May 19. 1998
Guaranty Federal Bank, F.S.B.
8333 Douglas Avenue
Dallas, Texas 75225
Re: Modification and $10,000,000.00 increase of an existing $40,000,000.00
guidance line from Guaranty Federal Bank, F.S.B. (Lender") to
Legacy/Monterey Homes L.P., an Arizona corporation ("Borrower'); such
loan and other indebtedness being guaranteed by Monterey Homes
Corporation, a Maryland corporation, MTH-Texas UP, Inc., an Arizona
corporation and MTH-Texas LP, Inc., an Arizona corporation
(collectively referred to as "GUARANTOR")
Gentlemen:
Reference is made to that certain Master Loan Agreement dated as of
January 31, 1993 (and all amendments thereto, if any) (the "LOAN AGREEMENT")
between Lender and Borrower governing a $40,000,000.00 loan (as increased) (the
"Loan") for the acquisition and/or refinancing of residential lots located in
certain counties in the State of Texas as described therein, and the
construction of single-family residences thereon. Unless otherwise expressly
defined herein, each term used herein with its initial letter capitalized shall
have the meaning given to such term in the Loan Agreement. As used in this
letter agreement, the term "LOAN INSTRUMENTS" shall mean and include (i) the
`Loan Instruments" as defined in the Loan Agreement, (ii) the Second
Modification Agreement dated as of the date hereof, executed by and between the
parties hereto, and (iii) this letter agreement and all other documents executed
in conjunction herewith (and all amendments thereto, if any).
Borrower and Lender desire to increase the Loan Amount to the stated
principal amount of $50,000,000.00 and to amend and modify certain terms and
provisions of the Loan and the Loan Instruments as follows:
1. The Loan Amount is hereby increased from $40,000,000.00 to
$50,000,000.00. All references in the Loan Instruments to the amount of
$40,000,000.00 are hereby increased to $50,000,000.00.
2. The stated maturity date of the Note is hereby extended to and
including July 31, 1999, when the entire unpaid principal balance of the Note,
together with all accrued and unpaid interest shall be due and payable;
provided, however, such date may be extended as set forth in PARAGRAPH 9 of the
Loan Agreement (as amended hereby).
3. EXHIBIT A to the Loan Agreement is hereby modified by deleting such
exhibit in its entirety and replacing it with EXHIBIT A attached hereto.
Guaranty Federal Bank. F.S.B.
May 19. 1998
Page 2
4. All Loan Instruments hereby are amended and modified in a manner
consistent with the modifications, terms and/or provisions contained herein.
Except as modified hereby, all the terms, provisions and conditions of the Loan
Instruments shall remain in full force and effect.
5. The terms and provisions of this letter agreement may not be
modified, amended. altered or otherwise affected except by instrument in writing
executed by Lender and Borrower.
6. Each Guarantor by its execution hereof agree to the amendments and
modifications to the Loan Instruments set forth herein and in the prior
amendments and modifications to the Loan Instruments and agree that all of such
modifications do not and will not waive, release or in any manner modify either
Guarantor's obligations and liabilities under and pursuant to the Guaranty.
(The balance of this page is intentionally left blank.)
Guaranty Federal Bank. F.S.B.
May 19, 1998
Page 3
If this letter agreement correctly sets forth our understanding of the
subject matter contained herein. please indicate this by executing this letter
agreement in the space furnished below and then return a fully-executed copy to
the undersigned.
Very truly yours,
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: Vice President
-----------------------
GUARANTOR:
----------
MONTEREY HOMES CORPORATION,
a Maryland corporation
By: /s/ John R. Landon
---------------------------------
Name: John R. Landon
----------------------------
Title: Co-Chief Executive Officer
---------------------------
MTH-TEXAS GP, INC.,
an Arizona corporation,
By: /s/ Rick Morgan
---------------------------------
Name: Rick Morgan
----------------------------
Title: Vice President
---------------------------
Guaranty Federal Bank. F.S.B.
May 19, 1998
Page 4
MTH-TEXAS LP, INC.,
an Arizona corporation,
By: /s/ Rick Morgan
-------------------------------
Name: Rick Morgan
--------------------------
Title: Vice President
-------------------------
ACCEPTED AND AGREED TO:
LENDER:
- -------
GUARANTY FEDERAL BANK, F.S.B.,
a federal savings bank
By: /s/ Sam A. Meade
------------------------------
Name: Sam A. Meade
-------------------------
Title: Vice President
------------------------
EXHIBIT A
---------
TO LOAN AGREEMENT
1. Introductory Paragraph. RESIDENCE AND INVENTORY LOT LIMITATIONS. At any
given time. Residences and Inventory Lots financed under the Loan shall be
limited to the following numbers, unless modified by Lender in writing:
Total Residences: Six Hundred Twenty-five (625).
Specs: Eighty (8O).
Models: Forty-five (45).
Inventory Lots: Two Hundred Fifty (250).
Borrower may increase the number of Specs allowed above by the same number
by which Borrower is short of Models allowed above. Borrower covenants and
agrees not to allow, and is prohibited from allowing, any more than ten
(IC) Specs or three (3) Models to exist in any Approved Subdivision (as
hereinafter defined).
The outstanding aggregate amount of the Loan Allocations for all Specs and
Models at any time shall never exceed $12,000,000.00.
The outstanding aggregate amount of the Loan Allocations for all Inventory
Lots at any time shall never exceed $4,000,000.00.
The term "SPECS" means a Residence which is not a Model and is not Under
Contract. The term "MODEL" means a Residence specifically utilized for the
purposes of marketing other residential products. The term "UNDER CONTRACT"
shall mean Residences under written contract to sell to bona fide third
parties unrelated to Borrower, having no contingency or any other
conditions not reasonably susceptible to being satisfied, providing for
earnest money deposits of at least $2,000.00, and for which Lender has
received preliminary loan approval from a bona fide residential permanent
lender.
