THIRDAMENDMENT TO WAREHOUSING CREDIT AGREEMENT

EXHIBIT 10.1

THIRD AMENDMENT TO

WAREHOUSING CREDIT AGREEMENT

THIS THIRD AMENDMENT TO WAREHOUSING CREDIT AGREEMENT (the “Third Amendment”) is made and entered into as of the 18th day of December, 2009, and is to be effective as of the 29th day of December, 2009, by and among (i) HOME LOAN CENTER, INC. D/B/A LENDINGTREE LOANS, a California corporation with its principal place of business located at 163 Technology Drive, Irvine, California 92618 (the “Company”), (ii) PNC BANK, NATIONAL ASSOCIATION, successor to NATIONAL CITY BANK, a national banking association with an office located at 101 South Fifth Street, Louisville, Kentucky 40202 (“PNC” or the “Bank”), and (iii) PNC BANK, NATIONAL ASSOCIATION, successor to NATIONAL CITY BANK, a national banking association with an office located at 101 South Fifth Street, Louisville, Kentucky 40202, its capacity as Agent for the hereinafter defined Banks (in such capacity, the “Agent”).

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

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

B.            The Company, the Agent and the Bank are willing to and desire to amend the Existing Credit Agreement in order to (i) extend the stated Termination Date to April 30, 2010; provided however, no Advances shall be requested by the Company or funded by the Agent and the Bank from and after the close of business on March 31, 2010,  (ii) modify the maximum principal amount of the Warehouse Line and the Total Warehouse Line Commitment to, as applicable, (a) Fifty Million Dollars ($50,000,000.00) to and until the close of business on January 14, 2010, (b) Forty Million Dollars ($40,000,000.00) from  January 15, 2010 to and until the close of business on February 14, 2010,  and (c) Thirty-Five Million Dollars ($35,000,000.00) from and after February 15, 2010, provided however, no Advances shall be requested by the Company or funded by the Agent and the Bank from and after the close of business on March 31, 2010, (iii) delete the Jumbo Loan Advance Sublimit and remove Jumbo Loans as Eligible Collateral thereunder, (iv) modify the definitions of Collateral Value and Eligible Collateral, (v) modify the interest rates applicable to the Warehouse Line, and (vi) implement certain other modifications thereto.

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

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

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

“Collateral Value” shall mean as of any date:

(a)           With respect to a Loan which constitutes Eligible Collateral on such date, the lesser of (i) ninety-nine percent (99%) of the face amount of the promissory note evidencing such Loan, or (ii) ninety-eight percent (98%) of the purchase price under the Commitment to which the applicable Loan has been assigned; and

Notwithstanding anything contained in (a) to the contrary:

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

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

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

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

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

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

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

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

“Eligible Collateral” shall mean, collectively and as of any date, [A] each Loan (i) which is a Conforming Loan, Government Loan or a Wet Loan, (ii) which is not an Aged Loan, (iii) which constitutes Collateral, (iv) which no default has occurred and is continuing on such Loan, (v) which is pledged as Collateral within thirty (30) calendar days of origination purchase or conversation, (vi) which has no principal/interest payment past due, (vii) which has not been under Trust Receipt in accordance with the terms of the Security Agreement for more than the maximum number of days allowed under the Security Agreement,

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(viii) which has not been shipped to an Approved Investor for more than the maximum number of days allowed by the Security Agreement and no purchase proceeds have been received by the Agent, (ix) in respect of which the loan-level representations, warranties and agreements contained in the Credit Agreement and the Security Agreement are true and correct, and (x) which is subject to a Firm Commitment or Standby Commitment; and [B] each Loan (i) that is a Discretionary Loan (as defined in Section 9.20 hereof) without duplication, (ii) that constitutes Collateral, and (iii) that is not subject to any lien or security interest other than that granted under the Credit Agreement and the Security Agreement.  “Stated Income/Stated Asset Loans” and “Option ARM Loans” are not permitted to be funded under the Warehouse Line and shall not constitute Eligible Collateral under this Credit Agreement.

“Maturity Date” shall mean April 30, 2010; provided, however, the Company acknowledges and agrees that no Advances of any type shall be requested by the Company or funded by the Agent or the Bank under this Credit Agreement from and after the close of business on March 31, 2010.

“Total Warehouse Line Commitment” shall mean the total aggregate principal amount of all Warehouse Line Commitments as determined from time to time in accordance with the provisions of Article 2 and Article 11 of this Credit Agreement, and shall mean the principal amount of, as applicable, either (i) Fifty Million Dollars ($50,000,000.00) to and until the close of business on January 14, 2010, (ii) Forty Million Dollars ($40,000,000.00) from January 15, 2010 to and until the close of business on February 14, 2010, and (iii) Thirty-Five Million Dollars ($35,000,000.00) from and after February 15, 2010; provided, however, the Company acknowledges and agrees that no Advances of any type shall be requested by the Company or funded by the Agent or the Bank from and after the close of business on March 31, 2010.

“Warehouse Line” shall mean the line of credit established by the Agent and the Banks in favor of the Company under Article 2 of this Credit Agreement in the maximum principal amount, as applicable, either (i) Fifty Million Dollars ($50,000,000.00) to and until the close of business on January 14, 2010, (ii) Forty Million Dollars ($40,000,000.00) from January 15, 2010 to and until the close of business on February 14, 2010, and (iii) Thirty-Five Million Dollars ($35,000,000.00) from and after February 15, 2010; provided, however, the Company acknowledges and agrees that no Advances of any type shall be requested by the Company or funded by the Agent or the Bank from and after the close of business on March 31, 2010.

