EXHIBIT 3
AMENDED AND RESTATED
LOAN AGREEMENT
between
HOMEFED CORPORATION
a Delaware corporation,
as Borrower,
and
LEUCADIA FINANCIAL CORPORATION,
a Utah corporation,
as Lender
Dated as of August 14, 1998
NYFS04...:\30\76830\0001\2475\AGR7088X.50F
AMENDED AND RESTATED
LOAN AGREEMENT
This AMENDED AND RESTATED LOAN AGREEMENT, dated as of August __,
1998, is entered into by and between HOMEFED CORPORATION, a Delaware
corporation, as Borrower, and LEUCADIA FINANCIAL CORPORATION, a Utah corporation
as Lender.
RECITALS
A. On October 22, 1992, Borrower filed in the United States Court for the
Southern District of California (the "Bankruptcy Court"), a voluntary petition
for relief under chapter 11 of Title 11 of the United States Bankruptcy Code
which was later consolidated with an involuntary bankruptcy case initiated by
certain holders of debentures on June 25, 1992, and was assigned Case No.
92-07591-All (the "Bankruptcy Case").
B. Borrower filed a Fourth Amended Plan of Reorganization (the "Plan") in
the Bankruptcy Case, which was approved by its creditors and confirmed by the
Bankruptcy Court by Order of Confirmation dated December 19, 1994 (which Order
of Confirmation was modified as of June 14, 1995).
C. Lender is the largest shareholder of Borrower, and Lender worked with
Borrower to create the Plan. It is in the best interest of Lender to enter into
this Loan Agreement, and to perform its other obligations under and otherwise
act in compliance with the Plan.
D. The original Loan Agreement, entered on the Effective Date (the
"Original Loan Agreement"), was required under the Plan. The borrowing made
under the Original Loan Agreement was evidenced by a promissory note executed on
the Effective Date by Borrower ("Original Note"), and was secured by the Stock
Pledge, the Guaranties, the Security Agreements, the Deeds of Trusts, and
related financing statements, all of which documents are more fully described
below in the definition of "Original Plan Documents."
E. As an inducement to the Borrower to enter into a Development Management
Agreement with Provence Hills Development Company, LLC, a Delaware limited
liability company, Lender has agreed to restructure certain of Borrower's
obligations under the Original Loan Agreement and the Original Note (the
"Restructuring"), among other things, (a) to extinguish the convertibility
provisions thereof; (b) to increase the principal amount outstanding by the
amount of accrued but unpaid interest to date; (c) to reduce the interest rate
to 6% per year,
compounded annually; and (d) to extend the term of the Original Note to December
31, 2004. The terms of the Restructuring are reflected in the amended and
restated promissory note executed by Borrower as of the date hereof (the "Note")
and this Loan Agreement, the Stock Pledge, the Guaranties, the Security
Agreements, the Deeds of Trusts, and related financing statements, all of which
documents are more fully described below in the definition of Restructured Plan
Documents.
NOW, THEREFORE, in consideration of the above recitals and the mutual
covenants and agreements herein contained, the parties hereto covenant and agree
as follows:
ARTICLE 1
DEFINITIONS AND ACCOUNTING TERMS
1.1 Defined Terms. As used in this Loan Agreement, the following terms
shall have the meanings set forth respectively after each:
"Affiliate" means, as to any Person, any other Person which
directly or indirectly controls, or is under common control with, or is
controlled by, such Person. As used in this definition, "control" (and its
correlative meanings, "controlled by" and "under common control with")
shall mean possession, directly or indirectly, of power to direct or cause
the direction of management or policies (whether through ownership of
securities or partnership or other ownership interests, by contract or
otherwise), provided that, in any event, (i) any Person that owns,
directly or indirectly, 50% or more of the securities having ordinary
voting power for the election of directors or other governing body of a
corporation (other than securities having such power only by reason of the
happening of a contingency) will be deemed to control such corporation,
(ii) any Person who is a general partner or an Affiliate of a general
partner of a partnership will be deemed to control such partnership, and
(iii) any Person who owns or controls 50% or more of either the voting
power as to any matters on which owners are permitted to vote or of the
value of the ownership interests of any other Person (including a
corporation or partnership), will be deemed to control such other Person.
"Borrower" means HomeFed Corporation, a Delaware
corporation.
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"Business Day" means a day other than Saturday, Sunday or other
day on which commercial banks are authorized or required by law to close
under the laws of the States of California and/or Utah.
"Cash" means, when used in connection with any Person, all
monetary and non-monetary items belonging to such Person that are treated
as cash in accordance with generally accepted accounting principles,
consistently applied.
"Cash Equivalent" means (i) securities with maturities of one year
or less from the date of the acquisition issued or fully guaranteed or
insured by the United States government or any agency thereof, (ii)
commercial paper of an issuer rated at least "A-1" by Standard & Poor's
Corporation or "P-1" by Xxxxx'x Investors Service, Inc., or carrying an
equivalent rating by a nationally recognized rating agency if both of the
two named rating agencies cease publishing ratings of investments.
"Certificate of a Responsible Official" means a certificate signed
by a Responsible Official of the Person providing the certificate.
"Code" means the Internal Revenue Code of 1986, as
amended.
"Common Stock" means the common stock, par value $.01
per share, of Borrower.
"Contingent Obligation" means, as applied to any Person, any
direct or indirect liability, contingent or otherwise, of such person with
respect to any Indebtedness or contractual obligation of another person,
if the purpose or intent of such Person in incurring the Contingent
Obligation is to provide assurance to the obligee of such Indebtedness or
contractual obligation that such Indebtedness or contractual obligation
will be paid or discharged, or that any agreement relating thereto will be
complied with, or that any holder of such Indebtedness or contractual
obligation will be protected (in whole or in part) against loss in respect
thereof. Contingent Obligations of a Person include, without limitation,
(a) the direct or indirect guarantee, endorsement (other than for
collection or deposit in the ordinary course of business), co-making,
discounting with recourse or sale with recourse by such Person of an
obligation of another Person, and (b) any liability of such Person for an
Obligation of
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another Person through any agreement (contingent or otherwise) (i) to
purchase, repurchase or otherwise acquire such obligation or any security
therefor, or to provide funds for the payment or discharge of such
obligation (whether in the form of a loan, advance, stock purchase,
capital contribution or otherwise), (ii) to maintain the solvency or any
balance sheet item, level of income or financial condition of another
Person, (iii) to make take-or-pay or similar payments, if required,
regardless of non-performance by any other party or parties to an
agreement, (iv) to purchase, sell or lease (as lessor or lessee) property,
or to purchase or sell services, primarily for the purpose of enabling the
debtor to make payment of such obligation or to assure the holder of such
obligation against loss, or (v) to supply funds to or in any other manner
invest in such other Person (including, without limitation, to pay for
property or services irrespective of whether such property is received or
such services are rendered), if in the case of any agreement described in
subclause (i), (ii), (iii), (iv), or (v) of this sentence the primary
purpose or intent thereof is as described in the preceding sentence. The
amount of any Contingent Obligation shall be equal to the amount of the
obligation so guaranteed or otherwise supported.
"Default" means any Event of Default and/or any event that, with
the giving of notice or passage of time or both, would be an Event of
Default.
"dollars" or "$" means United States dollars.
"Effective Date" means July 3, 1995.
"Exchange Act" means the Securities Exchange Act of
1934, as amended.
"Event of Default" shall have the meaning ascribed to
it in Section 8.1.
"GAAP" means United States generally accepted accounting
principles as established from time to time.
"Government Securities" means readily marketable direct
obligations of the United States of America or obligations fully
guaranteed by the United states of America.
