UP TO U.S. $25,000,000
REVOLVING CREDIT AGREEMENT
Dated as of May 30, 1995
between
UNITED HOMES, INC.
as Borrower
and
GENEL COMPANY, INC.
as Lender
GENEL COMPANY, INC. HOLDS ARIZONA MORTGAGE BANKER'S LICENSE NO. 8284
TABLE OF CONTENTS
Page
----
1. DEFINITIONS AND INTERPRETATION MATTERS ................................ 1
1.1 DEFINITIONS ................................................. 1
1.2 ACCOUNTING MATTERS .......................................... 24
1.3 OTHER MATTERS ............................................... 25
2. AMOUNT AND TERMS OF CREDIT ............................................ 25
2.1 REVOLVING CREDIT ADVANCES ................................... 25
2.2 MANDATORY PREPAYMENT ........................................ 27
2.3 OPTIONAL PREPAYMENT ......................................... 27
2.4 USE OF PROCEEDS ............................................. 27
2.5 SINGLE LOAN ................................................. 27
2.6 INTEREST ON LOAN ............................................ 27
2.7 COMMITMENT FEE .............................................. 29
2.8 AVAILABILITY AND ADMINISTRATION FEES ........................ 29
2.9 CASH MANAGEMENT SYSTEM ...................................... 29
2.10 APPLICATION OF PAYMENTS ..................................... 31
2.11 ACCOUNTING .................................................. 31
2.12 INDEMNITY ................................................... 31
2.13 ACCESS ...................................................... 32
2.14 TAXES ....................................................... 32
2.15 CONFIDENTIALITY ............................................. 33
3. CONDITIONS PRECEDENT .................................................. 34
3.1 CONDITIONS TO LOAN .......................................... 34
3.2 FURTHER CONDITIONS TO EACH REVOLVING CREDIT ADVANCE.......... 37
4. REPRESENTATIONS AND WARRANTIES ........................................ 38
4.1 CORPORATE EXISTENCE: COMPLIANCE WITH LAW .................... 38
4.2 EXECUTIVE OFFICES ........................................... 38
4.3 SUBSIDIARIES ................................................ 38
4.4 CORPORATE POWER; AUTHORIZATION; ENFORCEABLE OBLIGATIONS ..... 38
4.5 FINANCIAL STATEMENTS ........................................ 39
4.6 PROJECTIONS ................................................. 40
4.7 OWNERSHIP OF PROPERTY; LIENS ................................ 40
4.8 NO DEFAULT .................................................. 41
4.9 BURDENSOME RESTRICTIONS ..................................... 41
4.10 LABOR MATTERS ............................................... 42
i
4.11 OTHER VENTURES .............................................. 42
4.12 INVESTMENT COMPANY ACT ...................................... 42
4.13 MARGIN REGULATIONS .......................................... 42
4.14 TAXES ....................................................... 42
4.15 ERISA ....................................................... 43
4.16 NO LITIGATION ............................................... 44
4.17 BROKERS ..................................................... 44
4.18 OUTSTANDING STOCK; OPTIONS; WARRANTS, ETC. .................. 44
4.19 EMPLOYMENT AND LABOR AGREEMENTS ............................. 44
4.20 PATENTS, TRADEMARKS, COPYRIGHTS AND LICENSES ................ 45
4.21 FULL DISCLOSURE ............................................. 45
4.22 LIENS ....................................................... 45
4.23 NO MATERIAL ADVERSE EFFECT .................................. 45
4.24 ENVIRONMENTAL PROTECTION .................................... 45
5. FINANCIAL STATEMENTS AND INFORMATION .................................. 46
5.1 REPORTS AND NOTICES ......................................... 46
5.2 COMMUNICATION WITH ACCOUNTANTS .............................. 48
6. AFFIRMATIVE COVENANTS ................................................. 48
6.1 MAINTENANCE OF EXISTENCE AND CONDUCT OF BUSINESS............. 48
6.2 PAYMENT OF OBLIGATIONS ...................................... 49
6.3 FINANCIAL COVENANTS ......................................... 49
6.4 LENDER'S FEES ............................................... 51
6.5 BOOKS AND RECORDS ........................................... 51
6.6 LITIGATION .................................................. 51
6.7 INSURANCE ................................................... 51
6.8 COMPLIANCE WITH LAW ......................................... 52
6.9 AGREEMENTS .................................................. 52
6.10 SUPPLEMENTAL DISCLOSURE ..................................... 52
6.11 EMPLOYEE PLANS .............................................. 53
6.12 SEC FILINGS; CERTAIN OTHER NOTICES .......................... 54
6.13 LEASES ...................................................... 54
6.14 ENVIRONMENTAL MATTERS ....................................... 54
6.15 STAY, EXECUTION AND USURY LAWS .............................. 56
6.16 REAL ESTATE SALES FROM AFFILIATES ........................... 56
6.17 SOLVENCY CERTIFICATE OF AFFILIATE ........................... 57
7. NEGATIVE COVENANTS .................................................... 57
7.1 MERGERS, ETC. ............................................... 57
7.2 INVESTMENTS; LOANS AND ADVANCES.............................. 57
7.3 PAYMENTS TO AFFILIATES....................................... 57
7.4 INDEBTEDNESS................................................. 58
7.5 RELEASE OR SUBORDINATION OF PERMITTED ENCUMBRANCES........... 58
ii
7.6 CAPITAL STRUCTURE ........................................... 59
7.7 MAINTENANCE OF BUSINESS ..................................... 59
7.8 TRANSACTIONS WITH AFFILIATES ................................ 59
7.9 GUARANTEED INDEBTEDNESS ..................................... 59
7.10 LIENS ....................................................... 59
7.11 CAPITAL EXPENDITURES ........................................ 59
7.12 SALE OF ASSETS .............................................. 59
7.13 CANCELLATION OF INDEBTEDNESS ................................ 59
7.14 HEDGING TRANSACTIONS ........................................ 60
7.15 RESTRICTED PAYMENTS ......................................... 60
7.16 COMPENSATION AND MANAGEMENT ................................. 60
7.17 ERISA ....................................................... 60
7.18 PREPAYMENT OF INDEBTEDNESS .................................. 60
7.19 VENDOR NOTES ................................................ 60
7.20 ESOP ........................................................ 60
8. TERM .................................................................. 60
8.1 TERMINATION ................................................. 60
8.2 SURVIVAL OF OBLIGATIONS UPON TERMINATION OF FINANCING
ARRANGEMENT ....................................................... 61
9. EVENTS OF DEFAULT; RIGHTS AND REMEDIES ................................ 61
9.1 EVENTS OF DEFAULT ........................................... 61
9.2 REMEDIES .................................................... 63
9.3 WAIVERS BY BORROWER ......................................... 63
9.4 RIGHT OF SET-OFF ............................................ 64
10. MISCELLANEOUS ......................................................... 64
10.1 COMPLETE AGREEMENT; MODIFICATION OF AGREEMENT; SALE OF
INTEREST .......................................................... 64
10.2 FEES AND EXPENSES ........................................... 65
10.3 NO WAIVER LENDER ............................................ 66
10.4 REMEDIES .................................................... 67
10.5 WAIVER OF JURY TRIAL ........................................ 67
10.6 SEVERABILITY ................................................ 67
10.7 PARTIES ..................................................... 67
10.8 CONFLICT OF TERMS ........................................... 67
10.9 AUTHORIZED SIGNATURE ........................................ 67
10.10 GOVERNING LAW ............................................... 67
10.11 NOTICES ..................................................... 68
10.12 SURVIVAL .................................................... 69
10.13 SECTION TITLES .............................................. 69
10.16 JOINT AND SEVERAL LIABILITY ................................. 70
10.17 NO ORAL AGREEMENTS .......................................... 70
iii
LIST OF DEFINED TERMS
Page
----
Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Borrower . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Lender . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Adjusted Consolidated Cash Flow . . . . . . . . . . . . . . . . . . . 1
Adjusted Consolidated Cash Flow Available for Fixed Charges . . . . . 2
Adjusted Consolidated Net Income . . . . . . . . . . . . . . . . . . 2
Adjusted Consolidated Operating Profit . . . . . . . . . . . . . . . 2
Adjusted Consolidated Tangible Net Worth. . . . . . . . . . . . . . . 2
Adjusted Financial Terms. . . . . . . . . . . . . . . . . . . . . . . 2
Administration Fee . . . . . . . . . . . . . . . . . . . . . . . . . 3
Advance Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Affiliate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Ancillary Agreements . . . . . . . . . . . . . . . . . . . . . . . . 3
Asset Sale . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Assignee Lender . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Availability Fee. . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Backlog Unit. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Board of Directors. . . . . . . . . . . . . . . . . . . . . . . . . . 4
Book Cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Borrower . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Borrowing Base. . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Borrowing Base Availability . . . . . . . . . . . . . . . . . . . . . 4
Advance Rate. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Borrowing Base Book Cost. . . . . . . . . . . . . . . . . . . . . . . 5
Business Day. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Calculation Date. . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Capital Asset . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Capital Lease . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Capital Lease Obligations . . . . . . . . . . . . . . . . . . . . . . 5
Carryback Purchase Note . . . . . . . . . . . . . . . . . . . . . . . 5
Certain Indebtedness Incurred . . . . . . . . . . . . . . . . . . . . 5
Certain Indebtedness Paid . . . . . . . . . . . . . . . . . . . . . . 6
Change of Control . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Code. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Collateral . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Collateral Documents. . . . . . . . . . . . . . . . . . . . . . . . . 7
Commitment Fee. . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
iv
Commitment Termination Date . . . . . . . . . . . . . . . . . . . . . 7
Common Equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Compensation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Concentration Account . . . . . . . . . . . . . . . . . . . . . . . . 7
Consolidated Capital Expenditures . . . . . . . . . . . . . . . . . . 7
Consolidated Fixed Charge Coverage Ratio. . . . . . . . . . . . . . . 7
Consolidated Net Income . . . . . . . . . . . . . . . . . . . . . . . 8
Consolidated Net Tangible Assets . . . . . . . . . . . . . . . . . . 8
Construction Budget . . . . . . . . . . . . . . . . . . . . . . . . . 8
Construction Costs. . . . . . . . . . . . . . . . . . . . . . . . . . 8
Cost of Sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Determination Date. . . . . . . . . . . . . . . . . . . . . . . . . . 8
Depository Account. . . . . . . . . . . . . . . . . . . . . . . . . . 8
Development Costs . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Disbursement Accounts . . . . . . . . . . . . . . . . . . . . . . . . 8
DOL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Eligible Collateral . . . . . . . . . . . . . . . . . . . . . . . . . 9
Eligible Housing Unit . . . . . . . . . . . . . . . . . . . . . . . . 10
Eligible Lot. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Eligible Model Homes. . . . . . . . . . . . . . . . . . . . . . . . . 10
Eligibility Termination Date. . . . . . . . . . . . . . . . . . . . . 10
Environmental Laws. . . . . . . . . . . . . . . . . . . . . . . . . . 10
Environmental Reports . . . . . . . . . . . . . . . . . . . . . . . . 11
ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
ERISA Affiliate . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
ERISA Event . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
ESOP. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Event of Default. . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Exchange Act. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Existing Guaranteed Indebtedness. . . . . . . . . . . . . . . . . . . 11
Fair Market Value . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Federal Reserve Board . . . . . . . . . . . . . . . . . . . . . . . . 11
Financials. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Finished Building Lots. . . . . . . . . . . . . . . . . . . . . . . . 11
Fiscal Year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Fixed Charge. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Funding Date. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
GAAP. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Governmental Authority. . . . . . . . . . . . . . . . . . . . . . . . 12
Guaranteed Indebtedness . . . . . . . . . . . . . . . . . . . . . . . 12
Primary Obligations . . . . . . . . . . . . . . . . . . . . . . . . . 12
Primary Obligor . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Guarantor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
v
Guaranty. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Guaranty of Performance . . . . . . . . . . . . . . . . . . . . . . . 13
Hazardous Substances. . . . . . . . . . . . . . . . . . . . . . . . . 13
Hazardous Substances Indemnity Agreement. . . . . . . . . . . . . . . 13
Hedging Obligations . . . . . . . . . . . . . . . . . . . . . . . . . 13
Housing Unit. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Indebtedness. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Index Rate. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
GECC Composite Commercial Paper Rate. . . . . . . . . . . . . . . . . 14
Average Interest Expense. . . . . . . . . . . . . . . . . . . . . . . 14
GECC Composite Commercial Paper . . . . . . . . . . . . . . . . . . . 14
Intangible Assets . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Interest Expense. . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Interest Incurred . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Interest Payment Date . . . . . . . . . . . . . . . . . . . . . . . . 15
Investment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
IRC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
IRS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Leases. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Lender. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Lien. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Loan. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Loan Documents. . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Loan Party. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Market Value. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Material Adverse Effect . . . . . . . . . . . . . . . . . . . . . . . 16
Maximum Available Revolving Credit Advances . . . . . . . . . . . . . 17
Maximum Lawful Rate . . . . . . . . . . . . . . . . . . . . . . . . . 17
Maximum Loan. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Model . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Mortgages . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Multiemployer Plan. . . . . . . . . . . . . . . . . . . . . . . . . . 17
Note. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Operating Protocol. . . . . . . . . . . . . . . . . . . . . . . . . . 17
Option Deposit. . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Ordinary Course Liens . . . . . . . . . . . . . . . . . . . . . . . . 18
Other Distributions . . . . . . . . . . . . . . . . . . . . . . . . . 18
Other Indebtedness. . . . . . . . . . . . . . . . . . . . . . . . . . 18
PBGC. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Pension Plan. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Permitted Encumbrances. . . . . . . . . . . . . . . . . . . . . . . . 18
Permitted Investments . . . . . . . . . . . . . . . . . . . . . . . . 19
Permitted Refinancing Indebtedness. . . . . . . . . . . . . . . . . . 20
vi
Person ................................................................... 20
Plan ..................................................................... 20
Pledge and Security Agreement (Borrower) ................................. 20
Pledge and Security Agreement (Guarantor) ................................ 20
Proceeding ............................................................... 21
Projections .............................................................. 21
Qualified Plan ........................................................... 21
Real Estate .............................................................. 21
Land ..................................................................... 21
Receipts ................................................................. 21
Reportable Event ......................................................... 21
Reserves ................................................................. 21
Restricted Payment ....................................................... 21
Retiree Welfare Plans .................................................... 22
Revolving Credit Advance ................................................. 22
Security Agreement ....................................................... 22
Speculative Unit ......................................................... 22
Spill .................................................................... 22
Stated Rate .............................................................. 22
Stock .................................................................... 22
Subordinated Loans ....................................................... 22
Subsidiary ............................................................... 22
Taxes .................................................................... 23
Termination Date ......................................................... 23
Title Company ............................................................ 23
Title IV Plan ............................................................ 23
Total Indebtedness ....................................................... 23
Total Indebtedness to Adjusted Consolidated Tangible Net Worth Ratio ..... 23
Total Unsecured Indebtedness ............................................. 23
Trade Payables ........................................................... 23
Trademark Security Agreement ............................................. 23
Tri-Party Agreement ...................................................... 23
Unit Backlog ............................................................. 24
Unit Backlog to Unit Inventory Ratio ..................................... 24
Unit Inventory ........................................................... 24
Welfare Plan ............................................................. 24
Work-in-Progress ......................................................... 24
Accounting Change ........................................................ 24
Accounting Change ........................................................ 24
Revolving Credit Advance ................................................. 25
Note ..................................................................... 26
Notice of Revolving Credit Advance ....................................... 27
Interest Payment Date .................................................... 27
Stated Rate .............................................................. 28
vii
Default Rate ............................................................. 28
Maximum Lawful Rate ...................................................... 28
Availability Fee ......................................................... 29
Administration Fee ....................................................... 29
Concentration Account .................................................... 29
Concentration Bank ....................................................... 29
Escrow Funds ............................................................. 30
Indemnified Part ......................................................... 31
Taxes .................................................................... 32
Other Taxes .............................................................. 32
Representatives .......................................................... 33
Confidential Information ................................................. 33
Confidential Information ................................................. 34
Projections .............................................................. 40
Federal Reserve Board .................................................... 42
Spill .................................................................... 45
Work ..................................................................... 55
Carryback Purchase Note .................................................. 56
dispositions ............................................................. 59
Event of Default ......................................................... 61
Borrowing Base ...........................................................1.1-1
Accounting Change ........................................................ 24
Accounting Change ........................................................ 24
Adjusted Consolidated Cash Flow .......................................... 1
Adjusted Consolidated Cash Flow Available for Fixed Charges .............. 1
Adjusted Consolidated Net Income ......................................... 2
Adjusted Consolidated Operating Profit ................................... 2
Adjusted Consolidated Tangible Net Worth ................................. 2
Adjusted Financial Terms ................................................. 2
Administration Fee ....................................................... 3
Administration Fee ....................................................... 29
Advance Costs ............................................................ 3
Advance Rate ............................................................. 4
Affiliate ................................................................ 3
Agreement ................................................................ 3
Agreement ................................................................ 1
Ancillary Agreements ..................................................... 3
Asset Sale ............................................................... 3
Assignee Lender .......................................................... 4
Availability Fee ......................................................... 4
Availability Fee ......................................................... 28
Average Interest Expense ................................................. 14
Backlog Unit ............................................................. 4
viii
Board of Directors ....................................................... 4
Book Cost ................................................................ 4
Borrower ................................................................. 4
Borrower ................................................................. 1
Borrowing Base ........................................................... 4
Borrowing Base ...........................................................1.1-1
Borrowing Base Availability .............................................. 4
Borrowing Base Book Cost ................................................. 5
Business Day ............................................................. 5
Calculation Date ......................................................... 5
Capital Asset ............................................................ 5
Capital Lease ............................................................ 5
Capital Lease Obligations ................................................ 5
Carryback Purchase Note .................................................. 5
Carryback Purchase Note .................................................. 55
Certain Indebtedness Incurred ............................................ 5
Certain Indebtedness Paid ................................................ 6
Change of Control ........................................................ 6
Charges .................................................................. 6
Code ..................................................................... 6
Collateral ............................................................... 6
Collateral Documents ..................................................... 7
Commitment Fee ........................................................... 7
Commitment Termination Date .............................................. 7
Common Equity ............................................................ 7
Compensation ............................................................. 7
Concentration Account .................................................... 7
Concentration Account .................................................... 29
Concentration Bank ....................................................... 29
Confidential Information ................................................. 33
Confidential Information ................................................. 33
Consolidated Capital Expenditures ........................................ 7
Consolidated Fixed Charge Coverage Ratio ................................. 7
Consolidated Net Income .................................................. 7
Consolidated Net Tangible Assets ......................................... 8
Construction Budget ...................................................... 8
Construction Costs ....................................................... 8
Cost of Sales ............................................................ 8
Default .................................................................. 8
Default Rate ............................................................. 27
Depository Account ....................................................... 8
Determination Date ....................................................... 8
Development Costs ........................................................ 8
Disbursement Accounts .................................................... 8
ix
dispositions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
DOL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Eligibility Termination Date. . . . . . . . . . . . . . . . . . . . . . 10
Eligible Collateral . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Eligible Housing Unit . . . . . . . . . . . . . . . . . . . . . . . . . 10
Eligible Lot. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Eligible Model Homes. . . . . . . . . . . . . . . . . . . . . . . . . . 10
Environmental Laws. . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Environmental Report. . . . . . . . . . . . . . . . . . . . . . . . . . 10
ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
ERISA Affiliate . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
ERISA Event . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Escrow Funds. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
ESOP. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Event of Default. . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Event of Default. . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
Exchange Act. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Existing Guaranteed Indebtedness. . . . . . . . . . . . . . . . . . . . 11
Fair Market Value . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Federal Reserve Board . . . . . . . . . . . . . . . . . . . . . . . . . 11
Federal Reserve Board . . . . . . . . . . . . . . . . . . . . . . . . . 42
Financials. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Finished Building Lots. . . . . . . . . . . . . . . . . . . . . . . . . 11
Fiscal Year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Fixed Charge. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Funding Date. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
GAAP. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
GECC Composite Commercial Paper . . . . . . . . . . . . . . . . . . . . 14
GECC Composite Commercial Paper Rate. . . . . . . . . . . . . . . . . . 14
Governmental Authority. . . . . . . . . . . . . . . . . . . . . . . . . 12
Guaranteed Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . 12
Guarantor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Guaranty. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Guaranty of Performance . . . . . . . . . . . . . . . . . . . . . . . . 12
Hazardous Substances. . . . . . . . . . . . . . . . . . . . . . . . . . 12
Hazardous Substances Indemnity Agreement. . . . . . . . . . . . . . . . 13
Hedging Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Housing Unit. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Indebtedness. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Indemnified Party . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Index Rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Intangible Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Interest Expense. . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Interest Incurred . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
x
Interest Payment Date . . . . . . . . . . . . . . . . . . . . . . . . . 15
Interest Payment Date . . . . . . . . . . . . . . . . . . . . . . . . . 27
Investment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
IRC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
IRS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Land. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Leases. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Lender. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Lender. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Lien. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Loan. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Loan Documents. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Loan Party. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Market Value. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Material Adverse Effect . . . . . . . . . . . . . . . . . . . . . . . . 16
Maximum Available Revolving Credit Advances . . . . . . . . . . . . . . 16
Maximum Lawful Rate . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Maximum Lawful Rate . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Maximum Loan. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Model . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Mortgages . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Multiemployer Plan. . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Note. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Note. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Notice of Revolving Credit Advance. . . . . . . . . . . . . . . . . . . 26
Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Operating Protocol. . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Option Deposit. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Ordinary Course Liens . . . . . . . . . . . . . . . . . . . . . . . . . 17
Other Distributions . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Other Indebtedness. . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Other Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
PBGC. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Pension Plan. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Permitted Encumbrances. . . . . . . . . . . . . . . . . . . . . . . . . 18
Permitted Investments . . . . . . . . . . . . . . . . . . . . . . . . . 19
Permitted Refinancing Indebtedness. . . . . . . . . . . . . . . . . . . 20
Person. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Plan. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Pledge and Security Agreement (Borrower). . . . . . . . . . . . . . . . 20
Pledge and Security Agreement (Guarantor) . . . . . . . . . . . . . . . 20
Primary Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Primary Obligor . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Proceeding. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
xi
Projections . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Projections . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Qualified Plan. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Real Estate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Receipts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Reportable Event. . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Representatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Reserves. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Restricted Payment. . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Retiree Welfare Plans . . . . . . . . . . . . . . . . . . . . . . . . . 21
Revolving Credit Advance. . . . . . . . . . . . . . . . . . . . . . . . 25
Revolving Credit Advance. . . . . . . . . . . . . . . . . . . . . . . . 21
Security Agreement. . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Speculative Unit. . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Spill . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Spill . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
Stated Rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Stated Rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Subordinated Loans. . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Subsidiary. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Termination Date. . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Title Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Title IV Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Total Indebtedness. . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Total Indebtedness to Adjusted Consolidated Tangible Net Worth Ratio. . 23
Total Unsecured Indebtedness. . . . . . . . . . . . . . . . . . . . . . 23
Trade Payables. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Trademark Security Agreement. . . . . . . . . . . . . . . . . . . . . . 23
Tri-Party Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Unit Backlog. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Unit Backlog to Unit Inventory Ratio. . . . . . . . . . . . . . . . . . 23
Unit Inventory. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Welfare Plan. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Work. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
Work-in-Progress. . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
xii
INDEX OF EXHIBITS
Exhibit A - Form of Note
Exhibit B - Form of Notice of Revolving
Credit Advance
Exhibit C - Form of Instruction Letter
(Concentration Banks)
Exhibit D - Form of Carryback Purchase Note
xiii
INDEX OF SCHEDULES
Schedule 1.1 Borrowing Base
Schedule 2.9(a) - Concentration Account
Schedule 2.9(b) - Disbursement Accounts
Schedule 4.2 - Executive Offices
Schedule 4.3 - Subsidiaries and Guarantors
Schedule 4.5(d) - Material Adverse changes and
Stock Related Transactions
Since December 31, 1992
Schedule 4.7(a) - Encumbrances on Real Estate
Schedule 4.7(b) - Rights of First Refusal
Schedule 4.7(d) - Pending or Threatened
Condemnation Proceedings
Schedule 4.7(e) - Casualty and Flood Hazard Area
Schedule 4.8 - Defaults
Schedule 4.11 - Other Ventures
Schedule 4.14 - Tax Matters
Schedule 4.15 - ERISA
Schedule 4.16 - Litigation
Schedule 4.18 - Outstanding Options
Schedule 4.19 - Employment Matters
Schedule 4.20 - Patents and Trademarks
Schedule 4.23 - Material Adverse Effect
Schedule 4.24 - Environmental Matters
Schedule 5.1(f) - Operating Reports
Schedule 6.7 - Insurance
Schedule 7.8 - Transactions with Affiliates
Schedule 7.16 - Employees and Officers Whose Annual Compensation
Exceeds $100,000
Schedule 10.9 - Authorized Signatures
xiv
REVOLVING CREDIT AGREEMENT
This REVOLVING CREDIT AGREEMENT ("AGREEMENT"), dated as of May ___,1995,
between UNITED HOMES, INC., an Illinois corporation, having an office at ▇▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇ ("BORROWER"), and
GENEL COMPANY, INC., an Oregon corporation, having an office at 13455 ▇▇▇▇ Road,
Suite ▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ ("LENDER").
R E C I T A L S:
A. Borrower has requested Lender to provide a secured revolving working
capital line of credit to Borrower, of up to Twenty Five Million Dollars
($25,000,000) in aggregate principal amount outstanding at any one time.
B. Lender has agreed to provide such secured revolving working capital
line of credit, but only upon the terms, and subject to the conditions,
contained herein.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
hereinafter contained, the parties hereto agree as follows:
1. DEFINITION AND INTERPRETATION MATTERS
1.1 DEFINITIONS.
In addition to the defined terms appearing above, capitalized terms used in
this Agreement shall have (unless otherwise provided elsewhere in this
Agreement) the following respective meanings when used herein:
"ADJUSTED CONSOLIDATED CASH FLOW" shall mean, with respect to Borrower, for
any period, an amount equal to the sum of the following amounts for such period:
(i) Adjusted Consolidated Operating Profit, plus (ii) all capitalized costs
relieved through Cost of Sales, including, without limitation, capitalized
interest, development and land costs, but excluding development and land costs
with respect to Eligible Collateral, plus (iii) Certain Indebtedness Incurred,
minus (iv) without duplication, all costs which are capitalized, including,
without limitation, Consolidated Capital Expenditures, capitalized finance,
interest, development and land costs, but excluding development and land costs
with respect to Eligible Collateral, minus (v) all cash payments constituting
Certain Indebtedness Paid, minus (vi) cash payments of Other Distributions,
Permitted Tax Distributions and federal, state and local income taxes, minus
(vii) Interest Incurred by Borrower in connection with this Agreement.
1
"ADJUSTED CONSOLIDATED CASH FLOW AVAILABLE FOR FIXED CHARGES" of Borrower
shall mean, for any period, the sum of the amounts for such period of (i)
Consolidated Net Income, plus (ii) federal income tax liability of Borrower and
Guarantor (other than income tax expense, either positive or negative,
attributable to extraordinary and nonrecurring gains or losses on Asset Sales),
plus (iii) Interest Expense, plus (iv) without duplication, all interest
included as a component of Cost of Sales, plus (v) all depreciation and, without
duplication, amortization, plus (vi) all other noncash items reducing
Consolidated Net Income during such period, minus (vii) all other noncash items
increasing Consolidated Net Income during such period, all as determined on a
consolidated basis for Borrower in accordance with GAAP.
"ADJUSTED CONSOLIDATED NET INCOME" shall mean, with respect to Borrower for
any period, the aggregate net income (or loss) for such period, determined in
accordance with GAAP; provided, that there will be excluded from such net income
(to the extent otherwise included therein), without duplication: (i) the net
income (or loss) of any Person other than Borrower in which any Person other
than Borrower has an ownership interest, provided, however, that to the extent
that any such income is actually received by Borrower in the form of dividends
or similar distributions, it shall be counted as net income during the period in
which it is received, (ii) except to the extent includable in Adjusted
Consolidated Net Income pursuant to the foregoing clause (i) the net income (or
loss of any Person that accrued prior to the date that (a) such Person is merged
into or consolidated with Borrower or (b) the assets of such Person are acquired
by Borrower, (iii) in the case of a successor to Borrower by consolidation,
merger or transfer of its assets, any net income (or loss) of the successor
prior to such merger, consolidation or transfer of assets, (iv) any noncash
losses, whether or not extraordinary, incurred in connection with the issuance
of Stock in exchange for Indebtedness of Borrower, and (v) all other noncash
items increasing net income during such period.
"ADJUSTED CONSOLIDATED OPERATING PROFIT" shall mean, with respect to
Borrower, for any period, the sum of the following amounts for such period: (i)
Adjusted Consolidated Net Income, (ii) federal income tax liability of Borrower
and Guarantor, the aggregate amounts of Interest Expense as reflected on the
income statement prepared in accordance with GAAP of Borrower, (iii)
depreciation, and (iv) amortization.
"ADJUSTED CONSOLIDATED TANGIBLE NET WORTH" shall mean, with respect to
Borrower at any date, (I) the stockholders' equity on a consolidated basis at
the end of the fiscal quarter immediately preceding such date, as determined in
accordance with GAAP, minus (ii) the amount of Intangible Assets reflected on
the consolidated balance sheet of Borrower as of the end of the fiscal quarter
of Borrower immediately preceding such date.
"ADJUSTED FINANCIAL TERMS" shall include the following defined terms:
Adjusted Consolidated Cash Flow, Adjusted Consolidated Net Income, Adjusted
Consolidated Operating Profit, Adjusted Consolidated Tangible Net Worth, Book
Cost, Adjusted Consolidated Cash Flow Available for Fixed Charges, Consolidated
Net Income, Consolidated Net Tangible Assets and Cost of Sales.
2
"ADMINISTRATION FEE" shall have the meaning assigned to it in Section
2.8(b) of this Agreement.
"ADVANCE COSTS" shall mean, for any period, redevelopment costs and land
development costs incurred by Borrower for improvements that may be required by
municipalities or other governmental bodies or any other party or entity that
imposes development requirements on any Real Estate.
"AFFILIATE" shall mean, with respect to any Person, (i) each Person that,
directly or indirectly, owns or controls, whether beneficially or as a trustee,
guardian or other fiduciary, 10% or more of the Stock having ordinary voting
power in the election of directors of such Person, (ii) each Person that
controls, is controlled by or is under common control with such Person or (iii)
each of such Person's officers and directors. For the purpose of this
definition, "control" of a Person shall mean the possession, directly or
indirectly, of the power to direct or cause the direction of its management or
policies , whether through the ownership of voting securities, by contract or
otherwise; provided, however, that Lender shall not be deemed to be an Affiliate
of Borrower.
"AGREEMENT" shall mean this Revolving Credit Agreement, including all
amendments, modifications and supplements hereto and any appendices, exhibits or
schedules to any of the foregoing, and shall refer to the agreement as the same
may be in effect at the time such reference becomes operative.
"ANCILLARY AGREEMENTS" shall mean any supplemental agreement, undertaking,
instrument, document or other writing executed by Borrower or any Affiliate as a
condition to advance or funding under this Agreement or otherwise in connection
herewith, including, without limitation, the Loan Documents, and all amendments
or supplements thereto.
"ASSET SALE" for any Person shall mean the sale, lease, conveyance or
other disposition (including, without limitation, by merger, consolidation or
sale and leaseback transaction, and whether by operation of law or otherwise)
of any of that Person's assets (including, without limitation, the sale or
other disposition of Stock or other ownership interest of any Subsidiary of
such Person, whether by such Person or such Subsidiary), whether owned on the
date hereof or subsequently acquired in one transaction or a series of
related transactions, in which such Person receives cash and/or consideration
(including, without limitation, the unconditional assumption of Indebtedness
of such Person) having an aggregate Fair Market Value of $200,000 or more as
to such transaction or series of related transactions; provided, however, (i)
sales of homes and sales of mortgages on homes in the ordinary course of
business consistent with past practices will not constitute Asset Sales, (ii)
sales, leases, conveyances or other dispositions, including, without
limitation, exchanges or swaps, of Real Estate in the ordinary course of
business consistent with past practices will not constitute Asset Sales, and
(iii) sales, leases, sale-leasebacks or other dispositions of amenities and
other improvements at Borrower's communities in the ordinary course of
business consistent with past practices will not constitute Asset Sales.
3
"ASSIGNEE LENDER" shall mean any holder of all or any portion of the Note
other than Lender.
"AVAILABILITY FEE" shall have the meaning assigned to such term in Section
2.8(a) of this Agreement.
"BACKLOG UNIT" means any Housing Unit that is the subject of a formal,
written agreement between Borrower and a third party customer (i) whereby
Borrower agrees to deliver and the customer agrees to buy a specific Housing
Unit at a specific selling price, and (ii) pursuant to which such customer
shall have made a customary cash deposit against the selling price of such
Housing Unit.
"BOARD OF DIRECTORS" means the board of directors of a Person or any
authorized committee of the board of directors of such Person.
"BOOK COST" of any Real Estate owned or acquired by any person shall mean
the cost of such Real Estate as reflected on the financial statements of such
Person determined in accordance with GAAP.
"BORROWER" shall mean United Homes, Inc., an Illinois corporation, having
an office at ▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇.
"BORROWING BASE" shall have the meaning assigned to it in Schedule 1.1
attached hereto, as interpreted and administered pursuant to the Operating
Protocol.
"BORROWING BASE AVAILABILITY" shall mean at any time, an amount equal to
the sum of:
(a) for each Eligible Housing Unit, the lesser of (i) 100% of
Construction Costs of the Eligible Housing Unit, PLUS the Advance Rate of the
Eligible Lot on which such Eligible Housing Unit has been or is being
constructed, or (ii) the applicable Advance Rate of the Eligible Housing Unit:
PLUS
(b) for each Eligible Lot, the lesser of (i) 100% of Borrowing Base
Book Cost for the Eligible Lots on which an Eligible Housing Unit has not been
and is not being constructed, or (ii) the applicable Advance Rate for such
Eligible Lot; MINUS
(c) the aggregate amount of all Trade Payables that have been
outstanding more than thirty (30) days after the due date of the applicable
invoice (after giving effect to the payment terms thereof).
As used herein, "ADVANCE RATE" shall mean: (a) with respect to any Eligible
Housing Unit, the following amounts: (i) if such Eligible Housing Unit is an
Eligible Model Home, 75% of the Market Value of such Eligible Model Home and the
Eligible Lot on which such
4
Eligible Model Home has been or is being constructed (considered as a whole);
(ii) if such Eligible Housing Unit qualifies as a Backlog Unit, 75% of the
Market Value of such Backlog Unit and the Eligible Lot on which such Backlog
Unit has been or is being constructed (considered as a whole); or (iii) if such
Eligible Housing Unit qualifies as a Speculative Unit, 65% of the Market Value
of such Speculative Unit and the Eligible Lot on which such Speculative Unit has
been or is being constructed (considered as a whole); and (b) with respect to an
Eligible Lot, 75% of the Market Value of such Eligible Lot.
"BORROWING BASE BOOK COST" of a Finished Building Lot shall mean all
acquisition costs of such Finished Building Lot which have been incurred by
Borrower. However, in the case of a Finished Building Lot transferred from an
Affiliate to Borrower, Borrowing Base Book Cost shall mean, at the time of the
transfer, all acquisition and development costs of such Finished Building Lot
which have been incurred by such Affiliate, including, but not limited to,
carrying cost, legal cost, engineering costs, taxes, bonds and permits. No
increases in Borrowing Base Book Cost shall occur due to transfer among
Affiliates and Borrower.
"BUSINESS DAY" shall mean any day that is not a Saturday, a Sunday or a day
on which banks are required or permitted to be closed in the States of Illinois
or New York.
"CALCULATION DATE" shall mean the first Business Day following which
Borrower has delivered its quarterly financial statements to Lender, an in no
event later than (i) the 45th day following the end of each Borrower's first
three fiscal quarters of each of Borrower's fiscal years and (ii) the 90th day
following the end of each of Borrower's fiscal years.
"CAPITAL ASSET" shall mean any asset that has a useful life of more than
one year and which is properly classified in relevant financial statements of
Borrower as a real property (excluding land held for investment or development,
land in the process of development, building lots and housing units, whether
under construction or completed), equipment, improvements, fixed assets or
similar types of assets capitalized in accordance with GAAP.
"CAPITAL LEASE" shall mean any lease of any property (whether real,
personal or mixed) by Borrower as lessee that, in accordance with GAAP, would be
required either to be classified and accounted for as a capital lease on a
balance sheet of Borrower or otherwise to be disclosed as such in a note to such
balance sheet.
"CAPITAL LEASE OBLIGATIONS" shall mean, with respect to any Capital Lease,
the amount of the obligations of the lessee thereunder.
"CARRYBACK PURCHASE NOTE" shall have the meaning assigned to it in Section
6.16.
"CERTAIN INDEBTEDNESS INCURRED" shall mean the amount of all sums borrowed
by Borrower in any period (i) pursuant to any future private placement or public
offering of Borrower's debt securities, (ii) representing acquisition,
development or construction
5
financing, and (iii) representing financing received from third parties with
respect to Models, but in no event including any (a) Guaranteed Indebtedness,
(b) Indebtedness evidenced by this Agreement, (c) Indebtedness evidenced by
the Carryback Purchase Notes or (d) Indebtedness evidenced by any vendor
notes, other than vendor notes given by Borrower with respect to Real Estate
which is not Eligible Collateral, or Trade Payables.
"CERTAIN INDEBTEDNESS PAID" shall mean all payments of principal and
interest made by Borrower in any period in connection with (i) any future
private placement or public offering of Borrower's debt securities, (ii)
acquisition, development or construction financing, including without
limitation any payments made by Borrower in connection with any Indebtedness
to third parties which Borrower has guaranteed or on which Borrower is a
co-obligor, and (iii) representing financing received from third parties with
respect to Models; but in no event including any (a) Indebtedness evidenced by
this Agreement, (b) Indebtedness evidenced by the Carryback Purchase Notes,
or (c) Indebtedness evidenced by any vendor notes, other that vendor notes
given by Borrower with respect to Real Estate which is not Eligible
Collateral, or Trade Payables, or (d) without duplication, other
Indebtedness, the proceeds of which were used to pay costs included in Cost
of Sales.
"CHANGE OF CONTROL" shall mean the occurrence of any of the following
events:
(i) the sale, lease or transfer of more than 5% of the assets
of borrower (considered as one entity) to any Person or "group" (as such
term is used in section 13(d)(3) of the Exchange Act);
(ii) any transaction or series of transactions the result of
which is that, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, and trusts
established for estate planning purposes for members of the immediate
families of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, in the aggregate,
beneficially own, directly or indirectly, less than 60% of the aggregate
voting power of all outstanding classes of Common Equity of Borrower and
Guarantor including, without limitation, convertible debt on an as
converted basis.
"CHARGES" shall mean all Federal, state, county, city, municipal, local,
foreign or other governmental taxes (including, without limitation, PBGC) at
the time due and payable, levies, assessments, charges, liens, claims or
encumbrances upon or relating to (i) the Collateral, (ii) the Obligations,
(iii) Borrower's employees, payroll, income or gross receipts, (iv)
Borrower's ownership or use of any of its assets, or (v) any other aspect or
Borrower's business.
"CODE" shall mean the Uniform Commercial Code of the jurisdiction with
respect to which such term is used, as in effect from time to time.
"COLLATERAL" shall mean the "Collateral" covered by the Security
Agreement, the Mortgages, the Trademark Security Agreement and any other
property, real or personal,
6
tangible or intangible, now existing or hereafter acquired, that may at any
time be or become subject to a security interest or Lien in favor of Lender
to secure the Obligations.
"COLLATERAL DOCUMENTS" shall mean the Security Agreement, the Mortgages,
the Trademark Security Agreement and any other security agreements, pledge
agreements, mortgages, deeds of trust, assignments or any other agreement or
document pursuant to which Lender obtains or perfects a security interest in
or Lien on Collateral.
"COMMITMENT FEE" shall have the meaning assigned to it in Section 2.7 of
this Agreement.
"COMMITMENT TERMINATION DATE" shall mean the earlier of (i)
May 31, 1999, (ii) the date that Lender elects, pursuant to an express
provision of this Agreement, to terminate Borrower's right to receive Revolving
Credit Advances, and (iii) the date of prepayment in full by Borrower of the
Loan in accordance with the provisions of Section 2.3 hereof.
"COMMON EQUITY" of any Person means all Stock of such Person that is
generally entitled to (i) vote in the election of directors of such Person or
(ii) if such Person is not a corporation, vote or otherwise participate in
the selection of the governing body, partners, managers or others that will
control the management and policies of such Person.
"COMPENSATION" shall mean, with respect to any Person, all payments
and accruals commonly considered to be compensation, including, without
limitation, all wages, commissions, salary, deferred payment arrangements,
bonus payments and accruals, profit sharing arrangements, stock appreciation
rights or similar rights, incentive payments, pension or employment benefit
contributions or similar payments, made to or accrued for the account of such
Person or otherwise for the direct or indirect benefit of such Person.
"CONCENTRATION ACCOUNT" shall mean that account designated on Schedule
2.9(a) hereof or other accounts as may be agreed to by Lender and Borrower.
"CONSOLIDATED CAPITAL EXPENDITURES" shall mean, for any period, the
aggregate amount of all payments by Borrower for any Capital Asset or
improvements or for replacements, substitutions or additions thereto, all as
determined on a consolidated basis for Borrower in accordance with GAAP.
"CONSOLIDATED FIXED CHARGE COVERAGE RATIO" of Borrower shall mean,
with respect to any Calculation Date, the ratio of (i) Adjusted Consolidated
Cash Flow Available for Fixed Charges of Borrower for the prior four full
fiscal quarters for which financial results have been reported immediately
preceding the Calculation Date, to (ii) the aggregate Interest Incurred of
Borrower for the prior four full fiscal quarters for which financial results
have been reported immediately preceding the Calculation Date, determined on
a consolidated basis in accordance with GAAP.
7
"CONSOLIDATED NET INCOME" of Borrower, for any period, shall mean the
Adjusted Consolidated Net Income of Borrower; provided that there will be
excluded therefrom (to the extent otherwise included therein), without
duplication, the gains (but not losses) resulting from (a) the acquisition of
securities issued by Borrower or extinguishment of Indebtedness of Borrower,
(b) Asset Sales, and (c) other extraordinary items. Notwithstanding the
foregoing, in calculating Consolidated Net Income, Borrower will be entitled
to take into consideration the tax benefits associated with any extraordinary
loss, but only to the extent such tax benefits are recognized by Borrower,
all determined on a consolidated basis in accordance with GAAP.
"CONSOLIDATED NET TANGIBLE ASSETS" shall mean, for any Person, the total
amount of assets of such Person and its subsidiaries (less applicable
reserves) on a consolidated basis, as determined in accordance with GAAP,
less Intangible Assets.
"CONSTRUCTION BUDGET" shall mean with respect to any Eligible Collateral
the budget for construction costs presented by Borrower with a "start
package" described in the Operating Protocol and approved by Lender.
"CONSTRUCTION COSTS" shall mean the actual costs incurred by Borrower in
connection with the construction of any Eligible Collateral pursuant to the
Construction Budget submitted to Lender for that Eligible Collateral,
including all capitalized soft costs which are allowable under GAAP, but
excluding the actual cost or Market Value of the Eligible Lots on which
Eligible Collateral has been or is being constructed.
"COST OF SALES" shall mean, with respect to Borrower for any period, the
"cost of sales" of Borrower for such period, determined on a consolidated
basis in accordance with GAAP.
"DEFAULT" shall mean any event which, with the passage of time or notice
or both, would, unless cured or waived, become an Event of Default.
"DETERMINATION DATE" shall mean any date on which Lender is determining
the current Borrowing Base Availability.
"DEPOSITORY ACCOUNT" shall mean that certain account of Lender, account
number ▇▇▇▇▇▇▇▇ in the name of GENEL/RCL-United at Bankers Trust Company, ▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ number 021 001 033.
"DEVELOPMENT COSTS" shall mean, with respect to Borrower as of any date,
land development costs for improvements.
"DISBURSEMENT ACCOUNTS" shall mean those certain accounts of Borrower
designated on Schedule 2.9(b) hereof, the primary Disbursement Account to
which Lender shall disburse
8
Revolving Credit Advances being American National Bank and Trust Company of
Chicago Account No. 500601658.
"DOL" shall mean the United States Department of Labor or any successor
thereto.
"ELIGIBLE COLLATERAL" shall mean Real Estate designated in writing by
Lender in its sole discretion as constituting Eligible Collateral and with
respect to which:
(i) Borrower is vested in title;
(ii) Lender has a first priority Lien perfected as contemplated by
the terms of this Agreement and the other Loan Documents;
(iii) In the case of any Finished Building Lot, Lender has approved
the Subdivision in which such Finished Building Lot is located;
(iv) In the case of any Housing Unit, there is Work-in-Progress or
finished Housing Units or Models thereon;
(v) In the case of any Housing Unit, Lender and Borrower have agreed
upon a "start package" and Construction Budget with respect to such Real
Estate as more fully described in the operating Protocol;
(vi) In the case of any Housing Unit, such Real Estate has all
necessary building and other permits and construction of a Housing Unit or
Model thereon has commenced;
(vii) Lender is satisfied with the results of its physical
inspection and with the valuation of such Real Estate set forth in
third-party appraisals performed at Borrower's expense;
(viii) Lender has received an Environmental Report from an
environmental consultant acceptable to Lender and is satisfied with the
environmental condition of such Real Estate;
(ix) Lender and its counsel are satisfied with the results of a
legal review of title to such Real Estate and Lender has received an ALTA
1970 lender's policy of title insurance (or a binding commitment to issue the
same) in form and content satisfactory to Lender and which, when the
applicable premium therefor is paid by Borrower and the policy is issued,
will insure that Lender's Lien created pursuant to the Collateral Documents
constitutes a valid first priority Lien encumbering such Real Estate, naming
Lender as insured, issued by a nationally recognized title insurance company
acceptable to Lender and providing such endorsements as Lender may require;
9
(x) Lender has received such other information and documents
regarding such Real Estate as it may require;
(xi) such Real Estate otherwise meets Lender's normal and customary
requirements for lending on similar real estate collateral including, without
limitation, approvals of subdivisions, absorption analyses, residual value
calculations and cash flow analyses;
(xii) with respect to any Real Estate subject to a Subordinated
Loan, the subordinated lender shall have delivered to Lender copies of all
documents evidencing such Subordinated Loan and such other documentation as
Lender may require and shall have submitted to the escrow company designated
to facilitate the sale of such Real Estate, duly executed and acknowledged
partial releases of the lots and units comprising the Real Estate; and
(xiii) all conditions to Real Estate becoming Eligible Collateral
set forth in the Operating Protocol have been satisfied.
"ELIGIBLE HOUSING UNIT" shall mean any housing unit on which Lender has
a first priority Lien and no other party has a Lien (other than Permitted
Encumbrances) and which constitutes Eligible Collateral and part of the
Borrowing Base.
"ELIGIBLE LOT" means any Finished Building Lot on which Lender has a
first priority Lien and no other party has a Lien (other than Permitted
Encumbrances) and which constitutes Eligible Collateral and part of the
Borrowing Base.
"ELIGIBLE MODEL HOMES" shall mean any Model on which Lender has a first
priority Lien and no other-party has a Lien (other than Permitted
Encumbrances) and which constitutes Eligible Collateral and part of the
Borrowing Base.
"ELIGIBLE TERMINATION DATE" shall mean May 31, 1998.
"ENVIRONMENTAL LAWS" shall mean (i) the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended by the Superfund
Amendments and Reauthorization Act of 1986, 42 U.S.C.A. Section 9601 ET SEQ.,
(ii) the Resource Conservation and Recovery Act, as amended by the Hazardous
and Solid Waste Amendment of 1984, 42 U.S.C.A Section 6901 ET SEQ., (iii) the
Clean Air Act, 42 U.S.C.A. Section 7401 ET SEQ., (iv) the Clean Water Act of
1977, 33 U.S.C.A. Section 1251 ET SEQ., (v) the Toxic Substances Control Act,
15 U.S.C.A. 2601 ET SEQ., and (vi) all other federal, state and local laws,
rules, regulations, statutes, and ordinances relating to air pollution, water
pollution, and the handling, release, discharge, use, storage, treatment, or
disposal of on-site or off-site hazardous or toxic waste, substances or
materials.
10
"ENVIRONMENTAL REPORT" shall mean an environmental report, audit or
assessment of real property owned, leased or operated by the Borrower which
is performed in accordance or substantially consistent with the Standard
Practices for Environmental Site Assessments; Phase I Environmental Site
Assessment Process or Transaction Screen Process, as established by the
American Society for Testing and Materials, or which is otherwise prepared in
accordance with the requirements of an appropriate federal, state or local
governmental agency.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974
(or any successor legislation thereto), as amended from time to time.
"ERISA AFFILIATE" shall mean, with respect to Borrower, any trade or
business (whether or not incorporated) under common control, or treated as a
single employer, with Borrower within the meaning of Section 414(b), (c),
(m), or (o) or the IRC.
"ERISA EVENT" shall mean, with respect to Borrower or any ERISA
Affiliate, the failure to make required contributions to a Qualified Plan.
"ESOP" shall mean the Employee Stock Ownership Plan adopted by Guarantor
for its employees.
"EVENT OF DEFAULT" shall have the meaning assigned to it in Section 9.1
hereof.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.
"EXISTING GUARANTEED INDEBTEDNESS" shall have the meaning assigned to it
in section 7.4(a) hereof.
"FAIR MARKET VALUE" shall mean the price at which particular assets or
property could be sold by a willing seller to a willing buyer under ordinary
and customary terms and conditions, and shall not mean the price at which
such assets or property could be sold in a liquidation or forced sale.
"FEDERAL RESERVE BOARD" shall have the meaning assigned to it in Section
4.13 hereof.
"FINANCIALS" shall mean the financial statements referred to in Sections
4.5(a) and (b) hereof.
"FINISHED BUILDING LOTS." shall mean any Real Estate that has been duly
recorded and platted for use as single family attached or detached dwelling
sites, zoned for such use, with respect to which all requisite governmental
consents and approvals have been obtained and as to which (i) all site
development activity, other than the application of the seal or finishing
coat on improved roadways and other minor repairs required to dedicate such
roadways has
11
been completed and (ii) all utilities connections (including electrical and,
where applicable, water and sewer) have been brought to each lot shown on the
plat covering such parcel and are available for hook-up.
"FISCAL YEAR" shall mean each one-year period commencing on October 1
and ending on September 30 of the succeeding year. Subsequent changes of the
fiscal year of Borrower shall not change the term "Fiscal Year," unless
Lender consents in writing to such changes.
"FIXED CHARGE" shall mean the aggregate of all interest on the Loan, all
interest on the loan from The Chase Manhattan Bank, N.A. to Guarantor
relating to the ESOP, and other fixed debt payments, other charges, and
reserves of Borrower and Guarantor as determined by Lender from time to time.
"FUNDING DATE" shall mean the first date on which all of the following
have occurred: (i) all conditions precedent set forth in Section 3 have been
satisfied or waived in writing by Lender as provided therein, and (ii) Lender
makes its first advance pursuant to this Agreement.
"GAAP" shall mean accounting policies and methodologies consistent with
generally accepted accounting principles in the United States of America as
in effect from time to time, as adjusted where required pursuant to Section
1.2 hereof.
"GOVERNMENTAL AUTHORITY" shall mean any nation or government, any state
or other political subdivision thereof and any agency, department or other
entity exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to government.
"GUARANTEED INDEBTEDNESS" shall mean any obligation of Borrower or
Guarantor 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
Borrower or Guarantor (i) to purchase or repurchase any such Primary
Obligation, (ii) to advance or supply funds (a) for the purchase or payment
of any such Primary Obligation or (b) 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, (iii) 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 (iv) to
indemnify the owner of such Primary Obligation against the loss in respect
thereof.
"GUARANTOR" shall mean United Development Management Company, an
Illinois corporation.
"GUARANTY" shall mean the agreement made in favor of Lender, including
all amendments, modifications and supplements thereto, and shall refer to the
Guaranty as the same may be in effect at the time such reference becomes
operative.
12
"GUARANTY OF PERFORMANCE" shall mean any surety or performance bond,
stand-by letter of credit or similar instrument issued to municipalities,
local governments or utilities supporting the performance by any Person for
the construction of public facilities required for the development or
maintenance of a subdivision.
"HAZARDOUS SUBSTANCES" shall mean any substance, material or waste, the
use, generation, handling, storage, release, treatment or disposal of which
is regulated by and federal, state or local government authority in any
jurisdiction in which either Borrower or Guarantor has owned, leased or
operated real property or disposed of hazardous materials, including, without
limitation, any such material, waste or substance which is (i) petroleum or a
petroleum product, whether refined or unrefined, (ii) regulated as a
"hazardous substance" pursuant to Section 311 of the Clean Water Act, 33
U.S.C.A. 1251 ET SEQ., (33 U.S.C.A. 1321) or regulated pursuant to Section
307 of the Clean Water Act (33 U.S.C.A. 1317), (iii) regulated as a
"hazardous waste" pursuant to Section 1004 of the Resource Conservation and
Recovery Act, 42 U.S.C.A. 6901 ET SEQ., (42 U.S.C.A. 6903), (iv) regulated as
a "hazardous substance" pursuant to Section 101 of the Comprehensive
Environmental Response, Compensation, and Liability Act, 42 U.S.C.A. 9601 ET
SEQ., (42 U.S.C.A. 9601), or (v) similarly regulated under any other federal,
state or local law, statute, regulation or ordinance relating to the
protection of human health or the environment.
"HAZARDOUS SUBSTANCES INDEMNITY AGREEMENT" shall mean the Hazardous
Substances Indemnity Agreement entered into among Lender, Borrower, and
Guarantor.
"HEDGING OBLIGATIONS" of any Person means the obligations of such Person
pursuant to any interest rate swap agreement, foreign currency exchange
agreement, interest rate cap or collar agreement, option or futures contract
or other similar agreement or arrangement relating to interest rates or
foreign exchange rates.
"HOUSING UNIT" shall mean any house, constructed or under construction
on a Finished Building Lot, for sale to retail purchasers.
"INDEBTEDNESS" of any Person at any date means, without duplication, (i)
all indebtedness of such Person for borrower money (whether or not the
recourse of the lender is to the whole of the assets of such Person or only
to a portion thereof), (ii) all obligations of such Person evidenced by
bonds, debentures, notes or other similar instruments, including, without
limitation, any and all such obligations of such Persons which are
convertible into or exchangeable for Stock, (iii) all obligations of such
Person in respect of letters of credit or other similar instruments (or
reimbursement obligations with respect thereto), other than standby letters
of credit (or similar instruments, including, without limitation,
reimbursement obligations) issued for the benefit of, or surety and
performance bonds issued by, such Person in the ordinary course of business,
(iv) all obligations of such Person with respect to Hedging Obligations
(other than (x) those that fix the exchange rate in connection with
indebtedness denominated in a foreign currency and otherwise permitted by
this Agreement and (y) the purchase of mortgage commitments in the ordinary
course of business), (v) all
13
obligations of such Person to pay the deferred and unpaid purchase price of
property or services, including, without limitation, all conditional sale
obligations of such Person and all obligations under any title retention
agreement (except trade payables and accrued expenses incurred in the
ordinary course of business), (vi) all Capital Lease Obligations of such
Person, (vii) all indebtedness of others secured by a Lien on any asset of
such Person, whether or not such indebtedness is assumed by such Person, and
(viii) all indebtedness of others guaranteed by, or otherwise the liability
of, such Person to the extent of such guaranty or liability, and (ix) all
indebtedness of any Person in connection with the ESOP. The amount of
indebtedness of such Person at any date will be (a) the outstanding balance
at such date of all unconditional obligations as described above, (b) the
maximum liability of such Person for any contingent under clause (viii) above
and (c) in the case of clause (vii) (if the Indebtedness referred to therein
is not assumed by such Person), the lesser of the (A) Fair Market Value of
any asset subject to a Lien securing the indebtedness of others on the date
that the Lien attached and (B) amount of the indebtedness secured.
