EXHIBIT 4.4
SENIOR BORROWING BASE REVOLVING LINE OF CREDIT AGREEMENT
Dated as of November 10, 2000
THE GENESEE COMPANY, a Colorado corporation, and KEYBANK NATIONAL
ASSOCIATION, a national banking association, as Agent and Lead Arranger for the
Banks that are parties to this Agreement for good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, hereby agree as
follows:
1. Definitions. For purposes of this Agreement, except as otherwise
expressly provided or unless the context otherwise requires: the terms defined
in this Section have the meanings assigned to them in this Section, and include
the plural as well as the singular; all accounting terms not otherwise defined
herein have the meanings assigned to them in accordance with GAAP; all terms not
otherwise defined herein have the meanings assigned to them in the UCC; and if a
term has a meaning assigned to it in accordance with GAAP and in the UCC, the
UCC definition shall apply.
a. "Accrual Date" shall have the meaning set forth in SECTION
6(B) below.
b. "Advance" shall mean an advance to Borrower by Lender under
the Revolving Line of Credit at the Interest Rate as provided herein.
c. "Advance Rate" shall mean the Advance Rates established
below, by property type, based upon the following Gross Margins (as
defined herein) established by the lesser of: (i) Borrower's immediately
preceding quarterly consolidated financial statements; or (ii)
Borrower's consolidated financial statements for the trailing twelve
(12) months:
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ADVANCE RATES
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PROPERTY TYPE GROSS MARGIN 17% GROSS MARGIN LESS GROSS MARGIN LESS THAN
AND HIGHER THAN 17% BUT 13% OR 13% BUT 10% OR GREATER
GREATER
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Pre-Sold 95% 90% 85%
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Specs 90% 85% 80%
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Models 90% 85% 80%
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Finished Lots 75% 70% 65%
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Advance Rates are also subject to compliance with all financial covenants
contained in Section 14 of this Agreement.
d. "Affiliate" shall mean any Person controlling, controlled by,
or under common control with another Person, including without
limitation, any Subsidiary of such Person. For purposes of this
definition, "control", when used with respect to any specified Person,
shall
mean the power to direct the management and policies of such Person,
directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise.
e. "Agent" shall mean and refer to KeyBank National Association
in its capacity as agent and "Lead Arranger" and any successor Agent
appointed hereunder.
f. "Agreement" shall mean this Borrowing Base Revolving Line of
Credit Agreement, and all amendments, modifications, replacements, and
substitutions thereto.
g. "Anniversary Date" shall have the meaning set forth in
SECTION 2 below.
h. "Annual Review" shall have the meaning set forth in SECTION 2
below.
i. "Applicable Law" shall mean all applicable provisions of all
constitutions, statutes, rules, regulations, and orders of any
governmental authorities; all orders, decisions, and decrees of any
judicial authorities; and all authorizations, consents, permits,
approvals, and licenses issued by any governmental or quasi-governmental
authority.
j. "Approved Filing" shall mean a residential subdivision Filing
located in Arizona or Colorado, and owned or optioned in whole or in
part by Borrower, in which Borrower intends to actively and continuously
conduct the construction and marketing of single family residential
properties for sale to individual purchasers and which has been approved
by Lenders in their sole discretion (which shall not be unreasonably
withheld) for purposes of including Pre-Sold Units, Spec Units, Model
Units and Finished Lots in the Borrowing Base.
k. "Architect" shall mean any Person that acts as the architect
for the construction of the Improvements.
l. "Assignment of Plans and Specifications" shall mean the
Assignment of Plans and Specifications, Architect's and Engineer's
Agreements, and Construction Contracts executed by Borrower as security
for the Revolving Line of Credit, as evidenced by the Promissory Note.
m. "Banking Day" shall mean a day other than a Saturday or
Sunday on which banks are generally open for business in Denver,
Colorado.
n. "Banks" shall mean and refer to a syndicate of banks
acceptable to Borrower and Agent, including Agent, who are parties to
and who shall fund this Facility.
o. "Borrower" shall mean THE GENESEE COMPANY, a Colorado
corporation.
p. "Borrowing Base" shall mean Borrower's ability to obtain
Advances under the Loan Documents during the Term of the Facility
(availability) subject to the limitations of Section 10(b), (c) and (d)
hereof based upon the lesser of:
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i. the Maximum Facility Amount, minus all outstanding
Advances to Borrower; or
ii. the sum of the aggregate of Borrower's unit costs for
the Eligible Pre- sold, Spec and Model Units multiplied
by the applicable Advance Rate for each property type;
plus the aggregate of Borrower's Lot Costs for Eligible
Finished Lots multiplied by the applicable Advance Rate
for Finished Lots.
q. "Borrowing Base Certificate" shall mean the certificate in
the form of EXHIBIT A attached hereto and incorporated herein by this
reference.
r. "Borrowing Base Collateral" shall mean, individually or
collectively, those parcels of real property owned by Borrower and
pledged to Lender hereunder as of the Closing Date of the Facility
(including, without limitation, any Improvements thereon and personal
property associated therewith) described on EXHIBIT B, plus additional
parcels of real property owned by Borrower and mortgaged to Lender after
the date hereof, provided all of such real property consists of Finished
Lots or Units (a) located within an Approved Filing, (b) against which
Lender has a perfected first mortgage lien, and (c) for which all the
requirements set forth in this Agreement for becoming Borrowing Base
Collateral have been satisfied and which have not under the terms of
this Agreement ceased to be Borrowing Base Collateral. In the event any
Finished Lot or Unit or Approved Filing becomes the subject of any
action by any governmental authority which adversely affects the timely
substantial completion of the construction of Improvements, or use or
occupation of such Improvements, or prevents the intended use of such
Improvements, such Finished Lot, Unit or Approved Filing shall not
qualify as Borrowing Base Collateral.
s. "Builder" shall mean any Person that acts as a general
contractor for the construction of the Improvements.
t. "Capitalized Lease Obligation" shall mean the amount of the
obligations under a lease that are required to be capitalized for
financial reporting purposes in accordance with GAAP.
u. "Carve-Out Loans" shall mean and refer to individual
Carve-Out Loans in the form of revolving lines of credit limited to
Thirteen Million and no/100 Dollars ($13,000,000.00) in the aggregate
made to Subsidiary Borrowers under the Revolving Line of Credit as
provided in Section 4 hereof.
v. "Change" shall mean any change after the date hereof in the
Risk-Based Capital Guidelines or any adoption of or change in any other
law or governmental or quasi-governmental rule, regulation, policy,
guideline, interpretation, or directive (whether or not having the force
of law) after the date hereof which affects the amount of capital
required or expected to be maintained by Lender or any corporation
controlling Lender.
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w. "Closing Date" shall mean the date of this Agreement.
x. "Collateral" shall mean the Property and all assets of
Borrower, including, by way of example and not limitation, the following
types or items of property which are used by Borrower or associated with
the Property, whether now owned or hereafter acquired and wheresoever
located, all products and proceeds thereof, all accessions and
attachments thereto, and all other collateral of any type that may now
or hereafter be provided to Lender to secure the Obligations or any part
thereof:
i. The Property.
ii. All easements and rights-of-way and rights to the
same belonging or in any way appertaining to the Property.
iii. All minerals and mineral rights, including oil,
gas, gravel, and other minerals, lying in, on, or under the
surface of the Property.0000000
iv. All water and water rights and all ditches and ditch
rights related or appurtenant to the Property and all water and
sewer taps belonging to or in any way related to or appurtenant
to the Property.
v. All strips and gores of land lying between the
Property and streets, roads, highways, or alleys, open or
proposed.
vi. All estates, rights, titles, interests, privileges,
tenements, hereditaments, and appurtenances of any nature
whatsoever, in any way belonging, relating, or pertaining to the
Property.
vii. The reversion or reversions, remainder and
remainders, rents, issues, and profits in any way belonging,
relating, or pertaining to the Property.
viii. All improvements presently located or subsequently
constructed on the Property.
ix. All machinery, apparatus, fixtures, and other
property of every kind and nature now or hereafter located upon
the Property and usable in connection with the present or future
operation of the Property. Borrower shall have the right to
replace any fixtures or other personal property with comparable
fixtures or equipment, provided that the Deed of Trust shall
extend to and represent a lien against all such replacement
items.
x. All deposits, funds, accounts, utility supply
contracts, contract rights, instruments, documents, marketing
and sales brochures, general intangibles (including trademarks,
trade names, and symbols used in connection therewith), and
notes or chattel paper arising from or by virtue of any
transaction related to the Property or the
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use thereof and the right to receive and apply the deposits,
funds, accounts, notes, chattel paper, contract rights,
instruments, documents, and general intangibles to the payment
of the Revolving Line of Credit.
xi. All permits, licenses, franchises, certificates, and
other rights and privileges obtained in connection with the
Property or the use thereof.
xii. All contracts for the sale of all or any portion of
the Property, the proceeds therefrom, and all xxxxxxx money
deposits pertaining thereto, and all proceeds arising from or by
virtue of the rental or other disposition of all or any of the
Property and the right to receive and apply all of said proceeds
to the payment of the Revolving Line of Credit.
xiii. All awards or payments, including interest
thereon, and the right to receive and apply the same to the
payment of the Revolving Line of Credit, which may be made with
respect to the Property, whether from the exercise of the right
of eminent domain (including any transfer made in lieu of the
exercise of said right) or for any other injury to or decrease
in the value of the Property.
xiv. All leases, sales contracts, and other agreements
affecting the sale, use, or occupancy of the Property now or
hereafter entered into, and the right to receive and apply the
rents, issues, and profits of the Property to the payment of the
Revolving Line of Credit.
xv. Any insurance policies required to be maintained
hereunder and all proceeds of and any unearned premiums on any
insurance policies required to be maintained hereunder or
otherwise covering the Property, including, without limitation,
the right to receive and apply the proceeds of any insurance,
judgments, or settlements made in lieu thereof for damage to the
Property to the payment of the Revolving Line of Credit.
xvi. The right, in the name and on behalf of Borrower
(but without prejudice to the right of Borrower to same), to
appear in and defend any action or proceeding brought with
respect to the Property and to commence any action or proceeding
to protect the interest of Lender in the Property.
xvii. All rents, issues, and profits in any way
belonging, relating, or pertaining to the Property.
xviii. All plans, specifications, and drawings for the
construction of improvements on the Property, whether presently
existing or subsequently prepared.
xix. All other interests of every kind and character
which Borrower now has or at any time thereafter acquires in and
to the real and personal property described herein and all
property which is used or useful in connection therewith,
including, but
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not limited to, rights of ingress or egress and all reversionary
rights or interests of Borrower therein.
xx. All agreements between Borrower and any Builder or
between Borrower and any other person or entity approved by
Lender for work to be performed or materials to be delivered in
connection with the construction of the Improvements.
xxi. All contracts and agreements between Borrower and
any Architect for the design of any Improvements on the
Property.
xxii. All other agreements and contracts including but
not limited to land option deposits between Borrower and other
persons and entities pertaining to the Property.
y. "Cost of Goods Sold" shall mean and refer to land and land
development costs, direct and certain indirect construction costs,
capitalized interest during the period of development through the
completion of construction, real estate taxes and related improvements.
Direct construction costs include permits, labor, subcontractors,
material costs, other unit-specific construction costs, and interim
financing costs excluding commissions. Indirect construction costs
include: jobsite and non-unit specific construction costs, including job
supervision, estimating, purchasing and design personnel, warranty
costs, construction vehicles, tools and any other indirect costs.
z. "Debt" shall mean with respect to a Person, without
duplication: (i) all items which constitute liabilities on the liability
side of a balance sheet of such Person as of the applicable date of
determination, including, without limitation, Capitalized Lease
Obligations; and (ii) all obligations of other Persons which such Person
has guaranteed.
aa. "Debt to Tangible Net Worth Ratio" shall mean the ratio
determined by comparing Borrower's Debt to Borrower's Tangible Net Worth
on the applicable date of determination.
bb. "Deeds of Trust" shall mean the Deeds of Trust to be
executed by Borrower as security for the Revolving Line of Credit, as
evidenced by the Promissory Notes. The Deeds of Trust shall be and at
all times during the term of the Revolving Line of Credit remain a first
priority lien against the Collateral encumbered thereby subject only to
the Permitted Encumbrances.
cc. "Default" shall mean an event that, with giving of notice,
passage of time, or both, would constitute an Event of Default.
dd. "Default Rate" shall mean at any time the lesser of (i)
three percent (3.0%) over the highest non-default Interest Rate, which
Default Rate shall change when and as the Interest Rate changes or (ii)
the highest non-usurious interest rate permitted by applicable law.
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ee. "Dollars" or the sign "$" shall mean lawful money of the
United States of America.
ff. "Eligible Finished Lots" shall mean all Finished Lots of
Borrower except the following:
i. Finished Lots held in Borrower's inventory for
more than eighteen (18) months.
ii. Finished Lots that are not located in an
Approved Filing.
iii. Finished Lots that are not subject to a first
priority lien and security interest in favor of
Lender subject only to the Permitted
Encumbrances.
gg. "Eligible Model Units" shall mean all Model Units of
Borrower except the following:
i. Model Units held in Borrower's inventory for
more than twenty-four (24) months.
ii. Model Units that are not located in an Approved
Filing.
iii. Model Units that are not subject to a first
priority lien and security interest in favor of
Lender subject only to the Permitted
Encumbrances.
hh. "Eligible Pre-Sold Units" shall mean all Pre-Sold Units of
Borrower except the following:
i. Pre-Sold Units held in Borrower's inventory for
more than twelve (12) months.
ii. Pre-Sold Units that are not located in an
Approved Filing.
iii. Pre-Sold Units that are not subject to a first
priority lien and security interest in favor of
Lender subject only to the Permitted
Encumbrances.
ii. "Eligible Spec Units" shall mean all Spec Units of Borrower
except the following:
i. Spec Units held in Borrower's inventory for more
than eighteen (18) months.
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ii. Spec Units that are not located in an Approved
Filing.
iii. Spec Units that are not subject to a first
priority lien and security interest in favor of
Lender subject only to the Permitted
Encumbrances.
jj. "Engineer" shall mean any Person approved by Lender that
acts as an engineer for Borrower.
kk. "Equity Investment" shall mean the amount of capital
investment by Fortress in Borrower from time to time, as shown on
Borrower's books and records and in the financial statements delivered
to Lender.
ll. "ERISA" shall mean the Employee Retirement Income Security
Act of 1974, and all amendments, modifications, replacements, and
substitutions thereto.
mm. "ERISA Affiliate" shall mean Borrower and each person under
common control with Borrower or otherwise treated as a single employer
under IRC Section 414.
nn. "Event of Default" has the meaning specified in SECTION 16
below.
oo. "Facility" shall mean and refer to the Revolving Line of
Credit provided to Borrower by Lenders pursuant to this Agreement and
the Loan Documents.
pp. "Filing" shall mean any lot or lots platted together under a
single filing number, which plat has received final subdivision approval
under the Applicable Laws of the governing jurisdiction as evidenced by
recordation of the final approved plat for the subdivision filing with
all applicable governmental authorities.
qq. "Final Term" shall have the meaning set forth in SECTION 2
below.
rr. "Finished Lot" shall mean a platted and developed lot
located within a Filing, upon which development of infrastructure has
been completed which infrastructure shall include but not be limited to
(i) paved road access, (ii) water, sewer, and other utility services
(except telephone service which shall be available upon substantial
completion of the Unit) available at the lot line, (iii) curbs and
gutters, and (iv) sidewalks if required in connection with site
development. Once a Finished Lot becomes a Unit, such Finished Lot shall
no longer be considered a Finished Lot for the purposes of this
Agreement.
ss. "Fortress" shall mean THE FORTRESS GROUP, INC., a Delaware
corporation, its successors and assigns.
tt. "GAAP" shall mean generally accepted accounting principles
in effect in the United States of America, applied on a consistent
basis.
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uu. "Genesee" shall mean THE GENESEE COMPANY, a Colorado
corporation (Tax Identification Number 000000000), its permitted
successors and assigns.
vv. "Gross Margin" shall mean and refer to Borrower's
consolidated Gross Profit divided by Borrower's consolidated Total
Revenue.
ww. "Gross Profit" shall mean and refer to Borrower's
consolidated Total Revenue less Cost of Goods Sold.
xx. "Improvements" shall mean the improvements constructed or to
be constructed on the Property.
yy. "Indemnified Liabilities" shall have the meaning set forth
in SECTION 19 below.
zz. "Indemnitees" shall have the meaning set forth in SECTION 19
below.
aaa. "Insurer" shall mean Land Title Guarantee Company as to the
Colorado property, and Fidelity National Title Insurance Company as to
the Arizona property.
bbb. "Interest Rate" shall mean the KeyBank Prime Rate as it is
defined herein.
ccc. "Inventory Auditor" shall mean RE-TECH, Inc.
ddd. "IRC" shall mean the United States Internal Revenue Code of
1986, and all amendments, modifications, replacements, and substitutions
thereto.
eee. "KeyBank Prime Rate" shall mean the higher of the rate of
interest determined and publicly announced by Agent from time to time at
its principal office as its "prime rate" or the federal funds effective
rate, plus one-half of one percent (.50%). The Prime Rate is not
necessarily the lowest rate charged by Agent on its loans; may or may
not be the best or most favorable interest rate charged by Agent for
commercial or other loans; and is set by Agent in its sole discretion.
If Agent shall cease to determine and announce a Prime Rate during the
term hereof, Agent may designate a substitute prime rate announced or
quoted by another bank of its choosing after notifying Borrower. Agent
will advise Borrower of the current Prime Rate upon Borrower's request.
fff. "Key Capital" shall mean KEY CAPITAL MARKETS, INC., its
successors and assigns.
ggg. "Lenders" shall mean KEYBANK NATIONAL ASSOCIATION, a
national banking association, and the Banks.
hhh. "Loan Documents" shall mean the Commitment, this Agreement,
the Revolving Notes, any other promissory notes, deeds of trust,
mortgages, pledge or security agreements, guaranties, and other loan
documents related to or given in connection with the transactions
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contemplated herein, and all amendments, modifications, replacements,
and substitutions thereto.
iii. "Loan Fees and Costs" shall mean all loan fees to be paid
by Borrower to Lenders pursuant to the terms of the Commitment and this
Agreement, together with all reasonable and necessary costs and expenses
paid to third parties by Lenders in connection with the Revolving Line
of Credit, which shall be reimbursed to Lender by Borrower, including,
by example and not limitation, surveys of the Property and title
insurance policies insuring title to the Property; inspection fees; and
all attorney's fees incurred by Lender arising out of, as a result of,
or in connection with the Revolving Line of Credit.
jjj. "Lot Cost" shall mean the Dollars actually expended by
Borrower for the hard costs necessary to acquire a Finished Lot. The
Dollars expended by Borrower for sales commissions shall not be included
in the determination of the Lot Cost for any Lot.
kkk. "Maintenance Agreement" shall mean and refer to the
Maintenance and Subordination Agreement between The Fortress Group, Inc.
and Agent pertaining to maintenance of Borrower's net worth, prohibition
on Loans to Borrower and other matters as reflected therein.
lll. "Master Budgets" shall mean the master budgets for each
Filing and each Finished Lot and Unit therein prepared by Borrower and
acceptable to Lenders in their sole discretion, and all amendments,
modifications, replacements, and substitutions thereto.
mmm. "Maturity Date" shall mean February 1, 2002.
nnn. "Maximum Facility Amount" shall mean Fifty Million and
No/100 Dollars ($50,000,000.00).
ooo. "Model Unit" shall mean a Unit that (a) is not subject to a
Sale Contract, (b) has been or is being constructed as a model for
display to and inspection by potential purchasers of other Units in the
Filing, and (c) incorporates typical construction and features of the
other Units.
ppp. "Net Worth" shall mean Borrower's net worth as determined
in accordance with GAAP. Notwithstanding the foregoing, the term "Net
Worth" shall include, without duplication, the Restricted Equity
Investment to the extent the Restricted Equity Investment has been
subordinated to the Revolving Line of Credit and shall not include any
notes or accounts receivable owing to Borrower from Fortress, any
shareholder, officer, director, Affiliate, or Subsidiary of Borrower,
Fortress, or any other Person related to Borrower or Fortress. Loans to
Fortress from Borrower shall be debited against Borrower's Net Worth.
qqq. "Obligations" shall mean each and every debt, liability,
and obligation of every type and description which Borrower may now or
at any time hereafter owe to Lenders,
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whether such debt, liability, or obligation now exists or is hereafter
created or incurred, whether it arises in a transaction involving
Lenders alone or in a transaction involving other creditors of Borrower,
and whether it is direct or indirect, due or to become due, absolute or
contingent, primary or secondary, liquidated or unliquidated, or sole,
joint, several, or joint and several, and including, but not limited to,
all indebtedness of Borrower arising under this Agreement, the Revolving
Note, or any other loan or credit agreement or guaranty between Borrower
and Lenders, whether now in effect or hereafter executed.
rrr. "Outstanding Principal Balance" shall mean the aggregate
principal amount outstanding under the Revolving Line of Credit.
sss. "PBCG" shall mean the Pension Benefit Guaranty Corporation,
and any successor thereof.
ttt. "Permitted Encumbrances" shall mean the liens, security
interests, and encumbrances against the Collateral that have been
disclosed on the Commitment for title insurance to the Collateral, or
otherwise agreed to in writing by Lender.
uuu. "Person" shall mean any individual, corporation,
partnership, joint venture, limited liability company, limited liability
partnership, association, joint-stock company, trust, unincorporated
organization, or governmental or quasi-governmental authority or any
agency or political subdivision thereof.
vvv. "Plan" shall mean an employee benefit plan or other plan
maintained for employees of Borrower or any ERISA Affiliate and covered
by Title IV of ERISA.
www. "Plans and Specifications" shall mean the plans and
specifications for construction of the Improvements.
xxx. "Pre-Sold Unit" shall mean a Unit that is subject to a Sale
Contract and does not constitute a Spec Unit.
