EXHIBIT 4.2 MAS1065A
9/16/96
AMENDED AND RESTATED
REVOLVING CREDIT LOAN AGREEMENT
Dated as of September 13, 1996
by and among
SUNDANCE HOMES, INC.
SUNDANCE HOLDINGS, INC.
SLIH DEVELOPMENT, INC.
SRLB DEVELOPMENT, INC.
SAR DEVELOPMENT, INC.
CHICAGO URBAN PROPERTIES, INC.
and
REMBRANDT HOMES, INC.
as Borrowers
and
BANK ONE, MILWAUKEE, NA
and
LASALLE NATIONAL BANK,
as Lenders
and
LASALLE NATIONAL BANK,
as Agent
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS; CONSTRUCTION
1.1 Certain Definitions 2
1.2 Accounting Principles 24
ARTICLE II
THE CREDIT
2.1 Revolving Credit Loans 24
(a) The Revolving Credit Commitment 24
(b) Maximum Borrowing Base 25
(c) Disbursements 25
(d) Revolving Credit 25
2.2 All Loans, Advances and Reimbursement Obligations
to Constitute One Loan 25
2.3 Revolving Promissory Note 26
2.4 Making of Revolving Credit Loans 26
2.5 Letters of Credit 27
(a) General Terms 27
(b) General Characteristics 27
(c) Applications 27
(d) Participation in Letters of Credit 28
(e) Issuance of Letters of Credit 28
2.6 Fees 29
2.7 Interest Rate Options 29
(a) Prime Rate Portion 30
(b) LIBOR Portions 30
2.8 Minimum Amounts 31
2.9 Computation of Interest 31
2.10 Manner of Rate Selection 31
2.11 Change of Law 31
2.12 Unavailability of Deposits or Inability to
Ascertain Adjusted LIBOR 32
2.13 Taxes and Increased Costs 32
2.14 Change in Capital Adequacy Requirements 33
2.15 Funding Indemnity 34
2.16 Lending Branch 34
2.17 Discretion of Lenders as the Manner of Funding 35
2.18 Voluntary Prepayments and Reduction/Termination
of Revolving Credit Commitment 35
2.19 Mandatory Prepayments 36
(a) Borrowing Base 36
(b) Net Proceeds 36
2.20 Payments 36
2.21 Statement of Account 38
2.22 General Indemnity 38
2.23 Sundance as Agent 40
ARTICLE III
COLLATERAL: GENERAL TERMS
3.1 Collateral 40
3.2 Cross Default Provisions 41
3.3 Protection of Collateral 41
3.4 Release and Retention of Collateral 42
3.5 No Waiver 42
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
4.1 Organization and Qualification 42
4.2 Executive Offices 43
4.3 Corporate Power; Authorization 43
4.4 Execution and Binding Effect 43
4.5 Authorizations and Filings 44
4.6 Financial Statements 44
4.7 Ownership of Property; Liens 45
4.8 No Default 45
4.9 Burdensome Restrictions 45
4.10 Labor Matters 46
4.11 Other Ventures 46
4.12 Taxes 46
4.13 Pension and Welfare Plans 46
4.14 Employment and Labor Agreements 47
4.15 Patents, Trademarks, Copyrights and Licenses 47
4.16 Environmental Matters 48
4.17 Financial Accounting Practices 48
4.18 Regulation U 48
4.19 Accurate and Complete Disclosure 48
4.20 Use of Proceeds 48
4.21 Permits 49
4.22 Ownership of the Operating Subsidiaries 49
4.23 Compliance with Laws 49
4.24 Litigation 50
4.25 Solvency 50
4.26 Indebtedness 50
4.27 No Material Adverse Effect 50
4.28 Depository Accounts 51
4.29 Real Property 51
4.30 Lofts 51
ARTICLE V
CONDITIONS PRECEDENT
5.1 Conditions to Closing 51
(a) Execution and Delivery of Loan Documents 51
(b) Documents and Other Agreements 51
(c) Absence of Material Adverse Change 53
(d) Current Payables 54
5.2 Condition to Loans and Letters of Credit 54
(a) Representations and Warranties;
Events of Default and Defaults 54
(b) Compliance 55
(c) Banking Laws 55
(d) Payment of Fees 55
(e) Details, Proceedings and Documents 55
ARTICLE VI
AFFIRMATIVE COVENANTS
6.1 Reporting and Information Requirements 56
(a) Annual Reports 56
(b) Semi-Annual Reports, Quarterly Reports,
Monthly Reports & Daily Reports 56
(c) Borrowing Base Certificate 57
(d) Compliance Certificates 58
(e) Accountants' Certificates 58
(f) Other Reports and Information 59
(g) Further Information 59
(h) Notice of Event of Default 59
(i) Notice of Material Adverse Effect 59
(j) Notice of Material Proceedings 59
(k) Visitation 59
(l) Notice of Other Material Defaults 60
(m) Pension Plans and Welfare Plans 60
6.2 Preservation of Existence and Franchises 61
6.3 Payment and Performance of Obligations 61
6.4 Financial Accounting Practices 62
6.5 Compliance with Laws 63
6.6 Government Authorizations, etc. 63
6.7 Maintenance of Properties 63
6.8 Insurance 63
6.9 Agreements 68
6.10 Banking Relationship 68
6.11 Date Down Endorsements 69
6.12 ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ 69
6.13 Olympia Development Company 69
6.14 Ticor 69
6.15 Kaco 69
6.16 Appraisals 69
6.17 Condominiums 70
6.18 Supplemental Disclosure 71
ARTICLE VII
NEGATIVE COVENANTS
7.1 Mergers, Etc. 71
7.2 Investments; Loans and Advances 71
7.3 Indebtedness 72
7.4 Capital Structure 72
7.5 Transactions with Affiliates 72
7.6 Guaranteed Indebtedness 73
7.7 Liens 73
7.8 Cancellation of Indebtedness 73
7.9 Events of Default 73
7.10 ERISA 73
7.11 Dispositions of Assets 74
7.12 Continuation of or Change in Business 74
7.13 Sundance Consolidated Net Worth 74
7.14 Sundance's Liabilities to
Consolidated Net Worth. 74
7.15 Sundance's Liabilities, Bonds and Letters of
Credit to Consolidated Net Worth 75
7.16 Sundance Consolidated Inventory 75
7.17 Speculative Construction 75
7.18 Net Working Capital 75
7.19 Consolidated Net Income 75
7.20 Use of Proceeds 75
7.21 Location of Principal Place of Business
and Certain Records 75
7.22 Name Change 75
7.23 Restrictions on Future Agreement 76
7.24 Dividends and Related Distributions 76
7.25 Fiscal Year 76
7.26 Models 76
7.27 Acquisition of New Real Property 76
ARTICLE VIII
DEFAULTS
8.1 Events of Default 78
8.2 Consequences of a Default 81
8.3 Letters of Credit 82
8.4 Payments Set Aside 82
8.5 Waivers by Borrowers 83
8.6 Set-Off 83
8.7 Sharing of Set-Offs 83
8.8 Cumulative Relief 84
8.9 No First Resort Obligation 84
ARTICLE IX
THE ADMINISTRATIVE AGENT
9.1 Appointment 84
9.2 Delegation of Duties 85
9.3 Nature of Duties; Independent Credit
Investigation 85
9.4 Exculpatory Provisions 85
9.5 Reimbursement and Indemnification 86
9.6 Withholding Taxes 87
9.7 Reliance by Agent 88
9.8 Individual Capacity 88
9.9 Holders of Notes 89
9.10 Successors 89
9.11 Advisers 89
ARTICLE X
MISCELLANEOUS
10.1 Holidays 90
10.2 Records 90
10.3 Modifications, Amendments or Waivers 90
10.4 No Implied Waiver; Remedies 91
10.5 Notices 91
10.6 Expenses; Taxes; Attorneys' Fees 92
10.7 Severability 93
10.8 Governing Law 93
10.9 Prior Understandings 93
10.10 Duration; Survival 93
10.11 Counterparts 94
10.12 Successors and Assigns; Participants. 94
(a) Successors and Assigns 94
(b) Participations 94
(c) Provision ofInformation to Participants 95
(d) Taxes 95
(e) No Rights in Borrowers; No Third Party
Beneficiary Rights 96
10.13 Time of Essence 96
10.14 Entire Agreement 96
10.15 Section Titles 96
10.16 References 96
10.17 Reinstatement 97
10.18 Consent to Jurisdiction 97
10.19 Venue 97
10.20 Advertisement 98
10.21 Waiver of Jury Trial 98
AMENDED AND RESTATED
REVOLVING CREDIT LOAN AGREEMENT
THIS REVOLVING CREDIT LOAN AGREEMENT, dated as of September
13, 1996, by and among SUNDANCE HOMES, INC., an Illinois
corporation ("Sundance"), SUNDANCE HOLDINGS, INC., an Illinois
corporation ("Holdings"), SLIH DEVELOPMENT, INC., an Illinois
corporation ("SLIH"), SRLB DEVELOPMENT, INC., an Illinois
corporation ("SRLB"), SAR DEVELOPMENT, INC., an Illinois
corporation ("SAR"), CHICAGO URBAN PROPERTIES, INC., an Illinois
corporation ("CUP"), and REMBRANDT HOMES, INC., an Illinois
corporation ("RH") (SLIH, SRLB, SAR, Holdings, CUP and RH being
referred to herein individually as an "Operating Subsidiary" and
collectively as the "Operating Subsidiaries"), (Sundance and the
Operating Subsidiaries sometimes being referred to herein
individually as a "Borrower" and collectively as the "Borrowers")
and BANK ONE, MILWAUKEE, NA, a national banking association, and
LASALLE NATIONAL BANK, a national banking association
("LaSalle"), (each individually a "Lender" and collectively the
"Lenders") and LaSalle as agent for the Lenders (the "Agent").
W I T N E S S E T H:
WHEREAS, the Borrowers are engaged in the businesses of the
construction and sale of single-family homes, including
condominiums, (both attached and detached) and residential loft
condominiums in Illinois, and contemplate engaging in such
businesses in Wisconsin and Indiana; and
WHEREAS, the Borrowers have previously obtained a secured
revolving credit facility from the Lenders in an amount not to
exceed $50,000,000.00 pursuant to that certain Revolving Credit
Loan Agreement dated as of July 14, 1996 by and among Borrowers,
Lenders and Agent, as amended ("Original Credit Facility"); and
WHEREAS, the Borrowers have requested that the Lenders renew
the Original Credit Facility; and
WHEREAS, the Lenders are willing to renew such credit
facility upon the terms and subject to the conditions hereinafter
set forth, including, without limitation, the grant by each
Borrower to Agent of a mortgage on the real property of such
Borrower and the grant of a security interest in the assets of
Heartland and SK (as each such term is hereinafter defined);
NOW, THEREFORE, in consideration of the premises and of the
mutual covenants and agreements herein contained and intending to
be legally bound hereby, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS; CONSTRUCTION
I.1 Certain Definitions. In addition to other words and
terms defined elsewhere in this Agreement, as used herein the
following words and terms shall have the following meanings,
respectively, unless the context hereof otherwise clearly
requires (such meanings to be equally applicable to both the
singular and plural forms of the terms defined):
"Adjusted LIBOR" shall mean a rate per annum determined by
the Lenders in accordance with the following formula:
Adjusted LIBOR = LIBOR
100%-Reserve Percentage
"Affiliate", with respect to any Person, shall mean: any
Person which, directly or indirectly, owns or controls, on an
aggregate basis, including all beneficial ownership and ownership
or control as a trustee, guardian or other fiduciary, at least 5%
of such class or classes of outstanding Capital Stock (or other
equity) having in the aggregate ordinary voting power to elect a
majority of the board of directors (or other management)
(irrespective of whether, at the time, stock of any other class
or classes (or holders of other equity or contract rights) shall
have or might have voting power by reason of the happening of any
contingency) of any other Person, or which is controlled by or is
under common control with such Person, or any officers, directors
or stockholders of such Person. For the purpose of this
definition, "control" means the possession, directly or
indirectly, of the power to direct or to cause the direction of
management or policies, whether through the ownership of voting
securities, by contract or otherwise. Nothing herein shall be
interpreted to constitute any Lender or the Agent as an Affiliate
of each other or of any Borrower.
"Agent" shall mean LaSalle, in its capacity as Agent for the
Lenders hereunder, and any successor appointed as provided in
Section 9.10 hereof.
"Agreement" shall mean this Amended and Restated Revolving
Credit Loan Agreement, including all amendments, modifications,
restatements and supplements hereto and any appendices, exhibits
or schedules to any of the foregoing, and shall refer to this
Agreement as the same may be amended from time to time.
"Aggregate Revolving Credit Commitment" shall mean the sum
of the Revolving Credit Commitments of all Lenders.
"Application" or "Applications" shall have the meaning given
such terms in Section 2.5(c).
"Appraisal" shall mean (i) in connection with any appraisal
undertaken pursuant to Section 6.16 or Section 7.27, an appraisal
prepared on behalf of Agent and each Lender on an as-is basis in
accordance with the requirements of FIRREA, prepared by an
independent third party appraiser holding an MAI designation, who
is state licensed or state certified if required under the laws
of the state where the applicable real property is located, who
meets the requirements of FIRREA and who is otherwise
satisfactory to Lenders and (ii) in all other events, an
appraisal in scope satisfactory to Lenders prepared by an
independent third party appraiser satisfactory to Lenders.
"Appraised Value" shall mean the appraised value of the real
property owned by any Borrower, any Subsidiary of any Borrower or
any Trust as evidenced by the Appraisals then most recently
obtained by the Lenders less the amount of Non-Recourse
Indebtedness secured by any of such real property and less the
amount of any Indebtedness owed to Kaco, Inc. secured by any of
such real property owned by SK, as the case may be.
"Approved Loft Project" shall mean a Loft Project which has
been approved in writing in advance by the Lenders in their
respective sole discretion and in accordance with Sections 6.17
and 7.27 hereof.
"Bankruptcy Code" shall mean Title 11 of the United States
Code, as amended from time to time, or any successor statute.
"Benefit Plan" shall mean each employee benefit plan (other
than a Multiemployer Plan), as defined in Section 3(3) of ERISA
(1) which currently is, or has ever been, maintained for
employees of any Borrower, any Subsidiary of any Borrower or any
ERISA Affiliate or (2) to which any Borrower, any Subsidiary of
any Borrower or any ERISA Affiliate makes or is required to make
or, within the past six years either made, or was required to
make, contributions.
"Bonds" shall mean those certain unsecured performance bonds
issued on behalf of any Borrower or any Subsidiary of any
Borrower by any insurer having a Best's rating of A or better,
provided that (i) all such performance bonds remain unsecured,
except that such bonds may be secured by a Letter of Credit (as
hereinafter defined), and (ii) the aggregate amount of the face
value of all such performance bonds outstanding at any one time
shall not exceed $25,000,000.00.
"Borrower" shall mean any of Sundance, each Operating
Subsidiary and their respective permitted successors and assigns.
"Borrowing Base Certificate" shall have the meaning given
such term in Section 6.1(c) hereof.
"Business Day" shall mean any day other than a Saturday,
Sunday, public holiday under the laws of the State of Illinois or
the State of Wisconsin or other day on which banking institutions
are authorized or obligated to close in Chicago, Illinois or
Milwaukee, Wisconsin, and if the applicable day relates to a
LIBOR Portion, Interest Period, or notice with respect to a LIBOR
Portion, a day in which dealings in Dollar deposits are also
carried on in the London interbank market and banks are open for
business in London.
"Capital Stock" shall mean, with respect to any Person, any
and all shares, interests, participations or other equivalents
(however designated) of corporate stock (or other equity
interest), including each class of common stock and preferred
stock of such Person.
"Change of Control" shall mean ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ and the
▇▇▇▇▇▇▇▇▇ Descendants Trust U/A/D December 29, 1992, together
shall cease to maintain beneficial ownership (within the meaning
of Rule 13d-3 promulgated by the U.S. Securities and Exchange
Commission under the Securities Exchange Act of 1934, as amended)
of Capital Stock of Sundance that carries 51% of the ordinary
voting power for the election of directors generally of Sundance.
"Charges" shall mean all Federal, state, county, city,
municipal, local, foreign or other governmental (including,
without limitation, PBGC) taxes, levies, assessments or charges
at the time due and payable, upon or relating to (i) the
Obligations, (ii) any Borrower's employees (other than taxes not
required to be withheld), payroll, income or gross receipts,
(iii) any Borrower's or any Subsidiary of any Borrower's
ownership or use of any assets, or (iv) any other aspect of any
Borrower's or any Subsidiary of any Borrower's business.
"City Ordinance" shall mean any county or municipal Law
regulating the conversion of real property to condominiums,
including, without limitation, the City of Chicago Condominium
Ordinance, Chapter 100.2-12 of the Municipal Code of the City of
Chicago, as any such Law may from time to time be amended.
"Closing Date" shall mean September 13, 1996.
"Code" shall mean the Internal Revenue Code of 1986, as
amended, and any successor statute of similar import, and
regulations thereunder, in each case as in effect from time to
time. References to sections of the Code shall be construed to
also refer to any successor sections.
"Collateral" shall mean all assets, property and/or rights
of any Person on or in which a Lien is granted to the Agent or
any Lender (or to any agent, trustee or other party acting on the
Agent's or such Lender's behalf) pursuant to this Agreement or
any other Loan Document.
"Condominium Act" shall mean any state Law regulating the
conversion of real property to condominiums, including, without
limitation, the Illinois Condominium Property Act, as any such
Law may from time to time be amended.
"Condominium Declaration" shall mean the document by which a
parcel of real property will be submitted to the Condominium Act,
prepared in accordance with the Condominium Act.
"Consolidated Net Income" for any period means, when used
with reference to Sundance, the aggregate of the net income (or
loss) of Sundance and its Subsidiaries (other than an entity
which is a Subsidiary because a Borrower or a Subsidiary of a
Borrower is a general partner or a member thereof) from
continuing operations for such period, on a consolidated basis,
determined in accordance with GAAP consistently applied;
provided, however, that the income of Sundance or any Subsidiary
derived from any Loft Project which does not constitute an
Approved Loft Project shall be excluded from such calculation,
unless the Borrowers, at their sole cost and expense, shall have
obtained an Appraisal with respect to such Loft Project which
shall be in form and substance acceptable to the Lenders.
"Consolidated Net Worth" shall mean the excess of total
assets of Sundance and its Subsidiaries (other than an entity
which is a Subsidiary because a Borrower or a Subsidiary of a
Borrower is a general partner or a member thereof) (including
deferred start-up costs) over the total liabilities and reserves
of Sundance and its Subsidiaries (other than an entity which is a
Subsidiary because a Borrower or a Subsidiary of a Borrower is a
general partner or a member thereof) computed on a consolidated
basis, total assets and total liabilities each to be determined
in accordance with GAAP consistently applied, (i) excluding,
however, from the determination of total assets, all assets which
would be classified as intangible assets under GAAP, including,
without limitation, goodwill, patents, trademarks, trade names,
copyrights, franchises and deferred charges (including, without
limitation, unamortized debt discount and expense, organization
costs and deferred research and development expense, other than
deferred start-up costs relating to any development project) and
(ii) excluding from such calculation any asset or any liability
of Sundance or any Operating Subsidiary arising from any Loft
Project which does not constitute an Approved Loft Project,
except that if the Borrowers, at their sole cost and expense,
shall have obtained an Appraisal in form and substance acceptable
to the Lenders, an amount equal to the lesser of (x) the
Appraised Value of such Loft Project and (y) the cash equity
investment of a Borrower and/or a Subsidiary of a Borrower in
such Loft Project as reflected in documentation reasonably
acceptable to the Lenders, shall be included in assets for
purposes of the calculation of Consolidated Net Worth and the
liabilities associated with such Loft Project shall be included
in liabilities for purposes of the calculation of Consolidated
Net Worth.
"Conversion" shall mean the submission of a parcel of real
property to the Condominium Act by the recording of a Condominium
Declaration, thereby converting such parcel to condominium
ownership.
"Current Assets" shall mean the total of current assets of
Sundance and its Subsidiaries (other than an entity which is a
Subsidiary because a Borrower or a Subsidiary of a Borrower is a
general partner or a member thereof) computed on a consolidated
basis and determined in accordance with GAAP consistently
applied, but excluding (i) thirty-five percent (35%) of the book
value of the Raw Land and Land Under Development, (ii) sixty-five
percent (65%) of the then outstanding amount of Non-Recourse
Indebtedness, (iii) work-in-process for Spec Homes and Models;
provided, however, that such calculation shall (x) exclude
property, equipment and deferred start-up costs relating to any
development project and (y) shall also exclude any current assets
arising from any Loft Project which does not constitute an
Approved Loft Project, except that if the Borrowers, at their
sole cost and expense, shall have obtained an Appraisal in form
and substance acceptable to the Lenders, an amount equal to the
lesser of (x) the Appraised Value of such Loft Project and (y)
the cash equity investment of a Borrower in such Loft Project
and/or a Subsidiary of a Borrower as reflected in documentation
reasonably acceptable to the Lenders, shall be included in
current assets for purposes of the calculation of Current Assets.
"Current Liabilities" shall mean the total current
liabilities (i) excluding contingent liabilities of Sundance and
its Subsidiaries (other than an entity which is a Subsidiary
because a Borrower or a Subsidiary of a Borrower is a general
partner or a member thereof) and (ii) excluding any current
liabilities arising from any Loft Project which does not
constitute an Approved Loft Project, except that if the
Borrowers, at their sole cost and expense, shall have obtained an
Appraisal in form and substance acceptable to the Lenders,
liabilities associated with such Loft Project shall be included
in liabilities for purposes of the calculation of Current
Liabilities) computed on a consolidated basis and determined in
accordance with GAAP consistently applied.
"Default" shall mean any event or condition which with
notice, passage of time or an election by the Lenders and/or the
Agent, as the case may be, allowed under any Loan Document, or
any combination of the foregoing, would constitute an Event of
Default.
"Disqualified Capital Stock" shall mean, with respect to any
Person, that portion of any class or series of Capital Stock of
such Person that, by its terms or by the terms of any security
into which it is convertible or exchangeable, is, or upon the
happening of an event or passage of time would be, required to be
redeemed or repurchased, including at the option of the holder,
in whole or in part, or has, or upon the happening of an event or
passage of time would have, a redemption or similar payment due,
in either case, on or prior to the Maturity Date.
"Distribution" by a Person shall mean any dividend or other
distribution of any nature (whether in cash, property, securities
or otherwise) on account of or in respect of any shares of the
Capital Stock of such Person or on account of the purchase,
redemption, retirement or acquisition of any shares of the
Capital Stock (or warrants, options or rights therefor) of such
Person.
"Disbursement Agreement" shall mean that certain letter
agreement of even date herewith by and among the Borrowers, SK,
the Agent, and the Title Insurer, as the same may be amended,
modified, supplemented or restated from time to time.
"Dollar," "Dollars" and the symbol "$" shall mean lawful
money of the United States of America.
"Eligible Acquisition Costs of Approved Loft Projects" shall
mean the following direct costs incurred by Borrowers in
connection with the acquisition of an Approved Loft Project: (i)
the acquisition cost of the building subject to development less
the amount of Non-Recourse Indebtedness secured thereby; (ii)
fees and expenses incurred in connection with the zoning of such
Approved Loft Project; (iii) expenses for engineering and
surveying; and (iv) all on-site and off-site hard costs
associated with utilities, paving, exterior lighting and signage.
Notwithstanding the foregoing, Eligible Acquisitions Costs of
Approved Loft Projects shall not include any costs incurred by
Borrowers to the extent that any such costs qualify for inclusion
in another category used in calculating the Borrowers' borrowing
base.
"Eligible Costs of Land Under Development" shall mean the
following costs incurred by Borrowers in connection with Land
Under Development: (i) the acquisition cost of the Raw Land
subject to development less the amount of Non-Recourse
Indebtedness secured thereby and less the amount of Indebtedness
owed to Kaco, Inc. secured by any of such real property owned by
SK, as the case may be; (ii) fees and expenses incurred in
connection with the annexation, zoning and/or plat recordation of
such Raw Land; (iii) expenses for land planning, engineering,
surveying and soil tests; (iv) fees for connection to existing
utilities; (v) expenses associated with cost sharing with third
parties for providing utility service to such Raw Land; (vi) all
on-site and off-site hard costs associated with earthwork,
utilities, paving, exterior lighting and signage.
Notwithstanding the foregoing, Eligible Costs of Land Under
Development shall not include any costs incurred by Borrowers to
the extent that any such costs qualify for inclusion in another
category used in calculating the Borrowers' borrowing base.
"Eligible Costs of Models" shall mean the following costs
incurred by Borrowers in connection with the construction of
Models: (i) the amount equal to (a) the portion of the
acquisition cost of Raw Land for the Project in which such Model
is located equal to the total acquisition cost of such Raw Land
divided by the total number of homes planned to be developed in
such Project minus (b) the amount of Non-Recourse Indebtedness
secured by such Raw Land and the amount of Indebtedness owed to
Kaco, Inc. secured by any such Raw Land owned by SK, as the case
may be, in each case divided by the total number of homes planned
to be developed in such Project; (ii) the portion of the cost of
improvements to Raw Land for the Project in which such Model is
located (which costs are not specific to a particular Model, Spec
Home, or Sold Home) equal to the total cost of such improvement
divided by the total number of homes planned to be developed in
such Project; and (iii) the following direct costs of
constructing such Model: the costs of wall and floor coverings,
window treatments, furnishings and exterior landscaping.
Notwithstanding the foregoing, Eligible Costs of Models shall not
include any costs incurred by Borrowers to the extent that any
such costs qualify for inclusion in either the Eligible Costs of
Spec Homes or the Eligible Costs of Sold Homes.
"Eligible Costs of Spec Homes" shall mean the following
costs incurred by Borrowers in connection with the construction
of a Spec Homes (including homes previously classified as a Sold
Home, but for which the Purchaser has defaulted under the terms
of the purchase contract thereon): (i) the amount equal to (a)
the portion of the acquisition cost of the Raw Land for the
Project in which such Spec Home is located equal to the total
acquisition cost of such Raw Land divided by the total number of
homes planned to be developed in such Project minus (b) the
amount of Non-Recourse Indebtedness secured by such Raw Land and
the amount of Indebtedness owed to Kaco, Inc. secured by any of
such Raw Land owned by SK, as the case may be, in each case
divided by the total number of homes planned to be developed in
such Project; (ii) the portion of the cost of improvements to the
Raw Land for the Project in which such Spec Home is located
(which costs are not specific to a particular Model, Spec Home or
Sold Home) equal to the total cost of such improvements divided
by the total number of homes planned to be developed in such
Project; and (iii) the direct costs of constructing such Spec
Home. Notwithstanding the foregoing, Eligible Costs of Spec
Homes shall not include any costs incurred by Borrowers to the
extent that any such costs qualify for inclusion in the Eligible
Costs of Sold Homes.
"Eligible Costs of Sold Homes" shall mean the following
costs incurred by Borrowers in connection with the construction
of Sold Homes (other than Units) for which a building permit to
commence construction thereof has been issued and for which
construction has commenced or which Borrowers have certified to
the Agent and each Lender that construction of such Sold Home
will commence within not more than thirty (30) days from the date
of such certification: (i) the amount equal to (a) the portion
of the acquisition cost of the Raw Land for the Project in which
such Sold Home is located equal to the total acquisition cost of
such Raw Land divided by the total number of homes planned to be
developed in such Project minus (b) the amount of Non-Recourse
Indebtedness secured by such Raw Land and the amount of
Indebtedness owed to Kaco, Inc. secured by any of such Raw Land
owned by SK, as the case may be, in each case divided by the
total number of homes planned to be developed in such Project;
(ii) the portion of the cost of improvements to Raw Land for the
Project in which such Sold Home is located (which costs are not
specific to a particular Model, Spec Home, or Sold Home) equal to
the total cost of such improvements divided by the total number
of homes planned to be developed in such Project; and (iii) the
direct costs of constructing such Sold Home.
"Eligible Unit and Common Area Costs of Approved Loft
Projects" shall mean the direct costs incurred by Borrowers in
connection with the construction of Units and/or the common areas
of such Approved Loft Projects.
"Environmental Laws" shall mean all federal, state and local
statutes, laws, rules, regulations, ordinances, requirements, or
rules of common law, including, but not limited to, those listed
or referred to in the definition of "Hazardous Materials" below,
any judicial or administrative interpretations thereof, and any
judicial and administrative consent decrees, orders or judgments,
whether now existing or hereinafter promulgated, relating to
public health and safety and protection of the environment.
"Environmental Report" shall mean a phase 1 environmental
report for a parcel of real property certified to Agent and each
Lender, prepared by an environmental engineering firm
satisfactory to Lenders pursuant to contract specifications
satisfactory to Agent and each Lender and prepared in conformity
with then current ASTM standards, or such higher standards as
Lenders may specify, and containing a certification by the
engineering firm that the information therein contained is true
and correct.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended, and any successor statute of similar import,
together with the regulations thereunder, in each case as in
effect from time to time. References to sections of ERISA shall
be construed to also refer to any successor sections.
"ERISA Affiliate" means any corporation, partnership or
other trade or business (whether or not incorporated) that is,
along with any Borrower, a member of a controlled group of
corporations or a controlled group of trades or businesses, as
described in Sections 414(b) and 414(c), respectively, of the
Code or Section 4001 of ERISA.
