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EXHIBIT 10.35
AMENDMENT NO. 1 TO FIFTH AMENDED AND RESTATED LOAN AGREEMENT AND
CONSENT AND WAIVER UNDER AMENDED AND RESTATED GUARANTY
AMENDMENT AGREEMENT, dated as of October 27, 1999, to the Fifth
Amended and Restated Loan Agreement, dated as of July 6, 1998 (as same has been
or may be further amended, supplemented, modified or restated in accordance with
its terms, the "Loan Agreement") among XXXXXXX HOMES (f/k/a The Xxxxxxx
Companies), a California corporation (the "Borrower"), the lenders listed on
Schedule 1.1(g) thereto (the "Lenders") and FOOTHILL CAPITAL CORPORATION, in its
capacity as agent (the "Agent"). Capitalized terms used herein and not otherwise
defined shall have the meanings attributed to them in the Loan Agreement.
WHEREAS, the Borrower has informed the Agent that Xxxxxxx
Delaware, the Borrower, Xxxxxxx Xxxx Homes, Inc., a California corporation
("Homes"), Xxxxxxx Xxxx, an individual, and Xxxxxxx X. Xxxx, an individual, have
entered into a Purchase Agreement and Escrow Instructions (the "Acquisition
Agreement"), dated as of October 7, 1999 pursuant to which, among other things,
the Borrower has agreed to purchase substantially all of the assets of Homes for
a purchase price of $48,000,000 and the assumption of substantially all of the
liabilities of Homes (the "Consideration" and collectively, the "Acquisition");
the form of the Acquisition Agreement is included as an exhibit to the
Registration Statement on Form S-4 filed with the Securities and Exchange
Commission by Xxxxxxx Merger Sub, Inc., a Delaware corporation and wholly owned
subsidiary of Xxxxxxx Delaware ("Merger Sub"); and
WHEREAS, the Borrower has informed the Agent that Xxxxxxx
Delaware intends to merge with and into Merger Sub, with Merger Sub as the
surviving corporation; and Merger Sub will, at the effective time of such
merger, change its name to "The Xxxxxxx Companies" (collectively, the "Merger");
and
WHEREAS, the Borrower has requested that the Lenders agree to
amend certain provisions of the Credit Agreement in connection with the
Acquisition and waive certain provisions of the Amended and Restated Guaranty
and the Lenders have so agreed, upon the terms and conditions set forth herein.
NOW, THEREFORE, for valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, and subject to the fulfillment of
the conditions set forth below, the parties hereto agree as follows:
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SECTION I. AMENDMENTS TO LOAN AGREEMENT
1. Section 8.8 of the Loan Agreement is hereby amended by (i)
deleting the word "and" at the end of paragraph (p) thereof, (ii) adding "and"
at the end of paragraph (q) and (iii) adding a new paragraph (r) which reads as
follows:
"(r) Recourse indebtedness incurred or guaranteed by the Borrower
in connection with the acquisition by a wholly-owned Subsidiary of the
Borrower of certain real estate projects of Xxxxxxx Xxxx Homes, Inc.,
not to exceed the respective amounts set forth below for the fiscal
quarter indicated:
Period Amount
------ ------
Fiscal quarter ending on or
about December 31, 1999 $25,000,000
Fiscal quarter ending on or
about March 31, 2000 $20,000,000
Fiscal quarter ending on or
about June 30, 2000 $20,000,000
Fiscal quarter ending on or
about September 30, 2000 $10,000,000
Fiscal quarter ending on or
about December 31, 2000 and each
fiscal quarter thereafter $ 0"
SECTION II. CONSENT AND WAIVER UNDER AMENDED AND
RESTATED GUARANTY
1. The Lenders hereby consent to the Merger pursuant to the
Certificate of Ownership and Merger dated July 15, 1999 (the "Merger
Certificate").
2. The Lenders hereby waive the applicable provisions of the
Amended and Restated Guaranty solely to permit the Merger pursuant to and in
accordance with the Merger Certificate.
