Exhibit 10.1
NINTH MODIFICATION AGREEMENT
This NINTH MODIFICATION AGREEMENT (this "AGREEMENT") is made and entered
into as of August 22, 2002, by and between LEGACY/MONTEREY HOMES L.P., an
Arizona limited partnership, HANCOCK-MTH COMMUNITIES, INC., an Arizona
corporation, HANCOCK-MTH BUILDERS, INC., an Arizona corporation, MTH
HOMES-TEXAS, L.P., a Texas limited partnership, jointly and severally
(collectively, "BORROWER"), and GUARANTY BANK, a federal savings bank
("Lender").
WITNESSETH:
WHEREAS, pursuant to a certain Master Loan Agreement (the "LOAN AGREEMENT")
dated as of January 31, 1993, between Lender and Borrower, Lender made a loan
(the "LOAN") to Borrower, evidenced by a certain Revolving Promissory Note (the
"NOTE") dated as of January 31, 1993, payable to Lender in the stated principal
amount of SEVENTY-FIVE MILLION AND NO/100 DOLLARS ($75,000,000.00), with
interest and principal payable as set forth therein; and
WHEREAS, to secure the Note and Loan, Master Form Deed(s) of Trust (With
Security Agreement and Assignment of Rents and Leases) (hereinafter collectively
referred to as the "MASTER DEEDS OF TRUST," whether one or more), which Master
Deeds of Trust have been recorded in certain counties in the State of Texas as
more particularly described on EXHIBIT A attached hereto; and which Master Deeds
of Trust are incorporated by reference pursuant to the terms and provisions of
certain Deeds of Trust Incorporating by Reference a Master Form Deed of Trust
(With Security Agreement and Assignment of Rents and Leases) (hereafter
collectively referred to as the "SUPPLEMENTAL DEEDS OF TRUST," whether one or
more) recorded in such counties and encumbering certain real and other property
(the "PROPERTY") described in such Supplemental Deeds of Trust (such Master
Deeds of Trust and Supplemental Deeds of Trust hereafter collectively referred
to as the "DEEDS OF TRUST," whether one or more); and
WHEREAS, the Deeds of Trust were modified pursuant to a Modification
Agreement (the "FIRST Modification"), and recorded in various counties in Texas,
which First Modification modified certain terms and provisions of the Loan as
set forth therein; and
WHEREAS, the Deeds of Trust were further pursuant to a Second Modification
Agreement (the "SECOND MODIFICATION") dated as of May 19, 1998, and recorded in
various counties in Texas, which Second Modification modified certain terms and
provisions of the Loan as set forth therein; and
WHEREAS, the Deeds of Trust were further pursuant to a Third Modification
Agreement (the "THIRD MODIFICATION") dated as of March 30, 1999, and recorded in
various counties in Texas, which Third Modification modified certain terms and
provisions of the Loan as set forth therein; and
WHEREAS, the Deeds of Trust were further pursuant to a Fourth Modification
Agreement (the "FOURTH MODIFICATION") dated as of July 31, 1999, and recorded in
NINTH MODIFICATION AGREEMENT - Page 1
various counties in Texas, which Fourth Modification modified certain terms and
provisions of the Loan as set forth therein; and
WHEREAS, the Deeds of Trust were further pursuant to a Fifth Modification
Agreement (the "FIFTH MODIFICATION") dated March 24, 2000, and recorded in
various counties in Texas, which Fifth Modification modified certain terms and
provisions of the Loan as set forth therein; and
WHEREAS, the Deeds of Trust were further pursuant to a Sixth Modification
Agreement (the "SIXTH MODIFICATION") dated as of July 31, 2000, and recorded in
various counties in Texas, which Sixth Modification modified certain terms and
provisions of the Loan as set forth therein; and
WHEREAS, the Deeds of Trust were further pursuant to a Seventh Modification
Agreement (the "SEVENTH MODIFICATION") dated as of _________________, 2001, and
recorded in various counties in Texas, which Seventh Modification modified
certain terms and provisions of the Loan as set forth therein; and
WHEREAS, the Deeds of Trust were further pursuant to a Ratification and
Assumption Agreement (the "RATIFICATION AGREEMENT") dated as of December _____,
2001, and recorded in various counties in Texas, which Ratification Agreement
modified certain terms and provisions of the Loan as set forth therein; and
WHEREAS, the Deeds of Trust were further pursuant to a Eighth Modification
Agreement (the "EIGHTH MODIFICATION") dated as of May 31, 2002, and recorded in
various counties in Texas, which Eighth Modification modified certain terms and
provisions of the Loan as set forth therein; and
WHEREAS, the Deeds of Trust were further pursuant to a Ratification and
Assumption Agreement (the "SECOND RATIFICATION AGREEMENT") dated as of July
_____, 2002, and recorded in various counties in Texas, which Second
Ratification Agreement modified certain terms and provisions of the Loan as set
