Document:

EX-10.1

Exhibit 10.1

SECOND MODIFICATION OF REVOLVING CREDIT AGREEMENT

     This Second Modification of Revolving Credit Agreement (the “Modification”) is entered into
and made effective as of June 26, 2009 (the “Effective Date”) by and between R.G. Barry
Corporation, an Ohio corporation (the “Borrower”), and The Huntington National Bank, a national
banking association (the “Bank”).

Background Information

     A. The Borrower and the Bank entered into a Revolving Credit Agreement, dated as of March 29,
2007, as modified by the First Modification of Revolving Credit Agreement dated as of April 16,
2007 (the Revolving Credit Agreement, as so modified, the “Agreement”), pursuant to which the Bank
agreed to provide Loans to the Borrower and issue Letters of Credit for the account of the
Borrower, upon and subject to the terms and conditions as set forth in the Agreement.

     B. The Borrower and the Bank desire to modify certain terms and provisions of the Agreement,
upon and subject to the terms and conditions as hereinafter set forth.

Provisions

     NOW, THEREFORE, the Bank and the Borrower acknowledge and agree to the statements set forth in
the Background Information set forth above, and in consideration of the foregoing, the agreements
and covenants hereinafter contained and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:

     Section 1. Capitalized Terms. Except as otherwise defined herein, the capitalized
terms used herein shall have the same meanings as set forth in the Agreement.

     Section 2. Modification of the Agreement.

          (a) Modification of the Commitment. The maximum principal amount of the Commitment,
subject to the terms of the Agreement, is modified to be $12,000,000, and in that connection:

          (i) The references to $20,000,000.00 in Section 1.1 of the Agreement are modified, from
and after the Effective Date, to be $12,000,000.00.

          (ii) Section 1.2 of the Agreement is modified to provide as follows:

          1.2 Commitment Limitations. Notwithstanding the foregoing and subject
to the other terms hereof, during the following periods in each year occurring
during the term of this Agreement the Commitment of the Bank shall be in an amount
equal to the lesser of the following amounts or the amount to which the Commitment
has been reduced pursuant to Section 3.6 hereof:

	 	 	 	 	 
	PERIOD	 	COMMITMENT
	 
	From June 26, 2009 through December 31, 2009

	 	$	12,000,000.00	 
	From January 1, 2010 through June 30, 2010

	 	$	5,000,000.00	 
	From July 1, 2010 through December 31, 2010

	 	$	10,000,000.00	 

 

 

	 	 	 	 	 
	PERIOD	 	COMMITMENT
	 
	From January 1, 2011 through June 30, 2011

	 	$	5,000,000.00	 
	From July 1, 2011 through December 31, 2011

	 	$	8,000,000.00	 

          (iii) Section 7.8 of the Agreement is modified, from and after the Effective Date, to
provide as follows:

          7.8 Limitation on Outstanding Balance of Loans. Permit the outstanding
principal balance of Loans under the Commitment to exceed the lesser of the
Borrowing Base or the Commitment at any time. As used herein, “Borrowing Base”
means, on any date, the sum of (i) 80% of Eligible Accounts Receivable plus (ii) 50%
of Eligible Inventory. Notwithstanding any term contained herein to the contrary,
if the outstanding principal balance of Loans exceeds the Borrowing Base or the
Commitment then in effect at any time, the Borrower shall prepay the Loans
immediately to the extent of the excess.

          (b) Borrowing Base Certificate. The Borrower shall provide, from and after the
Effective Date, to the Bank each month a certificate calculating the Borrowing Base, and in that
connection the following new Section 6.13 is added to the Agreement in numerical order:

          6.13 Borrowing Base Certificate. Not later than the 20th day of each month,
beginning with July 20, 2009, furnish to the Bank a certificate, in the form attached here
as Exhibit A or such other form which is satisfactory to the Bank, setting forth the
calculation of the Borrowing Base as of the last day of the previous month, which
certificate shall be signed by the chief financial officer or controller of the Borrower.

          (c) Extension of Termination Date. The Termination Date is extended from March 31,
2010 to December 31, 2011, and in that connection the definition of “Termination Date” set forth in
12.31 of the Agreement is modified to provide as follows:

     12.31 “Termination Date” means December 31, 2011 or such later date(s) to which
the Commitment may be extended from time to time pursuant to the provisions of this
Agreement.

          (d) Modification of Interest Rate. The Variable Interest Rate is modified, from and
after the Effective Date, to be the rate per annum equal to the sum of the LIBO Rate plus 2.75%,
and in that connection the definition of “Variable Rate” set forth in Section 12.32 of the
Agreement is modified to provide as follows:

     12.32 “Variable Rate” means a rate per annum equal to the sum of the LIBO Rate
plus 2.75%.

          (e) Modification of Payment of Certain Fees.

          (i) From and after the Effective Date, the obligation of the Borrower to pay an annual
facility fee in the amount of $2,500 as set forth in Section 3.3 of the Agreement is
terminated.

          (ii) The Unused Line Fee required to be paid by the Borrower to the Bank as set forth
in Section 3.3 of the Agreement is modified to be, from and after the Effective Date, 3/8%
per annum.

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          (f) Modification of Tangible Net Worth. The calculation of Consolidated Tangible Net
Worth is modified, from and after the Effective Date, to add back certain pension plan adjustments
and the minimum Consolidated Tangible Net Worth to be maintained by the Borrower on a consolidated
basis shall be modified to be $44,000,000 as of June 30, 2009, and increasing by 50% of
Consolidated Net Income (without deduction for any net loss) for each fiscal year thereafter, and
in that connection:

          (i) Section 7.2 of the Agreement is modified, from and after the Effective Date, to
provide as follows:

          7.2 Maintenance of Consolidated Tangible Net Worth. Permit
Consolidated Tangible Net Worth to be less than $44,000,000 as of June 30, 2009,
with such amount to be increased on each June 30 thereafter by the amount equal to
50% of Consolidated Net Income for each fiscal year ending on such June 30, but
without any deduction for any consolidated net loss for any such fiscal year.

          (ii) The definition of “Consolidated Tangible Net Worth” set forth in Section 12.9 of
the Agreement is modified, from and after the Effective Date, to provide as follows:

          12.9 “Consolidated Tangible Net Worth” means at any time the sum of the
consolidated shareholders’ equity of the Borrower and its Subsidiaries, plus (to the
extent not included in shareholders’ equity) preferred stock, minus assets properly
classified as intangible assets, plus the amount of any pension plan related
adjustments and charges made in accordance with accounting rules for the fiscal year
ending June 27, 2009 and each fiscal year thereafter during the term of this
Agreement, all determined in accordance with GAAP for the Borrower and its
Subsidiaries on a consolidated basis.

     Section 3. Conditions to Bank’s Obligations. The agreement of the Bank to enter into
this Modification and be bound by the terms (x) hereof, and (y) of the Agreement as modified by
this Modification is subject to the satisfaction of the following conditions precedent:

     (a) Delivery of Documents. The Bank shall have received the following, each in
form and substance satisfactory to the Bank and its counsel:

          (i) Resolutions. A copy of the resolutions of the governing
board/committee of the Borrower authorizing (1) the execution, delivery and
performance of this Modification, (2) the consummation of the transactions
contemplated hereby and by the Agreement as modified by this Modification, and (3)
the borrowing and other financial transactions provided for herein and in the
Agreement as modified by this Modification, certified by the secretary or an
assistant secretary (or other appropriate representative) of the Borrower. Each
such certificate shall state that the resolutions set forth therein have not been
amended, modified, revoked or rescinded as of the date hereof.

          (ii) Other Documents. Such other certificates, documents and other
items as the Bank, in its reasonable discretion, deems necessary or desirable.

     (b) Incumbency. The Borrower hereby confirms that the officers of the Borrower
listed in the incumbency certificate most recently furnished to the Bank still hold such
offices, or if that is not the case, the Borrower shall provide to the Bank a revised
incumbency certificate to reflect its current officers.

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     (c) Representations and Warranties. The representations and warranties made by
the Borrower in this Modification shall be true and correct as of the date of this
Modification.

     (d) Modification and Extension Fee. The Borrower shall have paid to Lender a
modification and extension fee in the amount of $42,500.00.

     Section 4. Representations and Warranties; No Defaults. In order to induce the Bank
to enter into this Modification so as to amend the Agreement as set forth herein, the Borrower
hereby represents and warrants to the Bank that:

     (a) The representations and warranties of the Borrower contained in the Agreement as
modified by this Modification are true, correct and complete on and as of the date of this
Modification as if made on and as of such date unless stated to relate to a specific earlier
date, in which case they were true, correct and complete on and as of such earlier date.

     (b) No Event of Default exists and no event or condition exists which, with the passage
of time or the giving or receipt of notice, would constitute an Event of Default.

     (c) All financial statements of the Borrower provided to the Bank since the date of the
Agreement are true, accurate and complete in all material respects as of the date of, and
for the periods covered by, such financial statements.

     (d) The Borrower has full power and authority to (i) make the borrowings contemplated
by the Agreement as modified by this Modification, (ii) execute, deliver and perform this
Modification, (iii) perform the Agreement as modified by this Modification, and (iv) to
incur the obligations provided for herein and in the Agreement as modified by this
Modification, all of which have been duly authorized by all necessary and proper corporate
action of the Borrower.

     (e) No consent, waiver or authorization of, or filing with, any Person is required to
be made or obtained by the Borrower in connection with the borrowings under the Agreement as
modified by this Modification or the execution, delivery, performance, validity or
enforceability of this Modification and the Agreement as modified by this Modification.

     (f) This Modification and the Agreement as modified by this Modification constitute the
legal, valid and binding obligations of the Borrower, enforceable in accordance with their
respective terms.

     (g) Neither this Modification nor any other document, certificate or written statement
furnished to the Bank or to special counsel to the Bank by or on behalf of the Borrower in
connection with the transactions contemplated hereby contains any untrue statement of a
material fact or omits to state a material fact necessary in order to make the statements
contained herein and therein not misleading.

     (h) The execution and delivery by the Borrower of this Modification and the performance
by the Borrower of this Modification and the Agreement as modified by this Modification:
(i) do not and will not violate any requirement of law; (ii) do not and will not violate any
order, decree or judgment by which the Borrower is bound; (iii) do not and will not violate
or conflict with, result in a breach of or constitute (with notice, lapse of time, or
otherwise) a default under any material agreement, mortgage, indenture or other contractual
obligation to which the Borrower is a party, or by which the Borrower’s properties are
bound; (iv) do not and will not result

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in the creation or imposition of any Lien upon any property or assets of the Borrower;
or (v) do not and will not violate the articles of incorporation or code of regulations of
the Borrower.

     Section 5. Reaffirmation of Liability. The Borrower hereby reaffirms its liability to
the Bank under the Agreement as modified by this Modification, the Note and all other agreements
and instruments executed by the Borrower for the benefit of the Bank in connection with the
Agreement and the transactions contemplated thereby (collectively, the “Bank Documents”). In
addition, the Borrower agrees that the Bank has performed all of its obligations under the
Agreement and the other Bank Documents and that the Bank is not in default under any obligation it
has or ever did have to the Borrower under the Agreement or the other Bank Documents.

     Section 6. Effectiveness of Documents. All of the terms, covenants and conditions of,
and the obligations of the Borrower under, the Agreement as modified by this Modification and the
other Bank Documents shall remain in full force and effect.

     Section 7. Reservation of Rights; Effect on Insolvency Proceeding. Nothing herein
shall be construed to release, waive, relinquish, discharge, or in any other manner modify or
affect the ability of the Bank to contest the discharge or dischargeability in bankruptcy of the
obligations of the Borrower in connection with the Agreement as modified by this Modification and
the other Bank Documents.

     Section 8. Governing Law. This Modification shall be construed and enforced in
accordance with, and governed by, the laws of the State of Ohio.

     Section 9. Severability. Any provision of this Modification which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective only to the extent
of such prohibition or unenforceability, without invalidating the remaining provisions hereof or
affecting the validity or enforceability of such provision in any other jurisdiction.

     Section 10. Covenants to Survive, Binding Agreement. This Modification shall be
binding upon and inure to the benefit of the Borrower and the Bank and their respective successors
or assigns; provided, however, that the Borrower may not assign or otherwise dispose of any of its
rights or obligations hereunder.

     Section 11. Entire Agreement. This Modification and the Bank Documents embody the
entire agreement and understanding between the Borrower and the Bank relating to, and supersedes
all prior agreements and understandings between the Borrower and the Bank relating to, the subject
matter hereof and thereof.

     Section 12. Counterparts. This Modification may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which together shall constitute
one and the same instrument.

     Section 13. Headings. The headings of the sections of this Modification are for
convenience only and shall not affect the construction or interpretation of this Modification.

     Section 14. Interpretation. This Modification is to be deemed to have been prepared
jointly by the parties hereto, and any uncertainty or ambiguity existing herein shall not be
interpreted against any party but shall be interpreted according to the rules for the
interpretation of arm’s length agreements.

     Section 15. Expenses. Whether or not the transactions herein contemplated shall be
consummated, the Borrower agrees to pay all out-of-pocket expenses (including reasonable fees and
expenses of counsel to the Bank) of the Bank incurred in connection with the preparation of this
Modification, any

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audit, appraisal or other such service deemed necessary or desirable by the Bank for the
preparation of this Modification or enforcing the Bank’s rights hereunder or under the Agreement as
modified by this Modification and the other Bank Documents.

     Section 16. WAIVER OF JURY TRIAL. THE BORROWER AND THE BANK WAIVE ANY RIGHT TO A
TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS (i) UNDER THE AGREEMENT
AS MODIFIED BY THIS MODIFICATION OR (ii) ARISING FROM ANY BANKING RELATIONSHIP EXISTING IN
CONNECTION WITH THE AGREEMENT AS MODIFIED BY THIS MODIFICATION, AND AGREES THAT ANY SUCH ACTION OR
PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY.

[Balance of Page Intentionally Left Blank]

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     IN WITNESS WHEREOF, the parties hereto have caused this Modification to be executed by their
duly authorized officers as of the date first above written.

	 	 	 
	BORROWER:

	 	BANK:
	 
	R.G. Barry Corporation, 

an Ohio corporation

	 	The Huntington National Bank,

a national banking association 

	 

	By: /s/ Jose G. Ibarra                  
                                 

	 	By: /s/ Bud Ward                  
                                  
	Name: José G. Ibarra
	 	Bud
Ward, Senior Vice President

	Title:   Senior Vice President, Finance

      Chief Financial Officer
	 	 

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EXHIBIT A

Form of Borrowing Base Certificate

[attached]

 

 

BORROWING BASE CERTIFICATE

FOR

R.G. BARRY CORPORATION

     R.G. Barry Corporation (the “Borrower”) hereby submits the following information regarding
Eligible Accounts Receivable and Eligible Inventory and the following calculation of the Borrowing
Base pursuant to the terms of the Revolving Credit Agreement by and between the “Borrower and The
Huntington National Bank (the “Bank”), dated as of March 29, 2007, as amended from time to time
(the “Agreement”). Capitalized terms used herein and not otherwise defined herein shall have the
meaning given in the Agreement.

Completed for the period ended:                     , 20___

	 	 	 	 	 	 	 	 	 
	Total accounts receivable per the accounts receivable aging report dated as of the
date shown above attached hereto
	 	 	 	 	 	$	 	 
	Less: accounts receivable over 90 days from original invoice date
	 	 	 	 	 	$	 	 
	Less: other accounts receivable not meeting the definition of Eligible Accounts Receivable
	 	 	 	 	 	$	 	 
	Total Eligible Accounts Receivable
	 	 	 	 	 	$	 	 
	Advance Rate
	 	 	 	 	 	 	80	%
	Total Amount Available on Eligible Accounts Receivable
	 	 	(a	)	 	$	 	 
	Total finished goods inventory
	 	 	 	 	 	$	 	 
	Less: any inventory not meeting the definition of Eligible Inventory
	 	 	 	 	 	$	 	 
	Total Eligible Inventory
	 	 	 	 	 	$	 	 
	Advance Rate
	 	 	 	 	 	 	50	%
	Total Amount Available on Eligible Inventory
	 	 	(b	)	 	$	 	 
	Borrowing Base — (a) plus (b)
	 	 	(c	)	 	$	 	 
	Current Commitment
	 	 	(d	)	 	$	 	 
	Total Maximum Amount Available (lesser of (c) and (d))
	 	 	 	 	 	$	 	 
	Less: aggregate of outstanding Loans
	 	 	 	 	 	$	 	 
	Less: aggregate of outstanding Letters of Credit
and unpaid drawn amounts under Letters of Credit
	 	 	 	 	 	$	 	 
	Availability (Shortage)
	 	 	 	 	 	$	 	 

     If
shortage, the Borrower hereby authorizes the Lender to debit the
Borrower’s account number
                          
for the amount of the shortage. I hereby certify that the above information and
calculations are true and correct as of the date shown above.

	 	 	 	 	 
	  Date:                     , 20__  	R.G. Barry Corporation,

an Ohio corporation

 	 
	 	By:  	 	 
	 	 	Title:Exhibit 10.1

Exhibit 10.1

	 	 	 
	RECORD AND RETURN TO:

	 	CROSS-REFERENCE TO:
	Catherine S. Moore

	 	Deed Book 47335, Page 0739
	Holt, Ney, Zatcoff & Wasserman, LLP

	 	Deed Book 48485, Page 74
	100 Galleria Parkway

	 	Deed Book 48835, Page 217
	Suite 600
	 	 
	Atlanta, Georgia 30339-5947
	 	 

THIRD CONSOLIDATED AMENDATORY AGREEMENT

($8,175,000 Loan)

THIS THIRD CONSOLIDATED AMENDATORY AGREEMENT (this “Agreement”) made and entered into as of
the 17th day of July, 2009, by and between ROBERTS PROPERTIES RESIDENTIAL, L.P., a Georgia limited
partnership (hereinafter referred to as “Borrower”), ROBERTS REALTY INVESTORS, INC., a Georgia
corporation (hereinafter referred to as “Guarantor”) and WACHOVIA BANK, NATIONAL ASSOCIATION, a
national banking association (hereinafter referred to as “Lender”).

W I T N E S S E T H:

WHEREAS, Borrower has heretofore executed and delivered to Lender that certain Promissory
Note, dated as of December 6, 2006, in the face amount of EIGHT MILLION ONE HUNDRED SEVENTY-FIVE
THOUSAND AND NO/100 DOLLARS ($8,175,000.00) with interest thereon (hereinafter referred to as the
“Note”); and

WHEREAS, Guarantor has heretofore executed and delivered to Lender that certain Guaranty
Agreement dated December 6, 2006 (herein referred to as the “Guaranty”), which guarantees the full
and prompt payment and performance of all obligations of Borrower under the Note, the Security Deed
(as defined below) and all other documents evidencing, securing or pertaining to the Note
(collectively the “Loan Documents”) and all other indebtedness of Borrower to Lender; and

 

 

 

WHEREAS, Borrower has heretofore executed and delivered to Lender that certain Deed to Secure
Debt and Assignment of Rents dated as of December 6, 2006, recorded in Deed Book 47355, page 0739,
Records of the Clerk of Superior Court of Gwinnett County, Georgia (herein referred to as the
“Security Deed”) for the purpose of securing the payment of the indebtedness evidenced by the Note
and any and all other indebtedness of Borrower to Lender; and

WHEREAS, the parties hereto did amend the Note, the Security Deed, and the Other Loan
Documents by First Consolidated Amendatory Agreement dated as of December 6, 2007, recorded in Deed
Book 48485, page 74, aforesaid records (the “First Amendment”); and

WHEREAS, the parties hereto did amend the Note, the Security Deed, and the Other Loan
Documents by Second Consolidated Amendatory Agreement and Agreement Regarding Cross-Default and
Cross-Collateralization of Loans dated as of April 28, 2008, but effective as of March 31, 2008,
recorded in Deed Book 48835, Page 217, aforesaid records (the “Second Amendment”; as used in this
Agreement, the terms “Note”, “Security Deed”, “Guaranty” and “Loan Documents” means each of such
documents as amended by the First Amendment and the Second Amendment); and

WHEREAS, Borrower has asked Lender to extend the term of the Note and to amend the Security
Deed and the other Loan Documents accordingly (and to provide for other terms and conditions); and

WHEREAS, Lender desires that Guarantor acknowledge and consent to the foregoing and the
modification of the documents described herein and that Guarantor ratify and confirm its obligation
as a guarantor of the Note.

NOW THEREFORE, for and in consideration of the premises and the sum of TEN AND NO/100 DOLLARS
($10.00) in hand paid, and other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged by the parties hereto, Borrower, Guarantor and Lender hereby agree as
follows:

1. Modification of Note. The Note is hereby modified and amended as follows:

	 	1.1	 	The fourth and eighth paragraphs on the first page of the Note
entitled INTEREST RATE and REPAYMENT TERMS are hereby deleted and substituted
in lieu thereof shall be the following:

	 
	 	 	 	INTEREST RATE. Interest shall be charged on the outstanding principal
balance (as applicable, “Interest Rate”), as determined by Bank prior to the
commencement of each Interest Period (defined below), from July 17, 2009, to
July 31, 2010 at a rate equal to three and fifty one-hundredths percent
(3.5%) per annum  plus the greater of (x) the Monthly LIBOR Index
Rate (defined below) or (y) the LIBOR Floor (defined below).

 

2

 

	 
	 	 	 	
Interest shall be calculated daily on the basis of the actual number of days
elapsed over a 360 day year. The applicable Interest Rate shall remain in
effect, subject to the provisions hereof, from and including the first day
of the Interest Period to and excluding the last day of the Interest Period
for which it is determined. For purposes hereof, the following terms shall
have the following meanings:

“Interest Period” means, initially, the period commencing on (and
including) July 17, 2009, and ending on (but excluding) the first Payment
Date (as hereinafter defined), and thereafter, each period commencing on
(and including) the last day of the immediately preceding Interest Period
and ending on (but excluding) the next Payment Date, provided, (i) any
Interest Period that would otherwise end on (but exclude) a day which is not
a New York business day shall be extended to the next succeeding New York
business day, and (ii) any Interest Period that would otherwise extend past
the Maturity Date shall end on (but exclude) the Maturity Date.

“LIBOR Floor” shall mean a rate of 2.00%.

“Monthly LIBOR Index Rate” means a rate per annum for U.S. dollar
deposits for a one (1) month maturity as reported on Telerate page 3750 as
of 11:00 a.m., London time, on the second London business day before the
relevant Interest Period begins (or if not so reported, then as determined
by the Bank from another recognized source or interbank quotation).

	 	 	 	REPAYMENT TERMS. This Note shall be due and payable in consecutive monthly
payments of accrued interest only, commencing on August 6, 2009, and
continuing on the same day of each month thereafter (each, a “Payment Date”)
until fully paid. In any event, all principal and accrued interest shall be
due and payable on July 31, 2010.”

	 
	 	1.2	 	Section 1.2 of the Second Amendment (describing the “Reduction
Condition” and terms under which the Interest Rate may be reduced by 0.50% per
annum) is deleted in its entirety and is null and void and without further
effect.

	 
	 	1.3	 	As consideration for the extension of the term of the Note, on
the date hereof, Borrower has paid Lender an extension fee in the amount of
Forty Thousand Eight Hundred Seventy-Five and No/100 Dollars ($40,875.00).

	 
	 	1.4	 	The Note may be prepaid at any time, in whole or in part,
without penalty or premium.

	 	1.5	 	Except as specifically modified and amended, all of the terms,
conditions and provisions of the Note shall remain in full force and effect.

 

3

 

2. Modification of Security Deed. The Security Deed is hereby modified and amended as
follows:

	 	2.1	 	All references in the Security Deed to April 30, 2009 as the
maturity date of the Note are hereby deleted and substituted in lieu thereof
shall be the date July 31, 2010.

	 	2.2	 	Except as specifically modified and amended, all of the terms,
conditions and provisions of the Security Deed shall remain in full force and
effect.

3. Modification of Loan Documents. The Loan Documents are hereby modified and amended
as follows:

	 	3.1	 	The terms “Note” and “Security Deed” as such terms may be used
in the Loan Documents shall mean the Note and the Security Deed, as modified
and amended hereby.

	 	3.2	 	Except as specifically modified and amended, all of the terms,
conditions and provisions of the Loan Documents shall remain in full force and
effect.

4. Modification of Guaranty. The Guaranty is hereby modified and amended as follows:

	 	4.1	 	The terms “Note” and “Loan Documents” as such terms may be used
in the Guaranty shall mean the Note and the Loan Documents, as modified and
amended hereby.

	 	4.2	 	Except as specifically modified and amended, all of the terms,
conditions and provisions of the Guaranty shall remain in full force and
effect.

5. Limitations on Transfers Involving Borrower and Guarantor. Borrower and Guarantor
hereby covenant and agree with Lender that notwithstanding anything to the contrary contained in
the Guaranty, the Security Deed or the other Loan Documents, Lender may, in its sole discretion,
declare the Obligations (as defined in the Security Deed) immediately due and payable if at any
time prior to final repayment of the Obligations, (i) Guarantor ceases to be the sole general
partner of Borrower or (ii) if a sale or transfer of a majority or controlling interest of the
partnership interests or corporate stock of Borrower or Guarantor occurs (whether in one
transaction or a series of transactions).

6. Cross-Default and Cross-Collateralization of Loans. Sections 5.1 through 5.12 of
the Second Amendment are hereby deleted in their entirety.

 

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7. Interest Reserve Account. In connection with the closing of the modification of
the Loan contemplated by this Agreement, account number 2000043975750 has been established with
Lender (the “Interest Reserve Account”), and Borrower is depositing Four Hundred Fifty Thousand and
No/100 Dollars ($450,000.00) in the Interest Reserve Account. All interest earned on the funds
deposited in the Interest Reserve Account shall become part of Borrower’s deposit. Borrower hereby
authorizes Lender to debit the Interest Reserve Account to pay interest due on the Loan as and when
such interest becomes due and payable. It is understood and agreed that Borrower shall be
obligated to pay, from its own funds, all interest on the Loan in the event that due and payable
amounts of accrued interest exceed the amount available in the Interest Reserve Account. Borrower
agrees that it shall include all interest and earnings on any such deposit as its income (and, if
Borrower is a partnership or other pass-through entity, the income of its partners, members or
beneficiaries, as the case may be), and shall be the owner of all funds on deposit in the Interest
Reserve Account for federal and applicable state and local tax purposes. Lender shall have the
exclusive right to manage and control all funds in the Interest Reserve Account, and Borrower shall
not have any right to withdraw funds from the Interest Reserve Account without Lender’s consent,
which may be withheld in Lender’s sole and complete discretion. Lender shall have no fiduciary
duty with respect to such funds and will not be liable to Borrower for any expense, claim, loss,
damage or cost (“Damages”) arising out of or relating to its holding of such funds other than those
Damages which result directly from its Lender’s gross negligence or willful misconduct. Any
account fees and charges may be deducted from the balance, if any, in the Interest Reserve Account.
Borrower grants to Lender a security interest in the Interest Reserve Account and all such funds
deposited at any time into such deposit account, and any proceeds thereof, as security for the
Obligations (as defined in the Security Deed). Such security interest shall be governed by the
Uniform Commercial Code of the State of Georgia, and Lender shall have available to it all of the
rights and remedies available to a secured party thereunder. The Interest Reserve Account may be
established and held in such name or names as Lender shall deem appropriate, including in the name
of Lender. Borrower hereby constitutes and appoints Lender and any officer or agent of Lender its
true and lawful attorneys-in-fact with full power of substitution to open the Interest Reserve
Account and to do any and every act that Borrower might do on its own behalf to fulfill the terms
of this Section 6. Borrower hereby ratifies all that said attorneys shall lawfully do or cause to
be done by virtue hereof. It is understood and agreed that this power of attorney, which shall be
deemed to be a power coupled with an interest, cannot be revoked.

8. Ratification and Consent by Borrower. Borrower hereby (i) ratifies and affirms all
of its obligations under the Note, the Security Deed and Loan Documents as modified and amended
hereby; (ii) acknowledges, represents and warrants that the Note, the Security Deed and the Loan
Documents, as modified, constitute valid and enforceable obligations of Borrower as of this date,
free from any defenses and claims of offset by Borrower; and (iii) consents to the modification and
amendment of the Note, the Security Deed and Loan Documents as set forth herein.

9. Certification of No Default. Borrower hereby certifies that, as of the date
hereof, Borrower is not in default under the terms of the Note, the Security Deed or any of the
Loan Documents.

 

5

 

10. Ratification and Consent by Guarantor. Guarantor hereby (i) ratifies and affirms
all its obligations under the Guaranty; (ii) acknowledges, represents and warrants that its
Guaranty constitutes the valid and enforceable obligation of Guarantor, as of this date, free from
any defenses and claims of offset; and (iii) consents to the execution by Borrower of the
modification and amendment of the Note, Security Deed and Loan Documents as set forth herein.

11. Binding Agreement. This Agreement shall be binding upon and shall inure to the
benefit of the parties hereto and their respective heirs, successors and assigns.

12. Entire Agreement. This Agreement constitutes the entire understanding and
agreement of the parties hereto with respect to the modification and amendment of the Note,
Security Deed and Loan Documents and supersedes all prior agreements, understandings or
negotiations with respect thereto.

