EXHIBIT 10.38
LOAN MODIFICATION AGREEMENT
THIS LOAN MODIFICATION AGREEMENT is entered into the 21st day of
August, 2000 by and between BIG BUCK BREWERY & STEAKHOUSE, INC., a Michigan
corporation, f/k/a Michigan Brewery, Inc. ("Borrower"), and XXXXX COUNTY
EMPLOYEES' RETIREMENT SYSTEM, a body politic of the State of Michigan
("Lender").
RECITALS
WHEREAS, on or about February 4, 2000, Lender (i) acquired certain
loans to Borrower from Bank One, Michigan ("BANK ONE"), formerly known as NBD
Bank, a Michigan banking corporation ("BANK ONE LOANS"), (ii) restructured the
Bank One Loans ("RESTRUCTURED LOAN"), and (iii) made an additional $5,876,114.74
loan to Borrower ("NEW LOAN").
WHEREAS, the Restructured Loan is evidenced by that certain Amended,
Restated and Consolidated Convertible Note dated February 4, 2000 in the
principal amount of $1,623,885.26 given by Borrower in favor of Lender
("RESTATED NOTE").
WHEREAS, the New Loan is evidenced by that certain 10% Convertible
Secured Promissory Note Due February 2003 dated February 4, 2000 in the
principal amount of $5,876,114.74 given by Borrower in favor of Lender
("CONVERTIBLE NOTE"; and the Restated Note and the Convertible Note are
hereinafter collectively referred to as the "NOTES").
WHEREAS, the Notes are secured or evidenced by:
(i) Mortgage (Future Advance) dated April 25, 1995
given by Borrower to Bank One, as recorded in Liber
586, Page 112, Otsego County Records, as amended by
Amendment dated July 28, 1995, as recorded in Liber
591, Page 139, Otsego County Records, as assigned to
Lender by Assignment of Mortgage dated February 4,
2000, as recorded in Liber 749, Page 302, as further
amended by that certain Second Amendment to Mortgage
dated February 4, 2000, as recorded in Liber 749,
Page 309, Otsego County Records (as amended, the
"GAYLORD MORTGAGE"), which Gaylord Mortgage encumbers
certain real property owned by Borrower in the City
of Xxxxxxx, Otsego County, Michigan ("GAYLORD
PROPERTY");
(ii) Mortgage dated February 4, 2000, given by Borrower in
favor of Lender as recorded in Liber ___, Page ____,
Oakland County Records ("AUBURN HILLS MORTGAGE",
encumbering Borrower's leasehold interest in certain
real property located in the City of Auburn Hills,
Oakland County, Michigan ("AUBURN HILLS PROPERTY");
(iii) Common Stock Purchase Warrant dated February 4, 2000
executed by the Borrower;
(iv) Subscription and Investment Representation
Agreement for 10% Convertible Secured Promissory Note
due February 2003 by and between Lender and Borrower;
(v) Security Agreement dated February 4, 2000 executed by
Lender and Borrower;
(vi) Limited Partnership Interest Pledge and Security
Agreement dated February 4, 2000 executed by Lender
and Borrower;
(vii) Stock Pledge and Security Agreement dated February 4,
2000 executed by Lender and Borrower'
(viii) an Assignment of Real Estate Leases and Rents dated
July 28, 1995, recorded in Liber 591, Page 144,
Otsego County Records given by Borrower in favor of
Bank One, as assigned to Lender by Assignment of Real
Estate Leases and Rents dated February 4, 2000, as
recorded in Liber 0749, Page 305, Otsego County
Records ("ASSIGNMENT");
(ix) Loan Agreement dated July 28, 1995 by and between
Borrower and Bank One, as assigned to Lender; and
(ix) UCC Financing Statements and other loan documents
with respect to the Notes and the documents executed
in connection with the Bank One Loan.
(all of the documents described in this recital are hereinafter collectively
referred to as the "Original Loan Documents");
WHEREAS, Borrower requested, and Lender agreed, to loan an additional
$1,500,000 to Borrower ("TEXAS LOAN"), to provide certain financing by Borrower
to Buck & Bass, L.P. ("BUCK & BASS"), an affiliate of Borrower, for fixtures and
equipment for Borrower's and/or Buck & Bass' Grapevine, Texas site ("GRAPEVINE
PROPERTY").