The term "INVENTORY RESIDENCE" means any Residence which is not a Model.
2. Introductory Paragraph. APPROVED SUBDIVISIONS. The following subdivisions
and any additional subdivisions approved in writing by Lender (the
"APPROVED SUBDIVISIONS") are approved by Lender for the Residences and
Inventory Lots:
SUBDIVISION COUNTY
----------- ------
Stone Canyon (Fern Bluff) Williamson
Oakmont Forest Williamson
Settlers Ridge/Creekside Travis
Round Rock Ranch Williamson
The Meadows (Thunderbird Est.) Collin
Brighton Estates - Arlington Tarrant
Bristol Park (Fountain Creek) Collin
Chase-Oaks Collin
Cottonwood Bend Collin
Country Club Park Dallas
Creekwood Estates Denton
Crestwood Collin
Cross Creek West Collin
Eden Road Estates Tarrant
El Dorado Heights Collin
Heritage Park - Allen Collin
Highland Parkway Collin
Hillcrest Estates Collin
Hunters Glen Collin
EXHIBIT A, - Page 1
Independence Hill Collin
Meadow Glen PH 11B Denton
Oakwood Glen Collin
Orchard Valley Estates Denton
Parkdale - PIano Collin
Shadow Lakes Collin
Shadow Lakes North Collin
Lakes of Valley Ranch Dallas
Vista Ridge Estates Denton
Windhaven Farms (Carelle Custom) Collin
Ravenglass Estates Collin
Frankford Meadows Dallas
Hunter Trail Tarrant
Fossil Beach Tarrant
3. Introductory Paragraph. APPROVED PRICE RANGE. The Residences shall be in
the $70,000.00 to $350,000.00 price range.
4. Paragraph 1(c). GUARANTOR. Guarantor of the Loan shall be: Monterey Homes
Corporation, a Maryland corporation; MTH-Texas G.P., Inc., an Arizona
corporation; and MTH-Texas L.P., Inc., an Arizona corporation.
5. Paragraph 2(h). LOAN FINANCE CHARGE. None.
6. Paragraph 2(k) and 6(g). INSPECTION FEE. An inspection fee of $30.00 per
Residence shall be paid to Lender on the day the Mortgage pertaining to
such Residence is recorded in the Real Property Records.
7. Paragraph 4(c). LOAN RATIOS. The Loan Allocation shall not exceed the
lesser of (1) one hundred percent (100%) of the direct costs of a Property,
as determined by Lender or, (2) seventy percent(70%) of the lowest of the
values as provided in PARAGRAPH 4(C) (I), (II' AND (iii) of this Loan
Agreement.
8. Paragraph 6(q). OTHER ENTITIES. The Mortgages shall additionally secure all
other indebtedness now or hereafter owed by the following entities to
Lender: None.
9. Paragraph 6(s). REQUIRED RELEASES. Borrower shall cause: (a) Inventory
Residences to be released from a Mortgage nine (9) months from the day such
Mortgage is recorded in the Real Property Records, (b) Models to be
released from a Mortgage twenty-four (24) months from the day such Mortgage
is recorded in the Real Property Records, and (c) Inventory Lots to be
released from a Mortgage twelve (12) months from the day such Mortgage is
recorded in the Real Property Records; provided, however, if no default
then exists under any Loan Instruments, Lender may, at its option, extend
the Required Release Date for periods of three (3) months (the `EXTENDED
RELEASE DATE") provided, such Extended Release Date shall in no event go
beyond the Stated Maturity Date (as hereinafter defined) or the Extended
Maturity Date (as hereinafter defined), if applicable.
10. Paragraph 7. REQUIRED PRINCIPAL REDUCTIONS. Prior to the date that Lender
gives Borrower the notice described in PARAGRAPH 4(FL above, the following
shall apply: in the event a Property has been granted an Extended Release
Date (as provided in PARAGRAPH 9 of this EXHIBIT A) and a Mortgage remains
covering such Property beyond the following periods from the date such
Mortgage is recorded, then Borrower shall make a principal payment of the
Note in an amount equal to ten percent (10%) of the Loan Allocation with
respect to such Property (and the Loan Allocation for such Property shall
be reduced by the same amount). as determined by Lender:
Inventory Residences: Fifteen (15) months.
Models: Twenty-four (24) months.
Inventory Lots: Twelve (12) months.
EXHIBIT A, - Page 2
From and after the date that Lender gives Borrower the notice described in
PARAGRAPH 4 (F) of the Loan Agreement, the following shall apply: in the
event a Property has been granted an Extended Release Date, as provided in
PARAGRAPH 9 of this EXHIBIT A. Borrower shall make a principal payment on
the Note of ten percent (10%) of that portion of the Loan advanced by
Lender for such Propert5. within the Following periods From the date a
Mortgage covering such Property is recorded in the Real Property Records:
Inventory Residences: Fifteen (IS) months.
Models: Twenty-four (24) months.
Inventory Lots: Twelve (12) months.
11. Paragraph 9. MATURITY AND EXTENSION. The maturity date of the Note shall be
the later of the maturity date as provided in the Note (July 31, 1999) (the
"STATED MATURITY Date"), or nine (9) months after the recording in the Real
Property Records of the last Mortgage (the "EXTENDED MATURITY DATE")
approved by Lender and recorded prior to the expiration of the Stated
Maturity Date. After the Stated Maturity Date, no additional Mortgage shall
be recorded.
12. Paragraph 10. ADDITIONAL DEFAULTS. In addition to the events of default
stipulated in the Loan Instruments, it shall be a default under this Loan
Agreement if Borrower fails to comply with any of the following: None.
13. Paragraph 11 ADDITIONAL LOAN COVENANTS. Borrower shall fully perform and
satisfy the following "ADDITIONAL LOAN COVENANTS":
(a) The aggregate net worth of Borrower (determined in accordance with
generally accepted accounting principles, consistently applied)
shall not fall below $7,500,000.00.
