EXHIBIT 10.40
LOAN DOCUMENTS MODIFICATION AGREEMENT
THIS LOAN DOCUMENTS MODIFICATION AGREEMENT (hereinafter referred to as
this "Amendment") is made and entered into as of the 11th day of May, 2001, by
and among SOUTHTRUST BANK, an Alabama banking corporation (hereinafter referred
to as "Lender"), and SUBURBAN LODGES OF AMERICA, INC., a Georgia corporation,
SUBURBAN HOLDINGS, L.P., a Georgia limited partnership and SUBURBAN
CONSTRUCTION, INC., a Georgia corporation (hereinafter collectively referred to
as "Borrower").
BACKGROUND STATEMENT
Borrower and Lender are parties to (i) that certain Non-Revolving
Draw-Down Term Note dated September 27, 2000, made by Borrower to the order of
Lender in the original principal amount of Ten Million and No/100 Dollars
($10,000,000.00) (hereinafter referred to as the "Term Note", and the loan
evidenced thereby as the "Term Loan"); (ii) that certain Amended and Restated
Line of Credit Note dated September 27, 2000, made by Borrower to the order of
Lender in the original principal amount of Fifteen Million and No/100 Dollars
($15,000,000.00) (hereinafter referred to as the "Line of Credit Note", and the
loan evidenced thereby as the "Line of Credit Loan", the Line of Credit Note
and the Term Note hereinafter collectively referred to as the "Note" and the
loans evidenced thereby as the "Loan"). The Note is secured by (a) that certain
Mortgage, Assignment of Rents and Security Agreement from Borrower to Lender,
dated February 18, 2000, recorded as Document No. 1680514, in the Records of
the County Recorder of Dakota County, Minnesota, as modified by that certain
First Modification to Security Deed dated September 27, 2000, recorded as
Document No. 1722211, aforesaid records (hereinafter referred to as the "Dakota
Security Deed"), (b) that certain Mortgage, Assignment of Rents and Security
Agreement from Borrower to Lender, dated February 18, 2000, recorded as
Document No. 1488409, in the Records of the County Recorder of Anoka County,
Minnesota, as modified by that certain First Modification to Security Deed dated
September 27, 2000, recorded as Document No. 1527507, aforesaid records
(hereinafter referred to as the "Anoka Security Deed"), (c) that certain
Mortgage, Assignment of Rents and Security Agreement from Borrower to Lender,
dated February 18, 2000, recorded at Clerk's File No. 2000-0032600, in the
Records of the County Clerk of Bexar County, Texas, as modified by that certain
First Modification to Security Deed dated September 27, 2000, recorded at
Clerk's File No. 2000-0170867, aforesaid records (hereinafter referred to as
the "Bexar Security Deed"), (d) that certain Mortgage, Assignment of Rents and
Security Agreement from Borrower to Lender, dated February 18, 2000, recorded
at Clerk's File No. 905707, in the Records of the County Clerk of Dallas
County, Texas as modified by that certain First Modification to Security Deed
dated September 27, 2000, recorded at Clerk's File No. 1155751, aforesaid
records (hereinafter referred to as the "Dallas Security Deed"), (e) that
certain Mortgage, Assignment of Rents and Security Agreement from Borrower to
Lender, dated February 18, 2000, recorded at Clerk's File No. 2000-0012575 in
the Records of the County Clerk of El Paso County, Texas as modified by that
certain First Modification to Security Deed dated September 27, 2000, recorded
at Clerk's File No. 20000071649, aforesaid records (hereinafter referred to as
the "El Paso Security Deed"), (f) that certain Tennessee Deed of Trust
Assignment of Rents and Leases and Security Agreement from Borrower to Lender,
dated February 18, 2000, recorded as Instrument No. 200000022400189, in Book
5542, Page 944 in the Public Records of Hamilton County, Tennessee as modified
by that certain First Modification to Security Deed dated September 27, 2000,
recorded as Instrument No. 20000101600383, aforesaid records (hereinafter
referred to as the "Tennessee Security Deed"), (g) that certain Mortgage,
Assignment of Rents and Security Agreement from Borrower to Lender, dated
February 18, 2000, recorded as Document No. R2000-027503, in the Public Records
of Dupage County, Illinois as modified by that certain First Modification to
Security Deed dated September
27, 2000, recorded as Document No. R2000-153061, aforesaid records (hereinafter
referred to as the "Dupage Security Deed"), (h) that certain Mortgage,
Assignment of Rents and Security Agreement from Borrower to Lender, dated
November 8, 2000, recorded as Document No. 2000-1115, in the Public Records of
Cook County, Illinois (hereinafter referred to as the "Cook Security Deed"),
(i) that certain Mortgage, Assignment of Rents and Security Agreement from
Borrower to Lender, dated February 18, 2000, recorded as Instrument No.
