Exhibit 10.3

 

FIRST LOAN MODIFICATION AGREEMENT

(Frisco 113, Collin County, Texas)

UDF V Loan # 9001

 

THIS FIRST LOAN MODIFICATION AGREEMENT (this “Agreement”) is entered into to be
effective as of September 23, 2015 (the “Effective Date”), by and among CTMGT
FRISCO 113, LLC, a Texas limited liability company (“Borrower”), CENTAMTAR
TERRAS, L.L.C., a Texas limited liability company (“Centamtar Terras”), CTMGT,
LLC, a Texas limited liability company (“CTMGT”), and MEHRDAD MOAYEDI, a natural
person residing in Dallas County, Texas (“Moayedi”, and together with CTMGT and
Centamtar Terras, each a “Borrower-Related Party” and collectively, the
“Borrower-Related Parties”), and UNITED DEVELOPMENT FUNDING INCOME FUND V, a
Maryland real estate investment trust (“Lender”).

 

RECITALS:

 

A.           Effective as of December 1, 2014, Lender made a loan to Borrower in
the original principal amount of $10,660,000.00 (as amended and modified, the
“Loan”), as evidenced by that certain Loan Agreement dated effective as of
December 1, 2014 (the “Loan Agreement”) by and among Lender, Borrower, and the
Borrower-Related Parties, and as further evidenced by that certain Secured
Promissory Note dated effective as of December 1, 2014 in the original principal
amount of $10,660,000.00 issued by Borrower and payable to the order of Lender
and its assigns (the “Note”).

 

B.           The Note is secured by, among other things, that certain Deed of
Trust, Assignment of Leases and Rents, Security Agreement and Fixture Filing
executed by Borrower, as the grantor thereunder, to Todd Etter, as trustee for
the benefit of Lender and its assigns covering that certain real property
further described on Exhibit “A” attached thereto (“Property”), dated effective
as of December 1, 2014, recorded at Instrument No. 20141202001313150 of the Real
Property Records of Collin County, Texas (the “Deed of Trust”).

 

C.           Borrower has requested that Lender (i) partially release the
portion of the Property known as “Phase I” from the lien of the Deed of Trust,
(ii) amend and modify that certain Subordination Agreement (the “Ryland
Subordination Agreement”) dated effective as of December 1, 2014, by and among
Lender, RH of Texas Limited Partnership, a Maryland limited partnership
(“Ryland”), and Borrower, recorded at Instrument No. 20141203001316340 of the
Real Property Records of Collin County, Texas, as further described herein, and
(iii) enter into that certain Subordination, Standstill and Intercreditor
Agreement (the “Ozarks Subordination Agreement”), to be effective on or about
the Effective Date, by and among Lender, Borrower and Bank of the Ozarks (“New
Senior Lender”), so that the lien of the Deed of Trust will be subordinate to
the lien of a deed of trust made by Borrower in favor of New Senior Lender
securing a new senior loan made by New Senior Lender to Borrower in the amount
of $6,928,400.00 (collectively, 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, (ii) a First Amendment to
Subordination Agreement, by and among Borrower, Lender and Ryland, amending the
Ryland Subordination Agreement (the “Ryland Subordination Agreement Amendment”),
(iii) the Ozarks Subordination Agreement, (iv) a Pledge Agreement executed by
CTMGT and Centamtar Terras, pursuant to which CTMGT and Centamtar Terras pledge
and grant a security interest in, and a lien on, the membership interests and
distributions of Borrower to Lender, (v) a Cross-Collateralization Agreement
executed by Borrower, CTMGT Frisco Hills 2B, 5A, 5B FL-2, LLC, a Texas limited
liability company (“Frisco Hills”), the Borrower-Related Parties, and Lender
(the “Cross-Collateralization Agreement”), and (vi) such other agreements,
certificates, resolutions, security instruments, amendments, modifications, and
supplements as Lender requires.

 

First Loan Modification Agreement
CTMGT Frisco 113, LLC (UDF V Loan #9001)1 

 

 

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.           New Definitions.   The following defined terms either (i) replace
the definitions for such terms set forth in Section 1 of the Loan Agreement, if
a definition for such term exists in Section 1 of the Loan Agreement, or (ii)
are added to the defined terms in Section 1 of the Loan Agreement in the
appropriate alphabetical order, if no definition for such term exists in Section
1 of the Loan Agreement:

 

“Assignments of Distributions” means that certain Assignment of Distributions
relating to the pledge of the distributions from Borrower, executed and
delivered to Lender by Pledgor pursuant to the requirements of the Pledge
Agreement, as the same may be amended, modified, renewed, extended, superseded,
or replaced from time to time.