Notwithstanding the foregoing, Indebtedness shall not include any obligations
relating to or arising out of special assessments by any municipality or by
any finance entities or agencies created by any municipality or authorized to
be created under state statutes.
"INDEX RATE" shall mean the "GECC Composite Commercial Paper Rate."
"GECC COMPOSITE COMMERCIAL PAPER RATE" shall mean the Average Interest
Expense on the actual principal amount of the GECC Composite Commercial Paper
outstanding for Lender's full fiscal month preceding the interest billing
month. "AVERAGE INTEREST EXPENSE" shall mean the percentage obtained by
dividing the interest expense on GECC Composite Commercial Paper for such
fiscal month by the average daily principal amount of GECC Composite
Commercial Paper outstanding during such fiscal month, divided by the actual
number of days in such fiscal month and multiplied by the actual number of
days in the calendar year. The GECC Composite Commercial Paper Rate shall be
determined by Lender and evidenced by a certificate issued by an authorized
Lender employee. "GECC COMPOSITE COMMERCIAL PAPER" shall mean Lender's
outstanding commercial paper for terms of nine (9) months or less from
sources within the United States, but excluding the current portion of
Lender's long term Debt and GECC Financial Corporation's borrowings and
interest expense.
"INTANGIBLE ASSETS" shall mean all unamortized debt discount and
expense, unamortized deferred charges, goodwill, patents, trademarks, service
marks, trade names, copyrights, write-ups of assets over their carrying value
on the Funding Date or the date of acquisition, if acquired subsequent
thereto (other than write-ups resulting from foreign currency transactions
and write-ups of tangible assets of a going concern business made within
12 months after the acquisition of such business), and all other items which
would be treated as intangibles on the consolidated balance sheets of
Borrower and Guarantor prepared in accordance with GAAP.
"INTEREST EXPENSE" of any Person for any period means, without
duplication, interest which, in conformity with GAAP, would be set opposite
the caption "interest expense" or any like caption on an income statement for
such Person (including, without limitation and
14
to the extent required to be included as "interest expense" in conformity
with GAAP, imputed interest included on Capital Lease Obligations, all
commissions, discounts and other fees and charges owed with respect to
letters of credit securing financial obligations and bankers' acceptance
financing, the net costs associated with Hedging Obligations, amortization of
other financing fees and expenses, the interest portion of any deferred
payment obligation, amortization of discount or premium, if any, and all
other noncash interest expenses other than interest and other charges
amortized to Cost of Sales BUT EXCLUDING any interest paid from interest
reserves on development loans).
"INTEREST INCURRED" of any Person for any period means, without
duplication, Interest Expense of such Person for such period plus, to the
extent not included in Interest Expense, all interest capitalized for such
period, all interest attributable to discontinued operations for such period
to the extent not set forth on the income statement under the caption
"interest expense" or any like caption, and all interest actually paid under
any guaranty of Indebtedness (including, without limitation, a guaranty of
principal, interest or any combination thereof) of any other Person during
such period.
"INTEREST PAYMENT DATE" shall have the meaning assigned to such term in
Section 2.6(a) hereof.
"INVESTMENT" means, with respect to any Person, (i) any direct or
indirect advance (other than advances to employees for moving, entertainment
and travel expenses, loans, advances or deposits in anticipation of goods or
services to be provided, in each case in the ordinary course of business),
loan or other extension of credit to, or guarantee of any Indebtedness of, or
capital contribution by such Person or any of its Subsidiaries to any other
Person (other than a Subsidiary of such Person), including all Indebtedness
and accounts receivable from such other Person that are not current assets or
did not arise from sales to such other Persons in the ordinary course of
business, (ii) any direct or indirect capital contribution to, purchase or
other acquisition of any Stock, partnership interest or other ownership
interest, debt security or other security of, or other investment in, any
Subsidiary or Affiliate of such Person, or (iii) any direct or indirect
purchase or other acquisition by such Person or any of its Subsidiaries of,
or a beneficial interest in, stock or other securities of any other Person.
The amount of any Investment shall be the original cost of such Investment
plus the costs of all additions thereto, without any adjustments for
increases or decreases in value, or write-ups, write-down or write-offs with
respect to such Investment.
"IRC" shall mean the Internal Revenue Code of 1986, as amended, and any
successor thereto.
"IRS" shall mean the Internal Revenue Service, or any successor thereto.
"LEASES" shall mean all of those leasehold estates in real property now
owned or hereafter acquired by Borrower, as lessee.
15
"LENDER" shall mean Genel Company, Inc. and certain of its affiliates
or their successors thereto which may make advances under this Agreement.
"LIEN" shall mean any mortgage or deed of trust, pledge, hypothecation,
assignment, deposit arrangement, lien, charge, claim, security interest,
easement or encumbrance, or preference, priority or other security agreement
(or other preferential arrangement in the nature of a security interest or
lien) of any kind or nature whatsoever (including, without limitation, any
lease or title retention agreement, any financing lease having substantially
the same economic effect as any of the foregoing, any perfected workers',
mechanics', suppliers', carriers' or warehousemen's lien, any "stop notice",
and the filing of, or agreement to give, any financing statement perfecting
a security interest under the Code or comparable law of any jurisdiction).
"LOAN" shall mean at any date the aggregate amount of Revolving Credit
Advances outstanding at such-date.
"LOAN DOCUMENTS" shall mean this Agreement, the Note, the Collateral
Documents, the Guaranty, the Tri-Party Agreement, those other Ancillary
Agreements as to which Lender is a party or a beneficiary on the Funding Date,
and all other agreements, instruments, documents and certificates, including,
without limitation, pledges, powers of attorney, consents, assignments,
contracts, notices, and all other written matter whether heretofore, now or
hereafter executed by or on behalf of Borrower or any of its Affiliates, or
any employee of Borrower or any of its Affiliates, and delivered to Lender
in connection with this Agreement or the transactions contemplated hereby.
"LOAN PARTY" shall mean Borrower, Guarantor, and each other party to a
Loan Document.
"MARKET VALUE" shall mean, with respect to any Eligible Collateral, an
amount equal to a value for such Eligible Collateral either (a) established
by Lender or an independent qualified appraiser approved by Lender in its
reasonable discretion, or (b) established by the sales price specified in a
formal written agreement between Borrower and a third-party customer which
qualifies a Housing Unit as Backlog Unit.
"MATERIAL ADVERESE EFFECT" shall mean material adverse effect on (i) the
business, assets, operations, prospects or financial or other condition of
Borrower, (ii) the Borrower's collective ability to perform the Obligations
in accordance with the terms thereof, (iii) the Collateral or Lender's Lien
on the Collateral or the priority of any such Lien where the aggregate value
of all Collateral or Lender's Lien therein so adversely affected shall exceed
$50,000 at any given time during the term of this Agreement or (iv) Lender's
rights and remedies under any of the Loan Documents, other than any effect on
such rights or remedies arising out of or caused by actions voluntarily taken
by Lender (including in connection with any exercise of its remedies).
16
"MAXIMUM AVAILABLE REVOLVING CREDIT ADVANCES" shall mean the maximum
amount of Revolving Credit Advances Borrower would have the ability to obtain
at any given time.
"MAXIMUM LAWFUL RATE" shall have the meaning assigned to it in Section
2.6(d) hereof.
"MAXIMUM LOAN" shall mean an amount of up to $20,000,000 until (i)
Borrower shall have achieved an Adjusted Consolidated Tangible Net Worth of in
excess of $9,000,000,(ii) Borrower shall have sold at least 351 Housing Units
in Fiscal Year 1994-1995, and (iii) shall have paid the $20,000 addition to
the Commitment Fee under Section 2.7, at which time Maximum Loan shall mean
an amount of up to $25,000,000.
"MODEL" shall mean any display house, which, may be decorated,
landscaped or furnished, which is used for marketing purposes and is not
generally for sale to retail purchasers until such time as it ceases to be
used as a display house, and may include with respect to Models of attached
housing, a unit or units attached to such Models but which are not used for
marketing purposes.
"MORTGAGES" shall mean agreements made in favor of Lender by Borrower,
granting Lender a Lien on Eligible Collateral, in form satisfactory to
Lender, subject to changes made from time to time to conform to applicable
state laws, including all amendments, modifications, spreaders and
supplements thereto and shall refer to the Mortgages as the same may be in
effect at the time such reference becomes operative.
"MULTIEMPLOYER PLAN" shall mean a "multiemployer plan" as defined in
Section 4001(a)(3) of ERISA, and to which Borrower or any ERISA Affiliate is
making, is obligated to make, has made or been obligated to make, contributions
on behalf of participants who are or were employed by any of them.
"NOTE" shall have the meaning assigned to it in Section 2.1(b) hereof.
"OBLIGATIONS" shall mean all loans, advances, debts, liabilities, and
obligations, for monetary amounts (whether or not such amounts are liquidated
or determinable) owing by Borrower to Lender 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,
Commitment Fees, Availability Fees, Administration Fees, charges, expenses,
indemnities (to the extent of any present claim thereunder), attorneys' fees
and any other sums chargeable to Borrower under any of the Loan Documents.
"OPERATING PROTOCOL" shall mean the Protocol and Procedures for
admission of Real Estate to and removal of Real Estate from the Borrowing
Base.
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"OPTION DEPOSIT" shall mean any payment of a cash deposit or delivery
of a letter of credit in conjunction with a contract committing a seller to
deliver title to all or a portion of a land parcel or finished lots, on
specified terms.
"ORDINARY COURSE LIENS" shall mean (i) liens for ad valorem taxes,
assessments or other similar governmental charges or levies, which are
either (a) not yet due and payable or, (b) contested in good faith and fully
bonded; and (ii) workers' mechanics', suppliers', carriers', or
warehousemen's liens arising by virtue of statute, in the ordinary course of
business, not yet due and payable.
"OTHER DISTRIBUTIONS" shall mean all amounts paid to Affiliates (whether
by loan, dividends, contributions, for the purchase of property, for services
or otherwise) except as permitted pursuant to Section 7.3(a), (c), (d), (e),
(f), (g) and (h).
"OTHER INDEBTEDNESS" shall mean all Indebtedness of Borrower, but not
including Indebtedness outstanding under this Agreement, Indebtedness
reflected by the Carryback Purchase Notes, or Trade Payables or other
customary trade payables and accruals incurred in the ordinary course of
business consistent with past practice (unless evidenced by notes).
"PBGC" shall mean the Pension Benefit Guaranty Corporation or any
successor thereto.
"PENSION PLAN" shall mean an employee pension benefit plan, as defined
in Section 3(2) of ERISA (other than a Multiemployer Plan), which is not an
individual account plan, as defined in Section 3(34) of ERISA, which Borrower
or any ERISA Affiliate maintains, contributes to or has an obligation to
contribute to on behalf of participants who are or were employed by any of
them.
"PERMITTED ENCUMBRANCES" shall mean the following encumbrances: (i)
Ordinary Course Liens; (ii) pledges or deposits securing obligations under
workmen's compensation, unemployment insurance, social security or public
liability laws or similar legislation; (iii) pledges or deposits securing
bids, tenders, contracts (other than contracts for the payment of money) or
leases to which Borrower is a party as lessee made in the ordinary course of
business; (iv) deposits securing public or statutory obligations of Borrower;
(v) deposits securing or in lieu of surety, appeal or customs bonds in
proceedings to which Borrower is a party; (vi) any attachment or judgment lien,
unless the judgment it secures shall not, within 60 days after the entry
thereof, have been discharged or execution thereof stayed pending appeal, or
shall not have been discharged within 60 days after the expiration of any
stay; (vii) "stop notices," unless the aggregate amount outstanding and
unbonded exceeds $50,000; (viii) zoning restrictions on the use of real
property (including leasehold title), so long as the same do not materially
impair the use, value, or marketability of such real property, leases or
leasehold estates; (ix) Liens, licenses or other restrictions or encumbrances
on Real Estate, specified on mortgagee title insurance binders and policies
approved by Lender and its counsel; (x) Liens securing the Permitted
Refinancing
18
Indebtedness; provided that (a) the amount of Indebtedness secured by such
Liens does not result in a violation of any of the financial covenants of
this Agreement, (b) such Liens do not spread to cover any additional assets
with a Fair Market Value in excess of the assets which previously secured the
refinanced Indebtedness, and (c) such Liens only extend to assets which are
similar to the type of assets previously securing the refinanced
Indebtedness; (xi) any interest in or title of a lessor to property subject
to any Capital Lease Obligations incurred in compliance with the provisions
of this Agreement; (xii) any contract to sell an asset; provided such sale is
not otherwise prohibited under this Agreement; (xiii) Liens securing
Indebtedness of Borrower; (xiv) any right of a lender or lenders to which
Borrower may be indebted to offset against, or appropriate and apply to the
payment of, such indebtedness any and all balances, credits, deposits,
accounts or monies of Borrower with or held by such lender or lenders; (xv)
any pledge or deposit of cash or property in conjunction with obtaining
surety and performance bonds and letters of credit required to engage in
constructing on-site and off-site improvements required by municipalities or
other governmental authorities in the ordinary course of business of
Borrower, by Borrower and as otherwise permitted by this Agreement; (xvi)
Liens in favor of Borrower; (xvii) Liens on property of a Person existing at
the time such Person is merged into or consolidated with Borrower or any
Subsidiary of Borrower or becomes a Subsidiary of Borrower; provided, that
such Liens were in existence prior to such merger or consolidation or the
time such Person becomes a Subsidiary and were not created in contemplation
thereof; (xviii) Liens on property existing at the time of acquisition
thereof by Borrower or any Subsidiary of Borrower; provided, that such Liens
were in existence prior to such acquisition and were not created in
contemplation thereof; (xix) Liens existing on the date hereof; (xx) Liens
created by special assessment districts used to finance infrastructure
improvements so long as such liens are non-recourse; (xxi) zoning
restrictions, licenses, restrictions on the use of real property or minor
irregularities in title thereto, which do not materially impair the use of
such real property in the ordinary course of business of Borrower or the
value of such real property for the purpose of such business; and (xxii) any
contract to sell an asset provided such sale is otherwise permitted under
this Agreement.
"PERMITTED INVESTMENTS" means (a) any Investments in Borrower, (b) any
Investments in (i) marketable direct obligations issued or unconditionally
guaranteed by the United States Government or issued by any agency thereof
and backed by the full faith and credit of the United States, in each case
maturing within one year from the date of acquisition thereof, (ii)
marketable direct obligations issued by any state of the United States of
America maturing within one year from the date of acquisition thereof and, at
the time of acquisition, having one of the two highest ratings obtainable
from both Standard & Poor's Corporation and ▇▇▇▇▇'▇ Investors Service, Inc.,
(iii) commercial paper maturing no more than one year from the date of
creation thereof and, at the time of acquisition, having one of the two
highest ratings obtainable from both Standard & Poor's Corporation and
▇▇▇▇▇'▇ Investors Service, Inc., (iv) certificates of deposit maturing within
six months from the date of acquisition thereof issued by, or bank accounts
maintained with, commercial banks organized under the laws of the United
States of America or any state thereof or the District of Columbia, each
having combined capital and surplus, as shown in the most recently
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consolidated financial statements at the time of acquisition of not less than
$10,000,000 and, at the time of acquisition, having a rating of "A" or better
from both Standard & Poor's Corporation and ▇▇▇▇▇'▇ Investors Service, Inc.,
(v) bonds issued by corporations organized under the laws for the United
States of America or any state thereof, having a maturity within one year
from the date of acquisition thereof and having, at the time of acquisitions,
one of the two highest ratings obtainable from both Standard & Poor's
Corporation and ▇▇▇▇▇'▇ Investors Service, Inc. but only to the extent that
such corporate bonds do not exceed fifty percent (50%) of the Borrower's
total Investments at the time of acquisition, (vi) money market funds
organized under the laws of the United States of America or any state thereof
that invest solely in any of the types of Investments permitted under this
definition, or (vii) any securities received in connection with Asset Sales
provided that, at the time of acquisition, the aggregate book value of such
securities does not exceed 10% of Borrower's Consolidated Net Tangible Assets
at the end of the most recent fiscal quarter for which financial statements
are available.
"PERMITTED REFINANCING INDEBTEDNESS" shall mean Indebtedness issued in
exchange for, or the proceeds of which are used to extend, refinance, renew,
replace, substitute or refund other Indebtedness of Borrower, but not any
Affiliate of Borrower; provided, however, that the principal amount of such
Permitted Refinancing Indebtedness shall not exceed the principal amount of
Indebtedness so extended, refinanced, renewed, replaced, substituted or
refunded (plus the amount of reasonable fees and expenses incurred in
connection therewith).
"PERSON" shall mean any individual, sole proprietorship, partnership,
joint venture, trust, unincorporated organization, association, corporation,
institution, public benefit corporation, entity or government (whether
Federal, state, city, municipal or otherwise, including, without limitation,
any instrumentality, division, agency, body or department thereof).
"PLAN" shall mean an employee benefit plan, as defined in Section 3(3) of
ERISA, which Borrower or any ERISA Affiliate maintains, contributes to or has
an obligation to contribute to on behalf of participants who are or were
employed by any of them.
"PLEDGE AND SECURITY AGREEMENT (BORROWER)" shall mean the agreement
entered into by Borrower in favor of Lender in form satisfactory to Lender,
including all amendments, modifications and supplements thereto, and shall
refer to the Pledge and Security Agreement (Borrower) as the same may be in
effect at the time such reference becomes operative.
"PLEDGE AND SECURITY AGREEMENT (GUARANTOR)" shall mean the agreement
entered into by Guarantor in favor of Lender in form satisfactory to Lender,
including all amendments, modifications and supplements thereto, and shall
refer to the Pledge and Security Agreement (Guarantor) as the same may be in
effect at the time such reference becomes operative.
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"PROCEEDING" shall mean any (i) insolvency, bankruptcy, receivership,
liquidation, reorganization, readjustment, composition or other similar
proceeding relating to Borrower or Guarantor, or their property or other
creditors as such (pursuant to the Bankruptcy Code or otherwise), (ii)
proceeding for any liquidation, dissolution or other winding-up of Borrower,
voluntary or involuntary, whether or not involving insolvency or bankruptcy
proceedings, (iii) assignment for the benefit of creditors of Borrower, or
(iv) other marshalling of the assets of Borrower.
"PROJECTIONS" shall mean the projections referred to in Section 4.6
hereof.
"QUALIFIED PLAN" shall mean an employee pension benefit plan, as defined
in Section 3(2) of ERISA, which is intended to be tax-qualified under Section
401(a) of the IRC, and which Borrower or any ERISA Affiliate maintains,
contributes to or has an obligation to contribute to on behalf of
participants who are or were employed by any of them.
"REAL ESTATE" shall mean all of those plots, pieces or parcels of land
now owned or hereafter acquired by Borrower (the "LAND"), together with the
right, title and interest of Borrower, if any, in and to the streets, the land
lying-in the bed of any streets, roads or avenues, opened or proposed, in
front of, adjoining, or abutting the land to the center line thereof, the air
space and development rights pertaining to the Land and right to use such air
space and development rights, all rights of way, privileges, liberties,
tenements, hereditaments, and appurtenances belonging or in any way
appertaining thereto, all fixtures, all easements now or hereafter benefiting
the Land all royalties and rights appertaining to the use and enjoyment of
the land, including, without limitation, all alley, vault, drainage, mineral,
water, oil, and gas rights, together with all of the buildings and other
improvements now or hereafter erected on the Land, and all fixtures and
articles of personal property appertaining thereto and all additions thereto
and substitutions and replacements thereof.
"RECEIPTS" shall mean all cash, cash equivalents, checks, notes, drafts
and any items of payment or collection received by or on behalf of Borrower,
or by any officers, employees, agents of Borrower, or other Persons acting
for or in concert with Borrower, to make collections on Borrower's behalf.
"REPORTABLE EVENT" shall mean any of the events described in Section
4043(b)(1), (2), (3), (5), (6), (8) or (9) of ERISA.
"RESERVES" shall mean such reserves for warranties, allowances and the
like as may be established by Borrower or as may otherwise be required in
accordance with GAAP.
"RESTRICTED PAYMENT" shall mean, with respect to any Person (i) the
declaration of any dividend or the incurrence of any liability to make any
other payment or distribution of cash, securities or other property or assets
in respect of such Person's Stock, except for dividends on Common Equity
payable in additional shares of Common Equity, and (ii) any
21
payment on account of the purchase, redemption, retirement or other
acquisition for value of such Person's Stock or any other payment or
distribution made in respect thereof, either directly or indirectly, other
than through the issuance of, or out of the proceeds of the substantially
concurrent sale of, Common Equity of such Person.
"RETIREE WELFARE PLANS" shall refer to any Welfare Plan providing for
continuing coverage or benefits for any participant or any beneficiary of a
participant after such participant's termination from employment, other than
continuation coverage provided pursuant to Section 4980B of the IRC and at
the sole expense of the participant or the beneficiary of the participant.
"REVOLVING CREDIT ADVANCE" shall have the meaning assigned to it in
Section 2.1(a) hereof.
"SECURITY AGREEMENT" shall mean the agreement entered into by Borrower in
favor of Lender, including all amendments, modifications and supplements
thereto, and shall refer to the Security Agreement as the same may be in
effect at the time such reference becomes operative.
"SPECULATIVE UNIT" shall mean any Housing Unit that, on any Determination
Date, in not a Backlong Unit or a Model.
"SPILL" shall have the meaning assigned to it in Section 4.24 hereof.
"STATED RATE" shall have the meaning assigned to it in Section 2.6(a)
hereof.
"STOCK" shall mean all shares, options, warrants, general or limited
partnership interests, participants or other equivalents (regardless of how
designated) of or in a corporation, partnership or equivalent entity whether
voting or nonvoting, including, without limitation, common stock, preferred
stock, or any other "equity security" (as such term is defined in Rule 3a11-1
of the General Rules and Regulations promulgated by the Securities and
Exchange Commission under the Securities Exchange Act of 1934, as amended);
provided that debt securities convertible into or redeemable or exchangeable
for Stock shall be deemed not to be Stock.
"SUBORDINATED LOANS" shall mean loans encumbering Eligible Collateral at
the time accepted by Lender as Eligible Collateral which are fully
subordinated to Lender's security interest in such Eligible Collateral
pursuant to documentation required by Lender in its discretion ; provided,
however, at no time shall the aggregate outstanding principal balances of all
Subordinated Loans exceed Two Million Dollars ($2,000,000).
"SUBSIDIARY" shall mean, with respect to any Person, (a) any corporation
of which an aggregate of more than 50% of the outstanding Stock having
ordinary voting power to elect a majority of the board of directors of such
corporation (irrespective of whether, at the
22
time, Stock of any other class or classes of such corporation shall have or
might have voting power by reason of the happening of any contingency) is at
the time, directly or indirectly, owned legally or beneficially by such Person
and/or one or more Subsidiaries of such Person, and (b) any partnership in
which such Person and/or one or more Subsidiaries of such Person shall have
an interest (whether in the form of voting or participation in profits or
capital contribution) of more than 50%.
"TAXES" shall have the meaning to it in Section 2.14 hereof.
"TERMINATION DATE" shall mean the date on which (i) all obligations
hereunder have been completely discharged and (ii) Borrower shall have no
further right to borrow any monies hereunder.
"TITLE COMPANY" shall mean Chicago Title Insurance Company.
"TITLE IV PLAN" shall mean a Pension Plan, other than a Multiemployer
Plan, which is covered by Title IV of ERISA.
"TOTAL INDEBTEDNESS" shall mean, with respect to Borrower as of any date
(without duplication), (i) all Indebtedness of Borrower outstanding pursuant
to this Agreement at such date, (ii) all Other Indebtedness outstanding at
such date.
"TOTAL INDEBTEDNESS TO ADJUSTED CONSOLIDATED TANGIBLE NET WORTH RATIO"
shall mean, as at the date of the calculation therof, the ratio (i) Total
Indebtedness at such date to (ii) Adjusted Consolidated Tangible Net Worth at
such date.
"TRADE PAYABLE" shall mean all lienable trade or other payables or
obligations incurred by Borrower in connection with the acquisition or
development of or construction of Real Estate.
"TRADEMARK SECURITY AGREEMENT" shall mean the agreement entered into
between Lender and Borrower, including all amendments, modifications and
supplements thereto, and shall refer to the Trademark Security Agreement as
the same may be in effect at the time such reference become operative.
"TRI-PARTY AGREEMENT" shall mean the agreement entered into among
Lender, Borrower, and the Title Company, including all amendments,
modifications and supplements thereto, and shall refer to the Tri-Party
Agreement as the same may be in effect at the time such reference becomes
operative.
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"UNIT BACKLOG" at any date shall mean the sum total, net of
cancellations, of all written agreements for the sale of Backlong Units.
"UNIT BACKLOG TO UNIT INVENTORY RATIO" shall mean, as at the date of
determination thereof, the ratio of (i) Unit Backlog to (ii) Unit Inventory;
PROVIDED, HOWEVER, that at any time and from time to time the Unit Backlog to
Unit Inventory Ratio may be recalculated based on Unit Backlog and Unit
Inventory over the most recent three (3)-month period.
"UNIT INVENTORY" at any date shall mean all Housing Units owned by
Borrower at such date (whether under construction or completed) which are not
included in Unit Backlong or which are Models at such date.
"WELFARE PLAN" shall mean an employee welfare benefit plan, as defined in
Section 3(1) of ERISA, which Borrower or any ERISA Affiliate maintains,
contributes to or has an obligation to contribute to on behalf of
participants who are or were employed by any of them.
"WORK-IN-PROGRESS" shall mean construction work which has begun, is
actively being pursued and has not yet been completed with respect to a
Finished Building Lot, Housing Unit or Model.
1.2 ACCOUNTING MATTERS. Any accounting term used in this Agreement
shall have, unless otherwise specifically provided herein, the meaning
customarily given such term in accordance with GAAP, and all financial
computations hereunder shall be computed, unless otherwise specifically
provided herein, in accordance with GAAP consistently applied, except as
provided below:
(a) In the event that any "ACCOUNTING CHANGE" (as defined below)
shall occur and such change would result in a change in the method of
calculation of financial covenants, standards or terms in this Agreement,
then Borrower and Lender agree to enter into negotiations in order to amend
such provisions of this Agreement so as to equitably reflect such Accounting
Change with the desired result that after such amendment has been executed
and delivered the criteria for evaluating Borrower's compliance with this
Agreement shall be as nearly as practicable the same after such Accounting
Change as it was prior to such Accounting Change having been made. Until such
time as such an amendment shall have been executed and delivered by Borrower
and Lender, all financial covenants, standards and terms in this Agreement
shall continue to be calculated or construed as if such Accounting Change had
not occurred. "ACCOUNTING CHANGE" means any change in accounting principles
required by the promulgation of any rule, regulation, pronouncement or
opinion by the Financial Accounting Standards Board of the American Institute
of Certified Public Accountants or, if applicable, the Securities and
Exchange Commission (or successors thereto or agencies with similar
functions). That certain terms or computations
24
are explicitly modified by the phrase "in accordance with GAAP" shall in no
way be constructed to limit the foregoing.
