MASTER LOAN MODIFICATION AND LIEN PRIORITY AGREEMENT
Exhibit
10.13
REDACTED – AS
FILED
[Portions of this Exhibit
have been omitted pursuant
to a Request for
Confidential Treatment]
BRACKETS “[ ]*” ARE USED TO
INDICATE WHERE A PORTION OF THIS EXHIBIT HAS BEEN
OMITTED. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS. A COMPLETE COPY OF THIS EXHIBIT, CONTAINING ALL
OF THE OMITTED PORTIONS, HAS BEEN SEPARATELY FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION TOGETHER WITH THE REQUEST FOR CONFIDENTIAL
TREATMENT.
THIS AGREEMENT, Made and entered into
as of this 30th day of September, 2008, by and between HARDY CREDIT CO. (the
"Borrower") and UNITED BANK,
INC. ("Bank"), and consented to and acknowledged by COMMUNITY BANK, N.A., as a
participant bank.
RECITALS:
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(a)
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Borrower
executed promissory notes in the principal amount not to exceed
$10,000,000.00 and $5,000,000.00, payable to the order of the Bank (the
"2003 Notes"), and a Line of Credit and Letter of Credit Agreement (the
"2003 Credit Agreement"), all dated March 14,
2003.
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(b)
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Borrower
executed a promissory note in the principal amount not to exceed
$10,000,000.00, payable to the order of the Bank (the "2005 Note"), and a
revolving line of credit agreement (the "2005 Credit Agreement"), both
dated October 3, 2005.
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(c)
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Borrower
executed a promissory note in the principal amount not to exceed
$7,000,000.00*,
payable to the order of the Bank (the "2007 Note"), and a revolving line
of credit agreement (the "2007 Credit Agreement"), both dated May 15,
2007.
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(d)
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The
2003, 2005 and 2007 Notes (collectively, the "Note") currently have a
maturity date of November 14, 2008, and the Borrower has requested an
eleven month extension of the same, and Bank has agreed to such extension
and modification, provided the terms of that certain letter dated July 14,
2008 are satisfied on or before October 1, 2008, and this Agreement is
entered into between the Borrower and Bank, and acknowledged and consented
to by Community Bank, N.A., as a participating
lender.
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(e)
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All
terms that are used herein shall have the same definitions provided in the
2003, 2005 and 2007 Credit Agreements (collectively, the "Credit
Agreements"), unless otherwise
indicated.
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THEREFORE, WITNESSETH, that
for and in consideration of the premises and the mutual agreements hereinafter
set forth, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Borrower and Bank hereby agree as
follows:
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1.
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All
of the recitals set forth hereinabove are true and
accurate.
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2.
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The
Expiration Date is hereby extended from November 14, 2008 to October 14,
2009.
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3.
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Notwithstanding
anything to the contrary in the Credit Agreements, Notes or any other Loan
Documents, the maximum aggregate amount available to the Borrower under
the Notes shall be the lesser of: (a) $27,500,000, (b) 80% of the
aggregate amount of the values of the Real Property established by the
Bank based in part on the last acceptable appraised fair market value or
"Validated FMV"** of the Real Property securing the Notes with stores
located thereon which have not been closed for business by the Tenant to
the public for more than 12 months, or (c) 100% of the principal amount
outstanding on the Purchased Loans that have been assigned to the Bank
pursuant to the Collateral Assignment of Notes and
Documents.
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4.
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Notwithstanding
anything to the contrary in the Credit Agreements, Notes, Mortgages, or
any other Loan Documents evidencing, securing or otherwise pertaining to
any of the Notes, or that certain Consent and Adjustment of Lien Priority
Agreement dated the 15th day of May, 2007, the priority of all Liens that
the Bank has on the real and/or personal property conveyed pursuant to the
Collateral Assignment of Notes and Documents, the Mortgages, the Lease
Assignments, the Reserve Fund Account Assignment or any other Loan
Documents securing any of the Notes shall be treated and recognized as a
shared perfected first lien with parity and equal dignity securing all of
the Notes (i.e. Hereafter, the Bank shall be deemed to have a perfected
first lien on all collateral securing the
Notes).
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**
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Note: In
accordance with that certain letter agreement dated July 14, 2008, from
the Bank to the Borrower pertaining to the renewal of the loans evidenced
by the Notes, updated appraisals were ordered on several parcels of the
Real Property, six of which have not yet been received (i.e. Store Nos.
303 (▇. ▇▇▇▇▇, Tx.), 1929 (Garland, Tx.), 1902 (Austin, Tx.), 1933
(Conroe, Tx.), 357 (Lancaster, Oh.) and 2009 (▇▇▇▇▇▇▇▇▇, Co.)). After the
review and approval of such appraisals by the Bank, the values of the Real
Property may be adjusted by the Bank to account for any changes in value
of the Real Property appraised. This adjustment process by the Bank shall
establish the "Validated FMV" for similar properties which were not
recently appraised. This validation process was agreed to by the parties
hereto rather than obtaining current appraisals on all parcels of the Real
Property. Accordingly, the availability under the Notes may be adjusted
after the Bank has reviewed the appraised values established by the
current appraisals and established the 'Validated FMV" for the various
parcels of Real Property.
