EXHIBIT 10.12
REVOLVING LINE OF
CREDIT LOAN AGREEMENT
THIS REVOLVING LINE OF CREDIT LOAN AGREEMENT (the "Agreement") is made
effective as of the 13 day of June, 2000, by and between SUNDERLAND CORPORATION,
a Delaware corporation, doing business in Nevada as SUNDERLAND OF NEVADA (the
"Borrower"), and SILVER STATE BANK, a Nevada State-Chartered Bank (the
"Lender").
W I T N E S S E T H :
WHEREAS, Borrower, by and through its subsidiary, CapSource, Inc., a
Nevada corporation, doing business as Del Mar Mortgage ("Del Mar Mortgage"), is
in the business of making loans secured by real property located primarily in
Xxxxx County, Nevada; and
WHEREAS, subject to the terms and conditions hereof, Lender has agreed
to lend to Borrower certain funds on a revolving line of credit basis in an
amount not to exceed at any time the principal sum of THREE MILLION AND
NO/100THS DOLLARS ($3,000,000.00) (the "Loan") for the purpose of providing
Borrower with a revolving line of credit to meet its working capital
requirements.
NOW, THEREFORE, IN CONSIDERATION of the mutual covenants and promises
of the parties and subject to the following terms and conditions, Borrower
agrees to borrow from Lender, and Lender agrees to loan to Borrower the Loan for
the purposes provided herein. The Loan shall be evidenced by a Revolving Line of
Credit Promissory Note (the "Note") bearing even date herewith, guaranteed by
XXXXXXX XXXXXXX (the "Guarantor"), by the execution of a Guarantee in form and
content acceptable to Lender (the "Guarantee"), and secured by various
collateral assignments of promissory notes and deeds of trust to be evidenced by
documentation to be executed by Borrower or Del Mar Mortgage from time to time
in form and content acceptable to Lender (the "Collateral Assignment
Documents"). This Agreement, the Note, the Guarantee, the Collateral Assignment
Documents, and any and all other documents now or hereafter executed by Borrower
or any other person or party in connection with or to evidence or secure payment
of the Loan are sometimes hereafter collectively referred to as the "Loan
Documents".
A. DISBURSEMENTS.
A.1 GENERAL. At any time prior to the date which is
twelve (12) months following the date hereof, Lender shall make disbursements of
the Loan (each a "Disbursement") from time to time at Borrower's request for the
purposes provided herein once Borrower has: (a) satisfied all conditions set
forth herein; and (b) deposited with Lender the following sums: (i) Lender's
loan fee in the sum of $30,000.00; and (ii) Lender's reasonable attorney's fees
incurred in connection herewith.
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Xxxx Xxxx Peek Xxxxxxxx Xxxxxx and Xxxxxxxx
Attorneys and Counsellors at Law
Las Vegas, Nevada
(000)000-0000
A.2 CONDITIONS PRECEDENT TO EACH DISBURSEMENT. Lender's
obligation to make any Disbursement of the Loan shall be further subject to the
following:
(a) Borrower shall submit to Lender a
Disbursement Request in form and content acceptable to Lender and executed by an
authorized officer or other representative of Borrower;
(b) No Event of Default (as herein defined), or
any event which with notice or the passage of time would constitute an Event of
Default, shall then exist hereunder;
(c) Borrower shall provide Lender with such
information as Lender may reasonably require regarding: (i) the proposed use of
the requested Loan funds; and (ii) the proposed collateral to be pledged by
Borrower in connection with the requested Disbursement, including, without
limitation, copies of the promissory note and the deed of trust to be
collaterally assigned to Lender (which must conform to FIDICIA guidelines), a
copy of the appraisal for the real property encumbered by such deed of trust,
and a copy of the lender's policy of title insurance insuring such deed of trust
as a lien on the real property encumbered thereby, all of which shall be in form
and content acceptable to Lender in its sole discretion; and
(d) Borrower and/or Del Mar Mortgage shall
execute and deliver to Lender, as security for the Loan, such Collateral
Assignment Documents as Lender shall require to collaterally assign to Lender
the promissory note(s), and deed(s) of trust securing the same (the "Collateral
Notes/Deeds of Trust"), executed by third parties in favor of Borrower or Del
Mar Mortgage. The Collateral Documents shall include, but not be limited to, a
Security Agreement, a Collateral Assignment of Note And Deed of Trust, and an
Assignment Endorsement in substantially the form attached hereto as Xxxxxxxx
"X", "X" and "C", respectively. In addition to the Collateral Assignment
Documents, Borrower shall deliver to Lender the original Collateral Notes/Deeds
of Trust, the original lender's policy or policies of title insurance insuring
the same, and ALTA form 104 title endorsements thereto in favor of Lender in
connection with the Collateral Assignment Documents. Borrower shall pay all of
costs, fees and expenses incurred by Lender in connection with the Collateral
Assignment Documents, including, reasonable attorneys' fees and costs, and title
insurance premiums.