yyy. "Property" shall mean the real property owned by Borrower
located in Arizona and Colorado, more particularly described on EXHIBIT
B attached hereto and incorporated herein by this reference and all
other real property of Borrower, whether now owned or hereafter
acquired, that is pledged to Lender as collateral for the Revolving Line
of Credit, including, without limitation real property acquired by
Borrower using Advances.
zzz. "Regulation D" shall mean Regulation D of the Board of
Governors of the Federal Reserve System, all amendments, modifications,
replacements, and substitutions thereto or other regulation or official
interpretation of said Board of Governors relating to reserve
requirements applicable to member banks of the Federal Reserve System.
aaaa. "Regulatory Change" shall mean (i) the enactment after the
date hereof of any new Applicable Law, (ii) the enactment or other
effectuation of any change in any existing
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Applicable Law, (iii) the adoption after such date of any new, or the
adoption or other effectuation of any change in any existing,
interpretation, directive, or request (whether or not having the force
of law), or (iv) any change in the administration or enforcement of any
Applicable Law, provided however, a general increase in the tax rate
applicable to taxable income earned by Lender shall not constitute a
Regulatory Change.
bbbb. "Reportable Event" shall have the meaning assigned to that
term in Title IV of ERISA.
cccc. "Restricted Equity Investment" shall mean the amount of
Equity Investment which is necessary, when added to Borrower's Tangible
Net Worth, to avoid a breach of Borrower's Debt to Tangible Net Worth
Ratio or Net Worth requirements set forth in this Agreement.
dddd. "Revolving Line of Credit" shall mean the revolving line
of credit in the maximum aggregate principal amount of the Maximum Loan
Amount being made available to Borrower by Lenders pursuant to the
Commitment and this Agreement.
eeee. "Revolving Notes" shall mean the master Revolving
Promissory Notes to Lenders evidencing their respective interests in
this Facility in the aggregate principal amount of Fifty Million and
no/100 Dollars ($50,000,000.00) in the form of EXHIBIT C attached hereto
and incorporated herein by this reference, and all amendments,
modifications, replacements, and substitutions thereto.
ffff. "Risk-Based Capital Guidelines" shall mean the risk-based
capital guidelines in effect in the United States on the date hereof,
including transition rules, and the corresponding capital regulations
promulgated by regulatory authorities outside the United States of
America, including transition rules, in effect on the date hereof.
gggg. "Sale Contract" shall mean a binding, written, bona fide
contract for the construction and sale of a completed Unit that (i) has
been fully executed by Borrower and an unaffiliated purchaser on terms
conforming to Borrower's ordinary practices in the sale of such Units,
(ii) provides for an xxxxxxx money deposit, (iii) provides for a closing
within twelve (12) months from the date of the contract, and (iv)
contains no contingencies or cancellation rights in favor of the
purchaser other than for (a) Borrower's default, (b) the purchaser's
inability to obtain financing as provided in the Sale Contract (provided
that purchaser has obtained and delivered to Borrower a
pre-qualification letter for a permanent loan issued by a recognized
lender and Borrower has delivered same to Lender immediately after the
date of execution of such Sale Contract), (c) material title defects not
acceptable to the purchaser, and (d) the sale of the purchaser's current
residence.
hhhh. "Security Agreements" shall mean the Security Agreements
executed by Borrower as security for the Revolving Line of Credit, as
evidenced by the Revolving Notes. The Security Agreements shall be and
at all times during the term of the Revolving Line of
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Credit remain a first priority lien against the Collateral encumbered
thereby subject only to the Permitted Encumbrances.
iiii. "Security Instruments" shall mean the Deeds of Trust; the
Security Agreements; the Assignment of Plans and Specifications; and
such other documents as may be reasonably required by Lender to fully
encumber the Collateral with a first priority lien and security interest
and secure the Revolving Line of Credit.
jjjj. "Senior Indenture" shall mean the Indenture dated as of
May 21, 1996 and as modified as of May 27, 1997 between Fortress and IBJ
Xxxxxxxx Bank & Trust Company, a banking organization under the law of
New York, as trustee.
kkkk. "Spec Unit" shall mean either (i) a Unit that is not
subject to a Sale Contract, (ii) a Unit that is subject to a Sale
Contract that has been rejected by Lender, or (iii) a Unit that has been
the subject of two (2) prior Sale Contracts which have been accepted by
Lender but which have not closed and fully funded in accordance with
their terms.
llll. "Subcontractor" shall mean any person performing services
and providing material in connection with the Improvements other than
Borrower or any Builder.
mmmm. "Subsidiary" shall mean any corporation, partnership,
limited liability company or partnership, or other entity of which more
than fifty percent (50%) of the outstanding ownership interests are
directly or indirectly owned by a Person, by a Person and one or more
entities of which more than fifty percent (50%) of the outstanding
ownership interests are directly or indirectly owned by that Person, or
by one or more corporations, partnerships, limited liability companies
or partnerships, or other entities of which more than fifty percent
(50%) of the outstanding ownership interests are directly or indirectly
owned by a Person.
nnnn. "Subsidiary Borrowers" shall mean and refer to Genesee
Communities II, IV, V, VI, VII and VIII each of which is a Colorado
corporation and an affiliate of Borrower.
oooo. "Tangible Net Worth" shall mean Borrower's Net Worth minus
the aggregate book value of all intangible assets included in
determining Borrower's Net Worth.
pppp. "Tax" shall mean any federal, state, or foreign tax,
assessment, or other governmental charge or levy (including any
withholding tax) upon assets, revenues, income, or profits (other than
income and franchise taxes) imposed upon Lenders by the jurisdictions
(or any political subdivision thereof) in which Lenders are located.
qqqq. "Term" shall mean November 1, 2001.
rrrr. "Total Revenue" shall mean and refer to all of Borrower's
consolidated revenue from all of its operations including but not
limited to home and lot sales.
13
ssss. "UCC" shall mean the Colorado Uniform Commercial Code or
the Arizona UCC with respect to Arizona Collateral as in effect from
time to time.
tttt. "Unit" shall mean a Finished Lot (including, without
limitation, the improvements thereon and personal property associated
therewith) or a Pre-Sold Unit, Spec Unit, or Model Unit that has been or
is being constructed, provided that the building permit and taps for
utility services have been obtained and the fees therefor and other
governmental or quasi- governmental fees which are required to be paid
at the time of and as a condition to issuance of the building permit
have been paid.
uuuu. "Unit Costs" shall mean those reasonable and necessary
Dollars actually expended by Borrower for hard costs and approved by
Lenders in connection with the construction of a Unit, including the
costs of governmental permits and utility taps specifically associated
with the Unit or with obtaining a building permit therefor, excluding,
however, all of the following:
i. general and administrative expenses of Borrower;
ii. marketing costs and sales commissions incurred to
generate sales;
iii. fees and other expenses pertaining to permanent
financing (or commitments therefor) for purchasers of Units;
iv. amounts paid to Affiliates for goods, services, real
estate, or other items in excess of the amounts which
independent third parties would charge for comparable goods,
services, real estate, or other items;
v. profit on transfers of real property, Finished Lots,
and Units by and among Borrower and any shareholders,
Affiliates, or Subsidiaries of Borrower or Fortress;
vi. the costs of interior decorating, wallpaper, window
coverings, furniture provided for a Unit, sidewalks installed in
connection with a Model Unit not otherwise required by
governmental regulation, or any other Model Unit upgrades from
base product unit;
vii. landscaping, fencing, sprinkler systems not
otherwise included in the purchase price of the Unit;
viii. any other costs of Borrower not directly
associated with the construction of the Unit; and
2. Term of Revolving Line of Credit. The Term of the Revolving Line of
Credit shall be for a period of twelve (12) months to and including November 1,
2001. Not later than Ninety (90) days prior to the anniversary of the Closing
Date ("Anniversary Date") Borrower shall deliver to
14
Lenders a written request to consider the extension of the Term of this Facility
for an additional Twelve (12) months. On or before November 1, 2001, Lenders
shall determine, by unanimous approval, in their sole discretion, whether or not
they will consider extending this Facility for an additional Twelve (12) months.
If Lenders unanimously decide, in their sole discretion, to consider extension
of this Facility, Lenders shall thereafter offer to Borrower the terms and
conditions and the Interest Rate upon which any such extension shall be made.
Borrower shall have to and including December 14, 2001, within which to
unconditionally accept, in writing, Lenders' commitment letter containing all of
the terms and conditions, and the Interest Rate upon which such extension may be
made. In the event Lenders' commitment letter is accepted by Borrower, as
provided herein, Borrower shall have to and including February 1, 2002, within
which to execute and deliver to Lenders all Loan Documents required by Lenders
to extend this Facility for an additional Twelve (12) months.
If Lenders, in their sole discretion, decide not to extend the Facility,
following Borrower's timely written request therefore, the Facility shall
possess an additional term of Three (3) months from November 1, 2001 to February
1, 2002. The final Three (3) month period shall be referred to as the "Final
Term." The last day of the Final Term shall be referred to herein as the
Maturity Date.
During the Final Term, Borrower shall have full availability under the
Facility. All outstanding amounts under the Facility, including the Carve-Out
Loans, shall be due and payable in full together with accrued interest thereon
at the Maturity Date.
3. Advances.
a. Maximum Amount. Provided that no Default or Event of Default
has occurred and is continuing under this Agreement or any other Loan
Document and that all fees provided in this Agreement have been paid by
Borrower, Lenders agree to provide Borrower with Advances from the date
hereof to the Maturity Date pursuant to the terms and conditions set
forth in EXHIBIT G of this Agreement. The aggregate outstanding amount
of all Advances shall not exceed the lesser of the Maximum Facility
Amount of Fifty Million and no/100 Dollars ($50,000,000.00); or the
Borrowing Base at any time. All Advances under the Revolving Line of
Credit shall accrue interest under the terms and conditions set forth in
this Agreement and such Advances together with any interest, fees,
expenses, and other amounts owing to Lenders in connection therewith
shall be secured by the Collateral. In the event the Outstanding
Principal Balance exceeds the Maximum Facility Amount, Borrower shall
pay Lenders, on demand, the amount of Advances in excess of the Maximum
Facility Amount together with interest thereon (from the date of the
disbursement thereof to Borrower until repayment to Lenders) at the
Default Rate. Notwithstanding anything to the contrary herein, the
Borrowing Base shall be reduced by the following: i. any Unit which is
materially damaged by fire, accident or other hazard; or ii. any Unit or
Units located in an Approved Filing which is subsequently disapproved by
Lenders due to material and negative adverse financial changes to any
special district in which such Approved Filing is located.
b. Minimum Weekly Advances. Borrower may request advances of not
less than One Hundred Thousand and No/100 Dollars ($100,000.00) for each
week during the Term of the Revolving Line of Credit, provided, however,
that in no instance shall Borrower request
15
any Advances that would cause the outstanding amount of the Revolving
Line of Credit to exceed the Maximum Facility Amount.
c. Requests for Advances. Each request for an Advance shall be
made in writing, specifying the date of the requested Advance and the
amount thereof. Advances may be requested by any agent authorized in
writing by Borrower. Any request for an Advance shall be deemed to be a
representation by Borrower that the terms and conditions for such
Advance that are described in this Agreement have been satisfied in a
complete manner.
d. Timing of Requests. Any request for an Advance shall be
provided to Lenders no later than 11:00 a.m. (Denver, Colorado time)
three Business Days prior to the date of disbursement.
e. Disbursement of Monies to Borrower. So long as no Default or
Event of Default has occurred and is continuing upon the date of
disbursement and all the conditions precedent described in this
Agreement have been satisfied in a complete manner, Lenders shall
provide Borrower with any requested Advance in accordance with EXHIBIT G
hereof by crediting such Advance to Borrower's demand deposit account
maintained with Agent.
4. Carve-Out Loans to Subsidiary Borrowers. Lenders shall make available
to the following Subsidiary Borrowers, each of whom is an affiliate of Borrower,
individual revolving lines of credit not to exceed Thirteen Million and no/100
Dollars ($13,000,000.00) in the aggregate for construction of attached
single-family residences by Subsidiary Borrowers in approved Filings within the
State of Colorado: Genesee Communities II, Genesee Communities IV, Genesee
Communities V, Genesee Communities VI, Genesee Communities VII, and Genesee
Communities VIII, all of which are Colorado corporations. Within the aggregate
Carve-Out Loan limit of $13,000,000.00, Lenders may make revolving lines of
credit available to such Subsidiary Borrowers as is requested by Borrower. The
Carve-Out Loans shall be evidenced by separate Promissory Notes and Loan
Agreements and shall be secured by such deeds of trust, security instruments and
such other Loan Documents related to the Property and the Subsidiary Borrower
which is the subject of each Carve-Out Loan as Lenders shall require. Advances
under the Carve-Out Loans to Subsidiary Borrowers shall reduce availability to
Borrower under the Borrowing Base established by this Agreement. As each of the
revolving Carve-Out Loans is repaid and not renewed by the Subsidiary Borrower,
availability under the Borrowing Base of this Facility shall be restored to
Borrower. The Collateral pledged for the Carve-Out Loans will be encumbered by
first priority liens not to exceed the Maximum Facility Amount as defined in the
Carve-Out Loan Agreements. Only the Subsidiary Borrower which executes the
Carve-Out Loan Documents in favor of Lenders shall be liable for the amounts
advanced under the specific Carve-Out Loan; provided, however, Borrower shall
guarantee all of the obligations and all indebtedness of Subsidiary Borrowers
under the Carve-Out Loans. In addition, each of the Carve-Out Loans shall be
cross-defaulted with this Loan.
5. Interest Rate. The principal of the Advances outstanding from time to
time during any month shall bear interest (computed on the basis of actual days
elapsed in a 360-day year) at the applicable Interest Rate; provided, however,
that from the first day of any month during which any Default or Event of
Default occurs or exists at any time, in Lenders' discretion and without waiving
16
any of its other rights and remedies, the principal of the Advances outstanding
from time to time shall bear interest at the Default Rate; and provided,
further, that in any event no rate change shall be put into effect which would
result in a rate greater than the highest rate permitted by Applicable Law.
6. Payments.
a. Interest. Borrower shall pay to Lenders interest on the
Outstanding Principal Balance on the first day of each month beginning
on December 1, 2000.
b. Default Interest and Late Charges. In the event that any
payment (except payment of principal and accrued and unpaid interest on
the Maturity Date) is not received by Lenders within fifteen (15) days
after the due date of such payment, Borrower shall pay to Lenders a late
charge in an amount equal to five percent (5%) of the amount of such
delinquent payment. In addition to the late charge referred to above, in
the event that any monthly payment of interest payable hereunder is not
made by the fifteenth (15th) day after the due date of such payment
("Accrual Date"), or the Outstanding Principal Balance and accrued and
unpaid interest thereon due on acceleration hereof or on the Maturity
Date are not paid when due, then such amounts shall bear interest from
the Accrual Date, Maturity Date or effective date of acceleration
hereof, as applicable, until paid at the Default Rate. Nothing set forth
in this section shall imply any obligation on the part of Lenders to
accept any payment not made when due, and acceptance by Lenders of any
such late payment together with any late charge and/or default interest
shall not be deemed to extend the due date of any other payment or waive
Lenders' rights to declare a default hereunder if any such other payment
is not made when due. Borrower acknowledges that it would be extremely
difficult and impracticable to determine Lenders' actual damages
resulting from any late payment and the aforementioned late charge and
default interest are reasonable estimates of those damages
c. Maturity Date. Borrower shall pay to Lenders all outstanding
amounts with respect to the Revolving Line of Credit (including without
limitation, any outstanding Advances and all accrued but unpaid
interest, fees, expenses, and charges with respect to the Revolving Line
of Credit) on the Maturity Date at which time Lenders' obligation to
provide Borrower with any additional Advances shall be terminated.
d. Prepayment Fees. Without limiting any other amounts required
to be paid by Borrower to Lenders pursuant to this Agreement, Borrower
shall be entitled to prepay any Advance or the Revolving Line of Credit
at any time; provided, however that (i) if Borrower makes any prepayment
that causes or is caused by a reduction in the Maximum Loan Amount,
Borrower shall pay to Lenders all accrued but unpaid interest, costs,
fees, and expenses pertaining to the amount prepaid along with the
prepayment.
e. Application of Payments. For so long as there does not exist
a Default or an Event of Default hereunder, all payments received by
Lenders under this Agreement, the Promissory Note, the Deed of Trust, or
any other Loan Document shall be applied as follows, regardless of any
designation of such payments as principal, interest, or other charges:
first, to the repayment of sums advanced or incurred by Lenders pursuant
to the terms of any of the
17
Loan Documents, including, without limitation, sums advanced for the
payment of taxes, assessments, insurance premiums, late charges, or
other charges against the Collateral (together with interest thereon
from the date of advance until the date repaid at the Default Rate),
then to the payment of the interest then due and payable, and then to
the payment of principal. From and after an Event of Default, all
payments received by Lenders hereunder or under any other Loan Document
shall be applied by Lenders to principal, interest, and/or other charges
due hereunder or under the other Loan Documents in such order as Lenders
shall determine in their sole subjective discretion including, without
limitation, the application of payments to the Obligations in the
inverse order of maturity.
f. Form of Payments. All payments with respect to the Revolving
Line of Credit and the other amounts to be paid to Lenders under this
Agreement and the other Loan Documents shall be made to Lenders in
Dollars and in immediately available funds. Following the occurrence and
during the continuance of an Event of Default, Borrower hereby
authorizes Lenders, in their discretion, to charge such amounts and any
other amounts owing by Borrower to Lenders against Borrower's depository
and other accounts (except for trust accounts) with Lenders and further
authorizes Lenders, in its discretion, to make an Advance under the
Revolving Line of Credit to the extent necessary to pay any amounts
owing under this Agreement and the other Loan Documents.
g. Place of Payment. All payments with respect to this Facility
shall be made in care of Agent at:
KeyBank National Association
0000 Xxxxxxxx, Xxxxx 000
Xxxxxx, XX 00000
Attn: Xxxx Xxxxxx, Vice President
h. Payment on Non-Banking Days. Whenever any payment to be made
hereunder shall be stated to be due on a day which is not a Banking Day,
such payment may be made on the next succeeding Banking Day, and such
extension of time shall in such case be included in the computation of
interest on the Advances or the fees hereunder, as the case may be.
i. Other Payments. In its sole discretion, Lenders may make
Advances to pay, either to itself or a third party, as applicable, any
of the following:
i. Loan Fees and Costs;
ii. Any amounts necessary to clear title to the Property
or to pay liens and encumbrances upon the Property prior to the
lien of the Security Instruments;
iii. Any other amounts Lenders may reasonably determine
are due and payable in connection with the terms and provisions
hereof or of the Loan Documents, or are due and payable to
preserve any Collateral for Lenders; and
18
iv. Interest on the Revolving Line of Credit.
j. Revolving Notes; Ledgers and Other Records. All Advances
shall be evidenced by and accounted for, cumulatively under the
Revolving Notes executed by Borrower in favor of Lenders in the amount
of their respective interests in this Facility. The principal amount of
all Advances outstanding shall be evidenced by the Revolving Notes or
any ledger or other record of Lenders. The ledgers and other records of
Lenders shall be conclusive and binding evidence of the amounts owing
and unpaid on the Revolving Notes absent manifest error.
7. Changes; Regulatory Changes.
a. Changes. If Lenders determine that the amount of capital
required or expected to be maintained by Lenders or any corporation
controlling Lenders is increased as a result of a Change, then, within
fifteen (15) days after demand by Lenders, Borrower shall pay Lenders
the amount necessary to compensate for any shortfall in the rate of
return on the portion of such increased capital which Lenders determine
is attributable to this Agreement or its obligation to make the
Revolving Line of Credit and charge interest at the LIBOR Rate.
b. Regulatory Changes. If any Regulatory Change:
i. shall subject Lenders to any Tax, duty, or other
charge determined by Lenders to be applicable to the Revolving
Line of Credit or any portion thereof, or shall change the basis
of taxation of payments to Lenders of the principal of or
interest on the Revolving Line of Credit or any portion thereof;
or
ii. shall impose, increase, modify, or deem applicable
any reserve, special deposit, assessment, or other requirement
or condition against the assets of or deposits with Lenders or
on account of the credit extended by Lenders;
and the result of the foregoing is (1) to reduce the amount of any sum
received or receivable by Lenders with respect to the Revolving Line of
Credit or any portion thereof or the return to be earned by Lenders on
the Revolving Line of Credit or any portion thereof, (2) to impose a
cost on Lenders that is attributable to maintaining the Revolving Line
of Credit or any portion thereof, or (3) to require Lenders to make any
payment on or calculated by reference to the gross amount of any amount
received by it hereunder or under the other Loan Documents, then, within
fifteen (15) days after demand by Lenders, Borrower shall pay to Lenders
such additional amount or amounts as Lenders reasonably determine will
compensate Lenders for such reduction, increased cost, or payment.
c. Notification. Lenders shall promptly notify Borrower of any
circumstance that would make the provisions of this Section applicable,
but the failure to give any such notice shall not affect Lenders' rights
hereunder. Such notice shall set forth the factual basis underlying the
circumstances giving rise to such notice.
19
d. Determinations. In making the determinations contemplated by
this Section, Lenders may make such estimates, assumptions, allocations,
and the like that Lenders determine to be appropriate, and Lenders'
selection thereof and the determinations made by Lenders on the basis
thereof, shall be final, binding, and conclusive upon Borrower, except,
in the case of such determinations, for manifest errors in computations
or transmission.
