Document:

Letter Agreement with Scott Edwards

 
Exhibit 10.15

 
December 23, 2002 
 
Scott Edwards 
234 Sunset Avenue 
Ridgewood, NJ 07450 
 
Dear Scott: 
 
Gateway is in the business of satisfying customers. Our aim is to deliver the best products, the best service and the best
value in the industry. To that end, we are building a world class team of talent. We are excited about the skills and values you can add to our executive team. Therefore, we are pleased to extend to you the following offer of employment:

 

	·	 	Position: Executive Vice President, Consumer, reporting to Ted Waitt, Chairman and CEO, with an employment start date to be mutually agreed upon.

 

	·	 	Salary and Bonus: Base salary of $400,000 per year, payable semi-monthly. You will be eligible for participation in the GR2 (Get Results, Get Rewards) incentive plan
with a quarterly bonus of 100% of your quarterly annual base salary, based on achievement of company target revenue and individual performance. During the first quarter of your employment the bonus payment you may receive will be prorated and will
be paid in accordance with the terms of the Plan. 

 

	·	 	Sign On Bonus: You will receive a hiring bonus of $125,000, less required tax deductions, payable within fifteen days of employment. The hiring bonus is repayable to
Gateway if your employment ends on or before your one-year anniversary date for any reason other than a Reduction in Force. 

 

	·	 	Initial Options: You will be given an initial stock option grant of 300,000 shares of Gateway common stock as of your start date. The option price will be the
closing price of the stock on your employment start date. Your stock options have a 10-year life and will vest 25% per year from the date granted. 

 

	·	 	Stock Option Plan: You also will be eligible for additional stock options in accordance with the terms of Gateway’s long-term Incentive Equity Plan. The number
of shares granted is at the discretion of the Compensation Committee of the Board of Directors. 

 

	·	 	Change of Control: In the event of change of control, standard change of control and severance package would be provided as stated in the Change of Control
compensation plan. 

 

	·	 	Vacation: On January 1, 2003, you will start your first calendar plan year for vacation, and will receive 4 weeks vacation per year. 

 

	·	 	Health and Medical Benefits: You are eligible on your date of hire, to participate in the following Gateway group plans, in accordance with the terms of each
respective plan: health, dental, vision, life insurance and Section 125 Flexible Spending Accounts (medical and dependent care spending accounts). You may also be eligible to participate in the Employee Stock Purchase Plan in the first pay period in
the seventh month of your employment. Please refer to the “Annual Enrollment Guide” for additional information. 

 

	·	 	401(k) Investment Plan: You are eligible to participate in Gateway’s 401(k) plan, beginning the first day of your employment with Gateway. You will receive an
enrollment kit in the mail from Wells Fargo with enrollment instructions and plan highlights. 

 

	·	 	Relocation: You are eligible for relocation assistance under Plan 1 of Gateway’s relocation benefits. You will be assigned a relocation consultant who will be
your single point-of-contact and who will work with you on every facet of your move (e.g., real estate agent, home finding, apartment/temporary living, mortgage). Please do not initiate any relocation activity until speaking with your relocation
consultant. The relocation amount is repayable pursuant to the Gateway Relocation Repayment Agreement. 

 

	·	 	Termination: If your employment is terminated for reasons other than cause you will receive separation/transition assistance according to the following schedule:
during your first two years of employment, 1 year of base salary will be provided; during your third year of employment, 6 months of base salary will be provided. If you are terminated after completing three years of employment, you will not be
eligible for separation/transition assistance. 

 

	·	 	A Non-Compete, Non-Disclosure and Intellectual Property agreement must be signed prior to commencement of employment. 

 
This employment offer is contingent upon successfully completing
Gateway’s pre-employment substance abuse screening and background check, executive assessment, signing Gateway’s Non-Compete, Non-Disclosure, and Intellectual Property agreement, signing Non-Harassment Policy and completing an I-9 form,
which establishes identity and employment eligibility, as well as other documents which will be provided on your first day of employment. 

 
Scott, we are excited that you
are becoming a member of the Gateway executive team and look forward to working with you. We believe that our vision, Improving the Quality of Life Through Technology, makes Gateway a great place to work. Please confirm as indicated below that you
accept the terms of this offer and wish to join our team. Please retain a copy of this letter for your files, and return the original letter to me at your earliest convenience. In the interim, if you have any questions or if we can be of any
assistance to you, please don’t hesitate to call me at 720-934-8927. 
 
