EX-10.1






Exhibit 10.1




THIRD AMENDMENT TO

AMENDED AND RESTATED CREDIT AGREEMENT




THIRD AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT, dated as of June 16, 2008 (this
“Amendment”), by and between LUMINENT MORTGAGE CAPITAL, INC., a Corporation organized under
the laws of the State of Maryland corporation (the “Borrower”), and ARCO CAPITAL
CORPORATION LTD., a corporation organized under the laws of the Cayman Islands (the
“Lender”).



WHEREAS, the Borrower and the Lender are parties to that certain Amended and Restated Credit
Agreement, dated as of September 26, 2007 (as amended by that certain First Amendment to Amended
and Restated Credit Agreement dated as of December 7, 2007 and Second Amendment to Amended and
Restated Credit Agreement dated as of May 9, 2008, and as the same may be further amended,
supplemented or otherwise modified from time to time, the “Credit Agreement”; capitalized
terms used herein without definition shall have the meanings given in the Credit Agreement);



WHEREAS, the Borrower and the Guarantors have requested that Lender fund a loan that would
otherwise be an Expansion Loan in the amount of $14,100,015.19, which amount shall be aggregated
with the Loans outstanding as of the date hereof; and



WHEREAS, the Borrower and the Guarantors have requested, and the Lender has, on terms and
conditions set forth herein, agreed to certain other modifications of the Credit Agreement; and



WHEREAS, from and after the Amendment Effective Date (as hereinafter defined) of this
Amendment, the Credit Agreement shall be amended, subject to and upon the terms and conditions set
forth herein.



NOW, THEREFORE, in consideration of the premises set forth above, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties
hereto agree as follows:



SECTION 1. Definitions. Unless otherwise defined herein, all defined terms that are
defined in the Credit Agreement shall have the same meanings when used herein.



SECTION 2. Amendment to the Credit Agreement. Effective as of the Amendment Effective
Date:



(a) Section 1.01 of the Credit Agreement is hereby amended by:




(i) replacing the text of the definition of “Commitment” in its entirety with the
following:



“‘Commitment” means the obligation of the Lender to make Loans
pursuant to Section 2.01, in an aggregate principal amount at any one
time outstanding not to exceed the amounts indicated below on and after the
dates indicated below, as such amount may be further adjusted from time to
time in accordance with this Agreement:



	 	 	 	 	 
	On and after:

	 	Principal Amount

	 

	 	 	 	 
	June 16, 2008

	 	$	29,933,032.19	 
	 

	 	 	 	 
	July 3, 2008

	 	$	27,583,029.66	 
	 

	 	 	 	 
	August 5, 2008

	 	$	25,233,027.13	 
	 

	 	 	 	 
	September 4, 2008

	 	$	22,883,024.60	 
	 

	 	 	 	 
	October 3, 2008

	 	$	20,533,022.07	 
	 

	 	 	 	 
	November 5, 2008

	 	$	18,183,019.54	 
	 

	 	 	 	 
	November 28, 2008

	 	$	15,835,000.00	 
	 

	 	 	 	 






and




(ii) adding the following definitions in their proper alphabetical sequence:



“‘June 2008 Expansion Loan’ means that certain Loan made by Lender as
of June 16, 2008 in the amount of $14,100,015.19.”



“‘Sovereign Credit Agreement’ means that certain Credit Agreement,
dated June 16, 2008, among the Lender, the Borrower, Saturn Portfolio
Management, Inc., a Delaware corporation, Minerva Mortgage Finance
Corporation, a Maryland corporation, and Sovereign Bank, a federal savings
bank.”



“‘Sovereign Interest Amount’ means the amount of interest accrued on
all Obligations of the Lender outstanding under the Sovereign Credit
Agreement for the period beginning on the Effective Date (as defined in the
Sovereign Credit Agreement) or the previous Sovereign Payment Date and ending
on the day prior to the then-current Sovereign Payment Date.”



