TERM LOAN AGREEMENT dated as of January 14, 2009 by and between ASHTON WOODS USA L.L.C., as Borrower and PARKMOUNT LAND DEVELOPMENT INC., as Lender
Exhibit 10.2
dated as of January 14, 2009
by and between
▇▇▇▇▇▇ ▇▇▇▇▇ USA L.L.C.,
as Borrower
as Borrower
and
PARKMOUNT LAND DEVELOPMENT INC.,
as Lender
as Lender
THIS TERM LOAN AGREEMENT (this “Agreement”), dated as of January 14, 2009, is made by and
between ▇▇▇▇▇▇ ▇▇▇▇▇ USA L.L.C., a Nevada limited liability company (“Borrower”), and PARKMOUNT
LAND DEVELOPMENT INC., a Canadian corporation (“Lender”).
ARTICLE 1: DEFINITIONS
1.1 Defined Terms. As used in this Agreement, the terms set forth in Exhibit
“A” attached hereto and made a part hereof shall have the meanings assigned therein.
ARTICLE 2: AMOUNT AND TERMS OF THE LOAN; PAYMENT
2.1 The Loan. Subject to the terms and conditions set forth herein, Lender has agreed
to make loan advances to Borrower in the maximum aggregate original principal amount of up to FIVE
MILLION AND NO/100 DOLLARS ($5,000,000.00) (the “Loan”). The initial loan advance shall be funded
upon Borrower’s satisfaction of the conditions to such initial advance described herein. The Loan
shall be repaid in accordance with this Agreement. The Loan is not a revolving loan; amounts
repaid may not be re-borrowed. Provided there are no Events of Default hereunder and no events of
default under the Credit Agreement (as defined herein), Borrower may request additional loan
advances after the initial funding in an amount not to exceed $5,000,000.00 less the amount
previously advanced hereunder on not less than five (5) Business Days’ prior notice. Borrower
shall provide to Lender all documentation reasonably requested by Lender in connection with such
advances.
2.2 Interest Rate; Late Charge. Provided that no Event of Default exists, the
principal amount of the Loan outstanding from time to time shall bear interest until paid at a
fixed per annum rate equal to the LIBOR Rate plus six (6%), as determined two (2) London Banking
Days prior to the date of this Agreement. Interest shall be calculated based on a three hundred
sixty (360) day year and charged for the actual number of days elapsed. In computing the number of
days during which such interest accrues, the day on which funds are initially advanced shall be
included regardless of the time of day such advance is made, and the day on which funds are repaid
shall be included unless repayment is credited prior to close of business. All interest hereunder
shall be paid upon maturity. Whenever any payment to be made hereunder shall be stated to be due
on a day that is not a Business Day, the payment shall be made on or before the last Business Day
prior to such due date. Notwithstanding any longer period granted hereunder in connection with the
occurrence of an Event of Default and Lender’s acceleration remedies, if any sum payable under this
Agreement is not paid on or before the date on which it is due, Borrower shall pay to Lender upon
demand an amount equal to the lesser of five percent (5%) of such unpaid sum or the maximum amount
permitted by applicable law to defray the expenses incurred by Lender in handling and processing
such delinquent payment and to compensate Lender for the loss of the use of such delinquent payment
and such amount shall be secured by the Mortgages and other Loan Documents.
2.3 Maximum Legal Interest. It is expressly stipulated and agreed to be the intent of
Borrower and Lender at all times to comply with applicable state law or applicable
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United States federal law (to the extent that it permits Lender to contract for, charge, take,
reserve, or receive a greater amount of interest than under state law) and that this section shall
control every other covenant and agreement in this Agreement. If the applicable law (state or
federal) is ever judicially interpreted so as to render usurious any amount called for under this
Agreement, or contracted for, charged, taken, reserved, or received with respect to the
Obligations, or if Lender’s exercise of the option to accelerate the Maturity Date, or if any
prepayment by Borrower results in Borrower having paid any interest in excess of that permitted by
applicable law, then it is Lender’s express intent that all excess amounts theretofore collected by
Lender shall be credited on the principal balance of this Agreement and all other Obligations and
the provisions of this Agreement immediately be deemed reformed and the amounts thereafter
collectible hereunder and thereunder reduced, without the necessity of the execution of any new
documents, so as to comply with the applicable law, but so as to permit the recovery of the fullest
amount otherwise called for hereunder or thereunder. All sums paid or agreed to be paid to Lender
for the use, forbearance, or detention of the Obligations shall, to the extent permitted by
applicable law, be amortized, prorated, allocated, and spread throughout the full stated term of
this Agreement until payment in full of the Obligations so that the rate or amount of interest on
account of the Obligations does not exceed the maximum lawful rate from time to time in effect and
applicable to the Obligations for so long as the Obligations are outstanding. Notwithstanding
anything to the contrary contained herein, it is not the intention of Lender to accelerate the
maturity of any interest that has not accrued at the time of such acceleration or to collect
unearned interest at the time of such acceleration.
