Exhibit 10.2

 

FIRST LOAN MODIFICATION AGREEMENT

(Rosehill Reserve – UDF V Loan #9002)

 

THIS FIRST LOAN MODIFICATION AGREEMENT (this “Agreement”) is entered into to be
effective as of the 5th day of December, 2014 (the “Effective Date”), by and
among ROSEHILL RESERVE, LTD., a Texas limited partnership (“Borrower”), HARRIGAN
DEVELOPMENT PARTNERS, LLC, a Texas limited liability company (“General
Partner”), and THOMAS LLOYD HARGROVE, JR., a natural person residing in Harris
County, Texas (“Hargrove”, and together with General Partner, the
“Borrower-Related Parties”), and UNITED DEVELOPMENT FUNDING INCOME FUND V, a
Maryland real estate investment trust (“Lender”).

 

RECITALS:

 

A.          On December 5, 2014, Lender made a loan to Borrower in the original
principal amount of $42,372,200.00 (as modified, the “Loan”), pursuant to that
certain Loan Agreement dated effective as of December 5, 2014 (as modified, the
“Loan Agreement”) among Borrower, the Borrower-Related Parties, and Lender.

 

B.          The Loan is evidenced and secured by, and is subject to, among other
things, (i) that certain Secured Promissory Note dated effective as of December
5, 2014, issued by Borrower and payable to the order of Lender and its assigns
in the original principal amount of $42,372,200.00 (the “Note”); (ii) that
certain Deed of Trust, Assignment of Leases and Rents, Security Agreement and
Fixture Filing (the “Deed of Trust”) executed by Borrower, as the grantor
thereunder, to Todd Etter, Trustee for the benefit of Lender and its assigns,
recorded on December 12, 2014 in the Official Public Records of Harris County,
Texas as Instrument Number 20140555272, covering certain real property as
described therein, and (iii) the other Loan Documents (as defined in the Loan
Agreement).

 

C.           Borrower has requested that Lender extend the Maturity Date to
December 5, 2017 (the “Borrower Request”).

 

D.           Lender has consented to the Borrower Request provided that Borrower
and the Borrower-Related Parties, as applicable, enter into, execute and deliver
to Lender, the following: (i) this Agreement, and (ii) such other agreements,
certificates, resolutions, security instruments, amendments, modifications, and
supplements as Lender requires.

 

AGREEMENT:

 

NOW, THEREFORE, for and in consideration of other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
Lender, Borrower and the Borrower-Related Parties agree as follows:

 

1.           General Definitions. Capitalized terms used in this Agreement shall
have the meanings given to such terms in the Loan Agreement, as modified by this
Agreement.

 

2.           Extension of Maturity. The Maturity Date is hereby extended to
December 5, 2017; subject, however, to the terms and conditions of the Loan
Agreement and the other Loan Documents. Borrower and the Borrower-Related
Parties understand and agree that Lender has no obligation to provide any
further extension of the Maturity Date.

 

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3.          Costs. Borrower agrees to pay all costs and expenses incurred by
Lender in connection with the transactions contemplated by this Agreement and
the other Loan Documents, including, without limitation, transfer taxes,
mortgage taxes, attorneys’ fees, title insurance policy and/or endorsement
charges, recording fees, and reasonable fees and expenses of legal counsel to
Lender.

 

4.          Representations. Borrower and each Borrower-Related Party hereby
represent and warrant to Lender that (i) the execution, delivery and performance
of this Agreement and the other Loan Documents have been authorized by all
requisite action on the part of Borrower and each Borrower-Related Party, and
concurrently with the execution of this Agreement, Borrower and each
Borrower-Related Party have delivered to Lender resolutions of the general
partner and managers and members of Borrower and each Borrower-Related Party, as
the case may be, authorizing this Agreement and the transactions contemplated
hereby, and (ii) after giving effect to this Agreement, no Event of Default has
occurred and is continuing and no event or condition has occurred that with the
giving of notice or lapse of time or both would constitute an Event of Default
under the Loan Documents.

