THIRD AMENDMENT
TO
UDC MASTER REVOLVING LINE OF CREDIT (BORROWING BASE)
LOAN AGREEMENT
This THIRD AMENDMENT TO UDC MASTER REVOLVING LINE OF CREDIT (BORROWING
BASE) LOAN AGREEMENT (the "Third Amendment"), dated as of December 23, 1996, is
made and entered into by and between UDC HOMES, INC., a Delaware corporation
("Borrower"); BANK ONE, ARIZONA, NA, a national banking association ("BOAZ");
BANKERS TRUST COMPANY, a New York banking corporation ("Bankers Trust"); XXXXX
FARGO BANK, NATIONAL ASSOCIATION, a national banking association, successor by
merger to First Interstate Bank of California, a banking corporation organized
and existing under the laws of California ("WFB"); THE FIRST NATIONAL BANK OF
BOSTON, a national banking association ("BkB"); XXXXX FARGO REALTY ADVISORS
FUNDING, INCORPORATED, a Colorado corporation ("Xxxxx Fargo"); and GUARANTY
FEDERAL BANK, F.S.B., a federal savings bank ("Guaranty Federal").
RECITALS:
A. Borrower, BOAZ, Bankers Trust, WFB, BkB, Xxxxx Fargo, and Guaranty
Federal are parties to the UDC Master Revolving Line of Credit (Borrowing Base)
Loan Agreement, dated November 8, 1995 (the "Original Revolving Loan
Agreement"). BkB became a party to the Original Revolving Loan Agreement
pursuant to an Assignment and Acceptance, dated November 30, 1995, between BkB
and Bankers Trust. Xxxxx Fargo became a party to the Original Revolving Loan
Agreement pursuant to an Assignment and Acceptance, dated December 5, 1995,
between Bankers Trust and Xxxxx Fargo. Guaranty Federal became a party to the
Original Revolving Loan Agreement pursuant to an Assignment and Acceptance,
dated December 14, 1995, between Bankers Trust and Guaranty Federal and pursuant
to an Assignment and Acceptance, dated December 14, 1995, between BOAZ and
Guaranty Federal. As of December 14, 1995, Borrower, the Administrative Agent,
the Co-Agents, and the Banks entered into a First Amendment to UDC Master
Revolving Line of Credit (Borrowing Base) Loan Agreement (the "First
Amendment"). As of May 1, 1996, Borrower, the Administrative Agent, the
Co-Agents, and the Banks entered into a Second Amendment to UDC Master Revolving
Line of Credit (Borrowing Base) Loan Agreement (the "Second Amendment"). The
Original Revolving Loan Agreement, as amended by the First Amendment and the
Second Amendment, is referred to in this Third Amendment as the "Revolving Loan
Agreement". Capitalized terms used in this Third Amendment and not defined in
this Third Amendment have the meanings ascribed to them in the Revolving Loan
Agreement.
B. Borrower has requested modifications to certain provisions of the
Revolving Loan Agreement and waivers of certain covenants in the Revolving Loan
Agreement. The Administrative Agent, the Co-Agents, and the Banks are willing to
agree to the modifications and waivers provided in this Third Amendment, on the
terms and conditions set forth in this Third Amendment.
AGREEMENT:
NOW THEREFORE, For good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Borrower, the Administrative
Agent, the Co-Agents, and the Banks agree as follows:
1. Waivers.
(a) The Administrative Agent, the Co-Agents, and the Banks
waive compliance by Borrower with the following Financial Covenants as
of September 30, 1996:
(i) The Maximum Total Debt to Tangible Net Worth
Covenant of Section 6.22.3 of the Revolving Loan Agreement;
(ii) The Minimum Tangible Net Worth Covenant of
Section 6.22.4 of the Revolving Loan Agreement;
(iii) The Debt Service Coverage Covenant of Section
6.22.5 of the Revolving Loan Agreement as of September 30,
1996; and
(iv) The Interest Coverage Covenant of Section 6.22.6
of the Revolving Loan Agreement as of September 30, 1996.
(b) The foregoing waivers shall relate only to the Financial
Covenants referred to above and only as of the date stated. Nothing
contained herein shall waive compliance with any other provisions of
the Loan Documents or with respect to any other date or period. Nothing
contained herein shall obligate Administrative Agent, Co-Agents or the
Banks to grant any additional waivers to Borrower.
