SECOND AGREEMENT TO MODIFY LOAN DOCUMENTS
Exhibit 10.1
SECOND
AGREEMENT TO MODIFY LOAN DOCUMENTS
THIS
SECOND AGREEMENT TO MODIFY LOAN DOCUMENTS (“Agreement”) is entered
into as of July 2, 2008, by XXXXXX FAMILY COMMUNITIES, INC., a Delaware
corporation
(“Borrower”), and RBC BANK (USA),
formerly known as RBC CENTURA BANK, a North Carolina banking corporation
(individually, as a “Lender” and as
“Agent” for all “Lenders” [as defined below]), FRANKLIN BANK
SSB, and INTERNATIONAL BANK OF COMMERCE, LAREDO, TEXAS, a Texas state banking
association (individually, as a “Lender”
and collectively, with RBC CENTURA BANK, “Lenders”). Borrower, Agent, and Lenders, for
and in consideration of the recitals and mutual promises contained herein,
confirm and agree as follows:
RECITALS
A. Agent, Lenders and
Borrower previously entered into that certain Borrowing Base Loan
Agreement (Syndicated Revolving Line of Credit) dated as of June 29, 2007 (as
the same has been
amended, modified, extended, increased, restated, and renewed, from time to
time, “Loan Agreement”), whereby Lenders previously
extended to Borrower a master line of credit in the current
principal sum of Thirty Million Dollars ($30,000,000.00) (as the same has been
amended, modified,
extended, increased, restated, and renewed, from time to time, “Master Line”).
B. The Master Line is
evidenced by that certain Promissory Note (RBC Centura Bank) in the
current principal sum of Ten Million Dollars ($10,000,000.00) (as the same has
been amended, modified,
extended, increased, restated, and renewed, from time to time, “Centura Note”), that certain
Promissory Note (International Bank of Commerce, Laredo, Texas) in the current
principal sum of
Ten Million Dollars ($10,000,000.00) (as the same has been amended, modified,
extended, increased,
restated, and renewed, from time to time, “IBC
Note”), and that certain Promissory Note (Franklin
Bank SSB) in the current principal sum of Ten Million Dollars ($10,000,000.00)
(as the same has
been amended, modified, extended, increased, restated, and renewed, from time to
time, “Franklin Bank Note,” collectively with Centura
Note and IBC Note, “Note”) all dated June
29, 2007.
C. The Note is secured
by, among other things, multiple security instruments referred to in the
singular as the “Deed of Trust” for each
and every “Approved Subdivision” (both as
defined in the Loan Agreement) financed with the proceeds of the
Loan.
D. All of the documents
evidencing or relating to the Master Line, including this Agreement,
and any other modification agreements or amendments that have been or will be
executed
in connection with the Master Line, collectively shall be referred to as the
“Loan Documents.” All capitalized terms not
specifically defined herein shall have the meanings given to such terms in the
Loan Agreement.
F. Borrower has
requested that Lenders modify the Master Line by, among other things,
extending the “Master Line Termination
Date” (as defined in the Loan Agreement and Note)
from the current date of June 29, 2008, to August 29, 2008 (“New Master Line Termination Date”) and such other modifications as are set
forth herein.
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G. Agent and
Lenders are willing to consent to the modifications to the Loan Documents
set forth
herein, subject to the conditions set forth below. The date on
which all conditions set forth herein have been satisfied shall be referred to
as the “Modification Closing Date.”
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing premises and other valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:
1.
Recitals.
The preamble, recitals and any exhibits hereto are hereby incorporated
into this
Agreement.
2.
Extension of the Master Line Termination Date. From and after the
Modification
Closing Date, the Master Line Termination Date is hereby extended from the
current date of June 29, 2008, to the New Master Line Termination Date of August
29, 2008 (“New
Master Line Termination Date”). All references in
the Loan Documents to the Master Line Termination Date shall be revised to refer
to the New Master Line Termination Date set forth herein.
3. Forbearance of Spec Home
Limitation and Developed Lot Limitation.
3.1 Forbearance of Spec Home
Limitation. Borrower is currently not in compliance
with the Spec Home limitation as set forth in Section 1.3(a) of Exhibit “C” to
the Loan Agreement (“Spec Home Limitation
Violation”). Borrower has requested and Agent and Lenders have agreed to
forbear from exercising their remedies with regard to the Spec Home Limitation
Violation until August 29, 2008 (“Spec Home
Forbearance Period”), provided
no additional defaults under the Loan occur between the date hereof and August
29, 2008. From and after August 29, 2008, Borrower shall be in compliance with
the Spec Home limitation.