200002230035892, in the Records of the County Recorder of Franklin County,
Ohio, as modified by that certain First Modification to Security Deed dated
September 27, 2000, recorded as Instrument No. 200010020199082, aforesaid
records (hereinafter referred to as the "Ohio Security Deed;" the Ohio Security
Deed, the Cook Security Deed, the Dupage Security Deed, the Dakota Security
Deed, the Anoka Security Deed, the Bexar Security Deed, the Tennessee Security
Deed, the Dallas Security Deed, and the El Paso Security Deed hereinafter
collectively referred to as the "Security Deed"), and (j) all of the "Loan
Documents," as that term is defined in the Security Deed. Certain obligations
of Borrower are contained in a Amended and Restated Loan Agreement by and
between Borrower and Lender dated September 27, 2000 (hereinafter referred to
as the "Loan Agreement") as subsequently amended herein and from time to time.
Borrower and Lender have agreed to amend the Loan Agreement and all of the
other Loan Documents, and the parties hereto are entering into this Amendment
to evidence their agreements.
AGREEMENT
FOR AND IN CONSIDERATION of the sum of Ten and No/100 Dollars ($10.00),
the foregoing recitals, and other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, Borrower and Lender do hereby
agree as follows:
1. Ratification; Expenses. Except as herein expressly modified or
amended, all the terms and conditions of the Note are hereby ratified,
affirmed, and approved. In consideration of Lender agreeing to amend the Loan
Agreement, the Term Note and the Line of Credit Note, Borrower agrees to pay
all fees and expenses incurred in connection with this Amendment.
2. Modification of Loan Agreement. As of the date hereof, Borrower
hereby reaffirms and restates each and every covenant, warranty and
representation set forth in the Loan Agreement except as modified herein. In
addition, Borrower and Lender hereby acknowledge and agree to the following
modifications of the Loan Agreement:
(a) The definition of "Suburban Debt Service Coverage Ratio" in
Article 101 of the Loan Agreement is hereby deleted in its entirety, and is
replaced by the following definition of "Suburban Debt Service Coverage Ratio:"
""Suburban Debt Service Coverage Ratio" shall mean, as of any particular
date and with respect to Suburban, net income after taxes, plus
depreciation, plus amortization, plus interest, less dividends, divided by
current maturities of all long-term debt payments, excluding any principal
amounts due under this Agreement, plus interest. Notwithstanding anything
herein to the contrary, this definition shall exclude (i) any write-downs
which may or may not be made from losses arising in connection with the
investment in HotelTools, Inc., as permitted pursuant to that certain June
27, 2000 consent letter by Lender to Borrower, and (ii) any first (1st)
quarter 2001 write-downs relating to losses incurred in connection with
undeveloped sites."
(b) Section 507(c) Minimum Tangible Net Worth of the Loan Agreement is
hereby deleted in its entirety, and is replaced by the following Section 507(c)
Minimum Tangible Net Worth:
"Minimum Tangible Net Worth: Suburban shall maintain a Tangible Net
Worth of no less than $160,000,000.00."
3. Modification of Loan Documents: As of the date hereof, Borrower hereby
reaffirms and restates each and every warranty and representation set forth in
the Loan Documents. All references in the Loan Documents to the Loan Agreement
shall hereafter refer to the Loan Agreement as herein amended.
4. No Defenses; Release. For purposes of this Paragraph 4, the terms
"Borrower Parties" and "Lender Parties" shall mean and include Borrower and
Lender, respectively, and each of their respective predecessors, successors and
assigns, and each past and present, direct and indirect, parent, subsidiary and
affiliated entity of each of the foregoing, and each past and present employee,
agent, attorney-in-fact, attorney-at-law, representative, officer, director,
shareholder, partner and joint venturer of each of the foregoing, and each
heir, executor, administrator, successor and assign of each of the foregoing;
references in this paragraph to "any" of such parties shall be deemed to mean
"any one or more" of such parties; and references in this sentence to "each of
the foregoing" shall mean and refer cumulatively to each party referred to in
this sentence up to the point of such reference. Each Borrower hereby
acknowledges, represents and agrees: that each Borrower has no defenses,
setoffs, claims, counterclaims or causes of action of any kind or nature
whatsoever with respect to the Security Deed, Assignment of Rents or any
amendments thereto, the Note, and the other Loan Documents or the indebtedness
evidenced and secured thereby, or with respect to any other documents or
instruments now or heretofore evidencing, securing or in any way relating to
the Loan, or with respect to the administration or funding of the Loan or the
development, operation or financing of the "Premises" (as said term is defined
in the Security Deed) or with respect to any other transaction, matter or
occurrence between any of the Borrower Parties and any Lender Parties or with
respect to any acts or omissions of any Lender Parties (all of said defenses,
setoffs, claims, counterclaims or causes of action being hereinafter referred
to as "Loan Related Claims"); that, to the extent that either Borrower may be
deemed to have any Loan Related Claims, each Borrower does hereby expressly
waive, release and relinquish any and all such Loan Related Claims, whether or
not known to or suspected by Borrower; that Borrower shall not institute or
cause to be instituted any legal action or proceeding of any kind based upon
any Loan Related Claims; and that each Borrower shall indemnify, hold harmless
and defend all Lender Parties from and against any and all Loan Related Claims
and any and all losses, damages, liabilities, costs and expenses suffered or
incurred by any Lender Parties as a result of any assertion or allegation by
any Borrower Parties of any Loan Related Claims or as a result of any legal
action related thereto. Borrower hereby reaffirms and restates, as of the date
hereof, all covenants, representations and warranties set forth in the Loan
Documents.