2. Amendment.
(a) Section 3.7.5(h) of the Revolving Loan Agreement is amended in
its entirety to read as follows:
"Unit Completion Percentage" means, for any Unit, the lesser
of (i) the current percentage of construction completed as reflected in
each Borrowing Base Report, based upon the ratio of (A) costs already
incurred and paid for by Borrower for material and labor actually
incorporated into such Unit pursuant to the Unit Budget (other than the
Unit Lot Cost), to (B) the Unit Budget; and (ii) the applicable
percentages set forth in the Construction Draw Schedules set forth on
Exhibit 3.7.5(h), based on the stage of completion of the particular
Unit; provided, however, that prior to March 1, 1997, Unit Completion
Percentages will be determined without regard to this clause (ii) but
shall instead be in increments of 5%.
(b) Section 3.7.5(e)(v) of the Revolving Loan Agreement is amended
in its entirety to read as follows:
(v) With respect to each A&D Land Project, the lesser of (A)
60% of the A&D Project Appraised Value (A&D Project Appraised Values
being determined as set forth in Section 3.10) for that A&D Project, or
(B) 60% of the A&D Project Cost for that A&D Project; provided,
however, that if the A&D Project for which the Maximum Allowed Advance
is being determined for purposes of this clause (v), and for the
purposes of clause (vi) and clause (vii) below, consists of more than
125 lots, then the percentages in this clause (v) and the percentages
in clause (vi) and clause (vii) will each be reduced by subtracting 5%
from the stated percentages; provided further, that if an A&D Land
Project consists of Existing A&D Entitled Land Collateral or of the
MountainBrook Village Collateral added pursuant to Section 3.4.4 and
is, on the following adjustment dates, still entitled to be included as
Eligible Collateral, then on the first day of the 13th
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Calendar Month following the A&D Eligibility Date for such A&D Land
Project and on the first day of each 6th Calendar Month thereafter, the
percentages set forth in this clause (v) (as adjusted pursuant to the
first proviso in this clause (v), if applicable) will be reduced on
each such day by subtracting 5% from the percentage that otherwise
would apply; provided further that with respect to any A&D Land
Project, A&D Development Project and A&D Finished Lot Project first
included as Eligible Collateral after November 1, 1996, the percentages
that would otherwise be applicable pursuant to this clause (v) or
pursuant to clause (vi) or clause (vii) shall be further reduced on
March 1, 1997 by five percent (5%) from the percentage that would
otherwise apply (after giving effect to the adjustments pursuant to the
first and second provisos of this sentence).
3. Extension of Eligibility for Certain Existing A&D Entitled Land.
Notwithstanding the provisions of Section 3.4.1 of the Revolving Loan Agreement,
the A&D Land Projects consisting of the Existing A&D Entitled Land described on
Exhibit 3.2.5(k) of the Revolving Loan Agreement as the Villages-Xxxxxxx project
and the Villages-Del Lago project shall be entitled to be included as Eligible
Collateral (as A&D Land Projects) from November 1, 1996 through February 28,
1997.
4. Inducements to the Banks. As additional consideration and inducement
to the Administrative Agent, the Co-Agents, and the Banks to grant the waivers
and modifications set forth in this Third Amendment and to agree to the other
terms of this Third Amendment, with knowledge that the Administrative Agent, the
Co-Agents, and the Banks would not enter into this Third Amendment but for the
provisions of this Paragraph 4:
(a) Borrower represents and warrants to the Administrative
Agent, the Co-Agents, and the Banks that:
(i) All Obligations under the Revolving Loan
Agreement (as amended by this Third Amendment) and the Loan
Documents are and continue to be valid, binding and
enforceable obligations of Borrower, enforceable in accordance
with their terms, and are and continue to be secured by the
Collateral;
(ii) All of the representations and warranties set
forth in the Revolving Loan Agreement (as amended by this
Third Amendment) and the other Loan Documents continue to be
true and correct as of the date hereof;
(iii) With respect to the Revolving Loan Agreement
(as amended hereby), all property and interests (including,
without limitation, property and interests that constitute
Eligible Collateral and property and interests that are not
included in the Eligible Collateral) encumbered under any
Deeds of Trust constitute, and shall continue to be, first
priority liens and collateral security for all of the
Obligations, and the value of such Collateral is and has at
all times been, in the aggregate, greater than the amount of
the Obligations;
(iv) Borrower has no defense, setoff, claim or
counterclaim against the Administrative Agent, the Co-Agents,
or the Banks in regard to its obligations under the Revolving
Loan Agreement, as amended by this Third Amendment, any other
Loan Document, any document, instrument, transaction, act or
omission arising out of or related to the Obligations, the
Revolving Loan Agreement (as amended by this Third Amendment),
or any other obligation to the Banks, the Administrative Agent
or the Co-Agents, or any of them.