B. REPRESENTATIONS, COVENANTS AND WARRANTIES.
Borrower hereby unconditionally represents, covenants and
warrants as follows:
B.1 POWER. If Borrower or any signator who signs on its
behalf is a corporation, partnership, limited liability company, or trust, that
it is a corporation duly incorporated, or a partnership, limited liability
company or trust duly organized, and in any event validly existing under the
laws of the state of its incorporation or organization and duly qualified to do
business in the State of Nevada, with requisite power and authority to (a) incur
the indebtedness evidenced by the Note;
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Attorneys and Counsellors at Law
Las Vegas, Nevada
(000)000-0000
(b) enter into this Agreement; (c) enter into any other Loan Documents executed
and delivered to Lender concurrently herewith; and (d) conduct its business and
to own and lease its assets.
B.2 AUTHORITY. That this Agreement, the Note and all
other Loan Documents executed and delivered to Lender concurrently herewith were
executed in accordance with the requirements of law, and, if Borrower or any
signator who signs on its behalf is a corporation, partnership, limited
liability company, or trust, in accordance with any requirements of its articles
of incorporation, partnership agreement, articles of organization and/or
operating agreement, or declaration of trust, and any amendments thereto, and
that the execution of the same, and the full and complete performance of the
provisions thereof, are authorized by its bylaws, partnership agreement,
articles of organization and operating agreement, or declaration of trust, or a
resolution of its board of directors, partners, members or managers, or
trustees, and will not result in any breach of, or constitute a default under,
or result in the creation of any lien, charge or encumbrance (other than those
contained herein or in any instrument delivered to Lender concurrently herewith)
upon any property or assets of Borrower under any indenture, mortgage, deed of
trust, bank loan or credit agreement or other instrument or agreement to which
Borrower is a party or by which Borrower is bound or, if applicable, under
Borrower's corporate charter, bylaws, partnership agreement, articles of
organization and/or operating agreement, or declaration of trust. No
governmental or other authorization which has not been obtained is required for
the creation of the liens or the enforcement by Lender of its remedies under the
Loan Documents. Each of the Loan Documents, when executed and delivered, will
constitute the legal, valid and binding obligations of Borrower and/or the
Guarantors enforceable against each in accordance with its terms, except as the
enforcement thereof may be limited by bankruptcy, insolvency or other similar
laws affecting the rights of creditors generally.
B.3 FINANCIAL STATEMENTS. Any and all balance sheets,
statements of income or loss, reconciliation of surplus and financial data of
any other kind heretofore furnished Lender by or on behalf of any of the
Borrower and Guarantor are true and correct in all material respects, and fully
and accurately present the financial condition of the subjects thereof as of the
dates thereof, and no material adverse change has occurred in the financial
condition reflected therein since the dates of the most recent financial data
submitted to Lender. During the Loan term, Borrower shall provide Lender with:
(i) copies of annual financial statements for Borrower and the Guarantor within
90 days following the end of each year; (ii) copies of federal income tax
returns (including schedules) and/or extension requests for Borrower and the
Guarantor within 15 days after filing the same; and (iii) such other financial
information in connection with the Borrower and the Guarantor as Lender may
reasonably request.
B.4 LITIGATION. There are no actions, suits or
proceedings of a material nature (collectively "Proceedings") pending, or to the
knowledge of Borrower threatened, against or affecting Borrower or any of the
Guarantor or involving the validity or enforceability of the Loan Documents, and
no event ("Adverse Event") has occurred (including specifically the execution of
this Agreement, the Note or any of the other Loan Documents) which will
materially adversely affect the financial condition, operations, or prospects of
Borrower or the Guarantor or the ability of such party
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Attorneys and Counsellors at Law
Las Vegas, Nevada
(000)000-0000
to perform its obligations under the Loan Documents. Borrower shall give Lender
written notice of any pending or threatened Proceeding or any Adverse Event
promptly after Borrower obtains knowledge thereof.
B.5 OUT OF DEBT PERIOD. During the term of the Loan,
Borrower shall make such principal payments as are required to reduce the
outstanding balance under the Loan to zero (0) for thirty (30) consecutive days
during each calendar quarter. For purposes hereof a calendar quarter [AMENDED ON
EXTENSION] shall mean the three (3) month periods commencing on January 1, April
1, July 1 and October 1 of each year, commencing with the quarter beginning on
July 1, 2000.