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In
conjunction with this Agreement, the Bank shall have received Mortgages,
which shall convey a shared first lien on the Borrower's fee simple estate
in the Real Property securing the 2003 Notes to secure the 2005 Note and
2007 Note, together with evidence satisfactory to Bank and counsel for
Bank that the Mortgages have been recorded and filed in the appropriate
public offices and that there are no Liens on the Real Property other than
those securing the Bank. The parties hereto agree to treat and recognize
all Liens securing the Bank as being equal, and having parity and a shared
first perfected lien position notwithstanding the order of
perfection.
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5.
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Section
5.01 of the Credit Agreements are hereby amended to add the following
subsection (j):
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"(j)
Borrower shall provide to Bank monthly, within 10 days of the end of each
month, an internally prepared summary of the status of the Purchased
Loans, which shall include, but not be limited to, the number of Purchased
Loans, the amount outstanding on each Purchased Loan, the date of purchase
by Borrower, the number of Purchased Loans sold or paid off, current loss
reserve amount for Purchased Loans, an aging of Purchased Loans, an
identification of any concentrations greater than 5% of the aggregate
outstanding balances of the Loans by contractor and/or location, and such
other information requested by Bank pertaining to the Purchased
Loans.
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6.
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Section
4.12 of the Credit Agreements is hereby amended to replace "evidence of
the deposit by Borrower of $1,000,000" in the Reserve Fund with "evidence
of the deposit by Borrower of an amount equal to at least the sum of: (i)
the minimum amount required by the [REDACTED –
CONFIDENTIAL TREATMENT REQUESTED]* Agreement and (ii) 5%
of the aggregate amount outstanding on the
Notes".
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7.
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Section
5.15 of the Credit Agreements is hereby amended to replace "and further
agrees to maintain a minimum balance of $1,000,000 therein" with "and
further agrees to maintain a minimum balance in the Reserve Fund equal to
at least the sum of: (i) the minimum amount required by the [REDACTED –
CONFIDENTIAL TREATMENT REQUESTED]* Agreement and (ii) 5%
of the aggregate amount outstanding on the
Notes".
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8.
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Section
7.01 of the 2003 Credit Agreement is hereby amended to add the following
subsections:
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"(n)
The Borrower or Tenant shall be in default of either the 2005 or 2007
Credit Agreements."
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"(o)
The Borrower shall be in "default" or "breach" of the [REDACTED –
CONFIDENTIAL TREATMENT REQUESTED]*
Agreement."
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9.
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Section
7.01 of the 2005 Credit Agreement is hereby amended to replace subsection
(n) and add subsection (o) with the
following:
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"(n)
The
Borrower or Tenant shall be in default of either the 2003 or 2007 Credit
Agreements."
"(o)
The
Borrower shall be in "default" or "breach" of the [REDACTED –
CONFIDENTIAL TREATMENT REQUESTED]*
Agreement."
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10.
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Section
7.01 of the 2007 Credit Agreement is hereby amended to add the following
subsection:
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"(o)
The Borrower shall be in "default" or "breach" of the [REDACTED –
CONFIDENTIAL TREATMENT REQUESTED]*
Agreement."
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11.
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Section
5.02 of the Credit Agreements is hereby amended by adding the following as
the second sentence of said
Section:
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"Borrower
shall also maintain, or require Tenant to maintain, a hazard insurance
policy insuring all insurable improvements on each parcel of the Real
Property against fire and other damage (including flood insurance if
available or evidence that the Real Property is not in a flood zone and
such insurance is not required) with each policy endorsed with loss
payable to the Bank, as its interest may appear and with coverages and in
amounts satisfactory to the Bank."
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12.
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All
provisions of the Notes and Credit Agreements and all other Loan Documents
securing, evidencing or otherwise pertaining thereto that are inconsistent
with this Agreement are hereby amended
accordingly.
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13.
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Except
as amended by the terms of this Agreement, the Credit Agreements, Notes
and all other Loan Documents shall remain in full force and effect in
accordance with their respective terms, as
amended.
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WITNESS the following
signatures as of the date first above written.
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Borrower:
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HARDY CREDIT
CO.
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By:
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84
LADC, LLC
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Its:
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General
Partner
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By:
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/s/ ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇
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▇▇▇▇▇▇
▇. ▇▇▇▇▇▇▇
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Its:
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Vice
President
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Bank:
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UNITED BANK,
INC.
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By:
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/s/ ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇
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▇▇▇▇▇▇▇
▇. ▇▇▇▇▇▇▇
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Title:
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Executive
Vice-President
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Consented
to and acknowledged by the following participant bank:
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COMMUNITY BANK,
N.A.
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By:
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/s/ BR ▇▇▇▇▇▇
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Title:
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President
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This
instrument was prepared by R. ▇▇▇▇▇ ▇▇▇▇▇▇▇, P.L.L.C., ▇.▇. ▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇.