FOURTH LOAN
MODIFICATION AGREEMENT
This Fourth Loan
Modification Agreement (the "Agreement"), is executed this 27
th day of February, 2009, by and between Big Boulder
Corporation, Blue Ridge Real Estate Company, BBC Holdings, Inc.,
BRRE Holdings, Inc., Northeast Land Company, Lake Mountain Company,
Jack Frost Mountain Company, Boulder Creek Resort Company,
Moseywood Construction Company, individually and doing business as
Stoney Run Realty Company and Stoney Run Builders Company, and Jack
Frost National Golf Course, Inc. (jointly, severally and
collectively the "Borrowers"); and Manufacturers and Traders Trust
Company (the "Bank").
BACKGROUND
A. On April 20, 2006,
the Bank agreed to extend certain financial accommodations to
Borrowers in the form of a construction and site development line
of credit facility (the "Loan").
B. The Loan is evidenced
by, inter alia, a Construction and Site Development Line of Credit
Mortgage Note dated April 20, 2006, in the stated principal amount
of Ten Million Dollars ($10,000,000.00), executed by Borrowers and
payable to Bank, as amended by a Joinder and Assumption Agreement
dated as of June 14,2007, and as further amended by an Amended and
Restated Construction and Site Development Line of Credit Mortgage
Note dated June 14,2007 which, among other things, increased the
principal amount of the Loan to Twenty Five Million Dollars
($25,000,000.00) (collectively the "Note"), and a Loan Agreement
dated April 20, 2006, executed by Borrowers and accepted by the
Bank, as amended by a Loan Modification Agreement dated October
27,2006, as further amended by a Second Loan Modification Agreement
dated June 15,2007, and as further amended by a Third Loan
Modification Agreement dated September 16,2008 (collectively the
"Loan Agreement"), and secured by, inter alia, the assets of the
Borrowers pursuant to a General Security Agreement dated April
20,2006, as amended (the "Security Agreement"), as perfected by
certain filed Financing Statements, as well as an Open-End Mortgage
from Blue Ridge Real Estate Company, as amended (the "Blue Ridge
Mortgage"), an Open-End Mortgage from Big Boulder Corporation, as
amended (the "Big Boulder Mortgage"), an Open-End Mortgage from
Northeast Land Co." as amended (the "Northeast Land Co. Mortgage")
(the Blue Ridge Mortgage, the Big Boulder Mortgage and the
Northeast Land Co., Mortgage are collectively referred to as the
"Mortgages"), certain recorded Assignments of Leases and Rents, as
amended (the "Assignments"), and certain recorded Cross
Collateralization Agreements, as amended.
C. The Loan Agreement,
the Note, the Security Agreement, the Financing Statements, the
Mortgages, the Assignments, the Cross Collateralization Agreements
and all other documents, certificates and instruments executed
and/or delivered in connection with the Loans are hereinafter
sometimes referred to individually as a "Loan Document" and
collectively as the "Loan Documents".
D. Borrowers and the
Bank have agreed to modify the terms of the Loan
Documents.
AGREEMENT
NOW, THEREFORE, for and
in consideration of the mutual covenants herein contained and other
good and valuable consideration, the receipt and adequacy of which
are hereby acknowledged, and intending to be legally bound hereby,
the Borrowers and Bank agree as follows:
1.
INCORPORATION.
The recitals set forth
in the Background to this Agreement and the Loan Documents referred
to therein are incorporated herein by reference and made a part
hereof with the same force and effect as if
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herein restated in full.
However, the following provisions of this Agreement shall prevail
over any inconsistent provisions contained in the materials
incorporated herein.
1.1.
Modification
Paramount. In
the event that any term or provision of any of the Loan Documents
is inconsistent or contrary to a specific and express term or
provision of this Agreement, the explicit and express term or
provision of this Agreement shall apply and shall be paramount. To
the extent that no such inconsistency exists, the terms and
provisions of the Loan Documents, as amended, shall continue in
full force and effect.
1.2.
No Novation;
Continuing Validity. This Agreement is not intended to be
nor shall it constitute a novation of the Loan Documents or the
indebtedness and obligations evidenced thereby. Borrowers hereby
ratify, confirm and approve the Loan Documents as modified herein,
and the indebtedness and obligations evidenced thereby, and
Borrowers agree that the same are valid and binding agreements of
the Borrowers, enforceable in accordance with their terms.
Borrowers warrant, represent, acknowledge and agree that the Loan
Documents have not been amended or modified by any oral or written
agreement or course of conduct of the parties.
1.3.
Further Compliance
with Loan Documents. Borrowers hereby ratify, reaffirm
and agree to all terms, conditions and remedies of and contained in
the Loan Documents, and warrant and agree that Borrowers shall
fully and strictly comply with all such terms and provisions, with
time being strictly of the essence.
2.
BANK'S COMPLIANCE;
BORROWERS' ACKNOWLEDGMENTS.
2.1.