2.4 Note. The Loan made by Lender pursuant hereto shall be evidenced by the Note,
payable to the order of Lender and evidencing the obligation of Borrower to pay the aggregate
unpaid principal amount of the Loan, with interest thereon as prescribed herein. The Note shall
(a) be dated as of the date hereof, (b) be stated to mature on the Maturity Date, and (c) bear
interest for the period from and including the date thereof on the unpaid principal amount thereof
from time to time outstanding at the applicable interest rate per annum determined as provided
herein.
2.5 Payment and Maturity. A payment of all Obligations then outstanding, including
but not limited to all outstanding principal and interest on the Loan, shall be due and payable by
Borrower on the Maturity Date.
2.6 Use of Proceeds. The proceeds of the Loan made hereunder shall be used by
Borrower for working capital and to fund operations.
2.7 Security. This Agreement is evidence of the Loan. This Agreement is secured by
(a) the Guaranty Agreement, (b) the Mortgages, and (c) the other Loan Documents.
ARTICLE 3: REPRESENTATIONS AND WARRANTIES
In order to induce Lender to enter into this Agreement and to make the Loan, Borrower hereby,
represents and warrants to Lender that on the date hereof:
3.1 Financial Statements. Borrower has heretofore furnished to Lender the
consolidated balance sheet and financial statement of Borrower and the Guarantors as of August
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31, 2008, certified by Borrower as true and correct. The foregoing financial statement fairly
presents, in all material respects, the financial condition of Borrower and the Guarantors as of
the date thereof and the results of the operations of Borrower and the Guarantors for the period
then ended.
3.2 Existence; Compliance with Law. Each of Borrower and the Guarantors (a) is duly
organized or formed, as appropriate, validly existing and in good standing under the laws of the
jurisdiction of its incorporation, formation or organization, as appropriate, (b) has the requisite
corporate, partnership or limited liability company power and authority to conduct the business in
which it is currently engaged, (c) is qualified as a foreign entity to do business under the laws
of any jurisdiction where the failure to so qualify would have a material adverse effect on the
business of Borrower and the Guarantors taken as a whole, and (d) is in compliance with all
Requirements of Law except to the extent that the failure to comply therewith would not, in the
aggregate, have a material adverse effect on the business, operations, property or financial or
other condition of Borrower and the Guarantors taken as a whole or would not materially adversely
affect the ability of Borrower or the Guarantors to perform their respective obligations under the
Loan Documents.
3.3 Power; Authorization; Enforceable Obligations. Borrower and each Guarantor has
the corporate, partnership or limited liability company (as applicable) power and authority to
make, deliver and perform the Loan Documents to which it is a party and (in the case of Borrower)
to borrow hereunder, and has taken all corporate or other action necessary to be taken by it to
authorize (a) (in the case of Borrower) such borrowing on the terms and conditions of this
Agreement and the Note, and (b) the execution, delivery and performance of the Loan Documents to
which it is a party. No consent, waiver or authorization of, or filing with any Person (including
without limitation any Governmental Authority) is required to be made or obtained by Borrower in
connection with the borrowings hereunder or by Borrower or any Guarantor in connection with the
execution, delivery, performance, validity or enforceability of the Loan Documents to which it is a
party. This Agreement has been, and the Note, the Mortgages and the Guaranty Agreement will be,
duly executed and delivered on behalf of Borrower or each Guarantor (as the case may be), and this
Agreement constitutes, and the Note, the Mortgages and Guaranty Agreement when executed and
delivered hereunder will constitute, a legal, valid and binding obligation of Borrower or the
Guarantors (as the case may be), enforceable against Borrower or the Guarantors (as the case may
be), in accordance with their terms, subject to the effect, if any, of bankruptcy, insolvency,
reorganization, arrangement or other similar laws relating to or affecting the rights of creditors
generally and the limitations, if any, imposed by the general principles of equity and public
policy.
3.4 No Legal Bar. The execution, delivery and performance of this Agreement and the
Note, the borrowing hereunder and the use of the proceeds thereof and the execution, delivery and
performance by the Guarantors of the Guaranty Agreement and the Mortgages (a) do not violate any
Requirement of Law or Contractual Obligation of Borrower or any of the Guarantors, (b) do not
contravene the articles of incorporation, charter, bylaws, partnership agreement, articles or
certificate of formation, operating agreement or other organizational documents of Borrower or any
of the Guarantors and (c) do not result in, or require, the creation or imposition of any Lien
(other than the Lien of the Loan Documents) on any of its properties or revenues pursuant to any
Requirement of Law or Contractual Obligation.
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3.5 No Defaults on Outstanding Judgments or Orders. Borrower and each Guarantor have
satisfied all unstayed and unappealed judgments in excess of $1,000,000 in the aggregate (that are
not covered by insurance), and neither Borrower nor any Guarantor is in default with respect to any
judgments in excess of $1,000,000 in the aggregate (that are not covered by insurance), or any
material writ, injunction, decree, rule, or regulation of any court, arbitrator, or federal, state,
municipal, or other governmental authority, commission, board, bureau, agency, or instrumentality,
domestic or foreign applicable to Borrower or any Guarantor.
3.6 Ownership and Liens. Borrower and each Guarantor have title to, or valid
leasehold interests in, all of their respective properties and assets, real and personal, including
the properties and assets and leasehold interests reflected in the financial statements referred to
in Section 4.1 hereof (other than any properties or assets disposed of in the ordinary course of
business), and none of the properties and assets owned by Borrower or any Guarantor and none of
their leasehold interests is subject to any Lien, except for Liens permitted herein or approved by
Lender.
