LOAN MODIFICATION AGREEMENT
This Loan Modification Agreement entered into this 30TH day of
November, 1998, is by and between Xxxxxxx-Xxxxxx, Inc., a Delaware corporation
(the "Company"), and FBR Asset Investment Corporation, a Virginia corporation
(the "Investor").
RECITALS
Reference is made to the Loan and Warrant Agreement, dated June 3,
1998, by and between the Company and the Investor (the "Original Agreement").
Pursuant to the Original Agreement, the Company has borrowed $10,000,000 from
the Investor and has issued to the Investor the Company's promissory note dated
June 3, 1998 (the "Promissory Note") to evidence the indebtedness. Capitalized
terms used herein and not otherwise defined shall have the meaning assigned to
them in the Original Agreement.
Under the terms of Original Agreement and the Promissory Note, all
outstanding principal and interest accrued and unpaid is due and payable at the
close of business or the first to occur of (i) a Public Offering and (ii)
December 3, 1998. The Company desires to extend the maturity date of the
Promissory Note and the Investor is willing to grant an extension on the terms
and conditions set forth herein.
Now, therefore, in consideration of the premises, the parties agree as
follows:
Agreement
1. Payment of Principal and Interest on December 3, 1998. Before the
close of business on December 3, 1998, the Company shall pay the Investor all
interest accrued and unpaid on the Promissory Note through December 3, 1998 and
principal in the amount necessary to reduce the outstanding principal amount of
the Promissory Note on December 3, 1998 to $7,500.000.
2. Promissory Note Modification. On December 3, 1998 (the "New Closing
Date") the Company will execute and deliver to the Investor a new promissory
note in the form of Exhibit A hereto (the "New Promissory Note") in exchange for
the delivery by the Investor to the Company of the Promissory Note marked
canceled. Principal and interest on the New Promissory Note shall be payable as
provided therein.
3. Commitment Fee. In consideration for the extension, the Company
shall pay the Investor a commitment fee of $37,500 on the execution and delivery
of this Loan Modification Agreement.
4. Representations and Warranties of the Company. The Company
represents and warrants that:
4.1. Financial Statements. The Company has furnished to the
Investor balance sheets of the Company and its consolidated subsidiaries as of
September 30, 1998 and 1997, and statements of income and statements of income
and cash flows of the Company and its consolidated subsidiaries for the
three-month periods ended September 30, 1998 and 1997, with all appropriate
footnotes, certified by the President and the chief financial officer of the
Company. Such balance sheets of the Company fairly present the condition of the
Company and its consolidated subsidiaries as at the respective dates indicated,
and in each case reflect all liabilities, contingent or other, as at the
respective dates indicated. All such financial statements have been prepared in
accordance with generally accepted accounting principles consistently applied.
4.2. Indebtedness. Neither the Company nor any subsidiary of the
Company has any indebtedness for borrowed money except (i) as shown in Exhibit
__ and, (ii) non-recourse indebtedness incurred in connection with the
acquisition of assets in the ordinary course of business, and (iii) indebtedness
to the Investor.
4.3. Changes, etc. Except as listed in Exhibit B, since December
31, 1997, there has been no material adverse change in the business or financial
condition of the Company and its consolidated subsidiaries.
5. Conditions to Closing. The Investor's obligation to deliver the
Promissory Note marked canceled to the Company is subject to the fulfillment to
the Investor's reasonable satisfaction of the following conditions:
5.1. Representations and Warranties Correct. Except as may be set
forth in Exhibit B, the representations and warranties of the Company made
herein and in the Original Agreement shall be correct in all material respects
at and as of the New Closing Date as if made on and as of the New Closing Date,
except as affected by the transactions contemplated hereby.
5.2. Performance. The Company shall have performed and complied
with all agreements and conditions contained herein required to be performed or
complied with by it before or at the New Closing Date.
5.3. Proceedings and Documents. All corporate and other
proceedings in connection with the transactions contemplated by this Agreement
and all documents and instruments incident to such transactions shall be
satisfactory in substance and form to the Investor and the Investor's counsel,
and the Investor or the Investor's counsel shall have received all such
counterpart originals or certified or other copies of such documents as the
Investor or they may reasonably request.
5.4. Compliance Certificate. The Investor shall have received an
Officer's Certificate, dated as of the New Closing Date, certifying that the
conditions specified in Sections 5.1 and 5.2 have been fulfilled.
