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NOTE MODIFICATION AGREEMENT
THIS AGREEMENT dated July 23, 1996 made among XXXXXXXX CORPORATION
("Xxxxxxxx"), HRH CONSTRUCTION CORPORATION ("HRH") and GRENADIER REALTY CORP.
("Grenadier"), all having an address at 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000 (collectively, the "Borrower") and THE CHASE MANHATTAN BANK, CHEMICAL
BANK, a New York banking corporation, having an office at 000 Xxxxxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000 (the "Lender").
W I T N E S S E T H
WHEREAS, the Lender extended to the Borrower a loan in the principal
amount of $3,000,000 on November 28, 1995 (the "Loan"); and
WHEREAS, the Loan is evidenced by a certain note dated November 28,
1995, as modified by letter agreement dated December 7, 1995 (collectively, the
"Note"); and
WHEREAS, the Borrower and the Lender have agreed to modify certain
provisions of the Note including the Maturity Date thereof
NOW, THEREFORE, in order to restate the terms of the Note, the parties
hereto agree for themselves, their successors and assigns as follows:
1. The Borrower acknowledges, covenants, warrants, represents and
agrees that:
(i) it is indebted under the Note and that there is
currently outstanding thereunder the principal sum of
$2,625,000.00;
(ii) no material adverse change has occurred in its financial
status since the making of the Loan;
(iii) there are no judgments against the Borrower in any
courts of the United States and there is no litigation, active, pending
or threatened, against the Borrower which might adversely affect the
Borrower's ability to pay when due any amounts which may become payable
in respect of the Loan;
(iv) no default, nor event which with notice and/or passage
of time would constitute a default, has occurred and is continuing under
the Note or any of the other instruments executed and delivered to
evidence and/or secure the Loan (collectively, the "Loan Documents") or
under any other note, loan or security agreement to which the Borrower
is a party;
(v) there are no offsets, defenses or counterclaims to the
Borrower's obligations under the Loan and the Loan Documents; and
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(vi) the Borrower has not entered into any agreements with
creditors that expressly or otherwise prohibit the Borrower from
entering into any extension or modification of the Loan or any Loan
Document in connection therewith.
2. In order to amend the terms of the Note, the parties hereto
agree that the Note is hereby amended as follows:
(a) The definition of "Final Maturity Date" is changed from
November 13, 1996 to July 15, 1997.
(b) The definition of "Letter of Credit Maturity Date" is
changed from May 12, 1997 to January 15, 1998.
(c) Borrower agrees to reduce the principal amount
outstanding under the loan to $-0- for at least one period of thirty(30)
consecutive days during any given twelve month period.
(d) Upon the making of any Loan pursuant to the Note and
along with delivery of the financial statements required to be delivered in
accordance with the terms of the Note, Lender shall receive a certificate
executed by the Chief Financial Officer of Xxxxxxxx, HRH or Grenadier, as the
case may be, that no material adverse change has occurred in their respective
financial conditions, that there is no material pending litigation against
Xxxxxxxx, HRH, Grenadier or any other subsidiary of any of them, that Xxxxxxxx,
HRH and Grenadier are in compliance with all of their covenants hereunder, that
all representations and warranties made by any of them continue to be true and
correct as of the date of such certificate and that no events of default have
occurred hereunder or under any document evidencing or relating to any other
indebtedness of any of them.
3. It shall be an Event of Default under the Note if:
(a) any person or entity shall become the beneficial owner
of more than 30% of the outstanding voting stock of Xxxxxxxx other than any
such individual or entity that owns such voting stock as of the date hereof;
(b) Xxxxxxxx shall merge into or with any other entity in
whatever manner;
(c) Any entity constituting Borrower shall declare
dividends in excess (on an annual basis) of the lesser of (a) 50% of the net
income after taxes of the entity declaring such dividends; or (b) an amount
equal to the prior year's dividend amount of such entity increased by the
percentage growth in such entity's ordinary net income, in neither instance
taking into account dividends payable to any of the entities constituting
Borrower.
(d) The consolidated stockholders' equity of Xxxxxxxx shall
fall below $52,00,000.
(e) Xxxxxx shall enter into any loan covenants with any
lender regarding Xxxxxx'x ability to declare and pay cash dividends to Xxxxxxxx
which would reduce any such permitted dividends below the lesser of 25% of
Xxxxxx'x consolidated net income or $1,500,000.
4. The Borrower's obligations under this Agreement and the other
Loan Documents are absolute and unconditional and are valid irrespective of any
other agreement or circumstance which might otherwise constitute a defense to
the obligations under this Agreement or the other Loan Documents or to the
obligations of others related
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to it. This Agreement sets forth the entire understanding of the parties with
respect to all modifications of the Loan which have occurred since December 7,
1995.
5. Except as specifically amended herein, all of the terms,
covenants, conditions and stipulations contained in the Note and all of the
other Loan Documents are hereby ratified and confirmed in all respects, shall
continue to apply with full force and effect.
6. Neither this Agreement nor any other Loan Document nor any
provision hereof or thereof may be modified, amended, changed, waived,
discharged or terminated orally, but only by an instrument in writing signed by
the party against whom enforcement of the change, waiver, discharge or
termination is sought.
7. This Agreement is and shall be deemed to be a contract entered
into pursuant to the laws of the State of New York and shall in all respects be
governed, construed, applied and enforced in accordance with the laws of the
State of New York.
8. This Agreement is binding upon, and shall inure to the benefit
of, the parties hereto and their respective successors and assigns.
9. Nothing in this Agreement or any other Loan Document is
intended to or shall be deemed to create any rights or obligations of
partnership, joint venture, or similar association among the parties hereto.
10. If any term, covenant, provision or condition of this Agreement
or any of the other Loan Documents shall be held to be invalid, illegal or
unenforceable in any respect, this Agreement shall be construed without such
term, covenant, provision or condition.
11. The parties hereto hereby irrevocably and unconditionally waive
any and all rights to trial by jury in any action, suit or counterclaim arising
in connection with, out of or otherwise related to this Agreement, the Note,
and every other Loan Document heretofore, now or hereafter executed and/or
delivered in connection therewith, the Loan and all other obligations of the
Borrower related thereto or in any way related to this transaction.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first above written.
XXXXXXXX CORPORATION
By ____________________________
HRH CONSTRUCTION
CORPORATION
By ____________________________
GRENADIER REALTY CORP.
By ____________________________
THE CHASE MANHATTAN BANK
By _____________________________
Vice President
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