(b) Lender and Borrower acknowledge that GAAP requires the Borrower
carry over the book basis of Real Estate purchased form certain Affiliates
(including the purchase of Finished Building Lots from Affiliates), as
opposed to obtaining a new book basis equal to the lower of the purchase
price or the Fair Market Value of such Real Estate. Lender and Borrower
desire to avoid such carryover treatment and the related income and other
accounting impacts, and hereby agree that the Adjusted Financial Terms shall
be calculated in accordance with GAAP with the exception that transfers of
Real Estate from Affiliates to Borrower on or after a non-Affiliate both for
balance sheet and income statement purposes. In no event, however, shall such
revised method apply in calculating Borrowing Base Book Cost or in preparing
the Financials referred to in Section 4.5 or the Projections referred to
Section 4.6 (except as otherwise specified).
1.3 OTHER MATTERS. Undefined terms contained in this Agreement shall,
unless the context indicates otherwise, have the meanings provided for by the
Code as in effect in the State of Illinois to the extent the same are used or
defined therein. 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 may from time to time be amended, modified
or supplemented, and not to any particular section, subsection or clause
contained in this Agreement.
Wherever from the context it appears appropriate, each term stated in
either the singular or plural, and pronouns stated in the masculine, feminine
or neuter gender shall include the masculine, the feminine and the neuter.
2. AMOUNT AND TERMS OF CREDIT
2.1 REVOLVING CREDIT ADVANCES
(a) Upon and subject to the terms and conditions hereof, Lender
agrees to make available, from time to time, until the Commitment Termination
Date, for Borrower's use and upon the request of Borrower therefor, advances
(each, a "REVOLVING CREDIT ADVANCES") against Borrowing Base Availiblity, in
an aggregate outstanding amount, which shall not at any given time exceed the
lesser of (i) the Maximum Loan, or (ii) Borrowing Base Availabilty on the
date such Revolving Credit Advance is made; PROVIDED, HOWEVER, and it is
understood and agreed (i) that the initial Revolving Credit Advance is being
made in order to satisfy, among the costs, indebtedness and obligations of
Borrower to other lenders which are secured by Liens against Housing Units
and Finished Building Lots, (ii) that Loan shall be secured by Mortgages
encumbering such Housing Units and Finished Building Lots, and the initial
Revolving Credit Advance shall be made
25
notwithstanding that such Housing Units and Finished Building Lots may not
qualify as Eligible Collateral or conform to the requirements of the
Operating Protocol, (iii) that on September 30, 1995, any of such Housing
Units and Finished Building Lots which do not qualify as Eligible Collateral
shall be removed from the Borrowing Base and on that date the Borrowing Base
availability shall be adjusted accordingly, and (iv) that from and after the
date hereof, no additional Housing Units or Finished Building Lots, other
than Eligible Housing Units and Eligible Lots, shall be admitted into the
Borrowing Base. On the Eligibility Termination Date, (i) no additional
Eligible Collateral will be accepted by Lender, (ii) no additional Borrowing
Base Availability will be created (other than Construction Costs incurred
with respect to Eligible Housing Units and Eligible Model Homes on the
existing Finished Building Lots, subject to the limitations set forth
herein), and (iii) no additional Revolving Credit Advances will be made,
except that from the Eligibility Termination Date to the Commitment
Termination Date, Lender shall make Revolving Credit Advances to complete
Work-in-Progress related to Eligible Collateral for the purpose of
liquidating the Eligible Collateral and paying down the outstanding balance
of the Loan and Borrower shall be entitled to Revolving Credit Advances to
the extent of existing Borrowing Base Availability. During the year
following the Eligibility Termination Date and unless the Borrowing Base
Availability otherwise shall have been reduced through sales of Eligible
Collateral or in accordance with the Operating Protocol, the Borrowing Base
Availability shall be automatically reduced as follows: (A) on August 31,
1998, the Borrowing Base Availability shall be reduced to eighty percent
(80%) of the sum of Borrowing Base Availability on the Eligibility on the
Eligibility Termination Date plus any additions to the Borrowing Base under
the immediately preceding sentence (the "FINAL BORROWING BASE AVAILABILITY"),
(B) on November 30, 1998, the Borrowing Base Availability shall be reduced to
sixty percent (60%) of the Final Borrowing Base Availability and (C) on
February 28, 1999, the Borrowing Base Availability shall be reduced to forty
percent (40%) of the Final Borrowing Base Availability. Subject to the
provisions of Section 2.3 hereof and until all amounts outstanding in respect
of the Loan shall become due and payable on the Commitment Termination Date,
Borrower may from time to time borrow, repay and reborrow under this section
2.1(a).
(b) The Loan made by Lender shall be evidenced by a promissory
note to be executed and delivered by Borrower, the form of which is attached
hereto and made a part hereof as Exhibit A (as subsequently renewed, amended,
restated, modified, continued and reinstated, the "NOTE"). The Note shall be
payable to the order of Lender and shall represent the obligation of Borrower
to pay the amount of the Maximum Loan or, if less, the aggregate unpaid
principal amount of all Revolving Credit Advances made by Lender to Borrower
with interest and expenses thereon as prescribed in Section 2.6(a). The date
and amount of each Revolving Credit Advance and each payment of principal
with respect thereto shall be recorded on the books and records of Lender,
which books and records shall constitute prima facie evidence of the accuracy
of the information therein recorded absent manifest error therein. The
entire unpaid balance of the Loan shall be due and payable on the Commitment
Termination Date.
26
(c) Each Revolving Credit Advance shall be made on notice, given
no later than 11:30 A.M. (Dallas, Texas time) on the Business Day of the
proposed Revolving Credit Advance, by Borrower to Lender. Each such notice
(a "NOTICE OF REVOLVING CREDIT ADVANCE") shall be in writing or by telephone
to Investment Manager, (▇▇▇) ▇▇▇-▇▇▇▇, telex of facsimile, confirmed
immediately in writing, in substantially the form of EXHIBIT B hereto,
specifying therein the requested date and amount of such Revolving Credit
Advance. Lender shall, before 1:30 P.M. (Dallas, Texas time) upon
fulfillment of the applicable conditions set forth in Section 2.1(c), wire to
a Disbursement Account selected by Lender the amount of such Revolving Credit
Advance.
2.2 MANDATORY PREPAYMENT.
(a) In the event that the outstanding balance of the Loan at any
time shall exceed the lesser of (i) the Maximum Loan or (ii) Borrowing Base
Availability, Borrower shall immediately repay the Loan in the amount of such
excess.
(b) No prepayment fee shall be payable in respect of any mandatory
prepayment under this Section 2.2.
2.3 OPTIONAL PREPAYMENT. Borrower shall have the right at any time, on
thirty (30) days prior written notice to Lender, to voluntarily and
permanently prepay the entire outstanding amount of the Loan, if any, without
premium or penalty and, at Borrower's election, to terminate Borrower's right
to receive further Revolving Credit Advances hereunder. Each repayment shall
be accompanied by the payment of any interest and fees that shall have
accrued and be unpaid through the date of such prepayment.
2.4 USE OF PROCEEDS. Borrower shall apply the proceeds of the
Revolving Credit Advances solely (i) for working capital purposes of Borrower
in the following regions: Greater Chicago metropolitan area, extended Phoenix
metropolitan area, and Grand Rapids, Michigan metropolitan area only,
including by not limited to, construction of homes, sales and marketing of
homes, and normal and customary business operations related to the
construction of homes excepting therefrom those operations that are not
related to Borrower's home-building business, and (ii) subject, without
limitation, to the provisions set forth in Sections 6.16 and 7.3, payments of
Carryback Purchase Notes and Other Distributions.
2.5 SINGLE LOAN. All of the Obligations of Borrower arising under this
Agreement and the other Loan Documents shall constitute one general
obligation of Borrower and shall be secured, until the Termination Date, by
all of the Collateral.
2.6 INTEREST ON LOAN.
(a) Borrower shall pay interest to Lender monthly, in arrears, on
the first day of each month, commencing on June 1, 1995 (each, an "INTEREST
PAYMENT DATE"), in an amount equal to the quotient of (i) an amount equal to
(A) the sum of the daily unpaid
27
principal amounts of the Loan outstanding on each day during the previous
month multiplied by (B) a rate equal to the Index Rate plus 3.75% per annum
(the "STATED RATE"), divided by (ii) 360.
(b) The Stated Rate shall be determined on the last day of
each month (unless any such day is not a Business Day, in which event the
next succeeding Business Day will be used) for use in calculating the
interest which is payable for the following month. If any payment on the Loan
becomes due and payable on a day other than a Business Day, the maturity
thereof shall be extended to the next succeeding Business Day and, with
respect to payments of principal, interest thereon shall be payable at the
then applicable rate during such extension.
(c) So long as any Event of Default shall be continuing, the
interest rate applicable to the Loan shall be equal to the Stated Rate plus
5.0% per annum (the "DEFAULT RATE").
(d) Notwithstanding anything to the contrary set forth in
this Section 2.6 if at any time until payment in full of all of the
Obligations, the Stated Rate or the Default Rate, as applicable, exceeds the
highest rate of interest permissible under any law which a court of competent
jurisdiction shall, in a final determination, deem applicable hereto (the
"MAXIMUM LAWFUL RATE"), then in such event and so long as the Maximum Lawful
Rate would be so exceeded, the rate of interest payable hereunder shall be
equal to the Maximum Lawful Rate; provided, however, that if at any time
thereafter the applicable rate is less than the Maximum Lawful Rate, Borrower
shall continue to pay interest hereunder at the Maximum Lawful Rate until the
total interest received by Lender from the making of advances hereunder is
equal to the total interest which Lender would have received had the Stated
Rate or the Default Rate, as the case may be, been (but for the operation of
this paragraph) the interest rate payable since the Funding Date. Thereafter,
the interest rate payable hereunder shall be the Stated Rate or the Default
Rate, as the case may be, unless and until the Stated Rate or the Default
Rate, as the case may be, again exceeds the Maximum Lawful Rate, in which
event this paragraph shall again apply. In no event shall the total interest
received by Lender pursuant to the terms hereof exceed the amount which
Lender could lawfully have received had the interest due hereunder been
calculated for the full term hereof at the Maximum Lawful Rate. In the event
the Maximum Lawful Rate is calculated pursuant to this paragraph, such
interest shall be calculated at a daily rate equal to the Maximum Lawful Rate
divided by the number of days in the year in which such calculation is made.
In the event that a court of competent jurisdiction, notwithstanding the
provisions of this Section 2.6(d), shall make a final determination that
Lender has received interest hereunder or under any of the Loan Documents in
excess of the Maximum Lawful Rate, Lender shall, to the extent permitted by
applicable law, promptly apply such excess in the following order: (i) to
then due and payable fees and expenses, (ii) to any due and payable interest,
(iii) to any due and payable principal, (iv) to the remaining principal, (v)
to other unpaid Obligations, and (vi) thereafter shall refund any excess to
Borrower or as a court of competent jurisdiction may otherwise order.
28
2.7 COMMITMENT FEE. Borrower shall pay to Lender a commitment fee
(the "COMMITMENT FEE") in the amount of $125,000, (a) $105,000 of which shall
be payable in immediately available funds on the date hereof, and (b) the
remaining $20,000 of which shall be payable as a condition to the increase of
the Maximum Loan to $25,000,000.
2.8 AVAILABILITY AND ADMINISTRATION FEES. The Availability Fee and
the Administration Fee shall be calculated as follows:
(a) Borrower shall pay to Lender an availability fee (each,
"AVAILABILITY FEE") in an amount equal to (i) $150,000 per annum until the
Maximum Loan is increased to $25,000,000, and (ii) $187,500 per annum
thereafter, accruing from and after the date hereof and payable in equal
quarterly installments (of $37,500 before the Maximum Loan is increased to
$25,000,000 and $46,875 after the Maximum Loan is increased to $25,000,000)
commencing on and thereafter quarterly in advance on the first Business Day
of each calendar quarter thereafter prior to the Commitment Termination Date,
which amount shall be prorated for any partial quarter during which this
Agreement is in effect. Borrower shall pay the Availability Fee to Lender in
immediately available funds; provided that to the extent the conditions of
Section 2.1 hereof are met, the quarterly Availability Fee payments may be
Revolving Credit Advances.
(b) As additional consideration for Lender's ongoing
administrative costs in making the Loan and other financial accommodations
available to Borrower, Borrower agrees to pay to Lender on the date hereof
(for the period from such date to the end of the Month in which such date
occurs) and thereafter on the first Business Day of each month prior to the
Termination Date, an administration fee in an amount equal to $2,000 per
month, which amount shall be prorated for any partial month during which this
Agreements is in effect (each such payment being an "ADMINISTRATION FEE").
2.9 CASH MANAGEMENT SYSTEM.
(a) From and after the date hereof, Borrower shall (i)
maintain an account (the "CONCENTRATION ACCOUNT") only with the bank set
forth on Schedule 2.9(a) (the "CONCENTRATION BANK") (so long as Lender deems
the procedures of such Concentration Bank acceptable to Lender; Lender hereby
acknowledging that it deems the procedures of the Concentration Bank set
forth on Schedule 2.9(a) to be acceptable to Lender); and (ii) deposit all
Receipts capable of being deposited into the Concentration Account; provided,
however, the Concentration Bank shall not be a bank to which Borrower or any
Guarantor owes any obligations and that if Concentration Bank is unacceptable
to Lender, Borrower may designate a substitute therefor reasonably acceptable
to Lender, which substitute shall then constitute a Concentration Bank
hereunder.
(b) From and after the Funding Date, Borrower shall maintain
the Disbursement Accounts as set forth in Schedule 2.9(b).
29
(c) On each Business Day, the bank at which the Concentration
Account is held, shall, in accordance with irrevocable instructions from
Borrower (by letter in the form attached hereto as EXHIBIT D) wire transfer
all collected and "good" funds on deposit in such Concentration Account to
the Depository Account, and Lender shall apply such funds to the obligations
in the order specified in Section 2.10 hereof.
(d) Borrower shall not establish or maintain any depository
accounts with banks or other financial institutions other than the
Concentration Accounts and the Disbursement Accounts.
(e) For purposes only of computing interest hereunder, all
payments shall be applied by Lender on the day payment has been credited by
Lender's depository bank to the Depository Account in immediately available
funds. For purposes of determining the amount of funds available for
borrowing by Borrower pursuant to Section 2.1(a) hereof, such payments shall
be applied by Lender against the outstanding aggregate amount of the Loan at
the time they are credited to Lender's Depository Account.
(f) On or before the Funding Date, Borrower, Title Company
and Lender will enter into the Tri-Party Agreement.
(g) Any instruments which constitute Receipts and which
evidence obligations payable to Borrower not capable of being transferred as
available funds to the Concentration Account shall instead be transferred to
Lender as soon as reasonably practicable and pledged directly to Lender as
part of the Collateral pursuant to the terms of the Security Agreement
(Borrower). Notwithstanding the foregoing, Borrower shall not transfer to
Lender any instruments which, by their terms, are required to be paid in cash
within 30 days of their receipt by Borrower, but shall instead immediately
remit such cash pursuant to the terms of this Section 2.9 upon its receipt.
(h) At any time at which (i) the amount of outstanding
Revolving Credit Advances is zero, (ii) all interest and applicable fees
payable to Lender pursuant to this Agreement have been received by Lender,
and (iii) Lender has been permanently relieved from its obligations to make
any additional Revolving Credit Advances, then the provisions of Section 2.9
hereof shall terminate and be of no further force or effect. In order to
facilitate the termination of the arrangements specified in this Section 2.9,
Lender agrees to execute such documents and make such acknowledgements as
shall be required to terminate such arrangements.
(i) Notwithstanding the foregoing provisions of this Section
2.9, this subsection (i) will govern Receipts which are received by or on
behalf of Borrower from buyers of Real Estate ("ESCROW FUNDS"). The initial
deposit made by a buyer shall be deposited in an escrow established by
Borrower and the buyer at Title Company. All other Escrow Funds, including,
without limitation, the buyer's closing funds and loan proceeds from third
party lenders shall be deposited directly with Title Company. On each day that
30
a close of an escrow occurs, Title Company shall, in accordance with the
Tri-Party Agreement, wire transfer all Escrow Funds which are payable to
Borrower at the close of escrow to the Concentration Bank for deposit in the
Concentration Account.
2.10 APPLICATION OF PAYMENTS. Lender and Borrower agree that Lender
shall apply any and all payments at any time or times hereafter received by
Lender from or on behalf of Borrower, including, without limitation, amounts
transferred to the Depository Account, against the outstanding Obligations of
Borrower as provided in the next sentence. Such payments received by Lender
shall be applied upon receipt in the following order: (i) then due and
payable fees and expenses; (ii) then due and payable interest payments; (iii)
then outstanding principal payments due on the Loan; (iv) then to any other
due and unpaid obligations; and (v) any excess shall be remitted to the
Disbursement Account. Lender is authorized to, and at its option may, make
advances on behalf of Borrower for payment of all fees, expenses, charges,
costs, principal and interest incurred by Borrower hereunder. Such advances
shall be made when and as Borrower fails to promptly pay when due such fees,
expenses, charges, costs, principal and interest and, at Lender's option and
to the extent permitted by law, shall be deemed Revolving Credit Advances
constituting part of the Loan hereunder.
2.11 ACCOUNTING. Lender will provide a monthly accounting of
transactions under the Loan to Borrower. Each and every such accounting shall
(absent manifest error) be deemed final, binding and conclusive upon Borrower
in all respects as to all matters reflected therein, unless Borrower, within
30 days after the date any such accounting is rendered, shall notify Lender
in writing of any objections which Borrower may have to any such accounting,
describing the basis for such objection with specificity. In that event, only
those items expressly objected to in such notice shall be deemed to be
disputed by Borrower. Lender's determination, based upon the facts available,
of any item objected to by Borrower in such notice shall (absent manifest
error) be final, binding and conclusive on Borrower, unless Borrower shall
commence a judicial or other proceeding (including arbitration) to resolve
such objection within 30 days following Lender's notifying Borrower of such
determination.
2.12 INDEMNITY. Borrower shall indemnify and hold Lender and each of
Lender's Affiliates, directors, officers, employees, agents and advisors
(each, an "INDEMNIFIED PARTY") harmless from and against any and all suits,
actions, proceedings, claims, damages, losses, liabilities and expenses
(including, without limitation, reasonable attorney's fees and disbursements,
including those incurred upon any appeal) which may be instituted or asserted
against or incurred by an Indemnified Party as the result of Lender having
entered into any of the Loan Documents or extended credit hereunder (but
excluding an action or proceeding by an Assignee Lender against Lender);
provided, however, that Borrower shall not be liable for such indemnification
to such Indemnified Party to the extent that any such suit, action,
proceeding, claim, damage, loss, liability or expense results solely from
such Indemnified Party's gross negligence or willful misconduct.
31
2.13 ACCESS. Lender and each Assignee Lender and any of their officers,
employees and/or agents shall have the right, exercisable as frequently as
Lender or any Assignee Lender reasonably determines to be appropriate, during
normal business hours (or at such other times as may reasonably be requested
by Lender or any Assignee Lender), to inspect the properties and facilities
of Borrower and its Affiliates (other than the Affiliates who are
individuals) and to inspect, audit and make extracts from all of Borrower's
and its Affiliates' (other than the Affiliates who are individuals) records,
files and books of account. Borrower shall deliver any document or instrument
reasonably necessary for Lender or any Assignee Lender, as any of them may
request, to obtain records from any service bureau maintaining records for
Borrower or its Affiliates (other than the Affiliates who are individuals),
and shall maintain duplicate records or supporting documentation on media,
including, without limitation, computer tapes and discs owned by Borrower and
its Affiliates (other than the Affiliates who are individuals), as the case
may be. Borrower shall instruct its Affiliates' (other than the Affiliates
who are individuals) banking and other financial institutions to make
available to Lender such information and records as Lender and each Assignee
Lender may reasonably request.
2.14 TAXES.
(a) Any and all payments by Borrower hereunder or under the Note
shall be made, in accordance with this Section 2.14, 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, excluding taxes that accrue as a result of Lender having failed to
comply with the limitations set forth in clause (i) of the third sentence of
Section 10.1 hereof, taxes imposed on or measured by the net income of Lender
by the jurisdiction under the laws of which Lender is organized or any
political subdivision thereof or taxes resulting solely from actions taken by
Lender (all such non-excluded taxes, levies, imposts, deductions, charges,
withholdings and liabilities being hereinafter referred to as "TAXES"). If
Borrower shall be required by law to deduct any Taxes from or in respect of
any sum payable hereunder or under the Note to Lender, (i) the sum payable
shall be increased as may be necessary so that, after making all required
deductions (including deductions applicable to additional sums payable under
this Section 2.14), Lender receives an amount equal to the sum it would have
received had no such deductions been made, (ii) Borrower shall make such
deductions, and (iii) Borrower shall pay the full amount deducted to the
relevant taxing or other authority in accordance with applicable law.
(b) In addition, Borrower agrees to pay any present, past or
future intangible personal property, stamp or documentary taxes or any other
sales, transfer, excise or property taxes, charges or similar levies that
arise from any payment made hereunder or under the Note or from the
execution, sale, transfer, delivery or registration of, or otherwise with
respect to, this Agreement on the Note, the Loan Documents and any other
agreements and instruments contemplated thereby (hereinafter referred to as
"OTHER TAXES").
32
(c) Borrower shall indemnify Lender for the full amount of Taxes
or Other Taxes (including without limitation, any Taxes or Other Taxes
imposed by any jurisdiction on amounts payable under this Section 2.14) paid
by Lender and any liability (including penalties interest and expenses)
arising therefrom or with respect thereto, whether or not such Taxes or Other
Taxes were correctly or legally asserted. This indemnification shall be made
within 30 days from the date Lender makes written demand therefor.
(d) Within 30 days after the date of any payment of Taxes,
Borrower shall furnish to Lender, at its address referred to in Section
10.11, the original or a certified copy of a receipt evidencing payment
thereof.
(e) Without prejudice to the survival of any other agreement of
Borrower hereunder, the agreements and obligations of Borrower contained in
this Section 2.14 shall survive the payment in full of principal and interest
hereunder and under the Note and the termination of this Agreement.
2.15 CONFIDENTIALITY. Lender hereby agrees, on behalf of itself, its
Affiliates, advisors and Representatives (as defined below) (a) to treat any
Confidential Information regarding Borrower or any of its Affiliates as
confidential and not, except (i) as may be released by Lender pursuant to any
court decree, subpoena, or other administrative order or process reasonably
believed by it to complete its disclosure, or if, in the opinion of its
counsel, Lender is otherwise required by law to disclose such information,
(ii) as set forth in clause, (iii) as may be required in Lender's judgement
in connection with any sale of all or part of the Loan, (b) below or (iv) as
otherwise agreed to in writing by Borrower, to disclose any of such
Confidential Information to any other person; (b) to limit the dissemination
of all Confidential Information to those of Lender's directors, officers,
employees, partners, representatives, agents and attorneys (such permitted
recipients, "REPRESENTATIVES") who, as part of their regular duties, need to
know such information; (c) to use such Confidential Information solely for
the purpose of performing Lender's obligations hereunder and the transactions
contemplated hereby; and (d) that Borrower and any Affiliates shall be
entitled to equitable relief, including injunction, in the event of any
breach of any of the provisions set forth in this section. Lender further
agrees to inform those of its Representatives to whom any Confidential
Information is disclosed pursuant to clause (b) above of the confidential
nature of the Confidential Information and of the restrictions set forth in
this section and to be responsible for compliance with the terms of this
section by such persons and by all of Lender's other Representatives. Should
Borrower agree in writing to allow Lender to disclose any Confidential
Information to any person other than its Representatives, Lender agrees,
prior to so disclosing, to obtain from such person a written confidentiality
agreement in form satisfactory to Borrower.
The Term "CONFIDENTIAL INFORMATION" as used in this section shall mean
all written information regarding the business, finances, operations and
affairs of the Borrower and its Affiliates (whether prepared by any of such
persons, its advisors or otherwise), including, without limitation, all
analyses, compilation, studies or other documents, records or data
33
prepared by Lender or any of its advisors or Representatives, together with
all analyses, compilations, studies or other documents, records or data
prepared by Lender or any of its Representatives that contain or otherwise
reflect or are generated from such information and documents. The term
"CONFIDENTIAL INFORMATION" does not include any information that (i) at the
time of disclosure to Lender or thereafter is generally available to the
public (other than as a result of a disclosure by Lender or any of its
Representatives in violation of this section), (ii) was available to Lender
on a nonconfidential basis from a source other than Borrower or its
Affiliates or advisers who is not prohibited from transmitting the
information to Lender by a contractual, legal or fiduciary obligation to
Borrower or any of its Affiliates, or (iii) has been independently developed
by Lender without violation of any obligation under this section, (iv) is
inadvertently disclosed by Lender despite the exercise of the same level of
care as Lender normally takes to preserve and safeguard its own confidential
proprietary information. In no event shall Lender be liable for any indirect,
punitive, exemplary, or consequential damages resulting from disclosure of
Confidential Information.
3. CONDITIONS PRECEDENT
3.1 CONDITIONS TO LOAN. Notwithstanding any other provision of this
Agreement and without affecting in any manner the rights of Lender hereunder,
Lender shall not be obligated to make the first Revolving Credit Advance
hereunder until each of the following conditions is satisfied (on or before
the date specified below) and, where required, Borrower shall have delivered
the required document or other documentation on the date indicated below,
each dated as of the date indicated below, to Lender, all in substantially
the form set forth as an exhibit hereto or to one of the other Loan Documents
or otherwise in form and substance satisfactory to Lender (unless otherwise
indicated) each dated the date hereof:
(a) The Note made payable to the order of Lender, duly executed by
Borrower;
(b) The Mortgages, duly executed by Borrower and acknowledged and
recorded:
(c) The Security Agreement, duly executed and delivered by
Borrower, the Trademark Security Agreement, duly executed by Borrower, the
Pledge and Security Agreement (Borrower), duly executed by Borrower, the
Pledge and Security Agreement (Guarantor), duly executed by Guarantor,
together with evidence that all other actions necessary or, in the opinion of
Lender, desirable to perfect and protect the security interests and Liens
created by the Collateral Documents will be taken;
(d) The Guaranty, duly executed and delivered by Guarantor;
(e) The Tri-Party Agreement duly executed by Borrower and the
Title Company;
34
(f) The Hazardous Substance Indemnity Agreement, duly executed by
Borrower and Guarantor;
(g) Favorable opinions of ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇, counsel to the
Loan Parties, and of Arizona counsel and Michigan counsel to the Loan
Parties, it being understood that to the extent that such opinion shall rely
upon any other opinion of counsel, each such other opinion shall be in form
and substance satisfactory to Lender and shall provide that Lender may rely
thereon;
(h) Instruction letter to the Concentration Bank, duly executed by
Borrower and the respective banks;
(i) Letter agreement from each bank holding a Disbursement
Account, waiving any rights of offset;
(j) Governmental certificates, dated the most recent practicable
date prior to the date hereof, with telegram updates where available, showing
that Borrower and each other Loan Party as Lender may request, is organized
and in good standing in the jurisdiction of its organization and is qualified
as a foreign corporation or partnership and in good standing in all other
jurisdictions in which it is qualified to transact business;
(k) Evidence that ALTA Loan Policies of Title Insurance, in form
and content acceptable to Lender, have been issued with respect to the
Eligible Collateral;
(l) Evidence that all regulatory approvals and third-party
consents necessary to permit Borrower to consummate the transactions
contemplated hereby have been obtained;
(m) Payment of the Commitment Fee, the Availability Fee and the
Administration Fee, pursuant to Sections 2.7 and 2.8;
(n) Evidence that Borrower has established cash control systems
and taken other steps required under Section 2.9 hereof;
(o) A copy of the organizational charter and all amendments
thereto of Borrower and each other Loan Party as Lender may request,
certified as of a recent date by the Secretary of State of the jurisdiction
of its organization, and copies of each Loan Party's by-laws, certified by
the Secretary or Assistant Secretary of such Loan Party as true and correct
as of the date hereof;
(p) Certificates of the Secretary or an Assistant Secretary of
Borrower and each other Loan Party as Lender may request, as to the
incumbency and signatures of the officers of such Loan Party executing this
Agreement, the Guaranty and any of the Loan Documents and other Ancillary
Agreements and any other certificate or other
35
document to be delivered pursuant hereto or thereto, together with evidence
of the incumbency of such Secretary or Assistant Secretary.