5.5. Opinion of Company Counsel. The Investor shall have received
from White & Case, counsel for the Company, a favorable opinion, dated as of the
New Closing Date and satisfactory in scope and form to the Investor and the
Investor's counsel, in substantially the form attached hereto as Exhibit C. Such
opinion shall also cover such other matters incident to the transactions
contemplated hereby as the Investor or its counsel may reasonably request.
6. Original Agreement Confirmed. Except as modified hereby, the
agreements, terms and provisions of the Original Agreement shall remain in full
force and effect.
IN WITNESS WHEREOF, the Parties have caused this Agreement to be duly
executed and delivered as of the day and year first written above.
THE COMPANY: XXXXXXX-XXXXXX, INC.
By: /s/ Xxxxxxx Xxxx
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Name: Xxxxxxx Xxxx
Title: Executive VP, CFO
THE INVESTOR: FBR ASSET INVESTMENT CORPORATION
By:__________________________
Name:________________________
Title:_______________________
EXHIBIT __
Schedule of Corporate Indebtedness
(After FBR Paydown)
Lender Debt Comments
EastWest Bank (Xxxxxxx-Xxxxxx L.O.C.) $22,000,000} Current outstanding approx. $800,000
EastWest Bank (Xxxxxxx- Xxxxxx Properties L.O.C.) 1,000,000}
FBR 7,500,000
Hawthorne Savings 4,000,000
Old Republic Life 2,200,000} Residential financing to be repaid within 9 months
Tokal Bank 1,300,000}
National Bank of California (Westlake) 1,800,000}
CLCA (Vista Paseo) 800,000}
Century Bank (Xxxx Homes) 900,000}
Diachi Kangyo Bank 300,000} Current outstanding for our Japanese
Sumitomo Bank 300,000} subsidiaries lines of credit approx.
Tokyo-Mitsubishi 300,000} $200,000
Colony-KW LLC Subordinated Debt 21,000,000} Already consented to by FBR
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Total: $63,400,000
Exhibit A
Promissory Note
$7,500,000 December 3, 1998
FOR VALUED RECEIVED, the undersigned, XXXXXXX-XXXXXX, INC., a Delaware
corporation ("the Company"), hereby promises to pay to the order of FBR ASSET
INVESTMENT CORPORATION, a Virginia corporation (the "Lender"), or to order, the
principal sum of SEVEN MILLION FIVE HUNDRED THOUSAND DOLLARS ($7,500,000), or so
much thereof as shall have been advanced to the Company by the Lender as line of
credit loans and remain unpaid under the provisions of the Loan and Warrant
Agreement (as hereafter defined), whichever is less, in lawful money of the
United States of America, together with interest on the unpaid principal balance
from day-to-day remaining computed from the date hereof until Maturity at the
rate of 17% per annum (the "Interest Rate").
1. This Note is issued pursuant to the Loan and Warrant Agreement
dated June 3, 1998, between the Company and the Lender as amended by a Loan
Modification Agreement dated November __, 1998 (the "Loan and Warrant
Agreement").
2. For purposes of calculating interest accrued hereon at the Interest
Rate, interest on this Note shall be calculated on the basis of the actual days
elapsed over a 365- or 366-day year, as the case may be.
Principal and accrued interest on this Note, computed as aforesaid,
shall be due and payable as follows:
(a) principal shall be payable at Maturity,
(b) interest at the rate of 13% per annum shall be payable monthly on
the last day of each month until Maturity, commencing December 31, 1998,
and
(c) interest at the rate of 4% per annum shall be accrued monthly and
added on the last day of each month, commencing December 31, 1998, to
principal amount of this Note on which interest accrues.
3. For purposes hereof, "Maturity" means the first to occur of (i) the
closing of a public offering of common stock by the Company and (ii) June 3,
1999, the date on which all outstanding principal and accrued but unpaid
interest is due under this Note.
4. Should the principal of, or any installment of the principal or
interest on, this Note become due and payable on any day other than a business
day, the maturity thereof shall be extended to the next succeeding business day
and interest shall be payable with respect to such extension. Payments made to
the Lender by the Company hereunder shall be applied first to accrued interest
and then to principal.
5. Except as herein provided, the Company waives demand for payment,
presentment, protest, notice of protest and non-payment, or other notice of
default, notice of acceleration and intention to accelerate, and agrees that its
liability under this Note shall not be affected by any renewal or extension in
the time of payment hereof, or by any indulgences, or by any release or change
in any security for the payment of this Note, and hereby consents to any and all
renewals, extensions, indulgences, releases or changes, regardless of the number
of such renewals, extensions, indulgences, releases or changes.
