FOURTH MODIFICATION AGREEMENT AND COVENANT WAIVER
Exhibit 10.1
FOURTH
MODIFICATION AGREEMENT AND COVENANT WAIVER
This
Fourth Modification Agreement and Covenant Waiver (this “Agreement”) is made
as of July 1, 2008 but effective June 30, 2008 (the “Effective Date”), by
and between VINEYARD NATIONAL BANCORP, a California corporation (“Borrower”) and FIRST
TENNESSEE BANK NATIONAL ASSOCIATION (“Lender”). Unless
otherwise set forth herein, all capitalized terms used herein shall have the
meaning given such terms in the Loan Documents (defined below).
WHEREAS, in connection with a loan from
Lender to Borrower in the original principal amount of $70,000,000.00, with a
current outstanding principal loan balance of $48,300,000.00 (the “Loan”), the Borrower
executed and delivered to Lender that certain Amended and Restated Promissory
Note (“Note”)
dated March 29, 2007, that certain Loan Agreement (“Loan Agreement”),
that certain Pledge Agreement together with Addendum to Pledge
Agreement (collectively the “Pledge”), each dated
as of March 17, 2006, that certain Modification Agreement effective as of May
11, 2006 (“First
Modification”), that certain Second Modification Agreement and Covenant
Waiver effective as of March 29, 2007 (“Second Modification”)
and that certain Third Modification Agreement and Covenant Waiver effective as
of March 15, 2008 (“Third Modification”)
(this Agreement, the Note, the Loan Agreement, the Pledge, the First
Modification, the Second Modification, the Third Modification and any other
documents executed by Borrower in connection with the Loan are collectively
herein referred to as the “Loan
Documents”);
WHEREAS, Borrower desires to extend the
maturity date of the Loan through August 29, 2008;
WHEREAS, Borrower has requested that
Lender extend the Waivers (as defined in the Third Modification) through and
including August 29, 2008 (the “Existing
Waivers”);
WHEREAS, Borrower acquired (i) 1031
Exchange Advantage, Inc., a California corporation and (ii) 1031 Funding and
Reverse Corp., a California corporation in December, 2007, and has requested
that Lender grant a waiver of Section 3.8 in the Loan Agreement as to such
acquisitions (the “Subsidiary Waiver”;
the Existing Waivers and Subsidiary Waiver are collectively referred to as the
“Waivers”);
WHEREAS,
subject to the terms and conditions contained herein, Lender is willing to (i)
extend the Maturity Date of the Loan and (ii) grant and extend the
Waivers.
NOW,
THEREFORE, FOR MUTUAL CONSIDERATIONS, the receipt and sufficiency of which is
hereby acknowledged, the undersigned Borrower and Lender do hereby modify the
Loan Documents as follows:
1) Capitalized
Terms. Any capitalized term used but not defined herein shall
have the meaning ascribed to it in the Loan Documents. All references
to the “Loan Documents” in the Loan Agreement and any of the other Loan
Documents shall include, without limitation, this Agreement and all other such
Loan Documents, as modified by this Agreement.
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2) Extension of Maturity Date;
Waiver. Subject to Borrower’s compliance with all representations,
warranties, covenants and agreements contained in this Agreement and all the
other Loan Documents as modified hereby:
(a) Maturity
Date. The “Maturity Date” set forth in the Loan Agreement and
elsewhere in the Loan Documents is hereby modified to mean August 29, 2008 (the
“New Maturity
Date”).
(b) Waivers. Lender
hereby extends the Waivers for a period through and including the New Maturity
Date.
3) Modification of the
Note. The Note and, where applicable, the other Loan Documents
are hereby modified as follows:
a. Interest
Rate. From and after June 30, 2008 through and including the
New Maturity Date, interest shall accrue on the outstanding principal balance of
the Note at a fixed annual rate equal to the LIBOR Rate, as hereinafter defined,
plus three hundred fifty (350) basis points (LIBOR Rate + 3.50%). As used
herein, the term "LIBOR Rate" refers to the sixty (60) day London Interbank
Offered Rate, as determined by Lender in its sole (but reasonable)
discretion. The LIBOR Rate shall be determined by Lender as of June
30, 2008 (or, if such date is not a business day, then on the next preceding
business day). Interest shall be calculated on the basis of a 360 day
year and the actual number of calendar days elapsed. Notwithstanding
anything else in this instrument to the contrary, in no event shall the maximum
rate of interest payable in respect to the indebtedness evidenced hereby exceed
the maximum rate of interest allowed to be charged by applicable
law.
