EXHIBIT 10.5
SEVENTH MORTGAGE LOAN MODIFICATION
AGREEMENT
THIS
SEVENTH MORTGAGE LOAN MODIFICATION AGREEMENT (the
“Agreement”) is entered into as of the 18th day
of August, 2009 by and among NATIONAL CITY BANK , a national
banking association, successor by merger with The Provident Bank,
One East Fourth Street, Cincinnati, Ohio 45202 (the
“Lender”), NTS/VIRGINIA DEVELOPMENT COMPANY
(“NTS/Virginia”), a Virginia corporation, and
NTS/LAKE FOREST II RESIDENTIAL CORPORATION, a Kentucky
corporation (“NTS/Lake Forest II”; NTS/Virginia and
NTS/Lake Forest II are sometimes hereinafter collectively referred
to as the “Borrowers”), ORLANDO LAKE FOREST JOINT
VENTURE , a Florida general partnership “Orlando Lake
Forest”), NTS MORTGAGE INCOME FUND , a Delaware
corporation and NTS GUARANTY CORPORATION , a Kentucky
corporation (collectively, the
“Guarantors”).
RECITALS :
A.
Borrowers, Orlando Lake Forest and/or the Guarantors have issued
and delivered to Lender the following loan agreements, promissory
notes and security documents:
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(1)
Amended and Restated
Development and Construction Loan Agreement among Lender, Borrowers
and Guarantors dated October 31, 2000 (“Loan
Agreement”);
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(2)
$18,000,000.00 Revolving
Promissory Note Construction Mortgage Loan made by Borrowers and
Guarantors payable to the order of Lender dated October 31, 2000,
which consolidates the Loans referenced in Sections 6 and 8 below
(“Revolving Note”);
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(3)
Guaranty Agreement made
by NTS Mortgage Income Fund in favor of Lender dated October 31,
2000;
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(4)
Stock Pledge Agreement by
NTS Mortgage Income Fund in favor of Lender pledging its one
hundred percent (100%) ownership in the capital stock of NTS/Lake
Forest II to Lender dated October 31, 2000;
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(5)
Amendment to Stock Pledge
Agreement by NTS Mortgage Income Fund in favor of Lender pledging
its one hundred percent (100%) ownership in the capital stock of
NTS/Virginia to Lender dated October 31, 2000;
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(6)
Development and
Construction Loan dated December 30, 1997 which evidences a Ten
Million Seven Hundred Thousand and 00/100 Dollar ($10,700,000.00)
loan made by Lender to NTS/Virginia Development Company which is
now consolidated under the Revolving Note. Such loan is secured by
the following:
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(a)
Credit Line Deed of Trust
and Security Agreement dated December 30, 1997 made by Borrower,
NTS/Virginia Development Corporation in favor of Phillip Sasser,
Jr. and James E. Jarrell, III, as Trustees for the benefit of
Lender, of record in Deed Book 1521, Page 447 in the office of
the
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Spotsylvania County
Recorder’s Office, as amended on October 31, 2000 in Deed
Book 1874, Page 355 in the Spotsylvania County Recorder’s
Office (as modified in Items 9, 12, 14, 17, and 20, the “Deed
of Trust”), which encumbers the real property more fully
described in Exhibit A (“Fawn Lake
Property”);
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(b)
Conditional Assignment of
Leases, Rents, Contracts, Income and Proceeds dated December 30,
1997 made by the Borrower in favor of Lender, of record in Deed
Book 1521, Page 501 in the Spotsylvania County Recorder’s
Office, as amended on October 31, 2000 in Deed Book 1874, Page 362,
Spotsylvania County Recorder’s Office; and
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(c)
UCC-1 Financing
Statements of record in Spotsylvania County Recorder’s
Office.
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(7)
Environmental Indemnity
Agreement between Lender and NTS/Virginia dated October 31,
2000;
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(8)
Environmental Indemnity
Agreement between Lender and NTS/Lake Forest II dated October 31,
2000;
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(9)
Mortgage Loan
Modification Agreement between Lender and Borrowers dated May 16,
2003 and recorded on July 1, 2003 as Instrument 200300025884 in the
Clerks office of the Circuit Court of Spotsylvania County,
Virginia;
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(10) Second
Amended and Restated Revolving Promissory Note dated May 16, 2003
granted by Borrowers to Lender in the principal amount of Twelve
Million and 00/100 Dollars ($12,000,000.00) (“Second Amended
Note”);
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(11) [INTENTIONALLY
LEFT BLANK]
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(12) Second
Mortgage Loan Modification Agreement between Lender and Borrowers
dated June 22, 2004 and recorded on July 12, 2004 as Instrument
LR200400026770 in the Clerks office of the Circuit Court of
Spotsylvania County, Virginia;
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(13) Third
Amended and Restated Revolving Promissory Note dated June 22, 2004
granted by Borrowers to Lender in the maximum amount of available
credit of Eight Million and 00/100 Dollars ($8,000,000.00)
(“Third Amended Note”);
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(14) Third
Mortgage Loan Modification Agreement between Lender and Borrowers
dated April 20, 2005 and recorded on May 16, 2005 as Instrument
200500018730 in the Clerks office of the Circuit Court of
Spotsylvania County, Virginia;
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(15) Fourth
Amended and Restated Revolving Promissory Note dated April 20, 2005
granted by Borrowers to Lender in the maximum amount of available
credit of Five Million and 00/100 Dollars ($5,000,000.00)
(“Fourth Amended Note”);
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(16) Fifth
Amended and Restated Revolving Promissory Note dated
October 24, 2007 granted by Borrowers to Lender in the maximum
amount of available credit of Seven Million Five Hundred Thousand
and 00/100 Dollars ($7,500,000.00) (“Fifth Amended
Note”);
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(17) Fourth
Mortgage Loan Modification Agreement between Lender, Borrower,
Orlando Lake Forest and Guarantor dated October 24, 2007 and
recorded December 13, 2007 as Instrument No. LR200700033396 in the