8. Borrower's Indemnity of Lenders. The requirements of this Loan
Agreement are for Lenders' sole protection and benefit, and Lenders do not
assume, nor may it be construed or inferred to assume, any obligation to
Borrower to supervise any disbursement process for Borrower's protection and
benefit. Lenders' only responsibility in this regard is to make Advances in
accordance with this Agreement. Lenders may, in their discretion, obtain or
require lien waivers, releases, or other documents to evidence receipt of
payment of the Revolving Line of Credit proceeds from any Builder,
Subcontractor, materialman, laborer, or any other such party. Borrower hereby
specifically acknowledges that said documents shall be obtained for Lenders'
sole and absolute benefit and that Lenders assume no responsibility, express or
implied, in any capacity whatsoever, to obtain such documents for or on behalf
of Borrower. No action taken by Lenders to obtain or require such documents in
any instance shall impose on them any duty to obtain or require such documents
at any future instance. Borrower specifically agrees to hold harmless and
indemnify Lenders from and against all claims, loss, damage, cost, and expense
arising out of the disbursement process, including, but not limited to, loss
resulting from materialmen's or mechanics' liens.
9. Fees.
a. Facility Fee. Borrower shall pay to Lenders, pro rata, a
Facility fee of One- Half of One Percent (.50%) or Two Hundred Fifty
Thousand and No/100 Dollars ($250,000.00) from the proceeds of the
Facility at closing and annually thereafter at each Anniversary Date
during the Term hereof and as it may be extended from time to time
hereafter in accordance with this Agreement.
b. Other Costs, Expenses, and Fees. Borrower shall pay or
reimburse Lenders for their fees and expenses (including, without
limitation, reasonable legal fees and all accounting, audit, and field
examination fees and expenses) incurred by Lenders in connection with
the preparation, negotiation, execution, delivery, filing, recording,
and administration of this Agreement and the other Loan Documents, the
protection, collection, enforcement, and exercise of any obligations,
rights, and remedies under this Agreement and the other Loan Documents,
and the collection, protection, repossession, storage, preparation,
processing, manufacture, sale, use, disposition, and foreclosure of any
Collateral. Borrower also shall pay or reimburse Lenders for all taxes
(except Lenders' income taxes), fees, duties, imposts, and other charges
incurred by or imposed upon Lenders in connection with the Revolving
Line of Credit and other financial accommodations described in this
Agreement and the other Loan Documents.
10. Collateral Provisions.
20
a. Collateral. The Revolving Line of Credit and all of
Borrower's Obligations to Lenders under this Agreement and the other
Loan Documents shall be secured at all times by first priority liens
against the Collateral.
b. Spec and Model Unit Limitations. At any time while there
remain outstanding Obligations under the Loan Documents or the Revolving
Line of Credit, Borrower shall not maintain more than the following Spec
Units and Model Units under the Borrowing Base:
-BORROWER-
------------------------------------------------------------------------
SINGLE-FAMILY RESIDENTIAL UNITS
------------------------------------------------------------------------
Pre-Solds No Limitation
------------------------------------------------------------------------
Specs Maximum of 2 Per Approved Filing except Pima
County, Arizona with 4 per Approved Filing
------------------------------------------------------------------------
Models Maximum of 2 Per Approved Filing
------------------------------------------------------------------------
Finished Lots Lesser of Maximum of 1,000 Finished Lots in
Aggregate for Borrower and all Subsidiary Borrowers;
or $22,000,000 of the Borrowing Base
------------------------------------------------------------------------
-SUBSIDIARY BORROWERS-
------------------------------------------------------------------------
ATTACHED RESIDENTIAL UNITS
------------------------------------------------------------------------
Pre-Solds No Limitation
------------------------------------------------------------------------
Specs 2 Buildings Per configuration Per Approved Filing
------------------------------------------------------------------------
Models 1 Per Plan Model Type Per Approved Filing
------------------------------------------------------------------------
Finished Lots Included in Lot Limitations of Borrower above
------------------------------------------------------------------------
c. Finished Lot Limitations/Total Land Inventory. Borrower may
not own or possess in the aggregate land inventory on its balance sheet
in excess of 150% of Borrower's Net Worth, tested quarterly.
d. Work in Process Limitation. Borrower shall not have work in
process (property or improvements which are neither a Finished Lot, or a
completed Unit) which exceeds the lesser of $90,000,000.00 (based on
completion amount) or 150% of the Borrowing Base at any one time, tested
monthly.
21
e. Inventory Audits. Lenders shall perform sample inventory
audits of Borrower's inventory of Pre-Sold Units, Spec Units, Model
Units, and Finished Lots within thirty (30) days of the Closing Date and
thereafter on a quarterly basis (or at such other intervals as Lenders
may reasonably require at Borrower's expense, not to exceed
________________and No/100 Dollars ($_________) per audit. Lenders
reserve the right to exceed this limit if changes imposed by regulatory
authorities or internal Lenders auditors require an audit of greater
scope.
f. Cross-Collateralization/Cross-Default. All Advances under the
Revolving Line of Credit shall be cross-collateralized and
cross-defaulted as between the Obligations owed to Lenders by Borrower
and by Subsidiary Borrowers.
11. Additional Collateral Approval Process. In the event that Borrower
desires to add additional Approved Filings, or additional Property in currently
Approved Filings, to the Collateral for purposes of calculating Advances under
the Borrowing Base, the following procedures shall apply:
a. Documents to be Filed. Prior to or concurrent with the
submission of a filing for approval as an Approved Filing, Borrower
shall submit to Lenders and make available to Lenders the following
documents in form and substance satisfactory to Lenders (the "Master
Filing Documents"):
i. A current title commitment issued by Insurer committing
to issue to Lenders a Title Policy in the form and substance
described in Section 12(a)(xi) which will insure a Deed of Trust
as a first and prior lien on Lots or Units located in the Filing
and will insure that merchantable title to the Lots or Units
located in the Filing is or will be vested in Borrower subject to
acquisition of title to real property under contract. Title shall
be subject only to the Deed of Trust and such other exceptions as
may be acceptable to Lenders. The Insurer shall provide Lenders
with legible copies of all documents and instruments shown in
Schedule B-2 as exceptions to title, and, if requested by
Lenders, all recorded documents and instruments shown in Schedule
B-1, the releases of which are requirements of Title Policy
issuance;
ii. A copy of the recorded plat delineating the entire
Filing dimensions and individual lot dimensions and ingress and
egress to the Filing and each lot therein. The plat must show all
easements, ditches, streets, lot lines, rights-of-way, any lot,
block and street delineations or designations affecting the
Filing and encroachments, if any, onto the Filing and must bear
the consent of any senior liens of record as of the date of plat
approval;
iii. Evidence of zoning or a copy of the final approved
Planned Unit Development ("PUD") map or other development plan
for the Filing of subdivision within which the Filing is located,
containing all use or building conditions or restrictions
affecting the Filing;
iv. Evidence of availability of Utility Services to the
Filing boundaries;
22
v. Soils reports prepared by a registered soils
engineer, indicating that the Filing is suitable for the
construction of the contemplated improvements;
vi. Evidence of comprehensive general public liability
insurance or "umbrella" coverage with limits of not less than
Ten Million and No/100 Dollars ($10,000,000.00);
vii. Evidence of Workmen's Compensation insurance;
viii. Evidence of all-risk course of construction and
casualty insurance with standard of non-contributing mortgage
clause, a lender's loss payable endorsement naming Lenders
and/or assigns, together with a full replacement cost
endorsement;
ix. If required by Lenders, master drainage plan for the
Filing;
x. Evidence satisfactory to Lenders that no Finished
Lot, nor any portion thereof, lies within any area designated as
wetlands or is subject to federal, state or local regulations
restricting the use of the property as a consequence of the
presence of wetlands or, if any portion of the Finished Lot is
subject to wetlands restrictions, evidence satisfactory to
Lenders of compliance of the appropriate party with any permit
or restrictions;
xi. Upon request by Lenders, a copy of any preliminary
development plan or similar plan ("PDP") for the Filing or in
which the Filing is located, approved by the appropriate
governmental or quasi-governmental authorities;
xii. A copy of any environmental impact statements for
the Filing or for property including the Filing, prepared under
or required by federal law, if any to Borrower's knowledge and
reasonably available to Borrower without statutory petition;
xiii. Copies of any and all CC&R's affecting the Filing;
xiv. Identification of any Special Districts affecting
the Filing and, at the request of Lenders, boundary map of the
Special District, financial statements and outline of the debt
structure of the Special District available to the Borrower or
to the public, and names and telephone numbers of the district
manager, if any, and officers of the Special District;
xv. Copies of any purchase or option contracts affecting
the Filing or under which Borrower is entitled to acquire title
to the real property and of any agreements affecting title to or
a possessory interest in the Filing, or any portion thereof, not
otherwise recorded in the Official Records;
xvi. Copies of any subdivider's agreements or
subdivision improvement agreements affecting the Filing, and
copies of any other agreements with governmental
23
or quasi-governmental entities in the nature of subdivider's
agreements or subdivision improvement agreements, pursuant to
which the Borrower or an Affiliate or Related Entity, as
developer or owner of property located in the Filing, is
obligated to pay or perform any obligations regarding
development, or copies of any other such agreements known and
available to Borrower pursuant to which a third-party developer
is obligated to pay or perform development obligations, not
otherwise recorded in the Official Records;
xvii. Copies of any marketing brochures or materials
regarding the Filing and Units built or to be built in the
Filing if prepared or otherwise available on the date of request
for Filing approval, with copies delivered subsequently as and
when available;
xviii. Phase One Environmental Audits and any subsequent
required audits prepared by an environmental engineering company
approved by Lenders and in substance satisfactory to Lenders for
the Filing or the portion thereof which Borrower has the right
to purchase;
xix. At the request of Lenders, copies of construction
and engineering drawings and specifications, including, but not
limited to, the following:
(1) sanitary sewer lines;
(2) storm sewer lines;
(3) water lines;
(4) cut and grade;
(5) curb and gutter;
(6) gas and electrical companies' construction
drawings or other evidence of the location of these
utilities, if available;
(7) any off-site improvements;
xx. Copies of plans and specifications for each base
unit product line to be built in the Filing;
xxi. Detailed cost breakdown on a cost allocation form
acceptable to Lenders for each base unit product line to be
built in the Filing;
xxii. Base unit selling price for each product line on a
standard Lot (without lot premium) in the Filing in which such
product line is being or will be built;
24
xxiii. The Proforma Absorption Plans for the Filing, if
not contained in Borrower's report entitled "Budget
Projections;"
xxiv. Evidence satisfactory to Lenders that any
obligations of Borrower, an Affiliate, or a Related Entity, as
developer, regarding development in connection with the Filing
arising under agreements with governmental or quasi-governmental
entities or providers of utility services or governmental
regulations which could become a lien against property located
in the Filing or a restriction against the issuance of building
permits in the Filing (collectively, "Development Obligations")
have been satisfied or performance of the Development
Obligations has been secured by adequate financial security such
as bonds letters of credit or certificates of deposit pursuant
to the agreements creating the Development Obligations or the
requirements of the utility provider and the same evidence of
satisfaction or performance with respect to a third- party
developer of a Filing, to the extent available to the Borrower
upon request;
xxv. Evidence satisfactory to Lenders that no portion of
the Filing, of which Borrower, an Affiliate, or a Related Entity
is the developer, is subject to restrictions against the
issuance of building permits as security for performance of the
Development Obligations and the same evidence with respect to a
Filing of which a third-party is developer, to the extent
available to the Borrower upon request.
xxvi. Other information and documents which may be
reasonably requested by Lenders.
b. Approval of Filing. Lenders shall have the right, in their
sole discretion (which shall not be unreasonably withheld), to approve
or disapprove the Filing as an Approved Filing for purposes of Borrowing
Base eligibility. Lenders shall give Borrower written notice within ten
(10) Business Days after the later of i. submission of the last to be
submitted of the Master Filing Documents of its approval or disapproval
of the Filing, or ii. completion by Lenders of their internal review of
the Environmental Audit for the Filing. In the event that Lenders
disapprove a Filing, Borrower may, subject to Lenders' written approval,
which will not be unreasonably withheld, and further subject to the
financial covenants and restrictions herein, obtain alternative
financing from another lender.
12. Conditions of Lending
a. Conditions Precedent to the Initial Advance. The obligation
of Lenders to make the initial Advance under the Revolving Line of
Credit shall be subject to the condition precedent that Lenders shall
have received all of the following, each in form and substance
satisfactory to Lenders in their sole discretion, and/or that all of the
following shall be true, correct, complete, and acceptable to Lenders in
their sole discretion on the date thereof:
i. A certificate of the Secretary or an Assistant
Secretary of Borrower, certifying as to (1) the resolutions of
the directors and, if required, the shareholders, of Borrower
authorizing the execution, delivery, and performance of this
Agreement
25
and the other Loan Documents, (2) the articles of incorporation
and bylaws of Borrower, and (iii) the signatures of the officers
or agents of Borrower authorized to execute and deliver this
Agreement, the other Loan Documents and other instruments,
agreements, and certificates, including Advance requests, on
behalf of Borrower.
ii. A current certificate issued by the Secretary of
State of the state of Borrower's incorporation certifying that
Borrower is in compliance with all organizational requirements
of such state.
iii. Evidence that Borrower is duly licensed or
qualified to transact business in all jurisdictions where the
character of the property owned or leased or the nature of the
business transacted by it makes such licensing or qualification
necessary.
iv. This Agreement, the Revolving Notes, and the other
Loan Documents, fully and properly executed by Borrower and all
other parties thereto;
v. A subordination agreement from Fortress, in form and
substance acceptable to Lenders in their sole discretion,
whereby Fortress, among other things, subordinates all
indebtedness and Restricted Equity Investment to the liens of
Lenders.
vi. the Maintenance Agreement with The Fortress Group.
vii. A Borrowing Base Certificate dated as of November
6, 2000.
viii. Current searches of appropriate filing offices
showing that no state or federal tax liens have been filed and
remain in effect against Borrower and Lenders have duly filed
all Security Instruments necessary to perfect the liens and
security interests in favor of Lenders.
ix. Financing statements and UCC filings as requested
and required by Lenders, in its sole discretion.
x. ALTA Mortgagee's Title Insurance Policies (or
unconditional commitments for title insurance acceptable to
Lenders and letters confirming the irrevocable and imminent
issuance of such policies) from all applicable title insurance
companies insuring the Property in the amount of not less than
$50,000,000.00 and any related endorsements required by Lenders,
properly executed by the applicable title insurance companies.
xi. Lenders, at their sole option, may require a notice
of title continuation or an endorsement to their mortgagee's
title insurance policies indicating that since the last
preceding Advance, there has been no change in the state of
title adverse to Lenders.
26
xii. Releases and terminations of all claims,
encumbrances, liens, and security interests against the
Collateral (other than the Permitted Encumbrances and those
belonging to Lenders) properly executed by the lienholders and
secured parties.
xiii. Certificates of Insurance and endorsements to
insurance policies required hereunder.
xiv. Payment of any unpaid fees or other amounts owing
to Lenders as of the Closing Date.
xv. An opinion of counsel to Borrower and Fortress in
form and substance acceptable to Lenders addressed to Lenders,
their participants, successors, and assigns, and their
attorneys.
xvi. All of the conditions to the closing of the
Revolving Line of Credit contained in the Commitment and this
Agreement have been and remain satisfied.
xvii. Borrower shall have materially complied with all
of its covenants and agreements contained in all of the Loan
Documents, and Borrower's representations and warranties
contained in any of the Loan Documents shall be true as of the
date of disbursement as if first made on that date.
xviii. Current Master Budgets and Plans and
Specifications (including updated list of options) for all
Filings and all Finished Lots and Units in the Filings, all in
form and substance acceptable to Lenders in their sole
discretion.
xix. Current surveys or approved Plats for each portion
of the Property and all documentation regarding the platting of
each portion of the Property, all in form and substance
acceptable to Lenders in their sole discretion and, if a survey
is provided, certified as accurate by a licensed surveyor in the
state of Colorado, for the benefit of Lenders.
xx. The Improvements are being and have been constructed
substantially in accordance with the Master Budgets and the
Plans and Specifications approved by Lenders.
xxi. Any certifications and lien waivers required by
Lenders.
xxii. Fully executed assignments of all contracts
between Borrower and Builder with reference to all major
subcontractors, suppliers, architects, and engineers of
Borrower.
xxiii. Such other agreements, documents, and instruments
as Lenders in their reasonable discretion may require.
27
xxiv. Tri-Party Agreement with Land Title Guarantee
Company.
xxv. Tri-Party Agreement with Fidelity National Title
Insurance Company.
b. Conditions Precedent to All Advances. The obligation of
Lenders to make each further Advance shall be subject to the further
conditions precedent that on such date:
i. the representations and warranties contained in
SECTION 13 hereof are correct on and as of the date of such
Advance as though made on and as of such date, except to the
extent that such representations and warranties relate solely to
an earlier date; and
ii. no event has occurred and is continuing, or would
result from such Advance, as the case may be, which constitutes
a Default or an Event of Default.
13. Representations and Warranties. Borrower represents and warrants to
Lenders as follows:
a. Existence and Power; Name; Chief Executive Office; Locations.
The Genesee Company is a corporation duly incorporated, validly
existing, and in good standing under the laws of the State of Colorado.
Borrower is duly licensed or qualified to transact business in all
jurisdictions where the character of the property owned or leased or the
nature of the business transacted by it makes such licensing or
qualification necessary. Borrower has all requisite power and authority,
corporate, organizational, or otherwise, to conduct its business, to own
its properties, and to execute and deliver, and to perform all of its
obligations under, the Loan Documents. During its existence, Borrower
has done business solely under the names set forth in EXHIBIT E attached
hereto and incorporated herein by this reference. The chief executive
offices and principal places of business of Borrower are located at the
addresses set forth in EXHIBIT D, and all of Borrower's records relating
to its business or the Collateral are kept at those locations.
b. Authorization of Borrowing; No Conflict as to Law or
Agreements. The execution, delivery, and performance by Borrower of the
Loan Documents and the borrowings from time to time hereunder have been
duly authorized by all necessary corporate or organizational action and
do not and shall not: i. require any consent or approval of the
stockholders or constituent members of Borrower; ii. require any
authorization, consent or approval by, or registration, declaration or
filing with, or notice to, any governmental or quasi- governmental
department, commission, board, bureau, agency, or instrumentality,
domestic or foreign, or any third party, except such authorization,
consent, approval, registration, declaration, filing, or notice as has
been obtained, accomplished, or given prior to the date hereof; iii.
violate any provision of any law, rule, or regulation (including without
limitation, Regulation X of the Board of Governors of the Federal
Reserve System) or of any order, writ, injunction, or decree presently
in effect having applicability to Borrower or of the articles of
incorporation, bylaws, articles of organization, or operating agreement
(as applicable) of Borrower; iv. result in a breach of or constitute a
default under any indenture
28
or loan or credit agreement or any other material agreement, lease, or
instrument to which Borrower is a party or by which it or its properties
may be bound or affected; or v. result in or require the creation or
imposition of any mortgage, deed of trust, pledge, lien, security
interest, or other charge or encumbrance of any nature upon or with
respect to any of the properties now owned or hereafter acquired by
Borrower (except those in favor of Lenders).
c. Legal Agreements. This Agreement constitutes and, upon due
execution by Borrower, the other Loan Documents shall constitute the
legal, valid, and binding obligations of Borrower, enforceable against
Borrower in accordance with their respective terms.
d. Subsidiaries. Except as set forth in EXHIBIT F attached
hereto and incorporated herein by this reference, Borrower has no
Subsidiaries.
e. Financial Condition; No Adverse Change. Borrower has
heretofore furnished to Lenders audited financial statements of Borrower
and Fortress for their fiscal years ended December 31, 1999 and
internally prepared unaudited quarterly financial statements of Borrower
and Fortress for the quarter ended June 30, 2000, and those statements
fairly present the financial condition of Borrower and Fortress on the
dates thereof and the results of their operations and cash flows for the
periods then ended and were prepared in accordance with GAAP. Since the
date of the most recent financial statements, there has been no material
adverse change in the business, properties, or condition (financial or
otherwise) of Borrower or Fortress.
f. Litigation. Except as disclosed to Lenders prior to Closing,
there are no actions, suits, or proceedings pending or, to the knowledge
of Borrower, threatened against or affecting Borrower, Fortress, or any
of Borrower's Affiliates or the properties of Borrower, Fortress, or any
of Borrower's Affiliates before any court or governmental department,
commission, board, bureau, agency, or instrumentality, domestic or
foreign, which, if determined adversely to Borrower, Fortress, or any of
Borrower's Affiliates, would have a material adverse effect on the
financial condition, properties or operations of Borrower, Fortress, or
any of Borrower's Affiliates.
g. Regulation U. Borrower is not engaged in the business of
extending credit for the purpose of purchasing or carrying margin stock
(within the meaning of Regulation U of the Board of Governors of the
Federal Reserve System), and no part of the proceeds of any Advance
shall be used to purchase or carry any margin stock or to extend credit
to others for the purpose of purchasing or carrying any margin stock.
h. Taxes. Borrower and its Affiliates have paid or caused to be
paid to the proper taxing authorities when due all federal, state, and
local taxes and assessments of every kind and character required to be
paid and/or withheld by each of them, provided, however, that Borrower
shall not be required to pay such taxes or assessments if Borrower is
contesting the amount, applicability, or validity of such taxes and
assessments in good faith by appropriate proceedings diligently pursued
by Borrower and has established unencumbered cash reserves for the
payment of the foregoing in an amount acceptable to Lenders, in their
sole discretion.
29
Borrower and its Affiliates have filed all federal, state, and local tax
returns which to the knowledge of the officers of Borrower or any
Affiliate, as the case may be, are required to be filed.
i. Titles and Liens. Borrower has good and absolute title to all
Collateral and all other properties and assets reflected in the latest
balance sheet referred to in SECTIONS 14(H)(I), (II) and (III) hereof
and all proceeds thereof, free and clear of all mortgages, security
interests, liens, and encumbrances, except for the liens and security
interests in favor of Lenders and the Permitted Encumbrances. No
financing statement naming Borrower as debtor is on file in any office
except to perfect only security interests permitted by this Agreement.
j. Plans. Except as disclosed to Lenders in writing prior to the
date hereof, neither Borrower nor any ERISA Affiliate maintains or has
maintained any Plan. Neither Borrower nor any ERISA Affiliate has
received any notice or has any knowledge to the effect that it is not in
full compliance with any of the requirements of ERISA. No Reportable
Event or other fact or circumstance which may have an adverse effect on
the Plan's tax qualified status exists in connection with any Plan.