b. Payment
Schedule. Said principal and accrued interest thereon shall be
due and payable as hereinafter set forth:
i) Concurrently
with Borrower’s execution hereof, Borrower shall pay to Lender:
(1) all
accrued and unpaid interest due on the Loan through and including June 30, 2008,
in the amount of Eight Hundred Twenty Eight Thousand Four Hundred Thirty Two
Dollars and 72/100 ($828,432.72); and
(2) Four
Hundred Ninety Five Thousand One Hundred Seventy Five Dollars and 63/100
($495,175.63) as prepayment of (and to be credited against) interest on the Loan
at the aforesaid rate, as and when such interest accrues, for the period
beginning July 1, 2008; provided, that if a Termination Event, defined below,
occurs prior to the New Maturity Date, then any portion of such prepayment that
remains uncredited at the time of such Termination Event shall, at Lender’s sole
option, be applied to the outstanding principal balance of the
Loan.
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ii) On the
New Maturity Date the entire outstanding principal balance of the Loan, any
accrued and unpaid interest thereon, and all incurred fees shall be due and
payable without demand.
c. No New
Advances. Borrower may not reborrow any sums repaid under the
Loan, and Lender has no obligation to advance any new loan proceeds under the
Loan.
4) Conditions of Extension of
Maturity Date;
Waiver. Lender’s agreement to extend the Maturity Date and Waivers
is conditioned upon and subject to the timely satisfaction by Borrower of each
of the following conditions (collectively the “Conditions of
Modification”):
a. Correctness and
Warranties. Except as expressly modified or waived herein, all
representations and warranties made by Borrower to Lender under this Agreement
and the other Loan Documents (including without limitation all of Borrower’s
representations and warranties set forth in Sections 3.5 and 3.9 of the Loan
Agreement) are and shall remain true and correct through and including the New
Maturity Date and payment in full of the Loan.
b. No Defaults
Hereunder. Borrower shall not breach any promise or covenant
contained in this Agreement and shall not be in default under any provision
of this Agreement or the other Loan Documents (except with respect to the
Waivers, as waived hereby).
5) Termination
Events. Each of the following shall constitute a Termination
Event and an Event of Default under this Agreement and all other Loan Documents
without any further cure or grace period, notwithstanding anything to the
contrary in the Loan Documents (each, a “Termination
Event”):
a. Conditions of Modification;
Compliance. If Borrower shall fail to comply in a timely
manner with any of the Conditions of Modification set forth above.
b. Bankruptcy. If
Borrower shall become a debtor in bankruptcy by means of either a voluntary or
involuntary petition.
c. Receivership;
Insolvency. If any kind of receivership or insolvency
proceeding is commenced by or against Borrower.
6) New Maturity Date;
Acceleration of Loan. Borrower agrees that the Loan
automatically, and without notice, shall be immediately all due and payable in
full upon the earlier of:
a. New
Maturity Date; or
b. The
occurrence of any Termination Event, as defined above.
The entire amount of the Loan,
including all accrued and unpaid interest, shall be immediately due and payable
upon the earlier to occur of the New Maturity Date or the occurrence of any
Termination Event, and Lender shall be entitled immediately to exercise all of
its rights and remedies under the Loan Documents, all without further notice to
Borrower.
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7) Representations, Warranties
and Covenants. As an inducement to Lender to enter into this
Agreement, Borrower makes the following representations, warranties and
covenants:
a. Enforceability. The
Loan, this Agreement, and all the other Loan Documents are fully
enforceable, and the Loan is not subject to any defense or counterclaim or any
claim of setoff or recoupment by Borrower.
b. Representation by
Counsel. Borrower has been represented by, or advised to consult
with, counsel in connection with the negotiation and execution of this
Agreement; this Agreement represents an arms-length transaction; and Borrower
has acted in good faith in the making of this Agreement.
c. Consents. The
execution and performance of this Agreement by Borrower does not and will not
violate any agreement to which Borrower is a party, and the execution and
performance of this Agreement by Borrower does not require the consent of any
third party, or if the consent of a third party is required, such consent has
been previously obtained by Borrower.
d. Sale of
Assets. Through and including the New Maturity Date, Borrower
will not dispose of any of its property outside the ordinary course of business
or as otherwise provided for in this Agreement.
e. New
Debt. Through and including the New Maturity Date, Borrower
will not incur any additional debt except for unsecured trade debt incurred in
the ordinary course of business without the prior written consent of Lender in
its sole and absolute discretion.
f. Impairment. Borrower
will take no action which would impair its ability to perform its obligations
hereunder or to satisfy any of the Conditions of Modification.
g. Extension
Fee. Concurrently with Borrower’s execution hereof, Borrower shall
pay (i) Lender a fee of one-quarter of one percent (1/4%) of the current
outstanding $48,300,000.00 principal balance of the loan, or $120,750.00, and
(ii) Lender’s attorneys fees in connection herewith in the amount of
$3,500.00.