Clerk’s Office of Spotsylvania County, Virginia;
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(18) Unrecorded
Open End Mortgage, Security Agreement and Assignment of Rents and
Leases dated October 24, 2007, granted by Orlando Lake Forest in
favor of Lender, encumbering land more particularly described in
Exhibit B (“Additional Property”) located in Seminole
County, Florida (“Additional Mortgage”);
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(19) Unrecorded
Assignment of Contracts and Income dated October 24, 2007, granted
by Orlando Lake Forest in favor of Lender ("Additional
Assignment");
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(20) Fifth
Mortgage Loan Modification Agreement between Lender, Borrower,
Orlando Lake Forest and Guarantor dated May 19, 2008 and recorded
June 12, 2008 as Instrument No. LR200800012251 in the Clerk’s
Office of Spotsylvania County, Virginia;
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(21) Sixth
Mortgage Loan Modification Agreement between Lender, Borrower,
Orlando Lake Forest and Guarantors dated September 1, 2008 and
recorded September 29, 2008 as Instrument No. 20080009584 in the
Clerk’s Office of Spotsylvania County, Virginia;
and
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(22) Sixth
Amended and Restated Promissory Note dated September 1, 2008
granted by Borrowers to Lender in the principal amount of Seven
Million Three Hundred Fifty-Two Thousand And 00/100 Dollars
($7,352,000.00) (“Sixth Amended Note”), which Sixth
Amended Note has a current outstanding balance in the amount of
Five Million Seven Hundred Ninety-Nine Thousand Four Hundred
Sixty-Eight and 00/100 Dollars ($5,799,468.00);
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(23) Unconditional
and Continuing Guaranty granted by NTS Guaranty Corporation dated
September 1, 2008;
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(24) Promissory
Note Modification Agreement dated November 21, 2008 between
Borrowers, Guarantors and Lender;
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(25) Promissory
Note Modification Agreement dated April 15, 2009 between Borrowers,
Guarantors and Lender; and
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(26) Promissory
Note Modification Agreement dated May 15, 2009 between Borrowers,
Guarantors and Lender.
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Items
(2), (10), (13), (15), (16) and (22) are hereinafter referred to as
the “Notes”. Items (1) through (26) are hereinafter
referred to as the “Loan Documents.”
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B. The
above described indebtedness, as evidenced by the Notes and all
additional sums due under the Loan Documents, remains unpaid and
Borrowers have requested and Lender has agreed to the rearrangement
of the terms of such indebtedness (the “Indebtedness”)
to extend the maturity date of the Notes, to amend the interest
rate thereunder, to approve the availability thereunder in the
amount of One Million and 00/100 Dollars ($1,000,000.00), to add
additional collateral as security for the Notes, to amend the
release prices under the Loan Documents and to add or amend certain
covenants to the Loan Documents, which modifications shall occur
upon Borrowers’ compliance with the provisions set forth
herein.
NOW,
THEREFORE, in consideration of the mutual promises made herein, the
benefits accruing to the parties herein and the obligations assumed
hereunder, the parties agree that the Loan shall remain outstanding
and the terms of such Indebtedness shall be amended as set forth
below:
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(1)
Amendment to the
Notes .
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(a)
The Notes shall be
amended and restated in their entirety to extend the maturity date,
to amend the interest rate thereunder, to add availability
thereunder in the amount of One Million and 00/100 Dollars
($1,000,000.00), and to provide for certain covenants,
representations and warranties of Borrowers, as more fully defined
in and pursuant to a Seventh Amended and Restated Promissory Note
dated of even date herewith (“Restated Note”). The
Restated Note shall not constitute a repayment or satisfaction of
the Indebtedness evidenced by the Notes, which for all purposes
hereunder shall remain outstanding from December 30, 1997, January
6, 1998, October 31, 2000, May 16, 2003, June 22, 2004, April 20,
2005, October 24, 2007, September 1, 2008, November 21, 2008, April
15, 2009 and May 15, 2009, respectively.
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(b)
The parties agree that
any reference in the Notes to a principal repayment in the amount
of Two Million and 00/100 Dollars ($2,000,000.00) shall be deleted
in its entirety.
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(2)
Amendment to Deed of Trust and Other Loan Documents . The
Deed of Trust and other Loan Documents shall be amended to reflect
the extension of the maturity date as set forth in the Restated
Note to September 1, 2010. The Deed of Trust and other Loan
Documents shall continue to secure the indebtedness under the
Notes, as now evidenced by the Restated Note which evidences an
outstanding principal amount of Five Million Seven Hundred
Ninety-Nine Thousand Four Hundred Sixty-Eight and 00/100 Dollars
($5,799,468.00) and additional availability thereunder of One
Million and 00/100 Dollars ($1,000,000.00) for a total maximum
amount of available credit of Six Million Seven Hundred Ninety-Nine
Thousand Four Hundred Sixty-Eight and 00/100 Dollars
($6,799,468.00) and accordingly, NTS/Virginia hereby continues to
grant, mortgage and convey the property as described in the Deed of
Trust (except as may have been previously released), to Lender as
security for the Restated Note and the other obligations of
Borrowers under the Loan Documents, subject in all respects to the
terms of the Deed of Trust and other Loan Documents.
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Borrowers
further represent and warrant that in addition to the Notes and the
Restated Note, the Deed of Trust shall secure any and all
obligations and liabilities of Borrowers to Lender, or any
affiliate of Lender, whether absolute or contingent, whether now
existing or hereafter created, arising, evidenced or acquired
(including all renewals, extensions an
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