Neither Borrower nor any of its ERISA Affiliates has:
i. Any accumulated funding deficiency within the meaning
of ERISA; or
ii. Any liability or knows of any fact or circumstances
which could result in any liability to the PBGC, the Internal
Revenue Service, the Department of Labor, or any participant in
connection with any Plan (other than accrued benefits which or
which may become payable to participants or beneficiaries of any
such Plan).
k. Default. Borrower is in compliance with all provisions of all
agreements, instruments, decrees, and orders to which it is a party or
by which it or its property is bound or affected, the breach or default
of which could have a material adverse effect on the financial
condition, properties, or operations of Borrower.
l. Submissions to Lenders. All financial and other information
provided to Lenders by or on behalf of Borrower in connection with
Borrower's request for the credit facilities contemplated hereby is true
and correct in all material respects and, as to projections, valuations,
or proforma financial statements, present a good faith opinion as to
such projections, valuations, and proforma condition and results.
m. Financing Statements. Borrower has provided to Lenders signed
financing statements sufficient when filed to perfect the liens and
security interests against Borrower's personal property required by the
Loan Documents. When such financing statements are filed in the offices
noted therein, Lenders shall have a valid and perfected security
interest in all personal property Collateral described in the Loan
Documents which is capable of being perfected by filing financing
statements. None of the Collateral is or shall become a fixture on real
estate, unless a sufficient fixture filing is in effect with respect
thereto.
30
n. Rights to Payment. Each right to payment and each instrument,
document, chattel paper, and other agreement constituting or evidencing
Collateral is (or, in the case of all future Collateral or such other
collateral, shall be when arising or issued) the valid, genuine, and
legally enforceable obligation of the account debtor, any other obligor
named therein, and any other obligor named in Borrower's records as
being obligated thereon, subject to no defense, setoff, or counterclaim.
o. Accurate Information. All information and documents furnished
by Borrower and Guarantor to Lenders in connection with the Revolving
Line of Credit are accurate and complete in all material respects.
p. Special Improvement Districts. Except as disclosed to Lenders
prior to Closing, the Property is not situated within any metropolitan,
local improvement or special improvement district, and Borrower has no
knowledge of any proposal under which the Property is to be placed in
any metropolitan, local improvement or special improvement district.
Additionally, Borrower has no knowledge of any material adverse change
in the financial condition of any disclosed special improvement district
or otherwise having assessment authority over the Property.
q. Condemnation. Borrower has not received any notice of the
exercise of eminent domain or condemnation which in any way affects the
Property, and to the best of Borrower's knowledge, no such action is
pending or threatened.
r. Zoning and Restrictive Covenants. The Property and all
improvements presently located thereon comply with all applicable
federal, state, city, and county zoning, subdivision, environmental, and
building codes, rules, and regulations and all restrictive covenants
affecting the Property.
s. Compliance. Borrower and Guarantor have conducted and will
continue to conduct their business in a lawful manner and in compliance
with all applicable federal, state, and local laws, ordinances, rules,
regulations, and orders and shall pay, before delinquent, all lawfully
imposed taxes and assessments upon the Collateral and its income.
t. Misrepresentations. This Agreement, the financial statements
furnished by Borrower and Fortress to Lenders, and all other statements
made by Borrower and Guarantor to Lenders in connection with the
Revolving Line of Credit contain no untrue statement of a material fact
and omit no material fact necessary to make the statements contained
therein not misleading. Neither Borrower or Fortress has failed to
disclose in writing to Lenders any fact that materially and adversely
affects or is reasonably likely to materially and adversely affect
Borrower or Fortress, the Collateral, or Borrower's ability to perform
its obligations under the Loan Documents.
u. Bankruptcy. No petition has been filed by or against Borrower
or Fortress for protection under the United States Bankruptcy Code.
31
v. Plans and Specifications; Master Budgets. The Plans and
Specifications and the Master Budgets have been approved by Borrower.
The Plans and Specifications have been approved by the Engineer: to
comply with all applicable laws and ordinances, including the Americans
With Disabilities Act; to be complete and contain all detail requisite
for the construction of the Improvements which, when constructed in
accordance with the Plans and Specifications, shall be suitable for use
for their intended purpose in compliance with all applicable laws; and
to be prepared in a manner consistent with accepted architectural
practices.
w. Government Approvals. The Plans and Specifications have been
submitted to all governmental authorities, property owners associations,
or architectural control committees whose approval of construction of
the Improvements or the use of the Improvements for their intended
purpose is required under any applicable law, statute, rule, regulation,
code, or restrictive covenant and the necessary approvals and permits
(with exception of building permits which shall be obtained prior to the
commencement of construction), have been obtained from such authorities
and remain effective.
x. Utilities. All public utilities existing for the operation of
all or any part of the Property, if any, enter the Property through
adjoining public streets or, if they pass through adjoining public or
private land, do so in accordance with valid public easements; and all
utility lines and mains serving the Property, if any, have been properly
dedicated to, and are serviced and maintained by, the appropriate public
or quasi-public entity.
y. Access. The Property has full and free access to and from
public highways, streets, and/or roads, and Borrower has no knowledge of
any fact or condition which would result in the termination of such
access and use.
z. Assignability of Plans, Specifications and Contracts. All
plans, specifications, architects' and engineers' agreements, and
construction contracts, are fully assignable without the acknowledgment
or approval of any third party engineer, architect, or contractor.
14. Affirmative Covenants of Borrower. So long as the Revolving Notes
shall remain unpaid and the Revolving Line of Credit shall be outstanding,
Borrower shall comply with the following requirements, unless Lenders shall
otherwise consent in writing:
a. Minimum Tangible Net Worth. Borrower shall maintain a Minimum
Tangible Net Worth of at least Twenty Million and No/100 Dollars
($20,000,000.00) at all times during the Term of the Revolving Line of
Credit tested as of the end of each fiscal quarter of Borrower occurring
during the term of the Revolving Line of Credit. Any loans from Borrower
to Fortress shall be debited against Borrower's Tangible Net Worth in
calculating Borrower's compliance with this Section.
b. Debt to Tangible Net Worth Ratio. Borrower shall maintain a
maximum Debt to Tangible Net Worth ratio of no more than 3.0 to 1.0 at
closing and for the first twelve (12) months of the Loan, with maximum
ratio to be no greater than 2.75:1 as of the first
32
Anniversary Date and maintained thereafter during the Term, tested as of
the end of each fiscal quarter of Borrower occurring during the Term of
the Revolving Line of Credit.
x. Xxxxx Margin. Borrower shall maintain a Gross Margin of at
least a 10% at all times during the term hereof (tested on rolling four
quarters).
d. Net Profit Margin. Borrower shall maintain a minimum pre-tax
net profit margin of 3% (tested on rolling four quarters).
e. Work In Process Limitation. Borrower's work in process
(property or improvements which are neither a Finished Lot, or a
completed Unit) shall not exceed the lesser of $90,000,000.00 (based on
completion amount) or 150% of Borrowing Base on a global basis at any
one time, tested monthly.
f. Land Inventory Limitation. Borrower's total land inventory on
its balance sheet shall not exceed 150% of Borrower's Tangible Net Worth
at any one time, tested quarterly.
g. Consecutive Quarter Net Losses. Borrower shall not sustain
two (2) consecutive quarters of cumulative net pre-tax losses from its
operations.
h. Reporting Requirements. Borrower shall deliver, or cause to
be delivered, to Lenders each of the following, which shall be in form
and detail acceptable to Lenders:
i. Annually, not later than one hundred twenty (120)
days after the end of each fiscal year of Borrower, Borrower
shall deliver to Lenders audited consolidated financial
statements of Fortress with the unqualified opinion of
independent certified public accountants selected by Borrower
and acceptable to Lenders, which financial statements shall
include the balance sheet of Borrower as at the end of such
fiscal year and the related statements of income, retained
earnings, and cash flows of Borrower for the fiscal year then
ended, prepared on a consolidating and consolidated basis to
include any Affiliates, all in reasonable detail and prepared in
accordance with GAAP, together with (1) a report signed by such
accountants stating that in making the investigations necessary
for said opinion they obtained no knowledge, except as
specifically stated, of any Default or Event of Default
hereunder and all relevant facts in reasonable detail to
evidence, and the computations as to, whether or not Borrower is
in compliance with the requirements set forth in SECTIONS 13(j),
(k), AND (l) and SECTION 14(t) hereof; and (2) a certificate of
the chief financial officer of Borrower stating that such
financial statements have been prepared in accordance with GAAP
and whether or not such officer has knowledge of the occurrence
of any Default or Event of Default hereunder and, if so, stating
in reasonable detail the facts with respect thereto;
ii. Quarterly, not later than sixty (60) days after the
end of each quarter, internally prepared balance sheets,
statements of income and statements of retained
33
earnings of Borrower as at the end of and for such quarter and
for the year to date period then ended, prepared on a
consolidating and consolidated basis to include any Affiliates,
in reasonable detail and stating in comparative form the figures
for the corresponding date and periods in the previous year, all
prepared in accordance with GAAP, subject to year-end audit
adjustments; and accompanied by a certificate of the chief
financial officer of Borrower, substantially in the form of
EXHIBIT G attached hereto and incorporated herein by this
reference and stating (1) that such financial statements have
been prepared in accordance with GAAP, subject to year-end audit
adjustments, (2) whether or not such officer has knowledge of
the occurrence of any Default or Event of Default hereunder not
theretofore reported and remedied and, if so, stating in
reasonable detail the facts with respect thereto, and (3) all
relevant facts in reasonable detail to evidence, and the
computations as to, whether or not Borrower is in compliance
with the requirements set forth in SECTIONS 13(j), (k), AND (l)
and SECTION 14(t) hereof;
iii. Annually, not later than fifteen (15) days after
the beginning of each fiscal year of Borrower, the projected
balance sheets and income statements for each quarter of such
year, each in reasonable detail, representing the good faith
projections of Borrower and certified by Borrower's chief
financial officer as being the most accurate projections
available and identical to the projections used by Borrower for
internal planning purposes, together with such supporting
schedules and information as Lenders may in their discretion
require;
iv. Monthly, as soon as available and in any event not
later than sixteenth day of each month, a Borrowing Base
Certificate, together with such supporting schedules and
information as Lenders may in their discretion require.
v. Monthly Work in Process Reports from Borrower and
Subsidiary Borrowers, as applicable, on or before the sixteenth
day of each month with respect to all construction activity in
subdivisions approved under the Borrowing Base.
vi. Monthly Sold Unit Reports on or before the sixteenth
day of each month reflecting on a cumulative basis all Unit
sales including contract price, gross sales proceeds, Unit type,
address and subdivision for all Borrowing Base Units on a
cumulative basis.
vii. immediately after the commencement thereof, notice
in writing of all litigation and of all proceedings before any
governmental or regulatory agency affecting Borrower which seek
a monetary recovery against Borrower in excess of Two Hundred
Fifty Thousand and No/100 Dollars ($250,000.00).
viii. as promptly as practicable (but in any event not
later than five (5) Banking Days) after an officer of Borrower
obtains knowledge of the occurrence of any breach, default, or
event of default under any Loan Document or any event which
constitutes a Default or Event of Default hereunder, a notice of
such occurrence,
34
together with a detailed statement by a responsible officer of
Borrower of the steps being taken by Borrower to cure the effect
of such breach, default, or event;
ix. as soon as possible and in any event within thirty
(30) days after Borrower knows or has reason to know that any
Reportable Event with respect to any Plan has occurred, the
statement of the chief financial officer of Borrower setting
forth details as to such Reportable Event and the action which
Borrower or its ERISA Affiliates proposes to take with respect
thereto, together with a copy of the notice of such Reportable
Event to the PBGC;
x. as soon as possible, and in any event within ten (10)
days after Borrower fails to make any quarterly contribution
required with respect to any Plan under Section 412(m) of the
Internal Revenue Code of 1986, as amended, the statement of the
chief financial officer of Borrower setting forth details as to
such failure and the action which Borrower proposes to take with
respect thereto, together with a copy of any notice of such
failure required to be provided to the PBGC;
xi. promptly upon knowledge thereof, notice of (1) any
disputes or claims by customers of Borrower; and (2) any change
in the persons constituting the senior officers and directors of
Borrower;
xii. promptly upon knowledge thereof, notice of any loss
of or material damage to any Collateral or of any material
adverse change in any Collateral;
xiii. promptly upon their distribution, copies of all
financial statements, reports, and proxy statements which
Borrower shall have sent to its stockholders;
xiv. promptly after the sending or filing thereof,
copies of all regular and periodic financial reports which
Borrower shall file with the Securities and Exchange Commission
or any national securities exchange;
xv. promptly upon knowledge thereof, notice of the
violation by Borrower of any law, rule, or regulation, the
non-compliance with which could materially and adversely affect
its business or its financial condition;
xvi. promptly deliver to Lenders upon the receipt
thereof, copies of any notices received by Borrower with respect
to any material events or circumstances affecting the financial
viability and/or condition of any special district in which the
Property is located; and
xvii. from time to time, with reasonable promptness, any
and all receivables schedules, collection reports, deposit
records, copies of invoices, shipment documents, and delivery
receipts, and such other material, reports, records, or
information as Lenders may request.
35
i. Books and Records; Inspection and Examination. Borrower shall
keep accurate books of record and account for itself pertaining to the
Collateral and pertaining to Borrower's business and financial condition
and such other matters as Lenders may from time to time request in which
true and complete entries shall be made in accordance with GAAP. At the
request of Lenders, on a quarterly basis, Borrower shall permit any
officer, employee, attorney, or accountant for Lenders to audit, review,
make extracts from, or copy any and all corporate and financial books
and records of Borrower. In the event of a default hereunder, Lenders
reserve the right to make such inspections and audits as set forth
above, upon twenty- four (24) hours notice. Borrower shall make
available to Lenders and Lenders' agents any and all documents and
records during ordinary business hours, and to make available Borrower's
directors, officers, employees and agents to discuss the affairs of
Borrower with Lenders or Lenders' agents. Borrower shall permit Lenders,
or its employees, accountants, attorneys, or agents, to examine and
inspect any Collateral or any other property of Borrower at any time
during ordinary business hours.
j. Account Verification. Borrower shall, upon request of
Lenders, and Lenders may, upon the occurrence of a Default or Event of
Default, send requests for verification of accounts or notices of
assignment to account debtors and other obligors.
k. Compliance with Laws. Borrower shall i. comply with the
requirements of applicable laws and regulations, the non-compliance with
which would materially and adversely affect its business or its
financial condition, and ii. use and keep the Collateral, and shall
require that others use and keep the Collateral, only for lawful
purposes, without violation of any federal, state, or local law,
statute, or ordinance.
l. Payment of Taxes and Other Claims. Borrower shall pay or
discharge, when due, i. all taxes, assessments, and governmental charges
levied or imposed upon it or upon its income or profits, upon any
properties belonging to it (including without limitation, the
Collateral) or upon or against the creation, perfection, or continuance
of the liens and security interests granted by the Security Instruments
prior to the date on which penalties attach thereto, ii. all federal,
state, and local taxes required to be withheld by it, and iii. all
lawful claims for labor, materials, and supplies which, if unpaid, might
by law become a lien or charge upon any properties of Borrower;
provided, however, Borrower shall not be required to pay any such tax,
assessment, charge, or claim if Borrower is contesting the amount,
applicability, or validity thereof in good faith by appropriate
proceedings diligently pursued by Borrower and has established
unencumbered cash reserves for the payment of the foregoing in an amount
acceptable to Lenders, in their sole discretion.
m. Maintenance of Properties.
i. Borrower shall keep and maintain the Collateral and
all of its other properties necessary or useful in its business
in good condition, repair, and working order (normal wear and
tear excepted) and shall from time to time replace or repair any
worn, defective, or broken parts; provided, however, that
nothing in this Section shall prevent Borrower from
discontinuing the operation and maintenance of any of its
36
properties if such discontinuance is, in the judgment of
Lenders, desirable in the conduct of Borrower's business and not
disadvantageous in any material respect to Lenders.
ii. Borrower shall defend the Collateral against all
claims or demands of all persons (other than Lenders) claiming
the Collateral or any interest therein.
iii. Borrower shall keep all Collateral free and clear
of all claims, encumbrances, liens, and security interests
except the liens and security interests in favor of Lenders and
the Permitted Encumbrances, except as otherwise provided for in
this Agreement.
n. Insurance. Borrower shall obtain and at all times maintain
insurance with insurers chosen by Borrower and acceptable to Lenders in
their sole discretion in such amounts and against such risks as may from
time to time be required by Lenders, but in all events in such amounts
and against such risks as is usually carried by companies engaged in
similar business and owning similar properties in the same general areas
in which Borrower operates. Without limiting the generality of the
foregoing, Borrower shall at all times keep all tangible Collateral
insured against risks of fire (including so-called extended coverage),
theft, collision (for Collateral consisting of motor vehicles), floods
and such other risks and in such amounts as Lenders may reasonably
request, with any loss payable to Lenders to the extent of its interest,
and all policies of such insurance shall contain a lender's "loss payee"
and/or "mortgagee" endorsement for the benefit of Lenders. All policies
of liability insurance required hereunder shall name Lenders as an
additional insured.
o. Preservation of Corporate Existence. Borrower shall preserve
and maintain its existence as a corporation and all of its rights,
privileges, and franchises necessary or desirable in the normal conduct
of its business and shall conduct its business in an orderly, efficient,
and regular manner.
p. Preservation of Public Corporate Existence-Fortress. Fortress
shall preserve and maintain its existence as a publicly-held corporation
and all of its rights, privileges, and franchises necessary or desirable
in the normal conduct of its business and shall conduct its business in
an orderly, efficient, and regular manner.
q. Delivery of Instruments, etc. Upon request by Lenders,
Borrower shall promptly deliver to Lenders in pledge all chattel papers,
documents, instruments, and investment property constituting Collateral,
duly endorsed or assigned by Borrower.
r. Additional Restricted Equity Investment. If Borrower fails to
satisfy the Minimum Net Worth or Debt to Tangible Net Worth Ratio
covenants, Borrower shall cause Fortress to provide Borrower with
additional subordinated Restricted Equity Investment or other equity, in
form and substance acceptable to Lenders, in its sole discretion,
sufficient to permit Borrower to comply with the Minimum Net Worth and
the Debt to Tangible Net Worth Ratio covenants.
37
s. Signage. Borrower shall permit Lenders to display suitable
Lenders signage on the Property during the term of this Agreement.
x. Xxxx for Liens. Borrower shall promptly after the filing of a
lien against the Collateral, notify Lenders of such lien and, upon
written request from Lenders, post a surety bond in such amount and in
form and with sureties satisfactory to Lenders, or provide other
assurance of payment or removal of said lien, and of all costs and
expenses resulting therefrom, acceptable to Lenders.
u. Protection of Property. Borrower shall protect the Property
and all materials stored on the Property for installation on the
Property from removal, destruction, and damage.
v. Notice of Changes. Borrower shall give Lenders prior written
notice of all material changes to the Plans and Specifications.
w. Subordinations. Borrower shall obtain and deliver to Lenders
such subordination agreements as may be required to establish and
preserve Lenders' first priority lien position in the Collateral
including but not limited to Xxxxxxx-Eagle Ridge LLC.
15. Negative Covenants. So long as the Revolving Note shall remain
unpaid or the Revolving Line of Credit shall be outstanding, Borrower agrees
that, without the prior written consent of Lenders:
a. Liens. Borrower shall not create, incur, or suffer to exist
any mortgage, deed of trust, pledge, lien, security interest, assignment
for security purposes, or other encumbrances (collectively "Liens")
against any of the Collateral whether now owned or hereafter acquired
securing Debt in excess of Two Hundred Fifty Thousand and No/100 Dollars
($250,000.00) in the aggregate; excluding, however, from the operation
of the foregoing:
i. the liens and security interests in favor of Lenders;
ii. the Permitted Encumbrances; and
iii. liens for taxes, worker's compensation premiums and
the like that are not yet due and payable.
b. No Debt to Fortress. Borrower shall not obtain from Fortress
and Fortress shall not grant to Borrower any loan until such time as
Borrower has repaid and satisfied all of its obligations to Lenders
under the Loan Documents and Lenders' obligation to provide Borrower
with any advances or other financial accommodations under the Loan
Documents has been terminated. Any Loan from Borrower to Fortress shall
be disclosed to Lenders at the time it is made and shall be debited
against Borrower's Tangible Net Worth for purposes of calculating
Borrower's compliance with Section 14(a) hereof.
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c. Debt. Borrower shall not incur, create, assume, or permit to
exist any debt or other liability except:
i. Debt arising hereunder or otherwise owing to Lenders
or their affiliates;
ii. Debt of Borrower in existence on the date hereof;
iii. Debt relating to Permitted Encumbrances; and
iv. Four (4) acquisition and development loans currently
in process at First National Bank of Fort Xxxxxxx.
d. Guaranties. Borrower shall not assume, guarantee, endorse, or
otherwise become directly or contingently liable in connection with any
obligations of any other Person, except:
i. the endorsement of negotiable instruments by Borrower
for deposit or collection or similar transactions in the
ordinary course of business;
ii. guaranties, endorsements, and other direct or
contingent liabilities in connection with the obligations of
other Persons in existence on the date hereof as disclosed to
and approved by Lenders; and
iii. guaranties for the Obligations to Lenders.
e. Investments and Subsidiaries. Borrower shall not purchase or
hold beneficially any stock or other securities or evidences of
indebtedness of, make or permit to exist any loans or advances to, or
make any investment or acquire any interest whatsoever in, any other
Person, including without limitation any partnership, joint venture, or
limited liability company, except:
i. investments in direct obligations of the United
States of America or any agency or instrumentality thereof whose
obligations constitute full faith and credit obligations of the
United States of America having a maturity of one year or less,
commercial paper issued by U.S. corporations rated "A-1" or
"A-2" by Standard & Poors Corporation or "P-1" or "P-2" by
Xxxxx'x Investors Service or certificates of deposit or bankers'
acceptances having a maturity of one year or less issued by
members of the Federal Reserve System having deposits in excess
of $100,000,000 (which certificates of deposit or bankers'
acceptances are fully insured by the Federal Deposit Insurance
Corporation);
ii. advances in the form of progress payments, prepaid
rent, or security deposits.