Sincerely, 
 
Charlie Piscitello, Vice President,
Staffing and Organization Change Management 
 
CC: John Heubusch,
SVP, Strategy & Planning 
 
Enclosure 
 
Confirmation: 
 

	
	 /s/Scott Edwards
	 	 1/15/03

	

	 NAME
	 	 Date

 
This offer will
expire ten days from the date of this letter and does not constitute an express or implied contract of employment. At Gateway, employment is at-will. This means that you can terminate your employment at any time and for any reason and that the
company reserves the right to terminate your employment on the same basis, with or without cause. 
 

3Exhibit 10.5

Exhibit 10.5

  

FOURTH AMENDMENT TO

MORTGAGE WAREHOUSE LOAN AND SECURITY AGREEMENT

This Fourth Amendment to Mortgage
Warehouse Loan and Security Agreement (this "Amendment"), made by and between FIRST PREFERENCE MORTGAGE CORP., a
Texas corporation  ("Borrower"), COLONIAL BANK, an Alabama banking
corporation, as lender ("Lender"), is dated as of the 31st day of
October, 2002.

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, and
that certain Third Amendment to Mortgage Warehouse Loan and Security Agreement
dated as of August 29, 2001 (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 $45,000,000.00 (the "Line of Credit"). 

Pursuant to the provisions of the
Agreement, the Line of Credit matured on March 31, 2002 (which date has been
extended to October 31, 2002 by letter agreement between Lender and
Borrower).  Borrower has requested that
Lender agree to extend the scheduled maturity date of the Line of Credit to
April 30, 2003 and to make certain other changes, and Lender is willing to do
so, but only on the express condition, among others, that Borrower enter into
this Agreement, 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 Leverage Ratio" to read in its entirety
as follows:

"Adjusted Leverage
Ratio" shall mean (x) Total Liabilities minus that portion of
Subordinated Debt (if any), including Subordinated Debt payable to stockholders
of Borrower, that is not due within one (1) year divided by (y) Adjusted
Tangible Net Worth.

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

 

 

 

"Adjusted Tangible
Net Worth" shall mean Tangible Net Worth, minus loans and advances
owing to Borrower from officers, directors, employees, stockholders and other
Affiliates of Borrower (if any), minus investments in Affiliates of
Borrower, plus that portion of Subordinated Debt (if any) that is not
due within one (1) year.

(C)              
By adding a definition
of "Authorized Representative" thereto which term shall have the same meaning
as the term "Authorized Officer", as such latter term is defined in the
Agreement.

(D)             
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 President and Chief
Executive Officer of Borrower, with substantially the same responsibilities and
job functions as he has as of the date hereof.

(E)              
By amending and
restating the definition of "Eligible Conforming Mortgage Loan" to read in its
entirety as follows:

"Eligible
Conforming Mortgage Loan" shall mean a Mortgage Loan with respect to which
each of the following statements is true and correct:

(a)        such Mortgage Loan is an Eligible
Mortgage Loan;

(b)        such Mortgage Loan is insured by the FHA
or guaranteed by the VA (or there exists a binding commitment to issue such
insurance or guaranty subject to the satisfaction of customary conditions),
and/or fully conforms to all underwriting and other requirements of FNMA or
FHLMC; provided, however, if such Mortgage Loan is (i) a "jumbo" Mortgage Loan
that meets all other "A" paper criteria except loan size and, if underwritten
by Borrower, the initial principal amount thereof does not exceed $650,000.00
or, if the initial principal amount thereof exceeds $650,000.00, such Mortgage
Loan has been underwritten and approved by the Approved Investor under the
Investor Commitment referred to in subparagraph (c) below, (ii) an "Alt-A"
Mortgage Loan with a FICO Score of 620, or (iii) an "A-" Mortgage Loan with a
FICO Score between 580 and 620 if sold on a "flow basis" or underwritten to
specific investor guidelines, such Mortgage Loan nevertheless will be deemed to
be an Eligible Conforming Mortgage Loan; and

(c)        except as otherwise permitted under
paragraph (q) of the definition of "Eligible
Mortgage Loan," such Mortgage Loan is covered by an Investor
Commitment that is in full force and effect and pledged to Lender hereunder,
and Borrower and such Mortgage Loan are in full compliance therewith.