 

5.         No Defenses. Borrower and each Borrower-Related Party hereby warrant,
represent, and certify to Lender the following facts knowing that Lender
requires, and is relying upon, the warranties, representations, and
certifications contained in this paragraph as a condition to entering into this
Agreement: (a) as of the date hereof, neither Borrower nor any Borrower-Related
Party has any defense, right of setoff, counterclaim, claim, or cause of action
of any kind or description against Lender related to (i) payment of the
principal sum described in the Note and Loan Documents, (ii) payment of interest
under the Note and the Loan Documents, (iii) payment of any other sums due and
payable under the Note or any of the other Loan Documents, (iv) performance of
any obligations under the Loan Documents, or (v) any of Lender’s acts or
omissions with respect to the Loan, the Loan Documents or Lender’s performance
under the Loan Documents, and (b) Lender is not in default and no event has
occurred which, with the passage of time, giving of notice, or both, would
constitute a default by Lender of Lender’s obligations under the terms and
provisions of the Loan Documents. To the extent Borrower or any Affiliate
thereof now has, or in the future possesses, any defenses, rights of setoff,
counterclaims, claims or causes of action against Lender or the repayment of all
or a portion of the Loan, whether known or unknown, fixed or contingent, the
same are hereby forever irrevocably waived and released in their entirety.

 

6.         Release. In consideration of Lender’s agreement to grant the Borrower
Request, and the other benefits received by Borrower and each Borrower-Related
Party hereunder, Borrower and each Borrower-Related Party hereby RELEASES,
RELINQUISHES and forever DISCHARGES Lender, as well as its partners and their
respective predecessors, successors, assigns, agents, officers, directors,
employees and representatives (collectively, the “Lender Group”) of and from any
and all claims, demands, actions and causes of action of any and all kind and
character, whether known or unknown, present or future, which any of them may
have against Lender or any member of the Lender Group arising out of or in any
way connected with or in any way resulting from the acts, actions or omissions
of Lender or any member of the Lender Group in connection with the Loan or the
Loan Documents, including, without limitation, any breach of fiduciary duty,
breach of any duty of fair dealing, breach of confidence, breach of funding,
commitment, undue influence, duress, economic coercion, conflict of interest,
negligence, bad faith, malpractice, violations of any state or federal usury
laws, any violations of federal or state usury laws, any violations of federal
or state Fair Debt Collection Practices Act, any violations of the Real Estate
Settlement and Procedures Act, intentional or negligent infliction of mental
distress, tortious interference with contractual relations, corporate
governance, or prospective business advantage, breach of contract, deceptive
trade practices, liable, slander, conspiracy or any claim for wrongful
accelerating the Note or wrongfully attempting to foreclose on any collateral
relating to the Note, but in each case only to the extent permitted by
applicable law.

 

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7.          Ratification; No Waiver. Borrower and the Borrower-Related Parties
hereby represent and agree that there are no oral agreements which modify any of
the Loan Documents, and that the Loan Documents, as expressly modified by this
Agreement, remain unaltered and in full force and effect and constitute the
entire agreement between Borrower, the Borrower-Related Parties and Lender with
respect to the Loan. Nothing herein shall constitute, and there has not
otherwise occurred, any extinguishment or release of the obligations and
agreements of Borrower and the Borrower-Related Parties under the Loan
Documents, and nothing herein shall constitute, and there has not otherwise
occurred, any novation with respect to the Note. Borrower and the
Borrower-Related Parties do hereby expressly ratify and confirm that the liens
and security interests created by the security instruments, including, without
limitation, the Deed of Trust, are valid and subsisting. Nothing in this
Agreement shall be understood or construed to be a satisfaction or release, in
whole or in part, of any obligation of Borrower or the Borrower-Related Parties
under the Loan Documents. Without limitation of the foregoing, Borrower and the
Borrower-Related Parties acknowledge and agree that (i) any and all rights,
titles, interests and liens securing the repayment of the Loan, as modified by
this Agreement, are hereby reaffirmed, renewed and extended, including, without
limitation, the rights, titles, interests and liens created in the Deed of Trust
and the other Loan Documents, and (ii) any Guaranty Agreement executed by one or
more Borrower-Related Parties guaranteeing the payment of the Loan, as modified
by this Agreement, is and shall remain in full force and effect and continues to
guaranty and secure the payment of the Loan, as modified by this Agreement.
Borrower and the Borrower-Related Parties hereby agree that nothing herein shall
constitute a waiver by Lender of any Event of Default, whether known or unknown,
which may now or hereafter exist. Borrower and the Borrower-Related Parties
hereby further agree that no action, inaction or agreement by Lender, including,
without limitation, any extension, indulgence, waiver, consent, or agreement of
modification which may occur or be granted or entered into with respect to
nonpayment of the Loan or any portion thereof, or with respect to matters
involving security for the Loan, or with respect to any other matter relating to
the Loan, shall require or imply any future extension, indulgence, waiver,
consent, or agreement by Lender, and that Lender has made no agreement, and is
in no way obligated, to grant any future extension, indulgence, waiver, or
consent or enter into any further agreement or modification with respect to the
Loan or any matter relating to the Loan.