8) Further
Assurances. At any time and from time to time after the date
of this Agreement, at the request of Lender, Borrower shall, without further
consideration, and at Borrower’s sole expense, execute and deliver such
documents and instruments, and take such actions, as Lender may deem necessary
(a) to perfect any of Lender’s security interests or liens granted in any of the
Loan Documents, and/or (b) to carry out the purposes and intentions of this
Agreement and the Loan Documents.
9) Effectiveness of the
Loan. This Agreement shall not constitute a novation of any of
the other Loan Documents, and all the Loan Documents shall survive the execution
of this Agreement and remain in full force and effect subject only to the
Waivers as set forth herein and to any express modifications thereto as herein
provided. The lien and security interest on the Collateral granted
pursuant to the Pledge is hereby extended, and the lien and security interest on
the Collateral shall continue to secure the remaining amounts outstanding in
respect of all indebtedness that may be due and owing pursuant to the terms of
the Loan Documents, including without limitation principal and interest on all
amounts loaned pursuant to the Note. There are no oral representations or
assurances from Lender to Borrower which survive the execution of this
Agreement.
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10) Release and
Waiver. Borrower hereby acknowledges and stipulates that it
has no claims or causes of action of any kind whatsoever against
Lender. Borrower represents that it is entering into this Agreement
freely, and with the advice of counsel as to its legal
alternatives. Borrower hereby releases Lender from any and all
claims, causes of action, demands and liabilities of any kind whatsoever whether
direct or indirect, fixed or contingent, liquidated or unliquidated, disputed or
undisputed, known or unknown, which Borrower has or may acquire in the future
relating in any way to any event, circumstance, action or failure to act to the
date of this Agreement. The release by Borrower herein, together with
the other terms and provisions of this Agreement, is executed by Borrower
advisedly and without coercion or duress from Lender, Borrower having determined
that the execution of this Agreement, and all its terms and provisions are in
Borrower's economic best interest.
11) No Obligation to Extend; No
Waiver. Borrower acknowledges and agrees that Lender is not
obligated and does not agree to any additional extensions of the New Maturity
Date or any further Waivers except as expressly set forth
herein. Except as expressly provided herein as to the New Maturity
Date and the Waivers, (i) this Agreement shall not constitute a waiver by Lender
of any defaults under the Loan Documents, (ii) Lender reserves all of its rights
and remedies under the other Loan Documents, and (iii) all of the Loan Documents
are in all respects confirmed, ratified and approved and are in full force and
affect as of the date hereof. No action or course of dealing on the
part of Lender, its officers, employees, consultants, or agents, nor any failure
or delay by Lender with respect to exercising any right, power or privilege of
Lender under the Loan Documents or this Agreement, shall operate as a waiver
thereof, except to the extent expressly provided herein.
12) Costs and
Expenses. Borrower agrees to pay on demand all out-of-pocket
costs and expenses of Lender, including the fees and out-of-pocket expenses of
counsel for Lender, in connection with the administration, enforcement, or
protection of Lender's rights under this Agreement and/or the Note and other
Loan Documents.
13) Governing
Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Tennessee.
14) Amendments. This
Agreement cannot be amended, rescinded, supplemented or modified except in
writings signed by the parties hereto.
15) Entire
Agreement. This Agreement contains the entire agreement of the
parties and supersedes any other discussions or agreements relating to the
subject of this Agreement.
16) Time of the
Essence. TIME
IS OF THE ESSENCE OF THIS AGREEMENT.
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17) Counterpart Signature
Pages. This Agreement may be executed in one or more
counterparts and may be delivered by facsimile or electronic mail, each of which
shall be deemed an original and all of which together shall constitute one and
the same instrument.