“‘Sovereign Interest Rate’ means the interest rate in effect from
time to time pursuant to the Sovereign Credit Agreement (including any
default interest accruing thereunder).”



“‘Sovereign Maturity Date’ means November 28, 2008.”



“‘Sovereign Payment Date’ means any date on which the Lender is
obligated under the terms of the Sovereign Credit Agreement to make a payment
of principal and interest thereunder.”




(iii) adding the following Section 2.12:



“Section 2.12 Repayment of June 2008 Expansion Loan. The Borrower
shall repay the outstanding principal amount of the June 2008 Expansion Loan
on or prior to each Sovereign Payment Date in five (5) consecutive monthly
installments in an amount equal to the sum of $2,350,002.53 plus the
related Sovereign Interest Amount through such date, commencing on July 3,
2008 until the Sovereign Maturity Date, on which date all unpaid principal
and remaining Sovereign Interest Amount and other amounts owing with respect
to the June 2008 Expansion Loan shall be due and payable in full.
Notwithstanding anything herein to the contrary, it is understood and agreed
that the Obligations comprising the June 2008 Expansion Loan and any related
Obligations shall bear interest at the then-effective Sovereign Interest Rate
except with respect to $131,950.95 thereof, such amount representing
certain fees and expenses associated with the closing of the Sovereign Credit
Agreement transaction, which shall bear interest at the rates set forth
herein for Loans.”




(iv) replacing the Borrower’s address for notices in Section 10.02 with the following:



“Luminent Mortgage Capital, Inc.



1515 Market Street, Suite 2000


Philadelphia, Pennsylvania 19102


Attention: Karen Chang, Chief Financial Officer


Telephone: (215) 564-5919


Facsimile: (215) 564-5990”



SECTION 3. Representations and Warranties of the Borrower. The Borrower and each of
the Guarantors represents and warrants (which representations and warranties shall survive the
execution and delivery hereof) to the Lender that:



(a) it has the corporate power and authority to execute, deliver and carry out the terms and
provisions of this Amendment and has taken or caused to be taken all necessary corporate action to
authorize the execution, delivery and performance of this Amendment;



(b) no consent of any person (including, without limitation, shareholders or creditors of the
Borrower or any Guarantor), and no action of, or filing with any governmental or public body or
authority is required to authorize, or is otherwise required in connection with the execution,
delivery and performance of this Amendment which has not been obtained;



(c) this Amendment has been duly executed and delivered by a duly authorized officer on behalf
of such party, and constitutes a legal, valid and binding obligation of such party enforceable
against such party in accordance with its terms, subject to bankruptcy, reorganization, insolvency,
moratorium and other similar laws affecting the enforcement of creditors’ rights generally and the
exercise of judicial discretion in accordance with general principles of equity;



(d) the execution, delivery and performance of this Amendment will not violate any law,
statute or regulation, or any order or decree of any court or governmental instrumentality, or
conflict with, or result in the breach of, or constitute a default under any contractual obligation
of such party;



(e) after giving effect to this Amendment, no Event of Default or event which upon notice or
lapse of time or both would constitute an Event of Default has occurred and is continuing; and



(f) on the date hereof, the representations and warranties contained in the Credit Agreement
and in the Related Documents are and will be true, correct and complete with the same effect as if
made on the date hereof, except to the extent such representations and warranties have been
qualified in writing to, and acknowledged in writing by, the Lender and except to the extent such
representations and warranties expressly relate to an earlier date, in which case, as of such
earlier date.



SECTION 4. Conditions to Effectiveness. This Amendment shall become effective as of
the date above written (the “Amendment Effective Date”), if, and only if:



(a) the Lender shall have received counterparts of this Amendment executed by the Borrower,
the Guarantors and the Lender;



(b) all representations and warranties contained in this Amendment or otherwise made in
writing to the Lender in connection herewith shall be true and correct in all material respects;



(c) the Lender shall have received such other information, materials and documentation as the
Lender or its counsel may reasonably request, which information, materials and documentation shall
be satisfactory in form and substance to the Lender and its counsel; and



(d) all legal matters incident to the effectiveness of this Amendment shall be satisfactory to
the Lender and its counsel.