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"Governmental Agency" means (a) any international, foreign,
federal, state, county or municipal government, or political subdivision
thereof, (b) any governmental or quasi-governmental agency, authority,
board, bureau, commission, department, instrumentality or public body, or
(c) any court, administrative tribunal or public utility.
"Hazardous Materials" means flammable explosives, radioactive
materials, petroleum, asbestos, polychlorinated biphenyls and hazardous
substances, materials or wastes which are defined as hazardous or toxic
substances, materials or waste under any applicable Law.
"Indebtedness" means, with respect to any Person (i) all
indebtedness of such Person for borrowed money, (ii) all obligations of
such Person evidenced by notes, bonds, debentures or similar instruments,
(iii) all indebtedness of such Person created or arising under any
conditional sale or other title retention agreement with respect to
property acquired by such Person (even though the rights and remedies of
the seller or Lender under such agreement in the event of default are
limited to repossession or sale of such property), (iv) all Contingent
Obligations of such Person, (v) all obligations of such Person to
purchase, redeem or otherwise acquire for value any stock or stock
equivalents of such Person, valued, in the case of redeemable preferred
stock, at the greater of its voluntary or involuntary liquidation
preference plus accrued and unpaid dividends, and (vi) all Indebtedness
referred to in clause (i), (ii), (iii), (iv) or (v) above secured by (or
for which the holder of such Indebtedness has an existing right,
contingent or otherwise, to be secured by) any lien upon or on property,
and (vii) all liabilities of such Person that would be shown on a balance
sheet of such Person prepared in conformity with GAAP.
"Interest Payment Date" means the last day of each September,
December, March and June to occur while the Note is outstanding.
"Investment" means, when used in connection with any Person, any
investment by or of that Person, whether by means of purchase or other
acquisition of stock or other securities or by means of loan, advance,
capital contribution, guaranty or other debt or equity participation or
interest in any other Person, or otherwise, and includes, without
limitation, any partnership and joint venture interests of such Person.
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"Laws" means, collectively, all international, foreign, federal,
state and local statutes, treaties, rules, regulations, ordinances, codes
and administrative or judicial precedents.
"Lender" means Leucadia Financial Corporation, a Utah corporation,
and any holder of the Note or any interest therein or any one or more or
all of their successors in interest, as the context requires or permits.
"Lender's Office" means Lender's address as set forth on the
signature pages of this Loan Agreement, or such other address as Lender
hereafter may designate by written notice to Borrower.
"Lien" means any pledge, hypothecation, security interest,
encumbrance, lien or charge of any kind, whether voluntarily incurred or
arising by operation of Law or otherwise, affecting any Property,
including any agreement to give any of the foregoing, any conditional sale
or other title retention agreement, any lease in the nature thereof,
and/or the filing of or agreement to give any financing statement under
the Uniform Commercial Code or comparable Law of any jurisdiction.
"Loan" means the principal amount outstanding under the Original
Loan Agreement as of the date hereof.
"Loan Agreement" means this Amended and Restated Loan Agreement,
either as originally executed or as it may from time to time be
supplemented, modified, amended, restated or extended.
"Material Adverse Effect" means a material adverse effect on the
business, operations or condition (financial or otherwise) of Borrower and
its Subsidiaries taken as a whole.
"Maturity Date" means December 31, 2004.
"Note" shall have the meaning set forth in Recital E and shall be
substantially in the form and substance of Exhibit A, with all blanks
properly completed, either as originally executed or as the same may from
time to time be supplemented, modified, amended, renewed, extended or
refinanced.
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"Obligations" means all present and/or future obligations of every
kind or nature of Borrower and its Subsidiaries at any time and/or from
time to time owed to Lender under any one or more of the Plan Documents,
whether due or to become due, matured or unmatured, liquidated or
unliquidated, or contingent or noncontingent, including obligations of
performance as well as obligations of payment, and including, without
limitation, any and all expenses (including without limitation, counsel
fees and expenses) incurred by Lender in enforcing its rights under this
Loan Agreement as well as interest that accrues after the commencement of
any bankruptcy or insolvency proceeding by or against Borrower or any
Subsidiary or Affiliate of Borrower.
"Person" means any entity, whether an individual, trustee,
corporation, general partnership, limited partnership, joint stock
company, trust, unincorporated organization, bank, business association,
firm, joint venture, Governmental Agency, or otherwise.
"Plan Documents" means all of the following documents, in each
case either as originally executed or as the same may from time to time be
supplemented, modified, amended, restated or extended:
(a) this Loan Agreement;
(b) the Note;
(c) the Security Agreement and Stock Pledge
("Stock Pledge"), dated July 3, 1995, between Borrower
and Lender;
(d) the Payment Guaranty, dated July 3, 1995, executed by
HomeFed Communities, Inc., a California corporation ("HomeFed
Communities");
(e) the Security Agreement, dated July 3, 1995, between
HomeFed Communities and Lender;
(f) the Payment Guaranty, dated July 3, 1995, executed by
HomeFed Resources Corporation a California corporation ("HomeFed
Resources");
(g) the Security Agreement, dated July 3, 1995, between
HomeFed Resources and Lender;
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(h) the Deed of Trust, dated July 3, 1995, executed by
Paradise Valley Communities No. 1, a California general
partnership ("Paradise Valley");
(i) the Payment Guaranty, dated July 3, 1995, executed by
Paradise Valley in favor of Lender;
(j) the Security Agreement, dated July 3, 1995, between
Paradise Valley and Lender;
(k) the Payment Guaranty, dated July 3, 1995, executed by
Northfork in favor of Lender (collectively with the Payment
Guaranties of HomeFed Communities, HomeFed Resources and Paradise
Valley, the "Payment Guaranties"); and
(l) the Security Agreement, dated July 3, 1995, between
Northfork and Lender (collectively with the Security Agreements of
HomeFed Communities, HomeFed Resources and Paradise Valley, the
"Security
Agreements").
"Principal" means the outstanding principal amount of the Loan,
which shall equal $26,462,381.64.
"Property" means any interest in any kind of property or asset,
whether real, personal or mixed, or tangible or intangible.
"Responsible Official" means:
(a) When used with reference to any Person other than an
individual, any corporate officer of such Person, general partner
of such Person, corporate officer of a corporate general partner
of such Person, or corporate officer of a corporate general
partner of a partnership that is a general partner of such Person,
or any other responsible official thereof duly acting on behalf
thereof; and
(b) When used with reference to a Person who is an
individual, such Person.
"Right of Others" means, as to any Property in which a Person has
an interest, any legal or equitable claim, right, title or other interest
(other than a Lien) in or with respect to that Property held by any other
Person, and any option or right held by any other Person to acquire any
such
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claim, right, title or other interests including any option or right to
acquire a Lien.
"Securities Act" means the Securities Act of 1933, as
amended.
"Subsidiary" means HomeFed Communities, HomeFed Resources,
Northfork, Paradise Valley and, after the date hereof, any other
corporation, association, partnership business trust or other business
entity of which Borrower shall at any time own directly or indirectly
through one or more Subsidiaries at least a majority (by number of votes)
of the outstanding voting stock of such entity.
"to the best knowledge of" means, when modifying a representation,
warranty or other statement of any Person, that the fact or situation
described therein is known by the Person (or, in the case of a Person
other than a natural Person, known by a Responsible Official of that
Person) making the representation, warranty or other statement, or with
the exercise of reasonable due diligence under the circumstances (in
accordance with the standard of what a reasonable Person in similar
circumstances would have done) should have been known by the Person (or,
in the case of a Person other than a natural Person, should have been
known by a Responsible Official of that Person).