3.7 Operation of Business. Borrower and each Guarantor possess all material licenses,
permits, franchises, patents, copyrights, trademarks, and trade names, or rights thereto, required
to conduct their respective businesses substantially as now conducted and as presently proposed to
be conducted and neither Borrower nor any Guarantor is in violation of any valid rights of others
with respect to any of the foregoing where the failure to possess such licenses, permits,
franchises, patents, copyrights, trademarks, trade names or rights thereto or the violation of the
valid rights of others with respect thereto may, in any one case or in the aggregate, adversely
affect in any material respect the financial condition, operations, properties, or business of
Borrower or any Guarantor or the ability of Borrower and the Guarantors, taken as a whole, to
perform their respective obligations under the Loan Documents to which they are a party.
3.8 Taxes. All income tax liabilities or income tax obligations of Borrower and each
Guarantor that are due (other than those being contested in good faith by appropriate proceedings)
have been paid or have been accrued by or reserved for by Borrower.
3.9 Compliance with Laws. Borrower and the Guarantors are in compliance in all
material respects with applicable statutes, regulations and ordinances in connection with the
operation of their business, including without limitation statutes, regulations or ordinances
relating to environmental matters, of any governmental entity, or any agency thereof.
ARTICLE 4: CONDITIONS PRECEDENT
4.1 Conditions to Initial Loan(s). The obligation of the Lender to make the Loan is
subject to the satisfaction of the following conditions precedent on or prior to the date hereof:
(a) Note. Lender shall have received the Note, conforming to the requirements hereof
and duly executed and delivered by a duly authorized officer of Borrower.
(b) Guaranty Agreements. The Guaranty Agreement shall have been duly executed and
delivered by all Guarantors to Lender.
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(c) Proceedings of Borrower. Lender shall have received a copy of the resolutions (in
form and substance satisfactory to Lender) of the board of directors of Borrower authorizing (i)
the execution, delivery and performance, of this Agreement, (ii) the consummation of the
transactions contemplated hereby, (iii) the borrowings herein provided for, and (iv) the execution,
delivery and performance of the Note and the other documents provided for in this Agreement, all
certified by the secretary or other appropriate representative of Borrower as of the date hereof.
Such certificate shall state that the resolutions set forth therein have not been amended,
modified, revoked or rescinded as of the date hereof.
(d) Proceedings of Guarantors. Lender shall have received a copy of the respective
resolutions (in form and substance reasonably satisfactory to Lender) of the board of directors,
management committee or other governing body of each of the Guarantors (or of Borrower or another
Subsidiary of Borrower as the sole shareholder or sole member of the applicable Guarantor where
appropriate), each resolution authorizing the execution, delivery and performance of the Guaranty
Agreement, all certified by the Secretary or Assistant Secretary (or other person in a comparable
position) of the respective Guarantor (or Borrower or Subsidiary) as of the date hereof. Such
certificate shall state that the resolutions set forth therein have not been amended, modified,
revoked or rescinded as of the date hereof.
(e) Incumbency Certificate of Borrower. Lender shall have received a certificate of
the secretary, manager or other appropriate representative of Borrower, dated the date hereof, as
to the incumbency and signature of the officer(s), members or managers of each executing this
Agreement, the Note and any certificate or other documents to be executed and delivered by Borrower
pursuant hereto or thereto.
(f) Incumbency Certificates of Guarantors. Lender shall have received a certificate
of the Secretary (or other person in a comparable position) of each of the Guarantors, dated the
date hereof, as to the incumbency and signatures of the officer(s) (or other person(s) in a
comparable position) of each executing the Guaranty Agreement.
(g) No Proceeding or Litigation; No Injunctive Relief. No action, suit or proceeding
before any arbitrator or any Governmental Authority shall have been commenced, no investigation by
any Governmental Authority shall have been commenced and no action, suit, proceeding or
investigation by any Governmental Authority shall have been threatened, against Borrower or any
Guarantor or any of the officers, directors or managers of Borrower or any Guarantor, seeking to
restrain, prevent or change the transactions contemplated by this Agreement in whole or in part or
questioning the validity or legality of the transactions contemplated by this Agreement or seeking
damages in connection with such transactions.
(h) No Default or Event of Default. No Default or Event of Default shall have
occurred and be continuing hereunder prior to or after giving effect to the making of the Loan.
(i) Additional Matters. All corporate and other proceedings and all other documents
and legal matters in connection with the transactions contemplated by the Loan Documents shall be
reasonably satisfactory in form and substance to Lender.
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(j) Compliance with Laws. Borrower and the Guarantors shall be in compliance in all
material respects with applicable statutes, regulations and ordinances in connection with the
operation of their business, including without limitation statutes, regulations or ordinances
relating to environmental matters, of any governmental entity, or any agency thereof.
(k) Legal Opinion of Counsel to Borrower. Lender shall have received an executed
legal opinion of Borrower’s counsel and other local counsel to Borrower and the Guarantors granting
the Mortgages, dated as of the date hereof and addressed to Lender in form and substance reasonably
satisfactory to Lender.