forth therein; and
WHEREAS, the Note and the Loan are guaranteed pursuant to that certain
Guaranty Agreement dated as of July ____, 2002 (the "GUARANTY"), executed by
MTH-Texas GP, Inc., an Arizona corporation, MTH-Texas LP, Inc., MTH-Texas GP II,
Inc., an Arizona corporation, MTH-Texas LP II, Inc., an Arizona corporation, and
Meritage Corporation, a Maryland corporation ("GUARANTOR," whether one or more);
and
WHEREAS, the Loan Agreement, the Note, the First Modification, the Second
Modification, the Third Modification, the Fourth Modification, the Fifth
Modification, the Sixth Modification, the Seventh Modification, the Ratification
Agreement, the Eighth Modification, the Second Ratification Agreement, the Deeds
of Trust and all other documents evidencing and/or securing the Loan are
hereinafter collectively called the "LOAN Instruments"; and
WHEREAS, Lender, the owner and holder of the Note and the Deeds of Trust
and all rights and titles evidenced thereby, and Borrower, the record owner of
NINTH MODIFICATION AGREEMENT - Page 2
the Property and being liable for the payment of the Note and Loan, desire to
modify the Loan Instruments as herein provided.
NOW, THEREFORE, in consideration of Ten and No/100 Dollars ($10.00) and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto hereby agree as follows:
1. The Loan is hereby increased from $75,000,000.00 to $90,000,000.00. All
references in the Loan Instruments to the amount of $75,000,000.00 are hereby
increased to $90,000,000.00.
2. Borrower shall execute and deliver to Lender a letter agreement (in form
and substance satisfactory to Lender in its sole discretion) (the "LETTER
AGREEMENT") dated as of the date hereof amending certain other terms and
provisions of the Loan Instruments. (Hereafter, this Agreement and the Letter
Agreement shall be included in the defined term "LOAN INSTRUMENTS.")
3. Borrower acknowledges and agrees, that as an accommodation to Borrower,
EXHIBIT A hereto (which exhibit describes the recording information of the
Master Deeds of Trust) shall be attached to this Agreement (and to any and all
other documents which may require the attachment of a description of the
recording information of the Master Deeds of Trust) after Borrower's execution
of same. Accordingly, Borrower hereby authorizes and directs Lender to attach
such EXHIBIT A to this Agreement.
4. Notwithstanding anything to the contrary in any of the Loan Instruments,
Borrower acknowledges and agrees, that to the extent that Lender is relying on
Chapter 303 of the Texas Finance Code to determine the Maximum Lawful Rate
(hereafter defined) payable on the Note and/or the Related Indebtedness
(hereafter defined) Lender will utilize the weekly ceiling from time to time in
effect as provided in such Chapter 303, as amended. To the extent United States
federal law permits Lender to contract for, charge, take, receive or reserve a
greater amount of interest than under Texas law, Lender will rely on United
States federal law instead of such Chapter 303 for the purpose of determining
the Maximum Lawful Rate. Additionally to the extent permitted by applicable law
now or hereafter in effect, Lender may, at its option and from time to time,
utilize any other method of establishing the Maximum Lawful Rate under such
Chapter 303 or under other applicable law by giving notice, if required, to
Borrower as provided by applicable law now or hereafter in effect. As used
herein, the term "MAXIMUM LAWFUL RATE" shall mean the maximum lawful rate of
interest which may be contracted for, charged, taken, received or reserved by
Lender in accordance with the applicable laws of the State of Texas (or
applicable United States federal law to the extent that it permits Lender to
contract for, charge, take, receive or reserve a greater amount of interest than
under Texas law), taking into account all Charges (as hereafter defined) made in
connection with the transaction evidenced by the Note and the other Loan
Instruments. As used herein, the term "CHARGES" shall mean all fees, charges
and/or any other things of value, if any, contracted for, charged, received,
taken or reserved by Lender in connection with the transactions relating to the
Note and the other Loan Instruments, which are treated as interest under
applicable law. As used herein, the term "RELATED INDEBTEDNESS" shall mean any
and all debt paid or payable by Borrower to Lender pursuant to the Loan
Instruments or any other communication or writing by or between Borrower and
NINTH MODIFICATION AGREEMENT - Page 3
Lender related to the transaction or transactions that are the subject mater of
the Loan Instruments, except such debt which has been paid or is payable by
Borrower to Lender.
