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EXHIBIT 10.17
AMENDMENT TO LOAN AGREEMENT
This AMENDMENT TO LOAN AGREEMENT (this "Agreement"), dated as
of November 29, 1995, is entered into among PRESIDENTIAL MORTGAGE COMPANY, a
California limited partnership (the "Borrower"), the financial institutions
party to the Loan Agreement, and NATWEST BANK N.A., a national banking
association (formerly known as National Westminster Bank USA), as the Agent.
Preliminary Statement
A. The Borrower, the Agent, and the Banks, are parties to the
Loan Agreement.
B. The Borrower has requested that the Agent and the Banks
amend the Loan Agreement in certain respects as hereinafter specified.
C. The parties hereto are willing to enter into this
Agreement.
NOW, THEREFORE, for valuable consideration (the receipt and
sufficiency of which are acknowledged), the parties hereto agree as follows:
ARTICLE I
DEFINITIONS; RULES OF CONSTRUCTION
1.1 Definitions. As used herein:
"Agent" means NatWest Bank N.A., a national banking
association, formerly known as National Westminster Bank USA, as agent on behalf
of itself and the banks under the Loan Agreement, and any successor thereto in
such capacity.
"Banks" means the banks party to the Loan Agreement as of the
date first set forth above.
"Borrower" has the meaning set forth in the introduction
hereto.
"Loan Agreement" means that certain Loan Agreement, dated as
of August 28, 1990, as amended, as amended and restated as of May 20, 1992, as
amended, as amended and restated as of September 28, 1994, as amended to the
date first set forth above, between the Borrower, as the borrower thereunder,
and NatWest, as the Agent and the sole Bank thereunder.
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"NatWest" means NatWest Bank N.A., a national banking
association, formerly known as National Westminster Bank USA.
"Released Parties" means, collectively, the Agent, the Banks,
and all of the Agent's and each Bank's current and former shareholders,
directors, officers, employees, accountants, attorneys, and agents, and all of
their respective successors and assigns.
1.2 Certain Rules of Construction. For purposes of this Agreement
and unless otherwise specified herein:
1.2.1 Construction. References to the plural include the
singular and to the singular include the plural, references to any gender
include any other gender, the part includes the whole, the term "including" is
not limiting, and the term "or" has, except where otherwise indicated, the
inclusive meaning represented by the phrase "and/or." References to any fiscal
period are references to fiscal periods of the Borrower. References in this
Agreement to any determination by the Agent, the Required Banks, or any Bank
include good faith estimates (in the case of quantitative determinations) and
good faith beliefs (in the case of qualitative determinations) by the Agent, the
Required Banks, or any Bank, as applicable; any determination made in good faith
by the Agent, the Required Banks, or any Bank shall be conclusive absent
manifest error. The words "hereof," "herein," "hereby," and "hereunder," and any
other similar words, refer to this Agreement as a whole and not to any
particular provision of this Agreement. Article, section, subsection, clause,
exhibit and schedule references are to this Agreement. Any reference to this
Agreement or any other Loan Document includes all permitted alterations,
amendments, changes, extensions, modifications, renewals, or supplements thereto
or thereof, as applicable.
1.2.2 No Presumption Against Any Party. Neither this Agreement
nor any uncertainty or ambiguity herein shall be construed or resolved using any
presumption against any party hereto, whether under any rule of construction or
otherwise. On the contrary, this Agreement has been reviewed by each of the
parties and their counsel and, in the case of any ambiguity or uncertainty,
shall be construed and interpreted according to the ordinary meaning of the
words used so as to fairly accomplish the purposes and intentions of all parties
hereto.
1.2.3 Independence of Provisions. All agreements and covenants
hereunder shall be given independent effect such that if a particular action or
condition is prohibited by the terms of any such agreement or covenant, the fact
that such action or condition would be permitted within the limitations of
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another agreement or covenant shall not be construed as allowing such action to
be taken or condition to exist.