(F)              
By amending and
restating the definition of "Eligible Non-Conforming Mortgage Loan" to read in
its entirety as follows:

2

 

 

"Eligible
Non-Conforming Mortgage Loan" shall mean a Mortgage Loan with respect to
which each of the following statements is true and correct:

(a)        such Mortgage Loan is an Eligible
Mortgage Loan, except that if such Mortgage Loan otherwise meets the
requirements of an Eligible Mortgage Loan, such Mortgage Loan may be secured by
a second priority mortgage (or deed of trust) on the Property encumbered
thereby;

(b)        the Property encumbered by such Mortgage
Loan is owner occupied and is not an investment property, except that Mortgage
Loans may be eligible even if they are held as investment property if such
Mortgage Loans are (i) rated "A" or "B" or (ii) underwritten and approved by
the Approved Investor issuing the Investor Commitment for such Mortgage Loan if
rated below "B";

(c)        such Mortgage Loan conforms to the
credit quality guidelines utilized by Fitch IBCA or such other
nationally recognized credit ratings agency or firm as specified by Lender as
set forth in Exhibit E and otherwise conforms to all underwriting and
other requirements of one of the Approved Investors other than FNMA, FHLMC, or
FHA/VA (such as by way of illustration and not limitation, Mortgage Loans which
are A- (except those that have been included as Eligible Conforming Mortgage
Loans), B, C, high LTV, second mortgages or HELOC's), which underwriting and
other requirements are customary in the mortgage banking industry and have been
approved by Lender in writing, except that Mortgage Loans rated "D" and below shall be ineligible;

(d)        such Mortgage Loan has been underwritten
to specific Approved Investor guidelines, and except as otherwise permitted in
paragraph (q) of the definition of "Eligible Mortgage Loan", such Mortgage Loan
is covered by an Investor Commitment that is in full force and effect and
pledged to Lender hereunder and Borrower and such Mortgage Loan are in full
compliance therewith;

(e)        such Mortgage Loan, if an "A-" Mortgage
Loan has not been included as an Eligible Conforming Mortgage Loan; and

(f)                
the initial principal
amount of such Mortgage Loan, if underwritten by Borrower, does not exceed
$650,000.00 or, if the initial principal amount thereof exceeds $650,000.00,
such Mortgage Loan has been underwritten and approved by the Approved Investor
under such Investor Commitment.

(G)             
By amending and
restating the definition of "Eligible Repurchased Mortgage Loan" to read in its
entirety as follows:

"Eligible Repurchased Mortgage Loan" shall mean a Mortgage Loan with respect to which
each of the following statements is true:

(a)               
such Mortgage Loan meets
the requirements of subparagraphs (a), (b), (c), (f), (g), (h), (i), (j), (k),
(m), (p), (r) and (s) of the definition of Eligible Mortgage Loan;

(b)               
such Mortgage Loan
currently is not eligible for purchase by an Approved Investor as either an "Eligible
Conforming Mortgage Loan" or an "Eligible Non-Conforming Mortgage Loan", but it
either meets the requirements set forth in subparagraph (b) of the definition
of "Eligible Conforming Mortgage Loan" or meets the requirements set forth in
subparagraphs (b) and (c) of the definition of "Eligible Non-Conforming
Mortgage Loan";

 

3

 

 

(c)               
such Mortgage Loan was
originally sold by Borrower to an Approved Investor and subsequently
repurchased by Borrower from such Approved Investor in accordance with the
terms of the applicable Investor Commitment or became, for reasons that do not
adversely affect or impair the enforceability of such Mortgage Loan against the
Obligor, ineligible for purchase by an Approved Investor as either an "Eligible
Conforming Mortgage Loan" or an "Eligible Non-Conforming Mortgage Loan" as long
as such Mortgage Loan initially met the applicable underwriting criteria;

(d)               
such Mortgage Loan was
not repurchased by Borrower from such Approved Investor as a result of any
issue concerning the appraisal of the Property encumbered by such Mortgage Loan
(or, if such Mortgage Loan was repurchased by Borrower from such Approved
Investor as a result of any issue concerning the appraisal of the Property
encumbered by such Mortgage Loan, the Property has been reappraised to Lender's
satisfaction by a different appraiser);

(e)               
if the promissory note
for such Mortgage Loan (or any other documentation relating thereto) has been
withdrawn from the possession of Lender on terms and subject to the conditions
set forth in Section 4.4(a) of this Agreement, (i) such promissory note or
other documentation has been released to Borrower pursuant to a Trust Receipt
as permitted under Section  of this
Agreement and such release has occurred within the immediately preceding ten
(10) days or (ii) such promissory note or other documentation has been released
to an attorney, trustee or other third party conducting foreclosure proceedings
on behalf of Borrower (for purposes of prosecuting such foreclosure
proceedings) pursuant to a Bailment Letter as permitted under Section 4.4(b) of
this Agreement; provided that the Collateral Value of the Mortgage Loan
for which such promissory note or other documentation has been released, when
added to the Collateral Value of all other Mortgage Loans for which notes or
other documentation have been similarly released to Borrower, does not exceed
$1,000,000.00; 

