April 28, 1998
VIA HAND DELIVERY
-----------------
UDC Homes, Inc.
0000 Xxxxx Xxxxxxxxxx Xxxx
Xxxxxxxxxx, Xxxxxxx 00000-0000
Attn: Xxxxx X. Xxxxxxxx
Re: Amended and Restated UDC Master
Revolving Line of Credit Loan Agreement (Borrowing
Base) dated as of April 30, 1997, as amended by that
First Modification Agreement dated as of February 27,
1998 (collectively, the "Loan Agreement")
Ladies and Gentlemen:
The purpose of this letter is to set forth the agreement of
Banks and Agent to grant consents to, and waivers of, temporary variances of
certain covenants of the Loan Agreement. Capitalized terms not otherwise defined
in this letter will have the meaning set forth in the Loan Agreement.
1. A&D Sublimit. The A&D Commitment Sublimit currently in
effect is $63,750,000.00. Banks hereby consent to an increase in the A&D
Commitment Sublimit to $80,000,000.00 for the period of April 28, 1998 through
and including September 30, 1998. The foregoing consent affects all covenants in
the Loan Agreement that relate to the A&D Commitment Sublimit, including,
without limitation:
(a) the covenant in Section 4.6(b)(v), which provides that the
aggregate Collateral Value with respect to all A&D Projects included in
Eligible Collateral shall not exceed the A&D Commitment Sublimit then
in effect; and
(b) the covenant in Section 4.6(b)(vi), which provides that
the aggregate of the Collateral Value for all Development Projects and
Finished Lot Projects shall not at any time exceed (A) the A&D
Commitment Sublimit then in effect, minus (B) the aggregate Collateral
Value of all Land Projects then included in Eligible Collateral.
2. Presold and Model Units. Pursuant to Section 4.6(b)(ii) of
the Loan Agreement, the aggregate Collateral Value with respect to Spec Units
and A&D Projects may not at any time exceed the aggregate Collateral Value of
all Presold Units and Model Units. Banks hereby waive any non-compliance by
Borrower with the
UDC Homes, Inc.
April 28, 1998
Page 2
requirements of Section 4.6(b)(ii) for the period of April 28, 1998 through and
including September 30, 1998.
3. Net Worth. Pursuant to Section 8.10 of the Loan Agreement,
Borrower is obligated to maintain a minimum Net Worth, as of each Test Date,
equal to or greater than $5,000,000.00. With respect to the Test Dates of March
31, 1998 and June 30, 1998, Banks hereby consent to a decrease in the minimum
Net Worth required to be maintained by Borrower from $5,000,000.00 to
$1,000,000.00.
The consents and waivers granted in this letter are specific in time and intent
and are granted only with respect to the covenants specified above and for the
times specified above. These consents and waivers shall not be construed as a
consent to or waiver of any other provisions of the Loan Agreement. These
consents and waivers do not constitute an agreement or obligation of Agent or
Banks to waive or consent to any other existing or future event that would,
absent consent or waiver, constitute an Unmatured Event of Default or Event of
Default under the Loan Agreement. Except for the waivers and consents
specifically set forth herein, Agent and Banks do not in any way waive or
relinquish any rights they have or may have under the Loan Agreement or
otherwise, nor do the waivers herein in any way affect or impair the terms of or
the rights of Agent or Banks under the Loan Agreement.
Please execute this letter in the space provided
below to indicate your agreement with the terms of this letter. This
letter may be executed in counterparts.
BANK ONE, ARIZONA, NA, a national
banking association, as the Agent
and as one of the Banks
By:
Name: Xxxxx X. Xxxxxxx
Title: Executive Vice President
GUARANTY FEDERAL BANK, F.S.B., a
federal savings bank, as the Co-Agent
and as one of the Banks
By:
Name: Xxxxx X. Xxx
Title: Assistant Vice President
UDC Homes, Inc.
April 28, 1998
Page 3
XXXXX FARGO BANK, NATIONAL
ASSOCIATION, a national banking
association, as one of the Banks
By:
Name: Xxxx X. XxXxxxx
Title: Vice President
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION, a
national banking association,
as one of the Banks
By:
Name: Xxxxx X. Xxxxxx
Title: Vice President
NORWEST BANK ARIZONA, NATIONAL
ASSOCIATION, a national banking
association, as one of the Banks
By:
Name: E. Xxxxx Xxxxx
Title: Vice President
AGENT AND BANKS
Accepted and agreed to this ____ day of April, 1998.
UDC HOMES, INC., a Delaware
corporation
By:
Name: Xxxxx X. Xxxxxxxx
Title: Senior Executive Vice President
BORROWER
UDC HOMES CONSTRUCTION, INC., an
Arizona corporation
By:
Name: Xxxxx X. Xxxxxxxx
Title: Senior Executive Vice President
UDC Homes, Inc.
April 28, 1998
Page 4
UDC ADVISORY SERVICES, INC., an
Illinois corporation
By:
Name: Xxxxx X. Xxxxxxxx
Title: Senior Executive Vice President
UDC CORPORATION, a Delaware
corporation
By:
Name: Xxxxx X. Xxxxxxxx
Title: Senior Executive Vice President
MOUNTAINBROOK VILLAGE COMPANY, an
Arizona corporation
By:
Name: Xxxxx X. Xxxxxxxx
Title: Senior Executive Vice President
GUARANTORS
UDC Homes, Inc.
April 28, 1998
Page 5
Borrower certifies to Banks and Agent that ABERDEEN SERVICES, INC., a Florida
corporation, and UDC HOMES OF GEORGIA, INC., a Georgia corporation, were
dissolved in accordance with Section 9.2 of the Loan Agreement.
UDC HOMES, INC., a Delaware corporation
By:
Name: Xxxxx X. Xxxxxxxx
Title: Senior Executive Vice President
BORROWER