6. No waiver by the Lender of any of its rights or remedies hereunder
or under any other document evidencing or securing this Note or otherwise shall
be considered a waiver of any other subsequent right to remedy of the Lender; no
delay or omission in the exercise or enforcement by the Lender of any rights or
remedies shall ever be construed as a waiver of any right or remedy of the
Lender; and no exercise or enforcement of any such rights or remedies shall ever
be held to exhaust any right or remedy of the Lender.
7. An "Event of Default" for the purposes of this Note shall mean any
Event of Default as defined in Section 8 of the Loan and Warrant Agreement. Upon
the occurrence of any Event of Default, the holder hereof may, at its option,
declare the entire unpaid balance of principal and accrued interest on this Note
to be immediately due and payable; provided, however, that with respect to any
Event of Default set forth in Section 8(a)(7) of the Loan and Warrant Agreement,
such Event of Default will automatically cause the principal and accrued
interest on this Note to become immediately due and payable.
8. The Company may prepay its obligation pursuant to this Note at any
time by tendering to the Lender the then outstanding principal balance hereof,
together with accrued but unpaid interest.
9. Notwithstanding anything contained in this Note to the contrary,
the Lender shall never be deemed to have contracted for or be entitled to
receive, collect or apply as interest on this Note any amount in excess of the
amount permitted and calculated at the Maximum Rate (defined below), and, in the
event the Lender ever receives, collects or applies as interest any amount in
excess of the amount permitted and calculated at the Maximum Rate, such
amount which would be excessive interest shall be applied to the reduction of
the unpaid principal balance of this Note, and, if the principal balance of
this Note is paid in full, any remaining excess shall forthwith be paid to
the Company.
The term "Maximum Rate," as used herein, shall mean, with respect to
the holder hereof, the maximum nonusurious interest rate, if any, that at any
time, or from time to time, may be contracted for, taken, reserved, charged, or
received on the indebtedness evidenced by this Note under the laws which are
presently in effect of the United States and the State of New York applicable to
such holder and such indebtedness or, to the extent permitted by applicable law,
under such applicable laws of the United States and the State of New York which
may hereafter be in effect and which allow a higher maximum nonusurious interest
rate than applicable laws now allow.
10. This Note is being executed and delivered, and is intended to be
performed in the State of New York. Except to the extent that the laws of the
United States may apply to the terms hereof, the substantive laws of the State
of New York shall govern the validity, construction, enforcement and
interpretation of this Note.
11. If this Note is placed in the hands of an attorney for collection,
and if it is collected through any legal proceedings at law or in equity or in
bankruptcy, receivership or other court proceedings, the Company promises to pay
all costs and expenses of collection including, but not limited to, court costs
and the reasonable attorneys' fees of the holder hereof.
The address for the Company for all purposes contained in this Note
and for the notices hereunder shall be: 000 Xxxxxxxx Xxxxxxxxx, #000, Xxxxx
Xxxxxx, Xxxxxxxxxx 00000.
The address of the Lender for all purposes contained in this Note
and for all notices hereunder shall be: 0000 Xxxxxxxxxx Xxxxxx, Xxxxx,
Xxxxxxxxx, Xxxxxxxx 00000.
Executed as of the day and year first above written.
XXXXXXX-XXXXXX, INC.
By:
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Name:
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Title:
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Promissory Note
$7,500,000 December 3, 1998
FOR VALUED RECEIVED, the undersigned, XXXXXXX-XXXXXX, INC., a Delaware
corporation ("the Company"), hereby promises to pay to the order of FBR ASSET
INVESTMENT CORPORATION, a Virginia corporation (the "Lender"), or to order, the
principal sum of SEVEN MILLION FIVE HUNDRED THOUSAND DOLLARS ($7,500,000), or so
much thereof as shall have been advanced to the Company by the Lender as line of
credit loans and remain unpaid under the provisions of the Loan and Warrant
Agreement (as hereafter defined), whichever is less, in lawful money of the
United States of America, together with interest on the unpaid principal balance
from day-to-day remaining computed from the date hereof until Maturity at the
rate of 17% per annum (the "Interest Rate").
1. This Note is issued pursuant to the Loan and Warrant Agreement
dated June 1998, between the Company and the Lender as amended by a Loan
Modification Agreement dated November ___, 1998 (the "Loan and Warrant
Agreement").
2. For purposes of calculating interest accrued hereon at the Interest
Rate, interest on this Note shall be calculated on the basis of the actual days
elapsed over a 365- or 366-day year, as the case may be.