(b) The ratio of total liabilities to equity (as determined by Lender)
shall not exceed 4.0 to 1.0.
(c) John Landon shall at all times retain management control of
Borrower.
(d) In no event shall Monterey Homes Corporation, a Maryland
corporation, be in default under any secured indebtedness.
If Borrower or Guarantor (if applicable to Guarantor) breaches any of the
Additional Loan Covenants then, at Lender's election, no additional
Mortgages shall be recorded in the Real Property Records; provided,
however, that a breach of any Additional Loan Covenants shall not be
considered a default under the Loan Instruments.
14. Paragraph 16(d). RELEASE PRICE. The partial release price shall be a cash
amount equal to the Loan Allocation for the Property multiplied by the
Stage (expressed as a percentage) of the Property, all as determined by
Lender; provided, however, if Lender shall have given Borrower the notice
described in PARAGRAPH 4(F) of the Loan Agreement, then the partial release
price shall be an amount in cash equal to one hundred and one hundred
percent (100%) of the outstanding balance of the Loan advanced by Lender
for the Property.
15. Paragraph 16(e). EXTENSION FEE. If Lender extends the Required Release
Date. as provided in Paragraph 9 of this Exhibit A Borrower shall pay to
Lender an extension fee of one percent (1%) of that portion of the Loan
advanced by Lender for each such Property times a fraction, the numerator
of which is the number of days the Required Release Dare is extended and
the denominator of which is 365.
EXHIBIT A, - Page 3
SECOND MODIFICATION AGREEMENT
-----------------------------
This SECOND MODIFICATION AGREEMENT (this `Agreement') is made and
entered into as of May 19, 1998, by and between LEGACY/MONTEREY HOMES L.P., an
Arizona limited partnership ("Borrower"), and GUARANTY FEDERAL BANK, F.S.B., a
federal savings bank organized and existing under the laws of the United States
("Lender").
W I T N E S S E T H:
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 FORTY MILLION AND NO/100 DOLLARS
($40,000,000.00)(as increased), 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") dated ___________, 1997, 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 Note and the Loan are guaranteed pursuant to that certain
Guaranty Agreement dated as of June 30, l997 (the `Guaranty'), executed by
MTH-Texas GP, Inc., an Arizona corporation, MTH-Texas LP, Inc., an Arizona
corporation, and Monterey Homes Corporation, a Maryland corporation
("Guarantor," whether one or more); and
WHEREAS, the Loan Agreement, the Note, the First Modification, 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 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 stated maturity date of the Note is hereby extended to and
including July 31, 1999, when the entire unpaid principal balance of the Note,
together with all accrued and
SECOND MODIFICATION AGREEMENT - Page 1
- -----------------------------
unpaid interest shall be due and payable: provided, however, such date may be
extended as set forth in the Loan Agreement.
2. The Loan is hereby increased from $40,000,000 to 50,000,000.00 All
references in the Loan Instruments to the amount of 40,000,000.00 are hereby
increased to 50,000,000.00
3. 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.")
4. 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.
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 increased) 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 increased).
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
increased).
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 4) 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.
SECOND MODIFICATION AGREEMENT - Page 2
- -----------------------------
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.
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.]
SECOND MODIFICATION AGREEMENT - Page 3
- -----------------------------
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: Vice President
-----------------------
LENDER:
-------
GUARANTY FEDERAL BANK, F.S.B.,
a federal savings bank
By: /s/ Sam A. Meade
--------------------------------
Name: Sam A. Meade
---------------------------
Title: Vice President
--------------------------
STATE Texas }
}
COUNTY OF COLLIN }
This instrument was ACKNOWLEDGED before me on May 19, 1998, by Rick
Morgan, Vice President 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.
Ana Patterson
[S E A L] -----------------------------
Notary Public
My Commission Expires:
- ----------------------
-----------------------------
Printed Name of Notary Public
ANA PATTERSON
NOTARY PUBLIC
STATE OF TEXAS
My Commission Expires 8-28-99
SECOND MODIFICATION AGREEMENT - Page 4
- -----------------------------
STATE Texas }
}
COUNTY OF DALLAS }
This instrument was ACKNOWLEDGED before me on the 20th day of May,
1998, by Sam A. Meade, Vice President of GUARANTY FEDERAL BANK, F.S.B., a
federal savings bank, on behalf of said federal savings bank.
LESLIE RUTH REYNOLDS Leslie Ruth Reynolds
Notary Public -----------------------------
STATE OF TEXAS Notary Public in and for the
My Comm. Exp. 02-04-2001 above county and state
My Commission Expires:
02/04/2001 Leslie Ruth Reynolds
- ---------------------- -----------------------------
Printed Name of Notary
SECOND MODIFICATION AGREEMENT - Page 5
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 Second 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 ____ day of _____________,1998.
GUARANTOR:
----------
MONTEREY HOMES CORPORATION,
a Maryland corporation
By: /s/ John R. Landon
---------------------------------
Name: John R. Landon
----------------------------
Title: Co-Chief Executive Officer
---------------------------
MTH-TEXAS GP, INC.,
an Arizona corporation,
By: /s/ Rick Morgan
---------------------------------
Name: Rick Morgan
----------------------------
Title: Vice President
---------------------------
MTH-TEXAS LP, INC.,
an Arizona corporation,
By: /s/ Rick Morgan
---------------------------------
Name: Rick Morgan
----------------------------
Title: Vice President
---------------------------
SECOND MODIFICATION AGREEMENT - Page 6
- -----------------------------
STATE Texas }
}
COUNTY OF COLLIN }
This instrument was ACKNOWLEDGED before me on May 19, 1998, by John R.
Landon, Co Chief Executive Officer of MONTEREY HOMES CORPORATION, a Texas
corporation, on behalf of said corporation.
