Agreement, and
any other document or instrument entered into in connection therewith, to the
Agreement shall be deemed to be references to the Agreement as amended by this
Amendment.

15.               This Amendment shall inure to and be binding upon and
enforceable by Borrower and Lender and their respective successors and assigns.

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16.               This Amendment may be executed in one or more counterparts,
each of which when executed and delivered shall constitute an original.  All
such counterparts shall together be deemed to be one and the same instrument.

17.               Further, the parties may execute facsimile copies of this
Amendment and the facsimile signature of any such party shall be deemed an
original and fully binding on said party; provided, however, any party executing
this Amendment by facsimile signature agrees to promptly provide an original
executed copy of this Amendment to Lender.  Further, the parties may execute
facsimile copies of this Amendment and the facsimile signature of any such party
shall be deemed an original and fully binding on said party; provided, however,
any party executing this Amendment by facsimile signature agrees to promptly
provide an original executed copy of this Amendment to Lender.

[Remainder of Page Intentionally Left Blank.]

 

 

 

 

 

 

 

 

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IN WITNESS WHEREOF, the parties hereto have duly executed this Amendment, by and
through their respective duly authorized officers as of the day and year first
above written.

                                                                             
BORROWER:

                                                                                              
FIRST PREFERENCE MORTGAGE CORP.

[CORPORATE SEAL]                                          By:  /s/ Charles
LaCombe                                                   
                                                                             
Name:                           Charles LaCombe
ATTEST:                                                               Its:
                President and Chief Executive Officer

By:         /s/ Cathy Davis                                 
Name:                   Cathy Davis
Its:                         Secretary

STATE OF TEXAS

COUNTY OF McLENNAN

On this 13th day of December, 2005, personally appeared Charles LaCombe, as
President and Chief Executive Officer of First Preference Mortgage Corp., a
Texas corporation ("Borrower"), and before me executed the attached Eleventh
Amendment to Mortgage Warehouse Loan and Security Agreement, Waiver and Consent
dated December ___, 2005, by and between Colonial Bank, N.A., as Lender, and
Borrower.

IN WITNESS WHEREOF, I have hereunto set my hand and official seal in the County
and State last aforesaid.

/s/ Mary Jane
Gonzales                                                           
Signature of Notary Public-State of Texas

                                                                                               
Print Name: Notary Public, State of Texas
Personally Known
  X                                                                
Produced Identification                                      
Type of Identification:                                        
              (NOTARIAL SEAL)

 

 

 

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LENDER:

                              COLONIAL BANK, N.A.

By:   /s/ Amy J. Nunneley                                          
Name:                           Amy J. Nunneley
Its:                             Senior Vice President

STATE OF ALABAMA

COUNTY OF MONTGOMERY

On this 13th day of December, 2005, personally appeared Amy J. Nunneley, as
Senior Vice President of Colonial Bank, N.A., a national banking association,
and before me executed the attached Eleventh Amendment to Mortgage Warehouse
Loan and Security Agreement, Consent and Waiver dated as of December ___, 2005,
by and between Colonial Bank, N.A., as Lender, and First Preference Mortgage
Corp., as Borrower.

IN WITNESS WHEREOF, I have hereunto set my hand and official seal in the County
and State last aforesaid.

 /s/ Nicole L
LaRue                                                                 
Signature of Notary Public-State of Alabama

                                                                                               
Print Name: Notary Public, State of Alabama
Personally Known
  X                                                              
Produced Identification                                      
Type of Identification:                                        
              (NOTARIAL SEAL)

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SCHEDULE 3

List of Shareholders and Ownership Interests

Name

Percentage Ownership

 

First Financial Corporation

100%

 

 

Also see attached Organizational Chart.

 

 

 

 

 

 

 

 

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SCHEDULE A

List of covenants, compliance with which is waived solely as of the respective
period set forth opposite such covenant below:

Covenant

Fiscal Period

Section 6.3(c) of the Agreement (Adjusted Leverage Ratio)

Month ending 9/30/2005

Section 13(F) of the Tenth Amendment to the Agreement dated September 28, 2005
(Requirement that Borrower receive a cash equity injection from its parent of at
least $500,000 by 10/31/2005)

N/A

 

 

 

 

 

 

 

 

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