"Estimated Value" shall mean with respect to any Sold Home,
Spec Home, Model or Unit, as the case may be, the lower of (a)
the Appraised Value thereof or (b) the then current base list
price of such unit (without any options or upgrades) as evidenced
by the Borrowers sales price schedules; provided, however, that
the value of any options or upgrades actually made to a Model or
Sold Home shall be included in the calculation of its base list
price for purposes of this clause (b).
"Event of Default" shall mean any of the Events of Default
described in Section 8.1 hereof.
"Fiscal Year" shall mean the twelve-month period that ends
on September 30th.
"GAAP" shall mean generally accepted accounting principles
in the United States of America (as in effect from time to time)
applied on a consistent basis.
"Guaranteed Indebtedness" shall mean, as to any Person, any
obligation of such Person guaranteeing any indebtedness, lease,
dividend, or other obligation ("primary obligations") of any
other Person (the "primary obligor") in any manner including,
without limitation, any obligation or arrangement of such Person
(a) to purchase or repurchase any such primary obligation, (b) to
advance or supply funds (i) for the purchase or payment of any
such primary obligation or (ii) to maintain working capital or
equity capital of the primary obligor or otherwise to maintain
the net worth or solvency or any balance sheet condition of the
primary obligor, (c) to purchase property, securities or services
primarily for the purpose of assuring the owner of any such
primary obligation of the ability of the primary obligor to make
payment of such primary obligation, or (d) to indemnify the owner
of such primary obligation against loss in respect thereof.
"Hazardous Materials" shall mean any above or underground
storage tanks, flammables, explosives, accelerants, asbestos,
radioactive materials, radon, urea formaldehyde foam insulation,
lead-based paint, polychlorinated biphenyls, petroleum or
petroleum based or related substances, hydrocarbons or like
substances and their additives or constituents, methane,
hazardous materials, hazardous wastes, toxic substances or
related materials, and including, without limitation, substances
now or hereafter defined as "hazardous substances", "hazardous
materials", "toxic substances", "solid waste", or "hazardous
wastes" in, or which are otherwise regulated pursuant to, The
Comprehensive Environmental Response, Compensation and Liability
Act of 1980, as amended (42 U.S.C.9601, et seq.), as amended by
Superfund Amendments and Reauthorization Act of 1986 (P.L. 99-
499, 42 U.S.C.), The Toxic Substance Control Act of 1976 as
amended, (15 U.S.C. 2601 et seq.), The Resource Conservation and
Recovery Act, as amended (42 U.S.C. 6901, et seq.), The
Hazardous Materials Transportation Act, as amended (49 U.S.C.
1801, et seq.), The Clean Water Act, as amended (42 U.S.C. 7401
et seq.), The Illinois Environmental Protection Act, as amended
(415 ILCS 5/1 et seq.), any so-called "Superfund" or "Superlien"
law or any other Environmental Law.
"Heartland" shall mean American Heartland Mortgage
Corporation, an Illinois corporation, and its successors and
assigns.
"Indebtedness" shall mean all liabilities, obligations and
indebtedness of any and every kind and nature, including, without
limitation, the Obligations and all obligations to trade
creditors, whether heretofore, now or hereafter owing, arising,
due, or payable from any Borrower or any Subsidiary of any
Borrower to any Person and howsoever evidenced, created,
incurred, acquired, or owing, whether primary, secondary, direct,
contingent, fixed, or otherwise. Without in any way limiting the
generality of the foregoing, Indebtedness specifically includes
(i) all obligations or liabilities of any Person that are secured
by any lien, claim, encumbrance, or security interest upon
property owned by any Borrower or any Subsidiary of any Borrower,
even though such Borrower or such Subsidiary of a Borrower has
not assumed or become liable for the payment thereof; (ii) all
obligations or liabilities created or arising under any lease of
real or personal property or conditional sale or other title
retention agreement with respect to property used or acquired by
any Borrower or any Subsidiary of any Borrower, even though the
rights and remedies of the lessor, seller or lender thereunder
are limited to repossession of such property; (iii) all unfunded
pension fund obligations and liabilities; and (iv) deferred
taxes.
"Interest Period" shall mean, with respect to (a) any LIBOR
Portion, the period commencing on, as the case may be, the
creation, continuation or conversion date with respect to such
LIBOR Portion and ending one (1), two (2) or three (3) months
thereafter as selected by Sundance in its notice as provided
herein; provided that all of the foregoing provisions relating to
Interest Periods are subject to the following:
(i) if any Interest Period would otherwise end on a
day which is not a Business Day, that Interest Period shall
be extended to the next succeeding Business Day, unless in
the case of an Interest Period for a LIBOR Portion the
result of such extension would be to carry such Interest
Period into another calendar month in which event such
Interest Period shall end on the immediately preceding
Business Day;
(ii) no Interest Period for a LIBOR Portion of any
Note may extend beyond the Maturity Date;
(iii) the interest rate to be applicable to each
Portion for each Interest Period shall apply from and
including the first day of such Interest Period to but
excluding the last day thereof; and
(iv) no Interest Period may be selected if after
giving effect thereto Borrowers will be unable to make a
principal payment scheduled to be made during such Interest
Period without paying part of a LIBOR Portion on a date
other than the last day of the Interest Period applicable
thereto.
For purposes of determining an Interest Period, a month
means a period starting on one day in a calendar month and ending
on a numerically corresponding day in the next calendar month,
provided, however, if an Interest Period begins on the last day
of a month or if there is no numerically corresponding day in the
month in which an Interest Period is to end, then such Interest
Period shall end on the last Business Day of such month.
"Inventory" shall mean the total inventory of Sundance and
its Subsidiaries (other than an entity which is a Subsidiary
because a Borrower or a Subsidiary of a Borrower is a general
partner or a member thereof) computed on a consolidated basis and
determined in accordance with GAAP consistently applied, plus the
cost of all real estate assets and homes under construction,
including, without limitation, Approved Loft Projects, Raw Land,
Land Under Development, work-in-process and completed homes, but
excluding (i) the value of any real property and improvements
thereon which secure Non-Recourse Indebtedness (ii) the value of
any real property and improvements thereon owned by SK which
secure Indebtedness owing to SK, and (iii) the value of any Loft
Projects which do not constitute Approved Loft Projects, in each
case at the cost reflected in the financial statements of the
Borrowers.
"IRS" shall mean the United States Internal Revenue Service.
"Land Under Development" shall mean any and all real
property owned by a Borrower forming a part of a Project (other
than a Loft Project) which is then being developed or which is
contemplated to be developed by Borrowers within the immediately
succeeding twelve month period and which is then being engineered
for on-site and/or off-site public improvements.
"Law" shall mean any law (including common law),
constitution, statute, treaty, regulation, rule, ordinance,
order, injunction, writ, decree or award of any Official Body.
"Lender" or "Lenders" shall have the meanings set forth in
the introduction to this Agreement.
"Letter of Credit" or "Letters of Credit" shall have the
meanings given such term in Section 2.5 herein.
"Liabilities" shall mean the aggregate amount of liabilities
(excluding contingent liabilities) of Sundance and its
Subsidiaries (other than an entity which is a Subsidiary because
a Borrower or a Subsidiary of a Borrower is a general partner or
a member thereof) computed on a consolidated basis and determined
in accordance with GAAP.
"LIBOR" shall mean for each Interest Period, (a) the LIBOR
Index Rate for such Interest Period, if such rate is available,
and (b) if the LIBOR Index Rate cannot be determined, the
arithmetic average of the rate of interest per annum (rounded
upward, if necessary, to the nearest 1/100th of 1%) at which
deposits in U.S. Dollars in immediately available funds are
offered to such Lender at 11:00 a.m. (London, England time) two
Business Days before the beginning of such Interest Period by
major banks in the interbank eurodollar market for a period equal
to such Interest Period and in an amount equal or comparable to
the applicable LIBOR Portion scheduled to be outstanding from the
Lenders during such Interest Period. "LIBOR Index Rate" shall
mean for any Interest Period, the rate per annum (rounded
upwards, if necessary, to the next higher one hundred-thousandth
of a percentage point) for deposits in U.S. Dollars for a period
equal to such Interest Period which appears on the Telerate Page
3750 as of 11:00 a.m. (London, England time) on the date two
Business Days before the commencement of such Interest Period.
"Telerate Page 3750" shall mean the display designated as "Page
3750" on the Telerate Service (or such other page as may replace
Page 3750 on that service or such other service as may be
nominated by the British Bankers' Association Interest Settlement
Rates for U.S. Dollar deposits). Each determination of LIBOR
made by a Lender shall be conclusive and binding absent manifest
error.
"LIBOR Portion" shall have the meaning given such term in
Section 2.7(a) herein.
"Lien" shall mean any mortgage or deed of trust (including
any leasehold mortgage), pledge, hypothecation, assignment,
deposit arrangement, lien, security interest, easement or
encumbrance, or preference, priority or other security agreement
or preferential arrangement of any kind or nature whatsoever
(including, without limitation, any lease intended as security or
any title retention agreement or any financing lease having
substantially the same economic effect as any of the foregoing,
but not including operating leases of assets not owned by the
lessee), and the filing of, or agreement to give, any financing
statement perfecting a security interest under the Uniform
Commercial Code of the State of Illinois or comparable law of any
jurisdiction.
"Loan" or "Loans" shall mean any revolving credit loans made
by any Lender to any of the Borrowers under this Agreement.
"Loan Documents" shall mean this Agreement, the Note, the
Security Documents, the Applications, the Subordination
Agreements, and the Supplemental Documentation, as any and all of
the foregoing may be amended, modified or supplemented from time
to time.
"Loft Project" shall mean a Project of any Borrower or any
Subsidiary of any Borrower for residential loft condominiums.
"Material Adverse Effect" shall mean that any one or more of
the following could occur (i) a material adverse effect on the
business operations, properties, assets or condition (financial
or otherwise) of the Operating Subsidiaries taken as a whole or
of Sundance, (ii) any event or condition which could materially
adversely affect any Borrower's ability to perform under the
terms of any of the Loan Documents, or (iii) any material adverse
effect on the ability of a Lender or the Agent to enforce the
terms of any of the Loan Documents.
"Maturity Date" shall mean February 1, 1997 or such earlier
date on which the Aggregate Revolving Credit Commitment is
terminated in whole pursuant to the terms of this Agreement.
"Maximum Borrowing Base" shall mean, with respect to all
Borrowers at any time, the amount calculated as the sum of the
following:
(i) the lesser of (a) 90% of the
Eligible Costs of Sold Homes or (b) 85% of the
Estimated Value of such Sold Homes (other than Units)
(or such other percentages thereof as the Agent, upon
the joint direction of the Lenders upon a material
adverse change in the value of the Collateral, shall
from time to time consider appropriate);
(ii) the lesser of (a) 80% of the
Eligible Costs of Spec Units or (b) 80% of the
Estimated Value of such Spec Units (or such other
percentages thereof as the Agent, upon the joint
direction of the Lenders upon a material adverse change
in the value of the Collateral, shall from time to time
consider appropriate) or (c) $750,000.00;
(iii) the lesser of (a) 75% of the
Eligible Costs of Models or (b) 75% of the Estimated
Value of such Models (or such other percentage thereof
as the Agent, upon the joint direction of the Lenders
upon a material adverse change in the value of the
Collateral, shall from time to time consider
appropriate);
(iv) the lesser of (a) 50% of the
Eligible Costs of Land Under Development, or (b) 75% of
the estimated retail value of fully-improved lots on
such Land Under Development as determined by the
Lenders in a commercially reasonable manner (or such
other percentage thereof as the Agent, upon the joint
direction of the Lenders upon a material adverse change
in the value of the Collateral, shall from time to time
consider appropriate) or (c) 35% of Inventory or (d)
$30,000,000; and
(v) the sum of (A) the lesser of (a)
50% of the Eligible Acquisition Costs of Approved Loft
Projects; provided, however, that with respect to any
such Approved Loft Project in which 50% of the Units
constitute Sold Homes, the applicable advance rate
shall be 90% or (b) 80% of the Estimated Value of such
Approved Loft Project and, provided that 25% of the
Units in an Approved Loft Project constitute Sold
Homes, (B) the lesser of (a) 90% of the Eligible Unit
and Common Area Costs of Approved Loft Projects of such
Project or (b) 80% of the Estimated Value of such
Approved Loft Project (or such other percentages
thereof as the Agent, upon the joint direction of the
Lenders in their sole discretion exercised in a
commercially reasonable manner, shall from time to time
consider appropriate); provided, however, that
notwithstanding the foregoing, the aggregate Maximum
Borrowing Base for all Eligible Acquisition Costs of
Approved Loft Projects, together with the Maximum
Borrowing Base for all Eligible Unit and Common Element
Costs of Approved Loft Projects shall not exceed a
total, aggregate amount of $15,000,000.00.
Notwithstanding the foregoing, in making the foregoing
calculation, the Agent may, upon the joint discretion of the
Lenders in their sole discretion exercised in a commercially
reasonable manner, establish sub-limits against any of the above
described categories. The Agent shall give the Borrowers thirty
(30) days prior written notice of any change to such advance
rates or the establishment of any sub-limits.
"Model" shall mean a single-family home which is located
within an area of a Project (other than a Loft Project) which has
been designated by a Borrower as a model area, and which is open
for viewing by prospective purchasers.
"Multiemployer Plan" means a "multiemployer plan" as defined
in Section 4001(a)(3) of ERISA which is maintained for employees
of any Borrower or its Subsidiaries or any ERISA Affiliate.
"Net Proceeds" shall mean the amount calculated as follows:
the gross sales price of a Sold Home minus (a) the sum of (i)
title and recording charges relating thereto payable by a
Borrower, (ii) sales commissions relating thereto payable by a
Borrower, and (iii) customary prorations in favor of the
purchaser thereof; provided, however, that in no event shall the
sum of the amounts described in clauses (i), (ii) and (iii)
exceed seven percent of the gross sales price of such Sold Home,
except that with respect to the sale of a Sold Home which had
previously qualified as either a Model or a Spec Home and which
sale involved an outside real estate broker, the sum of the
amounts described in clauses (i), (ii) and (iii) shall not exceed
ten percent of the gross sales price of such Sold Home, and (b)
with respect to the sale of a Sold Home located on either (x) the
Kaco Real Property, the amount, if any, due to Kaco, Inc., an
Illinois corporation ("Kaco") under that certain Purchase and
Sale Agreement dated as of September 21, 1992 between SK and Kaco
as amended by that certain First Amendment to Purchase Agreement
dated as of September 21, 1992, that certain Second Amendment to
Purchase Agreement dated as of January 22, 1993, and that certain
Third Amendment to Purchase Agreement dated as of July, 1994
(collectively, "Kaco Purchase Agreement") and (y) the Bellechase
subdivision, the amount, if any, owing to Kaco under that certain
Purchase and Sale Agreement dated as of July 28, 1994 between SAR
and Kaco.
"Non-Recourse Indebtedness" shall mean the Indebtedness of
any Borrower, any Subsidiary and/or Trust incurred in connection
with the acquisition of real property; provided that in each case
no Borrower, Subsidiary and/or Trust shall have any liability for
such Indebtedness other than such creditor's recourse solely to
the assets encumbered by a mortgage relating thereto.
Notwithstanding anything contained herein to the contrary, in no
event shall any Non-Recourse Indebtedness or the assets secured
thereby be taken into consideration as either an asset or a
liability, as the case may be, in the calculation of any of the
financial covenants set forth in Article VII herein
"Note" shall mean the Revolving Promissory Note.
"Obligations" shall mean all Loans, advances, debts,
Reimbursement Obligations, liabilities, and obligations, for
monetary amounts (whether or not such amounts are liquidated or
determinable) owing at any time by one or more Borrowers to
either Lender and/or the Agent, and all covenants and duties
regarding such amounts, of any kind or nature, present or future,
whether or not evidenced by any note, agreement or other
instrument, arising under any of the Loan Documents. This term
includes, without limitation, all interest, prepayment fees,
charges, expenses, attorneys' fees and any other sum chargeable
to one or more Borrowers under any of the Loan Documents.
"ODC" shall mean Olympia Development Company, an Illinois
corporation, and its successors and assigns.
"Office" when used in connection with the Agent shall mean
its office located at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
▇▇▇▇▇, or such other office or offices of the Agent or branch,
subsidiary or affiliate thereof as may be designated in writing
from time to time by the Agent to the Borrowers and the Lenders.
"Official Body" shall mean any government or political
subdivision or any agency, authority, bureau, central bank,
commission, department or instrumentality of either, or any
court, tribunal, grand jury or arbitrator, in each case whether
foreign or domestic.
"Operating Subsidiary" shall mean each of Holdings, SLIH,
SRLB, SAR, CUP, and RH each a wholly-owned Subsidiary of
Sundance, together with any other wholly-owned Subsidiary of
Sundance designated at any time by the Agent, by an amendment to
this Agreement, to be immediately entitled to the benefits of
(and immediately subject to the provisions of) the revolving
credit facility created pursuant to this Agreement.
"Original Credit Facility" shall have the meaning given such
term in the Recitals.
"PBGC" means the Pension Benefit Guaranty Corporation and
any entity succeeding to any or all of its functions under ERISA.
"Pension Plan" means a "pension plan," as such term is
defined in Section 3(2) of ERISA, which is subject to the
provisions of Title IV of ERISA (other than a Multiemployer Plan)
and to which any Borrower or any of its Subsidiaries or any ERISA
Affiliate might have any liability, including any liability by
reason of being deemed to be a contributing sponsor under Section
4069 of ERISA.
"Permit" shall mean any and all permits, authorizations,
approvals, registrations, rights of way, orders, waivers,
variances or other licenses issued or granted by any Official
Body.
"Permitted Encumbrances" shall mean: (i) Liens in favor of
Agent or any Lender to secure the Obligations; (ii) Liens for
taxes or assessments or other governmental charges or levies,
either not yet due and payable or to the extent that nonpayment
thereof is permitted by Section 6.3(b) hereof; (iii) pledges or
deposits securing obligations under workmen's compensation,
unemployment insurance, social security or public liability laws
or similar legislation (other than in respect of a benefit plan
subject to ERISA); (iv) pledges or deposits securing bids,
tenders, contracts (other than contracts for the payment of
money) or leases to which any Borrower or a Subsidiary of any
Borrower is a party as lessee made in the ordinary course of
business; (v) workers', mechanics', suppliers', carriers',
warehousemen's, landlords' or other similar liens arising in the
ordinary course of business for sums not yet delinquent or being
contested in good faith in accordance with Section 6.3(b) herein,
if such reserve or other appropriate provision, if any, as shall
be required by GAAP shall have been made therefor; (vi) deposits
securing (in lieu of surety, appeal or customs bonds) proceedings
to which any Borrower or any Subsidiary of any Borrower is a
party; (vii) any attachment or judgment Lien, unless the judgment
it secures shall not, within 30 days after the entry thereof have
been discharged or execution thereof stayed pending appeal, or
shall not have been discharged within 5 days after the expiration
of any such stay or is fully and adequately covered by insurance
and with respect to which the insurer has acknowledged coverage
in writing and any lis pendens provided the litigation related
thereto is being contested in accordance with Section 6.3(b)
hereof; (viii) zoning restrictions, easements, licenses, or other
restrictions on the use of real property or other minor
irregularities in title (including leasehold title) thereto, so
long as the same do not materially impair the present use, value
or marketability of such real property, leases or leasehold
estates or otherwise have a Material Adverse Effect; (ix) Liens
on fixtures granted to lessors pursuant to leases; (x) contracts
for Sold Homes; (xi) the Liens arising from the Non-Recourse
Indebtedness; (xii) those Liens set forth on Schedule 1 attached
hereto and made a part hereof subject to the Lenders' approval;
and (xiii) extensions, renewals or replacements of any Lien
referred to in clauses (i) through (xi) above provided that such
extension, renewal or replacement is granted in the ordinary
course of business and limited to the assets originally
encumbered thereby and the amount of the Indebtedness secured
thereby has been reduced from time to time by payment or
performance in accordance with the terms of such Indebtedness and
has not been increased in violation of the terms of this
Agreement.
"Permitted Investments" means any or all of the types of
investments provided by either Lender, provided that such
investment is made with a Lender.
"Person" and "person" shall mean an individual, corporation,
partnership, trust, unincorporated association, joint venture,
joint-stock company, government (including political
subdivisions), governmental authority or agency, or any other
entity.
"Plan" shall mean the one year operating plan summary of the
Borrowers prepared on a consolidated basis, which shall be
delivered to the Agent and each Lender, as adopted by the Board
of Directors of Sundance, by no later than September 30th of the
Fiscal Year preceding the Fiscal Year for which such Plan is
applicable and which Plan shall be in scope and detail
satisfactory to the Lenders.
"Pledge Agreement" shall mean (i) the Amended and Restated
Pledge Agreement of even date herewith by and among ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, the Lenders and the Agent and (ii) the ▇▇▇▇▇▇▇▇▇
Descendants Trust Amended and Restated Pledge Agreement of even
date herewith by and among ▇▇▇▇▇▇▇▇▇ Descendants Trust U/A/D
12/29/92 ("Descendants Trust"), the Lenders and Agent, as such
Agreements may be amended, modified, supplemented or restated
from time to time, respectively.
"Policy" or "Policies" shall mean title insurance policies
issued by the Title Insurer, containing the respective legal
descriptions of the applicable parcels of real property, in the
form of a 1970 B-Form if available (or 1992 Form if not
available) ALTA Lender's Title Insurance Policy for such parcels
in the aggregate amount of $50,000,000.00 in form satisfactory to
Agent and the Lenders, insuring that title to such parcel is
vested in a Borrower, a Subsidiary of a Borrower, or a Trust and
the Mortgage on such parcel to be a valid first lien on such
parcel free and clear of all liens, encumbrances, and exceptions,
excepting Permitted Encumbrances. Each Policy shall further
contain (i) a 3.1 Zoning Endorsement, with parking coverage
(except as to Raw Land or Land Under Development, in which case a
3.0 Zoning Endorsement shall be acceptable), (ii) a Revolving
Credit Endorsement, (iii) a Comprehensive Endorsement No. 1, (iv)
a Variable Rate Endorsement, (v) a Real Estate Tax Parcel
Endorsement, (vi) a tie-in endorsement satisfactory to Lenders,
and (vii) such other endorsements as Agent or any Lender may
require. The Policies shall be reinsured by one or more other
Title Insurers acceptable to Agent as to the amount of the Loan
in excess of $15,000,000.00 pursuant to reinsurance agreements
with direct access endorsements satisfactory to Agent and the
Lenders. The form of all endorsements to the Title Policies
shall be subject to Agent's and each Lender's approval.
"Preferred Stock" shall mean, with respect to any Person,
any share of Capital Stock of such Person or its Subsidiaries in
respect of which a holder is entitled to receive payment (whether
in connection with dividends, liquidation or otherwise) before
any similar or other payment may be made with respect to other
Capital Stock of such Person or its Subsidiaries.
"Prime Rate Portion" shall have the meaning given such term
in Section 2.7(a) hereof.
"Project" shall mean the real property and improvements
constituting a residential real estate development to be
developed or being developed by a Borrower or any Subsidiary of a
Borrower; provided, that any such Project may include real estate
subject to commercial development so long as such commercial real
estate is (i) de minimis relative to such residential real estate
development, (ii) incidental to such residential real estate
development, and (iii) not developed by any Borrower, any
Subsidiary of any Borrower or any Trust.
"Pro Rata" shall mean as among the Lenders, in proportion to
each Lender's percentage of the Aggregate Revolving Credit
Commitment, or if the Revolving Credit Commitments shall have
been terminated, each Lender's percentage of the Loans and
Reimbursement Obligations then outstanding.
"Prime Rate" shall mean the rate publicly announced by the
Agent, or its successor, from time to time as its "prime rate"
(or such rate that is used by the Agent in replacement of the
prime rate).
"Raw Land" shall mean any and all unimproved real property
which is purchased by a Borrower for speculative purposes or
which relates to development of a Project which is not
contemplated to be developed within the immediately succeeding
twelve month period.
"Reimbursement Obligation" shall mean the obligation of
Borrowers pursuant to an Application to reimburse the Agent for
the amount of any draft drawn under a Letter of Credit.
"Reportable Event" means any of the events described in
Section 4043 of ERISA, other than any such event for which the
thirty (30) day notice requirement has been waived.
"Reserve Percentage" shall mean, for the purpose of
computing Adjusted LIBOR, the maximum rate of all reserve
requirements (including, without limitation, any marginal,
emergency, supplemental or other special reserves) imposed by the
Board of Governors of the Federal Reserve System (or any
successor) under Regulation D on either Lender against
Eurocurrency liabilities (as such term is defined in Regulation
D) for the applicable Interest Period as of the first day of such
Interest Period, but subject to any amendments to such reserve
requirement by such Board or its successor, and taking into
account any transitional adjustments thereto becoming effective
during such Interest Period. For purposes of this definition,
LIBOR Portions shall be deemed to be Eurocurrency liabilities as
defined in Regulation D without benefit of or credit for
prorations, exemptions or offsets under Regulation D, except as
premitted by lenders in their sole and absolute discretion.
"Revolving Credit Commitment" shall have the meaning given
such term in Section 2.1(a) herein.
"Revolving Promissory Note" shall mean the Amended and
Restated Revolving Promissory Note of even date herewith in the
stated principal amount of $50,000,000 executed by the Borrowers
and delivered to the Agent under this Agreement, together with
all extensions, renewals, refinancings or refundings thereof in
whole or part.
"Security Agreement" shall mean the Amended and Restated
Security Agreement of even date herewith by and among the
Borrowers, Heartland, SK, ODC and the Agent, as the same may be
amended, modified, supplemented or restated from time to time.
"Security Documents" shall mean the Mortgages, Assignments,
ABIs, Environmental Indemnity Agreement, Pledge Agreement,
Security Agreement, Stock Pledge Agreement and such other
documents and agreements which a Borrower or its Subsidiaries
executes in favor of the Agent granting a Lien upon its
respective assets.
"Shareholder Notes" means those certain unsecured
subordinated promissory notes of certain of the Borrowers in the
aggregate stated principal amount of $4,193,000.00 in favor of
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇▇ Descendants Trust U/A/D December
29, 1992, as the case may be, a copy of each of which notes and
any assignment relating thereto is attached hereto as Exhibit R.
"SK" shall mean Sundance-Kaco Limited Partnership, an
Illinois limited partnership.
"Sold Homes" shall mean a home or Unit that is subject to a
written contract for the sale of such home or Unit, made and
entered into by and between a Borrower, or its duly authorized
agent, and a bona fide third party purchaser, on a form approved
by the Lenders, or their counsel, and (1) the consideration for
such sale consists solely of cash, (2) the purchaser has
deposited ▇▇▇▇▇▇▇ money thereunder in an amount not less than (a)
five percent (5%) of such sale price with respect to
conventionally financed homes or Units or (b) the minimum
required percentage of the sale price under applicable programs
of the Federal Housing Administration and/or the Department of
Veterans Affairs, (3) the purchaser thereunder has been pre-
qualified by such Borrower, or its duly authorized agent, for a
mortgage loan on the basis of generally accepted ratios of income
to anticipated debt service on the proposed mortgage loan for
such home or Unit, and (4) such contract contains no
contingencies other than those pertaining to the condition of
title and similar conditions to closing customarily included in
contracts for new construction home sales or condominium
conversion sales, as the case may be.
"Solvent" means, with respect to a Person on a non-
consolidated basis and a particular transaction, that, upon
consummation of the transaction and after giving effect thereto,
(a) the Person's financial condition shall be such that the
Person's property at a fair valuation will exceed its debts, (b)
the present fair saleable value of the Person's assets will be
greater than the amount that will be required to pay its probable
liability on its debts as such debts become absolute and matured,
(c) the Person is paying its debts as they become due, and
intends and believes that it will be able to pay its debts as
they mature, and (d) the property remaining in the Person will
not be an unreasonably small capital for the business in which
the Person is engaged or is about to engage. As used herein,
"debts" includes any legal liability, whether matured or
unmatured, liquidated or unliquidated, absolute, fixed or
contingent.
"Spec Homes" shall mean single-family homes (excluding
Units, Models and foundations), whether attached or detached,
which do not constitute Sold Homes.
"Standard Notice" shall mean an irrevocable notice provided
to the Agent by no later than 11:00 a.m. Chicago time on a
Business Day which is (i) not less than two Business Days prior
to the date specified therein for the making of a requested Loan
or the prepayment of any Loan which constitutes a part of the
Prime Rate Portion, (ii) not less than three (3) Business Days
prior to the date specified therein for the making of a Loan
which constitutes a LIBOR Portion or the prepayment of any Loan
which constitutes a LIBOR Portion, or (iii) not less than five
Business Days prior to the date specified therein for the
issuance of a requested Letter of Credit.
"Stock Pledge Agreement" shall mean the Amended and Restated
Stock Pledge Agreement of even date herewith by and between
Sundance, the Lenders and the Agent, as the same may be amended,
modified, supplemented or restated from time to time.
"Subordinated Debt" shall mean Indebtedness of any Borrower
or any Subsidiary of any Borrower or any Trust which is
Subordinated to the Obligations on such terms and conditions as
the Lenders shall determine.
"Subordination Agreements" shall mean those certain
subordination agreements of even date herewith relating to the
Shareholder Notes and the Kaco Real Property and Kaco Purchase
Agreement, in the forms of Exhibits A-1 and A-2 and Exhibit B
hereof respectively, as the same may be amended, modified,
supplemented or restated from time to time.
"Subsidiary" of any Person at any time shall mean any
corporation of which a majority (by number of shares or number of
votes) of any class of outstanding Capital Stock normally
entitled to vote for the election of one or more directors or
managers, as the case may be (regardless of any contingency which
does or may suspend or dilute the voting rights of such class),
is at such time beneficially owned directly or indirectly by such
Person or one or more of its Subsidiaries. Notwithstanding
anything contained herein to the contrary, with respect to any
Borrower and/or Subsidiary thereof, the term "Subsidiary" shall
include any partnership of which such Borrower or Subsidiary is a
general partner or any limited liability company of which such
Borrower or Subsidiary is a member.
"Survey" shall mean a plat of survey of a parcel of real
property acceptable to the Title Insurer, Agent and each Lender,
made by a surveyor licensed in the state in which the particular
parcel is located showing the legal description and area of such
parcel, access to and from such parcel to a dedicated roadway,
all encroachments, improvements, overlapping of improvements, set-
back lines, roadways, easements, fences, water courses that are
either of record, apparent or may be discovered by visible
inspection. Each such Plat of Survey shall be certified to the
Borrower, Subsidiary of Borrower or Trust in title to such
parcel, the Title Insurer, Agent and Lenders as having been
prepared in accordance with the Minimum Standard Detail
Requirements for Land Title Surveys jointly established and
adopted by the American Land Title Association and the American
Congress on Surveying and Mapping in 1992 and shall further
certify that no portion of such parcel lies within any area
having special flood hazards as designated by Federal Emergency
Management Agency (unless Borrowers shall have provided Lenders
with evidence of Flood Insurance meeting the requirements of
Section 6.8 hereof).
"Supplemental Documentation" shall mean agreements,
instruments, documents, and other written matter relating to or
necessary or reasonably desirable and requested by the Agent or
any Lender to effect the transactions contemplated by this
Agreement or any other Loan Document.
"Title Insurer" shall mean Ticor Title Insurance Company, a
California corporation.
"Trust" shall mean a land trust in which any Borrower or any
Subsidiary of any Borrower owns a beneficial interest.
"Unit" shall mean a residential apartment in a Loft Project
that will be converted to a condominium unit upon the occurrence
of a Conversion.
The words "herein," "hereof" and "hereunder" and other words
of similar import refer to this Agreement as a whole, including
the Exhibits and Schedules hereto, as the same from time to time
be amended, modified, restated or supplemented and not to any
particular section, subsection or clause contained in this
Agreement. The term "including" shall mean including without
limitation. References to beneficial ownership or similar terms
shall have the meaning set forth in the definition of Change of
Control herein.
I.2 Accounting Principles. Except as otherwise provided in
this Agreement, all computations and determinations as to
accounting or financial matters and all financial statements to
be delivered pursuant to this Agreement shall be made and
prepared in accordance with GAAP (including principles of
consolidation where appropriate), and all accounting or financial
terms shall have the meanings ascribed to such terms by GAAP.
ARTICLE II
THE CREDIT
II.1 Revolving Credit Loans.
(a) The Revolving Credit Commitment. Subject to the terms
and conditions and relying upon the representations and
warranties herein set forth, and provided that there does not
then exist any Default or Event of Default, each Lender severally
agrees (such agreement being herein called such Lender's
"Revolving Credit Commitment") to make Loans under the Revolving
Promissory Note to the Borrowers or any of them at any time or
from time to time on or after the date hereof to, but not
including, the Maturity Date in an amount or amounts such that
the aggregate outstanding principal amount of all Loans by such
Lender and its Pro Rata share of all Letters of Credit and
Reimbursement Obligations shall not exceed at any time the
Revolving Credit Commitment of such Lender at such time. Subject
to Section 2.18 hereof, each Lender's Revolving Credit Commitment
at any time shall equal Twenty-Five Million Dollars
($25,000,000.00). The Lenders shall have no obligation to make
Loans and the Agent shall have no obligation to issue Letters of
Credit hereunder on or after the Maturity Date (or such earlier
date as may be applicable herewith). The aggregate principal
amount of the Aggregate Revolving Credit Commitment is Fifty
Million Dollars ($50,000,000.00). The obligations of the Lenders
hereunder are several and not joint and no Lender shall under any
circumstances be obligated to extend credit hereunder in excess
of its Revolving Credit Commitment or its Pro Rata share of the
credit outstanding hereunder.
(b) Maximum Borrowing Base. Borrowers shall set forth on
each Borrowing Base Certificate delivered under Section 6.1(c)
hereof their collective Maximum Borrowing Base (including all
such detail, computations and information as the Agent or any
Lender may reasonably deem appropriate). Subject to Section 2.19
hereof, as to all Borrowers collectively, at all times, the sum
of the unpaid principal amount of all Loans then outstanding to
the Borrowers plus the undrawn amount of all Letters of Credit
then outstanding plus the principal amount of all Loans and the
face amount of all Letters of Credit not yet made or issued, as
the case may be, as to which a Standard Notice has been given or
is concurrently being given by any Borrower under Section 2.4
hereof shall not be greater than the Maximum Borrowing Base.
Notwithstanding the foregoing, but subject to the Aggregate
Revolving Credit Commitment, the Agent, upon the joint direction
of the Lenders, may elect at any time to make Loans or issue
Letters of Credit, including, without limitation, pursuant to
Section 2.20 herein, the effect of which is to exceed the Maximum
Borrowing Base, and in such event neither the Agent nor the
Lenders shall be deemed to have changed the Maximum Borrowing
Base or be obligated to make Loans or issue Letters of Credit in
excess of the Maximum Borrowing Base, except as expressly
provided for in the immediately preceding sentence.
(c) Disbursements. Borrowers hereby authorize and direct
the Agent to disburse for and on the behalf of Borrowers and
Borrowers' account, the proceeds of Loans made by the Lenders to
any Borrower, pursuant to this Agreement, as any officer or
director of any Borrower shall direct, whether in writing or
orally. Disbursements of the proceeds of Loans made hereunder
shall be made by Agent to Sundance's operating account, account
number ▇▇▇▇▇▇▇, which Sundance maintains at LaSalle
("Disbursement Account") for the benefit of Borrowers; provided,
however, that the proceeds of any Loans made to pay a Lender or
the Agent any fees or expenses owed to it by any Borrower shall
be disbursed directly to such Lender or the Agent, as the case
may be.
(d) Revolving Credit. Within the limits of time and amount
set forth in this Section 2.1, and subject to the provisions of
this Agreement, each Borrower may borrow, repay and reborrow
hereunder, it being agreed that each Borrower shall be liable,
jointly and severally, for the Obligations of any Borrower.
Loans made under the Revolving Promissory Note shall be due and
payable on the Maturity Date, or such earlier date in accordance
with the terms of this Agreement.
II.2 All Loans, Advances and Reimbursement Obligations to
Constitute One Loan. Notwithstanding the limitations on the line
of credit set forth in Section 2.1, all loans and advances by
Lenders to Borrowers and Reimbursement Obligations owed by
Borrowers to the Agent under this Agreement and the other Loan
Documents shall constitute one loan and all indebtedness and
obligations of Borrowers to Lenders and/or the Agent under this
Agreement and all the other Loan Documents shall constitute one
general obligation. Borrowers agree that all of the rights of
Lenders and/or the Agent set forth in this Agreement shall apply
to any restatement, amendment, modification of, or supplement to
this Agreement and the other Loan Documents.
II.3 Revolving Promissory Note. The obligations of
Borrowers to repay the unpaid principal amount of the Loans made
by each Lender and to pay interest thereon and to pay
Reimbursement Obligations shall be evidenced in part by the
Revolving Promissory Note of Borrowers payable to the order of
the Agent dated of even date herewith in the stated principal
amount of $50,000,000 in the form attached hereto as Exhibit C.
The executed Revolving Promissory Note shall be delivered by the
Borrowers to the Agent on or before the Closing Date. The date
and amount of the Loans made and Letters of Credit issued on
behalf of each Borrower and payment of principal and
Reimbursement Obligations, as applicable, with respect thereto
shall be recorded on the books and records of the Agent, which
books and records shall constitute prima facie evidence of the
accuracy of the information therein recorded.
II.4 Making of Revolving Credit Loans. Whenever a Borrower
desires that the Lenders make Loans to it, such Borrower shall
provide Standard Notice to the Agent setting forth the following
information:
(a) the date, which shall be a Business Day, on which such
Loan is to be made; and
(b) the total principal amount of such Loan.
The Agent shall promptly give notice to each Lender of the
information contained in such Standard Notice and of the amount
of such Lender's Loan. On the date specified in such Standard
Notice each Lender shall wire immediately available funds in an
amount equal to the proceeds of its Pro Rata share of such Loan
to the Agent by no later than 12:00 o'clock noon, Chicago time.
Subject to the terms and provisions hereof, the Agent shall
before 2:00 P.M. Chicago time on the date specified in such
Standard Notice, make the amount of such Loan available to
Borrowers in the Disbursement Account, but only to the extent
received from the Lenders.
II.5 Letters of Credit.
(a) General Terms. Subject to all of the terms and
conditions hereof, the Aggregate Revolving Credit Commitment may
be availed of in the form of standby letters of credit issued for
the account of any Borrower (such letters of credit, including,
without limitation, the letters of credit described on Exhibit D
hereto, as they may be amended, modified, supplemented or
replaced from time to time in accordance with the terms of this
Agreement, being hereinafter referred to individually as a
"Letter of Credit" and collectively as the "Letters of Credit"),
provided, that the aggregate outstanding amount of Letters of
Credit issued at the request of any Borrower hereunder when taken
together with all outstanding Reimbursement Obligations shall in
no event exceed $20,000,000.00. The amount of any Letter of
Credit for all purposes of this Agreement, regardless of the
original issuance amount thereof, shall be the maximum amount
which is then available to be drawn thereunder. The Letters of
Credit shall be issued by the Agent, but each Lender shall be
obligated to reimburse the Agent for its Pro Rata share of the
amount of each draft drawn thereunder and, accordingly, each
Letter of Credit shall be deemed to utilize each Lender's
Revolving Credit Commitment Pro Rata with the respective amounts
thereof.
(b) General Characteristics. Each Letter of Credit issued
hereunder shall be irrevocable, shall have a date of expiry no
later than twenty-four (24) months from its date of issuance and,
subject to Section 7.3 hereof, shall expire no later than twelve
(12) months after the Maturity Date, shall be payable against
sight drafts in Dollars, shall conform to the general
requirements of the Agent for the issuance of letters of credit
as to form and substance and shall be a letter of credit which
the Agent may lawfully issue.
(c) Applications. At the time any Borrower requests a
Letter of Credit to be issued (or prior to the first issuance of
a Letter of Credit, in the case of a continuing application)
pursuant to a Standard Notice, it shall execute and deliver to
the Agent Agent's then current standard application for such
Letter of Credit (individually, an "Application" and collectively
"Applications"). In the event the Agent is not reimbursed for
the amount of any draft drawn under a Letter of Credit issued
hereunder on the date such draft is paid by the Agent, an Event
of Default shall exist hereunder and the Reimbursement Obligation
of the Borrowers for the amount of such draft shall bear interest
(which the Borrowers hereby promise to pay) from and after the
date such draft is paid at the rate per annum determined by
adding three and one-half percent (3.5%) to the Prime Rate as
from time to time in effect. This Agreement supersedes any terms
of the Applications which are irreconcilably inconsistent with
the terms hereof. Anything contained in the Applications to the
contrary notwithstanding, the Borrowers shall pay fees in
connection with Letters of Credit as set forth in Section 2.6
hereof.
(d) Participation in Letters of Credit. Each Lender shall
participate on a Pro Rata basis in the Letters of Credit issued
by the Agent (and those Letters of Credit described on Exhibit D
hereto), which participation shall automatically arise upon the
issuance of each Letter of Credit (or with respect to those
Letters of Credit described on Exhibit D hereto, upon the
execution of this Agreement) (such participations to count
against the Revolving Credit Commitment of each Lender Pro Rata
when the Letters of Credit are issued, or with respect to those
Letters of Credit described on Exhibit D hereto, upon the
execution of this Agreement). Each Lender unconditionally agrees
that in the event the Agent is not reimbursed by the Borrowers
for the amount paid by it on any draft presented under a Letter
of Credit on the date of such payment, then in that event such
Lender shall pay to the Agent its Pro Rata amount of each draft
so paid by the Agent and in return such Lender shall
automatically receive an equivalent percentage participation in
all of the rights of the Agent in respect of such draft
(including the right to obtain reimbursement from the Borrowers
for the amount of such draft, together with interest thereon as
provided for herein). In the event that any Lender fails to
honor its obligation to reimburse the Agent for its Pro Rata
share of the amount of any such draft on the date that such draft
is paid, then in that event (i) each other Lender shall pay to
the Agent its Pro Rata share of the payment due to the Agent from
the defaulting Lender, (ii) the defaulting Lender shall have no
right to participate in any recoveries from the Borrowers in
respect of such draft, and (iii) all amounts to which the
defaulting Lender would otherwise be entitled under the terms of
this Agreement shall first be applied to reimbursing the Lenders
for their respective Pro Rata shares of the defaulting Lenders'
portion of the draft, together with interest thereon at the rate
provided for in Section 2.5(c) hereof. Upon reimbursement to the
other Lenders pursuant to clause (iii) above of the amounts
advanced by them to the Agent in respect of the defaulting
Lender's share of the draft, together with interest thereon, the
defaulting Lender shall thereupon be entitled to its
participation in the Agent's rights of recovery against the
Borrowers in respect of the draft paid by the Agent.
(e) Issuance of Letters of Credit. Whenever a Borrower
desires that the Agent issue a Letter of Credit, such Borrower
shall provide a Standard Notice to the Agent (together with an
Application, unless a continuing Application applicable thereto
shall then be in effect) setting forth the following information:
(i) the date which shall be a Business Day, on which
such Letter of Credit is to be issued; and
(ii) the beneficiary and face amount thereof, as well
as any other terms necessary for the issuance thereof.
II.6 Fees.
(a) The Borrowers jointly and severally agree to pay to the
Agent for the account of each Lender, as consideration for the
Aggregate Revolving Credit Commitment hereunder, the following
fees (in the aggregate for all the Borrowers).
(i) A fee of $50,000.00 on the Closing Date.
(ii) A fee at the rate of one percent (1%) per annum
(computed on the basis of a year of 360 days and the actual
number of days of the stated term of the Letter of Credit) on the
amount available to be drawn on each Letter of Credit (measured
on the first Business Day of each applicable calendar quarter)
such fee to be payable quarterly in advance; provided, however,
that with respect to any Letters of Credit to be issued in a face
amount of less than $200,000.00, such fee shall be payable in
advance in full.
(b) The Borrowers jointly and severally agree to pay to the
Agent, for itself, the following fees relating to the
administration of the line of credit created hereunder.
(i) A fee equal to the Agent's standard administrative
fees relating to the issuance of Letters of Credit hereunder
as such fees are from time to time in effect.
(ii) A fee in the amount of $25,000.00 per calendar
quarter, payable on the first day of each calendar quarter
thereafter to and including the Maturity Date.
II.7 Interest Rate Options. Subject to all of the terms and
conditions of this Agreement, portions of the principal
indebtedness evidenced by the Note (all of the indebtedness
evidenced by the Note bearing interest at the same rate for the
same period of time being hereinafter referred to as a "Portion")
may, at the option of Sundance (which is acting on behalf of the
Borrowers pursuant to Section 2.23 hereof), bear interest with
reference to the Prime Rate (the "Prime Rate Portion") or with
reference to an Adjusted LIBOR (a "LIBOR Portion") and Portions
may be converted from time to time from one basis to the other.
Notwithstanding anything contained herein to the contrary, at no
time may the Loans constituting the LIBOR Portions exceed Thirty
Million Dollars ($30,000,000.00) in the aggregate. All of the
indebtedness evidenced by the Note which is not part of a LIBOR
Portion shall constitute a single Prime Rate Portion of the Note.
All of the indebtedness evidenced by the Note which bears
interest with reference to a particular Adjusted LIBOR for a
particular Interest Period shall constitute a single LIBOR
Portion of the Note. Anything contained herein to the contrary
notwithstanding, the obligation of the Lenders to create,
continue or effect by conversion any LIBOR Portion shall be
conditioned upon the fact that at the time no Default or Event of
Default shall have occurred and be continuing. The Borrowers
hereby jointly and severally promise to pay interest on each
Portion at the rates and times specified in this Article II.
(a) Prime Rate Portion. Borrowers shall pay interest to
the Agent for the account of each Lender on the Prime Rate
Portion of the Loans on the first Business Day of each calendar
month in an amount equal to the quotient of (i) the sum of the
products of the unpaid principal amount of such Prime Rate
Portion on each day during the preceding calendar month,
multiplied by a rate equal to the Prime Rate in effect on each
such day plus one-half of one percent (0.5%), divided by (ii)
360. Any change in the Prime Rate resulting from a change in the
Agent's prime rate shall be effective as of the date of the
relevant change. In no contingency or event whatsoever shall the
interest rate charged with respect to the Loans pursuant to the
terms of this Agreement exceed the highest rate permissible under
any law which a court of competent jurisdiction shall, in a final
determination, deem applicable hereto. In the event that such a
court determines that a Lender has received interest hereunder in
excess of the highest applicable rate, such interest shall, in
such Lender's sole discretion, either (i) be deemed repayment of
principal under the Loans or (ii) be promptly refunded to
Borrowers.
(b) LIBOR Portions. Each LIBOR Portion shall bear interest
for each Interest Period selected therefor at a rate per annum
determined by adding two and three-quarters percent (2.75%) to
the Adjusted LIBOR for such Interest Period, provided that if any
LIBOR Portion is not paid when due (whether by lapse of time,
acceleration or otherwise) such Portion shall bear interest,
whether before or after judgment, until payment in full thereof,
at the rate per annum determined by adding three and one-half
percent (3.5%) to the interest rate which would otherwise be
applicable thereto through the end of the Interest Period then
applicable thereto, and effective at the end of such Interest
Period such LIBOR Portion shall automatically be converted into
and added to the Prime Rate Portion and shall thereafter bear
interest until payment in full thereof at the interest rate
applicable to the Prime Rate Portion after default. Interest on
each LIBOR Portion shall be due and payable on the last day of
each Interest Period applicable thereto and interest after
maturity (whether by lapse of time, acceleration or otherwise)
shall be due and payable upon demand. Sundance shall notify the
Agent on or before 11:00 a.m. (Chicago time) on the third
Business Day preceding the end of an Interest Period applicable
to a LIBOR Portion whether such LIBOR Portion is to continue as a
LIBOR Portion, in which event Sundance shall notify the Agent of
the new Interest Period selected therefor, and in the event
Sundance shall fail to so notify the Agent, such LIBOR Portion
shall automatically be converted into and added to the Prime Rate
Portion as of and on the last day of such Interest Period.
Upon the occurrence of an Event of Default and so long as
such Event of Default continues, except as otherwise expressly
provided herein, the Obligations shall bear interest for each day
until paid (before and after judgment) at a rate ("Default Rate")
per annum (based on a year of 360 days) which shall be three and
one-half percent (3.5%) above the Prime Rate, such interest rate
to change automatically from time to time effective as of the
effective date of each change in the Prime Rate.
II.8. Minimum Amounts. Each LIBOR Portion shall be in a
minimum amount of $1,000,000 or such greater amount which is an
integral multiple of $1,000,000.
II.9 Computation of Interest. All interest on the Note
shall be computed on the basis of a year of 360 days for the
actual number of days elapsed.
II.10 Manner of Rate Selection. Sundance on behalf of
the relevant Borrower(s) shall notify the Agent by 11:00 a.m.
(Chicago time) at least three (3) Business Days prior to the date
upon which Sundance requests that any LIBOR Portion be created or
that any part of the Prime Rate Portion be converted into a LIBOR
Portion (each such notice to specify in each instance the amount
thereof and the Interest Period selected therefor). If any
request is made to convert a LIBOR Portion into the Prime Rate
Portion, such conversion shall only be made so as to become
effective as of the last day of the Interest Period applicable
thereto. All requests for the creation, continuance and
conversion of Portions under this Agreement shall be irrevocable.
II.11 Change of Law. Notwithstanding any other provisions
of this Agreement or the Note, if at any time any Lender shall
determine in good faith that any change in applicable laws,
treaties or regulations or in the interpretation thereof by any
governmental authority, central bank or comparable agency charged
with the administration thereof makes it unlawful for such Lender
to create or continue to maintain any LIBOR Portion, it shall
promptly so notify Sundance and the obligation of such Lender to
create, continue or maintain any such LIBOR Portion under this
Agreement shall be suspended until it is no longer unlawful for
such Lender to create, continue or maintain such LIBOR Portion.
If the continued maintenance of any such LIBOR Portion is
unlawful, Sundance, on behalf of the relevant Borrower(s), hereby
elects to convert the principal amount of the affected LIBOR
Portion into the Prime Rate Portion, subject to the terms and
conditions of this Agreement; provided, however, that if such
conversion is not permitted by the terms of this Agreement, the
Borrowers shall, on demand prepay the outstanding principal
amount of the affected LIBOR Portion, together with all interest
accrued thereon and all other amounts payable to such Lender with
respect thereto under this Agreement, provided, further, that if
upon such payment the Borrowers shall then have the right
hereunder to obtain additional Loans pursuant to the provisions
hereof, Borrowers may request such payment be readvanced to one
or more of the Borrowers as part of the Prime Rate Portion.
II.12 Unavailability of Deposits or Inability to
Ascertain Adjusted LIBOR. Notwithstanding any other provision of
this Agreement or the Note, if prior to the commencement of any
Interest Period, a Lender shall determine in good faith that
deposits in the amount of any LIBOR Portion scheduled to be
outstanding during such Interest Period are not readily available
to such Lender in the relevant market or, by reason of
circumstances affecting the relevant market, adequate and
reasonable means do not exist for ascertaining Adjusted LIBOR,
then such Lender shall promptly give notice thereof to Sundance
and the obligations of Lenders to create, continue or effect by
conversion any such LIBOR Portion in such amount and for such
Interest Period shall be suspended until such Lender notifies
Sundance that deposits in such amount and for the Interest Period
selected by Sundance are readily available in the relevant market
and adequate and reasonable means exist for ascertaining Adjusted
LIBOR.
II.13 Taxes and Increased Costs. With respect to any
LIBOR Portion, if any Lender shall determine in good faith that
any change in any applicable law, treaty, regulation or guideline
(including, without limitation, Regulation D of the Board of
Governors of the Federal Reserve System), or any new law, treaty,
regulation or guideline, or any interpretation of any of the
foregoing by any governmental authority charged with the
administration thereof or any central bank or other fiscal,
monetary or other authority having jurisdiction over such Lender
or its lending branch or the LIBOR Portions contemplated by this
Agreement (whether or not having the force of law), shall:
(i) impose, increase, or deem applicable any
reserve, special deposit or similar requirement against
assets held by, or deposits in or for the account of, or
loans by, or any other acquisition of funds or disbursements
by such Lender which is not in any instance already
accounted for in computing the interest rate applicable to
such LIBOR Portion;
(ii) subject such Lender, any LIBOR Portion or any
Note to the extent it evidences such a Portion to any tax
(including, without limitation, any United States interest
equalization tax or similar tax however named applicable to
the acquisition or holding of debt obligation and any
interest or penalties with respect thereto), duty, charge,
stamp tax, fee, deduction or withholding in respect of this
Agreement, any LIBOR Portion or any Note to the extent it
evidences such a Portion, except such taxes as may be
measured by the overall net income or gross receipts of such
Lender or its lending branches and imposed by a
jurisdiction, or any political subdivision or taxing
authority thereof, in each case which has jurisdiction over
such Lender's principal executive office or lending branch;
(iii) change the basis of taxation of payments of
principal and interest due from the Borrowers to such Lender
hereunder or under the Note to the extent it evidences any
LIBOR Portion (other than by a change in taxation of the
overall net income or gross receipts of the Agent or any
Lender); or
(iv) impose on such Lender any penalty with
respect to the foregoing or any other condition regarding
this Agreement, its disbursement, any LIBOR Portion or any
Note to the extent it evidences any LIBOR Portion;
and such Lender shall determine in good faith that the result of
any of the foregoing is to increase the cost (whether by
incurring a cost or adding to a cost) to such Lender of creating
or maintaining any LIBOR Portion hereunder or to reduce the
amount of principal or interest received or receivable by such
Lender (without benefit of, or credit for, any prorations,
exemption, credits or other offsets available under any such
laws, treaties, regulations, guidelines or interpretations
thereof), then the Borrowers shall pay on demand to such Lender
from time to time as specified by such Lender such additional
amounts as such Lender shall reasonably determine are sufficient
to compensate and indemnify them for such increased cost or
reduced amount. If any Lender makes such a claim for
compensation, it shall provide to the Borrowers a certificate
setting forth the computation of the increased cost or reduced
amount as a result of any event mentioned herein in reasonable
detail and such certificate shall be presumed correct and
accurate.
II.14 Change in Capital Adequacy Requirements. If any
Lender shall determine that the adoption after the date hereof of
any applicable law, rule or regulation regarding capital
adequacy, or any change in any existing law, rule or regulation
regarding capital adequacy, or any change in the interpretation
or administration thereof by any governmental authority, central
bank or comparable agency charged with the interpretation or
administration of any such law, rule or regulation regarding
capital adequacy, or compliance by a Lender (or any of its
branches) with any request or directive regarding capital
adequacy (whether or not having the force of law) of any such
authority, central bank or comparable agency, has or would have
the effect of reducing the rate of return on such Lender's
capital with respect to any LIBOR Portion as a consequence of its
obligations hereunder or for that portion of the credit which is
the subject matter hereof relating to LIBOR portions to a level
below that which such Lender could have achieved but for such
adoption, change or compliance (taking into consideration such
Lender's policies with respect to liquidity and capital adequacy)
by an amount deemed by such Lender to be material, then from time
to time, within fifteen (15) days after demand by such Lender,
the Borrowers shall pay to such Lender such additional amount or
amounts reasonably determined by such Lender as will compensate
such Lender for such reduction.
II.15 Funding Indemnity. In the event that the Agent or
any Lender shall incur any loss, cost or expense (including,
without limitation, any loss (including loss of profit), cost or
expense incurred by reason of the liquidation or reemployment of
deposits or other funds acquired or contracted to be acquired by
any Lender to fund or maintain any LIBOR Portion or the relending
or reinvesting of such deposits or other funds or amounts paid or
prepaid to the Agent or any Lender) as a result of:
(i) any payment of a LIBOR Portion on a date other
than the last day of the then applicable Interest Period for
any reason, whether before or after the occurrence of a
Default or Event of Default, and whether or not such payment
is required by any provision of this Agreement; or
(ii) any failure by any Borrower to create, borrow,
continue or effect by conversion a LIBOR Portion on the date
specified in a notice given pursuant to this Agreement;
then upon the demand of the Agent or any Lender, as the case may
be, the Borrowers shall pay to the Agent or such Lender such
amount as will reimburse the Agent or such Lender for such loss,
cost or expense. If the Agent or such Lender requests such a
reimbursement, it shall provide to the Borrowers a certificate
setting forth the computation of the loss, costs or expense
giving rise to the request for reimbursement in reasonable detail
and such certificate shall be presumed correct and accurate.
II.16 Lending Branch. Any Lender may, at its option, elect
to make, fund or maintain Portions of the Loans hereunder at such
of its branches or offices as such Lender may from time to time
elect. To the extent reasonably possible, each Lender shall
designate an alternate branch or funding office with respect to
the LIBOR Portions to reduce any liability of the Borrowers to
such Lender under Section 2.13 hereof or to avoid the
unavailability of an interest rate option under Section 2.11 or
2.12 hereof, so long as such designation is not otherwise
disadvantageous to the Agent or such Lender.
II.17 Discretion of Lenders as the Manner of Funding.
Notwithstanding any provision of this Agreement to the contrary,
each Lender shall be entitled to fund and maintain its funding of
all or any part of the Note in any manner it sees fit, it being
understood, however, that for the purposes of this Agreement all
determinations hereunder (including, without limitation,
determinations under 2.12, 2.13 and 2.15 hereof) shall be made as
if such Lender had actually funded and maintained each LIBOR
Portion during each Interest Period applicable thereto through
the purchase of deposits in the relevant market in the amount of
such LIBOR Portion, having a maturity corresponding to such
Interest Period, and bearing an interest rate equal to Adjusted
LIBOR plus two and three-quarters percent (2.75%) for such
Interest Period.
II.18 Voluntary Prepayments and Reduction/Termination of
Revolving Credit Commitment.
(a) Subject to Borrowers' obligations under Section 2.15
hereof, the Borrowers shall have the right at their option from
time to time to voluntarily prepay all of their Loans and all
other Obligations (other than indemnification obligations
hereunder) then outstanding in whole at any time and terminate
the Aggregate Revolving Credit Commitment, in each case, upon the
payment to the Agent for the account of the Lenders by Borrowers
of (i) a fee equal to the product of (x) $50,000,000.00,
(y) .0014% and (z) the actual number of days remaining from such
date until the Maturity Date; provided, however, that in the
event that neither LaSalle nor Bank One, Milwaukee, NA, shall at
any time be Agent hereunder, Borrowers may voluntarily prepay all
then outstanding in whole and terminate the Aggregate Revolving
Credit Commitment without payment of the foregoing fee, and (ii)
with respect to any LIBOR Portion being prepaid, the amounts
payable pursuant to Section 2.15.