[Signatures
on Following Page]
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COUNTER
PART SIGNATURE PAGE TO
FOURTH
MODIFICATION AGREEMENT AND COVENANT WAIVER
IN
WITNESS WHEREOF, the parties have executed this Agreement as of the date first
above written.
BORROWER:
a California
corporation
By: /s/
Xxxxxx Xxxx
Name: Xxxxxx
Xxxx
Title: Executive Vice President
& CFO
STATE
OF CALIFORNIA
COUNTY
OF ORANGE
Before me, Xxxxx XxXxxxxx, Notary
Public of the state and county aforesaid, personally appeared Xxxxxx Xxxx, with
whom I am personally acquainted (or proved to me on the basis of satisfactory
evidence), and who, upon oath, acknowledged himself to be Executive Vice
President/CFO (or other officer authorized to execute the instrument) of VINEYARD NATIONAL BANCORP, a
California corporation, the within named bargainor, and that he as such
Executive Vice President/CFO, executed the foregoing instrument for the purpose
therein contained, by signing the name of the corporation by himself as
Executive Vice President/CFO.
WITNESS MY HAND, at office, this 1st
day of July, 2008.
_/s/
Xxxxx McClaran___________
Notary Public
My
Commission Expires:
March 10, 2010
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COUNTER
PART SIGNATURE PAGE TO
FOURTH
MODIFICATION AGREEMENT AND COVENANT WAIVER
IN WITNESS WHEREOF, the parties have
executed this Agreement as of the date first above written.
LENDER:
FIRST TENNESSEE BANK
NATIONALASSOCIATION, a national
banking association
By: /s/
Xxxxx X.
Work
Name: Xxxxx X.
Work
Title: Executive Vice
President
STATE OF
TENNESSEE
COUNTY
OF SHELBY
Before me, Xxxxx Xxxxxx, Notary Public
of the state and county aforesaid, personally appeared Xxxxx X. Work, with whom
I am personally acquainted (or proved to me on the basis of satisfactory
evidence), and who, upon oath, acknowledged himself to be Executive Vice
President (or other officer authorized to execute the instrument) of First
Tennessee Bank National Association, a national banking association, the within
named bargainor, and that he as such Executive Vice President, executed the
foregoing instrument for the purpose therein contained, by signing the name of
the national banking association by himself as Executive Vice
President.
WITNESS MY HAND, at office, this 30th
day of June, 2008.
_/s/ Carly
Wilson____________________
Notary Public
My
Commission Expires:
February
23, 2011
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CERTIFICATE
OF SECRETARY OF
I, Xxxxxx Xxxxxxx, Xx., being the duly
appointed, qualified and acting Secretary of VINEYARD NATIONAL BANCORP, a
California corporation (the “Company”), DO HEREBY
CERTIFY that I am charged with the duty of keeping and having official custody
of the minutes and records of the Company.
I do further certify that attached
hereto a collective Exhibit “A” is a true
and correct copy of the resolutions adopted by written consent of the Directors
of VINEYARD NATIONAL BANCORP, and that all such resolutions and instruments
remain in effect, without change, to the date hereof.
IN WITNESS WHEREOF, I have
hereunto subscribed my name as Secretary.
DATED: June 30, 2008
/s/ Xxxxxx
Xxxxxxx
Xxxxxx
Xxxxxxx, Xx., Secretary of Vineyard National Bancorp
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LOAN
MODIFICATION RESOLUTION
RESOLVED, that it is in the
best interests of the Company to modify a certain loan transaction between, on
the one hand, the Company, acting on its own behalf as borrower, and on the
other hand, FIRST TENNESSEE BANK NATIONAL ASSOCIATION, a national banking
association, as lender, for a $70,000,000.00 loan originally made on March 17,
2006 (the “Loan”), for the
purpose of (i) extending the maturity date of the Loan until August 29, 2008
(“Maturity Date
Extension”), and (ii) granting and extending certain covenant Waivers, as
more particularly defined and described in that certain Fourth Modification
Agreement and Covenant Waiver of even date (collectively, the Maturity Date
Extension and the Waivers are referred to as the “Modification”).
FURTHER RESOLVED, that the
President or other officers of the Company, be, and each is hereby authorized,
empowered, and directed, for and on behalf of this Company, to sign and execute
said Fourth Modification Agreement and Covenant Waiver and any other such
agreements, certificates, instruments and documents of any kind and nature, and
to take any action that, in his or their discretion, may be necessary or
appropriate to consummate the Modification.
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