(q) The Projections and the pro forma consolidated financial
statements referred to in Sections 4.5 and 4.6, each certified by the chief
financial officer of Borrower;
(r) A certificate of Borrower executed by the chief executive
officer of Borrower, satisfactory in form and substance to Lender, stating
that, as of the date hereof, to the best of his knowledge, except as set
forth in Schedule 4.5(d), no material adverse change has occurred in the
business, assets, operations, prospects, or financial or other condition of
Borrower taken as a whole since March 31, 1995;
(s) A certificate of Borrower executed by the chief executive
officer of Borrower, satisfactory in form and substance to Lender, stating
that all of the representations and warranties of the Loan Parties contained
herein or in any of the Loan Documents are correct, and, except as set forth
on Schedule 4.8, no event has occurred and is continuing, or would result
from the Loan, which constitutes or would constitute a Default or an Event of
Default;
(t) Evidence that the insurance policies provided for in Section 6.7
are in full force and effect, certified by the issuer thereof, together with
appropriate evidence showing a loss payable clause in favor of Lender and a
clause whereby Lender receives 30-day notice of cancellation, non-renewal or
material change;
(u) A copy of each agreement or plan or, if not available, a
summary thereof, providing for employment, severance, deferred payments,
bonus payments or accruals, profit sharing arrangements, stock option or
stock appreciation rights, incentive payments, pension or employment benefit
contributions or similar payments or arrangements for the benefit of
Borrower's management personnel, in form and substance as has been approved
by Lender;
(v) To the extent no already advanced by Borrower, payment by
Borrower of all (i) reasonable fees and expenses of (a) Lender's outside
counsel, (b) all special local counsel retained in connection with any of the
Loan Documents and the transactions contemplated thereby, (c) all appraisers
or asset valuators retained in connection with any of the Loan Documents and
the transactions contemplated thereby, and (ii) other reasonable costs and
expenses incurred by Lender in connection with the negotiation,
documentation, closing or other activities undertaken with respect to the
transactions contemplated hereby;
(w) A copy of each loan contract and material agreement of the
Borrower and each Guarantor has been made available to Lender, each of which
has been reviewed by Lender with results satisfactory to Lender;
36
(x) The Operating Protocol, duly executed by Borrower;
(y) Evidence satisfactory to Lender that each Affiliate or other
party which is transferring any property to Borrower concurrent with this
Agreement is solvent, is not rendered insolvent by reason of such transfer,
and is receiving reasonably equivalent value for such transfer.
(z) Such additional information and materials as Lender may
reasonably, and in a timely manner with due regard to the scheduled Funding
Date, request, including, without limitation, copies of any debt agreements,
security agreements and other material contracts.
3.2 FURTHER CONDITIONS TO EACH REVOLVING CREDIT ADVANCE. It shall be a
further condition to the initial and each subsequent Revolving Credit Advance
that the following statements shall be true on the date of each such advance
or incurrence:
(a) All of the representations and warranties of the Loan Parties
contained herein or in any of the Loan Departments shall be correct on and as
of the Funding Date and the date of each such Revolving Credit Advance as
though made on and as of such date, except to the extent that any such
representation or warranty expressly relates to an earlier date and for
changes therein permitted or contemplated by this Agreement.
(b) No event shall have occurred and be continuing, or would result
from the funding of any Revolving Credit Advance, which constitutes or would
constitute a Default or an Event of Default.
(c) The aggregate unpaid principal amount of the Revolving Credit
Advances, after giving effect to such Revolving Credit Advance, shall not
exceed the lesser of (i) the Maximum Loan, or (ii) the Borrowing Base
Availability.
(d) No Liens have arisen or been granted with respect to the
Collateral, other than Liens permitted under 7.10 hereof, as verified by
title searches obtained by Lender, at Borrower's expense, from the Title
Company from time to time.
(e) No Proceedings shall exist wherein any Loan Party is a party.
No action, claim or proceeding shall be pending or, to the knowledge of
Borrower, threatened or contemplated against Borrower, at law, in equity or
otherwise, before any court, board, commission, agency or instrumentality of
any Federal, state, or local government or of any agency or subdivision
thereof, or before any arbitrator or panel of arbitrators, which, if
determined adversely, could reasonably be expected to have a Material Adverse
Effect, either individually or in the aggregate, nor, to the knowledge of
Borrower, shall a state of facts exist which is reasonably likely to give
rise to such proceedings, nor shall any pending or threatened action, claim
or proceeding question the validity of the Loan Documents or any action taken
or to be taken pursuant thereto.
37
(f) Borrower (i) is solvent, (ii) has sufficient assets and capital
for its business and (iii) has the ability to pay its debts as they become due.
(g) Borrower's Adjusted Consolidated Tangible Net Worth as of
September 30, 1994 equalled or exceeded $7,500,000.
The acceptance by Borrower of the proceeds of each Revolving
Credit Advance shall be deemed to constitute, as of the date of such
acceptance, (i) a representation and warranty by Borrower that the
conditions in this Section 3.2 have been satisfied and (ii) a confirmation
by Borrower of the granting and continuance of Lender's Liens pursuant to the
Collateral Documents.
4. REPRESENTATIONS AND WARRANTIES
To induce Lender to make the Loan as herein provided for, Borrower makes
the following representations and warranties to Lender, each and all of which
shall be true and correct as of the date hereof and shall survive the
execution and delivery of this Agreement:
4.1 CORPORATE EXISTENCE; COMPLIANCE WITH LAW. Each entity comprising
Borrower (i) is a corporation duly organized, validly existing and in good
standing under the laws of the state of its organization; (ii) is duly
qualified as a foreign corporation, as the case may be, and is in good
standing under the laws of each jurisdiction where its ownership or lease of
property or the conduct of its business requires such qualification; (iii)
has the requisite corporate or partnership, as the case may be, power and
authority and the legal right to own, pledge, mortgage or otherwise encumber
and operate its properties, to lease the property it operates under lease,
and to conduct its business as now, heretofore and proposed to be conducted;
(iv) has all licenses, permits, consents or approvals from or by, and has
made all filings with, and has given all notices to, all Governmental
Authorities having jurisdiction, to the extent required for such ownership,
operation and conduct except where the failure to have any such license,
permit, consent or approval, make such filing or give such notice will not
have a Material Adverse Effect; (v) is in compliance with its certificate or
articles of incorporation and by-laws or partnership agreement, as the case
may be; and (vi) is in compliance with all applicable provisions of law where
the failure to comply would have a Material Adverse Effect.
4.2 EXECUTIVE OFFICES. The current location of Borrower's executive
offices and principal place of business is set forth on Schedule 4.2
hereto.
4.3 SUBSIDIARIES. There currently exist no subsidiaries of Borrower
other than as set forth on Schedule 4.3 hereto.
4.4 CORPORATE POWER; AUTHORIZATION; ENFORCEABLE OBLIGATIONS. The
execution, delivery and performance by Borrower and Affiliates of the
Loan Documents, Ancillary Agreements and all instruments and documents
to be delivered by Borrower and Affiliates
38
to the extent they are parties thereto, hereunder and thereunder and the
creation of all Liens provided for herein and therein: (i) are within
Borrower's and the Guarantors', corporate power or partnership power, as the
case may be; (ii) have been duly authorized by all necessary or proper
corporate action or partnership action, as the case may be; (iii) are not in
contravention of any provision of Borrower's or the Guarantors', respective
certificates or articles of incorporation or by-laws or partnership or
venture agreements, as the case may be; (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, or any other
agreement or instrument which is material and to which Borrower or any of the
Guarantors is a party or by which Borrower or any of the Guarantors or any of
their property is bound; (vi) do not require the consent, approval,
authorization of or filing or registration with any governmental body,
agency, authority or any other Person other than those which will have been
duly obtained or made prior to the date hereof and which will be in full
force and effect on the date hereof; and (vii) will not result in the
creation or imposition of any Lien upon any of the property of Borrower or
any of the Guarantors other than those in favor of Lender, all pursuant to
the Loan Documents. At or prior to the date hereof, each of the Loan
Documents shall have been duly executed and delivered for the benefit of or
on behalf of Borrower or the Guarantors, as the case may be, and each shall
then constitute a legal, valid and binding obligation of Borrower or the
Guarantors, to the extent they are parties thereto, enforceable against them
in accordance with its terms, subject to applicable bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and similar laws affecting
creditors, rights and remedies generally and subject, as to enforceability,
to general principles of equity, including principles of commercial
reasonableness, good faith and fair dealing (regardless of whether
enforcement is sought in a proceeding at law or in equity).
4.5 FINANCIAL STATEMENTS.
(a) The pro forma consolidated balance sheets of Borrower as of
September 30, 1994, copies of which have been furnished to Lender prior to
the date of this Agreement, have been prepared in a manner consistent with
Borrower's GAAP accounting, are based on the audited consolidated balance
sheet of Borrower as of September 30, 1994, and present fairly on a pro forma
basis the consolidated financial position of Borrower at such date.
(b) All of the following consolidated balance sheets and
statements of income, retained earnings and cash flow statements of Borrower,
copies of which have been furnished to Lender prior to the date of this
Agreement, have been, except as noted therein, prepared in accordance with
GAAP consistently applied throughout the periods involved and present fairly
the consolidated financial position of Borrower as at the dates thereof, and
the results of operations and cash flow statements for the periods then ended
(as to the unaudited interim financial statements, subject to normal year-end
audit adjustments):
39
(i) the unaudited consolidated balance sheet of Borrower as of
February 28, 1995, and the related consolidated statements of income, and
retained earnings and cash flow statements for the three (3) months ending
on such date; and
(ii) the audited consolidated balance sheet of Borrower as at
September 30, 1994, and the related consolidated statements of income, and
retained earnings and cash flow statements for the year then ended.
(c) Borrower as of February 28, 1995, had no obligations,
contingent liabilities or liabilities for Charges, long-term leases or unusual
forward or long-term commitments which are not reflected in the September 30,
1994 audited consolidated balance sheet of Borrower or otherwise disclosed in
writing to Lender and which would have a Material Adverse Effect.
(d) Except as set forth on Schedule 4.5(d), there has been no
material adverse change in the business, assets, operations, prospects or
financial or other condition of Borrower taken as a whole since February 28,
1995. No dividends or other distributions have been declared, paid or made
upon any shares of Stock of Borrower, nor have any shares of Stock of
Borrower been redeemed, retired, purchased or otherwise acquired for value by
Borrower since February 28, 1995, otherwise than as set forth on Schedule
4.5(d).
4.6 PROJECTIONS. The projections of Borrower's annual operating budgets
on a consolidated basis, and Borrower's consolidated balance sheets and cash
flow statements prepared in a manner consistent with Borrower's GAAP
accounting, and Borrower's cash flow statements wherein transfers of Real
Estate from Affiliates to Borrower are treated as though such transfers were
from non-Affiliates for the fiscal years ending on December 31, 1994, 1995
and 1996 (the "PROJECTIONS"), copies of which have been delivered to Lender,
disclose in general terms all material assumptions made with respect to
general economic, financial and market conditions in formulating such
Projections. No facts are known to Borrower which would result in any
material change in any of such Projections. The Projections are based upon
reasonable estimates and assumptions, all of which are fair in light of
current conditions, have been prepared on the basis of the assumptions,
stated therein, and reflect the reasonable estimate of Borrower of the results
of operations and other information projected therein. Additional projections
for future periods requested by Lender shall constitute "Projections" and
shall be subject to this Section 4.6.
4.7 OWNERSHIP OF PROPERTY: LIENS.
(a) Borrower owns good and marketable fee simple title to all of
the Real Estate and good and marketable title to, or valid leasehold
interests in, all of its other properties and assets, and none of the
properties and assets of Borrower, including without limitation, the Real
Estate and Leases, is subject to any Liens, except (i) encumbrances existing
as of the date hereof as set forth on Schedule 4.7(a), (ii) Permitted
Encumbrances, and (iii) from and after the date hereof, the Lien in favor of
Lender pursuant to the Collateral
40
Documents, have a Material Adverse Effect; and Borrower has received all
deeds, assignments, waivers, consents, non-disturbance and recognition or
similar agreements, bills of sale and other documents, and duly effected all
recordings, filings and other actions necessary to establish, protect and
perfect Borrower's right, title and interest in and to all such property
except where the failure to have received such documents or effected such
actions will not, in the aggregate, have a Material Adverse Effect.
(b) Except as set forth on Schedule 4.7(b), Borrower does not own
or hold, and is not obligated under or a party to, any option, right of first
refusal or any other contractual right to purchase, acquire, sell, assign or
dispose of any real property other than option contracts for the purchase of
lots or raw land entered into in the ordinary course of their business.
(c) All permits required to have been issued in order for the Real
Estate to be lawfully occupied and used for all of the purposes for which
they are currently occupied and used, have been lawfully issued and are, as
of the date hereof, in full force and effect, except for any such permit
where the failure to obtain the same would not have a Material Adverse Effect.
(d) Except as set forth on Schedule 4.7(d), Borrower has not
received any notice, and has no knowledge, of any pending, threatened or
contemplated condemnation proceeding affecting any Real Estate or any part
thereof, or of any sale or other disposition of an real property owner or
leased by Borrower or any part thereof in lieu of condemnation.
(e) Except as set forth on Schedule 4.7(e), no portion of any Real
Estate owned or leased by Borrower has suffered any material damage by fire
or other casualty loss which has not heretofore been repaired and restored as
nearly as practicable to its original condition. Except as set forth on
Schedule 4.7(e), no portion of the Real Estate is located in a special flood
hazard area as designated by any federal, Governmental Authority, except for
Real Estate located in such areas, where the effect of such location would
not have a Material Adverse Effect.
4.8 NO DEFAULT. Except as set forth on Schedule 4.8, Borrower is not in
default, nor to Borrower's knowledge without inquiry, is any third party in
default, under or with respect to any contract, agreement, lease or other
instrument to which it is a party, except for any defaults which (either
individually or collectively with other defaults arising out of the same
event or events) would not have a Material Adverse Effect. No Default or
Event of Default under this Agreement has occurred and is continuing.
4.9 BURDENSOME RESTRICTIONS. No contract, lease, agreement or other
instrument to which Borrower is a party or is bound and no provision of
applicable law or governmental regulation has a Material Adverse Effect, or
insofar as Borrower can reasonably forsee, may have a Material Adverse Effect.
41
4.10 LABOR MATTERS. There are no strikes or other labor disputes against
Borrower pending or, to Borrower's knowledge, threatened which would have a
Material Adverse Effect. Hours worked by and payment made to employees of
Borrower have not been in violation of the Fair Labor Standards Act or any
other applicable law dealing with such matters which would have a Material
Adverse Effect. All payments due from Borrower on account of employee health
and welfare insurance which would have a Material Adverse Effect if not paid
have been paid or accrued as a liability on the books of Borrower.
4.11 OTHER VENTURES. Schedule 4.11 lists (i) each interest held by
Borrower in any partnership, joint venture or other business association,
together with a description of such interest, (ii) all material agreements
and documents defining such interest, and (iii) each Affiliate (other than
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇) of Borrower, together with a
description of the relationship between Borrower and such Affiliate and a
list of all material agreements or documents defining such relationship.
Except as set forth in Schedule 4.11, Borrower is not engaged in any joint
venture or partnership with any other Person.
4.12 INVESTMENT COMPANY ACT. Borrower is not an "investment company" or
an "affiliated person" of, or "promoter" or "principal underwriter" for, an
"investment company," as such terms are defined in the Investment Company Act
of 1940, as amended. The making of the Loan by Lender, the application of the
proceeds and repayment thereof by Borrower and the consummation of the
transactions contemplated by this Agreement and the other Loan Documents will
not violate any provision of such Act or any rule, regulation or order issued
by the Securities and Exchange Commission thereunder.
4.13 MARGIN REGULATIONS. Borrower does not own any "margin security," as
that term is defined in Regulations G and U of the Board of Governors of the
Federal Reserve System (the "FEDERAL RESERVE BOARD"), and none of the
proceeds of the Loan will be used, directly or indirectly, for the purpose of
purchasing or carrying any margin security, for the purpose of reducing or
retiring any indebtedness which was originally incurred to purchase or carry
any margin security or for any other purpose which might cause any of the
loans under this Agreement to be considered a "purpose credit" within the
meaning of Regulations G, T, U or X of the Federal Reserve Board. Borrower
will not take or permit any agent acting on its behalf to take any action
which might cause this Agreement or any document or instrument delivered
pursuant hereto to violate any regulation of the Federal Reserve Board.
4.14 TAXES. Except as set forth on Schedule 4.14, all Federal, state,
local and foreign tax returns, reports and statements required to be filed by
Borrower have been filed with the appropriate Governmental Authority and all
Charges and other impositions shown thereon to be due and payable have been
paid prior to the date on which any fine, penalty, interest or late charge
may be added thereto for nonpayment thereof, or any such fine, penalty,
interest, late charge or loss has been paid. Except as set forth on Schedule
4.14, Borrower has paid, when due and payable, all Charges required to be
paid by it. Proper and
42
accurate amounts have been withheld by Borrower from its employees for all
periods in full and complete compliance with the tax, social security and
unemployment withholding provisions of applicable federal, state, local and
foreign law and such withholdings have been timely paid to the respective
governmental agencies. Schedule 4.14 sets forth for Borrower those taxable
years for which its tax returns are currently being audited by the IRS or any
other applicable Governmental Authority. Except as set forth on Schedule
4.14, Borrower has not executed or filed with the IRS or any other
Governmental Authority any agreement or other document extending, or having
the effect of 3extending, the period for assessment or collection of any
Charges. Borrower has not filed a consent pursuant to IRC Section 341(f) or
agreed to have IRC Section 341(f)(2) apply to any dispositions of subsection
(f) assets (as such term is defined in IRC Section 341(f)(4)). Except as set
forth on Schedule 4.14, none of the property owned by Borrower is property
which Borrower is required to treat as being owned by any other Person
pursuant to the provisions of IRC Section 168(f)(8) of the Internal Revenue
code of 1954, as amended, and in effect immediately prior to the enactment of
the Tax Reform Act of 1986 or is "tax-exempt use property" within the
meaning of IRC Section 168(h). Except as set forth on Schedule 4.14, Borrower
has not agreed and has not requested to make any adjustment under IRC Section
481(a) by reason of a change in accounting method or otherwise. Except as set
forth on Schedule 4.14 hereof, Borrower has no obligation under any written
tax-sharing agreement.
4.15 ERISA.
(a) Schedule 4.15 lists all Plans maintained or contributed to by
Borrower and all Qualified Plans maintained or contributed to by any ERISA
Affiliate. Neither Borrower nor any of its Affiliates maintains, contributes
to or has any obligation to contribute to any Pension Plan, Title IV Plan,
Multiemployer Plan or Retiree-Welfare Plan or has in the past maintained,
contributed or had an obligation to contribute to the same.
(b) Each Qualified Plan has been determined by the IRS to qualify
under Section 401 of the IRC, and the trusts created thereunder have been
determined to be exempt from tax under the provisions of Section 501 of the
IRC, and, to the best knowledge of Borrower nothing has occurred which would
cause the loss of such qualification or tax-exempt status.
(c) Each Plan is in compliance in all material respects with the
applicable provisions of ERISA and the IRC, including the filing of reports
required under the IRC or ERISA (all of which are true and correct in all
material respects as of the date filed), and all required contributions and
benefits have been paid in accordance with the provisions of each such Plan.
(d) Neither Borrower nor any ERISA Affiliate, with respect to any
Qualified Plan, has failed to make any contribution or pay any amount due as
required by Section 412 of the IRC.
43
(e) There are no pending or, to the knowledge of Borrower, any
threatened claims, actions or lawsuits (other than claims for benefits in the
normal course), asserted or instituted against (i) any Plan or its assets,
(ii) any fiduciary with respect to any Plan or (iii) Borrower or any ERISA
Affiliate with respect to any Plan.
(f) Borrower and each ERISA Affiliate have complied in all
material respects with the notice and continuation coverage requirements of
Section 4980B of the IRC and the regulations thereunder.
(g) Borrower has not engaged in a prohibited transaction, as
defined in Section 4975 of the IRC or Section 406 of ERISA, in connection
with any Plan, which would subject Borrower (after giving effect to any
exemption) to a material tax on prohibited transactions imposed by Section
4975 of the IRC or any other material liability.
(h) Except as set forth on Schedule 4.15, no liability under any
Plan has been funded, nor has such obligation been satisfied, with the
purchase of a contract from an insurance company that is not rated AA by
Standard & Poor's Corporation and the equivalent rating by each other
nationally recognized rating agency.
4.16 NO LITIGATION. Except as set forth on Schedule 4.16 hereto, no
action, claim or proceeding is now pending or, to the knowledge of Borrower,
threatened or contemplated against Borrower, at law, in equity or otherwise,
before any court, board, commission agency or instrumentality of any Federal,
state, or local government or of any agency or subdivision thereof, or before
any arbitrator or panel or arbitrators, which, if determined adversely, could
reasonably be expected, individually or in the aggregate, to have a Material
Adverse Effect, nor, to the knowledge of Borrower, does a state of facts
exist which is reasonably likely to give rise to such proceedings, nor do any
of the matters set forth therein question the validity of any of the Loan
Documents or any action taken or to be taken pursuant thereto.
4.17 BROKERS. No broker or finder acting on behalf of Borrower brought
about the obtaining, making or closing of the Loan made pursuant to this
Agreement, and Borrower has no obligation to any Person in respect of any
finder's or brokerage fees in connection with the Loan contemplated by this
Agreement.
4.18 OUTSTANDING STOCK; WARRANTS, ETC. Except as set forth on Schedule
4.18, Borrower has no outstanding rights, options, warrants or agreements
pursuant to which it may be required to issue or sell any Stock.
4.19 EMPLOYMENT AND LABOR AGREEMENTS. Except as set forth on Schedule
4.19, there are no employment agreements covering management of Borrower
which provide for compensation in excess of $100,000 per year and there are
no collective bargaining agreements or other labor agreements covering any
employees of Borrower. A true and complete copy of each agreement listed on
Schedule 4.19 has been furnished to Lender.
44
4.20 PATENTS, TRADEMARKS, COPYRIGHTS AND LICENSES. Except as would not
have a Material Adverse Effect, Borrower owns or has the right to use as they
are currently used or contemplated to be used, all licenses, patents, patent
applications, copyrights, service marks, trademarks, trademark applications
and trade names necessary to continue to conduct its business as heretofore
conducted by it, now conducted by it and proposed to be conducted by it, each
of which is listed, together with Patent and Trademark office application or
registration numbers, where applicable, on Schedule 4.20 hereto. To the best
of its knowledge, Borrower conducts its business 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 would not
have a Material Adverse Effect. To the best of Borrower's knowledge and
except as set forth on Schedule 4.20, 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 Borrower.
4.21 FULL DISCLOSURE. No information contained in this Agreement, the
other Loan Documents, the Financials or any written statement furnished by or
on behalf of Borrower pursuant to the terms of this Agreement which has
previously been delivered to Lender, contains any untrue statement of a
material fact or omits to state a material fact necessary to make the
statements contained herein or therein not misleading in light of the
circumstances under which made.
4.22 LIENS. The Liens granted to Lender pursuant to the Collateral
Documents with respect to the Borrower and each Affiliate are (i) valid and
continuing first priority perfected security interests in the Concentration
Account and in all other Collateral with respect to which a security interest
may be perfected by filing pursuant to the UCC prior to all other Liens,
except, with respect to Collateral other than the Concentration Account,
Liens existing as of the date hereof and the Liens granted to Lender under
the Collateral Documents, and (ii) fully perfected Liens in and to the
Collateral which is Real Estate, as described therein; provided, however that
all Liens related to Eligible Collateral must be fully perfected first
priority Liens.
4.23 NO MATERIAL ADVERSE EFFECT. Except as set forth on Schedule 4.23,
no event has occurred since March 31, 1995, and is continuing which has had
or could reasonably be expected to have a Material Adverse Effect.
4.24 ENVIRONMENTAL PROTECTION. To Borrower's knowledge, except as
disclosed in Schedule 4.24, (a) no Hazardous Materials are located at, on or
under any real property owned, leased, or operated by Borrower in violation
of any Environmental Laws, (b) Borrower is in compliance with all
Environmental Laws at real property owned, leased or operated by Borrower,
(c) Borrower has not caused or suffered to occur any actual or threatened
discharge, disposal, release, migration, spillage, uncontrolled loss,
seepage, or filtration of any Hazardous Materials, including, without
limitation, chemical liquids, gases or solids, (a "SPILL") from or within any
real property owned, leased or operated by
45
Borrower, (d) Borrower is not aware of any condition, nor is it involved in
any operations, which would lead to the imposition of any material liability
or Lien against the Borrower under the Environmental Laws, and Borrower has
not permitted any tenant or occupant of such real property to engage in any
such activity, and (e) Borrower has not caused or allowed any offsite Spill
of Hazardous Materials originating from or generated at real property owned,
leased, or operated by Borrower.
5. FINANCIAL STATEMENTS AND INFORMATION
5.1 REPORTS AND NOTICES. Borrower covenants and agrees that from and after
the date hereof and until the Termination Date, it shall deliver to Lender:
(a) Within 30 days after the end of each fiscal month, copies of all
financial information which has been prepared by Borrower for such month. At
any time and from time to time upon the reasonable request of Lender,
Borrower shall prepare such financial information on a monthly basis.
(b) Within 45 days after the end of each fiscal quarter (other than
the last fiscal quarter of the fiscal year), (i) a copy of the unaudited
consolidated balance sheets and the related consolidated statements of income
and retained earnings and cash flows of Borrower as of the close of such
quarter and the related consolidated statements of income and retained
earnings and cash flows for that portion of the Fiscal Year ending as of the
close of such quarter, and (ii) a copy of the unaudited consolidated
statements of income of Borrower for such quarter, all prepared in accordance
with GAAP (subject to normal year end adjustments), setting forth in
comparative form in each case the consolidated figures for such quarter in
the prior Fiscal Year, the consolidated figures for that portion of the prior
Fiscal Year and projected consolidated figures for such period and
accompanied by (A) a statement in reasonable detail showing the calculations
used in determining the financial and real estate covenants under Sections
6.3, 7.3, 7.11 and 7.12 hereof, and (B) the certification of the chief
executive officer or chief financial officer of Borrower that all such
financial statements are complete and correct and present fairly in
accordance with GAAP (subject to normal year end adjustments) the
consolidated financial position, the consolidated results of operations and
cash flow statements of Borrower as at the end of such quarter and for the
period ended, and that, to the best of such officer's knowledge and belief,
there was no Default or Event of Default in existence as of such time.
(c) Within 90 days after the close of each Fiscal Year, a copy of
the annual audited consolidated financial statements of Borrower consisting
of consolidated balance sheets and consolidated statements of income and
retained earnings and cash flow, setting forth in comparative form in each
case the consolidated figures for the previous Fiscal Year, which financial
statements shall be prepared in accordance with GAAP, accompanied by an
unqualified auditor's report, from the independent certified public
accountants regularly retained by Borrower, or any other firm of independent
certified public accountants of recognized national standing selected by
Borrower and acceptable to Lender, and
46
accompanied by (i) a schedule in reasonable detail showing the calculations
used in determining the financial and real estate covenants under Sections
6.3, 7.3, 7.11 and 7.12 hereof, (ii) a report from such accountants to the
effect that in connection with their audit examinations, nothing has come to
their attention to cause them to believe that a Default or Event of Default
had occurred and (iii) a certification of the chief executive officer or
chief financial officer of Borrower that all such financial statements are
complete and correct and present fairly in accordance with GAAP the
consolidated financial position, the consolidated results of operations and
the changes in consolidated financial position of Borrower as at the end of
such year and for the period then ended and that, to the best of such
officer's knowledge and belief, there was no Default or Event of Default in
existence as of such time.