(l) Fee. Borrower shall have paid to Lender a fee in the amount of one-half of one
percent (.5%) of the amount of the Loan.
ARTICLE 5: DEFAULTS, EVENTS OF DEFAULT; DISTRIBUTION OF PROCEEDS AFTER EVENT OF DEFAULT
Upon the occurrence of any of the following events:
(1) Borrower shall fail to make any payment under the Note or fail to pay any fee, charge or
other amount payable hereunder, and such failure shall continue uncured for five (5) Business Days;
or
(2) any representation or warranty made or deemed made by Borrower or any Guarantor herein, in
any other Loan Document or which is contained in any certificate, document or financial or other
statement furnished at any time under or in connection herewith or therewith, shall prove to have
been incorrect in any material respect on or as of the date made or deemed made; or
(3) (a) Borrower or any Guarantor or shall commence any case, proceeding or other action (i)
under any existing or future law of any jurisdiction, domestic or foreign, relating to bankruptcy,
insolvency, reorganization or relief of debtors, seeking to have an order for relief entered with
respect to it, or seeking to adjudicate it a bankrupt or insolvent, or seeking reorganization,
arrangement, adjustment, winding-up, liquidation, dissolution, composition or other relief with
respect to it or its debts, or (ii) seeking appointment of a receiver, trustee, custodian or other
similar official for it or for all or any substantial part of its assets, or Borrower or any
Guarantor shall make a general assignment for the benefit of its creditors; or (b) there shall be
commenced against Borrower or any Guarantor any case, proceeding or other action of a nature
referred to in clause (a) above which (i) results in the entry of an order for relief of any such
adjudication or appointment, and (ii) remains undismissed, undischarged or unbonded for a period of
60 days; or (c) there shall be commenced against Borrower or any Guarantor any case, proceeding or
other action seeking issuance of a warrant of attachment, execution, distraint or similar process
against all or any substantial part of its assets which results in the entry of an order for any
such relief which shall not have been vacated, discharged, or stayed or bonded pending appeal
within 60 days from the entry thereof; or (d) Borrower or any Guarantor shall take any action in
furtherance of, or indicating its consent to,
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approval of, or acquiescence in, any of the acts set forth in clauses (a), (b) or (c) above;
or (e) Borrower or any shall generally not, or shall be unable to, or shall admit in writing its
inability to, pay its debts as they become due; or
(4) Borrower’s obligations under that certain First Amended and Restated Credit Agreement,
dated as of December 16, 2005, by and among Borrower, Wachovia Bank, National Association, and the
lenders from time to time party thereto, as amended by that certain First Amendment to First
Amended and Restated Credit Agreement, dated as of January 11, 2007, as further amended by that
certain Second Amendment to First Amended and Restated Credit Agreement, dated as of June 15, 2007,
as further amended by that certain Third Amendment to First Amended and Restated Credit Agreement,
dated as of December 20, 2007, and as further amended by that certain Fourth Amendment to First
Amended and Restated Credit Agreement, dated as of January 13, 2009 (as the same may be amended or
modified from time to time, the “Credit Agreement”), shall be accelerated pursuant to the terms
thereof by the lenders thereunder prior to the final maturity date of such obligations.
then, and in any such event, (a) if such event is an Event of Default specified in paragraph (3)
above, all Obligations shall immediately become due and payable, (b) if such event is an Event of
Default specified in paragraphs (1) or (4) above and is continuing, Lender may by notice to
Borrower declare the full amount of all outstanding Obligations to be due and payable forthwith,
whereupon the same shall immediately become due and payable, and (c) if such event is any other
Event of Default, is continuing, and an Event of Default specified in paragraphs (3) or (4) above
has occurred, Lender may by notice to Borrower declare the full amount of all outstanding
Obligations to be due and payable forthwith, whereupon the same shall immediately become due and
payable. Except as expressly provided above in this Article, presentment, demand, protest and all
other notices of any kind are hereby expressly waived. Additionally, Lender may exercise any and
all other rights and remedies available to Lender pursuant to the other Loan Documents, at law or
in equity to the extent not inconsistent with the rights specifically granted to Lender hereunder;
provided that, with an Event of Default other than those specified in paragraphs (1), (3) and (4)
above, an Event of Default specified in either paragraph (3) or (4) above shall have occurred prior
to Lender exercising any rights or remedies available to it.
ARTICLE 6: MISCELLANEOUS
6.1 Notices. (a) Except in the case of notices and other communications expressly
permitted to be given by telephone (and except as provided in paragraph (b) below), all notices and
other communications provided for herein shall be in writing and shall be delivered by hand or
overnight courier service, mailed by certified or registered mail or sent by telecopier as follows:
(i) if to Borrower or any Guarantor, to it at ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇▇▇, Attention of ▇▇▇ ▇▇▇▇▇▇ (Telecopier No. 770-998-7494).