(b) Whenever Borrowers desire to voluntarily prepay the
Loans and terminate the Aggregate Revolving Credit Commitment,
Borrowers shall provide Standard Notice to the Agent setting
forth the following information:
(i) The date, which shall be a Business Day not more
than 30 Business Days following the date the Standard Notice
is given, on which the proposed prepayment and termination
of the Aggregate Revolving Credit Commitment is to be made;
and
(ii) The total principal amount of all Loans
outstanding on the date of such Standard Notice.
(c) Standard Notice having been so provided, on the date
specified in such Standard Notice, the principal amounts of the
Loans, together with interest on each such principal amount to
such date, and together with the fees payable pursuant to Section
2.18(a) above, shall be due and payable, the Aggregate Revolving
Credit Commitment shall be terminated and Borrowers shall comply
with the terms of Section 8.3 herein.
II.19 Mandatory Prepayments
(a) Borrowing Base. If at any time the unpaid
principal amount of Borrowers' Loans plus the undrawn amount
of the outstanding Letters of Credit shall exceed the
Maximum Borrowing Base, the Borrowers shall immediately make
a prepayment of principal (plus all accrued and unpaid
interest thereon) of their Loans in an amount not less than
the amount of such excess.
(b) Net Proceeds. Borrowers shall immediately make a
prepayment of principal of their Loans in an amount not less
than the amount of ninety-five percent (95%) of the Net
Proceeds as the Borrowers receive such Net Proceeds and in
accordance with the terms of the Disbursement Agreement.
II.20 Payments. Except as otherwise provided in Section
2.22, all payments to the Agent for the account of each Lender
shall be payable at the Office or at such other place or places
as the Agent may designate from time to time in writing to
Borrowers. That portion of the Obligations consisting of:
(a) Interest payable pursuant to this Agreement shall
be payable and shall be charged in accordance with the
applicable provisions of Section 2.7 hereof; provided that,
with respect to any payment of interest which becomes due
hereunder, at any and all times any Loan is outstanding
hereunder, Borrowers authorize and direct the Agent to, and
the Agent shall, cause such interest to be paid on such due
date by charging such payment as a Loan against the line of
credit established pursuant to Section 2.1 of this
Agreement;
(b) Costs, fees and expenses payable pursuant to this
Agreement or any other Loan Document shall be payable as and
when provided in this Agreement or any other Loan Document
and, if not specified, on demand; provided that, with
respect to payment of any cost, fee or expense which becomes
due hereunder, Borrowers authorize and direct the Agent to,
and the Agent shall, cause such cost, fee or expense to be
paid on the tenth day following such due date by charging
such cost, fee or expense as a Loan against the line of
credit established pursuant to Section 2.1 of this
Agreement;
(c) The balance of the Obligations, if any, shall be
payable as and when provided in this Agreement or the other
Loan Documents and, if not specified, upon the termination
of this Agreement or as and when declared due by the Agent
pursuant to Section 8.2; and
(d) All payments to be made in respect of principal,
interest, fees or other amounts due from a Borrower
hereunder, under the Note, or under a Letter of Credit
(other than the fees described in Section 2.6(b) above),
shall be paid to the Agent for the Pro Rata benefit of the
Lenders.
All payments of principal, interest, fees and all other
Obligations payable hereunder and under the other Loan Documents
shall be made to the Agent at its Office no later than 2:00 P.M.
Chicago time on the date any such payment is due and payable.
Payments received by the Agent after 2:00 P.M. Chicago time shall
be deemed received as of the opening of business on the next
Business Day. All such payments shall be made in lawful money of
the United States of America, in immediately available funds at
the place of payment, without setoff or counterclaim and without
reduction for, and free from, any and all present or future
taxes, levies, imposts, duties fees, charges, deductions,
withholdings, restrictions and conditions of any nature imposed
by any government or any political subdivision or taxing
authority thereof (but excluding any taxes imposed on or measured
by the net income of the Agent or either Lender). For the
purpose of computing interest hereunder payment shall be applied
by the Agent on account of the Obligations on the day of deposit
thereof to the Agent prior to 2:00 P.M. Chicago time.
Notwithstanding anything to the contrary herein, all such items
of payment shall, solely for purposes of determining the
occurrence of an Event of Default, be deemed received upon actual
receipt by the Agent, unless the same are subsequently dishonored
for any reason whatsoever. All payments made by or on behalf of
and all credits due Borrower may be applied and reapplied in
whole or in part to any of the Obligations to the extent and in
the manner each Lender deems advisable, provided that such Lender
will not charge Borrowers additional interest in the event of
such Lender's reapplication of payments made by or credits due
Borrowers.
Unless Sundance on behalf of the Borrowers otherwise
directs, principal payments shall be applied first to the Prime
Rate Portion until payment in full thereof, with any balance
applied to the LIBOR Portions in the order in which their
Interest Period expire. Notwithstanding the foregoing, in the
event that any payments to be made hereunder pursuant to the
terms of the Disbursement Agreement would repay the Prime Rate
Portion in full and would result in the payment of any LIBOR
Portions prior to the expiration of their respective Interest
Period, Sundance, on behalf of the Borrowers, may provide written
notice to the Agent (not less than five (5) Business Days prior
to the date of such payment to be made pursuant to the
Disbursement Agreement) electing to have the Agent pay into the
Reserve Account (as such term is hereinafter defined) that
portion of such payment to be made under the Disbursement
Agreement which would prepay any LIBOR Portion (which amount
shall be specified in the notice to the Agent). If any such
notice is received by the Agent and, if the Agent agrees with the
amount specified in the notice, then upon the Agent's receipt of
such amount, the Agent shall pay such amount into the Reserve
Account rather than using such amount to repay such LIBOR
Portions. Any LIBOR Portion with respect to which a deposit is
made into the Reserve Account shall be deemed to remain
outstanding notwithstanding the Agent's receipt of all or a
portion of the amount owing with respect thereto. The "Reserve
Account" shall be an interest bearing money market account
maintained by the Agent in its name. All such amounts deposited
into the Reserve Account shall be the Agent's (on behalf of the
Lenders) property to be applied against the Obligations, and not
any Borrower's property. At such time as a LIBOR Portion with
respect to which a deposit has been made into the Reserve Account
is scheduled to mature, the Agent shall apply such amount of the
Reserve Account balance payable under such LIBOR Portion to such
LIBOR Portion. The Reserve Account shall be an interest bearing
account. If a Default does not then exist, on the first day of
each calendar quarter during the term hereof, the Agent shall
disburse to Sundance the interest accrued on the Reserve Account
to such date.
II.21 Statement of Account. The Agent shall provide
Sundance and each Lender with a statement of account for each
Lender and the Agent relating to Obligations on a monthly basis
between the twenty fifth day of such month and the first day of
the subsequent month. Each such statement of account shall be
presumed correct and accurate and shall, except for each Lender's
right to reapply payments, constitute an account stated between
Borrowers and each Lender and between Borrowers and Agent.
Borrowers agree to use their best efforts to deliver a
reconciliation of such statements of account to Agent within
thirty (30) days of the delivery of such statement to Sundance.
II.22 General Indemnity. Without limiting any other
provision of this Agreement or of any other Loan Document,
Borrowers hereby jointly and severally indemnify each Lender, the
Agent and their respective directors, officers, employees,
Affiliates and agents (collectively, "Indemnified Persons")
against, and agree to hold each such Indemnified Person harmless
from, any and all claims, damages and liabilities, including
claims brought by any shareholder or former shareholder of any
Borrower, and related expenses, including reasonable counsel fees
and expenses, incurred by such Indemnified Person arising out of
any claim, litigation, investigation or proceeding (whether or
not such Indemnified Person is a party thereto) relating to any
transactions, services or matters that are the subject or arise
in connection with or as a result of this Agreement or the
transactions contemplated hereby (including, without limitation,
relating to the properties or business of any Borrower, or any
default by a Borrower in the performance or observance of any
representation, warranty, covenant or condition in this Agreement
or any other Loan Document); provided, however, that such
indemnity shall not apply to any such losses, claims, damages, or
liabilities or related expenses determined by a court of
competent jurisdiction to have arisen from the gross negligence,
willful misconduct or subjective bad faith of such Indemnified
Person, and if such Indemnified Person is a director, officer,
employee, Affiliate or agent of a Lender or the Agent, then, to
the extent of such gross negligence, willful misconduct or
subjective bad faith, such indemnity shall not apply to such
Lender or the Agent, as applicable. If any litigation or
proceeding is brought against any Indemnified Person in respect
of which indemnity may be sought against Borrowers pursuant to
this Section 2.22, such Indemnified Person shall promptly notify
Borrowers in writing of the commencement of such litigation or
proceeding, but the omission so to notify Borrowers shall not
relieve Borrowers from any other obligation or liability which it
may have to any Indemnified Person, except that no Borrower
waives any rights for damages incurred by it on account of such
delay. Failure of the Indemnified Person to timely notify
Borrowers of the commencement of such litigation or proceeding
shall not relieve Borrowers of their obligations under this
Section 2.22, except where such failure irrevocably prejudices
Borrowers' ability to defend such litigation or proceeding. In
case any such litigation or proceeding shall be brought against
any Indemnified Person and such Indemnified Person shall notify
Borrowers of the commencement of such litigation or proceeding,
Borrowers shall be entitled to participate in such litigation or
proceeding and, after written notice from Borrowers to such
Indemnified Person, to assume the defense of such litigation or
proceeding with counsel of its choice at its expense, provided
that such counsel is satisfactory to the Indemnified Person in
the exercise of its reasonable judgment. Notwithstanding the
election of Borrowers to assume the defense of such litigation or
proceeding, such Indemnified Person shall have the right to
employ separate counsel and to participate in the defense of such
litigation or proceeding, and Borrowers shall bear the reasonable
fees, costs and expenses of such separate counsel if (i) the use
of counsel chosen by Borrowers to represent such Indemnified
Person would present such counsel with a conflict of interest;
(ii) the defendants in, or targets of, any such litigation or
proceeding include both an Indemnified Person and any Borrower,
and such Indemnified Person shall have reasonably concluded that
there may be legal defenses available to it which are different
from or additional to those available to any Borrower (in which
case Borrowers shall not have the right to direct the defense of
such action on behalf of the Indemnified Person); (iii) Borrowers
shall not have employed counsel satisfactory to such Indemnified
Person in the exercise of the Indemnified Person's reasonable
judgment to represent such Indemnified Person within a reasonable
time after notice of the institution of such litigation or
proceeding; or (iv) Borrowers shall authorize such Indemnified
Person to employ separate counsel at the expense of Borrowers,
provided that Borrowers shall not be liable for the fees, costs
and expenses of more than one separate counsel at the same time
for all such Indemnified Persons in connection with the same
action and any separate but substantially similar or related
action in the same jurisdiction. Borrowers shall not consent to
the entry of any judgment or enter into any settlement in any
such litigation or proceeding unless such judgment or settlement
includes as an unconditional term thereof the giving by the
claimant or plaintiff to such Indemnified Person of a release
from all liability in respect to such claim or litigation.
The agreements of Borrowers in this Section 2.22 shall be in
addition to any liability that Borrowers may otherwise have. All
amounts due under this Section 2.22 shall be payable within ten
(10) days of written demand therefor.
II.23 Sundance as Agent. Notwithstanding anything
contained herein to the contrary, each Borrower hereby
irrevocably appoints and authorizes Sundance to act as its agent
and attorney-in-fact to request Loans to be made to and Letters
of Credit to be issued for the benefit of any Borrower.
ARTICLE III
COLLATERAL: GENERAL TERMS
III.1 Collateral. The Collateral shall consist of the
following items:
(I) With respect to each parcel of real property (other
than (i) real property securing Non-Recourse Indebtedness, (ii)
the Kaco Real Property, so long as it is subject to a mortgage in
favor of Kaco, Inc. and/or (iii) Loft Projects which do not
constitute Approved Loft Projects) owned by any Borrower, any
Subsidiary of any Borrower or any Trust, as the case may be:
(a) A first Mortgage and Security Agreement with Assignment
of Rents in the form of Exhibit E attached hereto ("Mortgage")
from each applicable Borrower or Subsidiary of a Borrower and,
where title to a parcel is held in a Trust, also from the land
trustee of such Trust, on such real property;
(b) A Collateral Assignment of Beneficial Interest in the
form of Exhibit F attached hereto ("ABI") in each Trust owning
real property wherein Agent is granted a perfected first security
interest in such beneficial interest; and
(c) A first Assignment of Rents and Leases in the form of
Exhibit G attached hereto ("Assignment") in favor of Agent for
the leasing or rental now existing or hereafter made of such real
property and all proceeds of any of the foregoing; and
(II) Generally:
_)(a) The Security Agreement from Borrowers, each
Subsidiary of each Borrower and each Trust in favor of Agent,
together with appropriate UCC-1 and UCC-2 Financing Statements,
granting to Agent a first priority security interest in all of
each Borrower's, each Subsidiary's of each Borrower and each
Trust's personal property and fixtures, including, without
limitation, all of each Borrower's equipment, fixtures,
inventory, accounts, contract rights, chattel paper, documents,
instruments and general intangibles as each such term is defined
in the Uniform Commercial Code of the jurisdiction in which such
Collateral is located and all proceeds of the foregoing;
(b) An Environmental Indemnity Agreement ("Environmental
Indemnity Agreement") from Borrowers, Heartland, SK and ODC in
favor of Agent and Lenders in the form of Exhibit H attached
hereto;
(c) The Stock Pledge Agreement; and
(d) The Pledge Agreement.
III.2 Cross Default Provisions. All Collateral which
Agent or any Lender has acquired or may at any time acquire from
any Borrower or from any other source in connection with the
Obligations shall constitute collateral for each and every one of
the Obligations, without apportionment or designation as to
particular Obligations, and all Obligations, howsoever and
whensoever acquired, and the Lenders shall have the right, in
their sole discretion to determine the order in which the
Lenders' rights in or remedies against any Collateral are to be
exercised and which types of Collateral or which portions of
Collateral are to be proceeded against and the order of
application of proceeds of such Collateral as against particular
Obligations. All Loan Documents shall contain cross-default
provisions.
III.3 Protection of Collateral. Agent and/or Lenders,
in their sole and absolute discretion, without waiving or
releasing any obligation, liability or duty of Borrowers under
this Agreement or the Loan Documents or any Event of Default, may
for the purposes of protecting the validity and priority of any
Lien granted to Agent or any Lender under this Agreement or any
Loan Document, or the Collateral or any part thereof at any time
or times hereafter, but shall be under no obligation to, pay,
acquire and/or accept an assignment of any Lien or claim asserted
by any Person against the Collateral unless such Borrower or its
insurer shall have undertaken the defense of such claim, shall
have been provided a cure or grace period with respect to such
Lien or claim, which cure or grace period has not yet expired and
shall have provided Agent with a bond or other security
protecting Agent and Lenders from loss or damage as a result of
the assertion of such Lien or claim, in which case Agent and
Lenders shall forbear from paying, acquiring or accepting an
assignment of the same for so long as Borrowers are diligently
pursuing the cure of any default in connection therewith. All
sums paid by Agent or any Lender in respect thereof and all
costs, fees and expenses, including reasonable attorneys' fees,
court costs, expenses and other charges relating thereto incurred
by Agent or any Lender on account thereof shall be part of the
Obligations payable by Borrowers to Agent or such Lender on
demand.
III.4 Release and Retention of Collateral. Subject to
the terms of the Disbursement Agreement, Agent, on behalf of
Lenders, may, at the joint direction of the Lenders, retain as
additional Collateral or, with the consent of the Lenders,
release to a Borrower, from time to time, such portion of the
Collateral as Lenders may determine. Any and all monies,
reserves and proceeds and other property of any Borrower in the
possession of Agent or any Lender at any time or times hereafter
are hereby pledged by each Borrower to Agent and the Lenders as
additional Collateral hereunder, and, in Lenders' sole and
absolute discretion, following the occurrence of a Default may be
held by Lenders until the Obligations are paid in full or, at any
time or times following the occurrence of a Default, be applied
by Lenders on account of the Obligations.
III.5 No Waiver. No authorization given by Agent or the
Lenders pursuant to this Agreement or the Loan Documents to sell
any specified portion of the Collateral or any part thereof, and
no waiver by Agent or Lenders in connection therewith shall
establish a custom or constitute a waiver of the prohibition
contained in this Agreement against such sales, with respect to
any portion of the Collateral or any part thereof not expressly
covered by said authorization.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
Each Borrower hereby jointly and severally represents,
warrants and covenants to the Agent and each Lender that:
IV.1 Organization and Qualification. Each Borrower and its
Subsidiaries is a corporation duly organized, validly existing
and in good standing under the laws of its jurisdiction of
incorporation and has full corporate power to own, operate and
lease its properties and to carry on its business as now
conducted. Each Borrower and its Subsidiaries is duly qualified
to do business as a foreign corporation and is in good standing
in each jurisdiction in which such qualification is required for
the conduct of such Borrower's business. Each jurisdiction in
which a Borrower or its Subsidiary is qualified to conduct
business is set forth in Schedule 4.1 hereto.
IV.2 Executive Offices. The location of each Borrower's
and its respective Subsidiaries' chief executive office,
principal place of business, and other offices and places of
business are set forth on Schedule 4.2 hereto, and are the sole
offices and places of business of each Borrower and its
respective Subsidiaries, provided that such locations may change
hereunder in accordance with the delivery of the notice required
by Section 7.21 hereof.
IV.3 Corporate Power; Authorization. The execution,
delivery and performance by each Borrower and its Subsidiaries of
the Loan Documents, to the extent they are parties thereto:
(i) are within each such Person's corporate power; (ii) have been
duly authorized by all necessary or proper corporate action;
(iii) are not in contravention of any provision of any such
Person's respective certificates or articles of incorporation or
by-laws; (iv) will not violate any law or regulation, or any
order or decree of any court or governmental instrumentality;
(v) will not conflict with or result in the breach or termination
of, constitute a default under or accelerate any performance
required by, any indenture, mortgage, deed of trust, lease,
agreement or other instrument to which any Borrower or any
Subsidiary of any Borrower is a party or by which any Borrower or
any Subsidiary of any Borrower or any of their property is bound;
(vi) will not result in the creation or imposition of any Lien
upon any of the property of any Borrower; and (vii) do not
require the consent or approval of any Person.
IV.4 Execution and Binding Effect. This Agreement has been
duly and validly executed and delivered by each Borrower and
constitutes the legal, valid and binding obligation of each
Borrower enforceable in accordance with the terms hereof, except
as such enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or other laws affecting creditors'
rights and except as may be limited by the exercise of judicial
discretion in applying general principles of equity (regardless
of whether considered in a proceeding in equity or at law). The
Note and the other Loan Documents will as of the Closing Date
have been duly and validly executed and delivered by each
Borrower and its Subsidiaries (as applicable) and will constitute
the legal, valid and binding obligations of such Borrower and its
Subsidiaries (as applicable) enforceable in accordance with the
terms thereof, except as such enforceability may be limited by
bankruptcy, insolvency, reorganization, moratorium or other laws
affecting creditors' rights and except as may be limited by the
exercise of judicial discretion in applying general principles of
equity (regardless of whether considered in a proceeding in
equity or at law).
IV.5 Authorizations and Filings. No authorization,
consent, approval, license, exemption or other action by, and no
registration, qualification, designation, declaration or filing
with, any Official Body is or will be necessary in connection
with the execution, performance and delivery of this Agreement,
the Note, any other Loan Document, consummation of the
transactions herein or therein contemplated, performance of or
compliance with the terms and conditions hereof or thereof or to
ensure the legality, validity, and enforceability hereof or
thereof.
IV.6 Financial Statements. (a) All of the following
consolidated balance sheets and consolidated and consolidating
statements of income, retained earnings and cash flows of
Borrowers and their respective Subsidiaries, copies of which have
been furnished to the Agent and each Lender prior to the date of
this Agreement, have been prepared in conformity with GAAP
consistently applied throughout the periods involved and present
fairly the consolidated and consolidating financial position of
each Borrower and Borrowers, as the case may be, in each case as
at the dates thereof, and the results of operations and cash flow
for the periods then ended (as to the unaudited interim financial
statements, subject to normal year-end audit adjustments and the
absence of footnotes):
(i) the unaudited consolidated balance sheet of
Borrowers as at June 30, 1996, and the related consolidated
statements of income, retained earnings and cash flows for
the nine months then ended; and
(ii) the audited consolidated balance sheet of
Borrowers as at September 30, 1995, and the related
consolidated and consolidating statements of income,
retained earnings and cash flows for the years then ended,
with the unqualified opinion thereon of Price Waterhouse
LLP.
(b) Except as otherwise permitted by this Agreement, since
September 30, 1995 (or the most recent date of audited financial
statements provided to the Agent and the Lenders, but only if
such statements are in accordance with, and have been delivered
pursuant to the terms of, this Agreement) there has been (i) no
material adverse change in the business, financial or other
conditions of the Operating Subsidiaries taken as a whole, or
Sundance, or in the projections or prospects of Borrowers (on a
consolidated basis), (ii) no material increase in the
Indebtedness (other than inter-Borrower liabilities of any
Borrower); (iii) no material decrease in the consolidated assets
of the Borrowers and their Subsidiaries and (iv) except as set
forth on Schedule 4.6, no dividends or other distributions have
been declared, paid or made upon any shares of Capital Stock of
any Borrower or its Subsidiaries, nor have any shares of Capital
Stock of any Borrower or its Subsidiaries been redeemed, retired,
purchased or otherwise acquired for value by any Borrower or its
Subsidiaries since September 30, 1995.
(c) Schedule 4.6(x) describes the Non-Recourse Indebtedness
of each Borrower, each Subsidiary of any Borrower and/or each
Trust as of the date hereof, (y) describes the assets of any such
Borrower, Subsidiary or Trust securing such Non-Recourse
Indebtedness, and (z) lists the agreements, documents and
instruments relating to the Non-Recourse Indebtedness described
in clause (x) and/or clause (y) above. A true, correct and
complete copy of each of the agreements, documents and
instruments listed on Schedule 4.6 pursuant to clause (z) above
has been delivered to Agent and each Lender.
IV.7 Ownership of Property; Liens. Each Borrower and its
Subsidiaries and each of the Trusts has good, indefeasible and
merchantable title to and ownership, free and clear of all Liens
other than Permitted Encumbrances, of all the assets and
properties of every kind and nature (tangible and intangible,
real and personal, including, without limitation, any beneficial
interests in any land trust) required or desirable to carry on
its business as presently conducted, including, without
limitation, all property reflected in the financial statements
described in Section 4.6 above and reflected in the financial
statements delivered to the Agent and each Lender pursuant to
Section 6.1 herein.
IV.8 No Default. No Borrower nor any Borrower's Subsidiary
or any Trust is in default, nor, to the actual knowledge of any
executive officer of each Borrower, is any third party in
default, (i) under or with respect to any contract, agreement,
lease or other instrument to which such Borrower or any of its
Subsidiaries or any Trust is a party, except for any default
which (either individually or collectively with other defaults
arising out of the same event or events) could not reasonably be
expected to have a Material Adverse Effect, or (ii) under or with
respect to any contract, agreement, lease or other instrument
relating to indebtedness for borrowed money to which such
Borrower or any of its Subsidiaries or a Trust is a party. No
Default or Event of Default has occurred and is continuing.
IV.9 Burdensome Restrictions. No contract, lease,
agreement or other instrument to which any Borrower, Subsidiary
of any Borrower or a Trust is a party or is bound and no
provision of applicable Law or governmental regulation could
reasonably be expected to have a Material Adverse Effect.
IV.10 Labor Matters. There are no strikes or other labor
disputes against any Borrower or any Subsidiary of any Borrower
pending or, to any Borrower's knowledge, threatened which could
have a Material Adverse Effect. Hours worked by and payment made
to employees of each Borrower and its Subsidiaries have not been
in violation of the Fair Labor Standards Act or any other
applicable Law dealing with such matters which could reasonably
be expected to have a Material Adverse Effect. All payments due
from any Borrower or any Subsidiary of any Borrower on account of
employee health and welfare insurance have been paid when due
(taking into account any grace period) and all such payments
which are not yet due have been accrued as a liability on the
books of such Borrower or Subsidiary.
IV.11 Other Ventures. Except as set forth in Schedule
4.11, no Borrower or Subsidiary of any Borrower is engaged in any
joint venture or partnership with any other Person nor is it a co-
beneficiary of any Trust with any other Person. Each of the
limited partnerships set forth in Schedule 4.11 is a limited
partnership duly organized, validly existing and in good standing
under the laws of the jurisdiction of its formation and has full
power to own, operate and lease its properties, and to carry on
its business as now conducted.
IV.12 Taxes. Each Borrower and its Subsidiaries has filed
all federal, state and local tax returns and other reports it is
required by law to file and has paid, to the extent due and
payable, all Charges other than Charges which are being contested
pursuant to Section 6.3(b) herein. The reserves and provisions
for taxes on the books of Sundance and each of its Subsidiaries
are adequate for all open years and for its current fiscal
period.
IV.13 Pension and Welfare Plans. Each Pension Plan
complies and has been administered in accordance with all
applicable Laws in all material respects; no Reportable Event has
occurred and is continuing with respect to any Pension Plan which
could have a Material Adverse Effect; no Borrower, Subsidiary of
any Borrower, nor any ERISA Affiliate has withdrawn from any
Multi-employer Plan in a "complete withdrawal" or a "partial
withdrawal" as defined in Section 4203 or 4205 of ERISA,
respectively which could have a Material Adverse Effect; no steps
have been instituted by any Borrower or its Subsidiary to
terminate any Pension Plan which could have a Material Adverse
Effect; no contribution failure has occurred with respect to any
Pension Plan which has resulted in the imposition of a Lien under
Section 302(f) of ERISA upon any of the assets of a Borrower or
its Subsidiary; no condition exists or event or transaction has
occurred in connection with any Pension Plan or Multiemployer
Plan which could result in the incurrence by a Borrower or its
Subsidiary or any ERISA Affiliate of any liability, fine or
penalty which is material in amount; and no Borrower, Subsidiary
of any Borrower nor any ERISA Affiliate is a "contributing
sponsor" as defined in Section 4001(a)(13) of ERISA of a "single-
employer plan" as defined in Section 4001(a)(15) of ERISA which
has two or more contributing sponsors at least two of whom are
not under common control. Except as listed in Schedule 4.13, no
Borrower, Subsidiary of any Borrower, or any ERISA Affiliate, to
the extent that a Borrower or any of its Subsidiaries has joint
and several liability with such ERISA Affiliate to pay such
benefits, maintains or has any liability to pay any medical
benefits under any employee welfare benefit plan within the
meaning of Section 3(1) of ERISA to former employees thereof or
to current employees with respect to claims incurred after the
termination of their employment (other than as required by
Section 4980B of the Code or Part 6 of Subtitle B of Title 1 of
ERISA), other than with respect to any course of treatment
initiated on or prior to termination of employment.
IV.14 Employment and Labor Agreements. Except as set forth
on Schedule 4.14, there are no employment agreements pursuant to
which any members of management of any Borrower or any Subsidiary
of any Borrower are employed and there are no collective
bargaining agreements or other labor agreements covering any
employees of any Borrower or any Subsidiary of any Borrower. A
true and complete copy of each such agreement set forth on
Schedule 4.14 has been furnished to the Agent and the Lenders.
Each Borrower and its Subsidiaries are in compliance with the
terms and conditions of all such collective bargaining agreements
and other labor agreements except where the failure to so comply
could reasonably be expected to have a Material Adverse Effect.
No labor contract is scheduled to expire prior to the Maturity
Date.
IV.15 Patents, Trademarks, Copyrights and Licenses. Each
Borrower and its Subsidiaries owns all material licenses,
patents, patent applications, copyrights, service marks,
trademarks, trademark applications, and trade names necessary to
continue to conduct its business as now conducted by them, each
of which is listed, together with Patent and Trademark Office
application or registration numbers, where applicable, on
Schedule 4.15 hereto. Each Borrower and its Subsidiaries
conducts its respective businesses without infringement or claim
of infringement of any license, patent, copyright, service ▇▇▇▇,
trademark, trade name, trade secret or other intellectual
property right of others, except where such infringement or claim
of infringement could not reasonably be expected to have a
Material Adverse Effect. Except as set forth in Schedule 4.15
hereto, to the best knowledge of each Borrower, there is no
infringement or claim of infringement by others of any material,
license, patent, copyright, service ▇▇▇▇, trademark, trade name,
trade secret or other intellectual property right of any Borrower
which infringement could reasonably be expected to have a
Material Adverse Effect.
IV.16 Environmental Matters. All real property and any
facilities located thereon owned, leased, used, operated or under
development by any Borrower, any Subsidiary of any Borrower, any
Trust, or, to the knowledge of any Borrower after due inquiry,
any predecessor in interest, have been, and continue to be,
owned, leased, used, operated or under development in compliance
in all material respects with all applicable Environmental Laws.
IV.17 Financial Accounting Practices. Each Borrower and
its Subsidiaries makes and keeps books, records and accounts
which, in reasonable detail, accurately and fairly reflect their
respective transactions and dispositions of their respective
assets and each maintains a system of internal accounting
controls sufficient to provide reasonable assurances that (a)
transactions are executed in accordance with management's general
or specific authorization, (b) transactions are recorded as
necessary (i) to permit preparation of financial statements in
conformity with GAAP and (ii) to maintain accountability for
assets, (c) access to assets is permitted only in accordance with
management's general or specific authorization and (d) the
recorded accountability for assets is compared with the existing
assets at reasonable intervals and appropriate action is taken
with respect to any differences.
