EXHIBIT
10AA.3
MODIFICATION
AGREEMENT
THIS MODIFICATION
AGREEMENT (the “Agreement”) is made effective as of
September 30, 2009 (“Effective Date”) by and between
WACHOVIA BANK, NATIONAL ASSOCIATION whose address is 225
Water Street, Jacksonville, FL 32202 (“Wachovia”), and
DECORATOR INDUSTRIES, INC., a Pennsylvania corporation,
whose address is 10011 Pines Boulevard, Suite 201, Pembroke Pines,
FL 33024 (“Borrower”).
W I T N E S SE T
H:
WHEREAS, Wachovia is
the owner and holder of that certain Amended and Restated Revolving
Promissory Note (the "Note") executed by Borrower in favor of
Wachovia dated April 25, 2008 in the original principal amount of
FIVE MILLION AND NO/100 DOLLARS ($5,000,000.00) (the "Loan");
and
WHEREAS, Borrower and
Wachovia executed that certain Loan Agreement dated May 24,
2006 which was subsequently amended by that certain First Amendment
to Loan Agreement dated April 25, 2008 (collectively, the "Loan
Agreement"); and
WHEREAS, At the request
of Borrower and after discussions between the parties as to the
paydown of the Loan, Wachovia signed that certain letter dated June
26, 2009, which extended the maturity date of the Note to September
30,2009 (the "Extension Letter"); and
WHEREAS, the Note and
the Loan Agreement, the Extension Letter, this Agreement, the
Mortgages (as defined herein) and all other documents executed by
Borrower in connection with such loan, are hereinafter sometimes
referred to as the "Loan Documents"); and
WHEREAS, Borrower has
advised Wachovia it cannot repay the Loan m full as of September
30, 2009; and
WHEREAS, Borrower has
requested that Wachovia extend the current Maturity Date of the
Loan from September 30, 2009 and requests that certain other terms
of the Loan Documents be modified and Wachovia has agreed to modify
the Loan Documents, but only upon the terms and subject to the
conditions hereinafter set forth.
NOW THEREFORE, in
consideration of the premises hereof, the mutual covenants
contained herein and the sum of TEN AND NO/100 DOLLARS ($10.00) in
hand paid by Borrower to Wachovia, the receipt and sufficiency of
which are hereby acknowledged, it is agreed as follows:
1
RECITALS
.
The Recitals contained
hereinabove are true and correct and are made a part
hereof.
2.
DEFINITIONS
.
Unless otherwise defined
herein, all initially capitalized terms used herein but not
otherwise defined shall have the meanings ascribed to such terms in
the Loan Agreement.
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3.
EXISTING STATUS
OF LOAN . In order to induce Wachovia to enter
into this Agreement, Borrower does hereby stipulate and acknowledge
that: (a) the Loan matures on September 30, 2009 and Borrower
cannot pay the Loan in full as of September 30, 2009 and said
failure to pay the Loan is an event of default under the Loan
Documents; (b) the Borrower has not met the Senior Funded Debt to
EBITDA Ratio (as set forth in Section 4 of the Loan Agreement)
which is an event of default under the Loan Documents; (c) the
principal balance and accrued interest of the indebtedness
represented by the Note as of the Effective Date is THREE MILLION
NINETY-NINE THOUSAND FOUR HUNDRED AND NO/100 DOLLARS
($3,099,400.00); and (d) the Loan Documents, as modified by this
Agreement are in full force and effect.
4.
REPRESENTATIONS
AND WARRANTIES . Borrower hereby represents and
warrants to Wachovia as of the Effective Date each of the
following
(a)
Enforceability of
Loan Documents . The Loan Agreement, the Note, the
Mortgages, this Agreement and any other Loan Documents executed by
Borrower with regard to the Loan are valid and binding upon
Borrower and enforceable in accordance with the terms
thereof.
(b)
Authority
. If Borrower is other
than a natural person: (i) Borrower is duly organized, validly
existing and in good standing in the state of Borrower's origin;
(ii) Borrower has all necessary power and authority to execute this
Agreement and to perform the transactions contemplated hereby;
(iii) Borrower's execution of this Agreement has been duly
authorized by all necessary action on the part of Borrower; and
(iv) those persons executing this Agreement on behalf of Borrower
have been duly authorized by all necessary action on Borrower's
behalf.
(c)
Consents
. Neither the execution
and delivery by Borrower of this Agreement, nor the performance by
Borrower of its obligations hereunder requires (i) the consent,
authorization or approval of, the giving of notice to, or the
registration with, or the taking of any other action in respect of,
any federal, state, foreign or local governmental authority or
agency, pursuant to any law, rule or regulation applicable to
Borrower or pursuant to any order, injunction or decree of any such
authority or agency, or (ii) the consent, authorization or approval
of, or the giving of notice to any partner or creditor of
Borrower.