(ii) if to Lender, to ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇▇▇▇▇, at c/o Great Gulf Homes, ▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇, ▇▇▇▇▇▇ (Telecopier No. 416-449-1073);
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Notices sent by hand or overnight courier service, or mailed by certified or registered mail, shall
be deemed to have been given when received; notices sent by telecopier shall be deemed to have been
given when sent (except that, if not given during normal business hours for the recipient, shall be
deemed to have been given at the opening of business on the next business day for the recipient).
Notices delivered through electronic communications to the extent provided in paragraph (b) below,
shall be effective as provided in said paragraph (b).
(b) Any party hereto may change its address or telecopier number for notices and other
communications hereunder by notice to the other party hereto.
6.2 No Waiver; Cumulative Remedies. No failure to exercise and no delay in
exercising, on the part of Lender, any right, remedy, power or privilege hereunder shall operate as
a waiver thereof; nor shall any single or partial exercise of any right, remedy, power or privilege
hereunder preclude any other or further exercise thereof or the exercise of any other right,
remedy, power or privilege. The rights, remedies, powers and privileges herein provided are
cumulative and not exclusive of any rights, remedies, powers and privileges provided by law.
6.3 Survival of Representations and Warranties. All representations and warranties
made hereunder and in any document, certificate or statement delivered pursuant hereto or in
connection herewith shall survive the execution and delivery of this Agreement and the Note and
shall remain in full force and effect until this Agreement is terminated and all Obligations are
paid in full.
6.4 Costs and Expenses; Indemnification; Reimbursement; Waiver of Damages. (a)
Borrower shall pay (i) all reasonable out-of-pocket expenses incurred by Lender and its Affiliates
(including the reasonable fees, charges and disbursements of counsel for Lender), in connection
with the preparation, negotiation, execution, delivery and administration of this Agreement and the
other Loan Documents or any amendments, modifications or waivers of the provisions hereof or
thereof (whether or not the transactions contemplated hereby or thereby shall be consummated),
(ii) all out-of-pocket expenses incurred by Lender (including the fees, charges and disbursements
of any counsel for Lender), in connection with the enforcement or protection of its rights in
connection with this Agreement and the other Loan Documents, including its rights under this
Section, and (iii) any civil penalty or fine assessed by the U.S. Department of the Treasury’s
Office of Foreign Assets Control against, and all reasonable costs and expenses (including counsel
fees and disbursements) incurred in connection with defense thereof by Lender as a result of the
funding of the Loan or the acceptance of payments due under the Loan Agreement.
(b) Borrower shall indemnify Lender (and any sub-agent thereof) and each Related Party of any
of the foregoing Persons (each such Person being called an “Indemnitee”) against, and hold each
Indemnitee harmless from, any and all losses, claims, damages, liabilities and related expenses
(including the fees, charges and disbursements of any counsel for any Indemnitee), incurred by any
Indemnitee or asserted against any Indemnitee by any third party or by Borrower or any Guarantor
arising out of, in connection with, or as a result of (i) the execution or delivery of this
Agreement, any other Loan Document or any agreement or instrument contemplated hereby or thereby,
the performance by the parties hereto of their respective obligations hereunder or thereunder or
the consummation of the transactions
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contemplated hereby or thereby, (ii) the Loan or the use or proposed use of the proceeds
therefrom, or (iii) any actual or prospective claim, litigation, investigation or proceeding
relating to any of the foregoing, whether based on contract, tort or any other theory, whether
brought by a third party or by Borrower or any Guarantor, and regardless of whether any Indemnitee
is a party thereto, provided that such indemnity shall not, as to any Indemnitee, be
available to the extent that such losses, claims, damages, liabilities or related expenses (x) are
determined by a court of competent jurisdiction by final and nonappealable judgment to have
resulted from the gross negligence or willful misconduct of such Indemnitee or (y) result from a
claim brought by Borrower or any Guarantor against an Indemnitee for breach in bad faith of such
Indemnitee’s obligations hereunder or under any other Loan Document, if Borrower or such Guarantor
has obtained a final and nonappealable judgment in its favor on such claim as determined by a court
of competent jurisdiction.
(c) To the fullest extent permitted by applicable law, Borrower shall not assert, and hereby
waives, any claim against any Indemnitee, on any theory of liability, for special, indirect,
consequential or punitive damages (as opposed to direct or actual damages) arising out of, in
connection with, or as a result of, this Agreement, any other Loan Document or any agreement or
instrument contemplated hereby, the transactions contemplated hereby or thereby, the Loan or the
use of the proceeds thereof. No Indemnitee referred to in paragraph (b) above shall be liable for
any damages arising from the use by unintended recipients of any information or other materials
distributed by it through telecommunications, electronic or other information transmission systems
in connection with this Agreement or the other Loan Documents or the transactions contemplated
hereby or thereby.
(d) All amounts due under this Section shall be payable not later than ten (10) days after
demand therefor.
6.5 Successors and Assigns Generally; Assignments. The provisions of this Agreement
shall be binding upon and inure to the benefit of the parties hereto and their respective
successors and assigns permitted hereby, except that Borrower may not assign or otherwise transfer
any of its rights or obligations hereunder without the prior written consent of Lender.
6.6 Waiver Of Jury Trial. EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST
EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL
PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY
OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY
OTHER PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PERSON WOULD NOT, IN THE
EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE
OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS
BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.