B.6 DOCUMENTS AND OTHER INFORMATION. All documents and
other information delivered to Lender pursuant to any of the Loan Documents are
and will be complete and correct in all material respects at the time of
delivery to Lender.
The foregoing representations, covenants and
warranties shall survive until all sums payable pursuant to the Note or this
Agreement or any of the other Loan Documents, have been paid in full.
C. DEFAULT.
C.1 EVENTS OF DEFAULT. Any of the following shall
constitute a default hereunder (each an "Event of Default"):
(a) The failure of Borrower to make any payment
required hereunder or under the Note or under any other Loan Document within
fifteen (15) days after such payment is due;
(b) The neglect, failure, or refusal of Borrower
to keep in full force and effect any permit, license, consent or approval
required in connection with Borrower's or Del Mar Mortgage's business
operations;
(c) The false or misleading nature of any
representation or warranty of Borrower contained herein, or in any other Loan
Document, or in any representation to Lender concerning the financial condition
of Borrower or the Guarantor;
(d) The failure of Borrower to fully perform any
and all other covenants and agreements hereunder or under the other Loan
Documents; provided, however, that such failure shall not be a default hereunder
if such failure is not specifically covered elsewhere in this Paragraph C.1,
such failure does not relate, in the judgment of Lender, to a matter which is of
an emergency nature, and Borrower performs such covenant or agreement within
thirty (30) days after written notice to Borrower that performance thereof is
due. If such failure is specifically covered elsewhere in this Paragraph C.1,
the foregoing 30-day grace period shall not be applicable and the grace period,
notice requirement and/or cure period, if any, set forth in such other reference
shall control;
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Attorneys and Counsellors at Law
Las Vegas, Nevada
(000)000-0000
(e) The admission by Borrower or the Guarantor
in writing of its inability to pay its debts generally as they become due, or
the filing by any such party of a petition or action for relief under any
bankruptcy, reorganization or insolvency law, or any other law or laws for the
relief of, or relating to, debtors;
(f) The filing of any involuntary petition under
any bankruptcy or insolvency law against Borrower or the Guarantor, or the
appointment of a custodian, receiver or trustee to take possession of the assets
of any such party, unless such petition or appointment is or has been set aside
or withdrawn within ninety (90) days from the date of such filing or
appointment;
(g) The filing by or against Borrower or the
Guarantor of a petition seeking the liquidation or dissolution of Borrower or
the Guarantor or the commencement of any other procedure to liquidate or
dissolve Borrower or the Guarantor (if such petition or procedure is not
dismissed or terminated within ninety (90) days after it is filed or otherwise
commenced), or the occurrence of any event, condition or circumstance which
causes the liquidation of Borrower (if such event, condition or circumstance is
not cured within ninety (90) days after it arises); or
(h) The Guarantor shall notify Lender of his
intention to rescind, terminate or revoke his Guarantee, or such Guarantee shall
cease to be in full force and effect for any reason without Lender's written
consent.
For the purpose of paragraph C.1, whenever Borrower
is provided with a period of time within which to cure any default, and such
default is not reasonably susceptible to cure within such period of time, it
shall be deemed cured if Borrower commences curative action within such time
period and diligently pursues such action thereafter.
C.2 ACCELERATION. Upon the occurrence of an Event of
Default hereunder, the entire unpaid balance of the Note including all accrued
interest shall, at the option of Lender, become immediately due and payable and
Lender shall have such rights of enforcement as may be afforded by law,
hereunder, or under the Note or any of the other Loan Documents.
D. REMEDIES.
Upon the occurrence of any Event of Default, Lender may,
without notice to or demand upon Borrower, which are expressly waived by
Borrower (except for any notices or demands otherwise required by applicable law
to the extent not effectively waived by Borrower, and any notices or demands
specified herein or the Loan Documents), exercise any one or more of the
following remedies, as Lender may determine:
D.1 GENERAL. Lender may, at its option, terminate all
commitments to make disbursements of the Loan, or Lender may waive the Event of
Default or, without waving the Event of Default, determine upon terms and
conditions acceptable to Lender to make further disbursements. All remedies of
Lender provided for herein are cumulative and shall be in addition to any and
all other
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Attorneys and Counsellors at Law
Las Vegas, Nevada
(000)000-0000
rights and remedies provided in the Note or any of the other Loan Documents or
by law. The exercise of any rights of Lender hereunder shall not in any way
constitute a cure or waiver of an Event of Default hereunder or elsewhere, or
invalidate any act done pursuant to any notice of default, or prejudice Lender
in the exercise of any of its other rights hereunder or elsewhere unless, in the
exercise of said rights, Lender realizes all amounts owed to it hereunder and
under the Note and the other Loan Documents.