IV.18 Regulation U. Each Borrower's execution and delivery
of this Agreement or any other Loan Document does not directly or
indirectly violate or result in a violation of Section 7 of the
Securities and Exchange Act of 1934, as amended, or any
regulations issued pursuant thereto, including, without
limitation, regulations G, U, T and X of the Board of Governors
of the Federal Reserve System, and no Borrower nor any of its
Subsidiaries owns any "margin stock," within the meaning of said
regulations, or is engaged in the business of extending credit to
others for such purpose, and no part of the proceeds of any
borrowing hereunder will be used to purchase or carry any "margin
stock" or to extend credit to others for the purpose of
purchasing or carrying any "margin stock."
IV.19 Accurate and Complete Disclosure. No representation
or warranty made by any Borrower under this Agreement or any
other Loan Document and no statement made by any Borrower or any
of its Subsidiaries in any financial statement, certificate,
report, exhibit or document furnished by any Borrower or any of
its Subsidiaries to the Agent and/or any Lender pursuant to or in
connection with this Agreement (including, without limitation, in
connection with the Original Agreement) is false or misleading in
any material respect (including by omission of material
information necessary to make such representation, warranty or
statement not misleading).
IV.20 Use of Proceeds. Each Borrower will apply the
proceeds of any Loan hereunder only for the following uses, all
of which are and will continue to be legal and proper corporate
uses and have been (or will be) duly authorized by its Board of
Directors and such uses are consistent with all applicable laws
and statutes, as in effect as of the date hereof, for the ongoing
working capital requirements of Borrowers and other general
corporate purposes, but only (i) to the extent such payments are
made to parties which are not Affiliates of any Borrower (other
than in the case of payments under the Shareholder Notes), and
(ii) to the extent such payments do not cause a breach of any
term of this Agreement or give rise to any Default or Event of
Default. Notwithstanding anything contained herein to the
contrary, no Borrowers shall use or permit the use of the
proceeds of any Loan or any Letter of Credit hereunder (a) by
Heartland and/or ODC or in connection with Heartland's and/or
ODC's business and/or (b) in connection with any Loft Project
which does not constitute an Approved Loft Project any amount in
excess of Three Million Dollars in the aggregate.
IV.21 Permits. Each Borrower and its Subsidiaries own or
possess, and are current and in good standing with respect to,
all Permits from an Official Body as are necessary to be obtained
in connection with the operation of such Borrower's or
Subsidiary's business as heretofore and now conducted and to own
or lease and operate the properties now owned or leased by it or
by any Trust.
IV.22 Ownership of the Operating Subsidiaries. There
exists no Subsidiary of any Borrower other than the Operating
Subsidiaries, Heartland, SK, ODC and any other Subsidiary of
Sundance hereafter created or acquired pursuant to Section 7.1
herein. Sundance owns of record and beneficially all of the
issued and outstanding Capital Stock of each Operating
Subsidiary, Heartland and ODC free and clear of all Liens. All
of the issued and outstanding shares of the Capital Stock of each
Borrower, Heartland and ODC have been duly and validly authorized
and issued and are fully paid and nonassessable. Except as set
forth in Schedule 4.22 hereof, there are no outstanding options,
warrants or other rights to purchase any Capital Stock of any
Borrower or any Subsidiary of any Borrower. Schedule 4.22 sets
forth the authorized Capital Stock of each Borrower and each
Subsidiary of any Borrower and the issued and outstanding shares
of each class of Capital Stock of each Borrower and each
Subsidiary of any Borrower. Schedule 4.22 sets forth each
Subsidiary of any Borrower.
IV.23 Compliance with Laws. No Borrower nor any Subsidiary
of any Borrower nor any Trust is in violation of or subject to
any contingent liability on account of any Law (including but not
limited to ERISA, the Code, any applicable occupational and
health or safety Law, Environmental Law, including but not
limited to any Law regulating the business in which they are
engaged or the use, maintenance or operation of the real and
personal properties owned or possessed by them), except to the
extent that such violation or liability could not reasonably be
expected to have a Material Adverse Effect. No Borrower nor any
Subsidiary thereof or any agent thereof has received any written
notice alleging any such violation from any applicable
governmental authority, tenant or insurance company or other
person.
IV.24 Litigation. Except as set forth on Schedule 4.24,
there is no action, suit, proceeding, government investigation or
arbitration (whether or not purportedly on behalf of any Borrower
or any of its Subsidiaries) at law or in equity or before or by
any Federal, state, municipal or other governmental department,
commission, board, bureau, agency or instrumentality, domestic or
foreign, pending or, to the knowledge of any Borrower, threatened
against or affecting any Borrower or any of its Subsidiaries or
any property of any Borrower or Subsidiary of any Borrower or any
land trust in which any Borrower or any of its Subsidiaries owns
a beneficial interest, nor to the knowledge of any Borrower does
a state of fact exist which is reasonably likely to give rise to
such proceedings.
IV.25 Solvency. Borrowers are and at all times while any
of the Obligations remain unpaid shall be Solvent on a
consolidated basis.
IV.26 Indebtedness. Except for the Obligations, operating
leases permitted hereunder, trade payables arising in the
ordinary course of business, the Shareholder Notes, the Bonds,
Non-Recourse Indebtedness consented to by each Lender and Agent,
the Indebtedness of SAR in its capacity as general partner of SK,
for the recourse obligations of SK, and any other Indebtedness
expressly permitted to be incurred in accordance with this
Agreement, no Borrower nor any Subsidiary of any Borrower has any
Indebtedness, including, without limitation, any letters of
credit. Without limiting the foregoing, except as set forth in
Schedule 4.26 hereof, no Borrower nor any Subsidiary of any
Borrower has any Guaranteed Indebtedness. No Borrower nor any
Subsidiary of any Borrower is in default in the payment when due
of any Indebtedness, and, since the date of the most recent
audited financial statements delivered to the Agent and the
Lenders, each Borrower's and Subsidiaries of each Borrower's
accounts payable have been paid in a manner acceptable to its
suppliers and creditors and in a manner which does not threaten
to disrupt the business relationship between such Borrower or
such Subsidiary, as the case may be, and its material suppliers
and creditors.
IV.27 No Material Adverse Effect. No event has occurred
since the date of the most recent audited financial statements
delivered to the Agent and the Lenders which has had, or could
reasonably be expected to have, a Material Adverse Effect.
IV.28 Depository Accounts. No Borrower nor any
Subsidiary of any Borrower nor any Trust owns or otherwise
maintains any depository account at any bank or other financial
institution other than a Lender, each of which accounts is listed
on Schedule 4.28.
IV.29 Real Property. Schedule 4.29 sets forth a true,
correct and complete list, as of the date hereof, of each parcel
of real property owned, leased or occupied by any Borrower, any
Subsidiary of any Borrower and/or any Trust, and attached thereto
is a true, correct and complete legal description of any such
real property. As of the date hereof, except as set forth on
Schedule 4.29 hereof, no Borrower, nor any Subsidiary of any
Borrower nor any Trust is a party to any agreement, contract or
commitment for its acquisition, lease or occupancy of any real
property.
IV.30 Lofts. Schedule 4.30 describes the Loft Projects
of any Borrower, any Subsidiary of any Borrower or any Trust as
of the date hereof. As of the date hereof, no Loft Projects
constitute Approved Loft Projects.
ARTICLE V
CONDITIONS PRECEDENT
V.1 Conditions to Closing. This Agreement shall become
effective upon the Closing Date, provided that the following
conditions precedent have been satisfied or waived by the Lenders
jointly:
(a) Execution and Delivery of Loan Documents. This
Agreement and all other Loan Documents, or counterparts thereof
where permitted, shall have been duly executed by and delivered
to the Agent and each Lender (and where applicable, to each
Borrower).
(b) Documents and Other Agreements. The Agent and each
Lender, as applicable, shall have received all of the following,
each in form and substance satisfactory to the Agent and each
Lender:
(1) The Revolving Promissory Note of the Borrowers
payable to Agent as required by Section 2.3 herein;
(2) A Certificate of Secretary of each Borrower and
each Subsidiary of each Borrower, together with true and correct
copies of the Articles of Incorporation and By-Laws of each
Borrower, and all amendments thereto, true and correct copies of
the resolutions of the Board of Directors of each Borrower
authorizing the execution, delivery and performance of this
Agreement and the other Loan Documents to be executed by such
Borrower, and the names of the officer or officers of such
Borrower authorized to sign said documents, together with a
sample of the true signature of each such officer;
(3) The written opinion of ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇,
counsel for Borrowers, Heartland and SK addressed to the Agent
and each Lender in the form of Exhibit I attached hereto and made
a part hereof;
(4) The written opinion of ▇▇▇▇▇▇ & ▇▇▇▇▇, Ltd.,
counsel for Borrowers, Heartland and SK, addressed to the Agent
and each Lender in the form of Exhibit J attached hereto and made
a part hereof;
(5) Good Standing Certificates for each Borrower,
Heartland and SK from the Secretaries of State of each such
Person's state of incorporation and each state in which such
Borrower is doing business, dated not more than 10 days prior to
the Closing Date;
(6) A Borrowing Base Certificate;
(7) Accountant's Reliance Certificate (as defined in
Section 6.1(d);
(8) A disbursement request;
(9) A Subordination Agreement relating to each
Shareholder Note in the form of Exhibit A-1 or Exhibit A-2
attached hereto, as the case may be;
(10) A Subordination Agreement relating to the
promissory note in favor of Kaco, Inc. evidencing obligations of
SK for the acquisition of certain real property in the form of
Exhibit B attached hereto;
(11) The Stock Pledge Agreement in the form of Exhibit
K attached hereto and made a part hereof;
(12) The Disbursement Agreement in the form of Exhibit
L attached hereto and made a part hereof;
(13) The Security Agreement in the form of Exhibit M
attached hereto and made a part hereof;
(14) The Environmental Indemnity Agreement;
(15) The Mortgage, Assignment and ABI, if applicable,
with respect to each parcel of real property disclosed on
Schedule 4.29 which does not secure Non-Recourse Indebtedness as
disclosed on Schedule 4.6 and other than the Kaco Real Property
so long as it is encumbered by a mortgage in favor of Kaco, Inc.
("Current Real Property");
(16) The Pledge Agreement in the form of Exhibit N-1 or
N-2 attached hereto and made a part hereof, as the case may be;
(17) UCC-1 and UCC-2 Financing Statements;
(18) Certificates of Insurance naming Agent as loss
payee;
(19) Certified copies of all trust agreements for all
Trusts holding title to any parcel of Current Real Property,
together with certified letters of direction for all Trusts
executing Mortgages in connection with the Loans, and pay
proceeds letters from such Trusts;
(20) A Policy with respect to each parcel of Current
Real Property;
(21) A Survey with respect to each parcel of Current
Real Property;
(22) Certified copies of all documents appearing on
Schedule B of the Policies;
(23) Copies of all Permits which are necessary for the
use of the improvements on the Current Real Property;
(24) Satisfactory (i.e., showing no Liens other than
Permitted Exceptions) UCC searches, together with tax lien,
judgment and litigation searches conducted in the appropriate
jurisdictions by a search firm acceptable to Agent and the
Lenders with respect to each Borrower, each Subsidiary of each
Borrower, the Current Real Property and the Trusts;
(25) An Environmental Report with respect to each
parcel of Current Real Property. Each such report shall confirm
the absence of any Hazardous Materials on, under or affecting the
parcel therein described and shall otherwise be satisfactory to
Lenders.
(26) An Appraisal of each parcel of Current Real
Property satisfactory to Agent and the Lenders;
(27) A Compliance Certificate; and
(28) All such other documents reasonably requested by
the Agent or a Lender, in its sole discretion.
(c) Absence of Material Adverse Change. Since September
30, 1995 and except as disclosed in Article IV and the Schedules
thereto, there shall have been (i) no material adverse changes in
the business, financial or other conditions of the Operating
Subsidiaries taken as a whole, or Sundance, or in the projections
or prospects of Borrowers (on a consolidated basis), (ii) no
material increase in the Indebtedness (other than inter-Borrower
liabilities) of any Borrower and (iii) no material decrease in
the consolidated assets of the Borrowers.
(d) Current Payables. No Borrower shall be delinquent in
the payment of its respective accounts payable as determined by
the Lenders jointly.
V.2 Condition to Loans and Letters of Credit. The
obligation of each Lender to make any Loan to or the Agent to
issue any Letter of Credit for the benefit of a Borrower
hereunder is further subject to satisfaction of each of the
following further conditions:
(a) Representations and Warranties; Events of Default and
Defaults. The representations and warranties on behalf of
Borrowers, their Subsidiaries and the Trusts contained herein
(except (i) for Section 4.6, which shall be applicable to the
most recent audited financial statements delivered by the
Borrowers and their Subsidiaries pursuant to Section 6.1 herein
and (ii) to the extent such representation and warranty
specifically relates to an earlier date, then only with respect
to such date, and (iii) for changes permitted or contemplated by
this Agreement) and in each of the other Loan Documents shall be
true in all material respects on and as of the date of each Loan
and the date of issuance of each Letter of Credit hereunder with
the same effect as though made on and as of each such date. On
the date of each Loan and of the issuance of each Letter of
Credit hereunder no Event of Default and no Default with respect
to any Borrower shall have occurred and be continuing or exist or
shall occur or exist after giving effect to the Loan or the
issuance of the Letter of Credit to be made on such date. Any
request by a Borrower for any Loan or Letter of Credit hereunder
shall constitute a representation and warranty by such Borrower
that (x) the representations and warranties on behalf of each of
the Borrowers and their Subsidiaries contained herein and in each
of the other Loan Documents are true and correct in all material
respects on and as of the date of such request with the same
effect as though made on and as of the date of such request and
(y) on the date of such request no Event of Default and no
Default with respect to any Borrower has occurred and is
continuing or exists or will occur or exist after giving effect
to such Loan or issuance of such Letter of Credit (for this
purpose such Loan being deemed to have been made and such Letter
of Credit being deemed to have been issued on the date of such
request). Failure of the Agent to receive notice from a Borrower
to the contrary before such Loan is made or such Letter of Credit
is issued shall constitute a further representation and warranty
by Borrowers that (1) the representations and warranties
contained in the first sentence of this Section 5.2(a) are true
and correct in all material respects on and as of the date of
such Loan or issuance of such Letter of Credit with the same
effect as though made on and as of the date of such Loan or
issuance of such Letter of Credit and (2) on the date of the Loan
or issuance of the Letter of Credit no Event of Default or
Default with respect to any Borrower has occurred and is
continuing or exists or will occur or exist after giving effect
to such Loan or issuance of such Letter of Credit.
(b) Compliance. Borrowers shall have delivered to the
Agent, a disbursement request and Compliance Certificate required
by Section 6.1(d) hereof (as of the date thereof).
(c) Banking Laws. On the date of each Loan and issuance of
each Letter of Credit and after giving effect thereto, each
Lender's Loan and the Agent's Letter of Credit shall be, in the
reasonable opinion of such Lender or the Agent, as applicable, in
full compliance with all banking Laws applicable to such Loan or
issuance of such Letter of Credit and neither the making of such
Loan, the issuance of such Letter of Credit, nor the use of the
proceeds thereof shall violate or be inconsistent with any
banking Law applicable to such Loan or issuance of such Letter of
Credit.
(d) Payment of Fees. On the date of each Loan and/or the
issuance of each Letter of Credit, all fees and expenses (to the
extent reimbursement for such expenses has been sought) due and
payable to the Agent and/or any Lender on or before such date
hereunder shall have been paid to the Agent and/or such Lender in
immediately available funds.
(e) Details, Proceedings and Documents. On the date of
each Loan and/or issuance of each Letter of Credit all legal
details and proceedings in connection with the transactions
contemplated by this Agreement shall be reasonably satisfactory
to the Agent and the Agent shall have received all such
counterpart originals or certified or other copies of such
documents and proceedings in connection with such transactions,
in form and substance satisfactory to the Agent, as the Agent may
from time to time request.
ARTICLE VI
AFFIRMATIVE COVENANTS
Each Borrower jointly and severally covenants with the Agent
and each Lender as follows, unless the Lenders jointly shall
otherwise consent in writing:
VI.1 Reporting and Information Requirements.
(a) Annual Reports. As soon as practicable, and in any
event within 90 days after the close of each Fiscal Year of
Sundance, each Borrower shall furnish or cause to be furnished to
the Agent and each Lender consolidated statements of income,
retained earnings and cash flows of Borrowers and their
consolidated Subsidiaries for such Fiscal Year and consolidated
balance sheets of Borrowers as of the close of such Fiscal Year,
and notes to each, all in reasonable detail, setting forth in
comparative form the corresponding figures for the preceding
Fiscal Year, with such consolidated statements and balance sheet
to be prepared in accordance with GAAP, certified without
qualification as to its scope of audit or the financial condition
of any Borrower as a going concern by Price Waterhouse LLP. Each
balance sheet furnished under this Section 6.1(a) shall be
accompanied by a schedule prepared and signed by the Chief
Financial Officer of each Borrower categorizing the assets and
liabilities set forth in each such balance sheet as either
current assets or liabilities or long-term assets or liabilities,
as the case may be, and in each case in accordance with GAAP. As
soon as practicable, and in any event within 90 days after the
close of each Fiscal Year of Sundance, Borrowers shall cause to
be furnished to the Agent and each Lender consolidated statements
of income, retained earnings and cash flows of SK for such Fiscal
Year and the consolidated balance sheet of SK as of the close of
such Fiscal Year, and notes to each, all in reasonable detail,
setting forth in comparative form the corresponding figures for
the preceding Fiscal Year, with such consolidated statements and
balance sheet to be prepared in accordance with GAAP, certified
without qualification as to its scope of audit or the financial
condition of SK as a going concern by Price-Waterhouse LLP.
(b) Semi-Annual Reports, Quarterly Reports, Monthly Reports
& Daily Reports.
(i) As soon as practicable, and in any event within 30
days after each June 30th and December 31st during the term
of the credit facility, Borrowers shall furnish or cause to
be furnished to the Agent and each Lender, in scope and
detail satisfactory to the Lenders, a separate profit and
loss statement with respect to each Project.
(ii) As soon as practicable, and in any event within
45 days after the end of each of the first three quarters of
each Fiscal Year of Sundance, Borrowers shall furnish or
cause to be furnished to the Agent and each Lender, in scope
and detail satisfactory to the Lenders, (x) unaudited
consolidated statements of income, retained earnings and
cash flows for Borrowers and their consolidated Subsidiaries
for such quarter and for the period from the beginning of
Sundance's then current Fiscal Year to the end of such
quarter, and unaudited consolidated balance sheet of
Borrowers as of the end of such quarter to be prepared in
accordance with GAAP, (y) financial and cash flow
projections for each Borrower and its Subsidiaries on a
consolidated basis for the twelve month period immediately
subsequent to each such quarter, and, (z) cash flow
projections with respect to each Project which projections
shall set forth current development costs and individual
unit hard cost budgets and (aa) the Plan.
(iii) As soon as practicable, and in any event within
30 days after the end of each calendar month, Borrowers
shall furnish or cause to be furnished to the Agent and each
Lender, in scope and detail satisfactory to the Lenders, (x)
unaudited consolidated statements of income, retained
earnings and cash flows for Borrowers and their Subsidiaries
for such month and for the period from the beginning of
Sundance's then current Fiscal Year to the end of such
month, and unaudited consolidated balance sheet of Borrowers
as of the end of such month and (y) monthly cash flow
projections for each Borrower and its Subsidiaries on a
consolidated basis for the immediately subsequent month.
(iv) At the close of business for Sundance each day on
which any Borrower is open for business, Borrowers shall
furnish or cause to be furnished to the Agent and each
Lender, in scope and detail satisfactory to the Lenders, a
report of closings on Sold Homes for such day, together with
a report of the gross proceeds and Net Proceeds from each
such sale.
Each interim statement furnished under this Section 6.1(b) shall
(x) include notes setting forth material changes in
(A) accounting policies or principles or (B) contingencies, and
(y) with respect to any balance sheet, be accompanied by a
schedule prepared and signed by the Chief Financial Officer of
each Borrower categorizing the assets and liabilities set forth
in each such balance sheet as either current assets or
liabilities or long-term assets or liabilities, as the case may
be, and in each case as determined in accordance with GAAP.
(c) Borrowing Base Certificate. By no later than the
twenty-first day of each calendar month (or on a more frequent
basis as the Agent, upon the joint direction of the Lenders, may
deem appropriate), Borrowers shall furnish to the Agent and each
Lender a certificate ("Borrowing Base Certificate") substantially
in the form attached hereto as Exhibit O hereto, signed by the
Chairman, President, Chief Financial Officer or Controller of
Sundance, with the blanks appropriately completed, setting forth
the Maximum Borrowing Base and the other information required
therein.
(d) Compliance Certificates. As soon as practicable, and
in any event within 30 days after the end of each calendar month,
Borrowers shall deliver or cause to be delivered to the Agent and
each Lender a certificate (in the form of Exhibit P attached
hereto) dated as of the end of such calendar month, signed on
behalf of each Borrower by its Chairman, President, Chief
Financial Officer or Controller (i) stating that as of the date
thereof no Event of Default or Default has occurred and is
continuing or exists, or if an Event of Default or Default has
occurred and is continuing or exists, specifying in detail the
nature and period of existence thereof and any action with
respect thereto taken or contemplated to be taken by the
Borrowers, (ii) setting forth and certifying the calculation of
each of the financial covenants set forth in Article VII (but
only with respect to the fiscal quarter most recently ended and
only if such month is the last month of a fiscal quarter), as
well as the number of Spec Units then under construction in each
Project, (iii) setting forth the Borrowers' most current MYLAR
Report, as well as the amount of Borrowers' current (A) raw land,
(B) land under development, (C) total site development, (D) work-
in-process, and (E) completed homes (whether Sold Homes or Spec
Units) and Units (whether sold or unsold), in each case on a
consolidated basis and reflected at Borrowers' cost, (iv) setting
forth a report of Borrowers' then outstanding Bonds, and (v)
stating that the signer has personally reviewed this Agreement
and that such certificate is based on an examination made by or
under the supervision of the signer sufficient to assure that
such certificate is accurate.
(e) Accountants' Certificates. Each set of year-end
audited consolidated and consolidating statements and balance
sheets delivered pursuant to Section 6.1(a) hereof shall be
accompanied by (i) a statement from such accountants in
reasonable detail showing the calculations used in determining
the financial covenants under Article VII (ii) a report from such
accountants to the effect that in connection with their audit
examination, nothing with respect to accounting matters, has come
to their attention to cause them to believe that an Event of
Default or Default had occurred or, if anything has come to their
attention to cause them to believe that an Event of Default or
Default had occurred, a description of such Event of Default or
Default which had occurred (the statement and report referred to
in clause (i) and (ii) above shall be in form and substance
previously acceptable to Lenders), (iii) a statement
("Accountants Reliance Certificate") in the form of Exhibit Q
attached hereto from such accountants addressed to Borrowers and
their Subsidiaries, with a copy addressed to the Agent and each
Lender, acknowledging, in substance, that a primary intent of
Borrowers and their Subsidiaries is for such financial statements
to benefit or influence the Agent and the Lenders and that the
Agent and the Lenders will rely upon such financial statements.
(f) Other Reports and Information. Promptly upon their
becoming available, Borrowers shall deliver or cause to be
delivered to the Agent and each Lender a copy of (i) all regular
or special reports or effective registration statements which any
Borrower, or any Subsidiary of any Borrower shall file with the
U.S. Securities and Exchange Commission (or any successor
thereto) or any securities exchange, (ii) all reports, proxy
statements, financial statements and other information
distributed by any Borrower or any Subsidiary of any Borrower to
all its stockholders, bondholders or the financial community in
general, and (iii) any written reports submitted to any Borrower
or any Subsidiary of any Borrower by independent accountants in
connection with any annual, interim or special audit of the
financial statements of any Borrower or any of its Subsidiaries,
and (iv) all annual attorneys' letters to Borrower's independent
certified public accountants.
(g) Further Information. Each Borrower will promptly
furnish or cause to be furnished to the Agent and each Lender
such other information and in such form as any of the Agent or
any Lender may reasonably request.
(h) Notice of Event of Default. Promptly upon, but in any
event within 5 Business Days after, an executive officer of any
Borrower becoming aware of any Event of Default or Default such
Borrower shall give the Agent notice thereof, together with a
written statement of its Chief Executive Officer or Chief
Financial Officer setting forth the details thereof and any
action with respect thereto taken or contemplated to be taken by
such Borrower.
(i) Notice of Material Adverse Effect. Promptly upon, but
in any event within 5 Business Days after, an executive officer
of any Borrower becoming aware thereof, such Borrower shall give
the Agent notice of any development or other information which
could have a Material Adverse Effect.
(j) Notice of Material Proceedings. Promptly upon, but in
any event within 5 Business Days after, an executive officer of
any Borrower becoming aware thereof, such Borrower shall give the
Agent notice of the commencement, existence or threat of any
proceeding by or before any Official Body or by any other Person
against or affecting such Borrower or any of its Subsidiaries
which, if adversely decided, could have a Material Adverse Effect
or could reasonably be expected to result in a Borrower or any of
its Subsidiaries incurring expenses or other liabilities in an
amount in excess of $250,000 in any one instance.
(k) Visitation. Each Borrower and its Subsidiaries shall
permit such persons as the Agent or any Lender may designate to
visit and inspect at any time any of the properties of such
Borrower, Subsidiary or Trust, to examine its books and records
and take copies and extracts therefrom and to discuss its affairs
with its officers, employees, banking and other financial
institutions, and independent accountants, as well as make
available such information and records as the Agent or any Lender
may request, with prior knowledge of one or more executive
officers at such times and as often as the Agent or a Lender may
request, including, without limitation, field audits to be
conducted by accountants selected by Lenders. Without limiting
the foregoing, each Borrower and its Subsidiaries shall permit
such Persons as the Agent may designate to visit and inspect the
Land Under Development and other construction activities of each
such Borrower and its Subsidiaries once per calendar quarter or
more often as Lenders may determine in their sole discretion
exercised in a commercially reasonable manner, each such
inspection to be at Borrowers' sole cost and expense. Each
Borrower and its Subsidiaries hereby authorizes such officers,
employees, banking and other financial institutions, and
independent accountants to discuss with the Agent or any of the
Lenders the affairs of the Borrowers and their Subsidiaries, as
well as make available such information and records as the Agent
or any Lender may request. On or before the Closing Date,
Borrowers and their Subsidiaries shall deliver a letter addressed
to such independent accountants instructing them to comply with
the provisions of this Section 6.1(k).
(l) Notice of Other Material Defaults. Promptly upon, but
in any event no later than 5 Business Days after, an executive
officer of any Borrower or any of its Subsidiaries becoming aware
of any material default by any Borrower or any of its
Subsidiaries or any Trust under any agreement or instrument to
which it or by which it or any of its properties may be bound,
such Borrower shall give the Agent notice thereof, together with
a written statement of the Chief Executive Officer or Chief
Financial Officer of such Borrower setting forth the details
thereof, if such agreement or instrument or the consequences of
such default or claim are material to the business, operations or
financial condition of the enterprise comprised of Borrowers and
their Subsidiaries taken as a whole or any Borrower or any
Subsidiary of any Borrower or any Trust.
(m) Pension Plans and Welfare Plans. Promptly upon, but in
any event within five Business Days after, an executive officer
of any Borrower becoming aware of any of the following, such
Borrower shall give the Agent notice thereof; the occurrence of a
Reportable Event with respect to any Pension Plan; the filing of
a notice of intent to terminate a Pension Plan by any Borrower,
any Subsidiary, or any ERISA Affiliate; the institution of
proceedings to terminate a Pension Plan by the PBGC or any other
Person which, if such proceedings are instituted with respect to
an ERISA Affiliate, could have a Material Adverse Effect; the
withdrawal in a "complete withdrawal" or a "partial withdrawal"
as defined in Sections 4203 and 4205, respectively, by any
Borrower, any Subsidiary of any Borrower or any ERISA Affiliate
(to the extent such withdrawal could have a Material Adverse
Effect) from any Multiemployer Plan; the failure of any Borrower,
any Subsidiary of any Borrower or any ERISA Affiliate to make a
required contribution to any Pension Plan including, but not
limited to, any failure to pay an amount sufficient to give rise
to a Lien under Section 302(f) of ERISA; the taking of any action
with respect to a Pension Plan which could result in the
requirement that any Borrower, any Subsidiary of any Borrower, or
any ERISA Affiliate furnish a bond or other security to the PBGC
or such Pension Plan; the occurrence of any event with respect to
any Pension Plan which could result in the incurrence by any
Borrower, any Subsidiary of any Borrower or any ERISA Affiliate
of any liability, fine or penalty which is material in amount;
the establishment of a new plan subject to ERISA or an amendment
to any existing plan subject to ERISA which will result in a
material increase in contributions or benefits under such plan or
the incurrence of any material increase in the liability of a
Borrower or any Subsidiary of any Borrower (or any ERISA
Affiliate to the extent there is joint and several liability with
a Borrower or any Subsidiary of any Borrower), including, but not
limited to, plans providing welfare benefits to retirees.
VI.2 Preservation of Existence and Franchises. Except to
the extent permitted under Section 7.1 herein, each Borrower and
its Subsidiaries shall maintain its corporate existence, rights
and franchises in full force and effect in its jurisdiction of
incorporation. Each Borrower and its Subsidiaries shall qualify
and remain qualified as a foreign corporation in each
jurisdiction where required by the nature of such entity's
business.