SECTION III. CONDITIONS PRECEDENT
This Amendment Agreement shall become effective on the date (the
"Effective Date") on which counterparts hereof are executed and delivered by the
Borrower, Xxxxxxx Delaware, Merger Sub, the Agent and the Lenders and the
following conditions are fulfilled:
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1. No unwaived event has occurred and is continuing which
constitutes a Default or an Event of Default.
2. All representations and warranties made by the Borrower,
Xxxxxxx Delaware and Merger Sub in this Amendment Agreement shall be true and
correct.
3. All required corporate actions in connection with the
execution and delivery of this Amendment Agreement shall have been taken, and
each shall be satisfactory in form and substance to the Agent, and the Agent
shall have received all information and copies of all documents, including,
without limitation, records of requisite corporate action that the Agent may
reasonably request, to be certified by the appropriate corporate person or
government authorities.
4. The Agent shall have received (i) a copy of the articles of
incorporation of Merger Sub, certified as of a recent date by the Secretary of
State or other appropriate official of the state of its organization, (ii) a
certificate as to its good standing from such Secretary of State or other
official, (iii) a certificate of good standing from the appropriate official of
each state in which it is qualified to do business, in each case dated as of a
recent date, (iv) a certificate of the Secretary of Merger Sub, dated the date
hereof, and certifying as to the incumbency and specimen signature of each of
Merger Sub's officers executing this Amendment Agreement or any other Loan
Document delivered in connection herewith, (v) a certificate of another of
Merger Sub's officers as to incumbency and signature of its Secretary, and (vi)
such other documents as the Agent or any Lender may reasonably request.
5. The Agent shall have received evidence in the form of an
officer's certificate signed by a Responsible Official that the Acquisition has
been consummated.
6. The Agent shall have received a duly executed copy of the
Acquisition Agreement, including all amendments and schedules thereto, as in
effect on the date of consummation of the Acquisition, each certified by a
Responsible Official of the Borrower.
7. The Agent shall have received such other documents as the
Lenders or the Agent or the Agent's counsel shall reasonably deem necessary.
SECTION IV. CONDITIONS SUBSEQUENT
The Borrower hereby agrees and covenants to satisfy the following
additional condition within 10 days of the Effective Date:
1. The Agent shall have received a copy of the Merger
Certificate, certified by the Secretary of State of the State of Delaware.
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SECTION V. MISCELLANEOUS
1. By its signature below, the Borrower reaffirms and restates
the representations and warranties set forth in Article VI of the Loan
Agreement, and all such representations and warranties are true and correct on
the Effective Date with the same force and effect as if made on such date
(except to the extent that they relate expressly to an earlier date). Xxxxxxx
Delaware and Merger Sub jointly and severally represent and warrant that, both
before and after giving effect to the consummation of the Merger, each of the
representations and warranties set forth in Section 7 of the Amended and
Restated Guaranty, are and shall be true and correct (except to the extent that
they relate expressly to the Closing Date). In addition, the Borrower, Xxxxxxx
Delaware and Merger Sub each represents and warrants (which representations and
warranties shall survive the execution and delivery hereof) to the Agent and the
Lenders that:
(a) it has the power and authority to execute, deliver and carry
out the terms and provisions of this Amendment Agreement and the transactions
contemplated hereby, and has taken or caused to be taken all necessary actions
to authorize the execution, delivery and performance of this Amendment Agreement
and the transactions contemplated hereby;
(b) no consent of any other Person (including, without
limitation, shareholders or creditors of the Borrower, Xxxxxxx Delaware or
Merger Sub) and no action of, or filing with any governmental or public body or
authority is required to authorize, or is otherwise required in connection with
the execution, delivery and performance of this Amendment Agreement, or
consummation of the transactions contemplated hereby;
(c) this Amendment Agreement has been duly executed and delivered
by or on behalf of the Borrower, Xxxxxxx Delaware and Merger Sub and constitutes
a legal, valid and binding obligation of each of the Borrower, Xxxxxxx Delaware
and Merger Sub enforceable in accordance with its terms, subject as to
enforceability to bankruptcy, reorganization, insolvency, moratorium and other
similar laws affecting the enforcement of creditors' rights generally and the
exercise of judicial discretion in accordance with general principles of equity;
(d) the execution, delivery and performance of this Amendment
Agreement will not violate any law, statute or regulation, or any order or
decree of any court or governmental instrumentality, or conflict with, or result
in the breach of, or constitute a default under any contractual obligation of
the Borrower, Xxxxxxx Delaware or Merger Sub; and
(e) Both before and after giving effect to the consummation of
each of the Acquisition, the Merger and the transactions contemplated hereunder
and thereunder (collectively, the "Transactions") there exists no Default or
Event of Default.