(d) On or before the fifteenth (15th) day of the third month of each
fiscal quarter, projections of Borrower's cash flows for the succeeding
fiscal quarter, reported on a monthly basis.
(e) As soon as practicable, but in any event within two (2) Business
Days after Borrower become aware of the existence of any Default or Event of
Default, or and in any event within five (5) Business Days after Borrower
becomes aware of any development or other information which could reasonably
be expected to have a Material Adverse Effect, by telephonic or telegraphic
notice specifying the nature of such Default or Event of Default or
development or information, including the anticipated effect thereof, which
notice shall be promptly confirmed in writing within five (5) days.
(f) In form and detail satisfactory to Lender, each operating report
listed on Schedule 5.1(f) hereof, as prescribed by such Schedule, and each
other operating report reasonably requested by Lender.
(g) Within 30 days prior to the beginning of each Fiscal Year,
Borrower's preliminary budget for such Fiscal Year, which shall include:
(i) projected consolidated balance sheet of Borrower for such
Fiscal Year, on a monthly basis;
(ii) projected consolidated cash flow statements of Borrower,
including summary details of cash disbursements, including for
Consolidated Capital Expenditures, for such Fiscal Year, on a monthly
basis;
(iii) projected consolidated income statements of Borrower for
such Fiscal Year, on a monthly basis; and
(iv) a summary of key assumptions underlying the projections
delivered pursuant to this Section 5.1(g);
together with appropriate supporting details as requested by Lender.
47
(h) If requested by Lender, copies of all federal, state, local and
foreign tax returns and reports in respect of income, franchise or other
taxes on or measured by income (excluding sales, use or like taxes) filed by
Borrower.
(i) As soon as practicable, but in any event, within two (2) Business
Days, notice of any change in the management of Borrower by ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇.
(j) As requested by Lender from time to time, (i) updated title
searches of all Eligible Collateral, (ii) lien releases, waivers, or receipts
for payment from all Persons who have performed work or for Eligible Housing
Units, (iii) a detailed schedule of all Trade Payables, including Trade
Payables aging information, and (iv) a current updated list of all
subcontractors and materialmen who have performed work on, or furnished
materials for, Eligible Collateral.
(k) Such other information respecting Borrower's business, financial
condition or prospectus as Lender or any Assignee Lender may, from time to
time, reasonably request.
5.2 COMMUNICATION WITH ACCOUNTANTS. Borrower authorized Lender, on
behalf of itself and each Assignee Lender, to communicate directly with its
independent certified public accountants and authorizes those accountants to
disclose any and all financial statements, work papers and other supporting
financial documents and schedules including copies of any management letter
with respect to the business, financial condition and other affairs of
Borrower to Lender, on behalf of itself and any Assignee Lender, and notifies
those accountants that Lender is entitled to rely on such materials.
6. AFFIRMATIVE COVENANTS
Borrower covenants and agrees that, unless Lender shall otherwise
consent in writing from and after the date hereof and until the Termination
Date:
6.1 MAINTENANCE OF EXISTENCE AND CONDUCT OF BUSINESS. Each entity
comprising Borrower shall (a) do or cause to be done all things necessary to
preserve and keep in full force and effect its existence as a corporation,
and its rights and franchises; (b) continue to conduct its business
substantially as now conducted or as otherwise permitted hereunder; (c) at
all times maintain, preserve and protect all of its trademarks and trade
names, and preserve all the remainder of its property, in use or useful in
the conduct of its business and keep the same in good repair, working order
and condition (taking into consideration ordinary wear and tear) and from
time to time make, or cause to be made, all needful and proper repairs,
renewals and replacements, betterments 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 (provided
that Borrower shall not be required to replace or improve property
constituting Capital Assets if such replacement or improvement
48
would violate the provisions of Section 7.11, unless the requirements of such
Section are waived by Lender, in its sole discretion); and (d) transact
business in such names as Borrower may from time to time use in conducting
its businesses.
6.2 PAYMENT OF OBLIGATIONS.
(a) Borrower shall (i) pay and discharge or cause to be paid and
discharged all its Indebtedness (other than nonrecourse Indebtedness)
including, without limitation, all the Obligations, as and when due and
payable by Borrower, except where failure to pay or discharge or cause to be
paid or discharged would not be a default under Section 9.1(m) hereof; and
(ii) except as set forth in Section 6.2(b) 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 before any thereof shall
become in default.
(b) Borrower may in good faith contest, by proper legal actions or
proceedings, the validity or amount of any Charges or claims arising under
Section 6.2(a)(ii), provided that, at the time of commencement of any such
action or proceeding, and during the pendency thereof (i) no Default or Event
of Default shall have occurred, and (ii) adequate Reserves with respect
thereto are maintained on the books of Borrower in accordance with GAAP, and
(iii) Borrower obtains a bond with respect to such Charges or claims in form
and substance acceptable to Lender.
6.3 FINANCIAL COVENANTS. Borrower shall, on a consolidated basis:
(a) Maintain (such maintenance to be evidenced as at the end of
each fiscal quarter specified below) an Adjusted Consolidated Tangible Net
Worth equal to or greater than:
Adjusted
49
Consolidated
Period Tangible Net
Worth
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Fiscal quarter ending June 30, 1995 $7,500,000
Fiscal quarter ending September 30, 1995 $7,740,000
Fiscal quarter ending December 31, 1995 $7,980,000
Fiscal quarter ending March 31, 1996 $8,220,000
Fiscal quarter ending June 30, 1996 $8,460,000
Fiscal quarter ending September 30, 1996 $8,700,000
Fiscal quarter ending December 31, 1996 $8,940,000
Fiscal quarter ending March 31, 1997 $9,180,000
Fiscal quarter ending June 30, 1997 $9,420,000
Fiscal quarter ending September 30, 1997 $9,660,000
Fiscal quarter ending December 31, 1997 $9,900,000
Fiscal quarter ending March 31, 1998 and for each
quarter thereafter until the Termination Date $10,140,000
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
(b) Achieve Adjusted Consolidated Operating Profit for each fiscal
quarter, equal to or greater than $800,000 (i) for the fiscal quarter ending
September 30, 1995 (based on that fiscal quarter), (ii) for the fiscal
quarter ending December 31, 1995 (based on an average of that fiscal quarter
and the immediately preceding quarter), (iii) for the fiscal quarter ending
March 31, 1996 (based on an average of that fiscal quarter and the
immediately preceding two fiscal quarters), and (iv) for each fiscal quarter
thereafter (based on an average of that fiscal quarter and the preceding
three fiscal quarters):
(c) Maintain (such maintenance to be evidenced as at the end of
each fiscal quarter specified below) a Total Indebtedness to Adjusted
Consolidated Tangible Net Worth Ratio equal to or less than 5:1.
(d) Maintain at all times, such maintenance to be evidenced as at
the end of each fiscal quarter based on a rolling four quarter period, a
Consolidated Fixed Charge Coverage Ratio equal to or greater than 1.5:1.
(e) Maintain at all times, such maintenance to be evidenced at the
end of each fiscal quarter, a ratio of Trade Payables balance to dollar value
of housing inventory equal to or less than 15%, reported consistent with and
reflected on Borrower's financial statements dated February 28, 1995.
(f) Maintain at all times, such maintenance to be evidenced at the
end of each fiscal quarter, a ratio of selling, general and administrative
expenses (excluding,
50
however, amortization of financing costs, capitalized interest and other
indirect costs) to total revenues from the "sale of homes," of no more than
15%, reported consistent with and reflected on Borrower's financial
statements dated February 28, 1995.
(g) Maintain on the Financials of Borrower and Guarantor an
average ratio based on a rolling four-quarter period of the value of all land
on such Financials to the Adjusted Consolidated Tangible Net Worth of not
more than (i) 2.5:1 on September 30, 1995 and ▇▇▇▇▇▇▇▇ ▇▇, ▇▇▇▇, (▇▇) 2.25:1
on ▇▇▇▇▇ ▇▇, ▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇, ▇▇▇▇, (▇▇▇) 2.0:1 on September 30, 1996 and
December 31, 1996, and (iv) 1.75:1 on March 31, 1996 and on the last day of
each calendar quarter thereafter.
6.4 LENDER'S FEES. Borrower shall pay to Lender, on demand, any and
all fees, costs or expenses that Lender shall pay to a bank or other similar
institution arising out of or in connection with the forwarding to Borrower
or any other Person on behalf of Borrower by Lender of proceeds of the Loan.
6.5 BOOKS AND RECORDS. Borrower shall keep adequate records and books
of account with respect to its business activities, in which proper entries,
reflecting all of its financial transactions, are made in accordance with
GAAP and on a basis consistent with the Financials referred to in Section
4.5(b) hereof.
6.6 LITIGATION. Borrower shall notify Lender in writing, promptly upon
learning thereof, of any litigation commenced or threatened against Borrower
or Guarantor and of the institution against it of any suit or administrative
proceeding that may impair the Collateral or if the amount in controversy
exceeds $200,000.
6.7 INSURANCE. Schedule 6.7 lists all insurance of any nature
maintained by Borrower as well as a summary of the terms of such insurance.
Borrower shall maintain (i) fire, (ii) theft, (iii) burglary, (iv) product
liability, (v) workers' compensation, (vi) standard all-risk coverage
insurance, (vii) builder's risk coverage insurance policies for properties
under construction for
51
the full insurable value of such properties, (viii) flood insurance on those
properties that have been identified as being in an area having special flood
hazard risks, and (ix) comprehensive general public liability insurance
providing for limits of liability of not less than $5,000,000 per occurrence
for injury or death to a person or property damage; Borrower shall deliver
certified copies of all such policies and such policies shall be enforced on
the standard New York (or local equivalent) long-form non-contributory
mortgagee clause in the name of Lender with endorsement on all property
insurance coverage in favor of Lender as an additional insured or loss payee,
as its interest may appear, issued by carriers rated at least A-IX by A.M.
Best Company with terms and coverage (in an amount and scope) acceptable to
Lender and requiring at least thirty (30) days' notice to Lender prior to
cancellation, non-renewal or material change and providing that no act or
default of Borrower or any other Person shall affect the right of Lender to
recover under such policy in case of loss or damage. Borrower shall pay all
insurance premiums.
6.8 COMPLIANCE WITH LAW. Borrower shall comply with all federal, state
and local laws and regulations applicable to it, including, without
limitation, ERISA, those regarding the collection, payment and deposit of
employees, income, unemployment and social security taxes and those relating
to environmental matters, in each case where the failure to comply reasonably
could be expected to have a Material Adverse Effect.
6.9 AGREEMENTS. Borrower shall perform, within all required time periods
(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, any leases to which it is a party, where the
failure to so perform and enforce would have a Material Adverse Effect.
Borrower shall not terminate or modify, in any manner adverse to it any
provision of any agreement to which it is a party, which termination or
modification could reasonably be expected to have a Material Adverse Effect.
6.10 SUPPLEMENTAL DISCLOSURE.
(a) From time to time as Lender reasonably may request (in the
event that such information is not otherwise delivered by Borrower to Lender
pursuant to this Agreement), so long as there are Obligations outstanding
hereunder, Borrower will supplement or amend 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 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.
(b) Borrower shall from time to time upon Lenders' request, provide
Lender with an updated appraisal, performed by a licensed independent
appraiser, of any Finished Building Lot designated as Collateral.
52
6.11 EMPLOYEE PLANS.
(a) With respect to each Qualified Plan (other than a Multiemployer
Plan) hereafter adopted or maintained by the Borrower or any ERISA Affiliate,
Borrower shall (i) seek, or cause its ERISA Affiliates to seek, and receive
determination letters from the IRS to the effect that such Qualified Plan is
qualified within the meaning of Section 401(a) of the IRC; and (ii) from and
after the adoption of any such Qualified Plan, cause such plan to be
qualified within the meaning of Section 401(a) of the IRC and to be
administered in all material respects in accordance with the requirements of
ERISA and Section 401(a) of the IRC.
(b) With respect to each Welfare Plan hereafter adopted or
maintained by Borrower or any ERISA Affiliate, Borrower shall comply, or
cause its ERISA Affiliates to comply, with the notice and continuation
coverage requirements of Section 4980B of the IRC and the regulations
thereunder.
(c) (i) Promptly and in any event within thirty (30) days after
Borrower or any ERISA Affiliate knows or has reason to know that any ERISA
Event has occurred, and (ii) promptly and in any event within ten (10) days
after Borrower or any ERISA Affiliate knows or has reason to know that a
request for a minimum funding waiver under Section 412 of the IRC has been
filed with respect to any Qualified Plan, Borrower shall furnish to Lender a
written statement of the chief financial officer or other appropriate officer
of Borrower describing such ERISA Event or waiver request and the action, if
any, which Borrower or any ERISA Affiliate proposes to take with respect
thereto and a copy of any notice filed with the PBGC or the IRS pertaining
thereto.
(d) Promptly upon request by Lender, Borrower shall furnish to
Lender a copy of each annual report (Form 5500 Series, including schedules
thereto) with respect to each Plan.
(e) Promptly and in any event within thirty (30) days after receipt
thereof, Borrower shall furnish to Lender a copy of any adverse notice,
determination letter, ruling or opinion Borrower or any ERISA Affiliate
receives from the PBGC, DOL or IRS with respect to any Qualified Plan.
(f) Promptly and in any event within thirty (30) Business Days
after the adoption thereof, Borrower shall furnish to Lender notice of any
amendment to any Welfare Plan which Borrower maintains, contributes or has an
obligation to contribute to, and which could result or results in an increase
in benefits for retirees or new benefits for retirees.
(g) Promptly and in any event after receipt of written notice of
commencement thereof, Borrower shall furnish to Lender notice of any action,
suit or proceeding before any court or other governmental authority affecting
Borrower or any
53
ERISA Affiliate with respect to any Plan, except those which, in the
aggregate, if adversely determined, could not reasonably be expected to have a
Material Adverse Effect.
(h) Promptly and in any event within thirty (30) days after notice
or knowledge thereof, Borrower shall furnish to Lender notice that Borrower
becomes subject to the tax on prohibited transactions imposed by Section 4975
of the IRC, together with a copy of Form 5330.
6.12 SEC FILINGS; CERTAIN OTHER NOTICES. Borrower shall furnish to
Lender (i) promptly after the filing thereof with the Securities and Exchange
Commission, a copy of each report, notice or other filing, if any, by
Borrower with the Securities and Exchange Commission, (ii) a copy of each
written communication which either (x) is material or (y) pertains to subject
matter outside the ordinary course of business, received by Borrower from or
delivered by Borrower to (A) the Securities and Exchange Commission or (B)
any holder of publicly held subordinated debt of Borrower, in each case
promptly after each such receipt or delivery.
6.13 LEASES. Upon request of Lender, Borrower shall provide Lender with
copies of all leases of real property or personal property (other than DE
MINIMIS items of personal property not necessary for the conduct of
Borrower's business) or similar agreements (and all amendments thereto)
entered into by Borrower after the date hereof, whether as lessor or lessee
and which provide for aggregate annual lease payments of $50,000 or greater.
Borrower shall (i) provide Lender with a copy of each notice of default
received by Borrower under any such lease promptly after receipt of any such
notice and deliver to Lender a copy of each notice of default sent by
Borrower under any such lease simultaneously with its delivery of such notice
under such lease; (ii) notify Lender, not later than 30 days prior to the
date of the expiration of the term of any such lease, of its intention either
to renew or not renew any such lease, and, if Borrower shall intend to renew
such lease, the terms and conditions of such renewal lease; and (iii) notify
Lender at least 14 days prior to the date Borrower takes possession of any
new leased premises or becomes liable under any lease, whichever is earlier.
6.14 ENVIRONMENTAL MATTERS.
(a) Borrower shall, and Borrower shall cause its agents,
representatives, tenants or occupants to (i) comply in all material respects
with the Environmental Laws applicable to them, (ii) notify Lender promptly,
but in any event within thirty (30) days, after knowledge in the event of any
Spill of Hazardous Materials upon, under, originating from or generated at
any real property owned, leased or operated by Borrower that is likely to
result in any actual or potential liability under the Environmental Laws to
Borrower, and (iii) promptly forward to Lender a copy of any significant
order, notice, permit, or any other communication or report received or
prepared by the Borrower relating to the cleanup or abatement of any
significant Spill of Hazardous Materials in violation of any applicable
Environmental Laws relating to such real property.
54
(b) Borrower shall at all times indemnify Lender and hold Lender
harmless from and against any loss, claims, suits, actions, obligations,
liability, damages or expense, including reasonable attorneys' fees,
suffered or incurred by Lender, whether as holder of a deed of trust, as
mortgagee in possession, or as successor in interest to Borrower by virtue of
foreclosure or acceptance of a deed or other transaction in lieu of
foreclosure (i) under or on account of the Environmental Laws, including the
assertion of any Lien thereunder, (ii) with respect to any Spill or liability
for the use of Hazardous Materials affecting real property owned, leased or
operated by Borrower, whether or not the same originates or emanates from
such real property or any contiguous real estate, including any loss of value
of such real property as a result of such use or Spill of Hazardous
Materials, (iii) with respect to the offsite disposal, release or migration
of Hazardous Materials originating from or generated by real property owned,
leased or operated by Borrower, (iv) with respect to any liability for
personal injury or property damage caused by, resulting from, or related to
an environmental condition or activity arising under any statutory or common
law theory, including, without limitation, damages assessed for the
maintenance of public or private nuisance or the carrying on of an abnormally
dangerous activity at or near any real property owned, leased or operated by
Borrower, and (v) with respect to any costs of removal, remedial or
investigative action incurred by Lender, including those costs incurred as a
result of actions or claims brought by the United States government, any
other government body or agency, or third party, or any costs incurred by
Lender as a result of injury to, destruction of, or loss of natural
resources, including reasonable costs to investigate and assess such injury,
destruction or loss; provided, however, Borrower shall not be liable to
Lender for any contamination at, under or from such property to the extent
caused or contributed to by actions of the Lender, its agents,
representatives or employees.
(c) In the event of (i) any Spill of Hazardous Materials in violation
of any Environmental Laws at, upon, under, or originating or generated from
any real property owned, leased or operated by Borrower, or (ii)
contamination or violation of Environmental laws resulting from the use of
any Hazardous Materials at such real property, Borrower shall, at no cost to
Lender, investigate and, as appropriate or necessary under the Environmental
Laws or as required by federal, state, or local governmental agencies,
remediate or correct such Spill, contamination or violation, or defend
against liability therefor. So long as Borrower is diligently pursuing such
investigation of, remediation of, correction of, or good faith defense
against liability for any such Spill, contamination or violation (together
"WORK"), Borrower shall be deemed to be in compliance with subsection (a)(i)
above. Nothing herein shall relieve Borrower of any other obligations as set
forth in this Section. If Lender believes that Borrower has materially failed
to conduct the Work, or is not conducting the Work in material compliance
with applicable Environmental Laws, Lender may cause such Work to be
performed, including taking any and all actions required under applicable
Environmental Laws to remedy such Spill, contamination or violation;
provided, however, that Lender shall provide Borrower with written notice of
Lender's intent to perform such Work or to take such actions thirty (30) days
in advance of so doing. However, in the event that such Spill, contamination
or violation poses an imminent and substantial danger or threat under
applicable Environmental
55
Laws, Lender may proceed immediately with such Work, but only to the extent
necessary to ▇▇▇▇▇ such condition. If Borrower notifies Lender within this
30-day period of Borrower's intent to perform such Work and thereafter
diligently proceeds to complete the Work as soon as feasible, any alleged
failure thereof shall be deemed cured. Borrower shall cooperate in good faith
with the performance of the Work by or for Lender, which shall include
providing Lender and its representatives access to the real property to
perform the Work. Any Work conducted by or for Lender shall be conducted so
as not to unreasonably interfere with the normal operations of Borrower on or
with respect to the real property. Any amounts paid by Lender as a result
thereof, together with interest thereon at the rate set forth in Section 2.6
hereof, shall be immediately due and payable by Borrower and, until paid,
shall be added to the Obligation; provided,however, Borrower shall not be
liable to Lender for any amounts incurred as the result of contamination
caused, contributed to or exacerbated by Lender, its agents, representatives
or employees in performing the Work.
(d) Borrower shall, upon Lender's request, (i) provide Lender with an
Environmental Report necessary to meet the Lender's needs from a consultant
mutually acceptable to Lender and Borrower, with respect to any Eligible
Collateral or any Real Estate submitted to Lender to be added as Eligible
Collateral, and (ii) make available to Lender copies of each Environmental
Report that Borrower performs internally or commissions from an outside
environmental consulting or engineering firm that are not subject to a claim
of privilege with respect to any parcel of Real Estate owned, leased or
operated by Borrower.
6.15 STAY, EXECUTION AND USURY LAWS. Borrower covenants (to the
extent that it may lawfully do so) that it will not at any time insist upon,
plead, or in any manner whatsoever claim or take the benefit or advantage of,
any stay, extension or usury law, wherever enacted, now or at any time
hereafter in force, that may affect its duty to pay the Obligations, and
Borrower (to the extent that it may lawfully do so) hereby expressly waives
all benefit or advantage of any such law insofar as such law applies to the
Obligations, and covenants that it will not, by resort to any such law,
hinder, delay or impede the execution of any power herein granted to Lender,
but will suffer and permit the execution of every such power as though no
such law had been enacted.
6.16 REAL ESTATE SALES FROM AFFILIATES. All transfers of Real Estate
to Borrower from Affiliates of Borrower shall be made at Fair Market Value.
The amount to be paid to any Affiliate for such Real Estate (or any Affiliate
holders of Liens on such Real Estate) shall be the Fair Market Value of such
Real Estate reduced by the sum of (a) the amount of Indebtedness paid by
Borrower to non-Affiliates at the time of such transfer to release Liens or
obtain subordination of Liens on such Real Estate, plus (b) the amount of any
Indebtedness which Borrower assumes or subject to which Borrower takes the
Real Estate. Except at such times as the amount of Revolving Credit Advances
outstanding is zero (during which Borrower may pay cash, at its sole
discretion), such amount so determined shall be payable pursuant to a
promissory note in the form of EXHIBIT D attached hereto (the "CARRYBACK
PURCHASE NOTE"), and secured by Subordinate Liens in form and substance
acceptable to Lender. Borrower shall make payments on Carryback Purchase
Notes in accordance with
56
terms and a payment schedule approved by Lender. All payments on the
Carryback Purchase Notes shall be applied first to interest and then to
principal. In any event, all indebtedness under the Carryback Purchase Notes
shall be due and payable 30 days following the Termination Date.
Notwithstanding the foregoing, no payments shall be made on Carryback
Purchase Notes if, at the time of, or after giving effect to such payments,
(i) a Default or Event of Default exists or would exist, or (ii) a Default or
Event of Default exists or would exist under the Guaranty (as such terms are
defined in the Guaranty). Not later than the date of making any payments
under Section 6.16, Borrower shall deliver to Lender a certificate of
Borrower in a form satisfactory to Lender stating that such payment is
permitted and setting forth the basis upon which the calculations required by
the applicable provisions were computed, which calculations may be based
upon Borrower's latest available financial statements.
6.17 SOLVENCY CERTIFICATE OF AFFILIATE. Prior to any transfer of Real
Estate to Borrower from an Affiliate of Borrower, Borrower shall deliver to
Lender a certificate signed by the chief financial officer of such Affiliate,
satisfactory in form and substance to Lender, stating that after giving
effect to such transfer, such Affiliate (i) will be solvent, (ii) will have
sufficient assets and capital for its business, and (iii) will have the
ability to pay its debts as they become due.
7. NEGATIVE COVENANTS
Borrower covenants and agrees that, without Lender's prior written
consent, from and after the date hereof and until the Termination Date:
7.1 MERGERS, ETC. Borrower shall not, 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 or form any new entity.
7.2 INVESTMENTS; LOANS AND ADVANCES. Except as otherwise provided
herein, Borrower shall not make Investments in, (i) an Affiliate or (ii) any
other Person; PROVIDED, HOWEVER, that at any time when the amount of
Revolving Credit Advances outstanding is zero, Borrower may make Permitted
Investments through the Disbursement Account.
7.3 PAYMENTS TO AFFILIATES. Borrower shall not make any payments
whatsoever (whether by loan, dividend, distributions, for the purchase of
Real Estate or other property, for services or otherwise) to or on behalf of
Affiliates or make any Restricted Payments, except as follows:
(a) Payments pursuant to Carryback Purchase Notes;
(b) Aggregate compensation and distributions to employees and
officers (A) not to increase by more than fifteen percent (15%) per year for
any employee or officer whose compensation exceeds $100,000; provided further
that compensation and distributions
57
to members of the families of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ shall be
consistent with compensation to employees and officers with similar
responsibilities;
(c) Payments to Guarantor for federal income tax liability of
Borrower and Guarantor;
(d) Payments for stock repurchases from the ESOP as provided under
the ESOP;
(e) Payment of dividends on preferred stock issued by Guarantor in
consideration for the transfer to Guarantor of certain land in Kalamazoo,
Michigan; provided (i) that such land has been developed, (ii) that such
dividends are payable entirely out of cash flow from such land, and (iii) such
dividends shall not exceed $108,000 per year; and
(f) Payments to United Homes, Inc., an Arizona corporation, United
Homes of Illinois, Inc., an Illinois corporation, and United Homes of Michigan,
Inc., a Michigan corporation, made in the ordinary course of business and for
reasonably equivalent value.
Notwithstanding the foregoing, no payments shall be permitted (i) under
Section 7.3 if, at the time of, or after giving effect to such payments, a
Default or Event of Default exists or would exist under this Agreement, or (ii)
under Section 7.3 (a) if, at the time of, or after giving effect to such
payments, a Default or Event of Default exists or would exist under the Guaranty
(as such terms are defined in the Guaranty).
Not later than the date of making any payments under Section 7.3 (a),
Borrower shall deliver to Lender an Officer's Certificate in a form satisfactory
to Lender stating that such payment is permitted and setting forth the basis
upon which the calculations required by the applicable provisions were computed,
which calculations may be based upon Borrower's latest available financial
statements.
7.4 INDEBTEDNESS. Except as otherwise expressly permitted by this
Section 7.4 or by any other section of this Agreement, Borrower shall not
create, incur, assume or permit to exist any Indebtedness of it on any date,
whether recourse or non-recourse, and whether superior or junior, resulting
from borrowings, loans, advances or the granting of credit, whether secured
or unsecured, unless, after giving effect thereto, the aggregate amount of
Other Indebtedness outstanding on such date plus the outstanding Revolving
Credit Advances on such date is $55,000,000 or less.
7.5 RELEASE OR SUBORDINATION OF PERMITTED ENCUMBRANCES. Borrower shall
not use any monies advanced by Lender to obtain a release or a subordination of
any Permitted Encumbrance in an amount greater than the actual amount required
to be paid by Borrower to obtain such release or subordination.
58
7.6 CAPITAL STRUCTURE. Borrower shall not make any changes in its capital
structure (including, without limitation, in the terms of its outstanding
Stock), amend its certificate of incorporation or by-laws, make any changes in
any of its business objectives, purposes, or operations which could reasonably
be expected to adversely affect the repayment of the obligations or have a
Material Adverse Effect. Borrower shall not issue any Stock.
7.7 MAINTENANCE OF BUSINESS. Borrower shall not engage in any business
other than the business currently engaged in by Borrower.
7.8 TRANSACTIONS WITH AFFILIATES. Except for those transactions described
on Schedule 7.8 attached hereto, Borrower shall not enter into or be a party to
any transaction with any Affiliate of Borrower except in the ordinary course of,
and pursuant to the reasonable requirements of, Borrower's business and upon
fair and reasonable terms that are fully disclosed to Lender and are no less
favorable to Borrower than Borrower would obtain in a comparable arm's length
transaction with a Person not an Affiliate of Borrower.