D.2 RIGHT OF CONTEST. Borrower shall have the right to
contest in good faith any claim, demand, levy, or assessment by a third party,
the assertion of which would constitute an Event of Default hereunder. Any such
contest shall be prosecuted diligently and in a manner not prejudicial to Lender
or the rights of Lender hereunder.
E. MISCELLANEOUS.
E.1 NO WAIVER. No waiver of any Event of Default or
breach by Borrower hereunder shall be implied from any omission by Lender to
take action on account thereof, and no express waiver shall affect any Event of
Default other than that specified in the waiver and the waiver shall be
operative only for the time and to the extent therein stated. Waivers of any
covenant, term, or condition contained herein shall not be construed as a waiver
of any subsequent breach of the same covenant, term or condition. The consent or
approval by Lender to or of any act by Borrower requiring consent or approval
shall not be deemed to waive or render unnecessary the consent or approval to or
of any subsequent similar act.
E.2 NO THIRD PARTIES BENEFITTED. This Agreement is made
and entered into for the sole protection and benefit of Lender (and any
participating lender) and Borrower. All conditions to the obligation of Lender
to make Disbursements hereunder are imposed solely and exclusively for the
benefit of Lender and may be freely modified by Lender with the concurrence of
Borrower or waived by Lender in whole or in part at any time if, in its sole
discretion, it deems it advisable to do so. No person other than Borrower shall
have standing to require Lender to make any Disbursements or be a beneficiary of
this Agreement or of any of the Disbursements to be made hereunder.
E.3 PLURAL BORROWERS JOINTLY AND SEVERALLY LIABLE. All
persons, firms and/or entities, including general partners, constituting
"Borrower" herein shall be jointly and severally liable to Lender for the
faithful performance of the terms hereof.
E.4 NOTICES. All notices or other communications required
or permitted to be given hereunder shall be in writing and shall be considered
as properly given if mailed by first class United States mail, postage prepaid,
registered or certified with return receipt requested, or by delivering the same
by courier service to the intended addressee, or by telefax. Notice so mailed
shall be effective five (5) business days following its deposit, and notice by
telefax or courier service shall be effective on the first business day after
received. Notice given in any other manner shall be effective only if and when
received by the addressee. For purposes of notice, the addresses of the parties
shall be as set forth on the signature page hereof; provided, however, that
either party shall
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Attorneys and Counsellors at Law
Las Vegas, Nevada
(000)000-0000
have the right to change its address for notice hereunder to any other location
by the giving of notice to the other party in the manner set forth above.
E.5 AUTHORITY TO FILE NOTICES. Borrower irrevocably
appoints, designates, and authorizes Lender as its agent (said agency being
coupled with an interest) to file for record any notices of completion,
cessation of labor, or any other notice that Lender deems necessary or desirable
to protect its interest hereunder or under the Note or any of the other Loan
Documents. Lender shall only file such notices if Borrower fails, within fifteen
(15) days after written demand by Lender, to do so.
E.6 EXPENSES. Borrower shall promptly pay all reasonable
costs, charges, and expenses incurred by Lender in connection with the
negotiation, documentation and closing of the Loan, including but not limited
to, title charges, tax and lien service charges, reasonable costs of inspection,
recording fees, processing fees, appraisal fees, reasonable attorneys' fees,
real property taxes and assessments and insurance premiums, and any and all fees
in consideration of Lender's commitment to provide the Loan.
E.7 ACTIONS. Lender shall have the right to commence,
appear in or defend any action or proceeding purporting to affect the rights,
duties, or liabilities of the parties hereunder, or the Disbursement of any
funds in the event that Borrower fails to appear in or adequately defend such
action or proceeding or fails to keep Lender advised of the status thereof. In
connection therewith, Lender may incur and pay costs and expenses, including
reasonable attorneys' fees, and Borrower shall pay to Lender on demand all such
costs and expenses and Lender is authorized to disburse funds from the Loan for
such purpose.
E.8 COMMISSIONS AND BROKERAGE FEE. Borrower shall
indemnify Lender from any responsibility and/or liability for the payment of any
commission, charge or brokerage fees to anyone which may be payable in
connection with the making, purchase or refinance of the Loan, it being
understood that any such commission, charge, or brokerage fees will be paid
directly by Borrower to the party or parties entitled thereto.