1.2.4 Other Defined Terms. Capitalized terms used in this
Agreement, unless otherwise defined, shall have the respective meanings
specified in the Loan Agreement.
ARTICLE II
AMENDMENTS, MODIFICATIONS, AND REAFFIRMATIONS
2.1 Amendment To The Loan Agreement. The Borrower, the Banks, and
the Agent hereby amend the Loan Agreement as follows:
2.1.1 The defined term "Applicable Margin" is hereby amended
to read in full as follows:
"Applicable Margin" means 1.5 percentage points per
annum.
2.1.2 The defined term "Termination Date" is hereby amended to
read in full as follows:
"Termination Date" means June 30, 1997.
2.1.3 The Borrower hereby acknowledges and agrees that the
current outstanding principal amount of the Loans is $7,995,743.91. In light
thereof, Section 2.5(b)(i) of the Loan Agreement is hereby amended to read in
full as follows:
(b) Mandatory Prepayments.
(i) The Borrower shall prepay the Loans so that the
outstanding principal balance of the Loans immediately after
such prepayment will not exceed, on each of the dates set
forth below, the correlative amount set forth below for such
date:
Maximum Outstanding
Date Principal Balance of the Loans
---- ------------------------------
06/30/96 $3,755,000
09/30/96 $2,755,000
12/31/96 $1,755,000
03/31/97 $755,000
06/30/97 $0
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The Borrower shall give notice of such prepayments to the
Agent pursuant to subsection (d) of this section.
2.1.4 Section 2.6(b)(i) of the Loan Agreement is hereby
deleted in its entirety.
2.1.5 Section 2.5(b)(ii)(2) of the Loan Agreement is hereby
amended to read as follows:
(2) the Borrower shall prepay the Loans within three (3)
Business Days following the date or dates on which such Net
Equity Proceeds are received by an amount up to $1,000,000.00,
not exceeding the amount of such Net Equity Proceeds.
2.1.6 Section 5.2(b) of the Loan Agreement is hereby amended
to read as follows:
The Borrower shall maintain, as of the end of each
calendar month, a ratio of (i) Net Real Estate Assets to (ii)
the aggregate outstanding Debt of the Borrower owing to the
Agent and the Banks hereunder and under the Notes of not less
than 1.60:1.00.
2.2 Conversion of the Borrower to a Public Stock Corporation. The
Agent and NatWest hereby consent to the conversion of the Borrower from a
limited partnership organized under the laws of the State of California to a
public stock corporation organized under the laws of one of the United States,
such conversion to be upon and subject to the terms and conditions specified in
Exhibit "A" hereto, with such changes to such terms and conditions as the Agent
or NatWest shall hereafter reasonably request and subject, in any event, to any
and all rights of the Agent and NatWest under the Loan Agreement. Within thirty
(30) days after the execution and delivery of this Agreement, the Borrower shall
execute and deliver (or cause to be executed and delivered) to NatWest the
5-year warrant to purchase 2% of the common stock of the corporation to which
the Borrower is to be converted, as described on page 3 of Exhibit "A" hereto,
such warrant to be satisfactory in form and substance to NatWest.
2.3 Extension Fee. In consideration of the Agent's and NatWest's
agreement to extend the Termination Date as provided in Section 2.1.2 of this
Agreement, the Borrower hereby agrees to pay the Agent an extension fee equal to
$75,000, payable, without interest, as follows: (i) $25,000 simultaneously with
the
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execution and delivery of this Agreement by the Borrower; (ii) $25,000 on or
before September 30, 1996; and (iii) $25,000 on or before January 31, 1997. The
extension fee herein described is in addition to the Administration Fees payable
by the Borrower pursuant to Section 2.6(a)(ii) of the Loan Agreement.
2.4 No Other Amendments; Reaffirmation. Except as expressly
amended hereby, the Loan Agreement is in all respects ratified and confirmed and
shall remain unchanged and in full force and effect. The Borrower reaffirms its
obligations and duties under the Loan Agreement, as amended hereby.