(f)                
such Mortgage Loan has
not aged longer than the applicable Warehouse Period and, if included in the
warehouse for a period in excess of (i) ninety (90) days, 15% (based on the
initial Advance Rate Amount) of the Mortgage Loan has been repaid on or before
the 91st day in the warehouse, (ii) one hundred eighty (180) days, an
additional 25% (based on the initial Advance Rate Amount) of the Mortgage Loan
has been repaid on or before the 181st day in the warehouse, (iii) two
hundred seventy (270) days, an additional 25% (based on the initial Advance
Rate Amount) of the Mortgage Loan has been repaid on or before the 271st day in
the warehouse, and (iv) three hundred sixty (360) days, the final 25% (based on
the initial Advance Rate Amount) of the Mortgage Loan has been repaid on or
before the 360th day in the warehouse; and

(g)               
(i) Borrower has
delivered (or caused to be delivered) to Lender those items for such Mortgage
Loan described on Exhibit C to this Agreement prior to the Advance
supported by such Mortgage Loan, plus a current (within 45 days)
appraisal of the property securing such Mortgage Loan and an original
assignment of mortgage (or deed of trust) in favor of Lender (in recordable
form and which will be recorded at Lender's option); (ii) Borrower or a
third party approved by Lender holds in trust for the Lender those items
described in Exhibit D to this Agreement; and (iii) Borrower has
delivered (or caused to be delivered) to Lender, if Lender has so requested in
writing, the additional items described on Exhibit D to this Agreement.

 

4

 

(H)              
By amending and
restating the definition of "LIBOR Rate" to read in its entirety as follows:

"LIBOR Rate"
shall mean the rate that appears on the display designated as page "3750" of
the Telerate Service (or such other page as may replace page 3750 of
that service) as of 11:00 a.m., Orlando time, on each Banking Day or, if not so
reported on such service, as otherwise quoted by Lender from time to time, as
the 30-day LIBOR Rate, adjusted daily with each change in the 30-day LIBOR
Rate; provided, however, in no event shall the LIBOR Rate be less
than the floor rate per annum equal to 2.50% (which floor rate may be changed
from time to time by Lender after consultation with the Treasurer of Lender) or
greater than the ceiling rate per annum equal to the Prime Rate.

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

"Maturity Date" shall
mean April 30, 2003; 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.

(J)               
By amending and restating the definition of "Prime Rate" to read in its
entirety as follows:

"Prime Rate" shall
mean the fluctuating interest rate per annum announced by Lender from time to
time as its Prime Rate as such Prime Rate may change from time to time,
adjusted daily with each change in such Prime Rate (which interest rate is only
a benchmark, is purely discretionary and is not necessarily the best or lowest
rate charged borrowing customers of Lender); provided, however,
in no event shall the Prime Rate be less than the floor rate per annum equal to
5.50% (which floor rate may be changed from time to time by Lender after
consultation with the Treasurer of Lender).

3.                  
Section 2.3 (Disbursement of Funds) of the Agreement is hereby
amended to amend and restate the first sentence thereof to read in its entirety
as follows:

Subject to Section 2.1 and the other provisions of this Agreement, no
later than 2:00 p.m. (Orlando time) on the date of each Advance, Lender shall
make available to Borrower the full amount of the Advance requested by Borrower
in the Advance Request by deposit of such funds to the Master Advance Account
or in such other manner as Lender may from time to time agree.