5. Notwithstanding anything to the contrary contained in the Deeds of Trust
or other Loan Instruments, with respect to any amendment to the Master Deeds of
Trust, the following terms and provisions shall apply:
With respect to any amendment or modification of the Master Deeds of Trust
now or hereafter executed by Borrower (or any future owner of the Property
if different from Borrower) and duly recorded in the appropriate official
public records, Borrower acknowledges and agrees that such amendment or
modification of the Master Deeds of Trust shall constitute an amendment or
modification to the terms and provisions of any such Supplemental Deeds of
Trust (and shall be incorporated into any such Supplemental Deeds of Trust
and made a part thereof for all purposes, as though such amendment or
modification of the Master Deeds of Trust specifically referred to such
Supplemental Deeds of Trust) without the necessity of any specific
reference in such amendment or modification to any such Supplemental Deeds
of Trust; and no such amendment or modification of the Master Deeds of
Trust shall impair the obligations of Borrower under any such Supplemental
Deeds of Trust or any other of the Loan Instruments.
6. Borrower hereby expressly promises to pay to the order of Lender, the
principal amount of the Note (as modified and extended) and all accrued and
unpaid interest now or hereafter to become due and payable under the Note, and
Borrower hereby expressly promises to perform all of the obligations of Borrower
under the Loan Instruments (as modified and extended).
7. The liens of the Deeds of Trust are hereby acknowledged by Borrower to
be good, valid and subsisting liens, and such liens are hereby renewed and
extended so as to secure the payment of the Note and Loan (as modified and
extended).
8. Borrower hereby represents and warrants to Lender that (a) Borrower is
the sole legal and beneficial owner of the Property; (b) Borrower has the full
power and authority to make the agreements contained in this Agreement without
joinder or consent of any other party; (c) the execution, delivery and
performance of this Agreement will not contravene or constitute an event which
itself or which with the passing of time or giving of notice or both would
constitute a default under any deed of trust, loan agreement, indenture or other
agreement to which Borrower or Guarantor is a party or by which Borrower or any
of its property is bound; and (d) there exists no default under the Loan
Instruments (as modified). BORROWER HEREBY AGREES TO INDEMNIFY AND HOLD LENDER
HARMLESS AGAINST ANY LOSS, CLAIM, DAMAGE, LIABILITY OR EXPENSE (INCLUDING
WITHOUT LIMITATION, ATTORNEYS' FEES) INCURRED AS A RESULT OF ANY REPRESENTATION
OR WARRANTY MADE BY BORROWER HEREIN PROVING TO BE UNTRUE IN ANY MATERIAL
RESPECT.
9. The terms and conditions hereof may not be modified, amended, altered or
otherwise affected except by instrument in writing executed by Lender and
Borrower.
NINTH MODIFICATION AGREEMENT - Page 4
10. All Loan Instruments are hereby amended and modified in a manner
consistent with the modifications, terms and/or provisions contained herein.
Except as expressly modified hereby, the terms and conditions of the Loan
Instruments are and shall remain in full force and effect.
11. Borrower agrees to pay to Lender, contemporaneously with the execution
and delivery hereof, all costs and expenses incurred in connection with this
transaction, title insurance endorsement premiums, reasonable fees of Lender's
counsel and recording fees.
12. Borrower hereby agrees to execute and deliver to Lender such further
documents and instruments evidencing or pertaining to the Loan, as modified and
increased hereby, as may be reasonably requested by Lender from time to time so
as to evidence the terms and conditions hereof.
[The balance of this page is intentionally left blank.]
NINTH MODIFICATION AGREEMENT - Page 5
EXECUTED on the date(s) set forth in the acknowledgment(s) below to be
EFFECTIVE as of the date first above written.
BORROWER:
LEGACY/MONTEREY HOMES L.P.,
an Arizona limited partnership
BY: MTH-TEXAS GP, INC.,
an Arizona corporation,
General Partner
By: /s/ Rick Morgan
--------------------------------
Name: Rick Morgan
---------------------------
Title: V.P.
--------------------------
HANCOCK-MTH COMMUNITIES, INC.,
an Arizona corporation
By: /s/ Rick Morgan
------------------------------------
Name: Rick Morgan
-------------------------------
Title: V.P.