SECTION 5. Ratification; Waiver of Defenses; and Release.



(e) The Credit Agreement, the Security Pledge Agreement, the Guarantee Agreement, the Master
Netting Agreement and the other Related Documents remain in full force and effect and are hereby
ratified and affirmed. The Borrower and each Guarantor hereby (i) confirms and agrees that the
Borrower is truly and justly indebted to the Lender in the aggregate amount of the Obligations
without defense, counterclaim or offset of any kind whatsoever; and (ii) reaffirms and admits the
validity and enforceability of the Credit Agreement, the Security Pledge Agreement, the Guarantee
Agreement, the Master Netting Agreement and the other Related Documents and the Liens in the
Collateral which were granted pursuant to the Related Documents and otherwise.



(f) This Amendment shall be limited precisely as written and shall not be deemed (i) to be a
consent granted pursuant to, or a waiver or modification of, any other term or condition of the
Credit Agreement or any of the instruments or agreements referred to therein or a waiver of any
Default or Event of Default under the Credit Agreement, whether or not known to the Lender or (ii)
to prejudice any other right or rights which the Lender may now have or have in the future under or
in connection with the Credit Agreement or any of the instruments or agreements referred to
therein. Except to the extent hereby waived or modified, the Credit Agreement and each of the
other Related Documents shall continue in full force and effect in accordance with the provisions
thereof on the date hereof.



(g) The Borrower and each Guarantor, on its own behalf and on behalf of its respective
successors and assigns, hereby waives, releases and discharges the Lender and all of its
affiliates, and all of the directors, officers, employees, attorneys, agents, successors and
assigns of the Lender and such affiliates, from any and all claims, demands, actions or causes of
action (known and unknown) arising out of or in any way relating to the Related Documents and any
documents, agreements, dealings or other matters connected with any of the Related Documents, in
each case to the extent arising (x) on or prior to the date hereof or (y) out of, or relating to,
actions, dealings or matters occurring on or prior to the date hereof. The waivers, releases, and
discharges in this Section 5 shall become effective regardless of when the conditions to this
Amendment are satisfied and regardless of any other event that may occur or not occur after the
date hereof.



SECTION 6. GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO PRINCIPLES OF CONFLICTS OF
LAW OTHER THAN SECTION 5-1401 AND SECTION 5-1402 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW
YORK.



SECTION 7. References. All references to the “Credit Agreement”, “thereunder”,
“thereof” or words of like import in the Credit Agreement or any other Related Document and the
other documents and instruments delivered pursuant to or in connection therewith shall mean and be
a reference to the Credit Agreement as modified hereby and as each may in the future be amended,
restated, supplemented or modified from time to time.



SECTION 8. Paragraph Headings. The paragraph headings contained in this Amendment are
and shall be without substance, meaning or content of any kind whatsoever and are not a part of the
agreement among the parties thereto.



SECTION 9. Successors and Assigns. The provisions of this Amendment shall be binding
upon and inure to the benefit of the parties hereto and their respective successors and assigns.



SECTION 10. Integration. This Amendment represents the entire agreement of the
parties hereto with respect to the amendment of the Credit Agreement. There are no
representations, agreements, arrangements or understandings, oral or written, between the parties
hereto, relating to the subject matter of this Amendment, which are not fully expressed herein.



SECTION 11. Severability. If any provisions of this Amendment shall be held invalid
or unenforceable in whole or in part in any jurisdiction, such provision shall, as to such
jurisdiction, be ineffective to the extent of such invalidity or enforceability without in any
manner affecting the validity or enforceability of such provision in any other jurisdiction or the
remaining provisions of this Amendment in any jurisdiction.