(d)
Conflicts
. Neither the execution
and delivery by Borrower of this Agreement, nor the performance by
Borrower of its obligations hereunder, will (i) conflict with, or
result in a breach of, any of the terms, conditions or provisions
of any law, rule or regulation applicable to Borrower or any order,
injunction or decree of any court or governmental instrumentality
or of any bond, debenture, note, mortgage, decd of trust, guaranty,
indenture, agreement or other instrument to which Borrower is now a
party or by which it may be bound, or constitute a default
thereunder or, if Borrower is other than a natural person, any
partnership agreement, articles of incorporation, by-laws or other
formation or charter documents, respectively, of Borrower or any of
its general partners, or (ii) result in the creation or imposition
of any claim, lien, security interest, charge or other encumbrance
of any nature whatsoever upon any property of Borrower pursuant to
the terms of any such agreement or instrument.
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(e)
Litigation . There are no actions, suits or
proceedings, pending or, to Borrower's knowledge, threatened
against or affecting Borrower or the Properties (as defined
herein), at law or in equity, before any court or commission,
agency or instrumentality which would materially and adversely
affect the business of Borrower or the financial condition of
Borrower or the ability of Borrower to perform its obligations
under the Loan, this Agreement or the Loan Documents.
(f)
No Bankruptcy or
Assignment for the Benefit of Creditors Filing
. Borrower is not a
debtor in any outstanding action or proceeding pursuant to any
bankruptcy law or assignment for the benefit of creditors law, and
none has, upon the Effective Date of this Agreement, any current
intent either to file a petition by it under any bankruptcy law or
assignment for the benefit of creditors law, or the liquidation of
all or any portion of its assets or property, and Borrower is not
aware that any other person has any current intent to file against
any such person a petition under any bankruptcy law or assignment
for the benefit of creditors law.
(g)
Title
. The Properties are
owned in fee simple by Borrower and are free and clear of all
liens, charges, and other monetary encumbrances such that the
Mortgages shall be first priority liens as to each of the
Properties.
5.
CONDITIONS TO
MODIFICATION .
(a)
Execution of
Documents .
Borrower shall have executed, acknowledged, where applicable, and
delivered to Wachovia, this Agreement, the Mortgages, and if
required by Lender, UCC-I or UCC-3 Financing Statements and any
other documents necessary to effectuate the terms of this
Agreement.
(b)
Reaffirmation of
Representations and Warranties . By its execution hereof, Borrower
hereby reaffirms to Wachovia the continued truth, accuracy and
completeness in all material respects of each of the
representations and warranties of Borrower set forth in Paragraph 4
above and in the Loan Documents with the same force and effect as
if each were separately stated herein and made as of the date
hereof.
(c)
Title
Policies . At
Borrower's cost. Lawyers Title Insurance Company or other
nationally-recognized title company selected by Wachovia at its
sole determination, shall issue to Wachovia, loan policies and
endorsements as to each of the Properties. Said policies shall be
acceptable to Wachovia at its sole discretion. To the extent that a
title search of the Property reveals any material defects or
monetary encumbrances to which Wachovia objects, Borrower shall
cure the same on or before November 9, 2009 and failure to
cure shall be an event of default under the Loan Documents.
Borrower shall provide any other documentation, including but not
limited to corporate documents, due authorization and/or affidavits
as may be required by the title company to issue said
policies.
(d)
Modification Costs
and Expenses . Borrower shall have paid or shall
pay within ten (l0) calendar days of presentation an invoice for
the same by Wachovia, all reasonable costs and expenses of the
closing of this modification of the Loan Documents (the "Closing").
Said costs and expenses shall include, but not be limited to title
fees and costs, recording fees and costs, mortgages or intangible
taxes (including those due on the Note pursuant to Florida law),
appraisal fees, environmental reports, attorneys fees and costs and
any other costs incurred by Lender in connection with this
Agreement. Borrower agrees to defend, indemnify and hold harmless
Wachovia from and against any and all such costs and expenses, and
agrees that the Wachovia shall not in any way be held liable for
such costs and expenses.
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(e)
Property
Taxes .
Borrower shall have paid or shall pay within thirty (30) days of
Closing any and all outstanding ad valorem property taxes and
governmental assessments or impositions applicable to the Property
and shall provide evidence of the payment of same from the office
of the County tax collector on or before the Closing.
(f)
Cash Management
Services .
Borrower shall maintain its cash management services with
Wachovia.
6.
LOAN MODIFICATION
TERMS . The Loan and the Loan Documents are
modified as follows:
(a)
Maturity
Date . The
Maturity Date is extended to December 31, 2010, provided however,
if there is an event of default under the Loan Documents or this
Agreement which is not cured within the applicable cure period set
forth in the Loan Documents or this Agreement, the Loan shall be
accelerated and immediately due and payable
(b)
Interest
Rate . The
Interest Rate as defined in the Note shall be:
Interest (computed on
the basis of a 360-day year from the actual number of days elapsed)
on the outstanding balance