4.                  
Subsection (a) of Section 2.5 (Interest) of the Agreement is
hereby amended and restated to read in its entirety as follows:

            (a)        Except as otherwise provided in this Agreement (including the last
sentence of this Section 2.5(a)), the principal amount of each Advance owed to
Lender shall bear interest at an annual interest rate equal to the lesser of:
(i) the Maximum Rate or (ii) (A) for Sublimit A Advances, the LIBOR Rate plus
1.90% (190 basis points), floating daily, subject, however, to
adjustment to the LIBOR Rate plus 2.15% (215 basis points), floating
daily, if the Mortgage Loan funded with the Advance is warehoused with Lender
for more than sixty (60) days, (B) for Sublimit B Advances, the LIBOR Rate plus
2.15% (215 basis points), floating daily, (C) for Sublimit C Advances, the
LIBOR Rate plus 2.40% (240 basis points), floating daily, subject,
however, to adjustment to the LIBOR Rate plus 2.65% (265 basis
points), floating daily, if the Mortgage Loan funded with the Advance is
warehoused with Lender for more than ninety (90) days, and (D) for Sublimit D
Advances, the LIBOR Rate plus 2.65% (265 basis points), floating daily.  Upon the delivery to Lender of the Required
Documents (as such term is defined in Section 4.3) for a Sublimit B Mortgage
Loan such Mortgage Loan shall be converted to a  Mortgage Loan of the appropriate Type and the related Sublimit B
Advance shall be converted to an Advance of the appropriate Type and shall bear
interest accordingly.  If Lender
specifically agrees in its sole and absolute discretion and on a case-by-case
basis to allow a Mortgage Loan to stay in warehouse longer than the Warehouse
Period therefore, the outstanding principal amount of the related Advance owed
to Lender shall, during the period of time in warehouse in excess of such
Warehouse Period, bear interest at an annual interest rate equal to the lesser
of:  (i) the Maximum Rate or (ii) the
Interim Default Rate.

 

5

 

5.                  
Subsection (a) of Section 2.9 (Fees) of the Agreement is hereby
amended and restated to read in its entirety as follows:

(a)        Borrower agrees to pay
to Lender a collateral agent fee (the "Collateral Agent Fee") in the
amount of $15.00 for each Mortgage Loan warehoused by Borrower with Lender,
payable monthly in arrears immediately following receipt by Borrower of a
statement from Lender for such Collateral Agent Fee based upon the prior
month's activity, unless otherwise directed by Lender.  In addition to the foregoing fees, Borrower shall
pay or reimburse Lender for any transaction fees payable to the Mortgage
Electronic Registration System, Inc. ("MERS") in connection with the
registration of mortgage assignments to Lender if Borrower uses MERS and
further, shall pay all pass-through costs in connection with the warehouse of
Mortgage Loans under Sublimit D (recording costs, etc.) and the use of any
electronic data transmission system or service allocable to Borrower if
Borrower downloads or submits data to Lender using electronic data
transmission.

6.                  
Subsection (d) of
Section 2.9 (Fees) of the Agreement is hereby amended and restated to
read in its entirety as follows:

(d)               
Borrower agrees to pay
to Lender an administrative fee (the "Administrative
Fee") in the amount of $1,500.00 per month for each month
end which Borrower is not in compliance with any of the financial covenants set
forth in Section 6.3 of the Agreement and/or Borrower's Adjusted Leverage Ratio
exceeds 12:1.0 but is still less than 15:1.0. 
The Administrative Fee shall be due immediately upon Borrower's receipt
of a statement for such Administrative Fee. 
In no way or manner whatsoever shall the existence or payment of any
Administrative Fee (i) relieve Borrower of its obligations to strictly observe
the financial covenants contained in Section 6.3 of the Agreement or any of its
other obligations to Lender under the Agreement or other Loan Documents, (ii) constitute
a waiver of any Event of Default or Potential Default, or (iii) limit or
restrict the rights of Lender following any Event of Default or Potential
Default.

7.                  
Clause (d) of Section
4.7 (Covenants of Borrower With Regard to the Collateral) of the Agreement
is hereby amended and restated to read in its entirety as follows:

(d)               
prior to each renewal of
the Line of Credit and at any other reasonable time, upon request by Lender, to
exhibit and to allow inspection by Lender (or Persons designated by Lender) of
the Collateral and the records concerning the Collateral and to pay the
reasonable fees  and costs in connection
with Lender's annual compliance audit of Borrower conducted by
Lender's staff and any third party operations audit;

 

6

 

8.                  
Section 5.8 (Subsidiaries;
Capitalization) of the Agreement is hereby amended and restated to read in
its entirety 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 Apex Re., Inc. which is owned 52% by Borrower and provides
reinsurance coverage for mortgage guaranty insurance placed on loans originated
by Borrower, (3) First Preference Properties, Inc. which is a wholly-owned
Subsidiary of Borrower that owns, manages and disposes of repossessed
properties securing residential mortgage loans originated by Borrower, and
(4) 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.

9.                  
Schedule 3 (List of Shareholders and Ownership Interests)
to the Agreement is hereby amended and restated in the form of Schedule 3
attached hereto.