“Warehouse Notes” shall mean, collectively, (i) that certain Amended and Restated Warehouse Promissory Note dated as of December 29, 2009, made by the Company, payable to the order of National City, in the face principal amount of Fifty Million Dollars ($50,000,000.00), a form of which is attached hereto as Exhibit C-1, as the same may hereafter be amended, modified, renewed, replaced and/or restated from time to time,  and (ii) when executed and delivered, any such additional Warehouse Promissory Note substantially in the form of Exhibit C-1 attached hereto, made by the Company, payable to the order of any respective Applicant Financial Institution as shall be added as a “Bank” hereunder and in the face principal amount of such Applicant Financial Institution’s Warehouse Line Commitment, as the same may thereafter be amended, modified, renewed, replaced and/or restated from time to time.

3.             Article 1 of the Existing Credit Agreement is hereby further amended by deleting thereform, each of the following defined terms:  “Jumbo Advance”, “Jumbo Advance Sublimit”, and “Jumbo Loan”, and the Existing Credit Agreement and each of the other Loan Documents are hereby further amended by deleting each reference to such terms in their entirety.

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

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“2.1         Warehouse Advances. Each Bank severally agrees to lend to the Company, and the Company agrees to borrow from each Bank, on the terms and conditions of this Credit Agreement, an aggregate amount not exceeding such Bank’s respective Warehouse Line Commitment, and the aggregate amount of all such Warehouse Line Commitments shall equal the Total Warehouse Line Commitment; provided, however the Total Warehouse Line Commitment includes a Wet Advance Sublimit.  Subject to the terms and conditions contained herein, Warehouse Advances may be repaid until the Termination Date; provided, however, the Company acknowledges and agrees that no Advances of any type shall be requested by the Company or funded by the Agent or the Bank under this Credit Agreement from and after the close of business on March 31, 2010.  Each Bank’s commitment to make Warehouse Advances under this Section 2.1 is herein called its “Warehouse Line Commitment” and is set forth opposite its name in Schedule 2.1 attached to this Credit Agreement and the aggregate maximum amount of the Warehouse Line Commitments is herein called the “Total Warehouse Line Commitment”. The Total Warehouse Line Commitment shall be equal to, as applicable, (i) Fifty Million Dollars ($50,000,000.00) to and until the close of business on January 14, 2010, (ii) Forty Million Dollars ($40,000,000.00) from  January 15, 2010 to and until the close of business on February 14, 2010, or (iii) Thirty-Five Million Dollars ($35,000,000.00) from and after February 15, 2010; provided, however, the Company acknowledges and agrees that no Advances of any type shall be requested by the Company or funded by the Agent or the Bank under this Credit Agreement from and after the close of business on March 31, 2010 and shall be available to the Company as Warehouse Advances, Excess Advances and Swing Advances, subject to the terms and conditions hereof.

Notwithstanding the foregoing, the Banks shall not be obligated to make a Warehouse Advance which, (a) when added to the sum of the Aggregate Outstanding Warehouse Balance plus the Aggregate Outstanding Excess Balance, would cause the Aggregate Outstanding Warehouse Balance plus the Aggregate Outstanding Excess Balance to exceed the Warehouse Borrowing Base at such time; (b) when added to the sum of the Aggregate Outstanding Warehouse Balance plus the Aggregate Outstanding Excess Balance, would cause or result in a violation of the financial covenants set forth in Article 5 hereof; (c) if such Warehouse Advance is a Wet Advance, when added to the aggregate outstanding balance of all Wet Advances would cause or result in a violation of the Wet Advance Sublimit; or (d) if such Warehouse Advance would cause or result in the Aggregate Outstanding Warehouse Balance plus the Aggregate Outstanding Excess Balance to exceed the Total Warehouse Line Commitment.  The Agent and the Banks shall not be obligated to honor any Request for Advance if the disbursement of funds thereunder would occur after the close of business on March 31, 2010, or if an Event of Default has occurred and is continuing or if such disbursement would cause or result in an Event of Default or an Unmatured Event of Default.”

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

“2.8         Rates of Interest.

(a)           Applicable Rates of Interest.  With respect to all Advances, the Swing Note and the Warehouse Notes shall bear interest at the following rates of interest, as applicable:  (a) the per annum rate equal to LIBOR plus two and one-half of one percent (2.50%) for that portion of the aggregate outstanding principal balance of  each Warehouse Note of each Bank which is not a Balance Funded Bank and for that portion of the aggregate outstanding principal balance of the Balance Funded Bank’s Warehouse Note and the Swing Note which exceeds the Average Monthly Available Deposits maintained by the Company with the Balance Funded Bank, and (b) the per annum rate equal to two and three-quarters of one percent (2.75%) for that portion of the aggregate outstanding principal balance of the Warehouse Note payable to the Balance

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

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

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

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

7.             The Existing Credit Agreement is hereby amended by amending and restating Exhibits A and C-1 and Schedule 6.1 thereof to read in their entirety as set forth on Exhibits A and C-1 and Schedule 6.1 attached to this Third Amendment and made a part hereof by this reference.

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

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

10.           The Company further represents and warrants that there have been no changes made to the Certificate of Incorporation or Bylaws of the Company since December 12, 2008.

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

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

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

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

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

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

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