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6.7 Counterparts; Integration; Effectiveness. This Agreement may be executed in
counterparts (and by different parties hereto in different counterparts), each of which shall
constitute an original, but all of which when taken together shall constitute a single contract.
This Agreement and the other Loan Documents, and any separate letter agreements with respect to
fees payable to Lender, constitute the entire contract among the parties relating to the subject
matter hereof and supersede any and all previous agreements and understandings, oral or written,
relating to the subject matter hereof. Except as provided in Article 4, this Agreement shall
become effective when it shall have been executed by Lender and when Lender shall have received
counterparts hereof that, when taken together, bear the signatures of each of the other parties
hereto. Delivery of an executed counterpart of a signature page of this Agreement by telecopy
shall be effective as delivery of a manually executed counterpart of this Agreement.
6.8 Governing Law. This Agreement, the Note and the rights and obligations of the
parties under this Agreement and the Note shall be governed by, and construed and in accordance
with, the law of the State of Georgia.
6.9 Severability of Provisions. Any provision of any Loan Document which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to
the extent of such prohibition or unenforceability without invalidating the remaining provisions of
such Loan Document or affecting the validity or enforceability of such provision in any other
jurisdiction.
6.10 Submission to Jurisdiction; Waiver of Venue; Service of Process
(a) BORROWER IRREVOCABLY AND UNCONDITIONALLY SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE
NONEXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF GEORGIA SITTING IN ▇▇▇▇▇▇ COUNTY AND OF THE
UNITED STATES DISTRICT COURT OF THE NORTHERN DISTRICT OF GEORGIA AND ANY APPELLATE COURT FROM ANY
THEREOF, IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT, OR FOR RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND EACH OF THE PARTIES HERETO
IRREVOCABLY AND UNCONDITIONALLY AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH ACTION OR PROCEEDING
MAY BE HEARD AND DETERMINED IN SUCH GEORGIA STATE COURT OR, TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, IN SUCH FEDERAL COURT. EACH OF THE PARTIES HERETO AGREES THAT A FINAL JUDGMENT IN
ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY
SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW. NOTHING IN THIS AGREEMENT OR IN ANY
OTHER LOAN DOCUMENT SHALL AFFECT ANY RIGHT THAT LENDER MAY OTHERWISE HAVE TO BRING ANY ACTION OR
PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AGAINST BORROWER OR ITS PROPERTIES
IN THE COURTS OF ANY JURISDICTION.
(b) BORROWER IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE
10
OF ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT IN ANY COURT REFERRED TO IN PARAGRAPH (a) OF THIS SECTION. EACH OF THE PARTIES HERETO
HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, THE DEFENSE OF AN
INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR PROCEEDING IN ANY SUCH COURT.
(c) EACH PARTY HERETO IRREVOCABLY CONSENTS TO SERVICE OF PROCESS IN THE MANNER PROVIDED FOR
NOTICES IN SECTION 6.1 HEREOF. NOTHING IN THIS AGREEMENT WILL AFFECT THE RIGHT OF ANY PARTY HERETO
TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY APPLICABLE LAW.
6.11 Headings. The headings of the Articles and Sections of this Agreement are
inserted for convenience only and shall not be deemed to constitute a part hereof.
6.12 USA Patriot Act. To the extent required by the USA Patriot Act (Title III of
Pub. L. 107-56) (signed into law October 26, 2001)) (the “Act”), Lender hereby notifies
Borrower that it may be required to obtain, verify and record information that identifies Borrower,
which information includes the name and address of Borrower and other information that will allow
Lender to identify Borrower in accordance with the Act.
6.13 Time of the Essence. Time is of the essence with respect to this Agreement.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK.]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed
and delivered by their proper and duly authorized officers as of the day and year first above
written.
| BORROWER: ▇▇▇▇▇▇ ▇▇▇▇▇ USA L.L.C., a Nevada limited liability company |
||||
| By: | /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇ | |||
| Name: | ▇▇▇▇▇▇ ▇▇▇▇▇▇ | |||
| Title: | Manager | |||
[Signatures continued on following page.]
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| LENDER: PARKMOUNT LAND DEVELOPMENT INC., a Canadian corporation |
||||
| By: | /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ | |||
| Name: | ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ | |||
| Title: | Secretary | |||
[End of signatures.]
13
EXHIBIT “A”
Defined Terms
Defined Terms
“Affiliate” shall mean (a) any Person which, directly or indirectly, controls, is
controlled by or is under common control with Borrower or (b) any Person who is a director, officer
or key employee of Borrower, any Guarantor or any Person described in clause (a) of this
definition. For purposes of this definition, “control” of a Person means the power, direct or
indirect, to vote five percent (5%) or more of the securities having voting power for the election
of directors or similar governing body of such Person or otherwise to direct or cause the direction
of the management and policies of such Person, whether by contract or otherwise.
“Agreement” shall mean this Term Loan Agreement, as the same may be amended,
supplemented or otherwise modified from time to time.
“Borrower” shall mean ▇▇▇▇▇▇ ▇▇▇▇▇ USA L.L.C., a Nevada limited liability company.
“Business Day” shall mean a day (other than a Saturday or Sunday) on which banks
generally are open in Atlanta, Georgia for the conduct of substantially all of their commercial
lending activities.