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2. The Borrower and Xxxxxxx Delaware each further represents and
warrants as of the Effective Date (which representations and warranties shall
survive the execution and delivery hereof) to the Agent and the Lenders that:
(a) Both before and immediately after the consummation of the
Acquisition, the fair salable value of the assets of the Borrower and its
consolidated Subsidiaries is not less than the amount that will be required to
be paid on or in respect of the probable liability on the existing debts and
other liabilities (including contingent liabilities) of the Borrower and its
consolidated Subsidiaries, as they become absolute and mature.
(b) Both before and immediately after the consummation of the
Acquisition, the assets of the Borrower and its consolidated Subsidiaries do not
constitute unreasonably small capital for the Borrower and its consolidated
Subsidiaries to carry out their business as now conducted and as proposed to be
conducted including the capital needs of the Borrower and its consolidated
Subsidiaries, taking into account the particular capital requirements of the
business conducted by the Borrower and its consolidated Subsidiaries and
projected capital requirements and capital availability thereof.
(c) Neither the Borrower nor any of its Subsidiaries intends to
incur debts beyond its ability to pay such debts as they mature (taking into
account the timing and amounts of cash to be received by the Borrower and any of
its Subsidiaries, and of amounts to be payable on or in respect of debt of the
Borrower and any of its subsidiaries). The cash flow of the Borrower and its
consolidated Subsidiaries, after taking into account all anticipated uses of the
cash of the Borrower and its consolidated Subsidiaries, will at all times be
sufficient to pay all such amounts on or in respect of debt of the Borrower and
its consolidated Subsidiaries when such amounts are required to be paid.
(d) Neither the Borrower nor any of its Subsidiaries believes
that final judgments against them in actions for money damages presently pending
will be rendered at a time when, or in an amount such that, they will be unable
to satisfy any such judgments promptly in accordance with their terms (taking
into account the maximum reasonable amount of such judgments in any such actions
and the earliest reasonable time at which such judgments might be rendered). The
cash flow of the Borrower and its consolidated Subsidiaries, after taking into
account all other anticipated uses of the cash of the Borrower and its
consolidated Subsidiaries (including the payments on or in respect of debt
referred to in paragraph (c) above), will at all times be sufficient to pay all
such judgments promptly in accordance with their terms.
(e) (i) The execution, delivery and performance by Xxxxxxx
Delaware, the Borrower and Homes of the Acquisition Agreement and the other
documents, agreements and instruments executed and delivered pursuant thereto or
in connection therewith (collectively, the "Acquisition Documents") have been
duly authorized by all necessary action on the part of Xxxxxxx Delaware, the
Borrower and Homes, (ii) the
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Acquisition Documents constitute the valid, binding and enforceable obligation
of each party thereto, subject to the effect of any applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting creditors'
rights generally, and are in full force and effect without default or waiver of
any of the conditions thereunder and (iii) there are no governmental consents,
filings, approvals or notices required to be made or obtained in connection with
the execution, delivery and performance of the Acquisition Documents except such
as have been duly made, obtained or delivered.
(f) To the best of Borrower's knowledge, each of the
representations and warranties made by Homes in the Acquisition Documents was
true and correct in all material respects both as of the time such
representation and warranty was made and as of the Effective Date as if such
representation and warranty was made on and as of such date (except to the
extent that they relate expressly to an earlier date).