ARTICLE III
RELEASE
3.1 Release.
3.1.1 No Present Claims. The Borrower acknowledges and agrees
that: (a) the Borrower has no claim or cause of action against any Released
Party arising under or in any way related to the Loans or the Loan Documents;
(b) the Borrower has no offset right, counterclaim, or defense of any kind
against any of the obligations and liabilities of the Borrower under the Loan
Documents; and (c) each Released Party has heretofore properly performed and
satisfied in a timely manner any and all of such Released Party's obligations,
if any, to the Borrower. The Agent and the Banks desire, and the Borrower
agrees, to eliminate any possibility that any past conditions, acts, omissions,
events, circumstances, or matters would impair or otherwise adversely affect the
Agent or the Banks or any of the Agent's or the Banks' rights, interests,
collateral, security, or remedies under the Loan Documents. Therefore, the
Borrower, on behalf of the Borrower and all successors and assigns of and any
and all other parties claiming rights through the Borrower, unconditionally
releases, acquits, and forever discharges each and every Released Party from:
(i) all liabilities, obligations, duties, or indebtedness of any of the Released
Parties to the Borrower, whether known or unknown, arising prior to the date
first above written; and (ii) all claims, offsets, causes of action, suits, or
defenses, whether known or unknown, which the Borrower might otherwise have
against any of the Released Parties on account of any condition, act, omission,
event, contract, liability, obligation, indebtedness, claim, cause of action,
defense, circumstance, or matter of any kind which existed, arose, or occurred
at any time prior to the date first written above. As further consideration for
the above release, the Borrower specifically agrees, represents, and warrants
that the matters released herein are not limited to matters which are known or
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disclosed, and the Borrower hereby waives any and all rights and benefits which
the Borrower now has, or in the future may have, conferred upon the Borrower by
virtue of the provisions of either New York law or the provisions of Section
1542 of the Civil Code of the State of California which provides as follows:
A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE
CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT
THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM
MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE
DEBTOR.
3.2 Waiver of Unknown Claims. The Borrower is aware that the Borrower
may later discover facts in addition to or different from those which the
Borrower now knows or believes to be true with respect to the releases given
herein, and that it is nevertheless the Borrower's intention to settle, release,
and discharge fully, finally, and forever all of these matters, known or
unknown, suspected or unsuspected, which previously existed, now exist, or may
exist. In furtherance of such intention, the Borrower specifically acknowledges
and agrees that the releases given in this Agreement shall be and shall remain
in effect as full and complete releases of the matters being released,
notwithstanding the discovery or existence of any such additional or different
facts and that such releases shall not be subject to termination or rescission
by reason of any such additional or different facts.
3.3 Warranty of Non-Assignment. The Borrower hereby represents and
warrants that it has not previously assigned or transferred, or purported to
assign or transfer, to any Person any of the claims, demands, grievances,
liabilities, debts, accounts, obligations, costs, expenses, liens, rights,
actions, or causes of action released by the terms of this Agreement.
ARTICLE IV
GENERAL PROVISIONS
4.1 Conditions to the Effectiveness of this Agreement. This Agreement
shall become effective upon the execution and delivery of this Agreement by both
the Borrower and the Agent.
4.2 Entire Agreement. This Agreement embodies the entire agreement and
understanding among the parties hereto relating to the subject matter hereof and
supersedes all prior agreements and understandings relating to the subject
matter hereof. No course of prior dealings among the parties hereto, no usage of
the trade, and no parol or extrinsic evidence of any nature, shall be
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used or be relevant to supplement, explain or modify any term used herein.
4.3 Governing Law; Jurisdiction and Venue; Waiver of Trial by Jury.
4.3.1 GOVERNING LAW. THE VALIDITY, CONSTRUCTION,
INTERPRETATION, AND ENFORCEMENT OF THIS AGREEMENT, AND THE RIGHTS OF THE PARTIES
HERETO AND THERETO, SHALL BE DETERMINED UNDER, GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK.