E.9 APPLICABLE LAW. This Agreement shall be governed by
and construed in accordance with the laws of Nevada, except as preempted by
federal law.
E.10 HEIRS, SUCCESSORS AND ASSIGNS. This Agreement shall
be binding upon and inure to the benefit of the heirs, successors, assigns and
personal representatives of the parties hereto; provided, however, that Borrower
shall not assign its rights hereunder in whole or in part without the prior
written consent of Lender, which such consent may be granted or withheld in the
sole and absolute discretion of Lender. Any such assignment without consent
shall be void. Lender may from time to time sell participations in the Loan to
any person (including affiliates of Lender) without notice to or the consent of
Borrower or the Guarantor. In connection with the sale of participations, Lender
is authorized to provide to potential participants information regarding
Borrower or the
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Attorneys and Counsellors at Law
Las Vegas, Nevada
(000)000-0000
Guarantor which Lender may have in its possession. No such sale of
participations shall, without Borrower's written consent, relieve Lender of its
obligations hereunder.
E.11 TIME. Time is of the essence of this Agreement and
each and every provision hereof in which time is an element.
E.12 RELATIONSHIP OF PARTIES. The relationship between
Borrower and Lender is, and at all time shall remain, solely that of debtor and
creditor, and shall not be, or be construed to be, a joint venture, equity
venture, partnership or other relationship of any nature, and Lender neither
undertakes nor assumes any responsibility or duty to Borrower or to any other
person with respect to the Loan, except as expressly provided in the Loan
Documents. Notwithstanding any other provision of the Loan Documents: (a) Lender
is not, and shall not be construed as, a partner, joint venturer, alter ego,
manager, controlling person or other business associate or participant of any
kind of Borrower or its partners, if applicable, and Lender does not intend to
ever assume such status; (b) Lender shall in no event be liable for any debts,
expenses or losses incurred or sustained by Borrower; (c) Lender's activities in
connection with the Loan Documents shall not be outside the scope of the
activities of a lender within the meaning of NRS 41.590 and other laws of the
State of Nevada; and (d) Lender shall not be deemed responsible for or a
participant in any acts, omissions or decisions of Borrower or its partners.
E.13 ATTORNEYS' FEES AND COSTS. If any legal action or any
arbitration or other proceeding (including a proceeding in bankruptcy) is
brought for the enforcement of this Agreement or because of an alleged dispute,
breach, Event of Default or misrepresentation in connection with any of the
provisions of this Agreement, the successful or prevailing party shall be
entitled to recover reasonable attorneys' fees and other costs incurred in that
action or proceeding, in addition to any other relief to which he may be
entitled.
E.14 EXPIRATION OF COMMITMENT. Lender's obligation to
disburse the Loan is further conditioned upon the execution of this Agreement
and the other Loan Documents on or before June 30, 2000.
E.15 INTERPRETATION. This Agreement shall not be construed
against the party preparing it, but shall be construed as if both parties
jointly prepared this Agreement and any uncertainty and ambiguity shall not be
interpreted against any one party.
E.16 PARTIAL INVALIDITY. In the event that any of the
terms hereof shall be held to be invalid or unenforceable by any court of
competent jurisdiction, such fact shall not affect the validity or
enforceability of the remaining terms hereof.
E.17 Reasonableness Standard. Except as otherwise provided
herein, whenever Lender's consent or approval is required in this Agreement,
such consent or approval shall not be unreasonably withheld or delayed.
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Xxxx Xxxx Xxxx Xxxxxxxx Xxxxxx and Xxxxxxxx
Attorneys and Counsellors at Law
Las Vegas, Nevada
(000)000-0000
IN WITNESS WHEREOF, the parties hereto have executed this Agreement the
day and year first above written.
SUNDERLAND CORPORATION SUNDERLAND CORPORATION, A
________________________ DELAWARE CORPORATION, DOING BUSINESS IN
________________________ NEVADA AS SUNDERLAND OF NEVADA
By: /s/ XXXXX XXXXX
--------------------------------
XXXXX XXXXX
ITS: PRESIDENT
"BORROWER"
SILVER STATE BANK SILVER STATE BANK, A NEVADA STATE-
000 X. XXXXX XXXXXX XXXXXXX CHARTERED BANK,
XXXXXXXXX, XXXXXX 00000
By: _______________________________
XXXXXXX X. XXXXXX
ITS: SENIOR VICE PRESIDENT
"LENDER"
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Xxxx Xxxx Xxxx Xxxxxxxx Xxxxxx and Xxxxxxxx
Attorneys and Counsellors at Law
Las Vegas, Nevada
(000)000-0000