3.2
Forbearance of Developed
Lot
Limitation. Section
1.3(a) of Exhibit “C” to the
Loan Agreement requires that not more than twenty percent (20%) of the Eligible
Property owned by
Borrower shall consist of Developed Lots (“Developed Lot Limitation”). Borrower is
currently not in compliance with the Developed Lot Limitation (“Developed Lot Limitation
Violation”). Borrower has
requested and Agent and Lenders have agreed to forbear from exercising
their remedies with regard to the Developed Lot Limitation Violation until August 29, 2008
(“Developed Lot Forbearance Period,”
collectively with the Spec Home Forbearance Period, “Forbearance Period”), provided no additional
defaults under the Loan occur between the date hereof
and August 29, 2008. From and after August 29, 2008, Borrower
shall be in compliance with all
convenants and limitations in the Loan Agreement, including without limitation
the Developed Lot
Limitation.
3.3
Advancement of Loan Funds During Forbearance Period.
Notwithstanding
the Spec Home Limitation Violation and Developed Lot Limitation Violation or any
provision in the Loan Documents to the contrary, during the Forbearance Period,
Lender shall continue to “Advance” (as
defined in the Loan Agreement) Loan funds to Borrower pursuant to the terms and
conditions of the Loan Agreement (excepting any condition which is not satisfied
due solely to the existence of the Spec Home Limitation Violation and Developed
Lot Limitation Violation), provided no additional defaults exist under the Loan
during the Forbearance Period. Furthermore the amount available to be advanced
will be determined without regard to the Spec Home Limitation Violation or
Developed Lot Limitation Violation.
4.
Conditions
Precedent. In no event shall Agent
have any obligation to close this transaction
unless and until all of the following conditions are satisfied:
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4.1 No
Defaults. Other than in connection with the Spec Home
Limitation Violation
and Developed Lot Limitation Violation,there shall be no: (a) uncured Event of
Default under the Master Line or under any of the Loan Documents, (b) continuing
representation, covenant or warranty hereunder or under the Loan Documents that
is false or misleading in any manner, and (c) event currently existing which,
with the passage of time or the giving of notice or both, will result in an
Event of Default or the falsity of any continuing representation, covenant or
warranty hereunder or under the Loan Documents.
4.2 No Financial
Change. There has been no material adverse change in
the financial
condition of Borrower or any Borrower Party since the closing of the Master
Line.
4.3 Payment Of Lender’s
Costs. Borrower pays to Agent the applicable Commitment
Fee and all of Agent’s costs and expenses incurred in connection with the
documentation
and closing of the modifications to the Loan Documents described herein,
including without
limitation all attorneys’ fees, title costs, recording charges and other closing
fees and costs.
4.4 Additional
Documents. Agent has received all additional
documents executed
by Borrower as required by Agent in connection with this Agreement.
5.
Representations and
Warranties. Borrower hereby represents and warrants to
Lenders
as follows:
5.1 No Default.
Other than in connection with the Spec Home Limitation
Violation
and Developed Lot Limitation Violation, no Event of Default under any of the
Loan Documents
has occurred that remains uncured, and no event has occurred which, with the
giving of notice or
the passage of time, or both, would constitute an Event of Default under any of
the Loan Documents.
5.2 Representations and
Warranties. As of the date hereof, all of the representations
and warranties contained in all of the Loan Documents remain true, correct,
complete and accurate except to the extent such representations and warranties
would be affected by the Spec Home Limitation Violation or Developed Lot
Limitation Violation.
5.3 No
New Liens.
Borrower has granted no liens or permitted
any encumbrances
upon any “Project” or security interests
in any “Lot”
or “Home”
(all as defined in the Loan Agreement) described in the Loan Documents, except
for the liens and security interests permitted under the Loan
Agreement.
5.4 No Claims or
Defenses. As of the date hereof, neither Borrower
nor any Borrower
Party has any claims against Agent or any Lender nor defenses to the enforcement
of any of the
Loan Documents in accordance with their respective terms, as amended by this
Agreement.
5.5 Satisfaction of Conditions.
All of the conditions precedent set forth herein have been
fully satisfied.
6.
Further
Assurances. Borrower agrees to perform such other and
further acts, and to
execute such additional documents, agreements, notices or financing statements,
as Agent deems necessary or desirable from time to time to create, preserve,
continue, perfect, validate or carry out any of Agent’s and Lenders’ rights
under this Agreement and the other Loan Documents.
7.
Integration. All
rights, remedies, powers and interest provided for Agent and Lenders
herein are in addition to the rights, remedies, powers and interests provided
for Agent and Lenders in the Loan Documents, the terms and provisions of which
are incorporated herein by this reference
and made a part hereof. If and to the extent any term or provision hereof is
inconsistent with any
term or provision of the Loan Documents, the term or provision of this Agreement
shall prevail.
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8.
Section
Headings. The section headings of this Agreement are included for
convenience
only, and shall not affect the construction or interpretation of any provision
of this Agreement.
9.
Entire Agreement. Amendments. Except
as expressly amended herein, the Loan Agreement,
the Note and all of the other Loan Documents remain unmodified and in full force
and effect.