1.2 Use of Defined Terms. Any defined term used in the plural shall refer
to all members of the relevant class, and any defined term used in the singular
shall refer to any one or more of the members of the relevant class.
1.3 Accounting Terms. All accounting terms not specifically defined in
this Loan Agreement shall be construed in conformity with, and all financial
data required to be submitted by this Loan Agreement shall be prepared in
conformity with, GAAP applied on a consistent basis, as in effect on the date
hereof, except as otherwise specifically prescribed herein.
1.4 Exhibits. Any and all exhibits to this Loan Agreement, either as
originally existing or as the same may from time to time be supplemented,
modified or amended, are incorporated herein by this reference.
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ARTICLE 2
NONREVOLVING LOAN
2.1 The Loan. The Loan shall be evidenced by the Note of even date
herewith, which shall be executed and delivered by Borrower.
2.2 Non-revolving. To the extent the Loan from time to time shall be
repaid by Borrower as permitted by Section 3.5, the Loan may not be reborrowed.
2.3 Use of Proceeds. The Borrower has used the proceeds of the Loan to
finance the Plan. No part of the proceeds of the Loan was used for the purpose
of "purchasing" or "carrying" any "margin stock" within the respective meanings
of each of the quoted terms under Regulation U of the Board of governors of the
Federal Reserve System as now and from time to time in effect ("Regulation U").
ARTICLE 3
PAYMENTS
3.1 Payment Terms. Commencing on September 30, 1998, only interest on the
outstanding Principal shall be payable quarterly in arrears on each Interest
Payment Date, through the Maturity Date, interest calculated at the rate of 6%
per annum; and on the Maturity Date, all unpaid Principal shall be due and
payable.
3.2 Non-Business Days. If any payment to be made by Borrower or any other
party under any Plan Document shall come due on a day other than a Business Day,
payment shall be made on the next succeeding Business Day and the extension of
time shall be reflected in computing interest.
3.3 Manner and Treatment of Payments.
(a) Each payment hereunder or on the Note or under any other Plan
Document shall be made to Lender, at Lender's Office or at such other
place as Lender may designate, for the account of Lender, in immediately
available funds not later than 12 noon Utah time on the day of payment
(which must be a Business Day). All payments shall be made in lawful money
of the United States of America.
(b) Each payment of any amount payable by Borrower under this Loan
Agreement and/or any other Plan Document shall be made free and clear of,
and without reduction by
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reason of, any taxes, assessments or other charges imposed by any
Governmental Agency, central bank or comparable authority.
3.4 Payment of Overdue Principal and Interest. The Borrower shall pay
interest on overdue Principal at the rate borne by the Note; it shall pay
interest on the overdue installments of interest at the same rate to the extent
lawful, such interest being due and payable on demand of Lender.
3.5 Prepayments. The Note shall be prepayable in whole, or in part,
without penalty or charge, upon 30 days prior written notice to Lender.
3.6 Limitation on Interest. All agreements between Borrower and Lender are
hereby expressly limited so that in no contingency or event whatsoever shall the
amount paid or agreed to be paid to Lender for the use, forbearance or retention
of the indebtedness evidenced hereby exceed the maximum amount which Lender is
permitted to receive under applicable law. If, from any circumstances
whatsoever, fulfillment of any provision hereto, at the time performance of such
provision shall be due, shall involve exceeding such amount, then the obligation
to be fulfilled shall automatically be reduced to the limit of such validity,
and if from any circumstance Lender should ever receive as interest an amount
which would exceed such maximum amount, such amount which would be excessive
interest shall be applied to the reduction of the Principal balance evidenced
hereby and not to the payment of interest. As used herein, the term "applicable
law" shall mean the law in effect as of the date hereof, provided, however, that
in the event there is a change in the law which results in a higher permissible
rate of interest, then the Note shall be governed by such new law as of its
effective date. This provision shall control every provision of all agreements
between Borrower and Lender.
3.7 Failure to Charge Not Subsequent Waiver. Any decision by Lender not to
require payment of any interest, fee, cost or other amount payable under any
Plan Document on any occasion shall in no way limit or be deemed a waiver of
Lender's right to require full payment of any interest, fee cost or other amount
payable under any Plan Document on any other or subsequent occasion.
3.8 Survivability. All of Borrower's obligations under this Article 3
shall survive until the Loan shall have been fully paid.
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ARTICLE 4
COLLATERAL SECURITIES AND GUARANTIES
4.1 Security of Borrower. All of the Obligations are to be secured by a
perfected first priority security interest (except as set forth in Section 6.4
of this Agreement) in all of the assets of Borrower whether now owned or
hereafter acquired, including any capital stock held by Borrower, pursuant to
the terms of the Stock Pledge.
4.2 Guaranties and Security of the Subsidiaries. The Obligations shall
also be guaranteed pursuant to the terms of the Payment Guaranties. All of the
obligations of the Subsidiaries under their respective Payment Guaranties shall
be in turn secured by a perfected first priority security interest (except as
set forth in Section 6.4 of this Agreement, and as revealed by title insurance
policies issued to Lender as of July 3, 1995 covering real Property that shall
as of July 3, 1995 be encumbered by the Deeds of Trust) in all of the assets of
such Subsidiary, whether now owned or hereafter acquired pursuant to the terms
of the Plan Documents to which such Subsidiary is a party.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF BORROWER
Borrower represents and warrants to Lender, as of the date hereof,
that:
5.1 Existence and Qualification; Power; Compliance With Laws. Borrower is
a corporation duly formed, validly existing and in good standing under the Laws
of Delaware. The chief executive offices of Borrower are in Salt Lake City,
Utah. Borrower is duly qualified or registered to transact business and is in
good standing in California and in each other jurisdiction in which the conduct
of its business or the ownership or leasing of its Property makes such
qualification or registration necessary where the failure to be so qualified
would have a Material Adverse Effect. Borrower has all requisite power and
authority to conduct its business, to own and lease its Property and to execute,
deliver and perform all of its Obligations under the Plan Documents. All
outstanding Common Stock of Borrower is duly authorized, validly issued, fully
paid and non-assessable and issued in compliance with all applicable state and
federal securities and other Laws. Borrower is in compliance with all Laws and
other legal requirements applicable to its business, has obtained all
authorizations, consents, approvals, orders, licenses and permits from, and has
accomplished all filings, registrations and qualifications with, or obtained
exemptions from any of the foregoing from, any Governmental Agency that are
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necessary for the transaction of its business as now conducted, except where the
failure so to comply, file, register, qualify or obtain exemptions would not
have a Material Adverse Effect.
5.2 Authority; Compliance with Other Agreements and Instruments and
Government Regulations. The execution delivery and performance by Borrower of
the Loan Agreement has been duly authorized by all necessary action on the part
of Borrower, and do not and will not:
(a) Require any consent or approval not heretofore obtained of any
director, stockholder, security holder, partner or creditor of Borrower;
(b) Violate or conflict with any provision of Borrower's charter,
certificate or articles of incorporation or bylaws, or amendments thereto,
as applicable;
(c) Result in or require the creation or imposition of any Lien or
Right of Others upon or with respect to any Property now owned or leased
or hereafter acquired by Borrower;
(d) Violate any provision of any Law, order, writ, judgment,
injunction, decree, determination or award presently in effect and having
applicability to Borrower; or
(e) Result in a breach of or constitute a default under, or cause
or permit the acceleration of any obligation owed under, any indenture or
loan or credit agreement or any other material agreement, lease or
instrument to which Borrower is a party or by which such Borrower or any
of its Property is bound or affected;
and neither Borrower, nor any Affiliate of Borrower is in default under any Law,
order, writ, judgment, injunction, decree, determination or award, or any
indenture, agreement, lease or instrument described in Section 5.2(e), in any
respect that is materially adverse to the interests of Lender or that would have
any Material Adverse Effect.