(g) There are not any actions, suits or proceedings at law or in
equity or by or before any governmental instrumentality or other agency or
regulatory authority now pending or, to the knowledge of any Responsible
Official of Xxxxxxx Delaware or the Borrower, threatened against or affecting
the Borrower, any of its Subsidiaries or Xxxxxxx Delaware or the businesses,
assets or rights of the Borrower, any of its Subsidiaries or Xxxxxxx Delaware
which involve any of the Transactions.
(h) The Consideration to be paid by the Borrower in connection
with the Acquisition is fair to the Borrower from a financial point of view, and
the Borrower will receive a reasonably equivalent value in exchange for such
Consideration.
By its signature below, the Borrower, Xxxxxxx Delaware and Merger Sub
each agrees that it shall constitute an Event of Default if any representation
or warranty made above should be false or misleading in any material respect.
3. Merger Sub hereby irrevocably and unconditionally affirms and
agrees that, immediately upon consummation of the Merger, it shall have assumed
all obligations and liabilities of Xxxxxxx Delaware under the Amended and
Restated Guaranty and each other Loan Document to which Xxxxxxx Delaware is a
party and that each Loan Document shall continue in full force and effect.
4. The Loan Agreement, and each other Loan Document is hereby
ratified and confirmed in all respects and, except as expressly amended or
waived or consented to hereby, all of the representations, warranties, terms,
covenants and conditions of the Loan Agreement and the other Loan Documents
shall remain unamended, unwaived and in effect in accordance with their
respective terms. The amendments, waivers and consents set forth herein shall be
limited precisely as provided for herein and shall not be deemed to be
amendments or consents to, or waivers of modifications of, any term or provision
of the Loan Documents or any other document or instrument referred to herein or
therein or of any transaction or further or future action on the part of the
Borrower, Xxxxxxx Delaware or Merger Sub requiring the
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consent of the Agent or any Lender, except to the extent specifically provided
for herein.
5. The Borrower, Xxxxxxx Delaware and Merger Sub each confirms in
favor of the Agent and each Lender that it agrees that it has no defense,
offset, claim, counterclaim or recoupment with respect to any of its obligations
or liabilities under the Loan Agreement or any other Loan Document and that,
except as herein provided, all terms of the Loan Agreement and the other Loan
Documents shall continue in full force and effect.
6. This Amendment Agreement may be executed by the parties hereto
individually or in combination, in one or more counterparts, each of which shall
be an original and all of which shall constitute one and the same agreement.
7. Delivery of an executed counterpart of a signature page by
telecopier shall be effective as delivery of a manually executed counterpart.
8. THIS AMENDMENT AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED
AND ENFORCED IN ACCORDANCE WITH, THE LOCAL LAWS OF CALIFORNIA.
XXXXXXX HOMES (f/k/a The Xxxxxxx
Companies), a California corporation
By /s/ Xxxxx X. Xxxxxx
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Name: Xxxxx X. Xxxxxx
Title: Senior Vice President -
Chief Financial Officer
By /s/ W. Xxxxxxxx Xxxxxx
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Name: W. Xxxxxxxx Xxxxxx
Title: Vice President - Corporate
Controller
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THE XXXXXXX COMPANIES, a Delaware
Corporation
By /s/ Xxxxx X. Xxxxxx
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Name: Xxxxx X. Xxxxxx
Title: Senior Vice President -
Chief Financial Officer
By /s/ W. Xxxxxxxx Xxxxxx
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Name: W. Xxxxxxxx Xxxxxx
Title: Vice President - Corporate
Controller
XXXXXXX MERGER SUB, INC., a
Delaware corporation
By /s/ Xxxxx X. Xxxxxx
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Name: Xxxxx X. Xxxxxx
Title: Senior Vice President -
Chief Financial Officer
By /s/ W. Xxxxxxxx Xxxxxx
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Name: W. Xxxxxxxx Xxxxxx
Title: Vice President - Corporate
Controller
FOOTHILL CAPITAL CORPORATION,
Individually and as Agent
By /s/ Xxxxx X. Xxxxxxx
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Name: Xxxxx X. Xxxxxxx
Title: Senior Vice President
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