7.9 GUARANTEED INDEBTEDNESS. Borrower shall not create, incur, assume or
permit to exist any Guaranteed Indebtedness except (i) by endorsement of
instruments or items of payment for deposit to the general account of Borrower,
and (ii) for Guaranteed Indebtedness incurred for the benefit of Borrower, if
the primary obligation is permitted by this Agreement.
7.10 LIENS. Borrower shall not create or permit any Lien on any of its
properties or assets except:
(a) presently existing or hereinafter created Liens in favor of
Lender; and
(b) Permitted Encumbrances.
7.11 CAPITAL EXPENDITURES. Borrower shall not make Consolidated Capital
Expenditures that, in the aggregate, exceed $200,000 in any Fiscal Year.
7.12 SALE OF ASSETS. Borrower shall not sell, transfer, convey or
otherwise dispose of any assets or properties or engage in any
sale-leasebacks or similar transactions involving such assets or properties
(collectively referred to as "DISPOSITIONS"), provided, however, that the
foregoing shall not prohibit (i) dispositions in the ordinary course of
Borrower's business, (ii) dispositions resulting from any casualty or
condemnation of assets or properties, (iii) dispositions of those assets and
properties listed on Schedule 7.12, or (iv) dispositions of assets or
properties out of the ordinary course of Borrower's business at the Fair
Market Value of such assets or properties.
7.13 CANCELLATION OF INDEBTEDNESS. Borrower shall not cancel any claim or
debt owing to it, except for commercially reasonable consideration and in the
ordinary course of business (other than settlement of intercompany accounts due
from Borrower).
59
7.14 HEDGING TRANSACTIONS. Borrower shall not engage in any speculative
interest rate hedging swaps, caps or similar transaction.
7.15 RESTRICTED PAYMENTS. Borrower shall not make any Restricted
Payments, except to the extent such payments are permitted pursuant to
Section 7.3.
7.16 COMPENSATION AND MANAGEMENT. Borrower, together with Guarantors,
shall not pay Compensation to any relatives of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇ (including relatives by marriage) except those listed on Schedule
7.16, in an amount in excess of $100,000 per year.
7.17 ERISA. Borrower shall not, and shall not permit any ERISA Affiliate
to, directly or indirectly, establish, maintain or become obligated to
contribute to any Pension Plan, Title IV Plan, Multiemployer Plan or Retiree
Welfare Plan. Borrower shall not establish, maintain or become obligated to
contribute to any new Welfare Plan or modify any existing Welfare Plan for
retirees, which would result in the present value of future liabilities under
any such plans to increase. Borrower shall not, directly or indirectly, and
shall not permit any ERISA Affiliate to (a) satisfy any liability under any
Qualified Plan by purchasing annuities from an insurance company, or (b)
invest the assets of any Qualified Plan with an insurance company, unless, in
each case, such insurance company is rated AA by Standard & Poor's
Corporation and the equivalent by each other nationally recognized rating
agency at the time of the investment.
7.18 PREPAYMENT OF INDEBTEDNESS. Except for prepayments in connection
with Permitted Refinancing Indebtedness, Borrower shall not make any
prepayment of principal or interest except prior to the date of the First
Revolving Credit Advance or as permitted in Sections 2.2 or 2.3 hereof, on
account of any Indebtedness of Borrower in excess of $100,000 in the
aggregate in any one calendar year.
7.19 VENDOR NOTES. Borrower shall not enter into any agreement or
arrangement with any vendor to pay for any services or materials provided
with respect to any Eligible Collateral on terms other than normal trade
credit customarily obtained by Borrower and in no case shall Borrower issue
any note for any such obligation or agree to pay any vendor on the sale of
Eligible Collateral.
7.20 ESOP. Borrower shall not amend or permit the amendment of the ESOP
without the prior written consent of Lender.
8. TERM
8.1 TERMINATION. Subject to the provisions of Section 2 hereof, the
financing arrangement contemplated hereby in respect of the Loan shall be in
effect until the Commitment Termination Date.
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8.2 SURVIVAL OF OBLIGATIONS UPON TERMINATION OF FINANCING ARRANGEMENT.
Except as otherwise expressly provided for in the Loan Documents, no termination
or cancellation (regardless of cause or procedure) of any financing arrangement
under this Agreement shall in any way affect or impair the obligations, duties,
or liabilities of Borrower or the rights and powers of Lender relating to any
transaction or event occurring prior to such termination. Except as otherwise
expressly provided herein or in any other Loan Document, all of Borrower's
undertakings, agreements, covenants, warranties and representations contained in
the Loan Documents shall survive (with respect to representations and warranties
as of the date made or deemed made only) such termination or cancellation and
shall continue in full force and effect until all of the obligations have been
paid in full in accordance with the terms of the agreements creating such
obligations, at which time the same shall terminate.
9. EVENTS OF DEFAULT; RIGHTS AND REMEDIES
9.1 EVENTS OF DEFAULT. The occurrence of any one or more of the following
events (regardless of the reason therefor) shall constitute an "EVENT OF
DEFAULT" hereunder;
(a) Borrower shall fail to make any payment of principal of, or
interest on or any other amount owing in respect of, the Loan or any of the
other Obligations when due and payable or declared due and payable, except that
with respect to expenses payable under this Agreement, or other Obligations
owing under any Loan Document other than this Agreement, such failure shall have
remained unremedied for five (5) days after Borrower has received notice of such
failure from Lender.
(b) Borrower shall fail to perform or observe any of the covenants
contained in Articles 5 or 7 of this Agreement.
(c) Guarantor shall fail to perform or observe any of the covenants
contained in the Guaranty.
(d) Borrower or Guarantor shall contest the validity or priority of
any Lien created under the Collateral Documents.
(e) Borrower shall fail to perform or observe any of the covenants
contained in Sections 6.3, 7.2, 7.3, 7.4, 7.9, 7.10, 7.11 or 7.12 of this
Agreement (each a "FINANCIAL COVENANT"). Borrower shall be unable to
demonstrate that it has complied with such Financial Covenant as of no later
than the end of the second succeeding quarterly period.
(f) Borrower shall fail or neglect to perform, keep or observe any
other provision of this Agreement or of any of the other Loan Documents, and the
same shall remain unremedied for a period ending on the first to occur of ten
(10) days after Borrower shall receive written notice of any such failure from
any Lender or twenty (20) days after Borrower shall become aware thereof.
61
(g) Any representation or warranty herein or in any Loan Document or
in any other written statement pursuant thereto or hereto, report, financial
statement or certificate made or delivered to Lender by Borrower shall be untrue
or incorrect in any material respect, as of the date when made or deemed made
(including those made or deemed made pursuant to Section 3.2).
(h) Any other event or condition shall have occurred which would have
a Material Adverse Effect and Lender shall have given Borrower at least five (5)
days' notice thereof.
(i) A Change of Control, to which Lender has not consented, shall
have occurred.
(j) ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ or ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ shall cease for any reason
to serve actively in such capacity as he serves as of the date hereof (except
that it is understood that ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ is serving as chief executive
officer of United Homes of Illinois, Inc. on an-interim basis only) and the
responsibilities formerly held by ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ or ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ to cease
to so serve, as the case may be, shall not be assumed by one or more individuals
reasonably acceptable to Lender, in the exercise of its discretion.
(k) With respect to any Plan, (i) a prohibited transaction with the
meaning of Section 4975 of the IRC or Section 406 of ERISA occurs which in the
reasonable determination of the Lender could result in direct or indirect
liability to the Borrower, (ii) with respect to any Qualified Plan, the Borrower
or any ERISA Affiliate shall incur an accumulated funding deficiency or request
a funding waiver from the IRS; provided, however, that the events listed in
clauses (i) and (ii) hereof shall constitute Events of Default only if the
liability, deficiency or waiver request of Borrower or any ERISA Affiliate,
whether or not assessed, would have Material Adverse Effect.
(l) Any material provision of any Collateral Document or the
Guaranty, after delivery thereof pursuant to Section 3.1, shall for any reason
cease to be valid or enforceable in accordance with its terms, or any Lien
created under any Collateral Document shall cease to be a valid and perfected
first priority Lien (except as otherwise stated therein and except for Ordinary
Course Liens) in any of the Collateral purported to be covered thereby and
aggregate value of all such Collateral on which Lender's Lien is so adversely
affected exceeds $50,000 at any one time.
(m) A default other than those defaults existing as of the date
hereof and specified on Schedule 4.8 shall occur under any other agreement,
document or instrument to which Borrower is a party or by which Borrower or
Borrower's property is bound, and such default (i) involves the failure to make
any payment (whether of principal, interest or otherwise) due within the grace
period provided for in such agreement, document or instrument (whether by
scheduled maturity, required prepayment, acceleration, demand or otherwise) in
respect of an Indebtedness of Borrower in an aggregate amount exceeding
62
$50,000 (which failure continues beyond any applicable grace period), or (ii)
causes Indebtedness of Borrower or a portion thereof in an aggregate amount
exceeding $200,000, to become due prior to its stated maturity or prior to its
regularly scheduled dates of payment.
(n) Any of the Collateral (other than the DE MINIMIS amount thereof)
subject to any seizure or attachment, or other legal proceedings.
(o) A judgment shall be entered against Borrower or Guarantor in an
amount in excess of $100,000 and such judgment shall become final.
(p) Borrower shall (i) file a petition seeking relief under the
Bankruptcy Code, as now constituted or hereafter amended, or any other
applicable federal, state or foreign bankruptcy or other similar law, (ii)
consent to the institution of proceedings thereunder or to the filing of any
such petition or to the appointment of or taking possession by a custodian,
receiver, liquidator, assignee, trustee or sequestrator (or similar official) of
Borrower or of any substantial part of its properties or (iii) take any
corporate action in furtherance of any such action.
(q) There shall exist outstanding "stop notices" not fully bonded
within 10 days of issuance in excess of $50,000, in the aggregate.
Lender shall have no obligation to make Revolving Credit Advances
during any cure period afforded Borrower in this Section 9.1 until Borrower
cures the Default.
9.2 REMEDIES. If any Event of Default shall have occurred and be
continuing, Lender may, without notice, (i) terminate this facility with respect
to further Revolving Credit Advances whereupon no Revolving Credit Advances may
be made or incurred hereunder, (ii) declare all Obligations to be due and
payable, whereupon all obligations shall become and be due and payable, without
presentment, demand, protest or further notice of any kind, all of which are
expressly waived by Borrower and/or (iii) exercise all rights and remedies
allowed by applicable laws of the United States and of any state thereof,
including, without limitation, the Code; provided, however, upon the occurrence
of an Event of Default specified in Sections 9.1(m) or (n) hereof, the
Obligations shall become due and payable without declaration, notice or demand
by Lender.
9.3 WAIVERS BY BORROWER. Except as otherwise provided for in this
Agreement and applicable law, 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 Lender or any Assignee Lender on which Borrower may in any
way be liable and hereby ratifies and confirms whatever Lender or any Assignee
Lender may do in this regard, (ii) all rights to notice and a hearing prior to
Lender's taking
63
possession or control of, or to Lender's replevy, attachment or levy upon, the
Collateral or any bond or security which might be required by any court prior to
allowing Lender to exercise any of its remedies, and (iii) the benefit of all
valuation, appraisal and exemption laws. 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.
9.4 RIGHT OF SET-OFF. Upon the occurrence and during the continuance of
any Event of Default, Lender and each Assignee Lender is hereby authorized at
any time and from time to time, to the fullest extent permitted by law, to set
off and apply any and all deposits (general or special, time or demand,
provisional or final) at any time held after crediting other indebtedness or
amounts of any kind at any time owing by Lender or such Assignee Lender to or
for the credit or the account of Borrower against any and all of the Obligations
of Borrower now or hereafter existing under this Agreement, and the Note held by
Lender or such Assignee Lender, irrespective of whether or not Lender or such
Assignee Lender shall have made any demand under this Agreement or the Note and
although such obligations may be unmatured.
10. MISCELLANEOUS
10.1 COMPLETE AGREEMENT: MODIFICATION OF AGREEMENT: SALE OF INTEREST.
The Loan Documents constitute the complete agreement between the parties with
respect to the subject matter hereof and may not be modified, altered or amended
except by an agreement in writing signed by Borrower and Lender. Borrower may
not sell, assign or transfer any of the Loan Documents or any portion thereof,
including, without limitation, Borrower's rights, title, interests, remedies,
powers and duties hereunder or thereunder. Lender and each Assignee Lender may
undertake the sale of participations, assignment, transfer or other disposition,
at any time or times, of any of the Loan Documents or of any portion thereof or
interest therein, including, without limitation, Lender's and each Assignee
Lender's rights, title, interests, remedies, powers or duties thereunder,
whether evidenced by a writing or not and the sale, assignment, transfer or
other disposition of all or a portion of the Loan; provided, that (i) neither
Lendernor any Assignee Lender shall transfer any interest under this Agreement
or in or to the Obligations to any Person that is not (a) a United States
resident or citizen or a corporation or partnership formed under the laws of
the United States or any of the states and (b) subject to United States
taxation with respect to the payments received hereunder and (ii) Lender shall,
at all times, retain whatever interest may be necessary in order to give Lender
the sole right to grant waivers or consents, declare Events of Default or
exercise remedies under any of the Loan Documents. Borrower agrees that it will
use its best efforts to assist and cooperate with Lender in any manner
reasonably requested by Lender to effect the sale of participations in or
assignments of any of the Loan Documents or of any portion thereof or interest
therein, including, without limitation, assistance in the preparation of
appropriate disclosure documents or placement memoranda.
64
If Lender or any Assignee Lender assigns or otherwise transfers all or any
part of the Note, Borrower shall, upon the request of Lender or such Assignee
Lender, issue one or more new Notes, as the case may be, to effectuate such
assignment or transfer.
Lender may sell, assign, transfer or negotiate to one or more other
lenders, commercial banks, insurance companies or other financial institutions
all or a portion of the rights and obligations under the Note and this
Agreement.
No amendment or waiver of any provision of this Agreement or the Note or any
other Loan Document, nor consent to any departure by Borrower therefrom, shall
in any event be effective unless the same shall be in writing and signed by the
Lender, and then such waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given; provided, however, that
no amendment, waiver or consent shall, unless in writing and signed by Lender
and all Assignee Lenders affected thereby do any of the following: (i) increase
the Maximum Loan or subject the Lender or any Assignee Lender to any additional
obligations, (ii) reduce the principal of, or interest on, the Note or other
amounts payable hereunder other than those payable only to Lender which may be
reduced by Lender unilaterally, (iii) postpone any date fixed for any payment of
principal of, or interest on, the Note or other amounts payable hereunder, other
than those payable only to Lender which may be postponed by Lender unilaterally,
(iv) change the aggregate unpaid principal amount of the Note, or the number of
Lenders and Assignee Lenders which shall be required for the Lenders and
Assignee Lenders or any of them to take any action hereunder, (v) release or
discharge any Person liable for the performance of any obligations of any Loan
Party hereunder or under any of the Loan Documents, or (vi) amend this Section
10.1; and provided, further, however, that no amendment, waiver or consent
shall, unless in writing and signed by all Lenders holding an interest in the
Note, increase the Maximum Loan; and provided, further, however, that no
amendment, waiver or consent shall, unless in writing and signed by Lender,
affect the rights or duties of the Lender under this Agreement, the Note or
any Loan Document.
10.2 FEES AND EXPENSES. Borrower shall, upon execution of this Agreement,
and thereafter pay all reasonable out-of-pocket expenses of Lender in connection
with the preparation of the Loan Documents (including the reasonable fees and
expenses of all of its counsel and advisors retained in connection with the Loan
Documents and the transactions contemplated thereby and advice in connection
therewith). If, at any time or times, regardless of the existence of an Event
of Default (except with respect to subparagraphs (iv) and (v), which shall be
subject to an Event of Default having occurred and being continuing), Lender (or
in the case of subparagraphs (iv) and (v) below, any Assignee Lender) shall
employ counsel or other advisors for advice or other representation or shall
incur reasonable legal or other costs and expenses in connection with:
(i) any sale of participations, assignment, transfer or other
disposition of Lender's interest in the Loan or any of the Loan Documents or
any portion thereof, but only as to one-half of any such expenses;
65
(ii) any amendment, interpretation of, modification or waiver, or
consent with respect to, any of the Loan Documents or advice in connection
with the administration of the Loans made pursuant hereto or its rights
hereunder or thereunder;
(iii) any litigation, contest, dispute, suit, proceeding or action
(whether instituted by Lender or any Assignee Lender, Borrower or any other
Person) in any way relating to the Collateral, any of the Loan Documents or
any other agreements to be executed or delivered in connection herewith;
(iv) any attempt to enforce any rights of Lender or any Assignee
Lender against Borrower or any other Person, that may be obligated to
Lender by virtue of any of the Loan Documents;
(v) any attempt to verify, protect, value, collect, sell, liquidate
or otherwise dispose of the Collateral;
then, and in any such event, the attorneys' and other parties' fees arising from
such services, including those of any appellate proceedings, and all expenses,
costs, charges and other fees incurred by such counsel and others in any way or
respect arising in connection with or relating to any of the events or actions
described in this Section shall be payable, on demand, by Borrower to Lender
(or as provided above to an Assignee Lender) and shall be additional obligations
secured under this Agreement and the other Loan Documents; provided, however,
the (a) so long as no Event of Default exists, Borrower shall be responsible for
fees, expenses, costs, charges and other fees incurred with respect to
subparagraph (ii) above only if Borrower shall have consented to paying for such
matters in advance and (b) in any direct action between Borrower and Lender
pursuant to subparagraph (iii) or (iv) above, all fees, expenses (including,
without limitation, all reasonable attorneys' fees and expenses), costs and
charges of the prevailing party (who shall be deemed to be the party who obtains
substantially the relief sought by such party, whether by settlement, compromise
or judgment) shall be paid by the nonprevailing party. Without limiting the
generality of the foregoing, such reasonable expenses, costs, charges and fees
may include: appraisers, liquidators, paralegal fees, costs and expenses;
accountants' and investment bankers' fees, costs and expenses; photocopying and
duplicating expenses; long distance telephone charges; air express charges;
telegram charges; secretarial overtime charges; and expenses for travel, lodging
and food paid or incurred in connection with the performance of such legal
services.
10.3 NO WAIVER LENDER. Lender's or any Assignee Lender's failure, at any
time or times, to require strict performance by any Loan Party of any provision
of this Agreement and any of the other Loan Documents shall not waive, affect or
diminish any right of Lender thereafter to demand strict compliance and
performance therewith. Any suspension or waiver by Lender or Assignee Lender of
an Event of Default by any Loan Party under the Loan Documents shall not
suspend, waive or affect any other Event of Default by any Loan Party under this
Agreement and any of the other Loan Documents whether the same is prior or
66
subsequent thereto and whether of the same or of a different type. None of the
undertakings, agreements, warranties, covenants and representations of any Loan
Party contained in this Agreement or any of the other Loan Documents and no
Event of Default by Borrower under this Agreement and no defaults by any Loan
Party under any of the other Loan Documents shall be deemed to have been
suspended or waived by Lender or Assignee Lender, unless such suspension or
waiver is by an instrument in writing signed by an officer of Lender and
directed to such Loan Party specifying such suspension or waiver.
10.4 REMEDIES. Lender's and each Assignee Lender's rights and remedies
under this Agreement shall be cumulative and nonexclusive of any other rights
and remedies which Lender and Assignee Lenders may have under any other
agreement, including without limitation, the Loan Documents, by operation of law
or otherwise. Recourse to the Collateral prior to the exercise of other
remedies shall not be required.
10.5 WAIVER OF JURY TRIAL. The parties hereto waive all right to trial by
jury in any action or proceeding to enforce or defend any rights under the Loan
Documents.
10.6 SEVERABILITY. Wherever possible, each provision of this Agreement
shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement shall be prohibited by or
invalid under applicable law, such provision shall be ineffective to the extent
of such prohibition or invalidity, without invalidating the remainder of such
provision or the remaining provisions of this Agreement.
10.7 PARTIES. This Agreement and the other Loan Documents shall be binding
upon, and inure to the benefit of, the successors of Borrower, Lender and any
Assignee Lender and the assigns, transferees and endorsees of Lender and any
Assignee Lender.
10.8 CONFLICT OF TERMS. Except as otherwise provided in this Agreement or
any of the other Loan Documents by specific reference to the applicable
provisions of this Agreement, if any provision contained in this Agreement is in
conflict with, or inconsistent with, any provision in any of the other Loan
Documents, the provision contained in this Agreement shall govern and control.
10.9 AUTHORIZED SIGNATURE. Until Lender shall be notified by Borrower to
the contrary, the signature upon any document or instrument delivered pursuant
hereto of an officer of Borrower listed in Schedule 10.9 hereto shall bind
Borrower and be deemed to be the act of Borrower affixed pursuant to and in
accordance with resolutions duly adopted by Borrower's Board of Directors.
10.10 GOVERNING LAW. Except as otherwise expressly provided in any of the
Loan Documents, in all respects, including all matters of construction, validity
and performance, this Agreement and the Obligations arising hereunder shall be
governed by, and construed and enforced in accordance with, the laws of the
State of Illinois applicable to contracts made and performed in such state,
without regard to the principles thereof regarding conflict of
67
laws, and any applicable laws of the United States of America. Lender, each
Assignee Lender and Borrower agree to submit to personal jurisdiction and to
waive any objection as to venue in the County of ▇▇▇▇, State of Illinois.
Service of process on Borrower, Lender or any Assignee Lender in any action
arising out of or relating to any of the Loan Documents shall be effective if
mailed to such party at the address listed in Section 10.11 hereof. Nothing
herein shall preclude Lender, any Assignee Lender or Borrower from bringing suit
or taking other legal action in any other jurisdiction.
10.11 NOTICES. Except as otherwise provided herein, whenever it is
provided herein that any notice, demand, request, consent, approval, declaration
or other communication shall or may be given to or served upon any of the
parties by another or whenever any of the parties desires to give or serve
upon another any communication with respect to this Agreement,
each such notice, demand, request, consent, approval, declaration or other
communication shall be in writing and either shall be delivered in person with
receipt acknowledged or by registered or certified mail, return receipt
requested, postage prepaid, or telecopied and confirmed by telecopy answerback
addressed as follows:
(a) If to Lender at
Genel Company, Inc.
c/o General Electric Capital Corporation
▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
Two Galleria Tower, LB24
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: Investment Manager
Telecopy No.: (▇▇▇)▇▇▇-▇▇▇▇
With copies to:
General Electric Capital Corporation
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Counsel, Commercial Real Estate Financing
Telecopy No.: (▇▇▇)▇▇▇-▇▇▇▇
and
▇▇▇▇▇▇ & ▇▇▇▇▇▇ L.L.P
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
68
(b) If to Borrower, at
United Homes, Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
With copies to:
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, Ltd.
▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
or at such other address as may be substituted by notice given as herein
provided. The giving of any notice required hereunder may be waived in writing
by the party entitled to receive such notice. Every notice, demand, request,
consent, approval, declaration or other communication hereunder shall be deemed
to have been duly given or served on the date on which personally delivered,
with receipt acknowledged, telecopied and confirmed by telecopy answerback or
three (3) Business Days after the same shall have been deposited in the United
States mail. Failure or delay in delivering copies of any notice, demand,
request, consent, approval, declaration or other communication to the persons
designated above to receive copies shall in no way adversely affect the
effectiveness of such notice, demand, request, consent, approval, declaration or
other communication.
10.12 SURVIVAL. The representations and warranties of Borrower in this
Agreement shall survive the execution, delivery and acceptance hereof by the
parties hereto and the closing of the transactions described herein or related
hereto.
10.13 SECTION TITLES. The Section titles and Table of Contents contained
in this Agreement are and shall be without substantive meaning or content of any
kind whatsoever and are not a part of the agreement between the parties hereto.
10.14 COUNTERPARTS. This Agreement may be signed in more than one (1)
counterpart, each of which shall be considered an original and all of which
together shall constitute one agreement.
10.15 TRANSFER OF NOTE AND LIENS. Lender may transfer the Note and the
Liens securing the same at any time without notice to or consent by Borrower.
69
10.16 JOINT AND SEVERAL LIABILITY. If Borrower consists of more than one
person or entity, each shall be jointly and severally liable to Lender for the
full and faithful performance of all obligations contemplated by this Agreement.
10.17 NO ORAL AGREEMENTS. THIS WRITTEN LOAN AGREEMENT AND THE LOAN
DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY, NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE
PARTIES.
IN WITNESS WHEREOF, this Agreement has been duly executed as of the date
first written above.
"Borrower"
UNITED HOMES, INC., an Illinois corporation,
By:/s/ ▇▇▇▇▇▇▇ ▇ ▇▇▇▇▇
------------------------------------------
▇▇▇▇▇▇▇ ▇ ▇▇▇▇▇, Secretary
"Lender"
GENEL COMPANY, INC., an Oregon corporation
By:/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇,
------------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Attorney-in-Fact
70
EXHIBIT A
FORM OF NOTE
$25,000,000.00 Chicago, Illinois
May ____, 1995
FOR VALUE RECEIVED, the undersigned, UNITED HOMES, INC., an Illinois
corporation ("BORROWER") hereby PROMISES TO PAY to the order of GENEL COMPANY,
INC., an Oregon corporation ("LENDER") or its assigns, at ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ or at such other place as the holder of this Note may
designate from time to time in writing, in lawful money of the United States of
America and in immediately available funds, the amount of TWENTY-FIVE MILLION
DOLLARS ($25,000,000), or such lesser principal amount of the Loan (as
hereinafter defined) as may be outstanding pursuant to the Credit Agreement
(as hereinafter defined), together with interest on the unpaid principal
amount of this Note outstanding from time to time from the date hereof at the
rate or rates provided in the Credit Agreement.
This Note is issued pursuant to that certain Revolving Credit Agreement
dated as of May___,1995 between Borrower and Lender (the "CREDIT AGREEMENT") is
referred to as the Note in the Credit Agreement and is entitled to the benefit
and security of the Loan Documents provided for therein, to which reference is
hereby made for a statement of all of the terms and conditions under which the
loan evidenced hereby is made. All capitalized terms, unless otherwise defined
herein, shall have the meanings ascribed to them in the Credit Agreement.
The principal amount of the indebtedness evidenced hereby shall be payable
in the amounts and on the dates specified in the Credit Agreement. Interest
thereon shall be paid until such principal amount is paid in full at such
interest rates and at such times as are specified in the Credit Agreement.
If any payment on this Note becomes due and payable on a day other than a
Business Day, the maturity thereof shall be extended to the next succeeding
Business Day and, with respect to payments of principal, interest thereon shall
be payable at the applicable rate during such extension.
If any payment of principal or interest, or any amount due under the Credit
Agreement or the other Loan Documents is not timely made and remains overdue and
payable after the expiration of any applicable cure period, interest shall
thereafter accrue on the principal amount at the Default Rate until such amounts
are paid. On the occurrence of an Event of Default (inclusive of any cure
periods with respect thereto) under the terms of any Loan Document, Borrower,
without notice or demand by Lender, shall
A-1
thereafter pay interest at the Default Rate until the Event of Default is cured.
Borrower recognizes that its default in making payments as provided herein or in
the Credit Agreement as agreed to be paid when due, or otherwise causing an
Event of Default to occur hereunder or under any other Loan Document, will
require Lender to incur additional expense in servicing the Loan, in loss to
Lender of the use of the money due and in frustration to Lender in meeting its
other financial and loan commitments and that damages caused thereby would be
extremely difficult and impractical to ascertain. Borrower agrees that an
amount equal to the accrual of interest at the Default Rate is a reasonable
estimate of the damage to Lender in the event of late payment and that the
accrual of interest at the Default Rate following any other default is a
reasonable estimate of the damage to Lender in the event of such other default,
regardless of whether there has been an acceleration of the Loan. Nothing in
this paragraph shall be construed as an obligation on the part of Lender to
accept, at any time, less than the full amount then due hereunder, or as a
waiver or limitation of Lender's rights to compel prompt performances.
During the continuance of an Event of Default, this Note may, as provided
in the Credit Agreement, and without demand, notice or legal process of any
kind, be declared, and immediately shall become, due and payable.