WHEREAS, in connection with the Texas Loan, Borrower is executing and
delivering to Lender this Agreement;
NOW, THEREFORE, as consideration of the foregoing it is hereby agreed
that:
1. RECITALS. The recitals set forth above are incorporated
herein by reference and shall form a part of this Agreement.
2. MODIFICATIONS. Subject to all the terms and conditions set
forth in this Agreement, Lender is agreeing, INTER ALIA, to fund the Texas Loan
to Borrower.
(For convenience, the modification referred to in this Paragraph 2 is
hereinafter referred to as the "MODIFICATION".)
3. BORROWERS ACKNOWLEDGEMENTS. As of August 21, 2000, there was
(i) $1,623,885.26 in principal owing under the Restated Note and (ii)
$5,876,114.74, in principal owing under the Convertible Note, plus accrued but
unpaid interest, costs and expenses and other obligations provided in the Loan
Documents (all such obligations of Borrower to Lender are hereinafter
collectively referred to as the "Obligations"). The Obligations are due and
owing Lender without setoff, recoupment, defense, deduction, counterclaim,
credit, allowance or adjustment, whether in law or equity, of any kind or
nature.
4. MODIFICATION OF DOCUMENTS.
(a) PROMISSORY NOTE. Borrower shall evidence its
obligations to repay the Texas Loan in accordance with the Modification by
executing and delivering to Lender a Promissory Note dated as of the effective
date hereof ("TEXAS NOTE"), in substantially the form of EXHIBIT A attached
hereto;
(b) AMENDMENT TO GAYLORD MORTGAGE. The Gaylord Mortgage
and Assignment shall be amended by a Third Amendment to Mortgage dated as of the
effective date hereof to evidence the fact that the Gaylord Mortgage also
secures the Texas Note, in substantially the form of EXHIBIT B attached hereto;
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(c) AMENDMENT TO AUBURN HILLS MORTGAGE. The Auburn Hills
Mortgage and Assignment shall be amended by a First Amendment to Mortgage dated
as of the effective date of this Agreement to evidence the fact that the Auburn
Hills Mortgage also secures the Texas Note, in substantially the form of EXHIBIT
C attached hereto;
(d) RATIFICATION OF GUARANTEES. Xxxxxxx Xxxxxxxx, Xxxxx
Xxxxxx and Xxxxxxx Xxxxxxx (collectively, the "GUARANTORS") shall confirm their
guaranty obligations with respect to the Texas Loan by executing a Ratification
of Guaranty in substantially the forms of EXHIBIT D attached hereto;
(e) CONSENT. Bass Pro Outdoor World, L.L.C. shall
evidence its consent to this transaction by executing an acknowledgment and
consent in substantially the form of EXHIBIT E attached hereto.
(f) ASSIGNMENT OF NOTE. Borrower shall execute and
deliver an assignment of the Buck & Bass Note and endorse the Buck & Bass Note
to Lender as collateral security for the Texas Loan, in substantially the form
of EXHIBIT F attached hereto; and
(g) MISCELLANEOUS. All such other documents and
agreements reasonably required by Lender to effectuate the provisions of this
Agreement.
(For convenience, this Agreement and all other documents executed in connection
herewith are sometimes hereinafter collectively referred to as the "MODIFICATION
DOCUMENTS", and the Original Loan Documents and the Modification Documents are
sometimes hereinafter collectively referred to as the "Loan Documents".)
5. CROSS-DEFAULT; CROSS-COLLATERALIZATION. Borrower acknowledges
and agrees that all of the Loan Documents shall stand as security for the Texas
Loan and the Texas Note and a default under any of the Modification Documents
including, but not limited to, the Texas Note shall be a default under the
Original Loan Documents and a default under the Original loan Documents shall be
a default under the Modification Documents.
6. REPRESENTATIONS, WARRANTIES, AGREEMENTS AND COMMENTS OF
BORROWER. The Borrower represents, warrants and covenants to Lender that:
(a) Borrower is a corporation duly organized and validly
existing under the laws of the State of Michigan; and
(b) Borrower has the full power and authority to execute
and deliver this Agreement, which has been duly authorized by all necessary
corporate action of Borrower. This Agreement is valid, binding and enforceable
in accordance with its terms.
(c) Borrower covenants with Lender that it, on its own
behalf, and on behalf of Buck & Bass, shall promptly obtain a commitment for a
takeout loan for the Texas Loan and close such loan as promptly as possible and
that all proceeds of such takeout loan shall be utilized to pay off the Texas
Note.