5.3 No Governmental Approvals Required. The Original Loan Agreement was
approved by the Bankruptcy Court in conjunction with the Plan, and no additional
authorization, consent, approval, order, license or permit from, or filing,
registration or qualification with, or exemption from any of the foregoing from,
any Governmental Agency is or will be required to authorize or permit under
applicable Law the execution, delivery and performance by Borrower of and under
any of the Plan Documents.
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5.4 Subsidiaries. Borrower holds 400 shares of the outstanding Common
Stock of HomeFed Communities, which shares constitute all of the outstanding
shares of HomeFed Communities and are represented by a certificate of HomeFed
Communities. Borrower also holds 20 shares of the outstanding Common Stock of
HomeFed Resources, which shares constitute all of the outstanding shares of
HomeFed Resources and are represented by a certificate of HomeFed Resources.
HomeFed Resources and HomeFed Communities comprise all of the partners of
Northfork and Paradise Valley.
5.5 Title to and Location of Property. Borrower and the Subsidiaries have
good and valid title to all the Property reflected in the Financial Statements,
other than Property subsequently sold in the ordinary course of business, free
and clear of all Liens and Rights of Others other than Liens or Rights of Others
permitted pursuant to Section 6.4.
5.6 Investment Company Act of 1940. Borrower is not an "investment
company" within the meaning of the Investment Company Act of 1940.
5.7 Litigation. Except as described in the Borrower Reports there are no
actions, suits or proceedings pending or, to the best knowledge of Borrower,
threatened against or affecting Borrower or any Property of Borrower in any
court of Law or before any Governmental Agency.
5.8 Binding Obligations. Each of the Plan Documents will continue to
constitute the legal, valid and binding obligation of Borrower, enforceable
against Borrower in accordance with its terms, except as enforcement may be
limited by bankruptcy, insolvency, reorganization arrangement, moratorium or
other similar Laws relating to or affecting creditors' rights generally or
equitable principles relating to the granting of specific performance and other
equitable remedies as a matter of judicial discretion.
5.9 No Default. No event has occurred and is continuing that
is an Event of Default.
5.10 Disclosure. No written statement made by Borrower to Lender in
connection with this Loan Agreement or the Loan contains any untrue statement of
a material fact or omits a material fact necessary to make the statement made
not misleading. There is no fact which Borrower has not disclosed to Lender in
writing which materially and adversely affects nor, so far as Borrower can now
foresee, is reasonably likely to prove to affect materially and adversely the
business, operations, Property, prospects, profits or
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condition (financial or otherwise) of Borrower, or the ability of Borrower to
perform its obligations under the Plan Documents.
5.11 Tax Liability. Borrower has filed all income tax returns which are
required to be filed, and has paid, or made provision for the payment of, all
taxes due for the transactions or periods covered by such returns, except such
taxes, if any, as are being contested in good faith and as to which adequate
reserves have been provided.
5.12 Insurance Coverage. There is in full force and effect one or more
policies of insurance issued by insurers of nationally recognized responsibility
insuring Borrower and its Property and business against losses and risks and in
such amounts as are adequate for the business of Borrower and as are customarily
carried by Persons engaged in the same or similar business.
5.13 Access to Data. Lender has had an opportunity to discuss Borrower's
business, management, and financial affairs with its management and to review
Borrower's records and facilities, and Lender is relying for purposes of this
Agreement upon its own due diligence review of Borrower, not on any
representation or warranty of Borrower other than as expressly set forth in this
Agreement.
ARTICLE 6
COVENANTS OF BORROWER
From the date of this Agreement and for so long as any of the Loan remains
unpaid, or any other sums, of any kind, due and payable by Borrower under this
Loan Agreement or due and payable by Borrower to Lender under any other debt
security, instrument, loan or other agreement, remain unpaid, Borrower shall,
and shall, if appropriate, cause each of its Subsidiaries to, unless Lender
otherwise consents in writing:
6.1 Payment of Principal and Interest. Duly and punctually pay the
Principal and interest on the Note in accordance with its terms and the terms of
this Loan Agreement.
6.2 Existence. Do or cause to be done all things necessary to preserve and
keep in full force and effect its existence and the existence of the
Subsidiaries, rights (charter and statutory) and franchises; provided, however,
that it shall not be required to preserve any such right or franchise if its
Board of Directors shall determine that the preservation thereof is no longer
desirable in the conduct of its business and that the loss thereof does not have
a Material Adverse Effect.
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6.3 Maintenance of Property. Cause all Property used or useful in the
conduct of its business to be maintained and kept in good condition, repair and
working order and supplied with all necessary equipment, and prohibit waste and
cause to be made all necessary repairs, renewals, replacements, betterments and
improvements thereof, all as in its judgment may be necessary so that the
business carried on in connection therewith may be properly and advantageously
conducted at all times; provided, however, that nothing in this Section shall
prevent discontinuing the operation or maintenance of any of such Property if
such discontinuance does not have a Material Adverse Effect and is, in its
judgment, desirable in the conduct of its business.
6.4 Payment of Taxes and Other Claims. Pay or discharge or cause to be
paid or discharged, before the same shall become delinquent, (1) all taxes,
assessments and governmental charges levied or imposed upon it or upon its
income, profits or Property, and (2) any and all Liens and any and all lawful
claims for labor, materials and supplies which, if unpaid, might by law become a
Lien; provided, however, that it shall not be required (i) to terminate that
certain financing statement (California Federal Bank, secured party) filed with
the California Secretary of State at no. 910092913, (ii) [to terminate those
certain financing statements (Xxxxx HomeFed Communities La Quinta, debtor;
Community Bank, secured party) filed with the California Secretary of State at
nos. 90209536, 90209538, and 90261832, which financing statements are due to
expire in 1995, or (iii)] to pay or discharge or cause to be paid or discharged
any such tax, assessment, charge, Lien or claim whose amount, applicability or
validity is being contested in good faith by appropriate proceedings and for
which adequate reserves are maintained.
6.5 Margin Stock. Refrain from "purchasing" or "carrying" any "margin
stock" within the respective meanings of each of the quoted terms under
Regulation U.
6.6 No Plan Amendments, Etc. Refrain from amending any Plan Documents
without the prior written consent of Lender except as specifically contemplated
by this Agreement.
6.7 Preservation of Tax Attributes. Take all reasonable steps necessary to
preserve the existence and availability for federal income tax purposes of
Borrower's net operating losses.
6.8 Conversion Reinstatement. Upon the written request of the Lender, the
Company agrees that it shall submit for shareholder approval a proposal to amend
its Restated Certificate of Incorporation to eliminate the restriction contained
in Article 4A
16
thereof and to reinstate Article 5 of the Original Loan Agreement and any
related provisions of the Original Loan Agreement necessary to provide the
Lender or its permitted assignees conversion privileges to convert the Note into
not more than 54,000,000 shares of Common Stock at a conversion price of $0.45
per share, as such number of shares and purchase price may be adjusted from time
to time in accordance with the terms of the Original Loan Agreement.