“Capital Leases” shall mean all leases which have been or should be capitalized on the
books of the lessee in accordance with GAAP.
“Contractual Obligation” shall mean, as to any Person, any provision of any security
issued by such Person or of any agreement, instrument or undertaking to which such Person is a
party or by which it or any of its property is bound.
“Default” shall mean any of the events specified in Article 5 hereof, whether or not
any requirement for the giving of notice, the lapse of time, or both, has been satisfied.
“Dollars” and “$” shall mean dollars in lawful currency of the United States
of America.
“Event of Default” shall mean any of the events specified in Article 5 hereof,
provided that any requirement for the giving of notice, the lapse of time, or both, has been
satisfied.
“GAAP” shall mean generally accepted accounting principles in the United States of
America as in effect at the time any determination is made or financial statement is required
hereunder as promulgated by the American Institute of Certified Public Accountants, the Accounting
Principles Board, the Financial Accounting Standards Board or any other body existing from time to
time which is authorized to establish or interpret such principles, applied on a consistent basis
throughout any applicable period, subject to any change required by a change in GAAP.
“Governmental Authority” means the government of the United States of America or any
other nation, or of any political subdivision thereof, whether state or local, and any agency,
authority, instrumentality, regulatory body, court, central bank or other entity exercising
executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or
pertaining to government (including any supra-national bodies such as the European Union or the
European Central Bank).
“Guarantors” means, collectively, each Person listed on Exhibit “B” attached
hereto and made a part hereof.
“Guaranty Agreement” shall mean the Subsidiary Guaranty Agreement, executed by
Guarantors in favor of Lender, as the same shall be modified and supplemented and in effect from
time to time.
“Indebtedness” shall mean, without duplication, with respect to any Person (a)
indebtedness or liability for borrowed money, including, without limitation, subordinated
indebtedness (other than trade accounts payable and accruals incurred in the ordinary course of
business); (b) obligations evidenced by debentures, notes, bonds, or other similar instruments;
(c) obligations for the deferred purchase price of property (including, without limitation, seller
financing of any inventory) or services; (d) obligations as lessee under Capital Leases to the
extent that the same would, in accordance with GAAP, appear as liabilities in such Person’s
consolidated balance sheet; (e) obligations under acceptance facilities; (f) obligations secured by
any Liens on any property of such Person, whether or not the obligations have been assumed
(provided that if such Person has not assumed such obligation, such Indebtedness shall be deemed to
be in an amount equal to the lesser of the aggregate amount of such Indebtedness and the fair
market value of the property to which such Lien relates as determined in good faith by such
Person); and (g) net liabilities under interest rate contracts, exchange or cap agreements (valued
as the termination value thereof, computed in accordance with a method approved by the
International Swaps and Derivatives Association and agreed to by such Person in the applicable
agreement).
“Indemnitee” shall have the meaning set forth in Section 6.4 hereof.
“Lender” shall have the meaning set forth in the preamble hereof.
“LIBOR Rate” shall mean a fixed rate of interest per annum equal to the British
Bankers Association LIBOR Rate, as published by Reuters (or other commercially available source
providing quotations of the British Bankers Association LIBOR Rate as selected by Lender) as
determined for each Business Day at approximately 11:00 a.m. London time two (2) London Banking
Days prior to the date in question, for U.S. Dollar deposits with a one month term.
“Lien” shall mean any mortgage, deed of trust, pledge, hypothecation, assignment,
deposit arrangement, charge, encumbrance, lien (statutory or other), preference, priority or other
security agreement or similar preferential arrangement of any kind or nature whatsoever (including
without limitation any conditional sale or other title retention agreement, any financing lease
having substantially the same economic effect as any of the foregoing, and
the authorized filing by or against a Person of any financing statement as debtor under the
Uniform Commercial Code or comparable law of any jurisdiction).
“Loan” shall mean the loan made pursuant to this Agreement that is more particularly
described in Section 2 hereof.
“Loan Documents” shall mean this Agreement, the Note, the Mortgages, the Guaranty
Agreement and all other documents (if any) from time to time executed and delivered by Borrower or
a Guarantor that evidence, secure or guarantee any of the Obligations.
“London Banking Day” shall mean a day on which banks in London are open for business
and dealing in offshore dollars.
“Maturity Date” shall mean the earlier of (i) ▇▇▇▇▇ ▇, ▇▇▇▇, (▇▇) the date of the
commencement of any case by or against Borrower or any Guarantor under Chapter 7 or Chapter 11 of
the Bankruptcy Code of the United States of America, as amended from time to time, or (iii) the
closing of the transactions contemplated by the Restructuring term sheet and the effectiveness of
the amendments (the Fourth Amendment Effectiveness Date, as defined therein) set forth in the
Fourth Amendment to First Amended and Restated Credit Agreement, dated as of January 13, 2009.
“Mortgages” shall mean those certain Deeds of Trust, Assignment of Rents and Leases,
Collateral Assignments of Property Agreements and Security Agreements, by certain Guarantors in
favor of Lender, as the same may be amended or modified from time to time.