VI.3 Payment and Performance of Obligations. (a) Subject
to paragraph (b) of this Section 6.3 each Borrower and its
Subsidiaries and each Trust shall (i) perform, pay and discharge
or cause to be paid and discharged all its Indebtedness,
including, without limitation, all the Obligations, as and when
due and payable, and (ii) pay and discharge or cause to be paid
and discharged promptly all (A) Charges imposed upon it, its
income and profits, or any of its property (real, personal or
mixed), and (B) lawful claims for labor, materials, supplies and
services or otherwise before any thereof shall become in default.
(b) Each Borrower and its Subsidiaries may contest, by
proper legal actions or proceedings, the validity or amount of
any Indebtedness referred to in Section 6.3(a) (i) (other than
the Obligations) or any Charges, Liens or claims arising under
Section 6.3(a)(ii) (other than those relating to the
Obligations), provided that such Borrower gives the Agent advance
notice of its intention to contest the validity or amount of any
such Indebtedness, Charge, Lien or claim, and that at the time of
commencement of any such action or proceeding, and during the
pendency thereof (i) no Default or Event of Default arising from
the failure to pay a Charge, Indebtedness, Lien or claim shall
have occurred and be continuing (provided that no Default or
Event of Default arising solely from any such failure to pay or
discharge shall be deemed to exist if the Borrowers comply with
the terms of clauses (ii) through (vii) in this Section 6.3(b));
(ii) adequate reserves with respect thereto are maintained on the
books of such Borrower or its Subsidiary, as applicable, in
accordance with GAAP, (iii) such contest operates to suspend
collection of the contested Indebtedness, Charges or claims and
is maintained and prosecuted continuously with diligence; (iv)
none of the assets of such Borrower having an aggregate fair
market value in excess of $100,000 would be subject to forfeiture
by reason of the institution or prosecution of such contest; (v)
no Lien shall exist for such Charges or claims during such action
or proceeding; (vi) such Borrower or its Subsidiary, as the case
may be, shall promptly pay or discharge such contested
Indebtedness, Charges and all additional charges, interest,
penalties and expenses, if any, and shall deliver to the Agent
evidence acceptable to the Agent of such compliance, payment or
discharge, if such contest is terminated or discontinued
adversely to such Borrower or its Subsidiary, as the case may be;
and (vii) the Agent has not advised such Borrower or its
Subsidiary in writing that the Agent reasonably believes that
nonpayment or nondischarge thereof could have a Material Adverse
Effect. Notwithstanding clause (v) above, with respect to
mechanics' liens and/or real estate taxes, a Lien may exist so
long as Borrowers either (A) maintain with Agent (for the benefit
of Lenders) a deposit of cash or negotiable securities
satisfactory to Lenders in an amount sufficient, as reasonably
determined by Lenders, to pay and discharge or to assure
compliance with the matter under contest in the event of a final
determination thereof adverse to Borrowers, or (B) obtain title
insurance coverage over such Lien on the Policy with respect
thereto. Borrowers agree to prosecute and contest such Lien
diligently and by appropriate legal proceedings which will
prevent the enforcement of the matter under contest and will not
impair the Lien of the Security Documents or interfere with the
normal conduct of business on the subject real property. On
final disposition of such contest, any cash or securities in
Agent's possession not required to pay or discharge or assure
compliance with the matter contested shall be returned to
Borrowers without interest.
VI.4 Financial Accounting Practices. Each Borrower and its
Subsidiaries shall make and keep books, records and accounts
which, in reasonable detail, accurately and fairly reflect its
transactions and dispositions of its assets and maintain a system
of internal accounting controls sufficient to provide reasonable
assurances that (a) transactions are executed in accordance with
management's general or specific authorization, (b) transactions
are recorded as necessary (i) to permit preparation of financial
statements (other than monthly financial statements) in
conformity with GAAP and (ii) to maintain accountability for
assets, (c) access to assets is permitted only in accordance with
management's general or specific authorization and (d) the
recorded accountability for assets is compared with the existing
assets at reasonable intervals and appropriate action is taken
with respect to any differences.
VI.5 Compliance with Laws. Each Borrower and its
Subsidiaries shall comply with all applicable Laws and
requirements (including but not limited to ERISA, the Code, and
any applicable tax Law, product safety Law, occupational safety
or health Law, and Environmental Law) in all respects.
VI.6 Government Authorizations, etc. Each Borrower and its
Subsidiaries shall at all times obtain and maintain in force all
authorizations, consents, approvals, licenses, exemptions and
other actions by, and all registrations, qualifications,
designations, declarations and other filings with, any Official
Body necessary in connection with (i) the execution and delivery
of this Agreement, the Note and/or the other Loan Documents,
consummation of the transactions herein or therein contemplated,
performance of or compliance with the terms and conditions hereof
or thereof or to ensure the legality, validity and enforceability
hereof or thereof or (ii) the ownership and operation of the
properties of any Borrower, any Subsidiary of any Borrower and
any Trust and the conduct of their respective business.
VI.7 Maintenance of Properties. Each Borrower and its
Subsidiaries shall at all times maintain, preserve and protect
all of its patents, trademarks, service marks, and trade names,
and maintain or cause to be maintained in good repair, working
order and condition (ordinary wear and tear alone excepted) the
properties used or useful in its business and now or hereafter
owned, leased or otherwise possessed by it and shall make or
cause to be made all needful and proper repairs, renewals,
replacements and improvements thereto consistent with industry
practices so that the business carried on in connection therewith
may be properly and advantageously conducted at all times.
VI.8 Insurance. (a) Each Borrower, Subsidiary of any
Borrower and Trust shall, at their expense, maintain the
following insurance with good and responsible insurance companies
reasonably satisfactory to the Lenders:
(i) comprehensive all risk insurance on their respective
assets, including, without limitation, the improvements and all
personal property in any Project, including contingent liability
from operation of building laws, demolition costs and increased
cost of construction endorsements, in each case (i) in an amount
equal to 100% of the "Full Replacement Cost," which for purposes
of this Agreement shall mean actual replacement value (exclusive
of costs of excavations, foundations, underground utilities and
footings) with a waiver of depreciation, but the amount shall in
no event be less than the aggregate outstanding principal balance
of the Note; (ii) containing an agreed amount endorsement with
respect to the improvements and personal property waiving all
co-insurance provisions; (iii) providing for no deductible in
excess of $50,000; and (iv) containing an "Ordinance or Law
Coverage" or "Enforcement" endorsement if any of the improvements
or the use of any real property shall at any time constitute
legal non-conforming structures or uses. The Full Replacement
Cost shall be redetermined from time to time (but not more
frequently than once in any twelve (12) calendar months) at the
request of a Lender by an appraiser or contractor designated and
paid by Borrowers and approved by Lenders, or by an engineer or
appraiser in the regular employ of the insurer. After the first
appraisal, additional appraisals may be based on construction
cost indices customarily employed in the trade. No omission on
the part of the Agent or any Lender to request any such
ascertainment shall relieve Borrowers of any of their obligations
under this Subsection. In addition, Borrowers shall obtain (y)
flood hazard insurance if any portion of the improvements is
currently or at any time in the future located in a federally
designated "special flood hazard area," or as otherwise
reasonably required by Lenders and (z) earthquake insurance in
amounts and in form and substance satisfactory to Lenders in the
event a parcel is located in an area with a high degree of
seismic activity, provided that the insurance pursuant to clauses
(y) and (z) hereof shall be on terms consistent with the
comprehensive all risk insurance policy required under this
Subsection 6.8(a)(i) except that the deductible on such insurance
shall not be in excess five percent (5%) of the appraised value
of any such Project;
(ii) commercial general liability insurance against claims
for personal injury, bodily injury, death or property damage
occurring upon, in or about any real property owned, leased or
occupied by any Borrower, any Subsidiary of any Borrower or any
Trust, such insurance (i) to be on the so-called "occurrence"
form with a combined single limit of not less than $1,000,000;
(ii) to continue at not less than the aforesaid limit until
required to be changed by Lenders in writing by reason of changed
economic conditions making such protection inadequate; and (iii)
to cover at least the following hazards: (1) premises and
operations; (2) products and completed operations on an "if any"
basis; (3) independent contractors; (4) blanket contractual
liability for all written and oral contracts; and (5) contractual
liability covering the indemnities contained in this Agreement to
the extent the same is available;
(iii) business income and rent loss insurance (i) with
loss payable to Agent for the benefit of Lenders; (ii) covering
all risks required to be covered by the insurance provided for in
Subsection 6.8(a)(i); (iii) containing an extended period of
indemnity endorsement which provides that after the physical loss
to the improvements and personal property has been repaired, the
continued loss of income will be insured until such income either
returns to the same level it was at prior to the loss, or the
expiration of twelve (12) months from the date of the loss,
whichever first occurs, and notwithstanding that the policy may
expire prior to the end of such period; and (iv) in an amount
equal to 100% of the projected gross income from the Projects for
a period of twelve (12) months. The amount of such business
income insurance shall be determined prior to the date hereof and
at least once each year thereafter based on Borrowers' reasonable
estimate of their Consolidated Net Income. All insurance
proceeds payable to Agent pursuant to this Subsection shall be
held by Agent and shall be applied to the Obligations; provided,
however, that nothing herein contained shall be deemed to relieve
Borrowers of their obligations to pay the Obligations on the
respective dates of payment provided for in the Note except to
the extent such amounts are actually paid out of the proceeds of
such business income insurance;
(iv) at all times during which structural construction,
repairs or alterations are being made with respect to any
improvements (i) owner's contingent or protective liability
insurance covering claims not covered by or under the terms or
provisions of the above mentioned commercial general liability
insurance policy; and (ii) the insurance provided for in
Subsection 6.8(a)(i) written in a so-called builder's risk
completed value form (1) on a non-reporting basis, (2) against
all risks insured against pursuant to Subsection 6.8(a)(i), (3)
including permission to occupy such real property, and (4) with
an agreed amount endorsement waiving co-insurance provisions;
(v) workers' compensation, subject to the statutory limits
of the State of Illinois and employer's liability insurance (i)
with a limit per accident and per disease per employee, and (ii)
in an amount for disease aggregate in respect of any work or
operations of the Borrowers, in each case reasonably required by
Lenders;
(vi) comprehensive boiler and machinery insurance, if
applicable, in amounts as shall be reasonably required by Lenders
on terms consistent with the commercial general liability
insurance policy required under Subsection 6.8(a)(ii);
(vii) umbrella liability insurance in an amount not less
than $10,000,000.00 per occurrence on terms consistent with the
commercial general liability insurance policy required under
Subsection 6.8(a)(ii);
(viii) motor vehicle liability coverage for all owned and
non-owned vehicles, including rented and leased vehicles
containing minimum limits per occurrence of $3,000,000 including
any umbrella liability coverage; and
(ix) such other insurance, including, without limitation,
host liquor liability insurance, and in such amounts as Lenders
or Lenders' insurance consultant from time to time may reasonably
request against such other insurable hazards which at the time
are commonly insured against for Persons engaged in businesses
similar to Borrowers.
(b) All insurance provided for in Subsection 6.8 hereof
shall be obtained under valid and enforceable policies (the
"Insurance Policies" or in the singular, the "Insurance Policy"),
and shall be subject to the approval of Lenders as to insurance
companies, amounts, forms, deductibles, loss payees and insurers.
The Insurance Policies shall be issued by financially sound and
responsible insurance companies authorized to do business in the
states in which Borrowers, Borrowers' Subsidiaries and the Trusts
conduct business and approved by Lenders. Each insurance company
must have a rating of "A" or better for claims rating ability
assigned by Standard & Poor's Ratings Group (the "Rating Agency")
or, if the Rating Agency does not assign a rating for such
insurance company, such insurance company must have a general
policy rating of A or better and a financial class of XV or
better by A.M. Best Company, Inc. (each such insurer shall be
referred to below as a "Qualified Insurer"). The Insurance
Policies described in Subsection 6.8(a) shall designate Agent as
loss payee. Not less than thirty (30) days prior to the
expiration dates of the Insurance Policies theretofore furnished
to Lenders pursuant to this Section 6.8, certified copies of the
Insurance Policies marked "premium paid" or accompanied by
evidence satisfactory to Lenders of payment of the premiums due
thereunder (the "Insurance Premiums"), shall be delivered by
Borrowers to Lenders; provided, however, that in the case of
renewal Insurance Policies, Borrowers may furnish Lenders with
binders therefor to be followed by the original Insurance
Policies when issued.
(c) Borrowers shall not obtain (1) any umbrella or blanket
liability or casualty Insurance Policy unless, in each case, such
Insurance Policy is approved in advance in writing by Lenders and
Lenders' and/or Agent's interest is included therein as provided
in this Agreement and such Policy is issued by a Qualified
Insurer, or (ii) separate insurance concurrent in form or
contributing in the event of loss with that required in this
Section 6.8 to be furnished by, or which may be reasonably
required to be furnished by, Borrowers. In the event Borrowers
obtain separate insurance or an umbrella or a blanket Insurance
Policy, Borrowers shall notify Lenders of the same and shall
cause certified copies of each Insurance Policy to be delivered
as required in this Section 6.8. Any blanket Insurance Policy
shall (a) specifically allocate to each parcel of real property,
on an individual basis, the amount of coverage from time to time
required hereunder or (b) be written on an occurrence basis for
the coverages required hereunder with a limit per occurrence in
an amount equal to the amount of coverage required hereunder and
shall otherwise provide the same protection as would a separate
Insurance Policy insuring such parcel, on an individual basis, in
compliance with the provisions of this Section 6.8.
(d) All policies of insurance provided for or contemplated
by this Section 6.8, except for the Insurance Policy referenced
in Subsection 6.8(a)(v), shall name Agent, Lenders and Borrowers
as the insured or additional insured, as their respective
interests may appear, and in the case of property damage, boiler
and machinery, flood and earthquake insurance, shall contain a
so-called New York standard non-contributing mortgagee clause in
favor of Agent providing, that the loss thereunder shall be
payable to Agent for the benefit of Lenders.
(e) All Insurance Policies provided for in Section 6.8(a)
shall contain clauses or endorsements to the effect that:
(i) no act or negligence of any Borrower, any Subsidiary of
any Borrower, any Trust, or anyone acting for any of them, or of
any tenant under any lease or other occupant, or failure to
comply with the provisions of any Insurance Policy which might
otherwise result in a forfeiture of the insurance or any part
thereof, shall in any way affect the validity or enforceability
of the insurance insofar as Agent and Lenders are concerned;
(ii) the Insurance Policy shall not be materially changed
(other than to increase the coverage provided thereby) or
cancelled without at least 30 days' written notice to Agent,
Lenders and any other party named therein as an insured;
(iii) each Insurance Policy shall provide that the
issuers thereof shall give written notice to Agent and Lenders if
the Insurance Policy has not been renewed thirty (30) days prior
to its expiration; and
(iv) Neither Agent nor any Lender shall be liable for any
insurance premiums thereon or subject to any assessments
thereunder.
(f) Borrowers shall furnish to Lenders, on or before thirty
(30) days after the close of Sundance's Fiscal Years, a statement
certified by Borrowers or a duly authorized officer of Borrowers
of the amounts of insurance maintained in compliance herewith, of
the risks covered by such insurance and of the insurance company
or companies which carry such insurance and, if requested by
Agent or any Lender, verification of the adequacy of such
insurance by an independent insurance broker or appraiser
acceptable to Lenders.
(g) If at any time Agent and Lenders are not in receipt of
written evidence that all insurance required hereunder is in full
force and effect, Lenders shall have the right to take such
action as Lenders deems necessary to protect their interest in
the Collateral, without limitation, the obtaining of such
insurance coverage as Lenders in their sole discretion deem
appropriate, and all expenses incurred by Lenders and/or Agent in
connection with such action or in obtaining such insurance and
keeping it in effect shall be paid by Borrowers to Lenders and
Agent, as the case may be, upon demand and until paid shall be
secured by this Agreement and the other Loan Documents and shall
bear interest at the rate of interest per annum equal to the
Prime Rate plus 3.5% until paid. Lenders shall deliver notice to
Borrowers that they have taken or will take such action.
(h) In case of loss or damage by fire or other casualty to
any Project or other Collateral, or condemnation of all or any
part of any Project, insurance or condemnation proceeds, as the
case may be, shall be applied as and for a prepayment on the Note
(whether or not the same is then due or otherwise adequately
secured); provided, however, that if upon such prepayment the
Borrowers shall then have the right hereunder to obtain
additional Loans pursuant to the provisions hereof, Borrowers may
request such prepayment be readvanced to one or more of the
Borrowers. Unless otherwise directed in writing by Lenders, in
the event of damage or destruction of a Project or any other
Collateral, or condemnation of all or any portion of a Project,
Borrowers shall rebuild, repair, replace or restore such Project
or other Collateral to the extent such insurance or condemnation
proceeds are made available to do so hereunder or pursuant to the
applicable Mortgage, as the case may be.
Schedule 6.8 hereto lists all insurance currently maintained by
each Borrower, its Subsidiaries and/or any Trust, together with a
summary of the terms of such insurance.
VI.9 Agreements. Each Borrower and its Subsidiaries and
each Trust shall perform, within any required time period (after
giving effect to any applicable grace periods), all of its
obligations and enforce all of its rights under each agreement to
which it is a party, including, without limitation, collective
bargaining agreements and leases to which any such Borrower or
its Subsidiaries or a Trust is a party. Each Borrower and its
Subsidiaries and each Trust shall not terminate or modify in any
manner adverse to any such Borrower or its Subsidiaries or any
Trust any provision of any agreement to which it is a party which
termination or modification could have a Material Adverse Effect.
VI.10 Banking Relationship. Each Borrower and its
Subsidiaries and each Trust shall maintain all of its deposit,
investment and disbursement accounts only with the Lenders.
Borrowers agree to use their best efforts to at all times
maintain an equal amount of deposits with each Lender.
VI.11 Date Down Endorsements. Within ten (10) days of
the end of each calendar quarter, Borrowers shall, at their sole
cost and expense, cause the Title Insurer to issue to Agent a
date down endorsement with respect to each Policy previously
issued to Agent by the Title Insurer with respect to each
Project, which date down endorsement will establish that the
insurance in favor of Agent under the original Policy remains
effective on the same terms and conditions as of the end of such
calendar quarter and that there are no exceptions to title other
than Permitted Exceptions.
VI.12 ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇. At all times until his death
or permanent disability, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ shall serve as the
Chairman and Chief Executive Officer of Sundance, devoting
substantially all of his business time and attention to the
Borrowers; provided, however, that, in the event of ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇'▇ death or permanent disability, Sundance shall, within
sixty (60) days from the date of such occurrence, employ and
elect another person as Chairman and Chief Executive Officer of
Sundance, which person must be acceptable to the Lenders in their
sole discretion.
VI.13 Olympia Development Company. Sundance shall cause
ODC to remain inactive and to maintain assets of not more than
$10,000.00
VI.14 Ticor. Each Borrower and its Subsidiaries shall
close the sale of any home, condominium, townhome or Unit owned
by such Borrower and/or any of its Subsidiaries and/or any Trust
only through the Title Insurer acting as disbursing agent or
escrow agent in connection with such sale in accordance with the
terms of the Disbursement Agreement.
VI.15 Kaco. Borrowers shall cause SK to deliver to
Agent (together with any Standard Notice requesting the
disbursement of Loan and/or the issuance of a Letter of Credit)
and to the Title Insurer (prior to the closing of a sale of a
Sold Home located on the Kaco Real Property) sworn owner's and
contractor's statements relating to the development of such
Project.
VI.16 Appraisals. Borrowers, at their sole cost and
expense, shall provide Agent and Lenders (a) with Appraisals on
each parcel of real property constituting Collateral when Agent
or the Lenders reasonably determine that a material financial
change has occurred with respect to the Borrowers and/or (b) with
an Appraisal on a parcel of real property when Agent or the
Lenders reasonably determine that a material financial change has
occurred with respect to a particular parcel of real property.
VI.17 Condominiums. As to each Approved Loft Project, the
following covenants shall apply:
(a) The property report, if any, required by the City
Ordinance ("Property Report") for each such Project subject
to conversion has been or will be prepared in accordance
with the requirements of the City Ordinance and all sales
and marketing activity has been and will be conducted in
accordance with the provisions of the Condominium Act and
City Ordinance.
(b) No Unit shall be offered for sale unless and until
a Property Report, if applicable, together with all exhibits
thereto has been delivered and reviewed by Lenders. Lenders
and their counsel shall have the right to approve the form
of Unit sales contract, Condominium Declaration, terms of
sale and sales prices for the Units, none of which, once
approved, shall be modified without Lenders' prior written
consent.
(c) Borrowers shall comply in all respects with the
Condominium Act and City Ordinance in connection with the
marketing and sales of Units and each Conversion.
(d) All ▇▇▇▇▇▇▇ money deposits received from
purchasers of Units shall be deposited in escrow with
Lenders.
(e) Upon a Conversion, the Borrowers shall cause the
condominium association created thereby to be operated in
accordance with the provisions of the Condominium Act and
shall cause the board of managers to administer such parcel
in accordance with the requirements of the Condominium Act.
(f) Borrowers shall not have the right to convert to
condominium any real property until a minimum of twenty-five
(25%) of the Units in such Conversion property constitute
Sold Homes, and the sale of all such Units are closed at one
time pursuant to a mass closing procedure (which may occur
over the course of thirty (30) consecutive days)
satisfactory to Lenders.
(g) Borrowers will comply with the provisions of the
Condominium Act and the Condominium Declaration as to the
payment of maintenance fees and assessments due to any
applicable condominium association.
(h) Borrowers will not vote to withdraw all or any
portion of the Project from the provisions of the
Condominium Act, without the prior written approval of
Lenders.
(i) Borrowers will not vote to distribute any
insurance proceeds subject to the administration by the
association to the Unit owners thereof, but will distribute
such proceeds in the manner provided herein.
VI.18 Supplemental Disclosure. From time to time as may be
necessary (in the event that such information is not otherwise
delivered by any Borrower or its Subsidiaries to the Lender
pursuant to this Agreement), so long as there are Obligations
outstanding, each Borrower and/or its Subsidiaries will, as
promptly as is reasonable under the circumstances after any
executive officer of a Borrower has knowledge with respect
thereto, and at least quarterly, supplement or amend and deliver
to the Agent and/or the Lenders, as applicable, each Schedule or
representation herein with respect to any matter hereafter
arising which, if existing or occurring at the date of this
Agreement, would have been required to be set forth or described
in such Schedule or representation as an exception to such
representation or which is necessary to correct any information
in such Schedule or representation which has been rendered
inaccurate thereby.
ARTICLE VII
NEGATIVE COVENANTS
Each Borrower jointly and severally covenants to the Agent
and each Lender as follows, unless the Lenders jointly shall
otherwise consent in writing:
VII.1 Mergers, Etc. No Borrower nor any of its
Subsidiaries shall directly or indirectly, by operation of law or
otherwise, merge with, consolidate with, acquire all or
substantially all of the assets or Capital Stock of, or otherwise
combine with, any Person nor create or acquire any new
Subsidiary; provided, however, that an Operating Subsidiary may
merge with or into or consolidate with another Operating
Subsidiary, subject to receipt by the Agent of 30 days' prior
written notice of such combination and further provided that a
merger or consolidation between Operating Subsidiaries may occur
only if the assets of such successor corporation are free and
clear of all Liens other than Permitted Encumbrances. No
Borrower nor any Subsidiary of any Borrower shall be a co-
beneficiary of a Trust with any other Person nor shall any
Borrower or any Subsidiary of any Borrower permit any other
Person to possess the power of direction with respect to a Trust
(other than pursuant to the Security Documents).
VII.2 Investments; Loans and Advances. No Borrower nor any
of its Subsidiaries shall make, retain or have any investment
(other than Permitted Investments) in, or make or accrue loans or
advances to any Person, through the direct or indirect holding of
securities or otherwise; provided, however, that Sundance shall
be permitted hereunder to make one or more investments in any of
the Operating Subsidiaries in the form of a cash contribution to
the capital of such Operating Subsidiary.
VII.3 Indebtedness. (a) Except as otherwise expressly
permitted by this Section 7.3, no Borrower nor any of its
Subsidiaries nor any Trust shall create, incur, assume or permit
to exist any Indebtedness, whether recourse or nonrecourse, and
whether superior or junior, resulting from borrowings, loans,
advances or the granting of credit, whether secured or unsecured,
except (i) the Loans, Letters of Credit and other Obligations,
(ii) trade credit incurred to acquire goods, supplies, services,
including without limitation, obligations incurred to employees
for compensation for services rendered in the ordinary course of
business, or merchandise on terms similar to those granted to
purchasers in similar lines of business as such Borrower or
Subsidiary of a Borrower and incurred in the ordinary and normal
course of business, (iii) lease payment obligations under leases
which such Borrower or Subsidiary of a Borrower is not prohibited
from entering into pursuant to the terms hereof, (iv) all
deferred taxes, (v) the Shareholder Notes, (vi) all unfunded
pension and other employee benefit plan obligations and
liabilities but only to the extent they are permitted to remain
unfunded under applicable law and only to the extent, in the case
of the "amount of unfunded benefit liabilities" (within the
meaning of Section 4001(a)(18) of ERISA) under any ERISA Plan
(other than any Multiemployer Plan), such amount of unfunded
benefit liabilities does not exceed $100,000 as of any date,
(vii) the Bonds; (viii) the Non-Recourse Indebtedness consented
to by each Lender and Agent; (ix) the Indebtedness of SAR as
general partner of SK for the recourse obligations of SK and (x)
Subordinated Debt; provided, however, that all Subordinated Debt
shall be unsecured unless the Lenders consent to the grant of any
security for any such Subordinated Debt on terms and conditions
designated by the Lenders, which terms and conditions and consent
shall be in the Lenders sole and absolute discretion.
VII.4 Capital Structure. (a) No Operating Subsidiary shall
issue or agree to issue any of its respective authorized but not
outstanding shares of Capital Stock (including treasury shares).
(b) Sundance shall not issue or have outstanding any
Disqualified Capital Stock or any Preferred Stock.
VII.5 Transactions with Affiliates. No Borrower shall or
permit any of its Subsidiaries to enter into or be a party to any
transaction with any Affiliate of such Borrower, except as
(a) not prohibited by this Agreement and (b) otherwise in the
ordinary course of and pursuant to the reasonable requirements of
such Borrower's or Borrower's Subsidiary's business, provided
such transaction is upon fair and reasonable terms that are fully
disclosed to the Agent and are no less favorable to such Borrower
or Subsidiary of a Borrower than would be obtained in a
comparable arm's length transaction with a Person not an
Affiliate of such Borrower or Subsidiary of a Borrower; provided
further that none of the Agent and the Lenders shall be deemed an
Affiliate of any Borrower or any Subsidiary of any Borrower for
purposes of this covenant.
VII.6 Guaranteed Indebtedness. No Borrower nor any of its
Subsidiaries nor any land trust in which any Borrower or any
Subsidiary of any Borrower owns a beneficial interest shall incur
or permit to exist any Guaranteed Indebtedness, except as
disclosed in Schedule 4.26.
VII.7 Liens. No Borrower nor any of its Subsidiaries nor
any Trust shall create, permit or suffer to exist, and each
Borrower, its Subsidiaries and such Trusts will defend its
properties and assets against and take such other action as is
necessary to remove, any Lien on any of its properties or assets,
except Permitted Encumbrances.
VII.8 Cancellation of Indebtedness. No Borrower nor any of
its Subsidiaries shall cancel or release, wholly or partly, any
claim or debt owing to it, except for reasonable consideration or
in the ordinary course of business and except that Sundance may
cancel or release any claim or debt owing to it from an Operating
Subsidiary, provided that no adverse effect on such Operating
Subsidiary results therefrom.
VII.9 Events of Default. No Borrower nor any of its
Subsidiaries nor any Trust shall take any action, which act or
omission would constitute a material default or an event of
default pursuant to, or noncompliance with any other contract,
lease, mortgage, deed of trust or instrument to which it is a
party or by which it or any of its property, is bound, or any
document creating a Lien.
VII.10 ERISA. No Borrower nor any Subsidiary of any
Borrower shall directly or indirectly, permit, any condition to
exist in connection with any Pension Plan which constitutes
grounds for the PBGC to institute proceedings to have such
Pension Plan terminated or a trustee appointed to administer such
Pension Plan; permit, and not permit any ERISA Affiliate to
permit, any failure to make a required contribution if such
failure is sufficient to give rise to a Lien under Section 302(f)
of ERISA; and engage in, or permit to exist or occur, or permit
any of its ERISA Affiliates to permit to exist or occur, any
other condition, event or transaction with respect to any Pension
Plan which would result in the incurrence by any Borrower or any
of its Subsidiaries of any liability, fine or penalty which is
material in amount.
VII.11 Dispositions of Assets. Other than in the ordinary
course of business or with respect to the public dedication or
donation of real property required by Law in connection with the
zoning, annexation or development of any Project of such Borrower
or Subsidiary of such Borrower, no Borrower nor any of its
Subsidiaries nor any Trust shall sell, convey, assign, lease,
abandon or otherwise transfer or dispose of, voluntarily or
involuntarily any of its assets (other than obsolete equipment no
longer used or useful in the conduct of such Borrower's or
Subsidiary's business) which assets of all such Borrowers,
Subsidiaries and Trusts, individually or in the aggregate had an
original cost of $100,000 or more.