ARTICLE 7
INFORMATION AND REPORTING REQUIREMENTS
7.1 Financial and Business Information. From the date of this Loan
Agreement and for so long as the Loan remains unpaid or any other sums of any
kind due and payable by Borrower under this Loan Agreement or due and payable by
Borrower to Lender under any other debt security, instrument, loan or under any
other agreement, remain unpaid Borrower shall, unless Lender shall otherwise
consent in writing, deliver to Lender, at Borrower's sole expense:
(a) As soon as practicable, and in any event within twenty (20)
days after the end of each fiscal month of Borrower, (i) consolidated
balance sheets of Borrower and its Subsidiaries as at the end of such
month, setting forth in comparative form the corresponding figures as at
the end of the corresponding month of their preceding fiscal year and (ii)
consolidated statements of income, shareholders' equity, and cash flows of
Borrower and its Subsidiaries for such month and for the portion of their
fiscal year ended with such month, setting forth in comparative form the
corresponding figures for the corresponding periods of their preceding
fiscal year, all in reasonable detail, including footnotes. The preceding
financial statements shall be certified by a Responsible Official of
Borrower as fairly presenting in all material respects the financial
condition, results of operations and changes in financial position of
Borrower and its Subsidiaries in accordance with generally accepted
accounting principles, consistently applied, as at such date and for such
periods, subject only to normal year- end audit adjustments.
(b) As soon as practicable, and in any event within thirty (30)
days after the end of each fiscal quarter of Borrower (including the last
fiscal quarter of each fiscal year, provided that with respect to such
last quarter the financial statements required hereby may be in
preliminary form, prior to year-end audit adjustments), (i) consolidated
balance sheets of Borrower and its Subsidiaries as at the end of such
quarter, setting forth in comparative form the
17
corresponding figures as at the end of the corresponding quarter of their
preceding fiscal year and (ii) consolidated statements of income,
shareholders' equity, and cash flows of Borrower and its Subsidiaries for
such quarter and for the portion of their fiscal year ended with such
quarter, setting forth in comparative form the corresponding figures for
the corresponding periods of their preceding fiscal year, all in
reasonable detail, including footnotes. The preceding financial statements
shall be certified by a Responsible Official of Borrower as fairly
presenting in all material respects the financial condition, results of
operations and changes in financial position of Borrower and its
Subsidiaries in accordance with generally accepted accounting principles,
consistently applied, as at such date and for such periods, subject only
to normal year-end audit adjustments.
(c) As soon as practicable, and in any event within ninety (90)
days after the close of each fiscal year of Borrower, (i) consolidated
balance sheets of Borrower and its Subsidiaries as at the end of such
fiscal year, setting forth in comparative form the corresponding figures
as at the end of their preceding fiscal year, and (ii) consolidated
statements of income, shareholders' equity, and cash flows of Borrower and
its Subsidiaries for such fiscal year, setting forth in comparative form
the corresponding figures for their previous fiscal year, all in
reasonable detail. Such balance sheets and statements shall be prepared in
accordance with generally accepted accounting principles, consistently
applied, and such consolidated balance sheet and consolidated statements
shall be accompanied by a report and opinion of independent public
accountants selected by Borrower and reasonably satisfactory to Lender
which report and opinion shall be prepared in accordance with generally
accepted auditing principles as at such date.
(d) As soon as practicable, and in any event within thirty (30)
days after the end of each fiscal month of Borrower, a Certificate of a
Responsible Official of Borrower setting forth a schedule of Investments
made by Borrower and/or its Subsidiaries during such month, and during
their fiscal year to date, separately for Borrower and each of its
Subsidiaries, and in reasonable detail.
(e) As soon as practicable, and in any event within thirty (30)
days after filing, copies of any report or other document filed by
Borrower or any of its Subsidiaries with any Governmental Agency.
18
(f) Promptly after the same are available, copies of each annual
report, proxy or financial statement or other report or communication sent
to the shareholders of Borrower, and copies of all annual, regular,
periodic and special reports and registration statements which Borrower
may file or be required to file with any Governmental Agency or with any
securities exchange.
(g) Promptly upon (and in no event later than five (5) Business
Days after) becoming aware of the existence of any condition or event
which constitutes a Default, a written notice specifying the nature and
period of existence thereof and what action Borrower or its Subsidiaries
are taking or propose to take with respect thereto.
(h) Promptly upon becoming aware that any Person asserts a claim
against Borrower or any of its Subsidiaries in excess of $25,000 and that
such Person has given notice or taken any other action with respect to a
claimed default or event of default, a written notice specifying the
notice given or action taken by such Person and the nature of the claimed
default or event of default and what action Borrower or its Subsidiaries
are taking or propose to take with respect thereto.
(i) Promptly upon any change in the name of Borrower or any
Subsidiary or a change in Borrower's organizational structure, a written
notice specifying such change.
(j) Promptly upon the occurrence of any uninsured or partially
insured loss (including the deductible amount) as a result of fire, theft,
liability or Property damage in excess of an aggregate of $25,000, a
written notice specifying the nature and amount of such loss.
(k) Such other data and information as from time to time may be
reasonably requested by Lender, including environmental audit reports
prepared by recognized California environmental consultants retained by
Borrower with the approval of Lender.
7.2 Compliance Certificates. So long as the loan remains unpaid or any
other Obligation remains unpaid or unperformed in whole or in part, Borrower
shall, upon the reasonable request of Lender, deliver to Lender, at Borrower's
sole expense, not later than 45 days after the end of each fiscal quarter of
Borrower, a Certificate of a Responsible Official of Borrower setting forth
computations or other appropriate information showing, in detail satisfactory to
Lender, whether any Default exists and, if so, the nature of the Default.
19
ARTICLE 8
EVENTS OF DEFAULT AND REMEDIES UPON EVENT OF DEFAULT
8.1 Events of Default. The existence or occurrence of any
one or more of the following events, whatever the reason therefor,
shall constitute an Event of Default;
(a) Borrower fails to pay any installment of Principal or interest
of any indebtedness on the Note or any portion thereof, or to pay any fee
or any other amount due Lender under any Plan Document within five (5)
Business Days after such payment is due and payable; or
(b) Any failure to comply with Section 7.1(g); or
(c) Any failure to perform or observe any other term, covenant or
agreement contained in any Plan Document to be performed or observed by
Borrower or a Subsidiary which is not cured within ten (10) calendar days;
or
(d) Borrower or any of its Subsidiaries (i) fails to pay the
principal, or any principal installment, of any present or future
Indebtedness or in connection with the purchase or lease of Property, or
any guaranty of present or future Indebtedness for borrowed money or
issued in connection with the Purchase or lease of Property, on its part
to be paid, when due (or within any stated grace period), whether at the
stated maturity, upon acceleration, by reason of required prepayment or
otherwise, or (ii) fails to perform or observe any other term, covenant or
agreement on its part to be performed or observed in connection with any
present or future Indebtedness for borrowed money or in connection with
the purchase or lease of Property, or of any guaranty of present or future
Indebtedness for borrowed money or issued in connection with the purchase
or lease of Property, if as a result of such failure any holder or holders
thereof (or an agent or trustee on its or their behalf) has the right to
declare such Indebtedness due before the date on which it otherwise would
become due; or
(e) Any Plan Document, at any time and for any reason other than
the agreement of Lender or satisfaction in full of all the Obligations,
ceases to be in full force and effect or is declared by a court of
competent jurisdiction to be null and void, invalid or unenforceable in
any respect which, in the reasonable opinion of Lender, is materially
adverse to the interests of Lender; or any party thereto other than Lender
denies that it has any or further liability or obligation under
20
any Plan Document, or purports to revoke, terminate or rescind
same; or
(f) Borrower or any of its Subsidiaries is the subject of an order
for relief in a bankruptcy case, or is unable or admits in writing its
inability to pay its debts as they mature, or makes an assignment for the
benefit of creditors; or applies for or consents to the appointment of any
receiver, trustee, custodian, conservator, liquidator, rehabilitator, or
similar officer for it or for all or any part of its Property; or any
receiver, trustee, custodian, conservator, liquidator, rehabilitator or
similar officer is appointed without the application or consent of that
Person and the appointment continues undischarged or unstayed for thirty
(30) calendar days; or institutes or consents to any bankruptcy,
insolvency, reorganization, arrangement, readjustment of debt,
dissolution, custodianship, conservatorship, liquidation, rehabilitation
or similar case or proceedings relating to it or to all or any part of its
Property under the Laws of any jurisdiction; or any similar case or
proceeding is instituted without the consent of that Person and continues
undismissed or unstayed for thirty (30) calendar days; or any judgment,
writ, warrant of attachment or execution or similar process is issued or
levied against all or any material part of the Property of any such Person
and is not released, vacated or fully bonded within thirty (30) calendar
days after its issue or levy; or
(g) Borrower or any Subsidiary thereof is dissolved or liquidated
or all or substantially all of the assets of Borrower or any Subsidiary of
Borrower are sold or otherwise transferred in violation of the provisions
of this Loan Agreement without the written consent of Lender; provided,
however, that Borrower shall be entitled to dissolve or liquidate any of
Borrower's Subsidiaries in the ordinary course of business if such act
does not have a Material Adverse Effect or (i) all of the proceeds of such
dissolution or liquidation go to Borrower, and (ii) such dissolution or
liquidation results in no breach of any obligations of Borrower or such
Subsidiary to any Person; or
(h) The revocation or nonrenewal of any permit or license,
authorization, consent, order or other approval from any Governmental
Agency necessary for the conduct of Borrower's business that has a
Material Adverse Effect; or
(i) Any judgment or order for the payment of money in excess of
$50,000 to the extent not fully covered by insurance shall be rendered
against Borrower or any of its Subsidiaries
21
and either, (i) enforcement proceedings shall have been commenced by any
creditor upon such judgment or order, or (ii) there shall be any period of
ten (10) consecutive days during which a stay of enforcement of such
judgment or order, by reason of a pending appeal or otherwise, shall not
be in effect.