SECTION 12. Related Document. This Amendment is a Related Document pursuant to the
Credit Agreement and shall (unless expressly indicated herein) be construed, administered, and
applied in accordance with all of the terms and provisions of the Credit Agreement.



SECTION 13. Further Assurances. The Borrower and each Guarantor shall, at any time
and from time to time following the execution of this Amendment, execute and deliver all such
further instruments and take all such further action as may be reasonably necessary or appropriate
in order to carry out the provisions of this Amendment.



SECTION 14. Consultation with Advisors. The Borrower and each Guarantor acknowledges
that it has consulted with counsel and with such other experts and advisors as it has deemed
necessary in connection with the negotiation, execution and delivery of this Amendment. This
Amendment shall be construed without regard to any presumption or rule requiring that it be
construed against the party causing this Amendment or any part thereof to be drafted.



SECTION 15. Acknowledgement by Guarantors. Each of the Guarantors hereby acknowledges
that it has read this Amendment and consents to the terms hereof and further confirms and agrees
that (a) the Security Pledge Agreement to which such Guarantor is a party and all of the Collateral
(defined in the Security Pledge Agreement), as the case may be, described therein does, and shall
continue to, secure the payment of all of the Obligations (as defined in the Security Pledge
Agreement), (b) that this Amendment shall constitute a “Transaction Document” as defined in the
Master Netting Agreement and that all of the Collateral (as defined in the Master Netting
Agreement), as the case may be, described therein does, and shall continue to, secure the payment
of all of the Obligations (as defined in the Master Netting Agreement).



SECTION 16. Counterparts. This Amendment may be executed in one or more counterparts,
each of which shall be deemed an original, but all of which together shall constitute one and the
same instrument. Delivery of an executed counterpart of a signature page by telecopier shall be
effective as delivery of a manually executed counterpart.



[The remainder of this page is intentionally left blank]




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IN WITNESS WHEREOF, this Amendment has been duly executed as of the day and year first
above written.



	 	 	 
	BORROWER:

	 	

	LUMINENT MORTGAGE CAPITAL, INC.

	By:

	 	/s/ Karen Chang
	
 
	 	 







	 	 	Name: Karen Chang

Title: SVP and CFO




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GUARANTORS:




MERCURY MORTGAGE FINANCE STATUTORY TRUST




By: /s/ Karen Chang



	 	 	 
	 	 	Name: Karen Chang
	 	 	Title: Treasurer and Secretary
	 	 	LUMINENT CAPITAL MANAGEMENT, INC.
	 	 	By: /s/ Karen Chang






	 	 	Name: Karen Chang

Title: SVP and CFO






PANTHEON HOLDING COMPANY, INC.




By: /s/ Karen Chang

Name: Karen Chang

Title: Controller and Corporate Secretary





PROSERPINE LLC




By: /s/ Karen Chang

Name: Karen Chang

Title: VP, Treasurer and Secretary





MAIA MORTGAGE FINANCE STATUTORY TRUST




By: /s/ Karen Chang



	 	 	 
	 	 	Name: Karen Chang
	 	 	Title: Treasurer and Secretary
	 	 	SATURN PORTFOLIO MANAGEMENT, INC.
	 	 	By: /s/ Karen Chang






	 	 	Name: Karen Chang

Title: Treasurer and Secretary






MINERVA MORTGAGE FINANCE CORPORATION




By: /s/ Karen Chang

Name: Karen Chang

Title: Treasurer and Secretary





MINERVA CDO DELAWARE SPV LLC




By: /s/ Karen Chang

Name: Karen Chang

Title: Treasurer and Secretary





OT REALTY TRUST




By: /s/ Karen Chang

Name: Karen Chang

Title: Treasurer and Secretary




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LENDER:




ARCO CAPITAL CORPORATION LTD.




By: Arco Capital Management LLC, its




attorney-in-fact




By: /s/ Francesco Piovanetti

Name: Francesco Piovanetti

Title: President





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