 

“Collateral” means, collectively, all property, assets and rights and all
proceeds in which a Lien in favor of Lender is or has been granted or arises or
has arisen or may hereafter be granted or arise, under or in connection with any
Loan Document or otherwise, to secure payment or performance of all or any part
of the Debt (as defined in the Deed of Trust). Without limitation of the
foregoing, the term “Collateral” includes, without limitation, (i) all
“Mortgaged Property” as such term is defined and used in the Deed of Trust,
hereby incorporated by reference, (ii) all “Pledged Collateral” as such term is
defined and used in the Pledge Agreement and the proceeds therefrom, (iii) all
Earnest Money (if any) and the proceeds therefrom, (iv) each Lot Sale Contract
(if any) and the proceeds therefrom, and (v) each Reimbursement Contract (if
any) and the proceeds therefrom.

 

“Pledge Agreement” means that certain Pledge Agreement executed by Pledgor in
favor of Lender, pursuant to which Pledgor pledges and grants a security
interest in, and a Lien on, the Pledged Collateral to Lender to secure the Loan,
as the same may be amended, modified, renewed, superseded, or replaced from time
to time.

 

“Pledge Assignment” means that certain Assignment of Membership Interests
relating to the pledge of the membership interests of Borrower, executed and
delivered to Lender by Pledgor pursuant to the requirements of the Pledge
Agreement, as it may be amended, modified, renewed, extended, superseded, or
replaced from time to time.

 

“Pledged Collateral” has the meaning given to such term in the Pledge Agreement.

 

“Pledgor” means, collectively, each of CTMGT, Centamtar Terras, and each other
Person who executes the Pledge Agreement as a Pledgor thereunder.

 

First Loan Modification Agreement
CTMGT Frisco 113, LLC (UDF V Loan #9001)2 

 

 

3.          Loan Documents.   Effective as of the Effective Date hereof, the
term “Loan Documents” as used in the Loan Agreement and in any other Loan
Document shall include the Ozarks Subordination Agreement, the Ryland
Subordination Agreement Amendment, the Pledge Agreement, the Assignment of
Distributions, the Pledge Assignment and the Cross-Collateralization Agreement.

 

4.          Subordination Agreements.  Lender and Borrower hereby agree to enter
into the Ozarks Subordination Agreement and the Ryland Subordination Agreement
Amendment on the terms hereof and thereof.

 

5.          Pledge.    Contemporaneously with the execution of this Agreement,
CTMGT and Centamtar Terras shall execute and deliver to Lender a Pledge
Agreement, an Assignment of Distributions and a Pledge Assignment for all of the
membership interests in Borrower, and all such other agreements, certificates,
resolutions, security instruments, amendments, modifications, and supplements as
Lender requires, all in forms approved by Lender in its sole discretion.

 

6.          Cross-Collateralization.    Contemporaneously with the execution of
this Agreement, Borrower, Frisco Hills, and the Borrower-Related Parties shall
execute and deliver to Lender the Cross-Collateralization Agreement.

 

7.          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.

 

8.          Representations.   Borrower and each Borrower-Related Party hereby
represent and warrant to Lender that (a) the execution, delivery and performance
of this Agreement, the Ozarks Subordination Agreement, the Ryland Subordination
Agreement Amendment 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 managers and
members of Borrower and each Borrower-Related Party authorizing this Agreement
and the transactions contemplated hereby, and (b) 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.

 

9.          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.

 

First Loan Modification Agreement
CTMGT Frisco 113, LLC (UDF V Loan #9001)3 

 

 

10.         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.

 

11.         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 (a) 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 (b) 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.

 

First Loan Modification Agreement
CTMGT Frisco 113, LLC (UDF V Loan #9001)4 

 

 

12.         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.

 

13.         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.

 

14.         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.

 

15.         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.

 

16.         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.

 

17.         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.

 

18.         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.

 

19.         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.]

 

First Loan Modification Agreement
CTMGT Frisco 113, LLC (UDF V Loan #9001)5 

 

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
on the 23rd day of September, 2015 to be effective as of the Effective Date.

 

BORROWER:           CTMGT FRISCO 113, LLC,     a Texas limited liability company
          By: Centamtar Terras, L.L.C.,       a Texas limited liability company
    Its: Manager    

 

  By: CTMGT, LLC,       a Texas limited liability company     Its: Sole Member
and Manager               /s/ Mehrdad Moayedi       Mehrdad Moayedi       Sole
Member and Manager  

 

BORROWER-RELATED PARTIES:       /s/ Mehrdad Moayedi   MEHRDAD MOAYEDI      
CTMGT, LLC, a Texas limited liability company       /s/ Mehrdad Moayedi  
Mehrdad Moayedi   Sole Member and Manager of CTMGT, LLC  

 

CENTAMTAR TERRAS, L.L.C., a Texas limited liability company       By: CTMGT, LLC
    a Texas limited liability company   Its: Sole Member and Manager          
/s/ Mehrdad Moayedi     Mehrdad Moayedi     Sole Member and Manager of CTMGT,
LLC  

 

First Loan Modification Agreement
CTMGT Frisco 113, LLC (UDF V Loan #9001)6 

 

 

LENDER:

 

UNITED DEVELOPMENT FUNDING INCOME FUND V,

a Maryland real estate investment trust

 

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

 

First Loan Modification Agreement
CTMGT Frisco 113, LLC (UDF V Loan #9001)7