------------------------------
HANCOCK-MTH BUILDERS, INC.,
an Arizona corporation
By: /s/ Rick Morgan
------------------------------------
Name: Rick Morgan
-------------------------------
Title: V.P.
------------------------------
MTH HOMES-TEXAS, L.P.,
an Texas limited partnership
BY: MTH-TEXAS GP II, INC.,
an Arizona corporation,
General Partner
By: /s/ Rick Morgan
------------------------------------
Name: Rick Morgan
-------------------------------
Title: V.P.
------------------------------
NINTH MODIFICATION AGREEMENT - Page 6
LENDER:
GUARANTY BANK
a federal savings bank
By: /s/ Sam A. Meade
------------------------------------
Name: Sam A. Meade
-------------------------------
Title: Senior Vice President
------------------------------
NINTH MODIFICATION AGREEMENT - Page 7
STATE OF TEXAS )
)
COUNTY OF COLLIN )
This instrument was ACKNOWLEDGED before me on August 19, 2002, by Richard
T. Morgan, V.P. of MTH-TEXAS GP, INC., an Arizona corporation, as General
Partner of LEGACY/MONTEREY HOMES L.P., an Arizona limited partnership, on behalf
of said limited partnership.
/s/ Amy C. Kirkpatrick
[SEAL] -----------------------------------------
Notary Public
My Commission Expires: Amy C. Kirkpatrick
-----------------------------------------
3/2/2005 Printed Name of Notary Public
- ----------------------
STATE OF TEXAS )
)
COUNTY OF COLLIN )
This instrument was ACKNOWLEDGED before me on August 19, 2002, by Richard
T. Morgan, V.P. of HANCOCK-MTH COMMUNITIES, INC., an Arizona corporation, on
behalf of said corporation.
/s/ Amy C. Kirkpatrick
[SEAL] -----------------------------------------
Notary Public
My Commission Expires: Amy C. Kirkpatrick
-----------------------------------------
3/2/2005 Printed Name of Notary Public
- ----------------------
STATE OF TEXAS )
)
COUNTY OF COLLIN )
This instrument was ACKNOWLEDGED before me on August 19, 2002, by Richard
T. Morgan, V.P. of HANCOCK-MTH BUILDERS, INC., an Arizona corporation, on behalf
of said corporation.
/s/ Amy C. Kirkpatrick
[SEAL] -----------------------------------------
Notary Public
My Commission Expires: Amy C. Kirkpatrick
-----------------------------------------
3/2/2005 Printed Name of Notary Public
- ----------------------
NINTH MODIFICATION AGREEMENT - Page 8
STATE OF TEXAS )
)
COUNTY OF COLLIN )
This instrument was ACKNOWLEDGED before me on August 19, 2002, by Richard
T. Morgan, V.P. of MTH-TEXAS GP II, INC., an Arizona corporation, as General
Partner of MTH HOMES-TEXAS, L.P., a Texas limited partnership, on behalf of said
limited partnership.
/s/ Amy C. Kirkpatrick
[SEAL] -----------------------------------------
Notary Public
My Commission Expires: Amy C. Kirkpatrick
-----------------------------------------
3/2/2005 Printed Name of Notary Public
- ----------------------
STATE OF TEXAS )
)
COUNTY OF DALLAS )
This instrument was acknowledged before me on the 22nd day of August, 2002,
by Sam A. Meade, Senior Vice President of GUARANTY BANK, a federal savings bank,
on behalf of said federal savings bank.
/s/ Leslie Ruth Reynolds
----------------------------------------
Notary Public in and for the
above county and state
My Commission Expires: Leslie Ruth Reynolds
----------------------------------------
02-04-2005 Printed Name of Notary Public
- ----------------------
NINTH MODIFICATION AGREEMENT - Page 9
CONSENT OF GUARANTOR
Each of the undersigned, as a guarantor ("GUARANTOR," whether one or more)
of the loan (the "LOAN"), evidenced by the Note and secured by the Deeds of
Trust described in the foregoing Ninth Modification Agreement (the "AGREEMENT")
to which this Consent is attached, hereby acknowledge and consent (jointly and
severally) to the terms of the Agreement and agree (jointly and severally) that
the execution and delivery of the Agreement will in no way change or modify
Guarantor's respective obligations under their respective Guaranty (as defined
in the Agreement); and each Guarantor acknowledges and agrees (jointly and
severally) that the Indebtedness (as defined in the respective instruments
comprising the Guaranty) includes the Loan (as increased and set forth in the
Agreement), together with any and all other Indebtedness now or at any time
hereafter owing by Guarantor to Lender; and each Guarantor (jointly and
severally) hereby unconditionally and absolutely guarantees to Lender the
payment when due of such Indebtedness, and hereby acknowledge and agree that
their respective Guaranty is in full force and effect, and that there are no
claims, counterclaims, offsets or defenses to their respective Guaranty; and
each Guarantor acknowledges and consents (jointly and severally) to the terms of
any and all prior modifications to the terms of the Loan (including, without
limitation, any and all extensions of the term thereof and increases in the
principal thereof prior to the date hereof, if any).