5. No Novation. Borrower and Lender hereby acknowledge and agree that
this Amendment shall not constitute a novation of the indebtedness evidenced by
the Loan Documents, and further that the terms and provisions of the Loan
Documents shall remain valid and in full force and effect except as may be
hereinabove modified and amended.
6. No Waiver or Implication. Borrower hereby agrees that nothing herein
shall constitute a waiver by Lender of any default, whether known or unknown,
which may exist under the Note or any other Loan Documents. Borrower hereby
further agrees that no action, inaction or agreement by Lender,
including, without limitation, any extension, indulgence, waiver, consent or
agreement of modification which may have occurred or have been granted or
entered into (or which may be occurring or be granted or entered into hereunder
or otherwise) with respect to nonpayment of the Loan or any portion thereof, or
with respect to matters involving security for the Loan, or with respect to any
other matter relating to the Loan, shall require or imply any future extension,
indulgence, waiver, consent or agreement by Lender. Borrower hereby acknowledges
and agrees that Lender has made no agreement, and is in no way obligated, to
grant any future extension, indulgence, waiver or consent with respect to the
Loan or any matter relating to the Loan.
7. No Release of Collateral. Borrower further acknowledges and
agrees that this Agreement shall in no way occasion a release of any collateral
held by Lender as security to or for the Loan, and that all collateral held by
Lender as security to or for the Loan shall continue to secure the Loan.
8. Successors and Assigns. This Amendment shall be binding upon
and inure to the benefit of Borrower and Lender and their respective successors
and assigns, whether voluntary by act of the parties or involuntary by operation
of law.
9. Cross References. All references in any of the Loan Documents
to any of the Loan Documents shall hereafter include the modifications to the
Loan Documents set forth herein.
IN WITNESS WHEREOF, this Amendment has been duly executed under seal
by Borrower and Lender as of the day and year first above written.
BORROWER:
SUBURBAN LODGES OF AMERICA, INC.,
a Georgia corporation
By: /s/ Paul A. Criscillis, Jr.
------------------------------------
Paul A. Criscillis, Jr.,
Chief Financial Officer
(CORPORATE SEAL) Address: 300 Galleria Parkway, Suite 1200
Atlanta, Georgia 30337
Attn.: Chief Financial Officer
Copy to: 300 Galleria Parkway, Suite 1200
Atlanta, Georgia 30337
Attn.: Corporate Secretary
[SIGNATURES CONTINUED ON THE FOLLOWING PAGE]
SUBURBAN CONSTRUCTION, INC., a
Georgia corporation
By: /s/ Paul A. Criscillis, Jr.
------------------------------------
Paul A. Criscillis, Jr.
Chief Financial Officer
(CORPORATE SEAL) Address: 300 Galleria Parkway, Suite 1200
Atlanta, Georgia 30337
Attn: Chief Financial Officer
Copy to: 300 Galleria Parkway, Suite 1200
Atlanta, Georgia 30337
Attn: Corporate Secretary
SUBURBAN HOLDINGS, L.P., a
Georgia limited partnership
By: Suburban Management, Inc., its
General Partner
By: /s/ Paul A. Criscillis, Jr.
-------------------------------
Paul A. Criscillis, Jr.
Chief Financial Officer
Address: 300 Galleria Parkway, Suite 1200
Atlanta, Georgia 30337
Attn: Chief Financial Officer
Copy to: 300 Galleria Parkway, Suite 1200
Atlanta, Georgia 30337
Attn: Corporate Secretary
LENDER:
SOUTHTRUST BANK, an Alabama banking
corporation,
By: /s/ William Harris
------------------------------------
William Harris, Vice President
Address: One Georgia Center
600 West Peachtree Street, Suite 450
Atlanta, GA 30308
Attn: William Harris, Vice President