 

8.          Binding Effect; Assignment. This Agreement shall be binding on
Borrower and the Borrower-Related Parties and their respective successors and
assigns, including, without limitation, any receiver, trustee or debtor in
possession of or for Borrower or any Borrower-Related Party, and shall inure to
the benefit of Lender and its successors and assigns. Should the status,
composition, structure or name of Borrower or any Borrower-Related Party change,
this Agreement and the other Loan Documents shall continue to be binding upon
such Person and also cover such Person under the new status, composition,
structure or name according to the terms hereof and thereof.

 

9.          Captions; Number or Gender of Words. The captions in this Agreement
are for the convenience of reference only and shall not limit or otherwise
affect any of the terms or provisions hereof. Except where the context indicates
otherwise, words in the singular number will include the plural and words in the
masculine gender will include the feminine and neutral, and vice versa, when
they should so apply.

 

10.        Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute but one and the same instrument.

 

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11.         Severability. If any provision of this Agreement shall be held
invalid under any applicable laws, then all other terms and provisions of this
Agreement and the Loan Documents shall nevertheless remain effective and shall
be enforced to the fullest extent permitted by applicable law.

 

12.         Amendments; Waivers. No amendment or waiver of any provision of this
Agreement nor consent to any departure here from shall in any event be effective
unless the same shall be in writing and signed by Lender and the affected
person, and then such waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given.

 

13.         Cumulative Remedies. All rights and remedies that Lender is afforded
by reason of this Agreement are separate and cumulative with respect to
Borrower, Borrower-Related Parties or any of them and otherwise and may be
pursued separately, successively, or concurrently, as Lender deems advisable. In
addition, all such rights and remedies are non-exclusive and shall in no way
limit or prejudice Lender’s ability to pursue any other legal or equitable
rights or remedies that may be available to Lender.

 

14.         Construction. Each party hereto acknowledges that it has
participated in the negotiation of this Agreement and each of the parties has
had sufficient time to review this Agreement, have been represented by legal
counsel at all times, have entered into this Agreement voluntarily and without
fraud, duress, undue influence or coercion of any kind. No representations or
warranties have been made by Lender to any party expect as set forth in this
Agreement.

 

15.         ORAL AGREEMENTS INEFFECTIVE. THIS AGREEMENT AND THE OTHER “LOAN
AGREEMENTS” (AS DEFINED IN SECTION 26.02(A)(2) OF THE TEXAS BUSINESS & COMMERCE
CODE, AS AMENDED) REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES, AND THIS
AGREEMENT AND THE OTHER WRITTEN LOAN AGREEMENTS MAY NOT BE CONTRADICTED BY
EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS BETWEEN THE
PARTIES.

 

[The remainder of this page is left blank intentionally.]

 

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
on the 21st day of April, 2015 to be effective as of the Effective Date.

 

BORROWER:

 

ROSEHILL RESERVE, LTD.,

a Texas limited partnership

 

By: Harrigan Development Partners, LLC,     a Texas limited liability company  
Its: General Partner           /s/ Thomas Hargrove     Thomas Hargrove    
Partner           /s/ Brian McGown     Brian McGown     Partner  

 

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BORROWER-RELATED PARTIES:

 

HARRIGAN DEVELOPMENT PARTNERS, LLC,

a Texas limited liability company

 

  /s/ Thomas Hargrove     Thomas Hargrove     Partner           /s/ Brian McGown
    Brian McGown     Partner  

 

/s/ Thomas Lloyd Hargrove, Jr.   THOMAS LLOYD HARGROVE, JR.  

 

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LENDER:

 

UNITED DEVELOPMENT FUNDING INCOME FUND V,

a Maryland real estate investment trust

 

/s/ David A. Hanson   David. A. Hanson   Chief Operating Officer  

 

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