(d) The sole shareholder of Buck and Bass Texas, Inc. is
Buck & Bass.
7. COSTS, EXPENSES, AND FEES. Borrower agrees to pay all Loan
modification costs, fees and expenses of Lender's attorney and all out of pocket
costs of Lender.
8. DOCUMENTS CONTINUE. Except as expressly modified and amended
by the terms of this Agreement, all of the terms and conditions of the Loan
Documents remain in full force and effect and are hereby ratified, confirmed and
approved. If there is an express conflict between the terms of this Agreement
and the terms of the Loan Documents, the terms of this Agreement shall govern
and control.
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9. IMPAIRMENT OF COLLATERAL. The execution and delivery of this
Agreement in no manner shall impair or affect any other security (by endorsement
or otherwise) for the Obligations. No security taken heretofore or hereafter
security for the Obligations shall impair in any manner or affect this
Agreement. All present and future additional security is to be considered as
cumulative security.
10. DEFAULT. A default under any of the terms of this Agreement
shall be a default under each of the Loan Documents and a default under any of
the Loan Documents shall be a default under this Agreement.
11. MISCELLANEOUS.
(a) This Agreement constitutes the entire understanding
of the parties with respect to the subject matter hereof and may be modified or
amended only by a writing signed by the parties to be charged.
(b) This Agreement is governed by the internal laws
of the State of Michigan (without regard to conflicts of the law of principles).
(c) This Agreement may be executed in counterparts, each
of which shall be deemed an original, but together they shall constitute one and
the same instrument, and facsimile copies of signatures shall be treated as
original signatures for all purposes.
(d) This Agreement is binding on, and inure to the
benefit of, the parties hereto and their respective successors and assigns.
(e) If any provision of this Agreement is in conflict
with any applicable statutes or rule of law or otherwise unenforceable, such
offending provision shall be null and void only to the extent of such conflict
or unenforceability, but shall be deemed separate from and shall not invalidate
any other provision of this Agreement.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first written above.
BIG BUCK BREWERY & STEAKHOUSE, INC.,
a Michigan corporation
By: /s/ Xxxxxxx X. Xxxxxxxx
-------------------------------------------------
Print name: Xxxxxxx X. Xxxxxxxx
-----------------------------------------
Its: President
-----------------------------------------
"Borrower"
STATE OF MICHIGAN )
) ss.
COUNTY OF XXXXX )
On this 21st day of August, 2000, before me appeared Xxxxxxx X.
Xxxxxxxx as the President of Big Buck Brewery & Steakhouse, Inc., a Michigan
corporation, on behalf of the corporation.
/s/ Xxxxxx X. Xxxxxxxx
----------------------------------------------------
Print name: Xxxxxx X. Xxxxxxxx
-----------------------------------------
Notary Public, Xxxxx County, Michigan
-------------------------------------
My commission expires October 3, 2004
-------------------------------
[SEAL]
[SIGNATURE PAGE FOR LOAN MODIFICATION AGREEMENT]
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first written above.
XXXXX COUNTY EMPLOYEES' RETIREMENT
SYSTEM,
a body politic of the State of Michigan
By: /s/ Xxxxxx Xxx
-------------------------------------------------
Print name: Xxxxxx Xxx
-----------------------------------------
Its: Director
-----------------------------------------
"Lender"
STATE OF MICHIGAN )
)ss.
COUNTY OF XXXXX )
The foregoing instrument was acknowledged before me this 21st day of
August, 2000 by Xxxxxx Xxx, the Director of Xxxxx County Employees' Retirement
System, on behalf of the Lender.
/s/ Xxxxxx X. Xxxxxxxx
------------------------------------------------
Print Name Xxxxxx X. Xxxxxxxx
-----------------------------------------
Notary Public Xxxxx County, Michigan
---------------------------------------
My Commission Expires: October 3, 2004
------------------------------
[SEAL]
Exhibits:
A - Promissory Note
B - Third Amendment to Mortgage (Gaylord)
C - First Amendment to Mortgage (Auburn Hills)
D - Ratifications of Guarantee
E - Acknowledgment and Consent
F - Assignment of Note
[SIGNATURE PAGE FOR LOAN MODIFICATION AGREEMENT]
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