LOAN MODIFICATION AGREEMENT
This LOAN MODIFICATION AGREEMENT (this "Modification Agreement" or,
variously, the "Agreement") is effective as of August 31, 2008, by and
between UNITED BANK, a Virginia banking association (the ""Bank" or "Lender")
and XXXXXXXX INDUSTRIES, INC., a Virginia corporation with offices at 0000
X.X. Xxxxxxx Xxxxx, Xxxxxxxx, XX 00000, INSURANCE RISK MANAGEMENT GROUP,
INC., a Virginia corporation, PIEDMONT METAL PRODUCTS, INC., a Virginia
corporation, XXXXXXXX BRIDGE COMPANY, a Virginia corporation, WII REALTY
MANAGEMENT, INC., a Virginia corporation, XXXXXXXX STEEL ERECTION COMPANY,
Inc., a Virginia corporation, GREENWAY CORPORATION, a Maryland Corporation,
XXXXXXXX EQUIPMENT COMPANY, a District of Columbia corporation (originally
and collectively, "Borrower"), XXXXXXXX FAMILY LIMITED PARTNERSHIP, a
Virginia limited partnership ("WFLP") and XXXXX X. XXXXXXXX, XX.,
individually ("Guarantor").
RECITALS
A. On or about April 16, 1999, Lender made a $2.5 million revolving
loan (Loan No. 9001), maturing May 5, 2005, evidenced by Revolving Credit
Note No. 3 of that date, to Xxxxxxxx Industries, Inc., Construction
Insurance Agency, Inc., Insurance Risk Management Group, Inc., Piedmont
Metal Products, Inc., Xxxxxxxx Bridge Company, WII Realty Management, Inc.,
Xxxxxxxx Steel Erection Company, Inc., all Virginia corporations, Greenway
Corporation, a Maryland corporation and Xxxxxxxx Equipment Corporation, a
D.C. corporation, jointly and severally ("Original Borrowers"), on which
loan $1,468,810.48 in principal is due as of August 20, 2008, and
B. The indebtedness due under Loan No. 9001 was secured by real and
personal property collateral including, without limitation, land, rents
and profits in Bedford, VA and in Manassas, VA under Deeds of Trust thereon,
as more fully set forth therein (the "Manassas Deed of Trust" and the
"Bedford Deed of Trust", originally limited to $797,000 as to Bedford land
and $3,302,960 as to Manassas land, respectively, together with business
assets and other personal property pledged under a Revolving Credit and
Term Loan Agreement dated April 16, 1999, and a related Security Agreement
between the Bank and Original Borrowers, a Security Agreement dated April
16, 1999, as amended by Amendment No. 2 thereto dated May 1, 2001, including
equipment, vehicles, machinery, tools, furniture, fixtures, office equipment,
accounts receivable, inventory, contract rights, general intangibles,
instruments, documents, chattel paper, securities, policies, certificates of
insurance, deposits, cash, books, records, computer software, licenses,
patents, trademarks, tradenames, copyrights, service marks and other
personal property, and the products and proceeds of all of the foregoing,
together with a pledge by Xxxxxxx Industries, Inc. of 534 shares of the
common stock of S.I.P., Inc., a Delaware corporation, under Pledge Agreement
dated August 31, 2000, and a Negative Pledge of 62,053 shares of Xxxxxxxx
Industries, Inc., stock from Xxxxx X. Xxxxxxxx, III and H. Xxxxxx Xxxxxxxx
under a Negative Pledge Agreement dated April 16, 1999 (collectively, the
"Original Collateral"), and
C. On or about April 16, 1999, Lender made a draw term loan to Original
Borrowers maturing April 1, 2014, evidenced by Term Note No. 1, in the
original principal amount of $2,260,750 (Loan No. 0101), secured by the
Original Collateral, on which loan $452,741.12 is due as of August 20,
2008, and
D. The indebtedness due under Loan No. 9001 and Loan No. 0101
(collectively, the "Indebtedness"), secured by the foregoing and by
other collateral pledged, from time to time, under various agreements
between Borrower and the Bank, was declared due and payable by the Bank on
May 12, 2005, together with other indebtedness due by Original Borrower,
since paid, and in respect of obligations under various letters of credit,
since satisfied, and
E. In connection with the foregoing, Borrower, Guarantor and WFLP
thereafter entered into a Forbearance Agreement dated June 30, 2005, and
a series of amendments thereto thereafter under which, among other things,
further collateral (in addition to the Original Collateral and to additional
collateral pledged thereafter to the Bank, after the date of these loans,
from time to time, in respect of Loan Nos. 9001, Loan No. 0101, and other
