SEVENTH AMENDMENT TO CREDIT AGREEMENT
SEVENTH AMENDMENT TO
THIS SEVENTH AMENDMENT TO CREDIT AGREEMENT (this “Amendment”) is made and entered into as of September 17, 2013, by and among PICO Northstar Xxxxxxx, LLC, a Delaware limited liability company (the “Borrower”), PICO Northstar, LLC, a Delaware limited liability company (the “Parent Guarantor”), the lenders from time to time party to the Credit Agreement, as defined below (the “Lenders”), and ING Capital LLC, a Delaware limited liability company, as agent for the Lenders (the “Agent”).
W I T N E S S E T H:
WHEREAS, the Borrower, the Parent Guarantor, the Lenders and the Agent are parties to that certain Credit Agreement dated as of June 13, 2011, which was amended pursuant to that certain First Amendment to Credit Agreement dated as of October 14, 2011, which was further amended pursuant to that certain Second Amendment to Credit Agreement dated as of February 8, 2012, which was further amended by that certain Third Amendment to Credit Agreement dated as of May 25, 2012, which was further amended by that certain Fourth Amendment to Credit Agreement dated as of August 14, 2012, which was further amended by that certain Fifth Amendment to Credit Agreement dated as of October 17, 2012 and which was further amended by that certain Sixth Amendment to Credit Agreement dated as of March 21, 2013 (as so amended, the “Existing Credit Agreement”; the Existing Credit Agreement, as amended by this Amendment and as hereafter amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”; capitalized terms used herein and not otherwise defined herein shall have the meanings assigned to such terms in the Credit Agreement), pursuant to which the Lenders have made certain financial accommodations available to the Borrower; and
WHEREAS, the Borrower has requested that the Credit Agreement be amended as set forth herein, and the Lenders have agreed to so amend the Credit Agreement as set forth herein, subject to the terms and conditions hereof;
NOW, THEREFORE, for good and valuable consideration, the sufficiency and receipt of all of which are acknowledged, the Borrower, the Parent Guarantor, the Required Lenders and the Agent hereby agree as follows:
1.Amendment to Section 1.1 of the Credit Agreement. The Existing Credit Agreement is hereby amended by replacing the definitions of “Debt Service Coverage Ratio”, “First DSCR Preferred Equity Issuance”, “Other DSCR Preferred Equity Issuance”, and “Tangible Net Worth” in their entirety with the following:
“Debt Service Coverage Ratio” means, for any period, the ratio of (a) EBITDA of the Borrower and its Subsidiaries for such period less (i) Consolidated Capital Expenditures for such period (excluding that portion of Consolidated Capital Expenditures that is financed by Indebtedness (other than the Obligations)) plus (ii) for the Fiscal Quarters ending on or after March 31, 2013 and on or before December 31, 2014, the proceeds of the First DSCR Preferred Equity Issuance and the proceeds of all Other DSCR Preferred Equity Issuances, to the extent such proceeds of such First DSCR Preferred Equity Issuance and such Other DSCR Preferred Equity Issuances are received (or deemed to have been received) by the Parent Guarantor and contributed by the Parent Guarantor to the equity capital of the Borrower during the four consecutive Fiscal Quarters ending on the last day of such
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period less (iii) Permitted Tax Distributions with respect to such period less (iv) any other distributions made by the Parent Guarantor to its members during such period to (b) Debt Service for such period.
“First DSCR Preferred Equity Issuance” means the issuance by the Parent Guarantor in December, 2012, of Qualified Preferred Equity Interests in exchange for the Sponsor Temporary Working Capital Loan in the original principal amount of $10,500,000; provided, however, that for purposes of calculating the Debt Service Coverage Ratio, the First DSCR Preferred Equity Issuance shall be deemed to have been contributed on January 1, 2013.
“Other DSCR Preferred Equity Issuance” means one or more issuances by the Parent Guarantor on or after the Sixth Amendment Effective Date and on or prior to September 30, 2014, of Qualified Preferred Equity Interests for cash the proceeds of which are contributed by the Parent Guarantor to the equity capital of the Borrower; provided, however that no Financial Covenant Default Contribution shall constitute an Other DSCR Preferred Equity Issuance.
“Tangible Net Worth” means, as of any date, with respect to the Sponsor, the Net Worth of the Sponsor less amounts attributable to goodwill arising from the acquisition of a Person or business unit of a Person; provided, however, that for purposes of determining the Sponsor’s Tangible Net Worth, the effect of UCP, Inc. as a consolidated Subsidiary of the Sponsor shall be excluded (including the exclusion of any deduction for minority interests) and the value of the Sponsor’s Equity Interest in UCP, Inc. shall be included at the higher of (i) book value, or (ii) market value, determined as of the date of determination by multiplying the number of shares owned by the Sponsor on such date by the stock price at the close of business on such date.