The Borrowers
acknowledge and agree that Bank has fully and completely fulfilled
and satisfied all obligations it had or has to Borrowers under the
Loan Documents and otherwise pursuant to all other obligations and
understandings it may have had to the date of this Agreement
(except those obligations, if any, expressly provided for in this
Agreement), including without limitation all obligations, if any,
required of Bank under all documents and instruments now in
existence or anticipated to be signed in connection with this
Agreement, and upon the occurrence of an event of default by
Borrowers, nothing further need be done by Bank before availing
itself of all or any of its rights and remedies against
Borrowers.
2.2.
Borrowers acknowledge
and confirm that by not exercising the rights, remedies and
privileges available to Bank, for any reason whatsoever, including
the negotiation and execution of this Agreement, Bank is not
waiving and has not waived any of its rights to do so in accordance
with the Loan Documents and this Agreement.
2.3.
Borrowers acknowledge
and agree that by negotiating and entering into this Agreement,
Bank is not establishing a course of conduct nor a pattern of
operation nor an implicit or explicit understanding that Bank mayor
will ever further revise, extend, increase or modify any term or
condition of the Loan Documents or this Agreement or agree to
forebear at any time in the future if an event of default should
occur under and pursuant to the Loan Documents, this Agreement
and/or any document or instrument contemplated or referred to
herein.
3.
AMENDMENTS TO LOAN
DOCUMENTS.
The Loan Documents are
hereby amended as follows:
3.1 The Borrowers agree
to execute an Allonge to the Amended and Restated Construction and
Site Development Line of Credit Mortgage Note in the form attached
hereto as Exhibit A and incorporated herein by reference which
shall, inter alia: (i) reduce the amount available under
the
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2
Loan from $25,000,000 to
$20,000,000; and (ii) amend the interest accruing on the
outstanding principal balance of the Loan to the greater of the
overnight LlBOR plus 350 basis points or the daily 30-day LlBOR
rate plus 350 basis points, but in all cases, the interest rate
accruing on the outstanding Principal Sum advanced shall be subject
to an interest rate floor of 5.5%.
3.2. Section 4.2 of the
Loan Agreement entitled, " Maximum Amount of the Site
Development Sub-Loan , which originally read, "The aggregate
amount disbursed under the Site Development Sub-Loan may not exceed
Six Million Five Hundred Thousand Dollars ($6,500,000.00)", and was
modified to read, "The aggregate amount disbursed under the Site
Development Sub-Loan may not exceed Twelve Million Nine Hundred
Thousand Dollars ($12,900,000.00)", and was again modified to read,
"The aggregate amount disbursed under the Site Development Sub-Loan
may not exceed Eleven Million Dollars ($11,000,000.00)", shall be
modified to read, "The aggregate amount disbursed under the Site
Development Sub-Loan may not exceed Six Million Dollars
($6,000,000.00)". Accordingly, all references to the Letters of
Credit in the Loan Agreement shall reflect the Bank agreement,
subject to the terms and the conditions contained in the Loan
Agreement, to issue, on one or more of the Borrowers' behalf,
irrevocable standby letters of credit to the Official Bodies in an
aggregate amount not to exceed Six Million Dollars ($6,000,000.00)
for the purpose of guaranteeing completion of the Infrastructure
Improvements to the pre-approved Projects as required by the
Official Bodies.
3.3. Any advances under
the Site Development Sub-Loan and/or the Construction Line of
Credit Sub-Loan shall be subject to the written consent and
approval of the Bank's Regional President.
3.4. The Borrowers agree
to establish an interest reserve account ("Interest Reserve
Account") in an amount not less than $690,000, which interest
reserve account shall be established immediately upon the sale by
Blue Ridge Real Estate Company of the Land Conservancy Property
(which is defined as the certain unimproved property containing an
aggregate of approximately 3,891 +/acres, consisting of
approximately 2,645 +/- acres, located in Buck Township, Luzerne
County, Thornhurst Township, Lackawanna County, and Tobyhanna and
Coolbaugh townships, Monroe County in Pennsylvania, and
approximately 1,246 +/- acres located in Bear Creek Township in
Luzerne County, Pennsylvania) for the payment of interest on the
Loan. So long as funds remain available in the Interest Reserve
Account and no Event of Default or Potential Default has occurred,
the Bank shall advance funds from the Interest Reserve Account to
pay monthly debt service on the Loan (including any fees incurred).
The Borrowers hereby pledge to the Bank any and all monies now or
hereafter deposited in the Interest Reserve Account as additional
security for the repayment of the Loan. Upon occurrence of an Event
of Default, the Bank may apply any sums in the Interest Reserve
Account to the repayment of the Borrowers' obligations to the Bank
in any order in its sole discretion. Until expended or applied as
provided herein, any amounts in the Interest Reserve Account shall
constitute additional security for the Loan. To the extent
permitted by applicable law, the Interest Reserve Account shall not
constitute a trust fund and may be commingled with other monies
held by the Bank, and no earnings or interest on the funds in the
Interest Reserve Account shall be payable to any of the
Borrowers.
3.5. Section 3.2 of the
Loan Agreement entitled " The Construction Line of Credit
Sub&