39
iii. investments in Subsidiaries in existence on the
date hereof and listed in EXHIBIT F.
iv. Investments in subsidiaries created after the date
of this Facility for the purpose of acquiring a new Filing.
f. Sale or Transfer of Assets; Suspension of Business
Operations. Borrower shall not sell, lease, assign, transfer, or
otherwise dispose of (i) the stock or other ownership interest of any
Subsidiary without thirty (30) days advance prior written notice to and
approval by Lenders which shall not be unreasonably withheld, (ii) all
or a material part of its assets, or (iii) any Collateral or any
interest therein (whether in one transaction or in a series of
transactions) to any other Person (including Affiliated Persons) other
than the sale of Finished Lots and Units in the ordinary course of
business and shall not liquidate, dissolve, or suspend business
operations. Borrower shall not in any manner transfer any property
without prior or present receipt of full and adequate consideration.
g. Consolidation and Merger; Asset Acquisitions. Borrower shall
not i. consolidate with or merge into any Person, or permit any other
Person to merge into it, or ii. acquire (in a transaction analogous in
purpose or effect to a consolidation or merger) all or substantially all
the assets of any other Person in one or more transactions without
thirty (30) days advance prior written notice to and approval by Lenders
which shall not be unreasonably withheld.
h. Sale and Leaseback. Other than Model Unit sale and
leasebacks, as provided herein, Borrower shall not enter into any
arrangement, directly or indirectly, with any other Person whereby
Borrower shall sell or transfer any real or personal property, whether
now owned or hereafter acquired, and then or thereafter rent or lease as
lessee such property or any part thereof or any other property which
Borrower intends to use for substantially the same purpose or purposes
as the property being sold or transferred.
i. Restrictions on Nature of Business. Borrower shall not engage
in any line of business materially different from that presently engaged
in by Borrower and shall not purchase, lease, or otherwise acquire
assets not related to its business.
j. Accounting. Borrower shall not adopt any material change in
accounting principles other than as required by GAAP. Borrower shall not
adopt, permit, or consent to any change in its fiscal year, which
currently ends on December 31st.
k. Defined Benefit Pension Plans. Borrower shall not adopt,
create, assume, or become a party to any defined benefit pension plan,
unless disclosed to Lenders pursuant to this Agreement.
l. Other Defaults. Borrower shall not permit any breach,
default, or event of default to occur under any note, loan agreement,
indenture, lease, mortgage, contract for deed,
40
security agreement, or other contractual obligation (except contracts
for the purchase of Units) binding upon Borrower.
m. Place of Business; Name. Without the prior written consent of
Lenders which shall not be unreasonably withheld, Borrower shall not:
(i) transfer its chief executive office or principal place of business,
or move, relocate, close, or sell any business location; (ii) permit any
tangible Collateral or any records pertaining to the Collateral to be
located in any state or area in which a financing statement covering
such Collateral would be required to be, but has not in fact been, filed
in order to perfect the liens and security interests in favor of
Lenders; or (iii) change its name.
n. Organizational Documents. Borrower shall not amend its
articles of incorporation, bylaws, articles of organization, or
operating agreement, as applicable.
o. Change in Ownership. Borrower shall not issue or sell any
stock, membership interests, or other form of equity of Borrower so as
to change the percentage of voting and non-voting stock owned by each of
Borrower's shareholders and Borrower shall not permit or suffer to occur
the sale, transfer, assignment, pledge, or other disposition of any or
all of the issued and outstanding shares of stock of Borrower without
thirty (30) days advance prior written notice to and approval by Lenders
which shall not be unreasonably withheld.
p. Special Improvement Districts. Borrower shall not consent or
agree to the inclusion of the Property in any metropolitan, local
improvement, or special improvement district, unless disclosed to
Lenders in writing.
q. Master Budgets. Borrower shall not amend, modify, replace, or
substitute any Master Budget without the prior written consent of
Lenders, which consent may be withheld by Lenders in their reasonable
discretion.
r. Closing of Unit Sales. In no event will Borrower allow any
purchaser of a Unit to obtain possession or control of such Unit prior
to closing and payment for the Unit by such purchaser.
s. Discount Sales Prohibited. Borrower shall not discount the
sales price of any Unit located in any Approved Filing which is part of
the Borrowing Base by more than ten percent (10%) as set forth in the
sales price structure in place as of the Closing Date. In the event
Borrower elects to reduce the sales price for Units by more than ten
percent (10%) and amend its sales price structure, Borrower must notify
Lenders in writing of such sales price change. Upon such notification in
writing, Lenders reserve the right to review and, in Lenders' sole
discretion, modify or amend the Advance Rate formula to reflect such
discounted prices.
16. Events of Default. The occurrence of any of the following events
shall constitute an event of default hereunder (individually an "Event of
Default" and collectively "Events of Default"):
41
a. Borrower shall fail to pay any installment of principal of or
interest on the Revolving Notes or any other sums of money due and
payable under this Agreement or any other Loan Document within fifteen
(15) business days of the due date;
b. Any representation or warranty made herein or in any written
statement, certificate, report, or financial statement at any time
furnished by, or on behalf of, Borrower in connection herewith, is
incorrect or misleading in any material respect when made or thereafter
becomes incorrect or misleading in any material respect;
c. Borrower shall fail to perform or observe any non-monetary
covenant or agreement contained in this Agreement, other than the
covenants and agreements specifically described in this Section, and
such failure remains unremedied for twenty (20) days after the earlier
of (1) the date Borrower knew or should of known of such failure or (2)
the date Lenders gives written notice thereof to Borrower (provided,
however, that such cure period shall not apply to any failure that is
not capable of being cured);
d. Borrower shall incur two cumulative net losses over any two
consecutive fiscal quarters, calculated by aggregating net profits or
losses over such quarters.
e. Borrower or any other party to any other Loan Document (other
than Lenders) shall breach any material representation, warranty, or
covenant or fail to pay or perform any material indebtedness, liability,
or obligation contained in the other Loan Documents and such breach is
not cured within the applicable cure period (if any) or otherwise
excused under Applicable Law.
f. Borrower breaches any material representation, warranty, or
covenant or fails to pay or perform any material indebtedness,
liability, or obligation to any third party (including, but not limited
to, those contained in loan agreements, notes, indentures, leases,
security agreements, mortgages, deeds of trust, and other contracts or
agreements) when due and such breach or failure is not cured by Borrower
within the applicable cure period (if any) or otherwise excused under
Applicable Law; or
g. Any Loan Document shall at any time or for any reason cease
to be in full force and effect or be declared null and void or the
validity or enforceability thereof shall be contested by Borrower or any
other party thereto (other than Lenders).
h. Borrower or Fortress shall:
i. discontinue its business, be adjudicated a bankrupt
or insolvent under any law of any existing jurisdiction,
domestic or foreign, cease, be unable, or admit in writing its
inability to pay its debts generally as they mature, or make a
general assignment for the benefit of creditors;
ii. apply for or consent to the appointment of any
receiver, trustee, or similar officer for it or for any
substantial part of its property, or any such receiver,
42
trustee, or similar officer is appointed without the application
or consent of Borrower, and such involuntary appointment
continues thereafter undischarged for a period of thirty (30)
days;
iii. institute or consent to the institution of any
bankruptcy, insolvency, reorganization, arrangement,
readjustment of debt, dissolution, liquidation, or similar
proceeding relating to it under the laws of any jurisdiction;
shall have any such proceeding instituted against it without its
consent, and such involuntary proceeding continues thereafter
undischarged for a period of thirty (30) days;
iv. assert any claim, defense, setoff, or counterclaim
against Lenders without merit; or
v. permit any judgment, writ, warrant of attachment or
execution, or similar process to be issued or levied against a
material portion of the property of Borrower and such judgment,
writ, or similar process is not effectively stayed within thirty
(30) days after its issue or levy.
i. Borrower shall fail, for a period of twenty (20) days after
written notice from Lenders to Borrower, to i. comply, or proceed with
all due diligence to comply, with any order of any government department
claiming jurisdiction of the Collateral; or ii. comply, or proceed with
all due diligence to comply, with all and singular the statutes,
requirement, orders, and/or decrees of any federal, state, or municipal
authority relating to the use of the Collateral or any part thereof.
j. If Borrower at anytime hereafter sponsors or establishes any
Plan, and Borrower (a) fails to notify Lenders in writing of such
occurrence within ten (l0) days after such Plan is authorized by
Borrower's board of directors or (b) fails to agree within a reasonable
time to such amendments to this Agreement regarding provisions with
respect to ERISA as Lenders customarily uses at that time in loan
agreements with other borrowers.
k. Borrower shall fail to pay any of its non-contested payables
within thirty (30) days from the due date thereof and/or shall fail to
provide to Lenders a monthly payable aging schedule.
l. Borrower or Fortress shall experience a change in control
structure during the Term of the Revolving Line of Credit, other than in
connection with the Second Amended and Restated Stock Purchase Agreement
dated as of February 19, 1998, by and between Fortress and Prometheus
Homebuilders LLC, or the securities issued thereunder.
m. The issuance of an attachment against Borrower or any of its
properties and Borrower shall fail to obtain a release of the attachment
within thirty (30) days from the date thereof unless Borrower is
contesting such attachment in the manner set forth in this Agreement.
43
n. Entry of a judgment against Borrower and Borrower shall fail
to satisfy said judgment prior to the expiration of any applicable stay
of execution unless Borrower is contesting such judgment in the manner
set forth in this Agreement.
o. Borrower shall fail to pay any tax, tax deficiency, insurance
premium, water rate, sewer rate, assessment, or any other charge or
payment imposed by any governmental, quasi-governmental, or public
authority prior to delinquency, or any insurance premium, repair charge,
rent charge, inspection fee, lien, attorney's fees, or other amount
properly payable hereunder provided, however, Borrower may contest the
payment of the amounts to the extent and in the manner set forth in this
Agreement.
p. Borrower shall fail after demand to furnish financial
information or to permit inspection of any books or records as required
in this Agreement.
q. The financial condition or affairs of Borrower changes such
that Lenders, in good faith, regards Borrower's ability to repay the
Revolving Line of Credit to be impaired.
r. Fortress shall default upon its outstanding debentures
including but not limited to debentures in the amount of One Hundred
Million and No/100 Dollars ($100,000,000) comprising the Senior
Indenture.
s. The waste or uninsured destruction of all or any material
portion of the Collateral.
t. The sale, transfer, or conveyance of all or any interest in
all or any material portion of the Collateral without the consent of
Lenders other than sales of Finished Lots and Units in the ordinary
course of Borrower's business.
u. A lien or other encumbrance shall arise and/or be filed
against the Collateral or any other security for the Revolving Line of
Credit other than those permitted in this Agreement, and the same shall
not have been removed, or Borrower shall not have posted adequate
security therefor in accordance with the applicable provisions of this
Agreement, within twenty (20) days after either notice thereof shall
have been given to Borrower or the date of Borrower's actual knowledge
thereof, whichever shall first occur.
v. A Stop Work Notice under Arizona Revised Statutes is received
by Agent, with respect to any Arizona Collateral and Borrower fails to
either deposit with Lender all amounts sufficient to pay such Notice; or
present evidence satisfactory to Agent that the claim represented by
such Notice has been paid in full within ten (10) days from Agent's
notice thereof to Borrower.
Borrower shall not make distributions or pay dividends upon the
occurrence of an Event of Default.
17. Rights and Remedies; Attorney-In-Fact.
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a. Rights and Remedies. Upon the occurrence of an Event of
Default or at any time thereafter, Lenders may exercise any or all of
the following rights and remedies:
i. Lenders shall have no further obligation to provide
Borrower with any Advances or financial accommodations of any
kind under this Agreement or any other Loan Document.
ii. Lenders may declare the Revolving Line of Credit to
be terminated, whereupon the same shall immediately terminate;
iii. Lenders may declare the entire unpaid Outstanding
Principal Balance, all accrued but unpaid interest thereon, all
amounts payable under this Agreement and the other Loan
Documents, and all other Obligations to be immediately due and
payable whereupon all such amounts shall immediately be due and
payable, without presentment, notice of dishonor or protest, or
further notice of any kind, all of which are hereby expressly
waived by Borrower;
iv. Lenders may, without further action, apply any and
all money owing by Lenders to Borrower, including without
limitation any funds on deposit with Lenders, whether or not
matured, to the payment of Advances, including interest accrued
thereon, and of all other sums then owing by Borrower hereunder
and under any other Loan Document;
v. Lenders may exercise and enforce any and all rights
and remedies available upon default to a secured party under the
UCC, including without limitation, the right to take possession
of Collateral, or any evidence thereof, without judicial process
or by judicial process (without a prior hearing or notice
thereof, which Borrower hereby expressly waives), and the right
to sell, lease, or otherwise dispose of any or all of the
Collateral, and, in connection therewith, Borrower shall on
demand assemble the Collateral and make it available to Lenders
at a place to be designated by Lenders which is reasonably
convenient to both parties;
vi. Lenders shall have the right to appraise all
collateral in the Borrowing Base at Borrower's expense.
vii. Lenders may apply the proceeds from any Collateral
or from any other source against any part of the Revolving Line
of Credit as and in any order Lenders deem appropriate.
viii. Lenders shall have the right, which shall be
exercised in Lenders' sole and absolute discretion, and without
any obligation on the part of Lenders to do so, to take
possession of the Property and to perform any and all work it
deems advisable or necessary to protect any Improvements made
prior to the date of possession by Lenders and to complete the
Improvements.
45
ix. Lenders may proceed with every remedy available at
law or in equity or provided for in this Agreement or in any of
the Loan Documents including but not limited to foreclosure and
sale, repossession and all other creditor's rights, and all
expenses incurred by Lenders in connection with any remedy shall
be deemed indebtedness of Borrower to Lenders.
b. Attorney-In-Fact. Upon the occurrence and during the
continuance of any Event of Default, Borrower hereby irrevocably
constitutes and appoints Lenders its attorney-in- fact with full power
and authority to:
i. Take possession of, protect, and complete the
Improvements.
ii. Use any Reserves and any funds not disbursed from
the Account for the purpose of completing the Improvements and
payment of other costs related thereto.
iii. Make such additions, changes, and correction in the
Plans and Specifications as deemed necessary or desirable by
Lenders to complete the Improvements.
iv. Pay, settle, or compromise all existing invoices,
charges, and claims relating to the Improvements as it deems
necessary for completion of the Improvements and clearance of
title to the Property for protection of its interest.
v. Prosecute and defend all actions and proceedings in
connection with construction of the Improvements and to apply
the proceeds of any judgment received by Borrower in any such
action against the Revolving Line of Credit as it sees fit.
vi. Execute, acknowledge, and deliver all instruments
and documents in Borrower's name and to do and perform all acts
in Borrower's name Lenders deem necessary or appropriate to
complete the construction of the Improvements.
Notwithstanding the foregoing, however, Lenders shall not have
the authority to settle, compromise, or defend any third party
claim or action that seeks to impose personal liability on any
of shareholder of Borrower; provided that Lenders shall have the
right and authority to settle, compromise, or defend any claim
or action (or any portion of a claim or action) that relates to
the Property or the construction of the Improvements. Nothing
contained in this Section shall prohibit Lenders from changing
the Plans and Specifications to effect a reduction of the costs
of any item therein when, in the exercise of good faith
judgment, Lenders determine that such action is necessary to
provide for the use, occupancy, operation, marketability, or
leasability of all or portions of the Property.
c. No Waiver. No delay or failure of Lenders in the exercise of
any right or remedy provided for under this Agreement or under any of
the Loan Documents shall be deemed a waiver of such right by Lenders. No
exercise or partial exercise or waiver of any
46
right or remedy shall be deemed a waiver of any further exercise of such
right or remedy or of any other right or remedy that Lenders may have
under this Agreement or under any of the Loan Documents. Enforcement of
any of Lenders' rights as to any security for the Revolving Line of
Credit shall not affect Lenders' right to enforce payment of the
Revolving Line of Credit and to recover judgment for any portion thereof
remaining unpaid. The rights and remedies set forth in this Agreement
and in any of the Loan Documents are cumulative and not exclusive of any
other right or remedy that Lenders may have.
d. No Responsibility. Lenders assume no responsibility for
completion of the Improvements, and nothing herein shall be construed as
establishing a relationship between Lenders and any other party, except
the lender/borrower relationship between Lenders and Borrower. Lenders
shall owe no duty to any person by reason of this Loan Agreement to
construct the Improvements, to apply any undisbursed funds from the
Account to claims arising out of the construction of the Improvements,
or to exercise any of its rights hereunder.]
e. Automatic Acceleration. Notwithstanding the foregoing, upon
the occurrence of an Event of Default, the entire unpaid principal
amount of the Revolving Note (whether contingent or funded), all
interest accrued and unpaid thereon, all other amounts payable under
this Agreement, the other Loan Documents, and any other Obligations
shall be immediately due and payable automatically without presentment,
demand, protest, or notice of any kind.
18. Certain Notices. If notice to Borrower of any intended disposition
of Collateral or any other intended action is required by law in a particular
instance, such notice shall be deemed commercially reasonable if given (in the
manner specified in this Agreement) at least ten calendar days prior to the date
of intended disposition or other action.
19. Miscellaneous.
a. Amendments, Etc. No amendment, modification, replacement,
substitution, termination, or waiver of any provision of any Loan
Document or consent to any departure by Borrower therefrom or any
release of any claim, lien, or security interest in favor of Lenders
shall be effective unless the same shall be in writing and signed by
Lenders, and then such amendment, modification, replacement,
substitution, termination, waiver, or consent shall be effective only in
the specific instance and for the specific purpose for which given. No
notice to or demand on Borrower in any case shall entitle Borrower to
any other or further notice or demand in similar or other circumstances.
b. Financing Statement. A carbon, photographic, or other
reproduction of this Agreement or of any financing statements signed by
Borrower is sufficient as a financing
47
statement and may be filed as a financing statement in any state to
perfect the security interests granted hereby. For this purpose, the
following information is set forth:
Name and address of Debtor:
The Genesee Company
000 Xxxx Xxxxx Xxxxx, Xxxxx 000
Xxxxxx, XX 00000
Federal Tax Identification No. 000000000
Name and address of Secured Party:
KeyBank National Association, Agent
0000 Xxxxxxxx, Xxxxx 000
Xxxxxx, XX 00000
Attention: Commercial Residential Client Services
c. Collateral. This Agreement does not contemplate a sale of
accounts, contract rights, or chattel paper, and, as provided by law,
Borrower is entitled to any surplus and shall remain liable for any
deficiency. Lenders' duty of care with respect to Collateral in their
possession (as imposed by law) shall be deemed fulfilled if it exercises
reasonable care in physically keeping such Collateral, or in the case of
Collateral in the custody or possession of a bailee or other third
person, exercises reasonable care in the selection of the bailee or
other third person, and Lenders need not otherwise preserve, protect,
insure, or care for any Collateral. Lenders shall not be obligated to
preserve any rights Borrower may have against prior parties, to realize
on the Collateral at all or in any particular manner or order, or to
apply any cash proceeds of the Collateral in any particular order of
application.
d. Indemnity. In addition to the payment of various costs, fees,
and expenses pursuant to the terms hereof and the other indemnities set
forth herein and in the other Loan Documents, Borrower agrees to
indemnify, defend, and hold harmless Lenders, and any of its
participants, parent corporations, subsidiary corporations, affiliated
corporations, successor corporations, and all present and future
officers, directors, employees, and agents of the foregoing (the
"Indemnitees"), from and against (i) any and all transfer taxes,
documentary taxes, assessments, or charges made by any governmental
authority by reason of the execution and delivery of this Agreement and
the other Loan Documents or the making of Advances and (ii) any and all
liabilities, losses, damages, penalties, judgments, suits, claims,
costs, and expenses of any kind or nature whatsoever (except for those
arising primarily from the gross negligence or wilful misconduct of the
Indemnitees) including without limitation the reasonable fees and
disbursements of counsel in connection with any investigative,
administrative, or judicial proceedings, whether or not such Indemnitee
shall be designated a party thereto, which may be imposed on, incurred
by or asserted against such Indemnitee, in any manner relating to or
arising out of or in connection with making of the Advances, this
Agreement and all other Loan Documents or the use or intended use of the
proceeds of the Advances ("Indemnified Liabilities"). If any
investigative, judicial, or administrative proceeding arising
48
from any of the foregoing is brought against any Indemnitee, upon
request of such Indemnitee, Borrower, or counsel designated by Borrower
and satisfactory to the Indemnitee, shall resist and defend such action,
suit, or proceeding to the extent and in the manner directed by the
Indemnitee, at Borrower's sole cost and expense. Each Indemnitee shall
use its best efforts to cooperate in the defense of any such action,
suit, or proceeding. If the foregoing undertaking to indemnify, defend,
and hold harmless may be held to be unenforceable because it violates
any law or public policy, Borrower shall nevertheless make the maximum
contribution to the payment and satisfaction of each of the Indemnified
Liabilities which is permissible under Applicable Law. The obligation of
Borrower under this Section shall survive the termination of this
Agreement and the discharge of Borrower's Obligations to Lenders.
e. Execution in Counterparts. This Agreement and other Loan
Documents may be executed in any number of counterparts, each of which
when executed and delivered shall be deemed to be an original and all of
which counterparts when taken together shall constitute one and the same
instrument.
f. Headings. Section headings in this Agreement are included
herein for reference purposes only and shall not constitute a part of
this Agreement for any other purpose.
g. Further Assurances and Substituted Performance. Borrower
shall take or cause any third party to take any actions and execute or
cause any third party to execute any additional documents (including
without limitation Uniform Commercial Code filings) deemed necessary by
Lenders in their reasonable discretion to carry out the intent or
purposes of this Agreement. Borrower hereby grants to Lenders the power
of attorney to act on behalf of Borrower and Lenders shall be entitled,
but not required, to take any action that was required to be, but not,
taken by Borrower under this Agreement. Such power of attorney is
coupled with an interest and is irrevocable. Borrower shall reimburse
Lenders upon demand for any amounts, attorneys' fees, expenses, and
costs paid by Lenders in connection with such actions together with
interest thereon at the Default Rate from the date of payment until the
date of reimbursement. No action taken by Lenders shall be deemed to
relieve Borrower's obligation to take such action or cure any default
under this Agreement.
h. Survival. This Agreement shall remain in full force and
effect until Lenders have been released from any obligation to provide
Borrower with any loans or other financial accommodations of any kind
and all of the Obligations have been indefeasibly paid and satisfied in
a full and complete manner.
i. Essence of Time. Time is of the essence with respect to the
payment and performance of Borrower's indebtedness, liabilities, and
obligations under this Agreement.
j. Assignment. Lenders shall be entitled to assign or xxxxx x
xxxx or security interest in its obligations, rights, and remedies under
this Agreement to any third party in its sole discretion. Except as
permitted by the Loan Agreement, Borrower shall not be entitled to
assign or grant a security interest in any of its obligations, rights,
and remedies under this
49
Agreement to any third party without the prior written consent of
Lenders (including any express consent set forth in this Agreement).
k. Waiver. Lenders shall not be deemed to have waived any of the
Obligations or any indebtedness, liability, obligation, right, or remedy
described in this Agreement unless Lenders have executed and delivered
to Borrower a written waiver thereof. A waiver of a right or remedy on
one occasion shall not act as a waiver of that or any other right or
remedy on a future occasion. Without limiting the foregoing, Lenders'
delay in exercising any right or remedy shall not constitute a waiver of
that or any other right or remedy described in this Agreement.
l. Successors and Assigns. This Agreement shall inure to the
benefit of and be binding upon the successors, assigns, and receivers of
the parties hereto.
m. Severability. The invalidity of one or more provisions shall
not affect the validity of the remaining provisions of this Agreement.
n. Notice. Any notice or other communication to be provided
under this Agreement shall be in writing and shall be deemed given when
sent via fax (with proof of transmission) or overnight, certified,
registered, or regular mail to the parties thereto at the following
addresses or such other address as a party may provide the other parties
with written notice of from time to time:
If to Borrower:
The Genesee Company
000 Xxxx Xxxxx Xxxxx, Xxxxx 000
Xxxxxx, XX 00000
Attention: Xxxxx X. Xxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
and:
Xxxxx, Johnson, Robinson, Xxxx & Xxxxxxxxx, P.C.