Ana Patterson
[S E A L] ----------------------------
Notary Public
My Commission Expires:
- ----------------------
-----------------------------
Printed Name of Notary Public
ANA PATTERSON
NOTARY PUBLIC
STATE OF TEXAS
My Commission Expires 8-28-99
STATE Texas }
}
COUNTY OF COLLIN }
This instrument was ACKNOWLEDGED before me on May 19, 1998, by Rick
Morgan, Vice President of MTH-TEXAS GP, INC., an Arizona corporation, on behalf
of said corporation.
Ana Patterson
[S E A L] ----------------------------
Notary Public
My Commission Expires:
- ----------------------
-----------------------------
Printed Name of Notary Public
ANA PATTERSON
NOTARY PUBLIC
STATE OF TEXAS
My Commission Expires 8-28-99
STATE Texas }
}
COUNTY OF COLLIN }
This instrument was ACKNOWLEDGED before me on May 19, 1998, by Rick
Morgan, Vice President of MTH-TEXAS LP, INC., an Arizona corporation, on behalf
of said corporation.
Ana Patterson
[S E A L] ----------------------------
Notary Public
My Commission Expires:
- ----------------------
-----------------------------
Printed Name of Notary Public
ANA PATTERSON
NOTARY PUBLIC
STATE OF TEXAS
My Commission Expires 8-28-99
SECOND MODIFICATION AGREEMENT - Page 7
- -----------------------------
EXHIBIT A
---------
Description of the Deed(s) of Trust
-----------------------------------
LEGACY/MONTEREY, L.P.
- ---------------------
Collin County Recorded September 4, 1996, Clerk File 96--0075977
- -------------
Dallas Recorded September 5, 1996, Volume 96175 Page 00192
- ------
Denton Recorded September 5, 1996, Clerk File 96--R0061921.
- ------
Harris Recorded August 6, 1997, Clerk File No. 5579911
- ------
Rockwall Recorded August 19, 1997, Clerk File No. 176219
- --------
Tarrant Recorded September 5, 1996, Clerk File D19E175179
- -------
Travis Recorded September 6, 1996,Volume 12766, Page 1157
- ------
Williamson Recorded September 9, 1996, Clerk File 9648096
- ----------
EXHIBIT A, Description of the Deeds of Trust - Page 1
---------------------------------
LOAN NO. ______
REVOLVING PROMISSORY NOTE
-------------------------
(Second Amended and Restated)
$50,000,000.00 As of May 31,1993
FOR VALUE RECEIVED, the undersigned (sometimes referred to herein as
"Maker"). jointly and severally if more than one, promise to pay to the order of
GUARANTY FEDERAL BANK, F.S.B., a federal savings bank organized and existing
under the laws of the United States (sometimes referred to herein as `Payee'),
at its principal offices at 5333 Douglas Avenue, Dallas, Texas 75225, or at such
other place as the holder hereof may from time to time designate, the principal
sum of FIFTY MILLION AND NO/100 DOLLARS ($50,000,000.00), or so much thereof as
may be advanced, with interest on the principal balance from time to time
remaining unpaid prior to default or maturity at the rate hereinafter provided,
interest only being payable on the first day of each month commencing June,
1993, and continuing until and including July31, I 999, when, unless extended
pursuant to the terms of Loan Agreement (hereafter defined), the unpaid
principal balance of this Note, together with all accrued and unpaid interest,
shall be due and payable. The principal of this Note shall otherwise be payable
in accordance with the Loan Agreement. All payments due under this Note shall be
delivered to the holder hereof not later than twelve o'clock, noon, Dallas,
Texas time, on the date such payment becomes due and payable (or the date any
voluntary prepayment of this Note is made), in immediately available funds. Any
payment received by the holder hereof after such time will be deemed to have
been made on the next following business day.
As herein provided, the unpaid Principal Amount (hereafter defined) of
this Note (or portions thereof) from time to time outstanding shall bear
interest prior to maturity at a varying rate per annum equal to, at Maker's
option, (i) the Commercial Base Rate (hereafter defined), or (ii) the applicable
LIBOR Base Rate (hereafter defined) (as elected in the manner specified in this
Note), provided that in no event shall the Applicable Rate (hereafter defined)
exceed the Maximum Rate (hereafter defined). Notwithstanding the foregoing, if
at any time the Applicable Rate exceeds the Maximum Rate, the rate of interest
payable under this Note shall be limited to the Maximum Rate, but any subsequent
reductions in the Commercial Base Rate or the LIBOR Base Rate, as the case may
be, shall not reduce the Applicable Rate below the Maximum Rate until the total
amount of interest accrued on this Note equals the total amount of interest
which would have accrued at the Applicable Rate if the Applicable Rate had at
all times been in effect. Interest on this Note shall be calculated at a daily
rate equal to 1/360 of the annual percentage rate stated above, subject to the
provisions hereof specifying the maximum amount of interest which may be charged
or collected hereunder.
As used in this Note, the following terms shall have the meanings
indicated opposite them:
"Additional Costs" -- Any costs, losses or expenses incurred by Payee
which it determines are attributable to its making or maintaining the Loan
(hereafter defined), or it5 obligation to make any Loan advances, or any
reduction in any amount receivable by Payee under the Loan or this Note.
"Applicable Rate" -- The Commercial Base Rate (as to that portion of
Principal Amount bearing interest at the Commercial Base Rate); provided,
however from and after May 15, 1998, the Applicable Rate shall be either the
Commercial Base Rate (as to that portion of the Principal Amount bearing
interest at the Commercial Base Rate) or the LIBOR Base Rate (as to each
Euro-Dollar Amount) as elected in the manner specified in this Note.
"Assessments" -- Any impositions and assessments imposed on Payee with
respect to any Euro-Dollar Amount for insurance or other fees, assessments and
surcharges.