8.2 Remedies Upon Event of Default. Without limiting any other rights or
remedies of Lender provided for elsewhere in this Loan Agreement, the Plan
Documents, or by applicable Law, or in equity, or otherwise:
(a) Upon the occurrence of any Event of Default other than an
Event of Default described in Section 11.1(f) Lender may declare all or
any part of the unpaid Principal of the Note, all interest accrued and
unpaid thereon and all other amounts payable under the Plan Documents to
be forthwith due and payable, whereupon the same shall become and be
forthwith due and payable, without protest, presentment, notice of
dishonor, demand or further notice of any kind, all of which are expressly
waived by Borrower.
(b) Upon the occurrence of any Event of Default described in
Section 8.1(f):
(1) all obligations of Lender and all rights of Borrower
under the Plan Documents shall terminate without notice to or
demand upon Borrower, which are expressly waived by Borrower;
provided, however, that Lender may waive the Event of Default or,
without waiving, determine, upon terms and conditions satisfactory
to Lender, to extend the Maturity Date; and
(2) the unpaid Principal of the Note, all interest accrued
and unpaid thereon and all other amounts payable under the Plan
Documents shall be forthwith due and payable, without protest,
presentment, notice of dishonor, demand or further notice of any
kind, all of which are expressly waived by Borrower.
(c) Upon the occurrence of any Event of Default, Lender, without
notice to or demand upon Borrower, which are expressly waived by Borrower,
may proceed to protect, exercise and enforce its rights and remedies under
the Plan Documents against Borrower and such other rights and remedies as
are Provided by Law or equity.
22
(d) The order and manner in which Lender's rights and remedies are
to be exercised shall be determined by Lender in its sole discretion, and
all payments received by Lender shall be applied first to the costs and
expenses (including attorneys' fees and disbursements) of Lender, and
thereafter paid to Lender. Regardless of how Lender may treat payments for
the purpose of its own accounting, for the purpose of computing Borrower's
Obligations hereunder and under the Note, payments shall be applied,
first, to the costs and expenses of Lender, as set forth above, second, to
the payment of accrued and unpaid interest due under any Plan Document to
and including the date of such application (ratably, and without
duplication, according to the accrued and unpaid interest due under each
of the Plan Documents), third, to the payment of all unpaid Principal
amounts due under any Plan Document (including, for the purposes hereof,
Principal due under the Note), and fourth, to the payment of all other
amounts (including fees) then owing to Lender under the Plan Documents. No
application of payments will cure any Event of Default, or prevent
acceleration, or continued acceleration, of amounts payable under the Plan
Documents, or prevent the exercise, or continued exercise, of rights or
remedies of Lender hereunder or thereunder or at Law or in equity.
(e) Upon the occurrence of any event that would be an Event of
Default under Section 11.1(f) with the passage of time, Lender may take
such action as Lender may deem necessary to protect the interests of
Lender under the Plan Documents.
ARTICLE 9
MISCELLANEOUS
9.1 Cumulative Remedies; No Waiver. The rights, powers, privileges and
remedies of Lender provided herein and in the Note and every other Plan Document
are cumulative and not exclusive of any right, power, privilege or remedy
provided by Law or equity. No failure or delay on the part of Lender in
exercising any right, power, privilege or remedy may be, or may be deemed to be,
a waiver thereof; nor may any single or partial exercise of any right, power,
privilege or remedy preclude any other or further exercise of the same or any
other right, power, privilege or remedy.
9.2 Amendments; Consents. No amendment, modification, supplement,
extension, termination or waiver of any provision of this Loan Agreement or any
other Plan Document, no approval or consent thereunder, and no consent to any
departure therefrom by Borrower or any other party to the Plan Documents other
than Lender,
23
may in any event be effective (except as otherwise provided in any other Plan
Document) unless in writing signed by the Parties hereto.
9.3 Nature of Lender's Obligations. Nothing contained in this Loan
Agreement or any other Plan Document and no action taken by Lender pursuant
hereto or thereto may, or may be deemed to, make Borrower and Lender a
partnership, an association, a joint venture or other entity, either between
themselves or with any Affiliate of Borrower. The relationship between Borrower
and Lender is, and shall at all times remain, solely that of a borrower and
Lender; Lender shall under no circumstance be construed to be a partner or joint
venturer of Borrower or its Affiliates; Lender shall under no circumstance be
deemed to be in a relationship of confidence or trust or a fiduciary
relationship with Borrower or its Affiliates, or to owe any fiduciary duty to
Borrower or its Affiliates; Lender undertakes or assumes no responsibility or
duty to Borrower or its Affiliates to select, review, inspect, supervise, pass
judgment upon or inform Borrower or its Affiliates of any matter in connection
with their Property, or the operations of Borrower or its Affiliates; Borrower
and its Affiliates shall rely entirely upon their own judgment with respect to
such matters; and any review, inspection, supervision, exercise of judgment or
supply of information undertaken or assumed by Lender in connection with such
matters is solely for the protection of Lender and neither Borrower nor any
other Person is entitled to rely thereon.
9.4 Survival of Representations and Warranties and Covenants. All
representations and warranties contained herein or in any other Plan Document,
or in any certificate or other writing delivered by or on behalf of Borrower,
will survive the making and repayment of the loan hereunder and the execution
and delivery of the Note and have been or will be relied upon by Lender,
notwithstanding any investigation made by Lender. All affirmative and negative
covenants contained herein will survive the payment of the Loan hereunder until
all indebtedness of Borrower to Lender under any other security debt instrument,
loan or other agreement is satisfied in full.