000 - 00xx Xxxxxx, Xxxxx 0000
Xxxxxx, XX 00000
Attention: Xxxxxx X. XxxXxxxxx, Esq.
Phone: (000) 000-0000
Fax: (000) 000-0000
If to Lenders:
KeyBank National Association
0000 Xxxxxxxx, Xxxxx 000
00
Xxxxxx, Xxxxxxxx 00000
Attention: Commercial Residential Client Services
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
and:
Block Xxxxxx Xxxxxxxx, L.L.C.
0000 Xxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxxxx, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
51
and:
Compass Bank
00 Xxxxx 00xx Xxxxxx, 00xx Xxxxx
Xxxxxxxxxx, Xxxxxxx 00000
Attention: Xxxxxxx Xxxx Xxxxx, Sr. Vice President
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
o. Governing Law; Consent to Jurisdiction and Venue. This
Agreement shall be governed by the laws of the State of Colorado.
Borrower consents to the jurisdiction and venue of the United States
District Court for the District of Colorado and the District Court for
the City and County of Denver, Colorado, in the event of any litigation
pertaining to the negotiation, execution, and delivery of this Agreement
or the other Loan Documents, the enforcement of any indebtedness,
liability, obligation, right, or remedy described therein, or any claim,
defense, setoff, or counterclaim in connection therewith.
Notwithstanding anything to the contrary herein, all Security
Instruments pertaining solely to Arizona real property shall be governed
by the laws of the State of Arizona.
p. Attorneys' Fees and Expenses. Borrower shall pay Lenders
their attorneys' fees and other costs and expenses incurred before
trial, at trial, and on appeal in the collection or enforcement of this
Agreement or the other Loan Documents or in any litigation pertaining to
the negotiation, execution, or delivery of this Agreement or the other
Loan Documents, the payment and performance of any indebtedness,
liability, or obligation or the enforcement of any right or remedy
described therein, or any claim, defense, setoff, or counterclaim
arising or asserted in connection therewith.
q. Entire Agreement. This Agreement and the other Loan Documents
represent the complete and integrated understanding between the parties
pertaining to the subject matter hereof and thereof. All other prior and
contemporaneous discussions, negotiations, and agreements, written or
oral, express or implied, are of no further force and effect to the
extent inconsistent therewith.
r. Americans With Disabilities Act. Borrower expressly assumes
all liability for any changes or modifications required to be made to
any Improvements pursuant to the Americans With Disabilities Act.
Borrower shall indemnify and hold Lenders harmless from any claim which
may be made against Lenders pursuant to the Americans With Disabilities
Act. The terms and provisions of this Section shall survive the payment
of the Revolving Line of Credit or, in the event of the default in the
payment of the Revolving Line of Credit, shall survive the foreclosure
of any instrument securing the Revolving Line of Credit. In the event
Lenders are the high bidder at a sale of all or any portion of the
Property pursuant to the foreclosure of any of the Loan Documents, then
the terms and provisions of this section shall survive such sale and the
acquisition of the Property by Lenders and shall remain in full force
and effect notwithstanding the foreclosure of any instrument securing
the Revolving Line of Credit and the cancellation of the Promissory Note
evidencing the Revolving Line of Credit.
52
s. Partial Releases. Lenders agree that they will, from time to
time, when requested by Borrower, execute partial releases of the lien
of the Deeds of Trust pertaining to Finished Lots, Pre-Sold Units, Spec
Units, or Model Units comprising portions of the Property on the
following terms and conditions:
i. Lenders shall be given at least five (5) business
days' notice of Borrower's request for each partial release.
ii. With each request for partial release, Borrower
shall furnish Lenders with a legal description of the applicable
Finished Lot, Pre-Sold Unit, Spec Unit, or Model Unit for which
a release is requested.
iii. At any time when a Default or an Event of Default
has occurred and is continuing hereunder or under any other Loan
Document, Lenders' obligation to grant partial releases shall
only apply to Pre-Sold Units, Spec Units, and Model Units which
have been subject to an acceptable sales contract prior to the
Default with respect to which notice has been given; the
construction of such Unit is complete, a certificate of
occupancy has been issued; and the Unit is ready for delivery of
possession to a Purchaser. In such case, Lenders shall give
partial releases for such Pre-Sold Units, Spec Units, and Model
Units, upon the receipt of Ninety Percent (90%) of the net sales
proceeds of the final contract price for such Unit. For purposes
of this section, Net Sales proceeds shall be the gross purchase
price paid by a bona fide third-party purchaser of the Unit,
less all customary seller's costs of sale actually paid to third
parties, including recording fees, taxes, sales commissions,
title insurance premiums and closing fees not to exceed in the
aggregate Ten Percent (10%) of the final contract price. The
final contract price, in all cases, must have been determined
and agreed to in writing between Borrower and Purchaser on a
date prior to the Default or Event of Default. Within two (2)
Business Days of a declaration of default by Lenders, Borrower
shall deliver to Lenders an updated Borrowing Base Certificate
which will set forth and identify the Units which are subject to
this partial release provision.
iv. The cost of each partial release, including Lenders'
reasonable attorneys' fees, if any, shall be paid by Borrower.
t. Waivers. Borrower hereby expressly waives i. any right of
contribution, reimbursement, exoneration, or recourse available to
Borrower as to any of the Obligations, against any person liable
therefor, or as to any collateral security therefor, ii. any and all of
its rights in connection with the settlement, compromise or release of,
or the waiver of any default with respect to, any Obligations, and iii.
to the greatest extent permitted by applicable law, any and all
defenses, claims, setoffs and discharges available to a surety,
guarantor or accommodation co-obligor. With respect to rights of
subrogation as to any of the Obligations, against any person liable
therefor, or as to any collateral security therefor, Borrower covenants
and agrees to defer the enforcement of any such right until such time as
all Obligations under the Loan are paid in full, or otherwise fully
performed. Borrower agrees that the amount of
53
the Obligations and the liens and security interests created by the Loan
Documents shall not be diminished and the liability of Borrower
hereunder shall not be otherwise impaired or affected by any of the
foregoing.
u. Syndication Rider. Agent's and Banks' rights, duties and
obligations with respect to this Facility are as provided in the
Syndication Rider executed and attached in counterparts as EXHIBIT G
hereto.
v. Counterparts. This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one
Agreement, and any of the parties hereto may execute this Agreement by
signing any such counterpart. This Agreement shall be effective when it
has been executed by Borrower, Agent and all Banks and each party has
notified Agent by fax or telephone that it has taken such action and has
provided Agent with its executed signature page hereof.
w. WAIVER OF JURY TRIAL. BORROWER AND LENDERS WAIVE THEIR
RESPECTIVE RIGHTS TO DEMAND A JURY TRIAL IN THE EVENT OF ANY LITIGATION
PERTAINING TO THE NEGOTIATION, EXECUTION, AND DELIVERY OF THIS AGREEMENT
OR THE OTHER LOAN DOCUMENTS, THE ENFORCEMENT OF ANY OBLIGATION, RIGHT,
OR REMEDY DESCRIBED THEREIN, OR ANY CLAIM, DEFENSE, SETOFF, OR
COUNTERCLAIM IN CONNECTION THEREWITH.
THE GENESEE COMPANY
By: _____________________________________
Xxxxx X. Xxxxx, Vice President
KEYBANK NATIONAL ASSOCIATION,
For itself and as Agent and Lead Arranger
By: _____________________________________
Xxxx Xxxxxx, Vice President
54
COMPASS BANK
By: _____________________________________
Xxxxxxx Xxxx Xxxxx, Sr. Vice President
55
EXHIBIT A
BORROWING BASE CERTIFICATE
[To Be Provided]
EXHIBIT B
PROPERTY
[To Be Provided]
EXHIBIT C
REVOLVING PROMISSORY NOTES
KeyBank National Association $35,000,000.00
Compass Bank $15,000.000.00
EXHIBIT D
BORROWER NAMES, CHIEF EXECUTIVE OFFICE,
AND PRINCIPAL PLACES OF BUSINESS
The Genesee Company
Genesee Communities II, Inc.
Genesee Communities IV, Inc.
Genesee Communities V, Inc.
Genesee Communities VI, Inc.
Genesee Communities VII, Inc.
Genesee Communities VIII, Inc.
Chief Executive Office:
000 Xxxx Xxxxx Xxxxx, Xxxxx 000
Xxxxxx, XX 00000
Principal Places of Business:
Denver Division
000 Xxxx Xxxxx Xxxxx, Xxxxx 000
Xxxxxx, XX 00000
Fort Xxxxxxx Division
0000 Xxxxxxx Xxxxx, Xxxxx 000
Xxxx Xxxxxxx, XX 00000
Tucson Division
000 Xxxxxxxx Xxx, Xxxxx 000
Xxxxxx, XX 00000
EXHIBIT E
SUBSIDIARIES
Genesee Development Company
The Genesee Company of Michigan, Ltd.
Genesee Communities II, Inc.
Genesee Venture Corporation
The Genesee Company/Castle Pines, Ltd.
Genesee Communities I, Inc.
Genesee Communities II, Inc.
Genesee Communities III, Inc.
Genesee Communities IV, Inc.
Genesee Communities V, Inc.
Genesee Communities VI, Inc.
Genesee Communities VII, Inc.
Genesee Communities VIII, Inc.
EXHIBIT F
COMPLIANCE CERTIFICATE
In accordance with the Revolving Loan Agreement dated November , 2000,
and all amendments, modifications, replacements, and substitutions thereto
(collectively, "Loan Agreement"), attached are the financial statements of THE
GENESEE COMPANY, a Colorado corporation ( the "Borrower") as of and for the
quarter and year-to-date period ended ("Current Financials").
I certify that the Current Financials have been prepared in accordance
with generally accepted accounting principles, consistently applied, subject to
year-end audit adjustments (with respect to quarterly financial statements
only).
Defaults and Events of Default (check one):
[] I have no knowledge of the occurrence of any Default or Event of
Default under the Loan Agreement which has not previously been
reported to you in writing and remedied.
[] Attached is a detailed description of all Defaults and Events of
Default of which I have knowledge and which have not previously
been reported to you and remedied.
Compliance with Financial Covenants:
For the date and periods covered by the Current Financials, Borrower is
in compliance with the covenants set forth in SECTIONS 13(J), (K), AND (L) and
SECTION 14(U) of the Loan Agreement, except as indicated below. The calculations
made to determine compliance are as follows:
Covenant Actual Requirement
-------- ------ -----------
---------------------------------
President/Chief Financial Officer
EXHIBIT G
SYNDICATION PROVISIONS
20. Provisions For Syndicated Loans.
a. Bank Assignments. The following terms used in this Section 20
and Section 21 (and elsewhere if used) shall have the following meanings:
i. Agent: KeyBank National Association and any successor
Agent appointed hereunder.
ii. Assignment and Assumption: The written Assignment
and Assumption Agreement satisfactory to Agent and the Banks.
iii. Commitment: The maximum amount each Bank has agreed
to lend to Borrower as part of the Loan, as set forth below the
signature line of each Bank, subject to modification by each
Assignment and Assumption. At closing of this Facility, the
Banks, and their interests in the Facility are as follows:
(1) KeyBank National Association - $35,000,000.00
(2) Compass Bank - $15,000,000.00
iv. Bank: Each party constituting Lender, as modified by
each Assignment and Assumption.
v. Defaulting Bank: As defined in Section 21(e)(ii).
vi. Lenders: KeyBank National Association and Compass
Bank, an Alabama banking association, and their successors and
assigns.
vii. Percentage: With respect to each Bank, the
percentage which its Commitment constitutes of the maximum
amount of the Loan.
viii. Required Banks: Banks holding Percentages
aggregating at least sixty-six and two-thirds percent (66 2/3%).
b. Several Liability. Anything in this Agreement contained to
the contrary notwithstanding, the obligations of the Banks to Borrower under
this Agreement are several and not
joint and several; each Bank shall only be obligated to fund its Percentage of
each disbursement to be made hereunder up to the amount of its Commitment.
c. Assignments and Participations.
i. Each Bank shall have the right to assign, transfer,
sell, negotiate, pledge or otherwise hypothecate this Agreement
and any of its rights and security hereunder and under the other
Loan Documents to any other lending institution (an "Assignee")
with the prior written consent of the Agent and with the prior
written consent of Borrower, which consents by the Agent and the
Borrower shall not be unreasonably withheld, conditioned or
delayed (provided that no consent of Borrower shall be required
if the Assignee is also a Bank or if an Event of Default then
exists) and no consent of the Agent shall be required if the
Assignee is also a Bank; provided, however, that (i) the parties
to each such assignment shall execute and deliver to Agent, for
its approval and acceptance, an Assignment and Assumption, (ii)
each such assignment shall be of a constant, and not a varying,
percentage of the assigning Bank's rights and obligations under
this Agreement, (iii) unless the Agent and, so long as no Event
of Default exists, Borrower otherwise consent, the aggregate
amount of the Commitment of the assigning Bank being assigned
pursuant to each such assignment shall in no event be less than
Five Million Dollars ($5,000,000), (iv) the Agent shall receive
from the assigning Bank and/or assignee a processing fee of Three
Thousand Five Hundred Dollars ($3,500), and (v) if the assignment
is less than the assigning Bank's entire interest in the Loan,
the assigning Bank must retain at least a Ten Million and no/100
Dollar ($10,000,000.00) interest in the Loan. The Agent may
designate any Assignee accepting an assignment of a specified
portion of the Loan to be a Co-Agent, an "Arranger" or similar
title, but such designation shall not confer on such Assignee the
rights or duties of the Agent. Upon such execution, delivery,
approval and acceptance, and upon the effective date specified in
the applicable Assignment and Assumption, (a) the Assignee
thereunder shall be a party hereto and, to the extent that rights
and obligations hereunder have been assigned to it and assumed by
it, as applicable, pursuant to such Assignment and Assumption,
have the rights and obligations of a Bank hereunder and under the
other Loan Documents, and Borrower hereby agrees that all of the
rights and remedies of Banks in connection with the interest so
assigned shall be enforceable against Borrower by an Assignee
with the same force and effect and to the same extent as the same
would have been enforceable but for such assignment, and (b) the
assigning Bank thereunder shall, to the extent that rights and
obligations hereunder and under the other Loan Documents have
been assigned by it pursuant to such Assignment and Assumption,
relinquish its rights and be released from its obligations
hereunder and thereunder.
ii. By executing and delivering an Assignment and
Assumption, the assigning Bank thereunder and the Assignee
thereunder confirm to and agree with
2
each other and the other parties hereto as follows: (i) except as
provided in such Assignment and Assumption, such assigning Bank
makes no representation or warranty and assumes no responsibility
with respect to any statements, warranties or representations
made in or in connection with this Agreement or any other Loan
Document or the execution, legality, validity, enforceability,
genuineness, sufficiency or value of this Agreement or any other
Loan Document or any other instrument or document furnished in
connection therewith; (ii) such assigning Bank makes no
representation or warranty and assumes no responsibility with
respect to the financial condition of the Borrower or the
performance or observance by the Borrower of any of its
obligations under any Loan Document or any other instrument or
document furnished in connection therewith; (iii) such Assignee
confirms that it has received a copy of this Agreement together
with such financial statements, Loan Documents and other
documents and information as it has deemed appropriate to make
its own credit analysis and decision to enter into the Assignment
and Assumption and to become a Bank hereunder; (iv) such Assignee
will, independently and without reliance upon Agent, the
assigning Bank or any other Bank, and based on such documents and
information as it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking action
under this Agreement; (v) such Assignee appoints and authorizes
the Agent to take such action as the Agent on its behalf and to
exercise such powers under this Agreement and the other Loan
Documents as are delegated to Agent by the terms hereof and
thereof, together with such powers as are reasonably incidental
thereto; and (vi) such Assignee agrees that it will perform in
accordance with their terms all of the obligations which by the
terms of this Agreement are required to be performed by it as a
Bank.
iii. Agent shall maintain a copy of each Assignment and
Assumption delivered to and accepted by it and shall record in
its records the names and address of each Bank and the Commitment
of, and Percentage of the Loan owing to, such Bank from time to
time. Borrower, the Agent and Banks may treat each entity whose
name is so recorded as a Bank hereunder for all purposes of this
Agreement.
iv. Upon receipt of an Assignment and Assumption executed
by an assigning Bank and an Assignee, Agent shall, if such
Assignment and Assumption has been properly completed and
consented to if required herein, accept such Assignment and
Assumption, and record the information contained therein in its
records, and the Agent shall use its best efforts to give prompt
notice thereof to Borrower (provided that neither the Agent nor
the Banks shall be liable for any failure to give such notice).
v. Borrower shall use reasonable efforts to cooperate with
Agent and each Bank in connection with the assignment of
interests under this Agreement or the sale of participations
herein.
3
vi. Anything in this Agreement to the contrary
notwithstanding, and without the need to comply with any of the
formal or procedural requirements of this Agreement, including
this Section, any Bank may at any time and from time to time
pledge and assign all or any portion of its rights under all or
any of the Loan Documents to a Federal Reserve Bank; provided
that no such pledge or assignment shall release such Bank from
its obligations hereunder. To facilitate any such pledge or
assignment, the Agent shall, at the request of such Bank, enter
into a letter agreement with the Federal Reserve Bank in, or
substantially in, the form of the exhibit to Appendix C to the
Federal Reserve Bank of New York Operating Circular No. 12.
vii. Anything in this Agreement to the contrary
notwithstanding, any Bank may assign all or any portion of its
rights and obligations under this Agreement to another branch or
affiliate of such Bank without first obtaining the approval of
any Agent or the Borrower, provided that (i) such Bank remains
liable hereunder unless the Borrower and Agent shall otherwise
agree, (ii) at the time of such assignment such Bank is not a
Defaulting Bank, (iii) such Bank gives the Agent and Borrower at
least fifteen (15) days prior written notice of any such
assignment; (iv) the parties to each such assignment execute and
deliver to Agent an Assignment and Assumption, and (v) the Agent
receives from the assigning Bank a processing fee of One Thousand
Five Hundred Dollars ($1,500).
viii. Each Bank shall have the right, without the consent
of the Borrower, to sell participations to one or more other
Banks (a "Participant") in or to all or a portion of its rights
and obligations under the Loan and the Loan Documents; provided,
however, that (i) such Bank's obligations under this Agreement
(including without limitation its Commitment to Borrower
hereunder) shall remain unchanged, (ii) such Bank shall remain
solely responsible to the other parties hereto for the
performance of such obligations (iii) the Borrower, the Agent and
the other Banks shall continue to deal solely and directly with
such Bank in connection with such Bank's rights and obligations
under this Agreement and with regard to any and all payments to
be made under this Agreement and (iv) the holder of any such
participation shall not be entitled to voting rights under this
Agreement or the other Loan Documents (but such holder may
contract with the Bank selling such Participant its interest in
such Bank's share of the Loan as to voting of such Bank's
interest under Section 21.f(ii) [but not under any other section
of this Agreement], provided that any such agreement by a Bank
shall bind only such Bank alone and not Borrower, the other Banks
or the Agent).
ix. No Assignee of any rights and obligations under this
Agreement shall be permitted to subassign such rights and
obligations. No participant in any rights and obligations under
this Agreement shall be permitted to sell subparticipations of
such rights and obligations.