VII.12 Continuation of or Change in Business. Each
Borrower and each of its Subsidiaries shall continue to engage in
the business of developing, constructing and selling residential,
single-family for-sale housing (whether attached or detached) and
residential loft condominiums as conducted as of the date hereof
(provided that, except with respect to Loft Projects, no Borrower
nor any Subsidiary of any Borrower nor any Trust shall be
involved in the development, construction or sale of any building
exceeding three stories) and only in those counties of Illinois,
Indiana and Wisconsin set forth in Schedule 7.12 hereto and shall
not directly or indirectly engage in any other business which
would substantially alter the nature of its business or its
assets as conducted on the date hereof; provided, however, that
Heartland may engage in the mortgage brokerage business and no
other business. Notwithstanding the foregoing, a Borrower, a
Subsidiary of a Borrower and/or a Trust may be involved in
incidental commercial real estate development subject to the
limitations contained in the definition of "Project" herein.
VII.13 Sundance Consolidated Net Worth. At all times
Sundance's Consolidated Net Worth shall not be less than the sum
of Thirty Three Million Eight Hundred Ninety Five Thousand and
no/100 Dollars ($33,895,000.00) plus fifty percent of the
Consolidated Net Income for each fiscal quarter ending after the
date hereof, provided that in calculating Sundance's Consolidated
Net Worth, the Borrowers' Liabilities shall exclude (i) the
Indebtedness of SAR as general partner of SK for the recourse
obligations of SK, (ii) the then outstanding Indebtedness under
the Shareholder Notes and (iii) Subordinated Debt incurred in
accordance with the terms hereof.
VII.14 Sundance's Liabilities to Consolidated Net Worth.
At all times, Sundance's ratio of its consolidated Liabilities to
Consolidated Net Worth shall not be in excess of 1.83 to 1.0,
provided that in calculating such ratio during either of the
foregoing periods, the Borrowers' Liabilities shall exclude (i)
the Indebtedness of SAR as general partner of SK for the recourse
obligations of SK, (ii) the then outstanding Indebtedness under
the Shareholder Notes, and (iii) Subordinated Debt incurred in
accordance with the terms hereof.
VII.15 Sundance's Liabilities, Bonds and Letters of
Credit to Consolidated Net Worth. At all times, the ratio of (a)
the sum of (i) Sundance's Liabilities (excluding the Indebtedness
of SAR as general partner of SK for the recourse obligations of
SK), (ii) the stated amount of all Letters of Credit then
outstanding (less the amount drawn thereunder, if any), and (iii)
the stated amount of Bonds then outstanding to (b) Consolidated
Net Worth shall not be greater than 2.75 to 1.0.
VII.16 Sundance Consolidated Inventory. At all times,
the ratio of Sundance's consolidated Inventory to Consolidated
Net Worth shall not exceed the ratio of 2.50 to 1.0.
VII.17 Speculative Construction. At all times, Borrowers
shall not commence construction of Spec Homes in an amount
exceeding (i) ten percent (10%) of all attached single-family
homes under construction and (ii) ten percent (10%) of all
detached single-family homes under construction.
VII.18 Net Working Capital. At all times, Sundance's
consolidated Current Assets minus Sundance's consolidated Current
Liabilities shall not be less than $10,000,000.00
VII.19 Consolidated Net Income. For each Fiscal Year,
Sundance's Consolidated Net Income shall not be less than $1.00.
VII.20 Use of Proceeds. Notwithstanding any other
provision of this Agreement (including, without limitation, any
reference to the incurrence or existence of certain Indebtedness
being permitted hereunder), no Borrower shall apply or otherwise
use the proceeds of the Loans or Letters of Credit hereunder
other than as set forth in Section 4.20 hereof.
VII.21 Location of Principal Place of Business and Certain
Records. No Borrower nor any Subsidiary of a Borrower shall
change the location of its principle place of business or remove
its books and records from the locations set forth in Schedule
4.2, or keep any of such books and records at any other office(s)
or location(s) unless (i) such Borrower or Subsidiary gives the
Agent written notice thereof and of the new location of said
books and records at least thirty (30) days prior thereto, and
(ii) the other office or location is within the continental
United States of America.
VII.22 Name Change. No Borrower nor any Subsidiary of any
Borrower will change its name, identity or corporate structure in
any manner unless any such Borrower or Subsidiary has given the
Agent at least thirty (30) days' prior written notice thereof and
has taken all action (or made arrangements to take such action
substantially simultaneously with such change if it is impossible
to take such action in advance) necessary or reasonably requested
by the Agent.
VII.23 Restrictions on Future Agreement. Each Borrower
agrees that until the Obligations have been fully satisfied, no
Borrower shall, nor shall permit any of its Subsidiaries or any
Trust to, without the Agent's prior written consent upon the
joint direction of the Lenders, enter into any agreement which is
inconsistent with any such Borrower's, Subsidiary's or Trust's
Obligations under this Agreement or any other Loan Document, and
each Borrower further agrees that it will not take any action, or
permit any action to be taken by others subject to its control,
including licensees, or fail to take any action, which would
affect the validity or enforcement of the rights transferred to a
Lender or the Agent under this Agreement.
VII.24 Dividends and Related Distributions. No
Distributions shall be made by Sundance to either the record or
beneficial owners of the Capital Stock of Sundance; provided,
however, that, if no Default or Event of Default shall then exist
or be created thereby, Sundance may make Distributions to the
record owners of its Capital Stock in any Fiscal Year, provided
that the aggregate amount of such Distributions shall not exceed
fifty percent of Sundance's Consolidated Net Income for the
immediately preceding Fiscal Year.
VII.25 Fiscal Year. No Borrower nor any of its
Subsidiaries shall change its Fiscal Year.
VII.26 Models. No Borrower nor any of its Subsidiaries
shall construct Models in any development in excess of four
Models of each specific product type offered in such development.
Schedule 7.26 sets forth all Models of any Borrower existing as
of the date hereof.
VII.27 Acquisition of New Real Property. The following
items shall be delivered by Borrowers to Agent and Lenders in
respect to the acquisition by any Borrower or any Subsidiary or
any Trust of any new real property which does not secure Non-
Recourse Indebtedness ("New Property"); provided, however, that
with respect to any real property which does secure Non-Recourse
Indebtedness, the Kaco Real Property, and/or a Loft Project which
does not constitute an Approved Loft Project, as the case may be,
the Borrowers shall comply with all of the following provisions
other than subparagraphs (c), (d), (e), (g), (h) and (i),
provided, that at any time that any such real property ceases to
secure Non-Recourse Indebtedness, a portion of the Kaco Real
Property ceases to be encumbered by the mortgage in favor of
Kaco, Inc., and/or as a condition to a Loft Project becoming an
Approved Loft Project, as the case may be, Borrowers shall
promptly comply with subparagraphs (c), (d), (e), (g), (h) and
(i) below:
(a) At the time a purchase contract is executed for the
acquisition of a parcel of New Property, Borrowers shall furnish
a true, complete and correct copy thereof to Lenders, and
thereafter, copies of any amendments thereto.
(b) Evidence reasonably satisfactory to Lenders that
Borrowers are, and will remain after the consummation of the
transaction, Solvent.
(c) An original executed counterpart of a new Mortgage and
other Security Documents (or, at Lenders' election, an amendment
to an existing Mortgage and Security Documents) encumbering the
New Property, including without limitation, financing statements
or other documents necessary to grant or perfect Agent's first
priority security interest in the fixtures and personalty located
thereon and the rents derived therefrom.
(d) A Policy satisfactory to Lenders insuring the lien of
the new or amended Mortgage on the New Property, in form and
substance satisfactory to Agent, insuring that the new or amended
Mortgage is a valid and enforceable first lien on the good and
marketable fee simple title of Borrowers to the New Property.
(e) An Environmental Report dated within 365 days prior to
delivery which confirms the absence of any Hazardous Materials
on, under or affecting the New Property therein described and
shall otherwise be satisfactory to Lenders.
(f) Payment of all costs and expenses (including expenses
associated with documentation, recording, title and consultant
costs) incurred by Agent and Lenders in conducting their due
diligence, financing fees, commitment fees, appraisal fees,
accounting fees, title insurance premiums, recording charges and
taxes and including reasonable counsel fees and disbursements, in
connection with the New Property and its inclusion as Collateral.
(g) A Survey of the New Property.
(h) Payment of all recording charges, filing fees, taxes,
or other expenses, including but not limited to intangibles taxes
and documentary stamp taxes in connection with the recording of
the new Mortgage and the Lien necessary to grant and perfect in
Agent a first priority, lien on and security interest in the New
Property.
(i) Original certificates and copies of policies of
insurance required by Agent under the terms of this Agreement
adding such New Property.
(j) Borrowers have otherwise complied with all conditions
precedent to an advance under Article V of this Agreement.
(k) UCC Searches with respect to the New Property and
Borrowers.
(l) Such other certificates, opinions, documents and
instruments relating to the acquisition reasonably requested by
Agent, and all corporate and other proceedings and all other
documents (including, without limitation, all documents referred
to herein and not appearing as exhibits hereto) and all legal
matters in connection with the substitution shall be satisfactory
in form and substance to Lenders.
(m) A Compliance Certificate.
ARTICLE VIII
DEFAULTS
VIII.1 Events of Default. An Event of Default shall mean
the occurrence or existence of one or more of the following
events or conditions (whatever the reason for such Event of
Default and whether voluntary, involuntary or effected by
operation of Law):
(a) Borrowers shall fail to pay (i) any interest or
principal when due (whether resulting from maturity, declaration
or otherwise), (ii) any Obligation payable on demand when
demanded, and/or (iii) any other Obligation within five days of
the date when due; or
(b) Any representation or warranty made by a Borrower under
this Agreement or any Loan Document or any statement made by a
Borrower or any Subsidiary of a Borrower or any Trust in any
financial statement, certificate, report, exhibit or document
furnished to the Agent or a Lender pursuant to this Agreement or
any other Loan Document shall prove to have been false or
misleading in any material respect as of the time when made; or
(c) Any Borrower shall default in the performance or
observance of any covenant contained in Section 2.19, 4.28,
6.1(g), 6.8, 6.13, 6.14, 6.15 or Article VII hereof; or
(d) Any Borrower shall default in the performance or
observance of any other covenant, condition or provision hereof
or of any other Loan Document and such default shall not have
been remedied for a period of 30 days after the earlier of a
Borrower's knowledge or notice thereof to such Borrower from the
Agent upon the joint direction of the Lenders; provided, however,
that if such default by its nature cannot reasonably be cured
within such 30 days, then no Event of Default shall exist
hereunder if such Borrower diligently commences and continues to
pursue such remedy, provided that (x) such default is capable of
being cured, (y) such default could not materially adversely
affect repayment of the Obligations, and (z) in no event shall
the period within which such Borrower may attempt to remedy such
default extend beyond 90 days from the date of the notice
relating thereto, or such Borrower's knowledge thereof; or
(e) One or more final judgments for the payment of money
shall have been entered against a Borrower, which judgment or
judgments exceed $250,000.00 in the aggregate (exclusive of those
judgments for which such Borrower's insurer has acknowledged
coverage), and such judgment or judgments shall have remained
undischarged and unstayed for a period of 60 consecutive days; or
(f) A writ or warrant of attachment, garnishment,
execution, distraint or similar process shall have been issued
against any of the assets of any Borrower which shall have
remained undischarged and unstayed for a period of sixty
consecutive days; or
(g) Any authorization, consent, approval, license,
exemption, registration, qualification, designation, declaration,
filing or other action or undertaking now or hereafter made by or
with any Official Body in connection with this Agreement, a Note
or any other Loan Document or any such action or undertaking now
or hereafter necessary to make this Agreement, a Note or any
other Loan Document legal, valid, enforceable and admissible in
evidence is not obtained or shall have ceased to be in full force
and effect or shall have been modified or amended or shall have
been held to be illegal or invalid; or
(h) A proceeding shall have been instituted in respect of a
Borrower or any of its Subsidiaries or any Trust:
(i) seeking to have an order for relief entered in
respect of such Borrower or Subsidiary or Trust, or seeking
a declaration or entailing a finding that such Borrower or
Subsidiary or Trust is insolvent or a similar declaration or
finding, or seeking dissolution, winding-up, charter
revocation or forfeiture, liquidation, reorganization,
arrangement, adjustment, composition or other similar relief
with respect to such Borrower or Subsidiary or Trust, its
assets or its debts under any law relating to bankruptcy,
insolvency, relief of debtors or protection of creditors,
termination of legal entities or any other similar law now
or hereafter in effect, or
(ii) seeking appointment of a receiver, trustee,
custodian, liquidator, assignee, sequestrator or other
similar official for such Borrower or Subsidiary or Trust or
for all or any substantial part of its property,
and such proceeding shall result in the entry, making or grant of
any such order for relief, declaration, finding, relief or
appointment, or such proceeding shall remain undismissed and
unstayed for a period of sixty consecutive days; or
(i) Any Borrower or any of its Subsidiaries or any Trust
shall become insolvent or admit in writing its inability to pay
its debts as they mature, or otherwise become generally unable to
pay its debts as they become due, or voluntarily suspend
transaction of business or cease to conduct its business as now
conducted (whether voluntarily or involuntarily), or make a
general assignment for the benefit of creditors, or institute a
proceeding described in Section 8.1(h)(i) hereof or consent to
any such order for relief, declaration, finding or relief
described therein, or institute a proceeding described in
Section 8.1(h)(ii) hereof or consent to any such appointment or
to the taking of possession by any such official of all or any
substantial part of its property whether or not any such
proceeding is instituted, or dissolve, windup or liquidate itself
or any substantial part of its property, or take any action in
furtherance of any of the foregoing; or
(j) Any Permit material to the business, operations or
financial condition of any Borrower any of its Subsidiaries,
shall be terminated, suspended or revoked; or
(k) There shall occur any uninsured damage to, or loss,
theft, or destruction of, any of the properties or assets of any
Borrower, any Subsidiary of any Borrower, or any Trust in excess
of $250,000; or
(l) A notice of lien or assessment is filed or recorded
with respect to all or any of any Borrower's, any Subsidiary of
any Borrower's or any Trust's assets by the United States, or any
department, agency or instrumentality thereof, or by any state,
county, municipal or other governmental agency, including,
without limitation, the PBGC, or if any taxes or debts owing at
any times hereafter to any one of these becomes a lien or
encumbrance upon any such Person's assets and the same is not
released within thirty (30) days after the same becomes a lien or
encumbrance; provided that such Person shall have the right to
contest by appropriate proceedings any such lien, levy or
assessment if such Person provides the Agent and the Lenders with
a bond or indemnity satisfactory to the Lenders assuring the
payment of such lien, levy or assessment; or
(m) Any of the following events if such event could have a
Material Adverse Effect: (i) the existence of a Reportable
Event, (ii) the withdrawal of a Borrower, any of its
Subsidiaries, or any ERISA Affiliate from a Pension Plan during a
plan year in which it was a "substantial employer" as defined in
Section 4001(a)(2) of ERISA, (iii) the occurrence of an
obligation to provide affected parties with a written notice of
intent to terminate a Pension Plan in a distress termination
under Section 4041 of ERISA, (iv) the institution by PBGC of
proceedings to terminate any Pension Plan, (v) any event or
condition which would require the appointment of a trustee to
administer a Pension Plan, (vi) the withdrawal of a Borrower, any
of its Subsidiaries, or any ERISA Affiliate from a Multi-employer
Plan, and (vii) any event that would give rise to a Lien under
Section 302(f) of ERISA; or
(n) A Change of Control occurs; or
(o) Agent is not reimbursed by Borrowers for a draft drawn
under a Letter of Credit issued hereunder on the date such draft
is paid by the Agent; or
(p) Any Borrower, any Subsidiary of any Borrower or any
Trust (i) shall default in any payment of principal of or
interest on any one or more obligations for Indebtedness of
$100,000.00 or more beyond any period of grace with respect
thereto or, if such obligation or obligations is or are payable
or repayable on demand, shall fail to pay or repay such
obligation or obligations when demanded or (ii) shall breach or
default in the performance or observance of any covenant, term or
condition in any agreement or instrument (other than the Loan
Documents) by which such obligation or obligations for
Indebtedness of $100,000.00 or more is or are created, secured or
evidenced if the effect of such default or breach (x) is to
cause, or to permit the holder or holders of such obligation or
obligations (or a trustee or agent on behalf of such holder or
holders) to cause, all or part of such obligation or obligations
to become due before its or their otherwise stated maturity or
(y) could have a Material Adverse Effect; or
(q) The Loan Documents after delivery thereof shall for any
reason (other than pursuant to the terms thereof) cease to create
a valid and perfected first priority lien on the Collateral
(subject to Permitted Encumbrances) purported to be covered
hereby or thereby.
VIII.2 Consequences of a Default. (a) Upon the occurrence
and continuation of an Event of Default specified in subsection
(h) or (i) of Section 8.1 herein, all of the Obligations shall,
without demand, notice, or legal process of any kind, be
declared, and immediately shall become, due and payable, and the
Aggregate Revolving Commitment shall terminate immediately.
(b) If any Event of Default specified in any of
subsections (a) through (g) and (j) through (q) hereof shall
occur and be continuing, the Agent upon the joint direction
of the Lenders shall:
(i) by notice to the Borrowers, declare the
Revolving Credit Commitment of each Lender terminated,
and any Obligations payable hereunder or under any
other Loan Document shall become due and payable
without presentment, demand, protest or further notice
of any kind, all of which are hereby expressly waived,
and an action therefor shall immediately accrue; and/or
(ii) by notice to the Borrowers, declare the
unpaid principal amount of any Note, interest accrued
thereon and all other Obligations owing by any of the
Borrowers hereunder or under any other Loan Document to
be immediately due and payable without presentment,
demand, protest or further notice of any kind, all of
which are hereby expressly waived, and an action
therefor shall immediately accrue.
VIII.3 Letters of Credit. When any Event of Default,
other than an Event of Default described in subsections (h) and
(i) of Section 8.1 hereof has occurred and is continuing,
Borrowers shall upon demand of the Agent upon the joint direction
of the Lenders, when any Event of Default described in
subsections (h) or (i) of Section 8.1 has occurred, or Borrowers
advise the Agent of their termination of the Aggregate Revolving
Credit Commitment in accordance with Section 2.18 hereof, or upon
the Maturity Date if a Letter of Credit is then outstanding,
Borrowers shall, without notice or demand from the Agent,
immediately pay to the Agent an amount equal to the full undrawn
stated amount of each Letter of Credit, the Borrowers hereby
agreeing to make each such payment immediately and acknowledging
and agreeing that the Agent and the Lenders would not have an
adequate remedy at law for failure of the Borrowers to honor any
such demand and that the Agent and/or any Lender shall have the
right to require the Borrowers to specifically perform such
undertaking whether or not any draws have been made under the
Letters of Credit. In the event that (i) any such Letter of
Credit terminates without any draws having been made thereunder,
and (ii) there are no other outstanding Letters of Credit (which
are not fully cash collateralized) or outstanding and unpaid
Reimbursement Obligations, and (iii) there are no outstanding
Loans or other amounts payable hereunder or under any of the
other Loan Documents then, in such event, the Agent agrees to
return any sums paid by the Borrowers under this Section 8.3 in
respect of such expired or terminated Letter of Credit.
VIII.4 Payments Set Aside. To the extent that Borrowers
make a payment or payments to the Agent or a Lender or the Agent
or a Lender exercises its rights of set-off, and such payment or
payments or the proceeds of such enforcement or set-off or any
part thereof are subsequently invalidated, declared to be
fraudulent or preferential, set-aside and/or required to be
repaid to a trustee, receiver or any other party under any
bankruptcy law, state or federal law, common law or equitable
cause, then to the extent of such recovery, the obligation or
part thereof originally intended to be satisfied shall be revived
and continued in full force and effect as if such payment had not
been made or such enforcement or set-off had not occurred.
VIII.5 Waivers by Borrowers. Except as otherwise provided
for in this Agreement and applicable law, each Borrower waives
(i) presentment, demand and protest and notice of presentment,
dishonor, notice of intent to accelerate, notice of acceleration,
protest, default, nonpayment, maturity, release, compromise,
settlement, extension or renewal of any or all commercial paper,
accounts, contract rights, documents, instruments, chattel paper
and guaranties at any time held by the Agent on which any
Borrower may in any way be liable and hereby ratifies and
confirms whatever the Agent may do in this regard. Each Borrower
acknowledges that it has been advised by counsel of its choice
with respect to this Agreement, the other Loan Documents and the
transactions evidenced by this Agreement and the other Loan
Documents.
VIII.6 Set-Off. If the unpaid principal amount of any
Note, interest accrued thereon or any other amount owing by a
Borrower hereunder or under any Loan Document or under any Note
shall have become due and payable (by acceleration or otherwise),
each Lender shall have the right, in addition to all other rights
and remedies available to it, without notice to such Borrower, to
set-off against and to appropriate and apply to such due and
payable amounts any debt owing to, and any other funds held in
any manner for the account of, any Borrower by such Lender
including, without limitation, all funds in all deposit accounts
(whether time or demand, general or special, provisionally
credited or finally credited, or otherwise) now or hereafter
maintained by any Borrower with a Lender. Such right shall exist
whether or not such Lender shall have given notice or made any
demand hereunder or under any Note or under any other Loan
Document, whether or not such debt owing to or funds held for the
account of such Borrower is or are matured or unmatured, and
regardless of any right or remedy available to such Lender. The
Borrowers hereby consent to and confirm the foregoing
arrangements and confirm the Lenders' rights of banker's lien and
set-off. Nothing in this Agreement shall be deemed a waiver or
prohibition of or restriction on each Lender's rights of banker's
lien or set-off.
VIII.7 Sharing of Set-Offs. Each Lender agrees that if
it shall, by exercising any right of set-off or counterclaim or
otherwise, receive payment of a proportion of the aggregate
amount of principal and interest due with respect to a Note or
any other Loan Document which is greater than its Pro Rata share,
the Lender receiving such proportionately greater payment shall
pay to such other Lender its Pro Rata share of the amount
recovered by exercising such right, and such other adjustments
shall be made, as may be required so that all such payments of
principal and interest with respect to a Note or any other Loan
Document shall be shared by the Lenders Pro Rata; provided,
however, that nothing in this Section 8.7 shall impair the right
of any Lender to exercise any right or set-off or counterclaim it
may have and to apply the amount subject to such exercise to the
payment of indebtedness of the Borrowers other than their
indebtedness under a Note or any other Loan Document. The
Borrowers agree, to the fullest extent they may effectively do so
under applicable Law, that any holder of a participation in a
Note, whether or not required pursuant to the foregoing
arrangements, may exercise rights of set-off or counterclaim and
other rights with respect to such participation as fully as if
such holder of a participation were a direct creditor of any of
such Borrowers in the amount of such participation.
VIII.8 Cumulative Relief. The rights and remedies provided
under this Agreement are cumulative and may be exercised singly
or concurrently, and are not exclusive of any rights and remedies
provided by law or equity.
VIII.9 No First Resort Obligation. In order to realize
hereon and to exercise the rights granted Agent and each Lender
hereunder and under applicable law, there shall be no obligation
on the part of the Agent and/or a Lender at any time to first
resort for payment to any security property, liens or any other
rights or remedies whatsoever, and the Agent and each Lender
shall have the right to enforce this Agreement irrespective of
whether other proceedings or steps are pending seeking resort to
or realization upon or from any of the foregoing.
ARTICLE IX
THE ADMINISTRATIVE AGENT
IX.1 Appointment. For the convenience of the parties
hereto, LaSalle is appointed Agent hereunder and under each of
the other Loan Documents for the Lenders with such powers as are
specifically delegated to the Agent by the terms of this
Agreement and the other Loan Documents, together with such other
powers as are reasonably incidental thereto, and by its execution
hereof LaSalle accepts such agency, solely for the purposes
herein set forth. The Agent shall have no authority to enforce,
nor any duty or responsibility for the enforcement of, any of the
terms hereof or of the other Loan Documents, except as requested
to do so by the Lenders jointly in accordance with the terms
hereof. The Agent shall send to all the Lenders as soon as
practicable after its receipt thereof, any information furnished
by any Borrower or any Subsidiary of a Borrower to the Agent as
required by the terms hereof or any other Loan Document or
otherwise received upon a request by the Agent. The Agent and
the Lenders may at any time discuss or otherwise share
information relating to the credit facility created hereby or
otherwise relating to any Borrower or any Subsidiary of any
Borrower.
IX.2 Delegation of Duties. The Agent may perform any of
its duties hereunder by or through agents or employees and shall
be entitled to rely on advice of counsel concerning all matters
pertaining to its duties hereunder and thereunder.
IX.3 Nature of Duties; Independent Credit Investigation.
The Agent shall have no duties or responsibilities except those
expressly set forth in this Agreement and any other Loan
Documents. The duties of the Agent shall be mechanical and
administrative in nature; the Agent shall not have by reason of
this Agreement or any other Loan Document a fiduciary
relationship in respect of any Lender; and nothing in this
Agreement or any other Loan Document, expressed or implied, is
intended to or shall be so construed as to impose upon the Agent
any obligations in respect of this Agreement or any other Loan
Document except as expressly set forth herein or therein. Each
Lender expressly acknowledges (a) that the Agent has not made any
representations or warranties to it and that no act by the Agent
hereafter taken, including any review of the affairs of the
Borrowers, shall be deemed to constitute any representation or
warranty by the Agent to any Lender; (b) that it has made and
will make its own independent investigation of the financial
condition and affairs, and its own appraisal of the
creditworthiness, of the Borrowers in connection with this
Agreement; (c) that it has made its own independent investigation
of the legal matters relating to this Agreement, the Notes and
the other Loan Documents to be issued to it hereunder; and
(d) that the Agent shall have no duty or responsibility, either
initially or on a continuing basis, to provide any Lender with
any credit or other information, whether coming into its
possession before the making of any Loans or the issuance of any
Letters of Credit hereunder or at any time or times thereafter,
except for notices, reports or other information, if any,
expressly required to be furnished to the Lenders by the Agent
hereunder.
IX.4 Exculpatory Provisions. Neither the Agent nor any of
its directors, officers, employees or agents shall be liable to
any Lender for any action taken or omitted to be taken by it
hereunder or under a Note or other Loan Documents, or in
connection herewith or therewith, unless caused by its own gross
negligence, willful misconduct or subjective bad faith. Subject
to the immediately preceding sentence, in performing its
functions and duties hereunder on behalf of the Lenders, the
Agent shall exercise the same care which it would exercise in
dealing with loans for its own account, but the Agent: (a) may
treat the payee of a Note as the holder thereof until the Agent
receives written notice of the assignment or transfer thereof,
signed by such payee and in form satisfactory to the Agent; (b)
may consult with legal counsel, independent public accountants
and other experts selected by it and shall not be liable for any
action taken or omitted to be taken by it in accordance with the
advice of such counsel, accountants or experts; (c) makes no
warranty or representations to any Lender for any statements,
warranties or representatives made in or on connection with this
Agreement or the other Loan Documents; (d) shall not be
responsible in any manner to any of the Lenders for the
effectiveness, enforceability, genuineness, validity or the due
execution of this Agreement, any of the Notes or any of the other
Loan Documents, or for any recital, representation, warranty,
document, certificate, report or statement herein or therein made
or furnished under or in connection with this Agreement or
(e) shall not be under any obligation to any of the Lenders to
ascertain or to inquire as to the performance or observance of
any of the terms, covenants or conditions hereof or thereof on
the part of the Borrowers or any other Person, or the financial
condition of the Borrowers or any Subsidiary of any Borrower or
the existence or possible existence of any Event or Default
and/or a Default or to inspect the property (including the books
and records) of the Borrowers and their respective Subsidiaries.
IX.5 Reimbursement and Indemnification. Each Lender agrees
to reimburse and indemnify the Agent (to the extent not
reimbursed by the Borrowers), ratably in the proportion which the
amount of such Lender's Revolving Credit Commitment bears to the
sum of the Aggregate Revolving Credit Commitment, for and against
any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of
any kind or nature whatsoever which may be imposed on, incurred
by or asserted against the Agent, in its capacity as such, in any
way relating to or arising out of this Agreement, the Notes the
other Loan Documents or any action taken or omitted by the Agent
hereunder or thereunder, provided that no Lender shall be liable
for any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or
disbursements to the extent that the same result from the Agent's
gross negligence, willful misconduct or subjective bad faith.
Without limitation of the foregoing, each Lender agrees to
reimburse the Agent promptly upon demand for its ratable shares
of any out-of-pocket expenses (including counsel fees) incurred
by the Agent in connection with the preparation, execution,
delivery, administration, modification, amendment or enforcement
(whether through negotiations, legal proceedings or otherwise)
of, or legal advice in respect of rights or responsibilities
under, this Agreement and each other Loan Document, to the extent
that the Agent is not reimbursed for such expenses by Borrowers.
IX.6 Withholding Taxes.