9.5 Notices, Etc. All notices and other communications provided for
hereunder shall be in writing (including, without limitation, telegraphic,
telex, telecopy or cable communication) and mailed, telegraphed, telecopied, or
delivered by hand, if to the Borrower, at its address at 000 Xxxx Xxxxx Xxxxxx,
Xxxx Xxxx Xxxx, Xxxx 00000 (telecopy number: (000) 000-0000) (telephone number:
(000) 000-0000); and if to Lender, at its address at 000 Xxxx Xxxxx Xxxxxx, Xxxx
Xxxx Xxxx, Xxxx 00000 (telecopy number: (000-000-0000) (telephone number:
(000-000-0000), Attention: Xxxxxxxx X. Xxxx; with a copy to Weil, Gotshal &
Xxxxxx, 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx
00
Xxxx 00000 (telecopy number 000-000-0000) (telephone number 212-310- 8000),
Attention: Xxxxxxx X. Xxxxxx, Esq.; or, at such other address as shall be
designated by such party in a written notice to the other party. All such
notices and communications shall, when mailed, telegraphed, telecopied or
delivered, be effective when deposited in the mails, delivered to the telegraph
company, telecopied with confirmation of receipt, or delivered by hand to the
addressee.
9.6 Execution of Loan Agreements. This Loan Agreement may be executed in
any number of counterparts and any party hereto or thereto may execute any
counterpart, each of which when executed and delivered will be deemed to be an
original and all of which counterparts of this Loan Agreement, as the case may
be, when taken together will be deemed to be but one and the same instrument.
The execution of this Loan Agreement by any party hereto or thereto will not
become effective until counterparts hereof or thereof, as the case may be, have
been executed by all the parties hereto or thereto
9.7 Binding Effect; Assignment. This Loan Agreement shall be binding upon
and shall inure to the benefit of the parties hereto and thereto and their
respective successors and assigns, except that Borrower and/or its Affiliates
may not assign their rights hereunder or thereunder or any interest herein or
therein without the prior written consent of Lender. Lender may assign its
rights and obligations hereunder without the consent of Borrower.
9.8 Statements Required in Certificate. Each certificate with respect to
compliance with a condition or covenant provided for in the Note or this Loan
Agreement shall include:
(a) a statement that each Person making such certificate has read
such covenant or condition;
(b) a brief statement as to the nature and scope of the
examination or investigation upon which the statements contained in such
certificate are based;
(c) a statement that, in the opinion of each such Person, he or
she has made such examination or investigation as is necessary to enable
him or her to express an informed opinion as to whether or not such
covenant or condition has been complied with; and
(d) a statement as to whether or not, in the opinion of each such
Person, such covenant or condition has been complied with.
25
9.9 Indemnity by Borrower. Borrower agrees to indemnify, save and hold
harmless Lender and each of its directors, officers, agents, attorneys and
employees (collectively the "Indemnitees") from and against: (a) any and all
claims, demands, actions or causes of action that are asserted against any
Indemnitee by any Person (other than Lender) if the claim, demand, action or
cause of action directly or indirectly relates to a claim, demand, action or
cause of action that such Person has or asserts against Borrower, any Subsidiary
of Borrower or any of their respective officers, directors, agents, attorneys,
employees or shareholders; (b) any and all claims, demands, actions or causes of
action that are asserted against any Indemnitee if the claim, demand, action or
cause of action arises out of or relates to the relationship between Borrower
and Lender under any of the Plan Documents or the transactions contemplated
thereby; (c) any and all administrative or investigative proceedings by any
Governmental Agency arising out of or related to any claim, demand, action or
cause of action described in clauses (a) or (b) above; and (d) any and all
liabilities, losses, costs or expenses (including attorneys' fees and
disbursements and other professional services) that any Indemnitee suffers or
incurs as a result of the assertion of any of the foregoing; provided that no
Indemnitee shall be entitled to indemnification for any loss caused by its own
gross negligence or willful misconduct. Each Indemnitee is authorized to employ
counsel of its own choosing in enforcing its rights hereunder and in defending
against any claim, demand, action, cause of action or administrative or
investigative proceeding covered by this Section 9.9; provided that each
Indemnitee shall endeavor, in connection with any matter covered by this Section
9.9 which also involves other Indemnitees, to use reasonable efforts to avoid
unnecessary duplication of effort by counsel for all Indemnitees. Any obligation
or liability of Borrower to any Indemnitee under this Section 9.9 shall be and
hereby is covered and secured by the Plan Documents, and shall survive the
expiration or termination of this Loan Agreement and the repayment of the Loan
and the payment and performance of all other Obligations owed to Lender.
9.10 No Third Parties Benefited. This Loan Agreement is made for the
purpose of defining and setting forth certain obligations, rights and duties of
Borrower and Lender in connection with the Loan, and is made for the sole
protection of Borrower and Lender, and Lender's successors and assigns, and no
other Person shall have any rights of any nature hereunder or by reason hereof.
9.11 Further Assurances. Borrower and its Subsidiaries shall, at their
expense and without expense to Lender, do, execute and deliver such further acts
and documents as Lender from time to time reasonably requires for the assuring
and confirming unto Lender of
26
the rights hereby created or intended now or hereafter so to be, or for carrying
out the intention or facilitating the performance of the terms of any Plan
Document, or for assuring the validity, perfection, priority or enforceability
of any Lien under any Plan Document.
9.12 Integration. This Loan Agreement, together with the other Plan
Documents, comprises the complete and integrated agreement of the parties on the
subject matter hereof and supersedes all prior agreements, written or oral, on
the subject matter hereof. In the event of any conflict between the provisions
of this Loan Agreement and those of any other Plan Document, the provisions of
this Loan Agreement shall control and govern; provided that the inclusion of
supplemental rights or remedies in favor of Lender in any other Plan Document
shall not be deemed a conflict with this Loan Agreement. Each Plan Document was
drafted with the joint participation of the respective parties thereto and shall
be construed neither against nor in favor of any party, but rather in accordance
with the fair meaning thereof.
9.13 Governing Law. This Loan Agreement and, except to the extent
otherwise provided therein each Plan Document, shall be governed by, and
construed and enforced in accordance with, the internal Laws of the State of
Utah (without regard to choice of law or conflict of law provisions).
9.14 Severability of Provisions. Any provision in any Plan Document that
is held to be inoperative, unenforceable or invalid as to any party or in any
jurisdiction shall, as to that party or jurisdiction, be inoperative,
unenforceable or invalid without affecting the remaining provisions or the
operation, unenforceability or validity of that provision as to any other party
or in any other jurisdiction, and to this end the provisions of all Plan
Documents are declared to be severable.
9.15 Headings. Article and Section headings in this Loan Agreement and the
other Plan Documents are included for convenience of reference only and are not
part of this Loan Agreement or the other Plan Documents for any other purpose.
9.16 Submission to Jurisdiction; Service of Process.
(a) Any legal action or proceeding with respect to the Note or
this Loan Agreement or any document related thereto may be brought in the
courts of the State of Utah or of the United States of America for the
District of Utah, and, by execution and delivery of the Note and this Loan
Agreement, Borrower hereby accepts for itself and in respect of its
property,
27
generally and unconditionally, the jurisdiction of the aforesaid courts.
The parties hereto hereby irrevocably waive any objection, including,
without limitation, any objection to the laying of venue or based on the
ground of forum non conveniens, which any of them may now or hereafter
have to the bringing of any such action or proceeding in such respective
jurisdictions.
(b) The Borrower irrevocably consents to the service of process of
any of the aforesaid courts in any such action or proceeding by the
mailing of copies thereof by registered or certified mail, postage
prepaid, to Borrower at its address provided herein.