EXECUTED on the date(s) set forth in the acknowledgment(s) below to be
EFFECTIVE as of the 22 day of August, 2002.
GUARANTOR:
MERITAGE CORPORATION,
a Maryland corporation
By: /s/ John Landon
------------------------------------
Name: John Landon
-------------------------------
Title: Co-CEO
------------------------------
MTH-TEXAS GP, INC.,
an Arizona corporation
By: /s/ Rick Morgan
------------------------------------
Name: Rick Morgan
-------------------------------
Title: V.P.
------------------------------
NINTH MODIFICATION AGREEMENT - Page 10
MTH-TEXAS LP, INC.,
an Arizona corporation
By: /s/ Rick Morgan
------------------------------------
Name: Rick Morgan
-------------------------------
Title: V.P.
------------------------------
MTH-TEXAS GP II, INC.,
an Arizona corporation
By: /s/ Rick Morgan
------------------------------------
Name: Rick Morgan
-------------------------------
Title: V.P.
------------------------------
MTH-TEXAS LP II, INC.,
an Arizona corporation
By: /s/ Rick Morgan
------------------------------------
Name: Rick Morgan
-------------------------------
Title: V.P.
------------------------------
NINTH MODIFICATION AGREEMENT - Page 11
STATE OF TEXAS )
)
COUNTY OF COLLIN )
This instrument was ACKNOWLEDGED before me on August 19, 2002, by Richard
T. Morgan, V.P. of MERITAGE CORPORATION, a Maryland corporation, on behalf of
said corporation.
/s/ Amy C. Kirkpatrick
[SEAL] -----------------------------------------
Notary Public
My Commission Expires: Amy C. Kirkpatrick
-----------------------------------------
3/2/2005 Printed Name of Notary Public
- ----------------------
STATE OF TEXAS )
)
COUNTY OF COLLIN )
This instrument was ACKNOWLEDGED before me on August 19, 2002, by Richard
T. Morgan, V.P. of MTH-TEXAS GP, INC., an Arizona corporation, on behalf of said
corporation.
/s/ Amy C. Kirkpatrick
[SEAL] -----------------------------------------
Notary Public
My Commission Expires: Amy C. Kirkpatrick
-----------------------------------------
3/2/2005 Printed Name of Notary Public
- ----------------------
STATE OF TEXAS )
)
COUNTY OF COLLIN )
This instrument was ACKNOWLEDGED before me on August 19, 2002, by Richard
T. Morgan, V.P. of MTH-TEXAS LP, INC., an Arizona corporation, on behalf of said
corporation.
/s/ Amy C. Kirkpatrick
[SEAL] -----------------------------------------
Notary Public
My Commission Expires: Amy C. Kirkpatrick
-----------------------------------------
3/2/2005 Printed Name of Notary Public
- ----------------------
NINTH MODIFICATION AGREEMENT - Page 12
STATE OF TEXAS )
)
COUNTY OF COLLIN )
This instrument was ACKNOWLEDGED before me on August 19, 2002, by Richard
T. Morgan, V.P. of MTH-TEXAS GP II, INC., an Arizona corporation, on behalf of
said corporation.
/s/ Amy C. Kirkpatrick
[SEAL] -----------------------------------------
Notary Public
My Commission Expires: Amy C. Kirkpatrick
-----------------------------------------
3/2/2005 Printed Name of Notary Public
- ----------------------
STATE OF TEXAS )
)
COUNTY OF COLLIN )
This instrument was ACKNOWLEDGED before me on August 19, 2002, by Richard
T. Morgan, V.P. of MTH-TEXAS LP II, INC., an Arizona corporation, on behalf of
said corporation.
/s/ Amy C. Kirkpatrick
[SEAL] -----------------------------------------
Notary Public
My Commission Expires: Amy C. Kirkpatrick
-----------------------------------------
3/2/2005 Printed Name of Notary Public
- ----------------------
NINTH MODIFICATION AGREEMENT - Page 13
EXHIBIT A
Description of the Deed(s) of Trust
EXHIBIT A - Page 1