10.              
Subsection (a)(iv) of
Section 6.1 (Affirmative Covenants) of the Agreement is hereby amended
and restated to read in its entirety as follows:

(iv)             
Tax Returns.  As soon as
available and in any event within forty-five (45) days after the date of
filing, copies of the completed annual Federal income tax returns, including
all schedules, of Borrower and of Guarantor; and further, if any extension is
filed, a copy of such extension will be provided within such 45-day period and
be followed by a copy of the actual tax return promptly after its filing date;

11.              
The last sentence of
Section 6.1(c) (Inspection of Property; Books and Records; Discussion)
of the Agreement is hereby amended and restated to read in its entirety as
follows:

Lender will be allowed to conduct, from time to time at Lender's
request and at Borrower's expense (and prior to each renewal of the Line of
Credit, if any), financial and operational audits at Borrower's office during
normal business hours, including Lender's annual compliance audit of Borrower's
operations and the Collateral, and Borrower shall pay the reasonable fees  and costs associated with such audits.

12.              
Section 6.3 (Special Financial Covenants) of the Agreement is
hereby amended and restated in its entirety to read as follows:

Section 6.3        Special Financial Covenants.

Borrower hereby covenants
and agrees that, as long as any Obligations remain unpaid or the Commitment
hereunder is outstanding, the following special financial covenants shall be
applicable to Borrower and tested monthly at the end of each calendar month as
set forth below:

(a)        Tangible Net Worth.  Borrower's Tangible Net Worth shall not be
less than $3,500,000.00.

 

7

 

(b)        Adjusted Tangible
Net Worth.  Borrower's Adjusted
Tangible Net Worth shall not be less than $3,200,000.00.

(c)        Adjusted Leverage
Ratio.  Borrower's Adjusted Leverage
Ratio shall not be greater than 15:1.0.

(d)        Current Ratio.  Borrower's Current Ratio shall not be less
than 1.0:1.0.

13.              
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)              
If required by Lender,
good standing certificates/certificates of existence of a recent date for
Borrower from the State of Texas and each other state in which Borrower
conducts its business

(F)              
If required by Lender, a third party operations audit, the results of
which must be satisfactory to Lender;

(G)             
If required by Lender,
such UCC and other lien searches as Lender shall request, showing no Liens
which have priority over Lender's first priority security interest in the
Collateral; and

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

14.              
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.

 

8

 

 

15.              
In order to induce
Lender to enter into this Amendment, Borrower represents and warrants that:

(A)              
The execution, delivery
and performance by Borrower of this Amendment and the other documents
contemplated hereby to which Borrower is a party is 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 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.

16.              
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.

17.              
This Amendment shall be
governed by and construed in accordance with the laws of the State of Florida.

18.              
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.

 

9

 

 

19.              
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.

20.              
This Amendment shall
inure to and be binding upon and enforceable by Borrower and Lender and their
respective successors and assigns.

21.              
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.

22.              
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.]

10

 

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:
                                                                         
      
	  	Name:     David W. Mann
	ATTEST:	Its:
          President and Chief
Executive Officer
	  	 
	By:                                                              
      	 
	Name:      Cathy Davis	 
	Its:            Secretary	 

STATE OF TEXAS

COUNTY OF McLENNAN

On
this ______ day of October, 2002, personally appeared David W. Mann, as
President and Chief Executive Officer of First Preference Mortgage Corp., a
Texas corporation ("Borrower"), and before me executed
the attached Fourth Amendment to Mortgage Warehouse Loan and Security
Agreement, by and between Colonial Bank, as Lender, and Borrower.

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

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

 

11

 

 

  	LENDER:
	  
	                          COLONIAL
BANK
	  
	By:                                                                                
      
	Name:                 Amy
J. Nunneley
	Its:                      Senior
Vice President

STATE OF ALABAMA

COUNTY OF JEFFERSON

On this _____ day of October,
2002, personally appeared Amy J. Nunneley, as Senior Vice President of Colonial
Bank, an Alabama banking corporation, and before me executed the attached
Fourth Amendment to Mortgage Warehouse Loan and Security Agreement, by and
between Colonial Bank, 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.

                                                                                                

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

12

 

 

SCHEDULE 3

List of Shareholders and
Ownership Interests

	
  Name

  	
  Percentage Ownership

  
	

   

  	

  
	
  First Financial
  Corporation

  	
  100%

  

 

Also see attached
Organizational Chart.

 

 

 

13

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