2.Amendment to Section 3.3.1(j) of the Credit Agreement. The Existing Credit Agreement is hereby amended by replacing clause (j) of Section 3.3.1 in its entirety with the following:
(j) shall, promptly after (and in any event within two (2) Business Days following) receipt by the Borrower or any Subsidiary or the Agent of any Net Securities Proceeds (excluding Net Securities Proceeds resulting from (i) any Additional Equity Issuance (2012), (ii) the First DSCR Preferred Equity Issuance, or (ii) Other DSCR Preferred Equity Issuances in an aggregate amount during the term of this Agreement not to exceed $25,000,000), make a payment to the Agent in an amount equal to such Net Securities Proceeds; provided, that this clause (j) of Section 3.3.1 shall not in any event be deemed a consent to any issuance or sale of Stock by any Loan Party that is otherwise prohibited by the terms of this Agreement or of any of the other Loan Documents;”
3.Conditions to Effectiveness of this Amendment. Notwithstanding any other provision of this Amendment, this Amendment shall not become effective, and the Borrower and the Parent Guarantor shall have no rights under this Amendment, until each of the following conditions shall have been satisfied:
(a) the Agent shall have received duly authorized, executed and delivered counterparts to this Amendment from each of the Borrower, the Parent Guarantor, the Required Lenders, the Sponsor and the Agent; and
(b) the Borrower shall have made payment or reimbursement of all costs and expenses of the Agent which have been invoiced not later than one Business Day prior to the date of this Amendment, including, without limitation, fees and expenses of King & Spalding LLP, counsel to the Agent.
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4.Agreement to Provide Documentation. The Borrower agrees to provide to the Agent true and correct copies of all documentation evidencing Other DSCR Preferred Equity Issuances promptly upon request by the Agent from time to time.
5.Representations and Warranties. To induce the Lenders and the Agent to enter into this Amendment, each of the Borrower, the Parent Guarantor and the Sponsor hereby represents and warrants to the Lenders and the Agent as follows:
(a) The execution, delivery and performance by it of this Amendment are within its organizational powers and have been duly authorized by all necessary organizational, and if required, shareholder, partner or member action.
(b) The execution, delivery and performance by it of this Amendment have been duly authorized by all necessary corporate or other organizational action, and do not and will not (a) contravene the terms of any of its Organizational Documents; (b) conflict with or result in any breach or contravention of, or the creation of any Lien under, or require any payment to be made under (i) any Contractual Obligation to which it is a party or affecting it or its properties or any of its Subsidiaries or (ii) any order, injunction, writ or decree of any Governmental Authority or any arbitral award to which it or its property is subject; or (c) violate any applicable law.
(c) This Amendment has been duly executed and delivered by it, and the Credit Agreement, as amended by this Amendment, constitutes its legal, valid and binding obligation, enforceable in accordance with its terms, except as enforceability may be limited by bankruptcy, insolvency or similar laws affecting the enforcement of creditors’ rights generally and by general principles of equity and public policy.
(d) The representations and warranties of the Borrower and the Parent Guarantor contained in the Credit Agreement and the other Loan Documents (i) were true and correct in all material respects as of the date initially made, and (ii) are true and correct in all material respects with the same effect as if made on the date hereof and both before and after giving effect to this Amendment and the amendments set forth herein (except to the extent expressly stated to be as of an earlier date).
(e) No material adverse development has occurred in any litigation, arbitration or governmental investigation or proceeding which renders such litigation, arbitration or governmental investigation or proceeding likely to succeed and, which, if successful could reasonably be expected to result in a Material Adverse Change.
(f) No Default or Event of Default has occurred and is continuing or would result from this Amendment or the transactions contemplated hereby.
(g) Since the Closing Date, no event has occurred which has had, or could reasonable be expected to have, a material adverse effect on the property, assets, nature of assets, business, operations, liabilities, condition (financial or otherwise) or prospects of the Borrower or the Project or (b) has resulted, or could reasonable be expected to result, in a Material Adverse Change.
6.Reaffirmations and Acknowledgments. Each of the Parent Guarantor and the Borrower hereby acknowledges that, as of the date hereof, the security interests and Liens granted to the Agent and the Secured Parties under the Credit Agreement and the other Loan Documents are in full force and effect, are properly perfected and are enforceable in accordance with the terms of the Credit Agreement and the other
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Loan Documents, except as enforceability may be limited by bankruptcy, insolvency or similar laws affecting the enforcement of creditors’ rights generally and by general principles of equity.