"Commercial Base Rate" --One percent (1%) per annum in excess of the
base rate announced or published from time to time by Guaranty Federal Bank,
F.S.B., which rate may not be the lowest
rate charged by Guaranty Federal Bank. F.S.B.: it being understood arid agreed
that the Commercial Base Rate shall increase or decrease. as the case may be,
from time to time as of the effective date of each change in such rate;
provided, however, from and after August 1. I 995 die Commercial Base Rate"
shall be the base rate announced or published from time to time by Guaranty
Federal Bank. F.S.B.
Euro-Dollar Amount' -- Each portion of the Principal Amount bearing
interest at the applicable LIBOR Base Rate pursuant to a Euro-Dollar Rate
Request. There shall be no more than five (5) portions of the Principal Amount
bearing interest at an applicable LIBOR Base Rate outstanding at any time, each
such portion shall be in amounts of not less than $1,000,000.00 each and in no
event shall the total portions of the Principal Amount bearing interest at the
LIBOR Base Rate exceed seventy percent (70%) of the Principal Amount of the time
of any Euro-Dollar Rate Request.
"Euro-Dollar Business Day" --Any day on which commercial banks are
open for domestic and international business (including dealings in U.S. Dollar
deposits) in New York City and Dallas, Texas.
"Euro-Dollar Rate Request" -- Maker's telephonic notice (to be
promptly confirmed in a written notice which must be received by Payee before
such Euro-Dollar Rate Request will be put into effect by Payee), to be received
by Payee by twelve o'clock noon (Dallas, Texas time) three (3) Euro-Dollar
Business Days prior to the Euro-Dollar Business Day specified in the Euro-Dollar
Rate Request for the commencement of the Interest Period, of (a) its intention
to have (1) all or any portion of the Principal Amount which is not then the
subject of an Interest Period (other than an Interest Period which is
terminating on such Euro-Dollar Business Day), and/or (2) all or any portion of
any advance of Loan proceeds which is to be made on such Euro-Dollar Business
Day, bear interest at the LIBOR Base Rate, and (b) the Interest Period desired
by Maker in respect of the amount specified. There shall be no more than three
(3) such requests for an election outstanding at any time.
Euro-Dollar Rate Request Amount" -- The amount, to be specified by
Maker in each Euro-Dollar Rate Request and stated in increments ofSl,000,000.00,
which Maker desires to bear interest at the LIBOR Base Rate; provided, however,
in no event shall any such amount be less than $ 1,000,000.00 in each instance.
"Euro-Dollar Reference Source" -- The display for Euro-Dollar rates
provided on The Bloomberg (a data service), viewed by accessing Page One (I) of
the global deposits segment of money-market rates (or such other page as may
replace Page One [11 for the purposes of displaying Euro-Dollar rates); or, at
the option of Payee the display for Euro-Dollar rates on such other service
selected from time to time by Payee and determined by Payee to be comparable to
The Bloomberg, which other service may include Reuters Monitor Money Rates
Service.
"Interest Period" -- The period during which interest at the LIBOR
Base Rate, determined as provided in this Note, shall be applicable to the
applicable Euro-Dollar Rate Request Amount; provided, however, that each such
period shall be either thirty (30), ninety (90), or one hundred eighty (180)
days, which shall be measured from the date specified by Maker in each
Euro-Dollar Rate Request for the commencement of the computation of interest at
the LABOR Base Rate, to the numerically corresponding day in the calendar month
in which such period terminates (or, if there be no numerical correspondent in
such month, or if the date selected by Maker for such commencement is the last
Euro-Dollar Business Day of a calendar month, then the last Euro-Dollar Business
Day of the calendar month in which such period terminates, or, if the
numerically corresponding day is not a Euro-Dollar Business Day, then the next
succeeding Euro-Dollar Business Day, unless such next succeeding Euro-Dollar
Business Day enters a new calendar month, in which case such period shall end on
the next preceding Euro-Dollar Business Day); and in no event shall any such
period be elected which extends beyond the Maturity Date.
"LABOR Base Rate" -- With respect to any Euro-Dollar Amount, the rate
per annum (expressed as a percentage) determined by Payee to be equal to the sum
of (a) the quotient of the
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LIBOR Rate for the applicable Euro-Dollar Amount and the applicable Interest
Period, divided by (1 minus the applicable Reserve Requirement). rounded up to
the nearest 1/100 of 1%. plus (b) the applicable Assessments, plus (c) two and
one-half percent (2.5%).
"LIBOR Rate" --The rate determined by Payee (rounded upward. if
necessary. to the nearest 1/16 of 1%) equal to the offered rate (and not the bid
rate) for deposits in U.S. Dollars of amounts comparable to the Euro-Dollar Rare
Request Amount for the same period of time as the Interest Period selected by
Maker in the Euro-Dollar Rate Request, as set forth on the Euro-Dollar Reference
Source at approximately I 0:00 am. (Dallas, Texas time) on the first day of the
applicable interest Period.
"Loan" -- The $50,000,000.00 loan evidenced hereby.
"Maturity Date" -- July 31, 1999, being the date this Note becomes due
and pay able in its entirety, unless extended pursuant to the terms of the Loan
Agreement.
"Maximum Rate" -- The maximum interest rate permitted under applicable
law,
"Principal Amount" -- That portion of the Loan evidenced hereby as is
from time to time outstanding.
REGULATION D --Regulation D of the Board of Governors of the Federal
Reserve System, as from time to time amended or supplemented.
"Regulation" -- With respect to the charging and collecting of
interest at the LIBOR Base Rate, any United States federal, state or foreign
laws, treaties, rules or regulations whether now in effect or hereinafter
enacted or promulgated (including Regulation D) or any interpretations,
directives or requests applying to a class of depository institutions including
Payee under any United States federal, state or foreign laws or regulations
(whether or not having the force of law) by any court or governmental or
monetary authority charged with the interpretation or administration thereof,
excluding any change the effect of which is determined by Payee to be reflected
in a change in the LIBOR Base Rate.