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(b) Borrower and all guarantors fully, finally, and forever
release and discharge the Administrative Agent, the Co-Agents, and the
Banks, and their respective successors, assigns, directors, officers,
employees, agents, and representatives from any and all actions, causes
of action, claims, debts, demands, liabilities, obligations, and suits,
of whatever kind or nature, in law or equity of Borrower or any of the
guarantors whether now known or unknown: (i) in respect of the loan
made pursuant to the Revolving Credit Agreement (as amended hereby) or
the acts or omissions of the Administrative Agent, the Co-Agents,
and/or the Banks, or any of them, in respect thereto and (ii) arising
from events occurring prior to the execution and delivery of this Third
Amendment by Borrower.
(c) In connection with the releases and waivers contained
herein, Borrower and each guarantor hereby expressly waive any and all
rights and benefits conferred upon it by the provisions of Section 1542
of the California Civil Code (or similar provisions of any other
applicable law) which provides:
"A general release does not extend to claims which
the creditor does not know or suspect to exist in his favor at
the time of executing the release, which if known by him must
have materially affected his settlement with the debtor."
Borrower and each guarantor have been advised by their legal counsel,
or Borrower and each guarantor have made a reasoned and fully informed
decision not to be so represented by counsel, and understand and
acknowledge the significance and consequences of this release and of
this specific waiver of Section 1542, and Borrower and each guarantor
expressly consent that the releases contained herein shall be given
full force and effect according to each and all of its express terms
and provisions including those relating to unknown and unsuspected
claims, demands and causes of action, if any, as well as those relating
to any other claims, demands and causes of action hereinabove
specified. The foregoing shall not be deemed to be an agreement by the
Administrative Agent, the Co-Agents or the Banks that California law is
the governing law under the Loan Documents.
5. Ratification. As modified by this Third Amendment, the Revolving
Loan Agreement is ratified and confirmed and continues in full force and effect.
6. Counterpart Execution. This Third Amendment may be executed in one
or more counterparts, each of which will be deemed an original and all of which
together will constitute one and the same document. Signature pages may be
detached from the counterparts and attached to a single copy of this Third
Amendment to physically form one document. Telecopied signature pages will be
acceptable, provided originally signed signature pages are provided to each of
the other parties by overnight courier.
7. Integration. This Third Amendment shall constitute one of the Loan
Documents, and the Loan Documents, together with this Third Amendment, contain
the complete understanding and agreement of Borrower, the Administrative Agent,
the Co-Agents and the Banks with respect to the transactions contemplated by the
Revolving Loan Agreement (except as between the Administrative Agent, the Co-
Agents and the Banks with respect to matters set forth in the
Agency/Participation Agreement) and supersede all prior representations,
warranties, agreements, arrangements, understandings, and negotiations,
including the Loan Commitment.
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IN WITNESS WHEREOF, the parties hereto have executed this Third
Amendment.
BORROWER: UDC HOMES, INC.,
a Delaware corporation
By: /s/ Xxxxx X. Xxxxxxxx
--------------------------------
Name: Xxxxx X. Xxxxxxxx
------------------------------
Title: Sr. Exec. VP
-----------------------------
BOAZ: BANK ONE, ARIZONA, NA, a national banking
association, individually as a Bank and in
its capacity as the Administrative Agent and
as one of the Co-Agents
By: /s/ Xxxxxx X. Xxxxxxxx
--------------------------------
Name: Xxxxxx X. Xxxxxxxx
------------------------------
Title: Vice President
-----------------------------
BANKERS TRUST: BANKERS TRUST COMPANY, a New York banking
corporation, individually as a Bank and in
its capacity as one of the Co-Agents
By: /s/ X.X.X. Xxxxxxx
-------------------------------
Name: X.X.X. Xxxxxxx
-----------------------------
Title: M.D.
----------------------------
WFB: XXXXX FARGO BANK, NATIONAL ASSOCIATION, a
national banking association, successor by
merger to First Interstate Bank of
California, a banking corporation organized
and existing under the laws of California
By: /s/ Xxxx X. XxXxxxx
------------------------------
Name: Xxxx X. XxXxxxx
----------------------------
Title: Vice President
---------------------------
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BkB: THE FIRST NATIONAL BANK OF BOSTON,
a national banking association
By: /s/ Xxxxxxxx Xxxxxxx
------------------------------
Name: Xxxxxxxx Xxxxxxx
----------------------------
Title: Vice President
---------------------------
XXXXX FARGO: XXXXX FARGO REALTY ADVISORS FUNDING,
INCORPORATED, a Colorado corporation
By XXXXX FARGO REAL ESTATE GROUP,
a California corporation, as agent
By: /s/ Xxxx X. XxXxxxx
------------------------
Name: Xxxx X. XxXxxxx
----------------------
Title: Vice President
---------------------
GUARANTY FEDERAL: GUARANTY FEDERAL BANK, F.S.B.,
a federal savings bank
By: /s/ Xxxxxxx X. Xxxxxxxx
-----------------------------
Name: Xxxxxxx X. Xxxxxxxx
---------------------------
Title: Vice President
--------------------------
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CONSENT
-------
The undersigned consent and agree to the foregoing. The undersigned
represent and warrant to Administrative Agent, Co-Agents and Banks that all of
the representations and warranties of the undersigned set forth in the Loan
Documents continue to be true and correct as of the date hereof. The undersigned
ratify and confirm all of their agreements and obligations pursuant to and in
connection with the Loan Documents. The undersigned hereby join in the release
and other provisions contained in the foregoing Third Amendment and agree to be
bound by all of the provisions thereof, and the undersigned otherwise fully,
finally and forever release and discharge Administrative Agent, Co-Agents and
Banks and their respective successors, assigns, directors, officers, employees,
agents and representatives from any and all actions, causes of actions, claims,
debts, demands, liabilities, obligations and suits, of whatever nature, in law
or equity of the undersigned, whether now known or unknown to the undersigned,
(i) in respect of the loans made pursuant to the Revolving Credit Agreement (as
amended by the foregoing Third amendment) or the acts or omissions of
Administrative Agent, the Co-Agents, and/or Banks, or any of them, in respect
thereto and (ii) arising from events occurring prior to the execution and
delivery of this Consent.
UDC HOMES CONSTRUCTION, INC.,
an Arizona corporation
By: /s/ Xxxxx X. Xxxxxxxx
---------------------------------
Its: Sr. Exec. V.P.
--------------------------------
UDC ADVISORY SERVICES, INC.,
an Illinois corporation
By: /s/ Xxxxx X. Xxxxxxxx
---------------------------------
Its: Sr. Exec. V.P.
--------------------------------
UDC MORTGAGE ACCEPTANCE
CORPORATION, an Arizona corporation
By: /s/ Xxxxx X. Xxxxxxxx
---------------------------------
Its: Sr. Exec. V.P.
--------------------------------
UDC MORTGAGE FINANCE GENERAL
PARTNERSHIP, an Arizona general partnership
By: UDC Homes, Inc., a Delaware corporation,
General Partner
By: /s/ Xxxxx X. Xxxxxxxx
---------------------------------
Its: Sr. Exec. V.P.
--------------------------------
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ABERDEEN SERVICES, INC.,
a Florida Corporation
By: /s/ Xxxxx X. Xxxxxxxx
---------------------------------
Its: Sr. Exec. V.P.
--------------------------------
UDC HOMES OF GEORGIA, INC.,
a Georgia corporation
By: /s/ Xxxxx X. Xxxxxxxx
---------------------------------
Its: Sr. Exec. V.P.
--------------------------------
REA ACQUISITION CORPORATION,
an Arizona corporation
By: /s/ Xxxxx X. Xxxxxxxx
---------------------------------
Its: Sr. Exec. V.P.
--------------------------------
MOUNTAINBROOK VILLAGE COMPANY,
an Arizona corporation
By: /s/ Xxxxx X. Xxxxxxxx
---------------------------------
Its: Sr. Exec. V.P.
--------------------------------
MBV GOLF COURSE, INC.,
an Illinois corporation
By: /s/ Xxxxx X. Xxxxxxxx
---------------------------------
Its: Sr. Exec. V.P.
--------------------------------
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