4
x. Borrower acknowledges and agrees that Banks may provide
to any Assignee or Participant originals or copies of this
Agreement, any other Loan Document and any other documents,
instruments, certificates, opinions, insurance policies, letters
of credit, reports, requisitions and other materials and
information of every nature or description, and may communicate
all oral information, at any time submitted by or on behalf of
Borrower or received by any Bank in connection with the Loan or
with respect to Borrower, provided that prior to any such
delivery or communication, such Assignees or Participants shall
agree to preserve the confidentiality of any of the foregoing to
the same extent that such Bank agreed to preserve such
confidentiality. In order to facilitate assignments to Assignees
and sales to Participants, Borrower shall execute such further
documents, instruments or agreements as Banks may reasonably
require; provided, that Borrower shall not be required (i) to
execute any document or agreement which would materially decrease
its rights, or materially increase its obligations, relative to
those set forth in this Agreement or any of the other Loan
Documents (including financial obligations, personal recourse,
representations and warranties and reporting requirements), or
(ii) to expend more than incidental sums of money or incidental
administrative time for which it does not receive reasonable
reimbursement in order to comply with any requests or
requirements of any Bank in connection with such assignment or
sale arrangement. In addition, Borrower agrees to cooperate fully
with Banks in the exercise of Banks' rights pursuant to this
Section, including providing such information and documentation
regarding Borrower as any Bank or any potential Assignee or
Participant may reasonably request and to meet with potential
Assignees and Participants.
21. Agent.
a. Appointment.
i. Key Bank National Association is hereby appointed as
Agent hereunder and under each other Loan Document, and the Banks
hereby irrevocably authorize the Agent to act as agent for
Lenders and to take such actions as Lenders are obligated or
entitled to take under the provisions of this Agreement and the
other Loan Documents and to exercise such powers as are set forth
herein or therein, together with such other powers as are
reasonably incidental thereto. Agent agrees to act as such upon
the express conditions contained in this Article in substantially
the same manner that it would act in dealing with a loan held for
its own account. Agent shall not have a fiduciary relationship
with respect to any Bank by reason of this Agreement.
ii. The provisions of this Article are solely for the
benefit of the Agent and the Banks, and Borrower shall not have
any rights to rely on or enforce any of the provisions hereof
except as provided in Section 21(b) below. In performing its
5
functions and duties under this Agreement, the Agent shall act
solely as agent of Lenders and does not assume, and shall not be
deemed to have assumed, any obligations toward or relationship of
agency or trust with or for the Borrower.
b. Reliance on Agent. All acts of and communications by the
Agent, as agent for the Banks, shall be deemed legally conclusive and binding;
and Borrower or any third party (including any court) shall rely on any and all
communications or acts of the Agent with respect to the exercise of any rights
or the granting of any consent, waiver or approval on behalf of Lenders in all
circumstances where an action by Lenders is required or permitted pursuant to
this Agreement or the provisions of any other Loan Document or by applicable law
without the right or necessity of making any inquiry of any individual Bank as
to the authority of Agent with respect to such matter. In no event shall any of
the foregoing limit the rights or obligations of any Bank with respect to any
other Bank pursuant to this Article 21.
x. Xxxxxx. The Agent shall have and may exercise such powers
under the Loan Documents as are specifically delegated to the Agent by the terms
of each thereof, together with such powers as are reasonably incidental thereto,
and may exercise all other powers of Lenders as are not made subject to the
consent of the Required Banks pursuant to Section 21(f)(i) or to the consent of
all Banks pursuant to Section 21.f(ii). The Agent shall not be considered, or be
deemed, a separate agent of the Banks hereunder, but is, and shall be deemed,
acting in its contractual capacity as Agent, exercising such rights and powers
under the Loan Documents as are specifically delegated to the Agent or Agent is
otherwise entitled to take hereunder. Agent shall have no implied duties to the
Banks, or any obligation to the Banks to take any action except any action
specifically provided by the Loan Documents to be taken by the Agent.
d. Disbursements.
i. At least one (1) Business Day (by 11:00 a.m. Denver
time) prior to each date a disbursement of the Loan is to be made
hereunder pursuant to this Agreement, the Agent shall notify each
Bank of the proposed disbursement. Each Bank shall make available
to Agent (or the funding Bank or entity designated by the Agent),
the amount of such Bank's Percentage of such disbursement (with
respect to such Bank, such amount being referred to herein as an
"Advance") in immediately available funds not later than 11:00
a.m. (Denver time) on the date such disbursement is to be made
(such date being referred to herein as a "Funding Date"). Unless
the Agent shall have been notified by any Bank prior to such time
for funding in respect of any Advance that such Bank does not
intend to make available to the Agent such Bank's Advance, the
Agent may assume that such Bank has made such amount available to
the Agent and the Agent, in its sole discretion, may, but shall
not be obligated to, make available to Borrower a corresponding
amount. If such corresponding amount is not in fact made
available to the Agent by such Bank on or prior to the respective
Funding Date, such Bank agrees to pay and Borrower agrees to
repay to Agent forthwith on demand such corresponding amount
together with
6
interest thereon, for each day from the date such amount is made
available to Borrower until the date such amount is paid or
repaid to Agent, at (A) in the case of such Bank, the Federal
Funds Effective Rate, and (B) in the case of Borrower, the
interest rate applicable at the time to a disbursement made on
such Funding Date. If such Bank shall pay to Agent such
corresponding amount, such amount so paid shall constitute such
Bank's Advance, and if both such Bank and Borrower shall have
paid and repaid, respectively, such corresponding amount, Agent
shall promptly return to Borrower such corresponding amount in
same day funds.
ii. Requests by the Agent for funding by the Banks of
disbursements of the Loan will be made by facsimile. Each Bank
shall make its Advance available to the Agent in dollars and in
immediately available funds to such Lenders and account as the
Agent may designate, not later than Noon (Denver time) on the
Funding Date. Nothing in this Section 21(d) shall be deemed to
relieve any Bank of its obligation hereunder to make any Advance
on any Funding Date, nor shall any Bank be responsible for the
failure of any other Bank to perform its obligations to make any
Advance hereunder, and the Commitment of any Bank shall not be
increased or decreased as a result of the failure by any other
Bank to perform its obligation to make any Advances hereunder.
iii. As soon as practical Agent will promptly forward to
each Bank copies of the Borrower's telecopy transmittal request
for Draws and shall cause the Lenders' Consultant to forward to
each Bank a copy of the Lenders' Consultant's most recent audit
inspection. Delivery of the Draw request documents and the
Lenders' Consultant's audit inspection report shall not be a
condition to funding any Advance. In addition, as soon as
practical on a monthly basis, Agent shall forward to each Bank a
copy of the Borrowing Base Certificate and all backup materials
received from Borrower.
e. Distribution and Apportionment of Payments.
i. Subject to Section 21(e)(ii), payments actually
received by Agent for the account of the Banks shall be paid to
them promptly after receipt thereof by Agent, but in any event
within one (1) Business Day, provided that, if any such payments
are not distributed to the Banks within one Business Day after
Agent's receipt thereof, Agent shall pay to such Banks interest
thereon, at the lesser of (i) the Federal Funds Effective Rate
and (ii) if the applicable payment represents repayment of a
portion of the principal of the Loan, the rate of interest
applicable to such portion of the Loan, from the date of receipt
of such funds by Agent until such funds are paid in immediately
available funds to such Banks provided such funds are received by
Agent not later than 11:00 A.M. (Denver time) on the date of
receipt. All payments of principal and interest in respect of the
Loan, all payments of the fees described in this Agreement (but
not in any separate fee letter except to the extent expressly set
7
forth therein), and all payments in respect of any other
obligations of Borrower under the Loan Documents shall be
allocated among such of Banks as are entitled thereto, in
proportion of their respective Percentages or otherwise as
provided herein in the other Loan Documents, as the case may be.
The Agent shall distribute to each Bank at its primary address
set forth herein or in its Assignment and Assumption, or at such
other address as a Bank may request in writing, such funds as it
may be entitled to receive, provided that the Agent shall in any
event not be bound to inquire into or determine the validity,
scope or priority of any interest or entitlement of any Bank and
may suspend all payments and seek appropriate relief (including
without limitation instructions from the Required Banks, or all
Banks, as applicable, or an action in the nature of interpleader)
in the event of any doubt or dispute as to any apportionment or
distribution contemplated hereby. The order of priority herein is
set forth solely to determine the rights and priorities of the
Banks as among themselves and may at any time or from time to
time be changed by the Banks as they may elect, in writing,
without necessity of notice to or consent of or approval by
Borrower.
ii. If a Bank (a "Defaulting Bank") defaults in making any
Advance or paying any other sum payable by it hereunder, such sum
together with interest thereon at the Default Rate from the date
such amount was due until repaid (such sum and interest thereon
as aforesaid referred to, collectively, as the "Bank Default
Obligation") shall be payable by the Defaulting Bank (i) to any
Bank(s) which elect, at their sole option (and with no obligation
to do so), to fund the amount which the Defaulting Bank failed to
fund or (ii) to Agent or any other Bank which under the terms of
this Agreement is entitled to reimbursement from the Defaulting
Bank for the amounts advanced or expended. Notwithstanding any
provision hereof to the contrary, until such time as a Defaulting
Bank has repaid the Bank Default Obligation in full, all amounts
which would otherwise be distributed to the Defaulting Bank shall
instead be applied first to repay the Bank Default Obligation (to
be applied first to interest at the Default Rate and then to
principal) until the Bank Default Obligation has been repaid in
full (whether by such application or by cure by the Defaulting
Bank), whereupon such Bank shall no longer be a Defaulting Bank.
Any interest collected from Borrower on account of principal
advanced by any Bank(s) on behalf of a Defaulting Bank shall be
paid to the Bank(s) who made such advance and shall be credited
against the Defaulting Bank's obligation to pay interest on the
amount advanced at the Default Rate. If no other Bank makes an
advance a Defaulting Bank failed to fund, a portion of the
indebtedness of Borrower to the Defaulting Bank equal to the Bank
Default Obligation shall be subordinated to the indebtedness of
Borrower to all other Banks and shall be paid only after the
indebtedness of Borrower to all other Banks is paid. The
provisions of this Section shall apply and be effective
regardless of whether an Event of Default occurs and is then
continuing, and notwithstanding (i) any other provision of this
Agreement to the contrary or (ii) any instruction of Borrower as
to its desired application of payments.
8
No Defaulting Bank shall have the right to vote on matters which
are subject to the consent or approval of Required Banks or all
Banks and while any Bank is a Defaulting Bank the requisite
percentage of Banks which constitutes the Required Banks shall be
calculated exclusive of the Percentage of the Defaulting Bank.
The Agent shall be entitled to (i) withhold or set off, and to
apply to the payment of the Bank Default Obligation any amounts
to be paid to such Defaulting Bank under this Agreement, and (ii)
bring an action or suit against such Defaulting Bank in a court
of competent jurisdiction to recover the Bank Default Obligation
and, to the extent such recovery would not fully compensate the
Banks for the Defaulting Bank's breach of this Agreement, to
collect damages. In addition, the Defaulting Bank shall
indemnify, defend and hold Agent and each of the other Banks
harmless from and against any and all claims, actions,
liabilities, damages, costs and expenses (including attorneys'
fees and expenses), plus interest thereon at the Default Rate,
for funds advanced by Agent or any other Bank on account of the
Defaulting Bank or any other damages such persons may sustain or
incur by reason of or as a direct consequence of the Defaulting
Bank's failure or refusal to abide by its obligations under this
Agreement.
iii. At least five Business Days prior to the first date
on which interest or fees are payable hereunder for the account
of any Bank, each Bank that is not incorporated under the laws of
the United States of America, or a state thereof, agrees that it
will deliver to the Agent two duly completed copies of United
States Internal Revenue Service Form 1001 or 4224, certifying in
either case that such Bank is entitled to receive payments under
this Agreement and the Note without deduction or withholding of
any United States federal income taxes. Each Bank which so
delivers a Form 1001 or 4224 further undertakes to deliver the
Agent two additional copies of such form (or a successor form) on
or before the date that such form expires or becomes obsolete or
after the occurrence of any event requiring a change in the most
recent forms so delivered by it, and such amendments thereto or
extensions or renewals thereof as may be reasonably requested by
the Agent, in each case certifying that such Bank is entitled to
receive payments under this Agreement and the Note without
deduction or withholding of any United States federal income
taxes, unless an event (including without limitation any change
in treaty, law or regulation) has occurred prior to the date on
which any such delivery would otherwise be required which renders
all such forms inapplicable or which would prevent such Bank from
duly completing and delivering any such form with respect to it
and such Bank advises the Agent that it is not capable of
receiving payments without any deduction or withholding of United
States federal income tax.
f. Consents and Approvals.
i. Each of the following shall require the approval or
consent of the Required Banks:
9
(1) Declaring the Note to be immediately due and payable
following an Event of Default or any recession of any such
acceleration;
(2) Approval of the exercise of rights and remedies
under the Loan Documents following an Event of Default;
(3) Appointment of a successor Agent;
(4) Approval of Post-Default Plan (defined in Section
21(g)(iv)); and
(5) Except as referred to in subsection (ii) below,
approval of any amendment or modification of this Agreement or
any of the other Loan Documents, or issuance of any waiver of
any material provision of this Agreement or any of the other
Loan Documents;
ii. Each of the following shall require the approval or consent
of all the Banks:
(1) Extension of the Maturity Date (beyond any extension
permitted herein) or forgiveness of all or any portion of the
principal amount of the Loan or any accrued interest thereon, or
any other amendment of this Agreement or the other Loan
Documents which would reduce the interest rate options or the
rate at which fees are calculated or forgive any loan fee, or
extend the time of payment of any principal, interest or fees;
(2) Reduction of the percentage specified in the
definition of Required Banks;
(3) Increasing of the amount of the Loan or any Bank's
Commitment;
(4) Release of any lien on any material collateral
(except as Borrower is entitled to under the Loan Documents) or
other release of Collateral; and
(5) Amendment of the provisions of this Article 21.
iii. In addition to the required consents or approvals referred
to in subsections (i) and (ii) above, the Agent may at any time request
instructions from the Required Banks with respect to any actions or
approvals which, by the terms of this Agreement or of any of the Loan
Documents, the Agent is permitted or required to take or to grant
without instructions from any Banks, and if such instructions are
promptly
10
requested, the Agent shall be absolutely entitled to refrain from taking
any action or to withhold any approval and shall not be under any
liability whatsoever for refraining from taking any action or
withholding any approval under any of the Loan Documents until it shall
have received such instructions from the Required Banks. Without
limiting the foregoing, no Bank shall have any right of action
whatsoever against any Agent as a result of such Agent acting or
refraining from acting under this Agreement or any of the other Loan
Documents in accordance with the instructions of the Required Banks or,
where applicable, all Banks. The Agent shall promptly notify each Bank
at any time that the Required Banks have instructed the Agent to act or
refrain from acting pursuant hereto.
iv. Each Bank authorizes and directs the Agent to enter
into the Loan Documents other than this Agreement for the benefit of the
Banks. Each Bank agrees that any action taken by the Agent at the
direction or with the consent of the Required Banks in accordance with
the provisions of this Agreement or any other Loan Document, and the
exercise by the Agent at the direction or with the consent of the
Required Banks of the powers set forth herein or therein, together with
such other powers as are reasonably incidental thereto, shall be
authorized and binding upon all Banks, except for actions specifically
requiring the approval of all Banks. All communications from the Agent
to the Banks requesting Banks' determination, consent, approval or
disapproval (i) shall be given in the form of a written notice to each
Bank, (ii) shall be accompanied by a description of the matter or item
as to which such determination, approval, consent or disapproval is
requested, or shall advise each Bank where such matter or item may be
inspected, or shall otherwise describe the matter or issue to be
resolved, (iii) shall include, if reasonably requested by a Bank and to
the extent not previously provided to such Bank, written materials and a
summary of all oral information provided to the Agent by Borrower in
respect of the matter or issue to be resolved, and (iv) shall include
the Agent's recommended course of action or determination in respect
thereof. Each Bank shall reply promptly, but in any event within ten
(10) Business Days after receipt of the request therefor from the Agent
(the "Bank Reply Period"). Unless a Bank shall give written notice to
the Agent that it objects to the recommendation or determination of the
Agent (together with a written explanation of the reasons behind such
objection) within the Bank Reply Period, such Bank shall be deemed to
have approved of or consented to such recommendation or determination.
With respect to decisions requiring the approval of the Required Banks
or all Banks, the Agent shall upon receiving the required approval or
consent follow the course of action or determination recommended to the
Banks by the Agent or such other course of action recommended by the
Required Banks.
g. Agency Provisions Relating to Collateral.
i. The Agent is hereby authorized on behalf of all Banks,
without the necessity of any notice to or further consent from any Bank,
at any time and from time to time, to take any action with respect to
any collateral for the Loan or any Loan Document which may be necessary
to preserve and maintain such collateral or to perfect and maintain
11
perfected the liens upon such collateral granted pursuant to this
Agreement and the other Loan Documents.
ii. Except as provided in this Agreement, the Agent shall
have no obligation whatsoever to any Bank or to any other person or
entity to assure that any collateral exists or is owned by Borrower or
is cared for, protected or insured or has been encumbered or that the
liens granted herein or in any of the other Loan Documents or pursuant
hereto or thereto have been properly or sufficiently or lawfully
created, perfected, protected or enforced or are entitled to any
particular priority.
iii. Should the Agent commence any proceeding or in any
way seek to enforce the Agent's or the Banks' rights or remedies under
the Loan Documents, irrespective of whether as a result thereof the
Agent shall acquire title to any collateral, each Bank, upon demand
therefor from time to time, shall contribute its share (based on its
Percentage) of the reasonable costs and/or expenses of any such
enforcement or acquisition, including, but not limited to, fees of
receivers or trustees, court costs, title company charges, filing and
recording fees, appraisers' fees and fees and expenses of attorneys to
the extent not otherwise reimbursed by Borrower. Without limiting the
generality of the foregoing, each Bank shall contribute its share (based
on its Percentage) of all reasonable costs and expenses incurred by the
Agent (including reasonable attorneys' fees and expenses) if the Agent
employ counsel for advice or other representation (whether or not any
suit has been or shall be filed) with respect to any collateral for the
Loan or any part thereof, or any of the Loan Documents, or the attempt
to enforce any security interest or lien on any collateral, or to
enforce any rights of the Agent or the Banks or any of Borrower's or any
other party's obligations under any of the Loan Documents, but not with
respect to any dispute between any Agent and any other Bank(s). It is
understood and agreed that in the event the Agent determines it is
necessary to engage counsel for Lenders from and after the occurrence of
a Default or Event of Default, said counsel shall be selected by the
Agent and written notice of such selection, together with a copy of such
counsel's engagement letter and fee estimate, shall be delivered to the
Banks.
iv. In the event that all or any portion of the collateral
for the Loan is acquired by the Agent as the result of the exercise of
any remedies hereunder or under any other Loan Document, or is retained
in satisfaction of all or any part of Borrower's obligations under the
Loan Documents, title to any such collateral or any portion thereof
shall be held in the name of the Agent or a nominee or subsidiary of
Agent, as agent, for the ratable benefit of the Agent and the Banks. The
Agent shall prepare a recommended course of action for such collateral
(the "Post-Default Plan"), which shall be subject to the approval of the
Required Banks. The Agent shall administer the collateral in accordance
with the Post-Default Plan, and upon demand therefor from time to time,
each Bank will contribute its share (based on its Percentage) of all
reasonable costs and expenses incurred by the Agent pursuant to the
Post-Default Plan, including without limitation, any operating losses
and all necessary operating reserves. To the extent there is net
operating income from such
12
collateral, the Agent shall, in accordance with the Post-Default Plan,
determine the amount and timing of distributions to Banks. All such
distributions shall be made to Banks in accordance with their respective
Percentages. In no event shall the provisions of this subsection or the
Post-Default Plan require the Agent or any Bank to take an action which
would cause such Bank to be in violation of any applicable regulatory
requirements.
h. Bank Actions Against Borrower or the Collateral. Each Bank
agrees that it will not take any action, nor institute any actions or
proceedings, against Borrower or any other person hereunder or under any other
Loan Documents with respect to exercising claims against the Borrower or rights
in any Collateral without the consent of the Required Banks. With respect to any
action by the Agent to enforce the rights and remedies of the Agent and Banks
with respect to the Borrower and any collateral in accordance with the terms of
this Agreement, each Bank hereby consents to the jurisdiction of the court in
which such action is maintained.
i. Assignment and Participation. No Bank shall be permitted to
assign or sell all or any portion of its rights and obligations under this
Agreement to Borrower or any affiliate of Borrower.
j. Ratable Sharing. Subject to Sections 21(d) and 21(e), Banks
agree among themselves that (i) with respect to all amounts received by them
which are applicable to the payment of the Loan, equitable adjustment will be
made so that, in effect, all such amounts will be shared among them ratably in
accordance with their Percentages, whether received by voluntary payment, by the
exercise of the right of set-off or bankers' lien, by counterclaim or cross
action or by the enforcement of any or all of the Loan Documents or any
collateral and (ii) if any of them shall by voluntary payment or by the exercise
of any right of counterclaim, set-off, bankers' lien or otherwise, receive
payment of a proportion of the aggregate amount of the Loan held by it which is
greater than its Percentage of the payments on account of the Loan, the one
receiving such excess payment shall purchase, without recourse or warranty, an
undivided interest and participation (which it shall be deemed to have done
simultaneously upon the receipt of such payment) in such obligations owed to the
others so that all such recoveries with respect to such obligations shall be
applied ratably in accordance with their Percentages; provided, that if all or
part of such excess payment received by the purchasing party is thereafter
recovered from it, those purchases shall be rescinded and the purchase prices
paid for such participations shall be returned to that party to the extent
necessary to adjust for such recovery, but without interest except to the extent
the purchasing party is required to pay interest in connection with such
recovery. Borrower agrees that any Bank so purchasing a participation from
another Bank pursuant to this Section may, to the fullest extent permitted by
law, exercise all its rights of payment (including the right of set-off) with
respect to such participation as fully as if such Bank were the direct creditor
of Borrower in the amount of such participation.
k. General Immunity. Neither Agent nor any of its directors,
officers, agents or employees shall be liable to Borrower or any Bank for any
action taken or omitted to be taken by it or them hereunder or under any other
Loan Document or in connection herewith or therewith, except for its or their
own gross negligence or willful misconduct. In the absence of gross
13
negligence, the Agent shall not be liable for any apportionment or distribution
of payments made by it in good faith pursuant to Section 21(e), and if any such
apportionment or distribution is subsequently determined to have been made in
error the sole recourse of any Bank to whom payment was due, but not made, shall
be to recover from the recipients of such payments any payment in excess of the
amount to which they are determined to have been entitled.
l. No Responsibility for Loan, Recitals, etc. Neither Agent nor
any of its directors, officers, agents or employees shall be responsible for or
have any duty to ascertain, inquire into, or verify (i) any statement, warranty
or representation made in connection with any Loan Document or any use of the
Loan; (ii) the performance or observance of any of the covenants or agreements
of any party to any Loan Document; (iii) the satisfaction of any condition
specified in this Agreement, except receipt of items purporting to be the items
required to be delivered to any Agent; or (iv) the validity, effectiveness or
genuineness of any Loan Document or any other instrument or writing furnished in
connection therewith, provided that the foregoing shall not release Agent from
liability for its gross negligence or willful misconduct.
m. Action on Instructions of Banks. The Agent shall in all cases
be fully protected in acting, or in refraining from acting, hereunder and under
any other Loan Document in accordance with written instructions signed by all
the Banks (or the Required Banks, if such action may be directed hereunder by
the Required Banks), and such instructions and any action taken or failure to
act pursuant thereto shall be binding on all of Banks. Each Bank, severally to
the extent of its Percentage, hereby agrees to indemnify Agent against and hold
it harmless from any and all liability, cost and expense that it may incur by
reason of taking or continuing to take any such action, provided that the
foregoing shall not release Agent from liability for its gross negligence or
willful misconduct.
n. Employment of Agents and Counsel. The Agent may undertake any
of its duties as Agent hereunder and under any other Loan Document by or through
employees, agents, and attorneys-in-fact and shall not be liable to Banks,
except as to money or securities received by them or their authorized agents,
for the default or misconduct of any such agents or attorneys-in-fact selected
by it with reasonable care. The Agent shall be entitled to advice of counsel
concerning all matters pertaining to the agency hereby created and its duties
hereunder and under any other Loan Document.
o. Reliance on Documents; Counsel. The Agent shall be entitled to
rely upon any notice, consent, certificate, affidavit, letter, telegram,
statement, paper or document believed by it to be genuine and correct and to
have been signed or sent by the proper person or persons, and, in respect to
legal matters, upon the opinion of counsel selected by the Agent, which counsel
may be an employee of Agent, provided that the foregoing shall not release the
Agent from liability for its gross negligence or willful misconduct. Any such
counsel shall be deemed to be acting on behalf of Bank in assisting the Agent
with respect to the Loan, but shall not be precluded from also representing
Agent in any matter in which the interests of Agent and the other Banks may
differ.