indebtedness due to the Bank by Borrower on various other loans, before the
indebtedness under Loan Nos. 9001, Loan No. 010 and all indebtedness of
Borrower and other obligors to the Bank was accelerated or otherwise
declared due and payable by the Bank in May, 2005), was pledged, including
new collateral pledged to the Bank by SIP, Inc. of Delaware, Inc. (later
sold) and by WFLP, all which collateral pledged to the Bank to date,
collectively with the Original Collateral, by Original Borrower, Guarantor
and WFLP (collectively, to the extent not previously released, the
"Obligors") in respect of Loan Nos. 9001, No. 0101 and such other
indebtedness, to the extent such collateral has not been previously released
by the Bank, is hereinafter referred to, collectively, as the "Collateral",
the most recent amendment being a Sixth Amendment to Forbearance Agreement
dated as of July 31, 2008, and
F. The Bank has previously released SIP, Inc of Delaware, Piedmont
Metal Products, Inc., and Xxxxxxxx Bridge Company ("Former Borrowers") from
any further financial liability for the Indebtedness, and also has released
all collateral owned by the Former Borrowers; the signatures of the Former
Borrowers hereunder are a matter of form and shall not be construed to modify
or to rescind such releases, and, therefore, the remaining borrowers are
Xxxxxxxx Industries, Inc., a Virginia corporation, Insurance Risk Management
Group, Inc., a Virginia corporation, WII Realty Management, Inc., a Virginia
corporation, Xxxxxxxx Steel Erection Company, Inc., a Virginia corporation,
Greenway Corporation, a Maryland Corporation, and Xxxxxxxx Equipment Company,
a District of Columbia corporation (originally and collectively, "Remaining
Borrowers").
G. The Bank has agreed to waive its acceleration of the Indebtedness, to
waive defaults previously declared, to term out the Indebtedness, and to
modify the terms of the promissory notes, deeds of trust, loan and security
agreements, pledge agreements, security agreements, forbearance agreements
and all other loan documents and instruments presently evidencing the
indebtedness due to the Bank under Loan Nos. 9001 and 0101, and guarantees
thereof, including, without limitation, the Amended And Restated Guaranty
Agreement dated September 29, 2005 between Guarantor and the Bank
(collectively, the "Loan Documents"), on the conditions hereof, and the
Obligors are in agreement thereto,
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:
NOW, THEREFORE, for good and valuable consideration, including the
Bank's continued extension of credit, on the terms hereof, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree to
modify the Loan Documents as follows:
1. Recitals. The recitals above are acknowledged to be true and
correct.
2. Term. The maturity date of the Indebtedness is extended to
August 31, 2011, thirty-six (36) months from the effective date hereof.
3. Debt Service. Debt service during the extended term of the
Indebtedness shall be paid monthly, interest only by Remaining Borrowers, as
if the obligations of Borrower to the Bank in respect of the Indebtedness
had never previously been accelerated, provided, however, that Remaining
Borrowers shall further curtail principal by $57,980, quarterly, on the last
day of each quarter, for the remaining Term of Loan No. 0901, and Remaining
Borrowers shall further curtail principal by $17,020, quarterly, for the
remaining Term of Loan No. 0101.
4. Interest Reserve. On or before Closing hereon, Remaining
Borrowers shall post a pre-paid interest reserve equal to One Hundred
Thousand Dollars ($100,000) and it shall maintain that interest reserve in
a Certificate of Deposit or other interest-bearing account as may be
mutually agreed, for the Term, such reserve held with respect to both loans.
5. Reaffirmation of Guaranty of Xxxxx X. Xxxxxxxx, Xx. Xxxxx X.
Xxxxxxxx, Xx. ("Guarantor") hereby ratifies, confirms and extends Amended
And Restated Guaranty Agreement dated September 29, 2005 (the "Guaranty"),
and further consents to the terms of this Agreement.
6. Reaffirmation of Pledge by WFLP. WFLP hereby ratifies,
confirms, and extends its pledge of $1,758,000 of the value of the
Wellington Parcel, which is secured by a Deed of Trust on such property,
and further consents to the terms of this Agreement.