(c) Nothing contained in this Section shall affect the right of
Lender or any holder of the Note to serve process in any other manner
permitted by law or commence legal proceedings or otherwise proceed
against Borrower in any other jurisdiction.
9.17 Certification. Except as otherwise specifically provided herein, any
requirement that any document or certificate be signed or executed by any Person
requires that such document or certificate be signed or executed by a
Responsible Official of such Person, and that the Responsible Official signing
or executing such document or certificate on behalf of such Person shall be
authorized to do so by all necessary corporate, partnership and/or other action.
[Remainder of Page Intentionally Left Blank]
28
IN WITNESS WHEREOF, the parties hereto have caused this Loan
Agreement to be duly executed as of the date first above written.
BORROWER:
HomeFed Corporation,
a Delaware Corp.
By /s/ Xxxxxxx X. Xxxxxxxxx
---------------------------------
Chairman of the Board
[Print Name and Title]
Address: 000 Xxxx Xxxxx Xxxxxx
Xxxx Xxxx Xxxx, Xxxx 00000
Telecopier: (801-524-1761)
Telephone: (000-000-0000)
Lender:
Leucadia Financial Corporation,
a Utah corporation
By /s/ Xxxxxx X. Orlando
---------------------------------
Vice President
and Chief Financial Officer
[Print Name and Title]
Address: 000 Xxxx Xxxxx Xxxxxx
Xxxx Xxxx Xxxx, Xxxx 00000
Telecopier: (801-524-1751)
Telephone: (000-000-0000)
29
EXHIBIT "A"
TO Loan Agreement
AMENDED AND RESTATED 6% SECURED NOTE
DUE DECEMBER 31, 2004
Salt Lake City, Utah
August 14, 1998
For value received, the undersigned HomeFed corporation, a
Delaware corporation ("Borrower"), unconditionally promises to pay to the order
of Leucadia Financial Corporation, a Utah corporation ("Lender"), at Lender's
principal place of business or at such other place as may be designated in
writing by Lender, in lawful money of the United States of America and in
immediately available funds, the principal sum of $26,462,381.64 plus interest.
This Note is made pursuant to that certain Amended and Restated
Loan Agreement of even date herewith between Borrower and Lender ("Loan
Agreement"). Capitalized terms not otherwise defined herein shall have the
meanings set forth in the Loan Agreement. Interest on this Note shall be payable
quarterly in arrears on each Interest Payment Date. Interest on this Note shall
be calculated at the rate of 6% per annum. This Note is due and payable on
December 31, 2004. There are no conversion rights under this Note.
This Note is being issued in replacement and substitution for the
Note dated as of July 3, 1995 in the aggregate principal amount of TWENTY
MILLION AND 00/100 DOLLARS ($20,000,000), as such amount has been increased
pursuant to the Amended and Restated Loan Agreement dated August 14, 1998.
This Note is secured by, among other things, the following:
(i) that certain Security Agreement and Stock Pledge dated July 3,
1995, executed by Borrower;
(ii) that certain Payment Guaranty dated July 3, 1995, executed
by HomeFed Communities, Inc., a California corporation ("HomeFed
Communities"), which Payment Guaranty is secured by a Security Agreement
of even date herewith, executed by HomeFed Communities;
(iii) that certain Payment Guaranty dated July 3, 1995, executed
by HomeFed Resources Corporation, a California corporation ("HomeFed
Resources"), which Payment Guaranty is
secured by a Security Agreement of even date herewith, executed
by HomeFed Resources; and
(iv) that certain Payment Guaranty and Deed of Trust dated July
3, 1995, each executed by Paradise Valley Communities No. I, a California
general partnership (and related financing statements).
If an Event of Default shall occur and be continuing, all
Principal and all interest accrued and other amounts due hereunder may be
declared due and payable in the manner and with the effect provided in the Loan
Agreement.
If any attorney is engaged by Lender to enforce or defend any
provision of this Note or the Loan Agreement, or as a consequence of any
Default, with or without the filing of any legal action or proceeding, then
Borrower shall pay to Lender immediately upon demand reasonable attorneys' fees
and costs incurred by Lender in connection therewith, together with interest
thereon from the date of such demand until paid at the rate of interest
applicable to the Principal as if such unpaid attorneys' fees and costs had been
added to Principal.
No previous waiver and no failure or delay by Lender in acting
with respect to the terms of this Note or the Loan Agreement shall constitute a
waiver of any breach, default, or failure of condition under this Note or the
Loan Agreement. A waiver of any term of this Note or the Loan Agreement must be
made in writing and shall be limited to the express written terms of such
waiver. In the event of any inconsistencies between the terms of this Note and
the terms of any other document related to the Loan, the terms of the Loan
Agreement and this Note shall prevail.
Except as may otherwise be provided in the Loan Agreement,
Borrower waives: presentment; demand; notice of dishonor; notice of default or
delinquency; notice of acceleration; notice of protest and nonpayment; notice of
costs, expenses or losses and interest thereon; notice of late charges; and
diligence in taking any action to collect any sums owing under this Note or in
proceeding against any of the rights or interests in or to properties, if any,
securing payment of this Note.
Time is of the essence with respect to every provision hereof.
This Note shall be construed and enforced in accordance with the internal laws
of the State or Utah, except to the extent that Federal laws preempt the laws of
the State of Utah.
Any legal action or proceeding with respect to this Note or any
document related hereto may be brought in the courts of the State of Utah or of
the United States of America for the District of Utah, and, by execution and
delivery of this Note, the Borrower hereby accepts for itself and in respect of
its Property, generally and unconditionally, the jurisdiction of the aforesaid
courts. The Borrower hereby irrevocably waives any objection, including, without
limitation, any objection to the laying of venue or based on the ground of forum
non conveniens, which Borrower may now or hereafter have to the bringing of any
such action or proceeding in such respective jurisdictions.
The Borrower irrevocably consents to the service of process of any
of the aforesaid courts in any such action or proceeding by the mailing of
copies thereof by registered or certified mail, postage prepaid, to the Borrower
at its address provided in the Loan Agreement.
Nothing contained in this Note shall affect the right of Lender to
serve process in any other manner permitted by law or commence legal proceedings
or otherwise proceed against the Borrower in any other jurisdiction.
BORROWER:
HomeFed Corporation,
a Delaware corporation
By
---------------------------------
---------------------------------
[Print Name and Title]
Address: 000 Xxxx Xxxxx Xxxxxx
Xxxx Xxxx Xxxx, XX 00000
Telecopier: (000) 000-0000
Telephone: (000) 000-0000
Each of the parties to the Plan Documents, by
signing below, confirms in favor of the Lender
that it (i) consents to the terms and conditions
of this Amended and Restated Loan Agreement,
(ii) agrees that all references in each of the
Plan Documents to the Loan Agreement shall refer
to this Amended and Restated Loan Agreement and
the Note executed in connection therewith, and
(iii) agrees it has no defense, offset, claim,
counterclaim or recoupment with respect to any
of its obligations or liabilities under its
respective Guaranty, Security Document and/or
its Deed of Trust and that all terms of such
Guaranty, Security Document or Deed of Trust
shall continue in full force and effect, subject
to the terms thereof and shall continue to
secure the Loan as amended thereby.
HOMEFED CORPORATION
By:_______________________________
Name:
Title:
HOMEFED COMMUNITIES, INC.
By:_______________________________
Name:
Title:
HOMEFED RESOURCES CORPORATION
By:_______________________________
Name:
Title:
XXXXXXXX XXXXXX XXXXXXXXXXX XX. 0
By:_______________________________
Name:
Title:
NORTHFORK COMMUNITIES
By:_______________________________
Name:
Title:
