Exhibit 10.13
AMENDMENT TO
AMENDED AND RESTATED MASTER LOAN AGREEMENT
THIS AMENDMENT, dated as of the 2nd day of July, 1999 (the
"Amendment"), is made by and between Xxxxxx Housing Corporation, a Florida
corporation (the "Borrower"), with offices located at 0000 Xxxxxxxx Xxxx Xxxxxx,
Xxxxx 000, Xxxxx, Xxxxxxx 00000, and Bank of America, N.A., a national banking
association, successor by merger to NationsBank, N.A. (the "Bank"), with its
offices located at 0000 X. Xxxxxxxxx Xxxxxxxxx, Xxxxx 000, Xxxxx, Xxxxxxx, to
modify and amend the terms of a certain Amended and Restated Master Loan
Agreement dated November 17, 1995 and riders thereto, as modified and amended,
and a certain Amended and Restated Master Loan Agreement dated July 2, 1998 and
riders thereto, as modified and amended, made by Borrower and Bank.
RECITALS
A. Borrower opened a revolving line of credit loan in the amount of
$10,000,000.00 and a revolving line of credit loan in the amount of
$9,500,000.00 with Bank, which have been modified and amended from time to time
thereafter (the "Loan" or "Loans"), which are used for the purpose of acquiring
lots and constructing single family dwellings in subdivisions acceptable to Bank
and mortgaged to Bank as security for the Loans.
B. Borrower and Bank have previously entered into a certain Amended and
Restated Master Loan Agreement dated November 17, 1995, and Borrower and Bank
have previously entered into a certain Amended and Restated Master Loan
Agreement dated July 2, 1998, (collectively the "Loan Agreement") setting forth
the terms upon which Bank has agreed to make advances under the Loans from time
to time.
C. Borrower has requested and Bank has agreed to increase the amount of
the Loan by a future advance in the amount of $3,500,000.00 secured by the
Mortgage and administered under the terms of the Loan Agreement, except as
modified herein.
D. Borrower and Bank desire to modify and amend the terms of the Loan
in the manner set out herein.
NOW, THEREFORE, in consideration of the premises, of the Loan advances
which may be agreed to be made Bank to Borrower hereinafter, and for other good
and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, Borrower and Bank hereby agree as follows:
1. The foregoing recitals are true and are incorporated herein.
2. Paragraph 1.1 (q) of the Loan Agreement is amended as follows:
The full payment and performance of the Loan will continue to
be guaranteed, jointly and severally, by International American Homes,
Inc., a Delaware corporation, and by
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Xxxxxx X. Xxxxxx, individually, ("Guarantor"), subject to the terms
provided in the Guaranty and herein. The Guarantor hereby subordinates
any and all obligations of the Borrower to him in favor of Bank in
order that there shall be no offset against the guarantee of any amount
which may be owing to the Guarantor by Borrower. The existing
individual guaranty of Guarantor Xxxxxx will be released as to sums
previously advanced and his guaranty shall not extend to sums advanced
under the Loan in the future, for the construction of Pre-Sold Units.
Furthermore, if the financial statements for International American
Homes, Inc., tested quarterly, show a Tangible Net Worth of $7,200,000
or more, and a Total Debt/ Tangible Net Worth ratio (adjusted for
bonds) of 2.75:1, or better, then the personal guaranty of Guarantor
Xxxxxx will be abated as to 50% of the sums previously advanced or
advanced in the future for the construction of Spec and Model Units and
lots. If the financial statements for International American Homes,
Inc., tested quarterly, show a Tangible Net Worth of $7,500,000 or
more, and a Total Debt /Tangible Net Worth ratio (adjusted for bonds)
of 2.50:1, or better, then the personal guaranty of Guarantor Xxxxxx
will be abated in full. The personal guaranty of Guarantor will be
reinstated consistent with the foregoing standards if International
American Homes, Inc. fails to maintain the stated ratios. If the
personal guaranty of Guarantor Xxxxxx qualifies for abatement in full
as of January 1, 2000, then Bank will release the personal guaranty of
Guarantor Xxxxxx in full on his request. The guaranty of International
American Homes, Inc. shall not be affected by any of the foregoing
actions taken as to Guarantor Xxxxxx.
3. Paragraph 2.1 of the Loan Agreement is amended as follows:
Borrower covenants and agrees to pay to Bank a nonrefundable
Commitment Fee in the amount of $137,500.00, one-half ($68,750.00) of
which is due on or before closing and one-half of which ($68,750.00) is
due on or before December 15,1999. An annual loan fee equal to
137,500.00 shall be due each year on the anniversary of the Loan
closing if the Loan extends beyond one year, one-half of which is due
on or before closing and one-half of which is due on or before December
15, 2000.
4. Paragraph 2.3 of the Loan Agreement is amended as follows:
The Loan proceeds will continue to be used solely to finance
the acquisition of developed lots and the cost of construction of
single family dwellings ("Units") on lots owned or to be acquired by
Borrower and mortgaged to Bank in those certain developments located in
Hillsborough County, Pasco County and Pinellas County, Florida, and in
such other counties as Bank may approve. Bank will disburse Loan
proceeds in accordance with the Loan documents as modified from time to
time thereafter.
(a) Use of Loan proceeds for the construction of Units shall
be limited to 125 Spec and Model Units and a total outstanding and
committed of $12,500,000.00 at any one time; and 93 Pre-Sold Units and
a total amount actually outstanding of $9,300,000.00 at any
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one time. Use of Loan proceeds is further limited to 10 Spec and Model
Units in any one subdivision at any one time.
(b) Each individual Unit financed under the Loan shall be
completed in a period not to exceed six (6) months from the date
construction commences.
(c) Use of Loan proceeds for the purchase of developed lots
shall be limited to 220 lots and a total amount outstanding and
committed of $4,000,000.00 at any one time. The amount to be funded for
each lot shall be an amount equal to the lesser of (i) 75% of
Borrower's cost, or (ii) 75% of appraised value, with a minimum of 25%
cash equity in each lot, or (iii) $35,000.00. Use of Loan proceeds is
further limited to 50 developed lots in any one subdivision at any one
time. Lots under the Loan greater than two (2) years shall be removed
from the collateral pool.
(d) Use of Loan availability for the issuance of standby
letters of credit in support of development activities shall be limited
to $1,000,000 outstanding or committed at any one time and shall reduce
the borrowing base availability proportionately.
Notwithstanding the foregoing limitations by category, the total amount
outstanding under the Loan at any one time shall not exceed the loan
amount of $23,000,000.00.
5. Paragraph 2.3(e) of the Loan Agreement is amended as follows:
To monitor the collateral base and to assist in calculating
the Maximum Allowable Funding, Borrower shall provide to Bank monthly a
report of construction completion status on the Bank's form, or other
form approved by Bank, for all units financed under the Loans.
Inspection fees under the Loans will be $125 per unit, irrespective of
the number of times Bank elects to inspect.
6. Paragraph 2.10 is hereby added to the Loan Agreement as follows:
2.10 Inspections and Monitoring. To monitor the collateral
base and to assist in calculating the Maximum AlIowabIe Funding,
Borrower shall provide to Bank monthly a report of construction
completion status on the Bank's form, or other form approved by Bank,
for all units financed under the Loans. Inspection fees under the Loans
will be $125 per unit, irrespective of the number of times Bank elects
to inspect.
7. Paragraph 5.9 of the Loan Agreement is amended as follows:
Title insurance coverage for the Loan under a loan policy or
policies of title insurance with revolving credit endorsement shall
continue to insure advances under the Loan.
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8. Paragraph 5.11 of the Loan Agreement is amended as follows:
Borrower will provide Bank with (a) quarterly 10-Q filings for
International American Homes, Inc., including internally prepared
consolidating financial information for wholly-owned subsidiaries,
within 90 days of the end of each quarter; (b) annual 10-K for
International American Homes, Inc., including consolidating financial
information for wholly-owned subsidiaries, within 120 days of fiscal
year end, and (c) annual and quarterly inventory and sales reports.
9. Paragraph 5.18 of the Loan Agreement is amended as follows:
(a) Bank will fund under the Loan up to but not in excess of
an amount, referred to here as the Aggregate Maximum Allowable Funding,
which is from time to time the aggregate sum of the Maximum Allowable
Funding amount for all units and lots subject to the Loan. In
calculating the Maximum Allowable Funding, the amount which has been
advanced or which is eligible to be advanced on account of the
underlying land lot is referred to herein as the Lot Advance. The
Maximum Allowable Funding amount for a pre-sold unit will be the sum of
(1) the Lot Advance, plus (2) the product of (a) the then current
percentage of completion of the unit, times (b) an amount which does
not exceed 100% of the unit cost breakdown (not including the Lot
Advance) submitted by Borrower and approved by Bank, nor the lesser of
1) 80% of the completed value of each unit, which amount shall be
determined by a valuation acceptable to Bank, less the Lot Advance, or
2) 80% of the contracted purchase price of the unit, less the Lot
Advance. The Maximum Allowable Funding amount for a model or spec unit
will be the sum of (1) the Lot Advance, plus (2) the product of (a) the
then current percentage of completion of the unit, times (b) an amount
which does not exceed 100% of the unit cost breakdown submitted by
Borrower and approved by Bank, nor 80% of the completed value of each
unit, less the Lot Advance. The Maximum Allowable Funding amount for a
lot will be the lesser of 1) 75% of Borrower's cost, 2) 75% of the
appraised value, or 3) not to exceed $35,000.00).
(b) Units or lots may be released from the lien of the
mortgage: (1) without a partial release payment if the Aggregate
Maximum Allowable Funding after subtracting the released lot or unit's
Maximum Allowable Funding from the collateral pool exceeds the then
outstanding loan balance; (2) otherwise, upon payment of the difference
between the Aggregate Maximum Allowable Funding after subtracting the
released lot or unit's Maximum Allowable Funding from the collateral
pool and the then outstanding loan balance. Spec units subject to the
Loan shall be removed from the collateral pool after one year. Model
units subject to the Loan shall be removed from the collateral pool
after two years.
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10. Paragraph 6.3 is hereby added to the Loan Agreement as follows:
6.3 Year 2000 Representations, Covenants and Warranties.
(a) Borrower has (i) begun analyzing the operations
of Borrower and its subsidiaries and affiliates that could be adversely
affected by failure to become Year 2000 compliant (that is, that
computer applications, imbedded microchips and other systems will be
able to perform date-sensitive functions prior to and after December
31, 1999); and (ii) developed a plan for becoming Year 2000 compliant
in a timely manner, the implementation of which is on schedule in all
material respects. Borrower reasonably believes that it will become
Year 2000 compliant for its operations and those of its subsidiaries
and affiliates on a timely basis except to the extent that a failure to
do so could not reasonably be expected to have a material adverse
effect upon the financial condition of Borrower.
(b) Borrower reasonably believes any suppliers and
vendors that are material to the operations of Borrower or its
subsidiaries and affiliates will be Year 2000 compliant for their own
computer applications except to the extent that a failure to do so
could not reasonably be expected to have a material adverse effect upon
the financial condition of Borrower.
(c) Borrower will promptly notify Bank in the event
Borrower determines that any computer application which is material to
the operations of Borrower, its subsidiaries or any of its material
vendors or suppliers will not be fully Year 2000 compliant on a timely
basis, except to the extent that such failure could not reasonably be
expected to have a material adverse effect upon the financial condition
of Borrower.
11. Paragraph 10.1 of the Loan Agreement is amended as follows:
10.1 Financial Covenants. Borrower will at all times report
its financial condition using generally accepted accounting principles
consistently applied, except to the extent modified by the following
definitions:
(a) Tangible Net Worth: "Tangible Net Worth" is
defined as the aggregate of total shareholders' equity plus any debt to
Related Parties (as hereinafter defined) which are subordinated to the
Loan, less any intangible assets and any obligations due from
shareholders, partners, employees, and/or affiliates.
(b) Ratio of Total Debt to Tangible Net Worth: The
"Ratio of Total Debt to Tangible Net Worth," is defined as the
aggregate of current liabilities and non-current liabilities (excluding
contingent liabilities and non-recourse bonds) less subordinated loans
from Related Parties (as hereinafter defined), divided by Tangible Net
Worth shall not
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exceed 2.75:1, tested semi-annually, during the period from closing of
the Loan to maturity, if and as extended.
(c) Net Loss: Borrower shall not suffer any net loss
as reflected in the annual financial statements prepared and submitted
to Bank during the term of the Loan.
(d) Related Parties: "Related Parties" shall mean the
partners or shareholders of Borrower, or any corporations, trusts,
partnerships, or other entities in which Borrower owns directly, or
indirectly, a 51% interest.
(e) Minimum Tangible Net Worth: Borrower shall
maintain a minimum Tangible Net Worth of $6,500,000, tested
semiannually, during the term of the Loan.
12. Except as expressly set out herein and in the Loan Documents of
even date, all terms and provisions of the Loan Documents shall continue in
force and effect with respect to the Loan.
IN WITNESS WHEREOF, Borrower and Bank have executed this Loan Agreement
as of the above written date.
Xxxxxx Housing Corporation,
a Florida corporation
[Seal]
/s/ Xxxxxx X. Xxxxx By: /s/ Xxxxxx X. Xxxxxx
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Witness XXXXXX X. XXXXX Xxxxxx X. Xxxxxx
/s/ Xxxxxx X. Xxxx, Xx. Its: President
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Witness XXXXXX X. XXXX, XX.
Bank of America, N.A.
By:
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Witness Xxxx X. Xxxx
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Witness Its: Senior Vice President
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JOINDER OF GUARANTOR
The undersigned as Guarantor hereby joins in and consents to the
foregoing Loan Agreement.
International American Homes, Inc.,
a Delaware corporation
{Seal}
/s/ Xxxxxx X. Xxxxx By: /s/ Xxxxxx X. Xxxxxx
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Witness XXXXXX X. XXXXX Xxxxxx X. Xxxxxx
/s/ Xxxxxx X. Xxxx, Xx. Its: President
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Witness XXXXXX X. XXXX, XX.
/s/ Xxxxxx X. Xxxxx /s/ Xxxxxx X. Xxxxxx {Seal}
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Witness XXXXXX X. XXXXX Xxxxxx X. Xxxxxx
individually
/s/ Xxxxxx X. Xxxx, Xx.
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Witness XXXXXX X. XXXX, XX.
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