“Note” shall mean the promissory note executed and delivered by Borrower payable to
the order of Lender, and delivered pursuant hereto, as the same may be modified, amended,
supplemented or replaced from time to time.
“Obligations” shall mean all unpaid principal of and accrued and unpaid interest on
the Loan, all accrued and unpaid fees and all expenses, reimbursements, indemnities and other
obligations of Borrower and any Guarantor to Lender or any Indemnitee arising under the Loan
Documents and including interest and fees that accrue after the commencement by or against Borrower
or any Guarantor or any Affiliate thereof of any bankruptcy or similar proceeding naming such
Person as the debtor in such proceeding, regardless of whether such interest and fees are allowed
claims in such proceeding.
“Permitted Liens” shall mean the following: (i) Liens for taxes, assessments or other
governmental charges or levies not yet due or which are being contested in good faith by
appropriate action; (ii) Liens in connection with worker’s compensation, unemployment insurance or
other social security, old age pension or public liability obligations (other than any Lien imposed
by the Employee Retirement Income Security Act of 1974, as amended from time to time); (iii) Liens
in favor of property owners’ associations securing payment of assessments or other charges;
(iv) easements, rights-of-way, restrictions, plats, declarations of covenants, conditions and
restrictions, condominium declarations, or similar encumbrances on the use of real property which
do not interfere with the ordinary conduct of business of Borrower or any Guarantor or materially
detract from the value of such real property; (v) Liens in favor of a seller of property requiring
Borrower or any Guarantor to make a payment upon the future sale of such
property in an amount not to exceed five percent (5%) of the gross sales price or in the case
of profit sharing agreements an amount that is reasonable and customary in the industry and market;
and (vi) any Liens of mechanics, materialmen or material suppliers incurred in the ordinary course
of business if, with respect to any such Liens securing Indebtedness that is past due, such Liens
are being contested in good faith by appropriate proceedings for which adequate reserves determined
in accordance with GAAP have been established and as to which the property subject to any such Lien
is not yet subject to foreclosure, sale or loss on account thereof.
“Person” shall mean an individual, a partnership, a limited liability company, a
corporation, a business trust, a joint stock company, a trust, an unincorporated association, a
Governmental Authority or any other entity of whatever nature (including without limitation a joint
venture).
“Property” means the interest in the property and assets, whether real, personal or
mixed, or tangible or intangible, which is encumbered by the Mortgages.
“Related Parties” means, with respect to any Person, such Person’s Affiliates and the
partners, directors, officers, employees, agents and advisors of such Person and of such Person’s
Affiliates.
“Requirement of Law” shall mean as to any Person, the Certificate (or Articles) of
Incorporation, By-Laws (or Code of Regulations), or other organizational or governing documents of
such Person, and any law, treaty, rule or regulation, or determination, including without
limitation all environmental laws, rules, regulations and determinations, of an arbitrator or a
court or other Governmental Authority, in each case applicable to or binding upon such Person or
any of its property or to which such Person or any of its property is subject.
“Restructuring” shall mean a restructuring of Borrower’s Indebtedness, including the
amendment and/or exchange of certain obligations of Borrower and certain of its Affiliates through
the exchange of its 9.5% Senior Subordinated Notes due 2015 for new debt instruments and equity
securities of Borrower, the modification of certain terms of the existing 9.5% Senior Subordinated
Notes due 2015 and the Credit Agreement and the investment of additional funds for common equity of
Borrower by the existing holders of equity of Borrower or one or more of their Affiliates, all in
accordance with the Lock-up and Support Agreement and related term sheet dated December 1, 2008,
whereby the credit line is reinstated and available to Borrower.
“Subsidiary” shall mean, as to any Person, a corporation, limited liability company or
other entity of which shares of stock or other ownership interests having ordinary voting power
(other than stock or such other ownership interests having such power only by reason of the
happening of a contingency) to elect a majority of the board of directors or other managers of such
corporation, limited liability company or other entity are at the time owned, or the management of
which is otherwise controlled, directly, or indirectly through one or more intermediaries, or both,
by such Person, and with respect to Borrower shall include all Subsidiaries of Subsidiaries of
Borrower. Unless otherwise specified, “Subsidiary” means a Subsidiary of Borrower (including
Subsidiaries of Subsidiaries).
EXHIBIT “B”
Guarantors
▇▇▇▇▇▇ ▇▇▇▇▇ Construction LLC
▇▇▇▇▇▇ ▇▇▇▇▇ Corporate, LLC
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Residential L.L.C.
▇▇▇▇▇▇ ▇▇▇▇▇ Arizona L.L.C.
Ashton Tampa Residential, LLC
Ashton Denver Residential, LLC
▇▇▇▇▇▇ ▇▇▇▇▇ Lakeside L.L.C.
Canyon Realty L.L.C.
Ashton Dallas Residential L.L.C.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Residential L.L.C.
Ashton Brookstone, Inc.
▇▇▇▇▇▇ ▇▇▇▇▇▇, LLC
▇▇▇▇▇▇ ▇▇▇▇▇ Orlando Limited Partnership
Pinery Joint Venture
Ashton Atlanta Residential, L.L.C.
▇▇▇▇▇▇ ▇▇▇▇▇ Transportation, LLC