(a) Each Lender represents and warrants to the Borrowers
and the Agent that under any applicable Law (as in effect on the
date hereof or, if later, on the date such Lender became a party
to this Agreement) no taxes will be required to be withheld by
the Agent or a Borrower with respect to any payments to be made
to such Lender in respect of any of the Loans. Prior to the date
that any interest payment is due on any Loan, each Lender that is
organized under the Laws of any jurisdiction other than the
United States or any State thereof hereby agrees to (a) furnish
to the Agent and the Borrowers either U.S. Internal Revenue
Service Form 4224 or U.S. IRS Form 1001 (wherein such Lender
claims entitlement to complete exemption from U.S. federal
withholding tax on all interest payments hereunder); (b) furnish
to the Agent and the Borrowers an IRS Form W-8 or W-9 or
successor applicable form, as the case may be (wherein such
Lender claims exemption from U.S. federal backup withholding tax
on all interest payments hereunder); (c) provide to the Agent and
the Borrowers a new Form 4224, Form 1001, Form W-8 or Form W-9
upon the obsolescence of any previously delivered form and
comparable statements in accordance with applicable U.S. Laws and
regulations together with any and all amendments thereto, duly
executed and completed by such Lender (stating in each case that
such Lender remains exempt from U.S. federal withholding and
backup withholding tax unless there has been a change in law
prior to the date that the applicable form must be delivered that
renders any such form inapplicable, in which case such Lender
must deliver the relevant form reflecting such changes in law);
and (d) comply from time to time with all applicable U.S. Laws
and regulations with regard to such withholding and backup
withholding tax exemptions.
(b) Any and all payments by a Borrower for the account of
the Agent or any Lender (each a "Payee") under any Loan Document
shall be made free and clear of, and without deduction for, any
and all present or future taxes, levies, imposts, deductions,
charges or withholdings, and all liabilities with respect
thereto, other than deductions or withholdings, in the case of
any Payee, for (i) taxes to the extent that such taxes would not
have been imposed if the only connection between such Payee and
the jurisdiction imposing such tax were the activities of such
Payee pursuant to or in respect of the Loan Documents, including,
without limitation, entering into, lending money or extending
credit pursuant to, receiving payments under, or enforcing, any
Loan Documents, and the activities of such Payee pursuant to or
in respect of similar agreements or loan documents, and
(ii) United States withholding tax payable with respect to
payments under the Loan Documents under laws (including, without
limitation, any statute, treaty, ruling, determination or
regulation) in effect on the date hereof or, if later, on the
date such Payee became a party to this Agreement, but without
deduction for any United States withholding tax payable as a
result of any change in such laws occurring after such date and
(iii) any taxes, levies, imposts, duties, charges, fees,
deductions, withholdings arising after the date hereof, solely as
a result of or attributable to such Lender (x) changing its
designated office as of the date hereof to any other office or
(y) designating an additional office located in any other
jurisdiction (all taxes, levies, imposts, deductions, charges,
withholdings and liabilities other than those for which
deductions are permitted above being hereinafter referred to as
"Taxes"). If any Taxes shall be required by law to be deducted
from or in respect of any sum payable under the Loan Documents to
any Payee (i) the sum payable by the Borrowers shall be increased
as may be necessary so that after making all required deductions
(including deductions applicable to additional sums payable under
this Section 9.6(b)) such Payee receives an amount equal to the
sum it would have received had no such deductions been made,
(ii) the Borrowers shall make such deductions and (iii) the
Borrowers shall pay the full amount deducted to the relevant
taxation authority or other authority in accordance with
applicable law. The Borrowers shall not, however, be required to
pay any amounts pursuant to clause (i) of the immediately
preceding sentence for the account of any Payee organized under
the laws of a jurisdiction outside of the United States, unless
such Payee has timely provided to the Borrowers such
documentation as it is required to furnish under Section 9.6(a).
If Taxes are incorrectly or illegally paid or assessed, and if
any Lender or the Agent contests the assessment of such Taxes,
such Lender or the Agent shall refund, to the extent of any
refund made to such Lender or the Agent, any amounts paid by the
Borrowers under this Section 9.6(b) in respect of such Taxes
together with any interest received by such Lender or the Agent
on such refund from the applicable taxing authority.
IX.7 Reliance by Agent. The Agent shall be entitled to
rely upon any writing, telegram, telex or teletype message,
resolution, notice, consent, certificate, letter, cablegram,
statement, order or other document or conversation by telephone
or otherwise believed by it to be genuine and correct and to have
been signed, sent or made by the proper party or parties, and,
with respect to all legal matters pertaining to the Loan
Documents, upon opinions of counsel and other professional
advisers selected by the Agent. Subject to Section 9.5, the
Agent shall be fully justified in failing or refusing to take any
action hereunder unless it shall first be indemnified to its
satisfaction by the Lenders against any and all liability and
expense which may be incurred by it by reason of taking or
continuing to take any such action.
IX.8 Individual Capacity. With respect to its Revolving
Credit Commitment and the Notes held by it in its individual
capacity, LaSalle shall have the same rights and powers hereunder
as any other Lender and may exercise the same as though it were
not the Agent, and the terms "Lenders" or "holders of Notes"
shall, unless the context hereof otherwise indicates, include
LaSalle in its individual capacity. LaSalle and its affiliates
may, without liability to account, make loans to, accept deposits
from, act as trustee under indentures of, and generally engage in
any kind of business with, the Borrowers and their respective
shareholders, Subsidiaries and affiliates as though it were not
acting as the Agent hereunder.
IX.9 Holders of Notes. The Agent may deem and treat the
payee of any Note as the owner of such Note for all purposes
hereof unless and until written notice of the assignment or
transfer thereof shall have been filed with the Agent. Any
request, authority or consent of any party who at the time of
making such request or giving such authority or consent is the
holder of any Note shall be conclusive and binding on any
subsequent holder, transferee or assignee of such Note or of any
Note or Notes issued in exchange therefor.
IX.10 Successors. The Agent may resign at any time by
giving written notice thereof to the Lenders and the Borrowers.
Upon any such resignation, the Lenders shall agree upon a
successor Agent; provided, however, that if LaSalle should resign
as Agent, Bank One, Milwaukee, NA shall become Agent. If no
successor Agent shall have been so agreed upon and appointed, and
shall have accepted such appointment, within 30 days after the
retiring Agent's giving of notice of resignation, then the
retiring Agent may, on behalf of the Lenders, appoint a successor
Agent which shall be a commercial lender organized under the Laws
of the United States of America or any State thereof, or a
foreign Lender with a branch or agency located in the United
States of America, and having a combined capital and surplus of
at least $100,000,000. Upon the acceptance by a successor Agent
of its appointment as Agent hereunder, such successor Agent shall
thereupon succeed to and become vested with all the rights,
powers, privileges and duties of the retiring Agent, and the
retiring Agent shall be discharged from its duties under this
Agreement. After any retiring Agent's resignation hereunder as
Agent, the provisions of this Article VIII shall inure to its
benefit as to any actions taken or omitted by it while it was
Agent under this Agreement.
IX.11 Advisers. Notwithstanding anything contained
herein to the contrary, the Agent may only engage professional
advisers hereunder upon the joint direction of the Lenders.
ARTICLE X
MISCELLANEOUS
X.1 Holidays. Except as otherwise provided herein,
whenever any payment or action to be made or taken hereunder or
under a Note shall be stated to be due on a day which is not a
Business Day, such payment or action shall be made or taken on
the next following Business Day and such extension of time shall
be included in computing interest or fees, if any, in connection
with such payment or action.
X.2 Records. The unpaid principal amount of a Note and
Reimbursement Obligations, the unpaid interest accrued thereon,
the interest rate or rates applicable to such unpaid principal
amount, the duration of such applicability, each Lender's
Revolving Credit Commitment, shall at all times be ascertained
from the records of the Agent, which shall be conclusive absent
manifest error.
X.3 Modifications, Amendments or Waivers. The Agent upon
joint direction of the Lenders and such of the Borrowers as are
then party thereto (or any other party thereto, as the case may
be) may from time to time enter into written agreements amending
or changing any provision of this Agreement or any other Loan
Document or the rights of a Lender or the Borrowers or such party
hereunder or thereunder or may grant waivers or consents to a
departure from the due performance of the obligations of the
Borrowers or other party thereto hereunder or thereunder, any
such agreement, waiver or consent made with such written consent
being effective to bind all Lenders; provided that if the Agent
upon the joint direction of the Lenders notifies Borrowers of its
desire to designate a Subsidiary of any Borrower as an Operating
Subsidiary, then the Borrowers agree to execute and shall cause
the designated Subsidiary to execute an amendment to this
Agreement to reflect the designation of a Subsidiary of Sundance
as an Operating Subsidiary and make such Subsidiary of Sundance a
party to this Agreement as described in the definition of
Operating Subsidiary herein, whereupon all representations,
warranties, covenants and other terms herein shall be applicable
to such Subsidiary as if it were an Operating Subsidiary and
party to this Agreement as of the date hereof. In addition,
Borrowers shall cause such Subsidiary to execute, deliver, file
and perform all documents and agreements reasonably required by
the Agent to accomplish the foregoing and to grant to Agent and
each Lender all rights and benefits to which it is entitled under
any of the Loan Documents. Any agreement, waiver or consent
referred to in this Section 10.3 must be in writing and shall be
effective only to the extent specifically set forth in such
writing. In the case of any such waiver or consent relating to
any provision hereof, any Event of Default or Default so waived
or consented to shall be deemed to be cured and not continuing,
but no such waiver or consent shall extend to any other or
subsequent Event of Default or Default or impair any right
consequent thereto.
X.4 No Implied Waiver; Remedies. No course of dealing and
no delay or failure of the Agent or any Lender in exercising any
right, power or privilege under this Agreement, a Note, any other
Loan Document or any other documents or instruments executed
pursuant to or in connection herewith shall affect any other or
future exercise thereof or exercise of any other right, power or
privilege except as and to the extent that the assertion of any
such right, power or privilege shall be barred by an applicable
statute of limitations; nor shall any single or partial exercise
of any such right, power or privilege or any abandonment or
discontinuance of steps to enforce such a right, power or
privilege preclude any further exercise thereof or of any other
right, power or privilege. In addition, to the extent that the
Agent or any Lender may have acquiesced in any noncompliance by
making any Loans or issuing any Letters of Credit, such
acquiescence shall not be deemed to constitute a waiver by the
Agent or any Lender of any continuing or future Obligation of any
Borrower with respect to future Loans, Letters of Credit or
otherwise. The rights and remedies of the Agent and the Lenders
under this Agreement, the Notes, the other Loan Documents or any
other documents or instruments executed pursuant to or in
connection herewith are cumulative and not exclusive of any other
rights or remedies which the Agent and any Lender would otherwise
have. In no event shall the Agent or any Lender be liable to any
Borrower for consequential damages, whatever the nature of a
breach by such Lender or the Agent of its obligations under this
Agreement, or of the other Loan Documents, and all Borrowers
hereby waive all claims for consequential damages. No Lender nor
the Agent shall be in breach under this Agreement, or under any
other Loan Documents, unless a written notice specifically
setting forth the claim of any Borrower shall have been given to
such Lender or the Agent, as applicable, within 60 days after
such Borrower first had knowledge of, or reasonably should have
had knowledge of, the occurrence of the event which such Borrower
alleges gave rise to such claim and such Lender does not remedy
or cure the default, if there be any, promptly thereafter.
X.5 Notices. All notices under Article II hereof shall be
sent by telecopy or telex (which shall be effective when
received) or by telephone confirmed by telecopy, telex, first
class mail or express carrier (which shall be effective when
telephoned), in all cases with charges prepaid. All other
notices, requests, demands, directions and other communications
(collectively "notices") under the provisions of this Agreement,
any Note or the other Loan Documents shall be in writing
(including telexed or telecopied communication) unless otherwise
expressly permitted hereunder or thereunder and shall be sent by
certified or registered mail, return receipt requested, or
express courier or by telex or telecopier with confirmation in
writing mailed by certified or registered mail, return receipt
requested, or sent by express courier, in all cases with charges
prepaid, and any such properly given notice shall be effective
when received. All notices shall be sent to the applicable party
at the address stated on the signature page hereof or in
accordance with the last unrevoked written direction from such
party to the other parties hereto.
For purposes of this Agreement, notice provided by the Agent
or any Lender to Sundance shall be deemed to be effective notice
to any and all Borrowers and notice provided by any Borrower to
the Agent shall be deemed effective notice to all Lenders.
Sundance agrees with the Agent and the Lenders that upon
receiving notice from the Agent or any Lender, it shall
distribute such notice to each Borrower in a prompt and timely
fashion.
X.6 Expenses; Taxes; Attorneys' Fees. The Borrowers,
jointly and severally, agree to pay or cause to be paid and to
save the Agent and each Lender (and their successors and assigns)
harmless against liability for the payment of all reasonable
out-of-pocket expenses, including but not limited to reasonable
fees and expenses of counsel for the Agent and/or each Lender,
travel expenses, fees and costs of accountants, and environmental
and appraisal costs and expense, all incurred from time to time
(i) arising in connection with the negotiation, preparation,
execution, delivery, administration (provided, however, that
Borrowers shall only reimburse the Agent and the Lenders for the
costs of field audits conducted by accountants designated by the
Agent or any Lender in an amount not to exceed $18,000.00 in any
Fiscal Year), syndication, participation, and sale of any
Lender's interest in this Agreement, interpretation and
performance of this Agreement, a Note, any other Loan Document
and any documents, instruments or transactions pursuant to or in
connection herewith, (ii) relating to any requested amendments
(or amendments or other documents required by the Agent or any
Lender on account of the designation of additional Operating
Subsidiaries as Borrowers), waivers or consents to, or to any
restructurings, work-outs or refinancings of the credit under
this Agreement, a Note, any other Loan Document or any such other
documents or instruments (iii) relating to asset valuations of
the Borrowers, or (iv) relating to any reorganization, bankruptcy
or any other proceedings to which any Borrowers or their
properties become subject. The Borrowers, jointly and severally,
further agree to pay or cause to be paid and to save the Agent
and each Lender harmless against liability for the payment of all
reasonable expenses, including but not limited to reasonable fees
and expenses of counsel for Agent and/or each Lender, incurred by
the Agent or such Lenders from time to time in connection with
the enforcement by the Agent and/or Lenders of this Agreement,
the Notes or any other Loan Document; provided that the Borrowers
shall not be liable under the foregoing indemnity agreement in
respect of any liabilities, claims, damages, losses or expenses
to the extent that the same are determined in a final judgment by
a court of competent jurisdiction to have resulted primarily from
the willful misconduct or gross negligence of the party seeking
indemnity. The Borrowers, jointly and severally, agree to pay
all stamp, document, transfer, recording or filing taxes or fees
and similar impositions now or hereafter determined by the Agent
to be payable in connection with this Agreement, the Notes, any
other Loan Document, or any other documents, instruments or
transactions pursuant to or in connection herewith, and the
Borrowers, jointly and severally, agree to save the Agent and
each Lender harmless from and against any and all present or
future claims, liabilities or losses with respect to or resulting
from any omission to pay or delay in paying any such taxes, fees
or impositions. In the event of a determination adverse to a
Borrower of any action at law or suit in equity in relation to
this Agreement, the Note or the Loan Documents, the Borrowers,
jointly and severally, will pay, in addition to all other sums
which such Borrower may be required to pay, a reasonable sum for
attorney's fees incurred by the Agent and/or any Lender or the
holder of such Note in connection with such action or suit. All
of the foregoing fees, costs and expenses shall be part of the
Obligations and payable on demand.
X.7 Severability. The provisions of this Agreement and the
other Loan Documents are intended to be severable. If any
provision of this Agreement or any Loan Document shall be held
invalid or unenforceable in whole or in part in any jurisdiction
such provision shall, as to such jurisdiction, be ineffective to
the extent of such invalidity or unenforceability without in any
manner affecting the validity or enforceability thereof in any
other jurisdiction or the remaining provisions hereof or thereof
in any jurisdiction, unless the ineffectiveness of such provision
materially and adversely alters the benefits to either party
hereunder.
X.8 Governing Law. This Agreement, the Notes and all other
Loan Documents shall be deemed to be contracts and obligations
under the laws of the State of Illinois and for all purposes
shall be governed by, construed and enforced in accordance with
the internal laws (as opposed to conflicts of law provisions) of
said State, and any applicable laws of the United States.
X.9 Prior Understandings. This Agreement, the Notes, and
the other Loan Documents supersede all prior understandings,
discussions, communications and agreements, whether written or
oral, among the parties hereto relating to the transactions
provided for herein.
X.10 Duration; Survival. All representations and
warranties of the Borrowers and the other parties to the Loan
Documents contained herein or therein or made in connection
herewith or therewith shall survive the making of and shall not
be waived by the execution and delivery of this Agreement or the
Notes, any investigation by the Agent or any Lender, or the
making of any Loan or the issuance of any Letter of Credit
hereunder. Subject to Section 10.17 herein, all covenants and
agreements of the Borrowers and such parties contained herein or
in any other Loan Document shall continue in full force and
effect from and after the date hereof so long as the Borrowers
may borrow and/or a Letter of Credit may be issued hereunder and
until payment in full of the Notes, interest thereon, fees and
all other Obligations of the Borrowers under this Agreement, any
Note or any other Loan Document (other than obligations in the
nature of continuing indemnities or expense reimbursement
obligations not yet due and payable); provided, however, that
notwithstanding anything to the contrary in this Agreement, all
obligations of the Borrowers to make payments to or to indemnify
the Agent or any Lender under any Loan Document shall survive the
payment in full of the Notes and of all other Obligations of the
Borrowers thereunder and hereunder.
X.11 Counterparts. This Agreement and any other Loan
Document may be executed in any number of counterparts and by the
different parties hereto on separate counterparts each of which,
when so executed, shall be deemed an original, but all such
counterparts shall constitute but one and the same instrument.
X.12 Successors and Assigns; Participants.
(a) Successors and Assigns. This Agreement shall be
binding upon and inure to the benefit of the Borrowers, the
Lenders, the Agent, all future holders of a Note, and their
respective successors and permitted assigns, except that none of
the Borrowers may assign or transfer any of its rights or
obligations under this Agreement or any interest herein without
the prior written consent of the Agent upon the joint direction
of the Lenders. The successors and assigns of the parties shall
include, without limitation, a receiver, trustee and/or debtor-in-
possession of or for any Borrower or its Subsidiaries, as the
case may be.
(b) Participations. Any Lender may, in the ordinary course
of its commercial banking or asset-based lending business and in
accordance with applicable law, at any time sell to one or more
financial institutions or other entities ("Participants"),
participating interests in any Loan owing to such Lender, any
Note held by a Lender, the Revolving Credit Commitment of such
Lender or any other interest of such Lender hereunder. Borrowers
shall use their best efforts to cooperate with, and assist any
Lender in its effort to syndicate participations in this
Agreement. In the event of any such sale by a Lender of
participating interests to a Participant, such Lender's
obligations under this Agreement to the other parties to this
Agreement shall remain unchanged, such Lender shall remain solely
responsible for the performance thereof, and the Borrowers and
the Agent shall continue to deal solely and directly with such
Lender in connection with such Lender's rights and obligations
under this Agreement. The Borrowers agree that if amounts
outstanding under this Agreement and/or Note are due and unpaid,
or shall have been declared or shall have become due and payable
upon the occurrence of an Event of Default, each Participant
shall be deemed to have the right of setoff in respect of its
participating interest in amounts owing under this Agreement and
any Note to the same extent as if the amount of its participating
interest were owing directly to it as a Lender under this
Agreement or any Note; provided that such right of setoff shall
be subject to the obligation of such Participant to share with
the Lenders, and the Lenders agree to share with such
Participant, as provided in Section 8.7. The Borrowers also
agree that each Participant shall be entitled to the benefits of
Sections 2.22 and 10.6 with respect to its participation in the
Loans outstanding from time to time, provided that no Participant
shall be entitled to receive any greater amount pursuant to such
Sections than the transferor Lender would have been entitled to
receive in respect of the amount of the participation transferred
by such transferor Lender to such Participant had no such
transfer occurred.
(c) Provision of Information to Participants. Subject to
such Participant first executing and delivering a confidentiality
agreement in the form previously executed by the Lenders or
otherwise satisfactory to the Borrowers, each Borrower authorizes
each Lender to disclose to any Participant and any prospective
Participant any and all financial and other information in such
Lender's possession concerning the Borrowers and their affiliates
which has been delivered to such Lender by or on behalf of the
Borrowers pursuant to this Agreement or which has been delivered
to such Lender by or on behalf of the Borrowers in connection
with Lender's credit evaluation of the Borrowers and their
affiliates prior to becoming a party to this Agreement.
(d) Taxes. If, pursuant to this Section 10.12, any
interest in this Agreement or the Note is transferred to any
Transferee which is organized under the laws of any jurisdiction
other than the United States or any State thereof, the transferor
Lender shall cause such Transferee, concurrently with the
effectiveness of such transfer, (i) to represent to the
transferor Lender (for the benefit of the transferor Lender, the
Agent, and the Borrowers) that under applicable law and treaties
(as then in effect) no taxes will be required to be withheld by
the Agent, the Borrowers or the transferor Lender with respect to
any payments to be made to such Transferee in respect of the
Loans, (ii) to furnish to the transferor Lender either IRS Form
4224 or IRS Form 1001 (wherein such Transferee claims entitlement
to complete exemption from U.S. federal withholding tax on all
interest payments hereunder) and (iii) to agree (for the benefit
of the transferor Lender, the Agent, and the Borrowers) to
provide the transferor Lender a new Form 4224 or Form 1001 upon
the expiration or obsolescence of any previously delivered form
and comparable statements in accordance with applicable U.S. laws
and regulations and amendments duly executed and completed by
such Transferee, and to comply from time to time with all
applicable U.S. laws and regulations with regard to such
withholding tax exemption.
(e) No Rights in Borrowers; No Third Party Beneficiary
Rights. Borrowers acknowledge and agree that none of the
obligations of the Agent to Lenders shall create or confer any
rights whatsoever (including, without limitation, third party
beneficiary rights) on or in any of the Borrowers. In addition,
the parties agree that the Agent and Lenders may amend any
provision of this Agreement which relates solely to the rights
and obligations between them, without any consent or approval
required by any of the Borrowers. Without limiting the
foregoing, Borrowers acknowledge and agree that nothing in this
Agreement or any other Loan Document creates or shall be deemed
to create any third party beneficiary rights whatsoever.
X.13 Time of Essence. Time is of the essence of this
Agreement, the Notes and the other Loan Documents.
X.14 Entire Agreement. The parties hereto agree that this
Agreement and the other Loan Documents, together with the
Schedules and Exhibits attached hereto and thereto, represent the
entire agreement and understanding of the parties hereto with
reference to the transactions contemplated herein and therein;
and no party shall claim that any party hereto has any right or
obligation regarding the transactions contemplated herein other
than as stated in this Agreement, the other Loan Documents, or
any amendment hereto duly adopted pursuant to Section 10.3
hereof. Without limiting the foregoing, nothing contained in any
disclosure document prepared by any Borrower or in any other
document (except the Loan Documents) shall constitute any
consent, waiver or agreement of the Agent or a Lender nor may it
be used in any manner whatsoever to interpret, modify or
otherwise affect this Agreement or any other Loan Document.
X.15 Section Titles. The section titles and table of
contents contained in this Agreement are for convenience only and
shall be without substantive meaning or content of any kind
whatsoever.
X.16 References. All references contained herein to any
laws, statutes, rules, regulations, or similar provisions shall
include all amendments thereto and any successor provisions.
X.17 Reinstatement. This Agreement shall remain in full
force and effect and continue to be effective should any petition
be filed by or against any Borrower for liquidation or
reorganization, should any Borrower become insolvent or make an
assignment for the benefit of creditors or should a receiver or
trustee be appointed for all or any significant part of any
Borrower's assets, and shall continue to be effective or be
reinstated, as the case may be, if at any time payment and
performance of the Obligations, or any part thereof, is, pursuant
to applicable law, rescinded or reduced in amount, or must
otherwise be restored or returned by any obligee of the
Obligations, whether as a "voidable preference", "fraudulent
conveyance", or otherwise, all as though such payment or
performance had not been made. In the event that any payment, or
any part thereof, is rescinded, reduced, restored or returned,
the Obligations shall be reinstated and deemed reduced only by
such amount paid and not so rescinded, reduced, restored or
returned.
X.18 Consent to Jurisdiction. As a further inducement to
the Agent and each Lender to enter into this Agreement, each
Borrower covenants and agrees (i) that the state and federal
courts within ▇▇▇▇ County, Illinois, and Milwaukee County,
Wisconsin shall have jurisdiction of any action or proceeding
relating to, or arising under or in connection with this
Agreement and each Borrower consents to personal jurisdiction of
such courts and waives any objection to such courts'
jurisdiction, (ii) that service of any summons and complaint or
other process in any such action or proceeding may be made by
registered or certified mail directed to Sundance's address
stated on the signature page hereof or to such other address as
Sundance may by written notice provide to the Agent and each such
Lender. Service so made shall be deemed to be service upon
Sundance and each of the other Borrowers, and each Borrower
hereby irrevocably appoints Sundance as its attorney in fact to
accept such service. Service so made shall be deemed completed
upon the earlier of actual receipt or five (5) days after the
same shall have been posted as aforesaid, each Borrower hereby
waiving personal service thereof. Nothing in this Section 10.18
shall affect the right of the Agent or a Lender to serve legal
process in any other manner permitted by law or affect the right
of the Agent or a Lender to bring any action or proceeding
against any Borrower or its property in the courts of any other
jurisdiction or effectuate any judgment entered by a court of
competent jurisdiction.
X.19 Venue. Each Borrower, the Agent and each Lender agree
that any claim or suit between or among any of the parties hereto
relating to, or arising under or in connection with this
Agreement or any transactions contemplated hereby shall be
brought only in and decided by the state or federal courts
located in the county of ▇▇▇▇, Illinois, or the county of
Milwaukee, Wisconsin (except as provided in the last sentence of
Section 10.18), such courts being a proper forum in which to
adjudicate such claim or suit, and each party hereby waives any
objection to such venue and waives any claim that such claim or
suit has been brought in an inconvenient forum.
X.20 Advertisement. Any of the Agent and each Lender may at
any time advertise the existence of the credit facility created
for Borrowers hereunder.
X.21 WAIVER OF JURY TRIAL. ALL OF THE PARTIES TO THIS
AGREEMENT WAIVE TO THE FULLEST EXTENT PERMITTED BY LAW ANY RIGHT
TO TRIAL BY JURY IN ANY CIVIL ACTION OR CIVIL PROCEEDING TO
ENFORCE OR DEFEND ANY RIGHTS UNDER THIS AGREEMENT OR ANY OF THE
DOCUMENTS OR INSTRUMENTS EXECUTED AND DELIVERED PURSUANT HERETO,
OR OTHERWISE RELATING TO THIS AGREEMENT OR SUCH OTHER DOCUMENTS
AND INSTRUMENTS, OR THE TRANSACTIONS CONTEMPLATED HEREBY OR
THEREBY, AND AGREE THAT ANY SUCH ACTION OR PROCEEDING SHALL BE
TRIED BEFORE A COURT AND NOT BEFORE A JURY. THE PARTIES HERETO
WAIVE TO THE FULLEST EXTENT PERMITTED BY LAW ALL RIGHT TO TRIAL
BY JURY IN ANY ACTION, SUIT OR PROCEEDING BROUGHT TO ENFORCE OR
DEFEND ANY RIGHTS OR REMEDIES UNDER, OR ARISING IN CONNECTION
WITH OR RELATING TO THIS AGREEMENT, THE NOTE OR ANY OF THE OTHER
LOAN DOCUMENTS.
IN WITNESS WHEREOF, the parties hereto, by their officers
thereunto duly authorized, have executed and delivered this
Agreement as of the date first above written.
SUNDANCE HOMES, INC., an Illinois corporation
Attest:
By:_/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ _______ By: ___/s/ ▇▇▇▇▇▇ ▇.Titus_______
Title: ___Controller __________ Title:___President_____________
[CORPORATE SEAL]
Address:
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
SLIH DEVELOPMENT, INC., an Illinois corporation
Attest:
By: __/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ______ By: _____/s/ ▇▇▇▇▇▇ ▇. Titus_________
Title: __Controller __________ Title:____President_________________
[CORPORATE SEAL]
Address:
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
REMBRANDT HOMES, INC., an Illinois corporation
Attest:
By: ___/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ _______ By: _____/s/ ▇▇▇▇▇▇ ▇.Titus__________
Title: ___Controller___________ Title: _____President________________
[CORPORATE SEAL]
Address:
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
SRLB DEVELOPMENT, INC., an Illinois corporation
Attest:
By: __/s/ ▇▇▇▇▇▇▇ Santay_______ By: ___/s/ ▇▇▇▇▇▇ ▇. Titus____________
Title: __Controller_____________ Title:____President_________________
[CORPORATE SEAL]
Address:
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
SAR DEVELOPMENT, INC., an Illinois corporation
Attest:
By: __/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ _____ By: ______/s/ ▇▇▇▇▇▇ ▇. Titus_________
Title: ___Controller__________ Title: ____President ________________
[CORPORATE SEAL] Address:
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
SUNDANCE HOLDINGS, INC., an Illinois corporation
Attest:
By: _/s/ ▇▇▇▇▇▇▇ Santay_______ By: __/s/ ▇▇▇▇▇▇ ▇. Titus_______
Title: __Controller_________ Title: ____President___________
[CORPORATE SEAL] Address:
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
CHICAGO URBAN PROPERTIES, INC., an Illinois corporation
Attest:
By: __/s/ ▇▇▇▇▇▇ ▇. Titus____ By: __/s/ ▇▇▇▇▇ Menas__________
Title: __President__________ Title: ___Vice President__________
[CORPORATE SEAL] Address:
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
BANK ONE, MILWAUKEE, NA, a national banking association
By:___/s/ ▇▇▇▇▇ ▇. Stone_____________
Its:___Vice President______________
Address:
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
LASALLE NATIONAL BANK, a national banking association, individually
and in its capacity as Agent
By: ___/s/ ▇▇▇▇ ▇. Knebelkamp_____
Title: ___Vice President______________
Address:
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