14
p. Agent' Reimbursement and Indemnification. Banks agree to
reimburse and indemnify Agent ratably (i) for any amounts (excluding principal
and interest on the Loan and loan fees) not reimbursed by Borrower for which
Agent is entitled to reimbursement under the Loan Documents, (ii) for any other
expenses incurred by Agent on behalf of Bank, in connection with the
preparation, execution, delivery, administration and enforcement of the Loan
Documents, if not paid by Borrower, (iii) for any expenses incurred by Agent on
behalf of Bank which may be necessary or desirable to preserve and maintain
collateral or to perfect and maintain perfected the liens upon the collateral
granted pursuant to this Agreement and the other Loan Documents, if not paid by
Borrower, (iv) for any amounts and other expenses incurred by Agent on behalf of
Bank in connection with any default by any Bank hereunder or under the other
Loan Documents, if not paid by such Bank, and (v) for any liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind and nature whatsoever which may be imposed
on, incurred by or asserted against Agent in any way relating to or arising out
of the Loan Documents or any other document delivered in connection therewith or
the transactions contemplated thereby, or the enforcement of any of the terms
thereof or of any such other documents, provided that no Bank shall be liable
for any of the foregoing to the extent they arise from the gross negligence or
willful misconduct of Agent.
q. Rights as a Bank. With respect to its Commitment, if any,
Agent shall have the same rights, powers and obligations hereunder and under any
other Loan Document as any Bank and may exercise such rights and powers as
though it were not an Agent, and the term "Bank" or "Banks" shall, unless the
context otherwise indicates, include Agent in its individual capacities. The
Borrower and each Bank acknowledge and agree that Agent and/or its affiliates
may accept deposits from, lend money to, hold other investments in, and
generally engage in any kind of trust, debt, equity or other transaction or have
other relationships, in addition to those contemplated by this Agreement or any
other Loan Document, with Borrower or any of its affiliates in which Borrower or
such affiliate is not restricted hereby from engaging with any other person.
x. Xxxxx' Credit Decisions. Each Bank acknowledges that it has,
independently and without reliance upon the Agent or any other Bank and based on
the financial statements and other information prepared by Borrower and such
other documents and information as it has deemed appropriate, made its own
credit analysis and decision to enter into this Agreement and the other Loan
Documents. Each Bank also acknowledges that it will, independently and without
reliance upon Agent or any other Bank and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under this Agreement and the
other Loan Documents.
s. Notice of Events of Default. Should Agent receive any written
notice of the occurrence of a default or Event of Default, or should the Agent
send Borrower a notice of Default or Event of Default, the Agent shall promptly
furnish a copy thereof to each Bank.
t. Successor Agent.
15
i. Agent may resign from the performance of all its
functions and duties hereunder at any time by giving at least thirty
(30) days prior written notice to Banks and Borrower. Such resignation
shall take effect on the date set forth in such notice or as otherwise
provided below. Such resignation by Agent as agent shall not affect its
obligations hereunder, if any, as a Bank.
ii. Upon resignation by the Agent, or any successor Agent,
the Required Banks shall appoint a successor Agent with the consent of
Borrower, which shall not be unreasonably withheld, conditioned or
delayed (provided that no consent of Borrower shall be required if the
successor Agent is also a Bank or if an Event of Default then exists).
If no successor Agent shall have been so appointed by the Required
Banks, and shall have accepted such appointment within thirty (30) days
after the retiring Agent's giving notice of resignation, then the
retiring Agent may appoint a successor Agent with the consent of
Borrower, which shall not be unreasonably withheld, conditioned or
delayed (provided that no consent of Borrower shall be required if the
successor Agent is also a Bank or if an Event of Default then exists).
Upon the acceptance of any appointment as an Agent hereunder by a
successor Agent, such successor Agent shall thereupon succeed to and
become vested with all the rights, powers, privileges and duties of the
Agent and the Agent, and the retiring Agent shall be discharged from its
duties and obligations hereunder and under the other Loan Documents
other than its liability, if any, for duties and obligations accrued
prior to its retirement. After any retiring Agent's resignation
hereunder as an Agent, the provisions of this Article 21 shall continue
in effect for its benefit in respect of any actions taken or omitted to
be taken by it while it was acting as an Agent hereunder and under the
other Loan Documents.
16
SECOND NOTE AND DEED OF TRUST MODIFICATION AGREEMENT
(THE GENESEE COMPANY, LLC)
THIS SECOND NOTE AND DEED OF TRUST MODIFICATION AGREEMENT
(Agreement) is made as of this ____ day of September, 2001, between and among
THE GENESEE COMPANY, LLC; KEYBANK NATIONAL ASSOCIATION, a national banking
association, for itself and as Agent and COMPASS BANK ("Lenders").
RECITALS
A. WHEREAS, The Genesee Company, LLC, a Colorado limited liability
company ("Borrower") and Lenders entered into that certain Senior Borrowing Base
Revolving Line of Credit Agreement dated as of November 10, 2000 (such
agreement, together with all amendments, modifications, extensions, replacements
and substitutions thereto is hereinafter referred to as the "Loan Agreement");
and
B. WHEREAS, Lenders have made available to Borrower a revolving
line of credit in the Maximum Facility Amount of Fifty Million and No/100
Dollars ($50,000,000.00) (the "Loan") pursuant to the Loan Agreement; and
C. WHEREAS, pursuant to the terms of the Loan Agreement, Borrower
executed and delivered to Lenders certain instruments, security instruments and
documents in connection with the Loan including, but not limited to, the
following, all of which are dated the date of the Loan Agreement (all of which
are collectively referred to as the "Loan Documents"):
1. The Loan Agreement;
2. The Revolving Promissory Note to KeyBank National Association in
the original principal amount of Thirty Five Million and No/100 Dollars
($35,000,000.00) (the "KeyBank Note") and the Revolving Promissory Note to
Compass Bank in the original principal amount of Fifteen Million and No/100
Dollars ($15,000,000.00) (collectively the "Notes");
3. The Deeds of Trust (the "Deeds of Trust") from Borrower in favor
of Lenders encumbering certain real property and improvements in Xxxxx, Boulder,
Xxxxxxx, Xxxxxxxxx and Larimer Counties, Colorado and Pima County, Arizona,
recorded in the real estate records of such counties and states between October
16, 2000 and the date of this Agreement, which real property and improvements
are more particularly described therein and are incorporated herein by this
reference (the "Property");
4. Security Agreements from Borrower in favor of Lenders pledging
certain personal property as security for the Loan;
5. Master Assignments of Leases, Rents and Profits from Borrower in
favor of Lenders encumbering the Property;
6. Master Assignment of Plans and Specifications, Architect's and
Engineer's Agreements, and Construction Contracts from Borrower in favor of
Lenders;
7. Master Environmental and Hazardous Substance Indemnification
Agreement from Borrower in favor of Lenders;
8. UCC-1 Financing Statements executed by Borrower, as
debtor, in favor of Lenders, as secured parties, as security for the Loan;
9. Tri-Party Agreements executed by Borrower, Land Title Guaranty
Company and Lenders pertaining to the Colorado Property and by Borrower, Fidelit
National Title Agency, Inc. and Lenders pertaining to the Arizona Property (the
"Tri-Party Agreements");
10. Guaranty of the Obligations of Borrower's affiliates, the
Genesee Communities II, IV, V, VI and VII, all of which are Colorado limited
liability companies.
Such other Loan Documents as were required by Lenders to
evidence the Loan and to provide security for the repayment thereof.
D. WHEREAS, as a condition to Lenders' obligations under the Loan
Agreement, Fortress Group, Inc., a Delaware corporation, executed and delivered
to Lenders a Maintenance and Subordination Agreement; and
E. WHEREAS, Borrower has requested Lenders to increase the Maximum
Facility Amount of the Loan from Fifty Million and No/100 Dollars
($50,000,000.00) to Fifty-Five Million and No/100 Dollars ($55,000,000.00) on a
one-time, temporary basis through the February 2, 2002 Maturity Date; and
F. WHEREAS, Lenders have agreed to make the temporary increase in
the Maximum Facility Amount of the Loan as requested by Borrower but only upon
the following terms and conditions.
AGREEMENT
NOW THEREFORE, in consideration of the mutual promises, payments,
extensions of credit, forbearances, and modifications contained herein, and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as follows:
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1. Modification of KeyBank Note. The original KeyBank Note is
hereby modified to provide as follows on a one-time, temporary basis through the
February 2, 2002 Maturity Date:
a. The principal amount of the KeyBank Note is hereby
increased from Thirty Five Million and No/100 Dollars ($35,000,000.00)
to the principal sum of the lesser of:
i. Forty Million and No/100 Dollars
($40,000,000.00) or
ii. KeyBank's pro rata interest in the unpaid
principal balance of the Senior Borrowing Base Revolving Line of
Credit Facility as increased hereby;
b. Borrower hereby agrees to and shall pay interest on the
Outstanding Principal Balance on the KeyBank Note as modified herein at
the Interest Rate in accordance with terms of the KeyBank Note and Loan
Agreement through the February 2, 2002 Maturity Date at which time all
principal and accrued interest shall be due and payable in full.
2. Modification of Loan Agreement. All references to the KeyBank
Note in the Loan Agreement shall be deemed to refer to the original KeyBank Note
as modified by this Agreement. In addition, the following terms and conditions
of the Loan Agreement are hereby modified to provide as follows:
a. The references to Fifty Million and No/100ths Dollars
($50,000,000.00) shall be changed to Fifty-Five Million and No/100ths
Dollars ($55,000,000.00).
b. Paragraph 10 (b) shall be modified to provide that
Borrower and all Subsidiary Borrowers shall not construct, maintain or
hold in inventory Finished Lots comprising more than Twenty-Two Million
and No/100 Dollars ($22,000,000.00) in the aggregate of the Borrowing
Base.
c. Paragraph 14(a) shall be modified to provide as follows:
(a) Minimum Tangible Net Worth. Borrower shall maintain a
Minimum Tangible Net Worth of at least $28,000,000.00 as of November 1,
2001, and at all times during the Term of the Revolving Line of Credit,
tested monthly. Any loans or advances from Borrower to Fortress or its
subsidiaries shall be debited against Borrower's Tangible Net Worth in
calculating Borrower's compliance with this Section.
3. Modification of Loan Documents. All references to the KeyBank
Note and the Loan Agreement in the Loan Documents shall be deemed to refer to
the KeyBank Note and the Loan Agreement as modified by this Agreement.
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4. Reaffirmation of Guaranties. Borrower hereby reaffirms, ratifies
and agrees to absolutely and unconditionally guaranty the payment and
performance of all of the present and future indebtedness, liabilities and
obligations to Lenders of any kind of Genesee Communities, II, IV, V, VI and VII
all of which are Colorado limited liability companies for which Borrower has
executed its guaranty of payment and performance as set forth in the Loan
Documents.
5. Conditions Precedent to Closing. Lenders shall receive and
approve all of the following documents and be satisfied, as applicable, as to
each of the following conditions precedent to the closing of this Agreement:
a. Borrower shall have a Minimum Tangible Net Worth of at
least $25,000,000.00 at closing of this Agreement calculated in
accordance with Paragraph 14(a) of the Loan Agreement.
b. All covenants, warranties, representations and
conditions of the Loan Documents remain in full force and effect and no
uncured Event of Default thereunder exists as of the date of this
Agreement.
c. The condition of title in and to all real and personal
property Collateral securing the Loan has not been materially, adversely
affected during the period November 10, 2000 through the date of this
Agreement.
d. The financial conditions of Borrower, of Genesee
Communities II, IV, V, VI and VII LLC, and of the Fortress Group, Inc.
have not been materially, adversely affected during the period November
10, 2000 through the date of this Agreement.
e. The Maintenance and Subordination Agreement between the
Fortress Group, Inc. and KeyBank National Association has been continued
and extended to include the Loan as modified herein.
f. Borrower shall provide opinions of Borrower's and
Fortress' counsel in form and substance satisfactory to Lender opining
as to such matters as Lender may require including but not limited to
the fact that this Agreement will not constitute an Event of Default
under existing agreements, restrictions of Borrower or Fortress or the
Senior Debenture.
6. Additional Provisions. At the closing of this Agreement,
Borrower shall:
a. Deliver to Lenders an endorsement to Lenders' existing
title insurance policies in form and substance satisfactory to Lenders,
insuring the continuing validity and first priority of the Loan
Documents, as modified herein, following the recording of this Agreement
(subject only to the matters set forth on Schedule B of said policies
and approved by Lenders), confirming all previous endorsements thereto,
and extending the coverage of said policy to the modified Maximum
Facility Amount of the Loan as provided herein.
b. Pay to Lenders all of Lenders' attorneys' fees and all
other out-of-pocket costs, fees and expenses incurred by or on behalf of
Lenders for recording expenses, title
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insurance premiums and all other costs incurred in connection with the
preparation and execution of this Agreement, and all other documents
necessary and required to effectuate the provisions hereof.
c. Pay to KeyBank National Association a .125% Facility Fee
on the Five Million and No/100 Dollars ($5,000,000.00) temporary
increase of $6,250.00 plus an arrangement fee of $3,000.00; and
7. Defined Terms. Unless otherwise defined herein all capitalized
terms shall have the meanings given to them in the Loan Agreement and the Loan
Documents.
8. Release. Borrower hereby releases and forever discharges
Lenders, their affiliates, directors, officers, agents, employees, and attorneys
of and from any and all liability, suits, damages, claims, counterclaims,
demands, reckonings, and causes of action, known and unknown, whether arising in
law or in equity, which Borrower had, now has, or may have in the future against
Lenders by reason of any acts, omissions, cause or thing, arising out of or in
any way related to the Loan Documents or this Agreement existing or accrued as
of the date of this Agreement.
9. Further Assurances. Borrower shall execute such amendments and
modifications to the Loan Documents as Lenders shall require to evidence and
reflect the terms of this Agreement. Borrower shall, upon Lenders' request,
immediately provide Lenders with such resolutions, Loan Agreements, Notes,
Security Agreements, UCC filings, Certificates of Title documents, Deeds of
Trust, Guaranties, Opinion Letters, and other documents, and shall take all
other actions reasonably requested by Lenders to evidence its indebtedness,
liabilities and obligations to Lenders hereunder, and to grant Lenders with a
continued lien and security interest in the Collateral in the identical priority
and under the same terms and conditions as are set forth in the Loan Documents
and in this Agreement.
10. Reservation of Rights. Nothing in this Agreement shall be
construed as a waiver by Lenders of any Event of Default or impair any of
Lenders' rights in any of their Collateral which shall accrue upon any default
subsequent to this Agreement.
11. Miscellaneous.
a. No maker, endorser, or guarantor of the Notes, the
Guaranty or of the Loan Documents shall be released by execution and
delivery of this Agreement.
b. Except as modified herein, all terms, covenants,
provisions, warranties and conditions of the Notes, Loan Documents, the
Guaranty and this Agreement shall remain in full force and effect and be
enforceable in accordance with their terms. Borrower hereby represents
and warrants to Lenders that all of the representations contained in any
of the Loan Documents are true and correct as of the date hereof.
Borrower hereby acknowledges and agrees that no defenses exist as
against the obligations to Lenders under the Notes, Loan Documents, the
Guaranty or in this Agreement as of the date of this Agreement.
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c. This Agreement and all other instruments, documents and
agreements executed and delivered in connection with this Agreement
embody the final, entire agreement among the parties hereto, and
supercede any and all prior commitments, agreements, and representations
and understandings, whether written or oral, relating to this Agreement,
and may not be contradicted or varied by evidence of prior,
contemporaneous or subsequent oral agreements or discussions of the
parties. This Agreement may only be modified or amended in a writing
signed by Borrower and Lenders.
d. The parties hereto consent to the jurisdiction and venue
of the United States District Court for the District of Colorado or the
District Court for the City and County of Denver, Colorado, in the event
of any litigation pertaining to this Agreement.
e. This Agreement shall be construed and governed by the
laws of the State of Colorado.
12. Binding Effect. This Agreement shall be binding upon Borrower,
its successors and assigns, and shall of which taken together shall constitute
one and the same instrument.
13. Counterparts. This Agreement may er executed in any number of
counterparts, each of which shall be deemed an original and all of which taken
togther shall be deemed an original and all of which taken together shall
constitute one and the same instrument.
14. WAIVER OF JURY TRIAL. BORROWER AND LENDERS WAIVE THEIR
RESPECTIVE RIGHTS TO DEMAND A JURY TRIAL IN THE EVENT OF ANY LITIGATION
PERTAINING TO THE NEGOTIATION, EXECUTION, AND DELIVERY OF THIS AGREEMENT OR THE
OTHER LOAN DOCUMENTS, THE ENFORCEMENT OF ANY OBLIGATION, RIGHT, OR REMEDY
DESCRIBED THEREIN, OR ANY CLAIM, DEFENSE, SETOFF, OR COUNTERCLAIM IN CONNECTION
THEREWITH.
Executed as of the date first above written.
BORROWER:
THE GENESEE COMPANY, LLC, a
Colorado limited liability company
By:
---------------------------
Title:
---------------------------
LENDERS:
KEYBANK NATIONAL ASSOCIATION
By:
---------------------------
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Title:
---------------------------
COMPASS BANK
By:
---------------------------
Xxxxxxx Xxxx Xxxxx
Senior Vice President
STATE OF COLORADO )
CITY AND ) ss
COUNTY OF DENVER )
The foregoing instrument was acknowledged before me this_____
day of September, 2001, by __________________ as Managing Member of The
Genesee Company, LLC, a Colorado limited liability company, on behalf of the
company.
Witness my hand and official seal.
SEAL
My commission expires:
----------------------- ---------------------------
Notary Public
STATE OF COLORADO )
CITY AND ) ss
COUNTY OF DENVER )
The foregoing instrument was acknowledged before me this _______
day of September, 2001, by ______________ , as _____________________ of
KeyBank National Association, a national banking association, on behalf of the
association.
Witness my hand and official seal.
SEAL
My commission expires
----------------------- ---------------------------
Notary Public
STATE OF ALABAMA
)
) ss
7
COUNTY OF JEFFERSON )
The foregoing instrument was acknowledged before me this _____
day of September, 2001, by Xxxxxxx Xxxx Xxxxx, as Senior Vice President of
Compass Bank, an Alabama banking corporation, on behalf of the corporation.
Witness my hand and official seal.
SEAL
My commission expires:
----------------------- ---------------------------
Notary Public
STATE OF ALABAMA )
) ss.
COUNTY OF JEFFERSON )
The foregoing instrument was acknowledged before me this _____ day of
September, 2001, by Xxxxxxx Xxxx Xxxxx, as Senior Vice President of Compass
Bank, an Alabama banking corporation, on behalf of the corporation.
Witness my hand and official seal.
SEAL
Notary Public
My commission expires:
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original document : C:\DOCS\SHADOW\JTMACD\0520841.01
and revised document: J:\DOCS\JTMACD\REAL\0520841.02
CompareRite found 16 change(s) in the text
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