Principal and accrued interest on this Note, computed as aforesaid,
shall be due and payable as follows:
(a) principal shall be payable at Maturity,
(b) interest at the rate of 13% per annum shall be payable monthly on
the last day of each month until Maturity, commencing December 31, 1998,
and
(c) interest at the rate of 4% per annum shall be accrued monthly and
added on the last day of each month, commencing December 31, 1998, to
principal amount of this Note on which interest accrues.
3. For purposes hereof, "Maturity" means the first to occur of (i) the
closing of a public offering of common stock by the Company and (ii) June 3,
1999, the date on which all outstanding principal and accrued but unpaid
interest is due under this Note.
4. Should the principal of, or any installment of the principal or
interest on, this Note become due and payable on any day other than a business
day, the maturity thereof shall be extended to the next succeeding business day
and interest shall be payable with respect to such extension. Payments made to
the Lender by the Company hereunder shall be applied first to accrued interest
and then to principal.
5. Except as herein provided, the Company waives demand for payment,
presentment, protest, notice of protest and non-payment, or other notice of
default, notice of acceleration and intention to accelerate, and agrees that its
liability under this Note shall not be affected by any renewal or extension in
the time of payment hereof, or by any indulgences, or by any release or change
in any security for the payment of this Note, and hereby consents to any and all
renewals, extensions, indulgences, releases or changes, regardless of the number
of such renewals, extensions, indulgences, releases or changes.
6. No waiver by the Lender of any of its rights or remedies hereunder
or under any other document evidencing or securing this Note or otherwise shall
be considered a waiver of any other subsequent right to remedy of the Lender; no
delay or omission in the exercise or enforcement by the Lender of any rights or
remedies shall ever be construed as a waiver of any right or remedy of the
Lender; and no exercise or enforcement of any such rights or remedies shall ever
be held to exhaust any right or remedy of the Lender.
7. An "Event of Default" for the purposes of this Note shall mean any
Event of Default as defined in Section 8 of the Loan and Warrant Agreement. Upon
the occurrence of any Event of Default, the holder hereof may, at its option,
declare the entire unpaid balance of principal and accrued interest on this Note
to be immediately due and payable; provided, however, that with respect to any
Event of Default set forth in Section 8(a)(7) of the Loan and Warrant Agreement,
such Event of Default will automatically cause the principal and accrued
interest on this Note to become immediately due and payable.
8. The Company may prepay its obligation pursuant to this Note at any
time by tendering to the Lender the then outstanding principal balance hereof,
together with accrued but unpaid interest.
9. Notwithstanding anything contained in this Note to the contrary,
the Lender shall never be deemed to have contracted for or be entitled to
receive, collect or apply as interest on this Note any amount in excess of the
amount permitted an calculated at the Maximum Rate (defined below), and, in the
event the Lender ever receives, collects or applies as interest any amount in
excess of the amount permitted and calculated at the Maximum Rate, such amount
which would be excessive interest shall be applied to the reduction of the
unpaid principal balance of this Note, and, if the principal balance of this
Note is paid in full, any remaining excess shall forthwith be paid to the
Company.
The term "Maximum Rate," as used herein, shall mean, with respect to
the holder hereof, the maximum nonusurious interest rate, if any, that at any
time, or from time to time, may be contracted for, taken, reserved, charged, or
received on the indebtedness evidenced by this Note under the laws which are
presently in effect of the United States and the State of New York applicable to
such holder and such indebtedness or, to the extent permitted by applicable law,
under such applicable laws of the United States and the State of New York which
may hereafter be in effect and which allow a higher maximum nonusurious interest
rate than applicable laws now allow.
10. This Note is being executed and delivered, and is intended to be
performed in the State of New York. Except to the extent that the laws of the
United States may apply to the terms hereof, the substantive laws of the State
of New York shall construction, enforcement and interpretation of this Note.
11. If this Note is placed in the hands of an attorney for collection,
and if it is collected through any legal proceedings at law or in equity or in
bankruptcy, receivership or other court proceedings, the Company promises to pay
all costs and expenses of collection including, but not limited to, court costs
and the reasonable attorneys' fees of the holder hereof.
The address for the Company for all purposes contained in this
Note and for the notices hereunder shall be: 000 Xxxxxxxx Xxxxxxxxx,
#000, Xxxxx Xxxxxx, Xxxxxxxxxx 00000.
The address of the Lender for all purposes contained in this Note,
and for all notices hereunder shall be: 0000 Xxxxxxxxxx Xxxxxx, Xxxxx,
Xxxxxxxxx, Xxxxxxxx 00000.
Executed as of the day and year first above written.
XXXXXXX-XXXXXX, INC.
By:
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Name:
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Title:
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