7. No Affirmative or Negative Covenants Except as Expressed Herein. The
Remaining Borrowers, WFLP and Guarantor covenant that the value of the real
property subject to Deeds of Trust securing the Indebtedness shall be not
less than 300% of the amount of Indebtedness, and the Bank acknowledges
receiving an appraisal acceptable to the Bank, which satisfies this
requirement as of the execution hereof. Not more than two times during the
extended terms hereof, the Bank may request an update of such appraisal at
Remaining Borrower's expense to confirm compliance with this covenant. All
other Affirmative and Negative Covenants in the Loan Documents, including
without limitation Sections 5 and 6 of the Revolving Credit and Term Loan
Agreement dated April 16, 1999, as amended, are hereby deleted and declared
null and void.
7. Release of Certain Borrowers. Provided there are no events of
default, the Bank hereby agrees to release the following Remaining Borrowers
and their respective assets upon the payment of additional principal
curtailments as listed:
(a) Xxxxxxxx Equipment Corp. and Greenway Corp. $250,000
(b) Xxxxxxxx Steel Erection Company, Inc. $250,000
8. Certain Representations and Warranties. To induce the Lender to
enter into this Agreement, Remaining Borrowers, WFLP and the Guarantor re-
affirm, as of the date hereof, all representations and warranties previously
made to the Bank under the Loan Documents, including, without limitation,
the Forbearance Agreement, all being incorporated herein by reference, as
of the date hereof. They represent that the Indebtedess is now due and
owing to the Bank, as aforesaid, without defense, offset or counterclaim
and that no further events of default have occurred under the Loan Documents,
not previously disclosed to Bank. Each party hereto represents that its
entry into this Agreement has been duly authorized by all required corporate,
partnership, trust and other action, that this Agreement represents their
binding obligation, enforceable in accordance with its terms, and that their
entry into this Agreement does not violate any contract or agreement to which
they are a party, nor require the consent of any third-person not a party
hereto.
9. No Novation, Waivers or Impairment. The parties hereto agree
that neither this Agreement nor any other document executed in accordance
herewith is intended to be a novation of any of the Loan Documents nor of
the Indebtedness or of any other obligations or duties owed to Lender under
the Loan Documents, nor a modification thereto, except as to the
modifications expressly provided for herein.
As modified herein, the Loan Documents and all obligations
therein, and all Collateral previously pledged to the Bank thereunder
(except to the extent released by the Bank), continue in full force and
effect.
The parties further agree that:
(a) Subject to Lender's duties hereunder, , nothing herein shall
release or waive any of the Remaining Borrowers' obligations under any of
the Loan Documents or those of WFLP or Guarantor in respect thereof, all of
which remain in full force and effect, nor impair the validity, perfection
or priority of any security interest, lien, deed of trust or other Collateral
therefore, nor release the obligations of any guarantee thereof, all of which
obligations, security interests, collateral, duties, rights and guarantees
are hereby ratified and affirmed by the Remaining Borrowers, WFLP and the
Guarantor, without prejudice to their rights herein or therein. Remaining
Borrowers, WFLP and Bank acknowledges that Bank has a duly perfected valid
first priority security interests and liens in the Collateral, except as set
forth on Exhibit 7(b) hereof and that such liens and security interests in
the Collateral shall continue to secure their indebtedness and Obligations
to the Bank in respect of the Indebtedness, under the guarantees thereof, and
under the Loan Documents;
(b) Subject to the Lender's duties hereunder, nothing herein
shall waive or impair any rights, powers or remedies of the Lender under the
Loan Documents including, without limitation, any right or remedy of Lender
against the Guarantor under his Guaranty, as amended by the Amended and
Restated Guaranty Agreement of September 29, 2005 (the "Guaranty");
(c) Nothing herein shall be construed to constitute an
agreement by the Lender or to require the Lender to extend the Term beyond
thirty-six (36) months from the effective date hereof, as provided for
herein, nor waive any rights of the Bank, in the event of any subsequent
defaults under the Loan Documents, after the date hereof;
(d) The Lender shall have the right at any time to take any
action at law or in equity with respect to the Loan Documents and/or the
Guaranty provided that such action is not inconsistent with the terms and
conditions of this Agreement and Lender's duty to forbear under the terms
and conditions hereof, including seeking the entry of such court orders and
judgments as the Lender in its sole discretion deems appropriate to enforce
the terms of this Agreement or to protect its security interests and rights
to repayment under the Loan Documents and the Guaranty.