"Reserve Requirement" -- The average maximum rate at which reserves
(including any marginal, supplemental or emergency reserves) are required to be
maintained under Regulation D by member banks of the Federal Reserve System in
New York City with deposits exceeding one billion U.S. Dollars against
"Eurocurrency Liabilities," as such quoted term is used in Regulation D. Without
limiting the effect of the foregoing, the Reserve Requirement shall reflect any
other reserves required to be maintained by such member banks by reason of any
regulatory change against (a) any category of liabilities which includes
deposits by reference to which the LIBOR Rate is to be determined as provided in
this Note, or (b) any category of extensions of credit or other assets which
includes loans the interest rate on which is determined on the basis of rates
referred to in the definition of "LIBOR Rate" set forth above,
If Maker desires the application of the LIBOR Base Rate, it shall
submit a Euro-Dollar Rate Request to Payee. Such Euro-Dollar Rate Request shall
specify the Interest Period and the Euro-Dollar Amount and shall be irrevocable,
subject to Payee's right to convert the rate of interest payable hereunder with
respect to any Euro-Dollar Amount from the LIBOR Base Rate to the Commercial
Base Rate as hereinafter provided, In the event that Maker fails to submit a
Euro-Dollar Rate Request with respect to an existing Euro-Dollar Amount not
later than twelve o'clock noon (New York time) three (3) Euro-Dollar Business
Days prior to the last day of the relevant Interest Period, then the applicable
Euro-Dollar Amount shall bear interest, commencing at the end of such Interest
Period, at the Commercial Base Rate.
In no event shall Maker have more than five (5) Interest Periods
involving Euro-Dollar Amounts in effect at any one time, whether or not any
portion of the Principal Amount is then bearing interest at the Commercial Base
Rate.
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Any portion of the Principal Amount to which the LIBOR Base Rate is
not (or pursuant to the terms hereof cannot be) applicable shall bear interest
at the Commercial Base Rate.
Maker shall pay to Payee. promptly upon demand, such amounts as are
necessary to compensate Payee for Additional Costs resulting from any Regulation
which (i) subjects Payee to any tax, duty or other charge with respect to the
Loan or this Note, or changes the basis of taxation of any amounts payable to
Payee under the Loan or this Note (other than taxes imposed on the overall net
income of Payee or of its applicable lending office by the jurisdiction in which
Payee's principal office or such applicable lending office is located), (ii)
imposes, modifies or deems applicable any reserve, special deposit or similar
requirements relating to any extensions of credit or other assets of, or any
deposits with or other liabilities of, Payee, or (iii) imposes on Payee or on
the interbank Euro-Dollar market any other condition affecting the Loan or this
Note. or any of such extensions of credit or liabilities. Payee will notify
Maker of any event which would entitle Payee to compensation pursuant to this
paragraph as promptly as practicable after Payee obtains knowledge thereof and
determines to request such compensation.
Without limiting the effect of the immediately preceding paragraph, in
the event that, by reason of any Regulation, (i) Payee incurs Additional Costs
based on or measured by the amount of (1) a category of deposits or other
liabilities of Payee which includes deposits by reference to which the LIBOR
Rate is determined as provided in this Note and/or (2) a category of extensions
of credit or other assets of Payee which includes loans the interest on which is
determined on the basis of rates referred to in the definition of "LIBOR Rate"
set forth above, (ii) Payee becomes subject to restrictions on the amount of
such a category of liabilities or assets which it may hold, or (iii) it shall be
unlawful or impractical for Payee to make or maintain the Loan (or any portion
thereof) at the LIBOR Base Rate, then Payee's obligation to make or maintain the
Loan (or portions thereof) at the LIBOR Base Rate (and Maker's right to request
the same) shall be suspended and Payee shall give notice thereof to Maker and,
upon the giving of such notice, interest payable hereunder at the LIBOR Base
Rate shall be converted to the Commercial Base Rate, unless Payee may lawfully
continue to maintain the Loan (or any portion thereof) then bearing interest at
the LIBOR Base Rate to the end of the current Interest Period(s), at which time
the interest rate shall convert to the Commercial Base Rate. if subsequently
Payee determines that such Regulation has ceased to be in effect. Payee will so
advise Maker and Maker may convert the rate of interest payable hereunder with
respect to those portions of the Principal Amount bearing interest at the
Commercial Base Rate to the LII3OR Base Rate by submitting a Euro-Dollar Rate
Request in respect thereof and otherwise complying with the provisions of this
Note with respect thereto.
Determinations by Payee of the existence or effect of any Regulation
on its costs of making or maintaining the Loan, or portions thereof, at the
LIBOR Base Rate, or on amounts receivable by it in respect thereof, and of the
additional amounts required to compensate Payee with respect to Additional Costs
and/or Assessments, shall be conclusive; provided, however, that such
determinations are made without manifest error.
Anything herein to the contrary notwithstanding, if, at the time of or
prior to the determination of the LIBOR Base Rate in respect of any Euro-Dollar
Rate Request Amount as herein provided, Payee determines (which determination
shall be conclusive [provided that such determination is made on a reasonable
basis] absent manifest error) that (i) by reason of circumstances affecting the
interbank Euro-Dollar market generally, adequate and fair means do not or will
not exist for determining the LIBOR Base Rate applicable to an Interest Period,
or (ii) the LIBOR Rate, as determined by Payee, will not accurately reflect the
cost to Payee of making or maintaining the Loan (or any portion thereof) at the
LIBOR Base Rate, then Payee shall give Maker prompt notice thereof, and the
applicable Euro-Dollar Rate Request Amount shall bear interest. or continue to
bear interest, as the case may be, at the Commercial Base Rate. If at any time
subsequent to the giving of such notice, Payee determines that because of a
change in circumstances the LIBOR Base Rate is again available to Maker
hereunder, Payee shall so advise Maker and Maker may convert the rate of
interest payable hereunder from the Commercial Base Rate to the LIBOR Base Rate
by submitting a Euro-Dollar Rate Request to Payee and otherwise complying with
the provisions of this Note with respect thereto.