This Agreement and all of the other Loan Documents contain the entire agreement
between Borrower,
Agent and Lenders with respect to the Master Line, and all prior negotiations,
commitments,
understandings and agreements concerning any modification of the Master Line are
superseded
by this Agreement and the Loan Documents. No amendment, modification,
supplement, extension,
termination or waiver of any provision of this Agreement, any Loan Document, or
any other
agreement executed in connection with any of the foregoing is effective unless
in writing and signed by
Agent, Lenders and Borrower, and then only in the specific instance and for the
specific purpose
given.
10. Governing
Law. The Loan Documents shall be governed by, and construed and
enforced
in accordance with, the internal laws of the State of Texas and the applicable
laws of the United States of America, without regard to its conflict of laws
principles.
11. Attorneys’ Fees.
If any action or other proceeding is brought to interpret or enforce
any
provision of this Agreement, the prevailing party shall be entitled to recover
attorneys’ fees and expenses.
12. Binding Effect.
This Agreement and the other Loan Documents shall be binding upon, and
shall inure to the benefit of, Borrower, Agent and Lenders and their respective
successors and assigns, or heirs and personal representatives, as applicable,
subject to any provision of the Loan Documents restricting transfers of the
Property.
13. Severability
of Provisions. No provision of this Agreement or any other Loan
Document that is held to be inoperative, unenforceable and invalid shall affect
the remaining provisions, and this and all provisions of this Agreement and the
Loan Documents are hereby declared to be severable.
14. Miscellaneous.
No reference to this Agreement is necessary in any instrument or
document
at any time referring to the Loan Documents. A reference to the Loan Documents
is deemed a reference to such document as modified hereby.
15. No
Commitment. The furnishing of this Agreement and other
modification documents
shall in no way be construed as a commitment by Agent or any Lender to modify,
amend, extend or otherwise alter the Loan Documents. Neither Agent or any Lender
is under an obligation to close the transaction evidenced by this Agreement
unless this Agreement and all related documents are returned to Agent fully
executed by Borrower, and unless this Agreement is actually executed by Agent
and Lenders and delivered to Borrower.
16. Counterparts.
This Agreement may be executed in any number of counterparts and by
different parties hereto on separate counterparts, each of which, when so
executed and delivered
shall be an original, but all such counterparts shall together constitute one
and the same instrument.
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IN
WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date
set forth on the cover page of this Agreement.
| BORROWER | |||
|
XXXXXX
FAMILY COMMUNITIES, INC.,
a
Delaware corporation
|
|||
| By: | /s/ Xxxxx Xxxxxx | ||
| Name: | Xxxxx Xxxxxx | ||
| Title: | President and Chief Executive Officer | ||
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| AGENT | |||||
|
RBC BANK
(USA), formerly known as RBC CENTURA BANK, a North Carolina banking
corporation
|
|||||
| By: | /s/ Xxxxxxxx Xxxxxxxx | ||||
| Xxxxxxxx Xxxxxxxx | , Vice President | ||||
| LENDER | |||||
|
RBC BANK
(USA), formerly known as RBC CENTURA BANK, a North Carolina banking
corporation
|
|||||
| By: | /s/ Xxxxxxxx Xxxxxxxx | ||||
| Xxxxxxxx Xxxxxxxx | , Vice President | ||||
[Signatures
continued on the following page.]
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| LENDER | ||||||
|
FRANKLIN
BANK SSB, a Texas state savings bank
|
||||||
| By: | /s/ Xxxxx Xxxx | |||||
| Xxxxx Lyon | , its | VP | ||||
[Signatures continued on
the following page.]
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CONSENT
OF GUARANTORS
THE
UNDERSIGNED GUARANTOR UNDER THAT CERTAIN AMENDED AND RESTATED CONTINUING
GUARANTY AGREEMENT DATED JUNE 23, 2008 AND INDEMNITOR UNDER THAT
CERTAIN ENVIRONMENTAL INDEMNITY DATED JUNE 5, 2008 AND THOSE CERTAIN
AMENDED
AND RESTATED ENVIRONMENTAL INDEMNITIES BOTH DATED JUNE 23, 2008, HEREBY
CONSENT TO THE ABOVE AMENDMENTS, AND HEREBY REAFFIRM THEIR GUARANTIES,
AS SO AMENDED, WHICH GUARANTIES ARE OF BORROWER’S REPAYMENT OF
CERTAIN OBLIGATIONS UNDER THE MASTER LINE AND COMPLETION OF CERTAIN OBLIGATIONS
UNDER THE LOAN DOCUMENTS AND WITH RESPECT TO CERTAIN ENVIRONMENTAL
MATTERS PERTAINING TO THE SUBJECT PROPERTY.
|
GREEN BUILDERS,
INC., a Texas corporation,
formerly
known as XXXXXX HOLDINGS INC., a
Nevada
corporation
|
|||
| By: | /s/ Xxxxx X. Xxxxxx | ||
| Xxxxx X. Xxxxxx, its President | |||
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