10. Release of the Lender. In consideration of Lender's entry into
this Agreement, the Borrower, WFLP and the Guarantor hereby release, remise,
acquit and forever discharge the Lender, the Lender's employees, agents,
representatives, consultants, attorneys, fiduciaries, servants, officers,
directors, partners, predecessors, successors and assigns, subsidiary
corporations, parent corporations and related corporate divisions (all of
the foregoing hereinafter called the "Released Parties") from any and all
actions and causes of action, judgments, executions, suits, debts, claims,
demands, liabilities, obligations, damages and expenses, breaches, rights of
setoff, counterclaims and statutory rights, of any and every character, known
or unknown, direct or indirect, liquidated or unliquidated, contingent or non-
contingent, at law or in equity, of every kind or nature, including any which
may arise in a bankruptcy or insolvency proceeding, whether heretofore or
hereafter arising, for or because of any manner of things done, omitted or
suffered to be done by any of the Released Parties prior to and including the
date of execution hereof, arising from or in any way directly or indirectly
related to this Agreement, the Forbearance Agreement as originally executed
on June 30, 2005, the six amendments thereto, the Loan Documents or from the
performance and payment by Borrower or WFLP thereunder, or from the Guarantee
of Borrowers' obligations to Lender by the Guarantor, and also from all other
claims, rights, demands or causes of action of any kind, in law or in equity
against the Lender, except for Lender's duties hereunder (all of the foregoing
hereinafter called, collectively, the "Released Matters"). Borrower, WFLP and
the Guarantor acknowledge that the agreements in this Section are intended to
be in full satisfaction of any and all alleged injuries or damages arising in
connection with the Released Matters, whether known or unknown, at law or in
equity, and that this release is a material inducement to the Lender's entry
into this Agreement. Each of the Borrower, WFLP and the Guarantor further
represents and warrants to the Lender that it has not transferred, assigned
or otherwise conveyed, or purported to transfer, assign or otherwise convey,
any right, title or interest in the Released Matters as to any Person and
that the foregoing constitutes a full and complete release of all Released
Matters.
11. No Partnership. Nothing herein shall be construed to make the
Lender, the Remaining Borrowers, WFLP or the Guarantor the agent, partner,
or joint venturer of the other, and the Remaining Borrowers, WFLP and the
Guarantor have no relationship with Lender other than that of debtor and
creditor.
12. Entire Agreement. This Agreement constitutes the entire
agreement of the parties concerning the subject matter hereof and supersedes
any prior or contemporaneous representations or agreements not contained
herein. In entering into this Agreement, each of Borrower, WFLP and the
Guarantor acknowledges that it is not relying on any statement,
representation, warranty, covenant or agreement of any kind made by the
Lender or by any agent or employee thereof, except for the agreements of the
Lender set forth herein. They further acknowledge that Agreement can be
amended only by written instruments, duly executed by Lender and all parties
hereto, and that no officer, agent or representative of Lender has authority
to act in any other manner.
13. Attorney's Fees. Borrower shall pay the reasonable attorney's
fees and all costs and expenses of Lender in connection with the preparation
of this Agreement and closing thereunder.
14. Successors and Assigns. This Agreement shall inure to the
benefit of and be binding on the parties and their successors and assigns;
provided, however, that this Agreement may not be assigned by any of the
Borrowers without the prior written consent of the Lender.
15. Counterparts. This Agreement may be executed in one or more
counterparts, and by different parties on different counterparts, each of
which shall constitute an original and all of which together shall
constitute one and the same agreement.
16. Time of the Essence. Time is of the essence under this
Agreement. Closing must occur by no later than 5:00 P.M. on September 5,
2008.
17. No waivers. By entering into this Agreement it is agreed
that Lender does not waive or limit any right it may have against Original
Borrower, WFLP or the Guarantor, except as may be expressly stated herein or
previously waived in writing, all other rights and remedies of Lender being
reserved.
18. Signatures. Faxed signatures shall be accepted for all
purposes, with originals to be provided within three (3) business days
thereafter. This Agreement may be signed in counterparts, each of which so
executed shall be deemed an original and all of which, taken together, shall
constitute one and the same instrument. All signators represent that their
signatures are given with full approval, after, for non-individual signators,
all required corporate and partnership action, and that their entry into this
Agreement does not violate any contract, agreement or law to which they are
subject or to which they are a party nor require the further consent of any
person not a party hereto.
