EXHIBIT 10.1
MODIFICATION TO CREDIT
AGREEMENT
This Modification to Credit Agreement
("Modification") is made as of October 13, 2009, by and among
OWENS FINANCIAL GROUP, INC. (“Borrower”) and
CALIFORNIA BANK & TRUST, FIRST BANK, formerly FIRST BANK
& TRUST, and CITY NATIONAL BANK (which are
collectively known as “Lenders”).
RECITALS
A. Pursuant
to the terms of a Credit Agreement ("Credit Agreement") between
Lenders and Borrower dated as of August 31, 2001, Lenders agreed to
make Revolving Loans to Borrower up to the credit limit of the
principal sum of $20,000,000. California Bank &
Trust is the agent of Lenders under the Credit Agreement
(“Agent”). The Credit Agreement was amended
by a Modification to Credit Agreement, dated February 28, 2002,
executed by the parties that, among other things, added Swing Loans
to the facility. The Revolving Loans and Swing Loans are
collectively referred to as “Loans.” By
further Modification to Credit Agreement, dated August 16, 2002,
executed by the parties, the “Amount of Aggregate
Commitment” for each Lender was reduced and the provisions
related to Swing Loans and Borrowing Procedures were
amended. By a Modification to Credit Agreement, dated
July 31, 2003, the “Commitment Termination Date” in
Section 1.1 of the Credit Agreement was extended to July 31,
2005. By a Modification to Credit Agreement, dated
September 13, 2004, among other things, the “Amount of
Aggregate Commitment” for the Lenders was adjusted and
financial covenants were changed. By further
Modifications to Credit Agreement, dated July 31, 2005 and
September 30, 2005, the Commitment Termination Date in Section 1.1
of the Credit Agreement was extended first to September 30, 2005
and then to July 31, 2007 with other adjustments. By a
Modification to Credit Agreement, dated June 1, 2006, section
11.1(e)(iii) of the Credit Agreement was amended. By
another Modification to Credit Agreement, dated August 15, 2006,
compliance with Section 11.25 of the Credit Agreement through
September 30, 2006 was waived. By a further Modification
to Credit Agreement, dated August 31, 2006, Section 11.1 of the
Credit Agreement, entitled “Financial Statements and Other
Information,” was modified. The Credit Agreement
was again amended by a Modification to Credit Agreement, dated July
20, 2007, by which the Commitment Termination Date was extended to
July 31, 2009. The Credit Agreement was further amended
by a Modification to Credit Agreement, dated November 7, 2007, by
which section 11.15, entitled “Restricted Payments,”
was replaced. The Credit Agreement was again amended by
a Modification to Credit Agreement, dated March 31, 2008, by which
the Commitment Termination Date was extended, and certain covenants
were changed, among other things. The Credit Agreement
was most recently amended by a Modification to Credit Agreement,
dated March 27, 2009, by which the interest rate was
adjusted.
B. The
Loans were evidenced by promissory notes executed by Borrower in
favor of each of the Lenders.
C. In
response to Borrower's request and in reliance upon Borrower's
representations made to Lenders in support thereof, Lenders have
agreed to further modify the terms of the Credit Documents, as set
forth in this Modification. Capitalized terms shall have
the meanings assigned to them in the Credit Agreement except as set
forth in this Modification.
AGREEMENT
NOW, THEREFORE, Borrower and Lenders agree as
follows:
1. Adoption of
Recitals . Borrower hereby represents and warrants
that each of the recitals set forth above is true, accurate and
complete.
2. Conditions
Precedent . This Modification shall become effective
only upon Borrower's delivery or satisfaction of the following
conditions in form and substance acceptable to Agent:
(a) There shall be no
Event of Default under the Credit Agreement;
(b) Borrower shall
execute this Modification;
(c) Borrower shall pay
to Agent all of Agent’s attorneys' fees incurred in the
preparation of this Modification and all out-of-pocket fees
incurred by Agent in connection with this Modification;
and
(d) Borrower shall
provide any other items or documents required by Agent in
connection with the consummation of this transaction.
3. Conditions Subsequent
. By
October 30, 2009, Borrower shall perform the following conditions
subsequent;
(a) Borrower
shall deliver Deeds of Trust in form satisfactory to Agent on
parcels of real property owned by Borrower, which Deeds of Trust
shall be recorded in the office of the county recorder for the
county in which the real property is located. Borrower
shall also execute and deliver to Agent Assignments of Promissory
Notes and related Assignments of Deeds of Trust (collectively
“Assignments”) in form acceptable to Agent for note
receivables in favor of Borrower. The Assignments shall
be accompanied by the original promissory note for the related note
receivable. The real property for which Deeds of Trust are to be
provided and the notes receivable related to the Assignments shall
be selected by Agent in its absolute discretion.
(b) Borrower
shall provide Agent with title insurance for the Deeds of Trust
delivered to Agent under subsection (a) above in form, substance
and amount acceptable to Agent.
4. Representations
and Warranties . Borrower hereby represents and
warrants that no event of default, breach or failure of condition
has occurred or exists, or would exist with notice or lapse of
time, or both, under any of the Credit Documents, and all
representations and warranties of Borrower in this Modification and
the other Credit Documents are true and correct as of the date of
this Modification and shall survive the execution of this
Modification.
5. Modification of
Loan Documents . The Credit Documents are hereby
supplemented, amended and modified according to the following,
which changes shall s