4.3.2 JURISDICTION AND VENUE. THE PARTIES HERETO AGREE THAT
ALL ACTIONS OR PROCEEDINGS ARISING IN CONNECTION WITH THIS AGREEMENT OR THE LOAN
DOCUMENTS SHALL BE TRIED AND LITIGATED ONLY IN THE STATE AND FEDERAL COURTS
LOCATED IN ▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇ OR, AT THE SOLE OPTION OF THE
REQUIRED LENDERS, IN ANY OTHER COURT IN WHICH THE LENDER SHALL INITIATE LEGAL OR
EQUITABLE PROCEEDINGS AND WHICH HAS JURISDICTION OVER THE SUBJECT MATTER AND
PARTIES IN CONTROVERSY. EACH PARTY HERETO WAIVES ANY RIGHT TO ASSERT THE
DOCTRINE OF FORUM NON CONVENIENS OR TO OBJECT TO VENUE TO THE EXTENT ANY
PROCEEDING IS BROUGHT IN ACCORDANCE WITH THIS SECTION 6.3.2 AND STIPULATES THAT
THE STATE AND FEDERAL COURTS LOCATED IN ▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇,
SHALL HAVE IN PERSONAM JURISDICTION AND VENUE OVER EACH SUCH PARTY FOR THE
PURPOSE OF LITIGATING ANY SUCH DISPUTE, CONTROVERSY, OR PROCEEDING ARISING OUT
OF OR RELATED TO THIS AGREEMENT, OR THE LOAN DOCUMENTS.
4.3.3 WAIVER OF TRIAL BY JURY. THE PARTIES TO THIS AGREEMENT
HEREBY EXPRESSLY WAIVE ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION,
CAUSE OF ACTION, OR PROCEEDING ARISING UNDER OR WITH RESPECT TO THIS AGREEMENT,
OR THE LOAN DOCUMENTS, OR IN ANY WAY CONNECTED WITH, OR RELATED TO, OR
INCIDENTAL TO, THE DEALINGS OF THE PARTIES HERETO WITH RESPECT TO THIS
AGREEMENT, THE LOAN DOCUMENTS, OR THE TRANSACTIONS RELATED HERETO OR THERETO, IN
EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND IRRESPECTIVE OF WHETHER
SOUNDING IN CONTRACT, TORT, OR OTHERWISE. THE PARTIES TO THIS AGREEMENT AGREE
THAT ANY SUCH CLAIM, DEMAND, ACTION, CAUSE OF ACTION, OR PROCEEDING SHALL BE
DECIDED BY A COURT TRIAL WITHOUT A JURY AND THAT ANY PARTY HERETO MAY FILE AN
ORIGINAL COUNTERPART OR A COPY OF THIS SECTION 6.3.3 WITH ANY COURT AS WRITTEN
EVIDENCE OF THE CONSENT OF THE OTHER PARTY OR PARTIES HERETO TO WAIVER OF THE
RIGHT TO TRIAL BY JURY.
4.4 Counterparts; Telefacsimile Signatures. This Agreement may
be signed in any number of counterparts, each of which shall be an original,
with the same effect as if all signatures were upon the same instrument.
Delivery of an executed counterpart of the signature page to this Agreement by
telefacsimile shall be
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effective as delivery of a manually executed counterpart of this Agreement, and
any party delivering such an executed counterpart of the signature page to this
Agreement by telefacsimile to any other party shall thereafter also promptly
deliver a manually executed counterpart of this Agreement to such other party,
provided that the failure to deliver such manually executed counterpart shall
not affect the validity, enforceability, or binding effect of this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the day and year first written above.
THE BORROWER: PRESIDENTIAL MORTGAGE COMPANY,
a California limited partnership
By: Presidential Management Company,
a California limited partnership
Title: General Partner
By: Presidential Services Corporation,
a California corporation
Title: General Partner
By:__________________________________
▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: President
THE AGENT: NATWEST BANK N.A.,
a national banking association
By:_________________________________
Title:______________________________
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