19. Binding Nature. This Agreement shall be binding upon and inure
to the benefit of the parties hereto and their respective successors and
assigns.
20. Choice of Law. This Agreement shall be governed by, and
enforced pursuant to, the internal laws of the Commonwealth of Virginia.
21. Further Assurances and Corrective Instruments. Borrower, WFLP
and Guarantor shall each execute, acknowledge and deliver, from time to time,
such supplements hereto and such further instruments and documents as the
Lender may require in its discretion to evidence any obligation of the
Borrower, WFLP or Guarantor to the Lender, to facilitate the carrying out
of the intentions of the parties to this Agreement, or to perfect the
Collateral, as applicable.
22. WAIVER OF JURY. EACH PARTY TO THIS AGREEMENT AGREES THAT ANY
SUIT, ACTION OR PROCEEDING, WHETHER CLAIM OR COUNTERCLAIM, BROUGHT OR
INSTITUTED BY ANY PARTY HERETO OR ANY SUCCESSOR OR ASSIGN OF ANY PARTY, ON
OR WITH RESPECT TO THIS AGREEMENT OR WHICH IN ANY WAY RELATES TO THE
INDEBTEDNESS, THE GUARANTEES THEREOF AND THE LOAD DOCUMENTS SHALL BE TRIED
ONLY BY A COURT AND NOT BY A JURY. EACH PARTY EXPRESSLY WAIVES ANY RIGHT TO
A TRIAL BY JURY AND ANY SUCH SUIT, ACTION OR PROCEEDING.
23. LIMITATION OF LIABILITY; WAIVER OF PUNITIVE DAMAGES. BORROWER,
WFLP AND GUARANTOR AGREE THAT IN ANY JUDICIAL, MEDIATION OR ARBITRATION
PROCEEDING OR IN ANY CLAIM OR CONTROVERSY AMONG THEM THAT MAY ARISE OUT OF
OR BE IN ANY WAY CONNECTED WITH THIS AGREEMENT, THE LOAN DOCUMENTS OR ANY
OTHER AGREEMENT BETWEEN OR AMONG THEM OR THEIR OBLIGATIIONS THEREUNDER OR
UNDER THIS AGREEMENT, THAT THEY SHALL HAVE NO REMEDY AGAINST BANK AND/OR ITS
AGENTS FOR, AND THAT BANK AND/OR ITS AGENTS SHALL NOT BE LIABLE FOR, (1)
INDIRECT, SPECIAL OR CONSEQUENTIAL DAMAGES OR (2) PUNITIVE OR EXEMPLARY
DAMAGES. EACH OF BORROWER, WFLP AND GUARANTOR HEREBY EXPRESSLY WAIVES ANY
RIGHT OR CLAIM TO PUNITIVE OR EXEMPLARY DAMAGES THEY MAY HAVE OR WHICH MAY
ARISE IN THE FUTURE IN CONNECTION WITH ANY SUCH PROCEEDING, CLAIM OR
CONTROVERSY, WHETHER THE SAME IS RESOLVED BY ARBITRATION, MEDIATION,
JUDICIALLY OR OTHERWISE.
24. Interpretation. Each party acknowledges (i) that it has
participated in the negotiation of this Agreement, and that no provision of
this Agreement shall be construed against or interpreted to the disadvantage
of any party hereto by any court or other governmental or judicial authority
by reason of such party having or being deemed to have structured, dictated
or drafted such provision; (ii) that it has had the opportunity to review,
analyze, and discuss this Agreement, and the underlying factual matters
relevant to this Agreement, for a sufficient period of time before the
execution and delivery hereof; (iii) that all of the terms of this Agreement
were negotiated at arm's length; (iv) that this Agreement was prepared and
executed without fraud, duress, undue influence, or coercion of any kind
exerted by any of the parties upon the others; (v) that the execution and
delivery of this Agreement is the free and voluntary act of each party, and
(vi) that, even though the Borrower, WFLP and Guarantor did not employ
outside counsel in connection with the negotiation and execution of this
Agreement and related documents, each of the Borrower, WFLP and Guarantor
was given ample opportunity to obtain counsel and chose not to do so, and,
moreover, Borrower used the services of its in-house counsel in this matter.
IN WITNESS WHEREOF, the parties have executed this Agreement as a
sealed instrument as of the day and year set forth above.
[signatures omitted in this electronic copy]