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Maker shall pay to Payee, immediately upon request and notwithstanding
contrary provisions contained in the Deeds of Trust (as hereafter defined) or
other Loan instruments (as hereafter defined), such amounts as shall, in the
conclusive judgment of Payee reasonably exercised. compensate Payee for any
loss, cost or expense incurred by it as a result of ( i) any payment or
prepayment, under any circumstances whatsoever, of any portion of the principal
Amount bearing interest at the LIBOR Base Rate on a date other than the last day
of an applicable Interest Period. (ii) the conversion, for any reason
whatsoever, of the rate of interest payable hereunder from the LIBOR Base Rate
to the Commercial Base Rate with respect to any portion of the Principal Amount
then bearing interest at the LIBOR Base Rate on a date other than the last day
of an applicable Interest Period, (iii) the failure of all or a portion of an
advance, which was to have borne interest at the LABOR Base Rate pursuant to a
Euro-Dollar Rate Request, to be made under the loan Agreement, or (iv) the
failure of Maker to borrow in accordance with a Euro-Dollar Rate Request
submitted by it to Payee, which amounts shall include, without limitation, lost
profits.
Maker shall have the right to prepay, in whole or in part, the
Principal Amount of this Note accruing interest at the Commercial Base Rate,
without premium or penalty upon the payment of all accrued interest on the
amount prepaid (and any interest which has accrued at the Default Rate
(hereafter defined) and other sums that may be payable hereunder); provided,
however, that any Euro-Dollar Amount may be prepaid only on the last day of the
applicable Interest Period.
All payments of principal shall be credited first against principal
amounts bearing interest at the Commercial Base Rate and then toward the payment
of Euro-Dollar Amounts, Payments of Euro-Dollar Amounts shall be applied in such
manner as Maker shall select; provided, however, that Maker shall select
Euro-Dollar Amounts to be repaid in a manner designed to minimize any losses
incurred by virtue of such payment. If Maker shall fail to select the
Euro-Dollar Amounts to which such payments are to be applied, or if an event of
default has occurred and is continuing at the time of payment, then Payee shall
be entitled to apply the payment to such Euro-Dollar Amounts in the manner it
deems appropriate. Maker shall compensate Payee for any losses incurred by
virtue of any payment of those portions of the Loan accruing interest at the
LIBOR Base Rate prior to the last day of the relevant Interest Period, which
compensation shall be determined in accordance with the provisions set forth in
this Note, and any payment received pursuant to this paragraph shall be applied
first to losses incurred by Payee by reason of such payment.
If a default shall occur under the Deeds of Trust, interest on the
Principal Amount shall, at the option of Payee, immediately and without notice
to Maker, be converted to the Commercial Base Rate. The foregoing provisions
shall not be construed as a waiver by Payee of its right to pursue any other
remedies available to it under the Deeds of Trust or any other instrument
evidencing or securing the Loan, nor shall it be construed to limit in any way
the application of the Default Rate.
Maker hereby agrees that it shall be bound by any agreement extending
the time or modifying the above terms of payment, made by Payee and the owner or
owners of the Property, whether with or without notice to Maker, and Maker shall
continue liable to pay the amount due hereunder, but with interest at a rate no
greater than the LIBOR Base Rate or the Commercial Base Rate, as the case may
be, according to the terms of any such agreement of extension or modification.
All or any portion of the principal of this Note may be borrowed,
paid, prepaid, repaid and reborrowed, from time to time prior to maturity, in
accordance with the provisions of this Note and the other Loan Instruments (as
hereafter defined). The excess of borrowing (advances and readvances) over
repayments shall evidence the principal balance due hereon from time to time and
at any time. The aggregate of all advances made under this Note may exceed the
face amount of this Note, but the outstanding principal balance of this Note at
any time shall never exceed the face amount of this Note.
At the option of the holder hereof, the entire principal balance and
accrued interest owing hereon shall, subject to applicable laws, at once become
due and payable without notice or demand upon the occurrence at any time of any
of the following events ("events of default"):
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1. Default in the payment of any installment of principal,
interest or any. other sum due hereunder or under any document
evidencing governing. securing or guaranteeing the Loan
(individually and collectively, the "Loan Instruments") and
the continuation of such default or a period of fifteen (15)
days following the due date thereof or defaults in the
performance of any of the covenants or provisions of any of
the Loan Instruments other than those covenants or provisions
involving the payment of the sums described in the preceding
clause in this paragraph 1.
2. The liquidation, termination, dissolution or (if any of the
undersigned is a natural person) the death of any of the
undersigned or any guarantor hereof
3. The bankruptcy or insolvency of, the assignment for the
benefit of creditors by. or the appointment of a receiver for
any of the property of any party liable for the payment of
this Note, whether as maker, endorser, guarantor, surety or
otherwise.
4. Default in the payment of any other indebtedness due the
holder hereof, or default in the performance of any other
obligation to the holder hereof by the undersigned or any
other party liable for the payment hereof, whether as
endorser, guarantor, surety or otherwise, it being reasonably
contemplated by the undersigned that it may incur additional
indebtedness owing to the holder hereof, from time to time,
subsequent to the date hereof
5. Notice of default given by any other lender or third party
(the "Other Lenders") to the undersigned or the acceleration
of any indebtedness owed by the undersigned to the Other
Lenders under any instruments evidencing, governing,
guaranteeing or securing any other indebtedness or obligation,
now or hereafter owed by the undersigned to the Other Lenders.
