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EXHIBIT 10.3(c)
SECOND AMENDMENT AND MODIFICATION
TO LOAN AGREEMENT
This Second Amendment and Modification to Loan Agreement (the "Second
Amendment") is executed by and between NEWMARK HOMES, L.P., a Texas Limited
Partnership (the "Borrower"), acting by and through NEWMARK HOME CORPORATION,
a Nevada corporation, as the general partner of the Borrower. and COMPASS
BANK, a Texas state banking association of Xxxxxx County, Texas (the "Bank")
effective as of June 1, 1997, for the following purposes and considerations:
WHEREAS, Borrower and Bank executed and entered into that certain
Master Revolving Line of Credit Loan Agreement dated October 1, 1996,
and thereafter Borrower and Bank entered into that certain First
Amendment and Modification to Loan Agreement dated March 1, 1997,
which are incorporated herein by reference for all purposes, and which
are hereinafter referred to collectively as the "Loan Agreement". All
capitalized terms used herein shall have the same meaning as defined
in the Loan Agreement; and
WHEREAS, Borrower and Bank desire to increase the amount of the loan
from Fifteen Million and no/100 ($15,000,000.00) DOLLARS to Twenty
Million and no/100 ($20,000,000.00) DOLLARS, and to extend the loan,
and to make certain other modifications to the Loan Agreement, such
modification and amendment to be subject to all of the other terms,
conditions, provisions and limitations as contained in the Loan
Agreement and in the Security Instruments;
WHEREAS, Bank is willing to so amend, modify, extend and increase the
loan, subject to all of the other terms, conditions, provisions and
limitations as contained in the Note, which is to be re-executed by
Borrower in the amount of $20,000,000.00, being the amount of the
increased loan, as a renewal, extension and modification of the
$15,000,000.00 Note, and subject to all of the other terms,
conditions, provisions and limitations as contained in the Loan
Agreement and in the Security Instruments:
NOW, THEREFORE, for and in consideration of the mutual benefits to
Bank and Borrower, the receipt and sufficiency of which are hereby acknowledged
and confessed by each party, the undersigned do hereby enter into this Second
Amendment, as of the date stated above, as follows:
1. The term "Qualification Date" shall mean May 31, 1998.
2. The term "Stated Maturity Date" is amended to mean June 1, 1999.
3. The term "Line of Credit Note" is modified, as follows:
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"Line of Credit Note" shall mean the promissory note of the Borrower
described in Section 2.1 of the Loan Agreement, as amended, and being
in the amount of $20,000,000.00 in substantially the form of the note
attached as Exhibit "A" to the Second Amendment, together with any and
all renewals, extensions for any period, increases or rearrangements
thereof, which is in renewal, extension and modification to that
certain $15,000,000.00 Line of Credit Note dated October 1, 1996.
4. The term "Maximum Loan Amount" is modified, as follows:
"Maximum Loan Amount" shall mean the lesser of: (i) Twenty Million and
no/100 ($20,000,000.00) DOLLARS; or (ii) the Borrowing Formula as
applied to Eligible Homes, utilizing the percentage of completion of
each Home included as an Eligible Home.
5. Section 2.1 of the Loan Agreement is amended to read as follows:
2.1 Commitment. The Borrower may, from time to time, request that
additional Home(s) be included as Eligible Home(s) under this
Agreement, and subject to the terms and conditions and relying on the
representations and warranties contained in this Agreement, the Bank
agrees to make available to Borrower funds as a revolving line of
credit loan to the Borrower. During the period commencing with the
date of this Agreement to and including the Funding Termination Date,
the Bank will make revolving line of credit loans to the Borrower from
time to time on any Business Day in such amounts as the Borrower may
request up to and including Twenty Million and no/100 ($20,000,000.00)
Dollars (the "Commitment"), but not to exceed however the Maximum
Loan Amount at any time, and the Borrower may borrow, prepay pursuant
to Section 2.4 and 2.5, and reborrow as provided in this Section 2.1;
provided, however, that the aggregate principal amount of all of such
Advances under the line of credit at any one time outstanding shall
not exceed the lesser of (i) the Maximum Loan Amount, as approved by
Bank; or (ii) the amount of the Commitment. It is expressly
contemplated that, by reason of prepayments or other circumstances,
there may be times when no Indebtedness is owing thereunder, but
notwithstanding such occurrences the Line of Credit Note shall remain
in full force and effect as to such loans or Advances made subsequent
to such occurrence. To evidence the loans made by the Bank pursuant to
this subsection, the Borrower will issue, execute and deliver its
promissory note dated of even date herewith in the original principal
amount of the Commitment, in substantially the form of Exhibit "A"
hereto. The said promissory note is in renewal, extension and
rearrangement of the promissory note, as renewed, extended and
modified, referenced in the Loan Agreement dated October 1, 1996,
including that certain $15,000,000.00 Promissory Note dated October 1,
1996.
6. Section 2.2 of the Loan Agreement is modified to read as follows:
2.2 Interest Terms. The Note shall bear interest on the
outstanding principal balance at the Index Rate per annum, floating,
but in no event to exceed the Highest Lawful Rate.
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Changes in the interest rate of the Line of Credit Note shall occur
without notice to Borrower as the Index Rate changes.
7. Section 3.1.G. of the Loan Agreement entitled "Speculative Home
Limitation" is hereby deleted from the Loan Agreement.
8. Section 3.1.C. of the Loan Agreement is modified to read as follows:
9. 3.1.C. Appraisal. A master appraisal dated not more than one year old
for each type of Home in each subdivision in form and substance and by
an appraiser satisfactory to Bank in the exercise of its sole
discretion indicating the appraised value of each Home after the
construction of the Improvements on the Property. In the event that
Bank's regulatory requirements dictate that the same is necessary, or
in the event that the Bank should request an updated appraisal, each
such appraisal must be updated for each type of Home in each
subdivision for Homes included in Eligible Homes.
10. Borrower hereby ratifies and confirms each and every provision of the
Loan Agreement, the Note and the Security Instruments, as modified
hereby, including but not limited to the warranties and
representations contained therein. Borrower further certifies to Bank
that Borrower is in full compliance with all of the covenants and
agreements contained in the Loan Agreement, the Note and the Security
Instruments, as modified hereby. Borrower further certifies that no
Event of Default has occurred or currently exists, and no situation
now exists which, with the passage of time, would constitute an Event
of Default.
This Second Amendment is executed between the parties effective on
the date stated above.
BORROWER: BANK:
NEWMARK HOMES, L.P. COMPASS BANK
By: Newmark Home Corporation, a
Nevada corporation
By: /s/ XXXXX XXXXX By: /s/ XXXXXXX X. XXX
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Name: Xxxxx Xxxxx Name: Xxxxxxx X. Xxx
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Title: SVP Title: Vice President
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