13. Georgia Law; Time. This Agreement shall be governed by and interpreted in
accordance with the laws of the State of Georgia. Time is of the essence of this Agreement

14. No Novation. Borrower, Lender and Guarantor hereby agree that this Agreement is
not, and shall not be construed as, a novation of the Note or Security Deed, or the other Loan
Documents.

15. No Setoffs or Defenses; Release.

(a) Borrower and Guarantor, for themselves and their respective partners, shareholders,
officers, members, directors, and for their respective heirs, personal representatives, successors
and assigns (collectively, the “Releasors”), acknowledge, agree and represent to Lender that none
of them has any setoff, defense, claim or counterclaim under or with respect to the Loan Documents.

(b) Borrower and Guarantor, for themselves and the other Releasors, for and in consideration
of the sum of Ten and No/100 Dollars ($10.00) and other good and valuable consideration, the
receipt and sufficiency of which are herby acknowledged, hereby fully release and discharge Lender,
its affiliates, subsidiaries and parent corporations, the respective partners, officers, directors,
shareholders, agents and employees of each of the foregoing, and their successors and assigns
(collectively, the “Released Parties”), of and from any and all claims, counterclaims, defenses,
setoffs, demands, actions, causes of action and damages that Borrower, Guarantor or any other
Releasor may have had, may now have or may hereafter have against any one or more of the Released
Parties arising under, by reason of, or in connection with any conduct, course of dealing,
statement, act or omission on the part of any of the Released Parties that arose, occurred or
accrued at any time prior to and through the time of delivery of this Agreement, including without
limitation any such conduct, course of dealing, statement, act or omission related to (i) any of
the Loan Documents, or (ii) any of the indebtedness or obligations evidenced or secured thereby.

[Signatures commence on following page]

 

6

 

IN WITNESS WHEREOF, the parties hereto have caused these presents to be executed under seal as
of the date first above written.

	 	 	 	 	 	 	 	 	 	 	 
	Signed, sealed and delivered
in the presence of:	 	“BORROWER”

ROBERTS PROPERTIES RESIDENTIAL, L.P., a
Georgia limited partnership	 	 
	/s/ Carla Britton
 

	 	 	 	 	 	 	 	 	 	 
	Witness	 	By:	 	Roberts Realty Investors, Inc., a	 	 
	 	 	 	 	Georgia corporation, its general partner	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	/s/ Natalie Bonta	 	 	 	By:	 	/s/ Charles R. Elliott	 	 
	 	 	 	 	 	 	 	 	 
	Notary Public

	 	 	 	 	 	Name:
	 	Charles R. Elliott	 	 
	 

	 	 	 	 	 	Title:
	 	Chief Financial Officer	 	 
	My commission expires:
	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	(NOTARIAL SEAL)
	 	 	 	 	 	 	 	 	 	 

[Signatures continued on following page]

 

7

 

	 	 	 	 	 	 	 	 	 
	Signed, sealed and delivered
in the presence of:	 	“GUARANTOR”

ROBERTS REALTY INVESTORS, INC., a Georgia
corporation	 	 
	/s/ Carla Britton
 

	 	 	 	 	 	 	 	 
	Witness
	 	By:	 	/s/ Charles R. Elliott	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:
	 	Charles R. Elliott	 	 
	/s/ Natalie Bonta

	 	 	 	Title:
	 	Chief Financial Officer	 	 
	 

Notary Public

	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	(CORPORATE SEAL)	 	 
	 
	 	 	 	 	 	 	 	 
	My commission expires:
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	(NOTARIAL SEAL)
	 	 	 	 	 	 	 	 

[Signatures continued on following page]

 

8

 

	 	 	 	 	 	 	 	 	 
	Signed, sealed and delivered
in the presence of:	 	“LENDER”

WACHOVIA BANK, NATIONAL ASSOCIATION, a
national banking association	 	 
	/s/ Margaret Beveridge
 

Witness

	 	 	 	 	 	 	 	 
	 	 	By:	 	/s/ Jennifer Blumencranz	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:
	 	Jennifer Blumencranz	 	 
	/s/ Valretha V. Bailey
 

	 	 	 	Title: 
	 	Vice President	 	 
	Notary Public
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	My commission expires:

	 	 	 	 	 	(BANK SEAL)	 	 
	 
	 	 	 	 	 	 	 	 
	April 10, 2011
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	(NOTARIAL SEAL)
	 	 	 	 	 	 	 	 

 

9

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