The failure to exercise the option to accelerate the maturity of this
Note upon the happening of any one or more of the events of default hereunder
shall not constitute a waiver of the right of the holder hereof to exercise the
same or any other option at that time or at any subsequent time with respect to
such uncured default or any other event of uncured default hereunder or under
any other of the Loan Instruments. The remedies of the holder hereof, as
provided in this Note and in any other of the Loan Instruments, shall be
cumulative and concurrent and may be pursued separately, successively or
together, as often as occasion therefor shall arise, at the sole discretion of
the holder hereof The acceptance by the holder hereof of any payment under this
Note which is less than payment in full of all amounts due and payable at the
time of such payment shall not constitute a waiver of or impair, reduce, release
or extinguish any of the rights or remedies of the holder hereof to exercise the
foregoing option or any other option granted to the holder hereof or in any
other of the Loan Instruments, at that time or at any subsequent time, or
nullify any prior exercise of any such option.
The unpaid principal of and, to the extent permitted by applicable
law, unpaid interest on this Note from time to time outstanding shall bear
interest from and after maturity at the rate (hereafter called the "Default
Rate") of five percent (5%) per annum above the Commercial Base Rate (as such
rate may change from time to time as provided above), provided that in no event
shall such interest rate be more than the Maximum Rate. Notwithstanding anything
to the contrary contained in this Note, at the option of the holder hereof and
upon notice to the undersigned at any time after the occurrence of a default, as
defined in the Deeds of Trust, from and after such notice and during the
continuance of such default, the unpaid principal of this Note from time to time
outstanding and all past due installments of interest shall, to the extent
permitted by applicable law, bear interest at the Default Rate (as such rate may
change from time to time with each change in the Commercial Base Rate), provided
that in no event shall such interest rate be more than the Maximum Rate.
The undersigned and all other parties now or hereafter liable for the
payment hereof whether as endorser, guarantor, surety or otherwise, severally
waive demand, presentment. notice of dishonor, notice of intention to accelerate
the indebtedness evidenced hereby, notice of the acceleration of the maturity
hereof, diligence in collecting, grace. notice and protest, and consent to all
extensions which
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from time to time may be granted by the holder hereof and to all partial
payments hereon, whether before or after maturity.
If this Note is not paid when due. whether at maturity or by
acceleration, or if it is collected through a bankruptcy, probate or other
court, whether before or after maturity the undersigned agrees to pay all costs
of collection, including but not limited to reasonable attorneys' fees and
expenses, incurred by the holder hereof.
This Note is executed pursuant to a Master Loan Agreement, dated as of
January 31. 1993. between the undersigned and the payee named herein (the "Loan
Agreement"). which Loan Agreement contains provisions for acceleration of the
maturity hereof upon the happening of certain events, and all advances made
hereunder shall be made pursuant to the Loan Agreement. This Note is secured by
one or more Deeds of Trust (With Security Agreement and Assignment of Rents and
Leases) (collectively, the `Deeds of Trust") covering certain property situated
in various Counties in Texas. The proceeds of this Note are to be used for
business, commercial, investment or other similar purposes and no portion
thereof will be used for personal, family or household use.
This Note is given in renewal, replacement and rearrangement, and not
in extinguishment of, the indebtedness evidenced by that certain (i) Revolving
Promissory Note in the amount of $17,000,000.00, dated May 31,1993, as executed
by Maker and payable to Payee, and (ii) Revolving Promissory Note (Amended and
Restated) in the amount of $40,000,000.00 (as increased), dated as of May 31,
1993, as executed by Maker and payable to Payee.
All agreements between the undersigned and the holder hereof whether
now existing or hereafter arising and whether written or oral, are hereby
limited so that in no contingency, whether by reason of acceleration of the
maturity hereof or otherwise, shall the interest contracted for, charged,
received, paid or agreed to be paid to the holder hereof exceed the Maximum
Rate. If from any circumstance the holder hereof shall ever receive anything of
value deemed interest by applicable law in excess of the Maximum Rate, an amount
equal to any excessive interest shall be applied to the reduction of the
principal hereof and not to the payment of interest, or if such excessive
interest exceeds the unpaid balance of principal hereof, such excess shall be
refunded to the undersigned. All interest paid or agreed to be paid to the
holder hereof shall, to the extent permitted by applicable law, be amortized,
prorated, allocated, and spread throughout the full period until payment in full
of the principal so that the interest hereon for such full period shall not
exceed the Maximum Rate. This paragraph shall control all agreements between the
undersigned and the holder hereof
The undersigned acknowledges and agrees that the holder hereof may,
from time to time, sell or offer to sell interests in the Loan to one or more
participants. The undersigned authorizes the holder hereof to disseminate any
information it has pertaining to the Loan, including, without limitation,
complete and current credit information on the undersigned, any of its
principals and any guarantor of this Note, to any such participant or
prospective participant.
(The balance of this page is intentionally left blank.)
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EXCEPT WHERE FEDERAL LAW IS APPLICABLE (INCLUDING, WITHOUT LIMITATION,
ANY FEDERAL USURY CEILING OR OTHER FEDERAL LAW WHICH, FROM TIME TO
TIME, IS APPLICABLE TO THE INDEBTEDNESS EVIDENCED HEREIN AND WHICH
PREEMPTS STATE USURY LAWS), THIS NOTE SHALL BE CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF TEXAS, AND THE LAWS OF THE UNITED STATES
APPLICABLE TO TRANSACTIONS IN SUCH STATE. THE UNDERSIGNED ACKNOWLEDGES
THAT THE LIEN OF THE DEEDS OF TRUST CONSTITUTES A FIRST LIEN ON
RESIDENTIAL REAL PROPERTY WITHIN THE MEANING OF PART A, TITLE V, OF
THE DEPOSITORY INSTITUTIONS DEREGULATION AND MONETARY CONTROL ACT OF
1980, AND THE REGULATIONS PROMULGATED THEREUNDER.
MAKER:
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LEGACY/MONTEREY HOMES L.P.
an Arizona limited partnership
BY: MTH-TEXAS UP, INC.,
an Arizona corporation,
General Partner
By: /s/ Rick Morgan
-------------------------------
Name: Rick Morgan
--------------------------
Title: Vice President
------------------------
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