7.Reaffirmation and Agreement Regarding Agreement to Contribute Capital. The Sponsor hereby acknowledges and agrees that neither the First DSCR Preferred Equity Issuance nor any Other DSCR Preferred Equity Issuance made by the Sponsor shall be deemed to have satisfied the obligation of the Sponsor to make any Financial Covenant Default Contribution under the Agreement to Contribute Capital.
8.Effect of Amendment. Except as expressly set forth herein, all terms of the Credit Agreement and the other Loan Documents shall be and remain in full force and effect and shall constitute the legal, valid, binding and enforceable obligations of the Borrower and the Parent Guarantor to the Lenders, the Agent and the other Secured Parties, except as enforceability may be limited by bankruptcy, insolvency or similar laws affecting the enforcement of creditors’ rights generally and by general principles of equity. The execution, delivery and effectiveness of this Amendment shall not, except as expressly provided herein, operate as a waiver of any right, power or remedy of the Lenders or the Agent under the Credit Agreement, nor constitute a waiver of any provision of the Credit Agreement or any Loan Document. This Amendment shall constitute a Loan Document for all purposes of the Credit Agreement.
9.Governing Law. THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
10.No Novation. This Amendment is not intended by the parties to be, and shall not be construed to be, a novation of the Credit Agreement or an accord and satisfaction in regard thereto.
11.Costs and Expenses. The Borrower agrees to pay all costs and expenses of the Agent in connection with this Amendment in accordance with Section 9.3 of the Credit Agreement, including without limitation, the reasonable costs and attorneys’ fees of King & Spalding LLP, counsel to the Agent.
12.Counterparts. This Amendment may be executed in counterparts (and by different parties hereto in different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract. This Amendment constitutes the entire contract among the parties relating to the subject matter hereof and supersedes any and all previous agreements and understandings, oral or written, relating to the subject matter hereof. This Amendment shall become effective when it shall have been executed by the Agent and when the Agent shall have received counterparts hereof that, when taken together, bear the signatures of each of the other parties hereto. Delivery of an executed counterpart of a signature page of this Amendment by facsimile, pdf or other electronic means shall be effective as delivery of a manually executed counterpart of this Amendment.
13.Binding Nature. This Amendment shall be binding upon and inure to the benefit of the parties hereto, their respective successors, successors-in-titles, and assigns.
[signature pages follow]
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed as of the date first above written.
ING CAPITAL LLC,
as the Agent and a Lender
By: /s/ Xxxxxx X. Xxxxxxxxx
Xxxxxx X. Xxxxxxxxx. |
Managing Director
PICO NORTHSTAR XXXXXXX, LLC,
as the Borrower
By: /s/ Xxxx X. Xxxxxx
Xxxx X. Xxxxxx
President and Chief Operating Officer
PICO NORTHSTAR, LLC,
as the Parent Guarantor
By: /s/ Xxxx X. Xxxxxx
Xxxx X. Xxxxxx
President and Chief Operating Officer
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The undersigned hereby consents to the foregoing Seventh Amendment to Credit Agreement and hereby agrees to the provisions of Section 7.
PICO HOLDINGS, INC.,
as the Sponsor
By: Xxxx X. Xxxx
Xxxx X. Xxxx
Chief Executive Officer
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AGCOUNTRY FARM CREDIT SERVICES, FLCA,
as a Lender
By: Xxxxx X. Xxxxxxxxx
Name: Xxxxx X. Xxxxxxxxx
Title: Vice President
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AGFIRST FARM CREDIT BANK,
as a Lender
By: /s/ Xxxxxx X. X'Xxxx
Name: Xxxxxx X. X'Xxxx
Title: Vice President
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FARM CREDIT SERVICES OF AMERICA, PCA,
as a Lender
By: /s/ Xxxx X. Xxxxx
Name: Xxxx X. Xxxxx
Title: Vice President
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FARM CREDIT WEST, FLCA,
as a Lender
By: /s/ Ben Xxxxxxx
Name: Ben Xxxxxxx
Title: Vice President
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MACQUARIE BANK LIMITED,
as a Lender
By: /s/ Xxxxxxx Xxxxxxxxx
Name: Xxxxxxx Xxxxxxxxx
Title: Division Director
/s/ Xxxx Xxxxxx
Xxxx Xxxxxx
Associate Director
(Signed in London, POA Ref: #938 dated 22nd November 2012)
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KODABANK,
as a Lender
By: /s/ Xxx Xxxxxxxx
Name: Xxx Xxxxxxxx
Title: Sr. Loan Officer
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AGSTAR FINANCIAL SERVICES, FLCA,
as a Lender
By: /s/ Xxxx Mosaert
Name: Xxxx Mosaert
Title: Vice President Capital Markets
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