Demand, presentment, protest and notice of nonpayment and protest are
hereby waived by Borrower.
This Note has been executed, delivered and accepted at Chicago, Illinois
and shall be interpreted, governed by and construed in accordance with, the laws
of the State or Illinois.
UNITED HOMES, INC., an Illinois corporation,
By:
-----------------------------------------
Name:
----------------------------------------
Title:
---------------------------------------
A-2
EXHIBIT B
NOTICE OF REVOLVING CREDIT ADVANCE
[Date]
Genel Company, Inc.
c/o General Electric Capital Corporation
▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
One Galleria Tower, LB 24
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: Investment Manager
Ladies and Gentlemen:
The undersigned, United Homes, Inc., an Illinois corporation
("BORROWER"), refers to that certain Revolving Credit Agreement, dated as of
May___, 1995 (as amended or modified, the "CREDIT AGREEMENT", the terms
defined therein being used herein as therein defined), between Borrower and
Genel Company, Inc. and hereby gives you notice, irrevocably, pursuant to
Section 2.1 of the Credit Agreement, that the undersigned hereby requests a
Revolving Credit Advance under the Credit Agreement, and in that connection
sets forth below the information relating to such Revolving Credit Advance as
required by Section 2.1(c) of the Credit Agreement:
(i) The date of the requested Revolving Credit Advance shall be
_________, 199__.
(ii) The aggregate amount of the requested Revolving Credit Advance is
$__________.
The undersigned hereby certifies that the statements contained in Section
3.2 of the Credit Agreement are true on the date hereof, and will be true on the
date of the requested Revolving Credit Advance before and after giving effect
thereto and to the application of the proceeds therefrom.
B-1
"Borrower"
UNITED HOMES, INC., an Illinois corporation
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
B-2
EXHIBIT C
May __, 1995
VIA CERTIFIED MAIL RECEIPT
NO._______________________
[Name of Bank]
[Address]
Re: United Homes, Inc. - Concentration Account Number ___________
Dear Bank Officer:
Please be advised that, pursuant to that certain Revolving Credit Agreement
(the "AGREEMENT") dated as of May __, 1995, between United Homes, Inc.
("BORROWER"), and Genel Company, Inc. ("LENDER"), Borrower has agreed to deposit
certain proceeds in the above-referenced account (the "CONCENTRATION ACCOUNT"),
in which security interests have also been granted to Lender.
You are hereby irrevocably directed to transfer, by wire, on each day that
is not a Saturday, a Sunday or a day on which banks are required or permitted to
be closed in the States of Illinois or New York, all collected and available
funds on deposit in the Concentration Account to Bankers Trust Company account
number _______ in the name of GECC/RCL United, ABA No. 021 001 033 (the
"DEPOSITORY ACCOUNT"). You are further directed that any funds remaining in the
Concentration Account after the daily transfer to the Depository Account shall
be invested overnight in government securities or federal funds. Except as set
forth in the two immediately preceding sentences, you are hereby further
directed not to transfer any other funds, and not to allow any other
withdrawals, from the Concentration Account, except, in either case, pursuant to
written instructions received by you from both Lender and Borrower, jointly.
[NAME OF BANK] (i) confirms that it is not the holder of any pledge or
assignment of the Concentration Account and has received no notice of any other
pledge or assignment of the Concentration Account and (ii) acknowledges and
agrees that any right of offset or claim that it may have against the
Concentration Account or any funds, cash, instruments or securities now or
hereafter deposited therein shall be subject, junior and subordinate to
------------------------
[Name of Bank]
May __, 1995
Page 2
the interest of Lender in the Concentration Account and all funds, cash,
instruments or securities now or hereafter deposited therein.
Please acknowledge your receipt of this letter and your agreement to its
terms by executing this letter in the space provided below and returning an
executed copy by facsimile to Lender at fascimile number (▇▇▇) ▇▇▇-▇▇▇▇ Attn:
Investment Manager.
Very truly yours,
UNITED HOMES, INC., an Illinois corporation
By:
----------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------
GENEL COMPANY, INC., an Oregon corporation
By:
----------------------------------------
Name:
---------------------------------
Title:
--------------------------------
Agreed and Acknowledged:
[NAME OF COLLECTION ACCOUNT BANK]
By:
--------------------------------
Name:
------------------------------
Title:
-----------------------------
EXHIBIT D
FORM OF CARRYBACK PURCHASE NOTE
$___________ _________,Illinois
__________ _____, 199___
FOR VALUE RECEIVED, the undersigned, UNITED HOMES, INC., an Illinois
corporation, and (hereinafter collectively referred to as "MAKER") hereby
PROMISES TO PAY to the order of [___________, a ____________] ("HOLDER") or its
registered assigns, at _________________or at such other place as Holder may
designate from time to time in writing, in lawful money of the United States of
America and in immediately available funds, the amount of [AMOUNT IN DOLLARS]
($_______________), together with interest on the unpaid principal amount of
this Note outstanding from time to time from the date hereof at the rate equal
to the Index Rate plus _____ percent (___%) per annum, calculated on the basis
of the actual number of days elapsed and on the basis of a 365 day year. This
Note is one of the notes referred to as the "CARRYBACK PURCHASE NOTES" in that
certain Revolving Credit Agreement dated as of May ___, 1995 between Maker and
General Electric Capital Corporation (as amended or otherwise modified from time
to time, the "CREDIT AGREEMENT"). All capitalized terms, unless otherwise
defined herein, shall have the meanings ascribed to them in the Credit
Agreement.
Payments of all indebtedness due under this Note shall be due and payable
30 days following the Termination Date; provided, however, that Maker may elect
to prepay at any time any portion of indebtedness due under this Note without
premium or penalty. To the extent Maker elects to make payments on an earlier
date, Maker shall only be entitled to make payments upon such terms and
conditions as set forth in the Credit Agreement.
If any payment on this Note becomes due and payable on a day other than a
Business Day, the maturity thereof shall be extended to the next succeeding
Business Day.
1
This Note has been executed, delivered and accepted at Chicago, Illinois
and shall be interpreted, governed by and construed in accordance with, the laws
of the State of Illinois.
UNITED HOMES, INC., an Illinois corporation
By:
----------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------
Accepted and acknowledged by:
GENEL COMPANY, INC., any Oregon corporation
By:
------------------------------
Name:
----------------------------
Title:
---------------------------
2
SCHEDULE 1.1
"BORROWING BASE" shall mean all Eligible Collateral that Lender has not
rejected in its sole discretion as constituting a portion of the Borrowing
Base and with respect to which (a) Lender has a first priority Lien perfected
as contemplated by the terms of this Agreement, subject only to Liens
specifically approved in writing by Lender; (b) Lender has received a binding
mortgagee's policy of title insurance on ALTA Form B (1970) (or equivalent)
and otherwise in form and content satisfactory to Lender, to be obtained at
Borrower's expense, insuring that the Lien of the Collateral Documents
constitutes a valid Lien encumbering the Real Estate, free and clear of all
defects and encumbrances (including any mechanics' liens claims, whether
recorded or unrecorded) except for such other Liens as Lender shall approve
and naming Lender as insured, issued by a nationally recognized title
insurance company acceptable to Lender, with no exceptions or exclusions
other than as may be approved by Lender (together with legible copies of all
permitted title exceptions), and in an amount not less than the Market Value
with the total amount of the title policies to be issued in Lender's favor to
be in a maximum aggregate amount equal to the maximum principal amount of
$25,000,000. Each title policy shall include such affirmative insurance as
Lender may require and shall be in form and substance satisfactory to
Lender's legal counsel. The title insurance policy shall be reinsured with
such title companies, in such amounts and in such manner and form as shall be
acceptable to Lender. In the event that a Lien is filed against any Eligible
Collateral subsequent to its admission to the Borrowing Base (whether or not
such Lien is subordinate to the Lien perfected by Lender as contemplated by
this Agreement), in addition to all other rights and remedies that Lender may
have under this Agreement or the other Loan Documents, Lender shall be
entitled, in its sole discretion, to remove the Eligible Collateral affected
by such Lien from the Borrowing Base, effective immediately.
1.1-1
SCHEDULE 2.9(a)
CONCENTRATION ACCOUNT
--------------------------------------------------------------------------------
ACCOUNT ACCOUNT
BANK NAME NUMBER
--------------------------------------------------------------------------------
AMERICAN NATIONAL BANK United Homes, Inc.
AND TRUST COMPANY OF
CHICAGO
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
--------------------------------------------------------------------------------
SCHEDULE 2.9(b)
DISBURSEMENT ACCOUNTS
--------------------------------------------------------------------------------
ACCOUNT ACCOUNT
BANK NAME NUMBER
--------------------------------------------------------------------------------
AMERICAN NATIONAL United Homes, Inc.
BANK AND TRUST
COMPANY OF CHICAGO
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
--------------------------------------------------------------------------------
▇▇▇▇▇ CENTER STATE United Homes, Inc.
BANK
▇▇▇▇-▇▇▇▇ ▇.▇.
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
--------------------------------------------------------------------------------
BANK OF AMERICA United Homes, Inc.
▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
--------------------------------------------------------------------------------
SCHEDULE 4.2
EXECUTIVE OFFICES
Illinois: ▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Michigan: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Arizona: ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
SCHEDULE 4.3
SUBSIDIARIES AND GUARANTOR
United Homes, Inc., an Arizona corporation
United Homes of Illinois, Inc., an Illinois corporation
United Homes of Michigan, Inc., a Michigan corporation
United Development Management Company, an Illinois corporation
SCHEDULE 4.5(d)
MATERIAL ADVERSE CHANGES AND STOCK RELATED TRANSACTIONS
SINCE FEBRUARY 28, 1995
None
SCHEDULE 4.7(a)
ENCUMBRANCES ON REAL ESTATE
To be attached from Title Commitments
SCHEDULE 4.7(b)
RIGHTS OF FIRST REFUSAL
None
SCHEDULE 4.7(d)
PENDING OR THREATENED CONDEMNATION PROCEEDINGS
None
SCHEDULE 4.7(e)
CASUALTY AND FLOOD HAZARD AREA
None
SCHEDULE 4.8
DEFAULTS
None
SCHEDULE 4.11
OTHER VENTURES
PARTNERSHIP:
The Gilberts Associates United Partnership
The ▇▇▇▇▇▇▇▇ Glens Partnership
United/RBG II L.P.
The Red Dog Ranch Limited Partnership
SCHEDULE 4.14
TAX MATTERS
Nothing Pending
SCHEDULE 4.15
ERISA
None
SCHEDULE 4.16
LITIGATION
SCHEDULE 4.18
OUTSTANDING OPTIONS
None
SCHEDULE 4.19
EMPLOYMENT MATTERS
None
SCHEDULE 4.20
PATENTS AND TRADEMARKS
None
SCHEDULE 4.23
MATERIAL ADVERSE EFFECT
None
SCHEDULE 4.24
ENVIRONMENTAL MATTERS
None
SCHEDULE 5.1(f)
OPERATING REPORTS
Audited financial statement as of September 30, 1994
Unaudited financial as of February 28, 1995
SCHEDULE 6.7
INSURANCE
Certificate of Insurance dated May 12, 1995, from ▇▇▇▇▇▇
▇. ▇▇▇▇▇▇▇▇▇ & Co.
[describe insurance]
CERTIFICATE OF INSURANCE ISSUE DATE
//05/23/95
PRODUCER THE CERTIFICATE IS ISSUED AS A MATTER
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ & CO OF INFORMATION ONLY AND CONFERS NO RIGHTS
ATTN: ▇▇▇▇ ▇▇▇▇ UPON THE CERTIFICATE HOLDER. THE
(▇▇▇) ▇▇▇-▇▇▇▇ CERTIFICATE DOES NOT AMEND, EXTEND OR
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇ ALTER THE COVERAGE AFFORDED BY THE POLICY
▇▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇ BELOW
--------------------------------------------
COMPANIES AFFORDING COVERAGE
------------------------------------------------------------------------------
INSURED COMPANY A
UNITED HOMES, INC LETTER NORTHBROOK PROPERTY & CASUALTY
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ --------------------------------------------
SUITE 110 COMPANY B
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ LETTER COMMERCIAL UNDERWRITERS (▇. ▇▇▇▇▇)
--------------------------------------------
COMPANY C
LETTER FEDERAL INSURANCE COMPANY (CHUBB)
--------------------------------------------
COMPANY D
LETTER
--------------------------------------------
COMPANY E
LETTER
--------------------------------------------
------------------------------------------------------------------------------
COVERAGE
------------------------------------------------------------------------------
THIS IS TO CERTIFY THAT THE POLICIES OF INSURANCE LISTED BELOW HAVE BEEN
ISSUED TO THE INSURED NAMED ABOVE FOR THE POLICY PERIOD INDICATED
NOTWITHSTANDING ANY REQUIREMENT, TERM OR CONDITION OF ANY CONTRACT OR OTHER
DOCUMENT WITH RESPECT TO WHICH THE CERTIFICATE MAY BE ISSUED OR MAY PERTAIN.
THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN IS SUBJECT TO ALL THE
TERMS, COLLECTIONS AND CONDITIONS OF SUCH POLICIES. LIMITS SHOWN MAY HAVE
BEEN REDUCED BY PAID CLAIM.
------------------------------------------------------------------------------
POLICY EFFECTIVE POLICY EXPIRATION
TYPE OF INSURANCE POLICY NUMBER DATE (MM/DD/YY) DATE (MM/DD/YY) ALL LIMITS IN THOUSANDS
----------------------------- -------------- ----------------- ------------------ -------------------------------------
A GENERAL LIABILITY 91453316 02/01/95 02/01/96 GENERAL AGGREGATE $ 2,000
B /X/ COMMERCIAL GENERAL LIABILITY EWC1000034 02/01/95 02/01/96 PRODUCTS-COMP/OPS/AGGR. $ 1,000
/ / CLAIMS MADE /X/ OCCUR PERSONAL & ADVERTISING INJURY $ 1,000
/ / OWNERS & CONTRACTOR'S PROT. EACH OCCURRANCE $ 1,000
----------------- FIRE DAMAGE (ANY ONE FIRE) $ 50
----------------------------------------------------------------------------------------------------------------------------
A AUTOMOBILE LIABILITY CA0437484-95 02/01/95 02/01/96 COMBINED SINGLE LIST $ 1,000
/ /ANY AUTO BODILY INJURY (PER PERSON) $
/ /ALL OWNED AUTOS BODILY INJURY (PER ???) $
/X/SCHEDULED AUTOS PROPERTY DAMAGE $
/X/HIRED AUTOS
/X/NON-OWNED AUTOS
/ /GARAGE LIABILITY
/X/PHYSICAL DAMAGE
----------------------------------------------------------------------------------------------------------------------------
C EXCESS LIABILITY 9679714773 02/01/95 02/01/96
/X/Y UMBRELLA FORM EACH OCCUR $10,000
OTHER THAN UMBRELLA FORM AGGREGATE $10,000
----------------------------------------------------------------------------------------------------------------------------
A WORKER'S COMPENSATION 91-453320 02/01/95 02/01/96 STATUTORY
AND // 500 (EACH ACCOUNT)
EMPLOYERS' LIABILITY // 500 (COVERAGE POLICY LIMIT)
// 500 (PURCHASE-EACH EMPLOYED)
----------------------------------------------------------------------------------------------------------------------------
A OTH. ALL RISK PROP. IM91439992 02/01/95 02/01/96 $17,469
REAL & PERSONAL IM91437876 02/01/95 02/01/96 (IN 1,000)
AND BUILDERS $10,000 PER
RISK COVERAGES SITE & OCCUR.
----------------------------------------------------------------------------------------------------------------------------
DESCRIPTION OF OPERATION/LOCATION/VEHICLES/SPECIAL/ITEMS
THE CERTIFICATE HOLDER, AS LENDER, IS ADDITIONAL INSURED ON GENERAL LIABILITY
& LOSS PAYEE/MORTGAGEE ON PROPERTY & BUILDER'S RISK WITH REGARD TO THEIR
INTERESTS, ALL POLICY TERMS & CONDITIONS APPLY.
------------------------------------------------------------------------------
------------------------------------------------------------------------------
GE CAPITAL SHOULD ANY OF THE ABOVE DESCRIBED POLICIES
1750 TWO GALLERIA TOWER BE CANCELLED BEFORE THE EXPIRATION DATE
▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ THEREOF, THE ISSUED COMPANY WILL ENDEAVOR
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ TO MAIL 30 DAYS WRITTEN NOTICE TO THE
-------------------------------- CERTIFICATE HOLDER NAMED TO THE LEFT.
------------------------------------------
AUTHORIZED REPRESENTATIVE
/S/ ILLEGIBLE
-------------------------
SCHEDULE 7.8
TRANSACTIONS WITH AFFILIATES
None, except as to United Development Management Company
SCHEDULE 7.16
EMPLOYEES AND OFFICERS WHOSE ANNUAL
COMPENSATION EXCEEDS $100,000
None
SCHEDULE 10.9
AUTHORIZED SIGNATURES
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
TUESDAY, MAY 30, 1995 AVAILABILITY BY SUBDIVISION Page 1
BORROWER: UNITED HOMES RECORDED SUBVISIONS AS OF 5/30/95
---------------------------------------------------------------------------------------------------------------------------------
DIVISION COUNTY MASTER- SUB- NO. LOT BUILD- CONST AVAILABILITY MAXIMUM CURRENT
PLAN DIVISION OF AVAIL OUT AVAIL SUBTOTAL AVAIL AVAIL
LOTS AVAIL
---------------------------------------------------------------------------------------------------------------------------------
CHICAGO N/A N/A BRISTOL PARK-1 4 $65,937.00 $0.00 $443,126.00 $509,063.00 $525,375.00 $500,4343.75
CHICAGO N/A N/A BRISTOL PARK-1 37 $609,917.25 $0.00 $2,342,548.45 $2,952,465.70 $4,214,124.50 $2,938,426.35
CHICAGO N/A N/A HARVEST RUN 5 $206,250.00 $0.00 $582,208.40 $788,459.40 $929,399.25 $0.00
CHICAGO N/A N/A PRAIRIE VILLAGE 33 $590,700.00 $0.00 $411,253,05 $1,001,953.05 $2,676,412.40 $0.00
CHICAGO N/A N/A ROYAL HILL 27 $752,605.00 $0.00 $2,743,001.20 $3,495,608.20 $4,045,957.50 $3,213,007.95
▇▇▇▇▇▇▇ ▇/▇ ▇/▇ ▇▇▇▇▇ ▇▇▇▇ #▇ 4 $76,000.00 $0.00 $494,395.00 $570,395.00 $589,875.00 $564,679.00
CHICAGO N/A N/A ▇▇▇▇▇▇▇▇ ▇▇▇▇ 32 $912,000.00 $0.00 $1,646,244.95 $2,558,244.95 $4,179,221.50 $0.00
CHICAGO N/A N/A WILLOW LAKE 32 $625,700.00 $0.00 $2,135,738.05 $2,761,438.05 $3,525,872.50 $2,698,695.50
GRAND RAPIDS N/A N/A BAYBERRY FARM 18 $398,000.00 $0.00 $318,600.00 $714,000.00 $1,885,968.00 $881,425.00
GRAND RAPIDS N/A N/A WINDCREST 17 $127,500.00 $0.00 $249,300.00 $376,600.00 $1,145,373.25 $376,800.00
PHOENIX N/A N/A ARISSONA 3 $202,500.00 $0.00 $162,926.70 $385,426.70 $799,683.75 $385,426.70
▇▇▇▇▇▇▇ ▇/▇ ▇/▇ AUTUMN RIDGE 17 $261,375.00 $0.00 $256,975.50 $518,350.50 $1,111,423.00 $502,551.30
▇▇▇▇▇▇▇ ▇/▇ ▇/▇ DESERT WINDS 18 $290,250.00 $0.00 $427,339.20 $717,589.20 $1,254,353.25 $519,810.45
▇▇▇▇▇▇▇ ▇/▇ ▇/▇ RED DOG RANCH 12 $747,600.00 $0.00 $320,481.45 $1,068,081.45 $2,503,429.50 $1,068,081.45
--------------------------------------------------------------------------------------------------------------------------------
TOTAL: 259 $5,864,334.25 $0.00 $12,534,138.95 $16,396,473.20 $29,366,488.40 $13,529,338.45
OUTSTANDING LOAN BALANCE $0.00
NET AVAILABILITY $13,529,338.45
TUESDAY, MAY 30, 1995 AVAILABILITY REPORT Page 1
Borrower: UNITED HOMES
Division: CHICAGO Masterplan: N/A Subdivision: BRISTOL PARK - I
County: N/A State: IL
--------------------------------------------------------------------------------
▇▇▇▇▇ ▇▇. ▇▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇
RESIDUAL APPRAISED BOOK AVAIL
SUBTTL SUBTTL SUBTTL
--------------------------------------------------------------------------------
N/A N/A N/A N/A 007 025 $0.00 $16,484.25 $22,000.00 $16,484.25
▇/▇ ▇/▇ ▇/▇ ▇/▇ ▇▇▇ ▇▇▇ $0.00 $16,484.25 $22,000.00 $16,484.25
▇/▇ ▇/▇ ▇/▇ ▇/▇ ▇▇▇ ▇▇▇ $0.00 $16,484.25 $22,000.00 $16,484.25
▇/▇ ▇/▇ ▇/▇ ▇/▇ ▇▇▇ ▇▇▇ $0.00 $16,484.25 $22,000.00 $16,484.25
--------------------------------------------------------------------------------
TOTAL 4 $0.00 $65,937.00 $88,000.00 $85,937.00
------------------------------------------------------------------------
TRACT BUILDOUT CONST UNIT MAXIMUM UNIT ST
AVAIL AVAIL AVAIL AVAIL CURRENT G
SUBTOTAL AVAIL RPT
------------------------------------------------------------------------
N/A $0.00 $122,270.00 $138,764.25 $148,125.00 $138,754.25 9
N/A $0.00 $105,883.00 $122,367.25 $131,250.00 $122,367.25 9
N/A $0.00 $102,829.00 $119,313.25 $126,000.00 $119,313.25 9
N/A $0.00 $112,144.00 $128,628.25 $120,000.00 $120,000.00 9
------------------------------------------------------------------------
TOTAL $0.00 $443,126.00 $509,083.00 $525,375.00 $500,434.75
TUESDAY, MAY 30, 1995 AVAILABILITY REPORT
Borrower: UNITED HOMES
Division: CHICAGO Masterplan: N/A Subdivision: BRISTOL PARK - II
County: N/A State: IL
---------------------------------------------------------------------------------
▇▇▇▇▇ ▇▇. ▇▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇
RESIDUAL APPRAISED BOOK AVAIL
SUBTTL SUBTTL SUBTTL
---------------------------------------------------------------------------------
N/A N/A N/A N/A 198-B 135 $0.00 $16,484.25 $28,000.00 $16,484.25
▇/▇ ▇/▇ ▇/▇ ▇/▇ 198-B 136 $0.00 $16,484.25 $28,000.00 $16,484.25
▇/▇ ▇/▇ ▇/▇ ▇/▇ 198-B 137 $0.00 $16,484.25 $28,000.00 $16,484.25
▇/▇ ▇/▇ ▇/▇ ▇/▇ 198-B 138 $0.00 $16,484.25 $28,000.00 $16,484.25
▇/▇ ▇/▇ ▇/▇ ▇/▇ 198-C 139 $0.00 $16,484.25 $28,000.00 $16,484.25
▇/▇ ▇/▇ ▇/▇ ▇/▇ 198-C 140 $0.00 $16,484.25 $28,000.00 $16,484.25
▇/▇ ▇/▇ ▇/▇ ▇/▇ 198-C 141 $0.00 $16,484.25 $28,000.00 $16,484.25
▇/▇ ▇/▇ ▇/▇ ▇/▇ 198-C 142 $0.00 $16,484.25 $28,000.00 $16,484.25
▇/▇ ▇/▇ ▇/▇ ▇/▇ ▇▇▇ ▇▇▇ $0.00 $16,484.25 $28,000.00 $16,484.25
▇/▇ ▇/▇ ▇/▇ ▇/▇ ▇▇▇ ▇▇▇ $0.00 $16,484.25 $28,000.00 $16,484.25
▇/▇ ▇/▇ ▇/▇ ▇/▇ ▇▇▇ ▇▇▇ $0.00 $16,484.25 $28,000.00 $16,484.25
▇/▇ ▇/▇ ▇/▇ ▇/▇ ▇▇▇ ▇▇▇ $0.00 $16,484.25 $28,000.00 $16,484.25
▇/▇ ▇/▇ ▇/▇ ▇/▇ ▇▇▇ ▇▇▇ $0.00 $16,484.25 $28,000.00 $16,484.25
▇/▇ ▇/▇ ▇/▇ ▇/▇ ▇▇▇ ▇▇▇ $0.00 $16,484.25 $28,000.00 $16,484.25
▇/▇ ▇/▇ ▇/▇ ▇/▇ ▇▇▇ ▇▇▇ $0.00 $16,484.25 $28,000.00 $16,484.25
▇/▇ ▇/▇ ▇/▇ ▇/▇ ▇▇▇ ▇▇▇ $0.00 $16,484.25 $28,000.00 $16,484.25
▇/▇ ▇/▇ ▇/▇ ▇/▇ ▇▇▇ ▇▇▇ $0.00 $16,484.25 $28,000.00 $16,484.25
▇/▇ ▇/▇ ▇/▇ ▇/▇ ▇▇▇ ▇▇▇ $0.00 $16,484.25 $28,000.00 $16,484.25
▇/▇ ▇/▇ ▇/▇ ▇/▇ ▇▇▇ ▇▇▇ $0.00 $16,484.25 $28,000.00 $16,484.25
▇/▇ ▇/▇ ▇/▇ ▇/▇ ▇▇▇ ▇▇▇ $0.00 $16,484.25 $28,000.00 $16,484.25
▇/▇ ▇/▇ ▇/▇ ▇/▇ ▇▇▇ ▇▇▇ $0.00 $16,484.25 $28,000.00 $16,484.25
▇/▇ ▇/▇ ▇/▇ ▇/▇ ▇▇▇ ▇▇▇ $0.00 $16,484.25 $28,000.00 $16,484.25
▇/▇ ▇/▇ ▇/▇ ▇/▇ ▇▇▇ ▇▇▇ $0.00 $16,484.25 $28,000.00 $16,484.25
▇/▇ ▇/▇ ▇/▇ ▇/▇ ▇▇▇ ▇▇▇ $0.00 $16,484.25 $28,000.00 $16,484.25
▇/▇ ▇/▇ ▇/▇ ▇/▇ ▇▇▇ ▇▇▇ $0.00 $16,484.25 $28,000.00 $16,484.25
▇/▇ ▇/▇ ▇/▇ ▇/▇ ▇▇▇ ▇▇▇ $0.00 $16,484.25 $28,000.00 $16,484.25
▇/▇ ▇/▇ ▇/▇ ▇/▇ ▇▇▇ ▇▇▇ $0.00 $16,484.25 $28,000.00 $16,484.25
▇/▇ ▇/▇ ▇/▇ ▇/▇ ▇▇▇ ▇▇▇ $0.00 $16,484.25 $28,000.00 $16,484.25
▇/▇ ▇/▇ ▇/▇ ▇/▇ ▇▇▇ ▇▇▇ $0.00 $16,484.25 $28,000.00 $16,484.25
▇/▇ ▇/▇ ▇/▇ ▇/▇ ▇▇▇ ▇▇▇ $0.00 $16,484.25 $28,000.00 $16,484.25
▇/▇ ▇/▇ ▇/▇ ▇/▇ ▇▇▇ ▇▇▇ $0.00 $16,484.25 $28,000.00 $16,484.25
▇/▇ ▇/▇ ▇/▇ ▇/▇ ▇▇▇ ▇▇▇ $0.00 $16,484.25 $28,000.00 $16,484.25
▇/▇ ▇/▇ ▇/▇ ▇/▇ ▇▇▇ ▇▇▇ $0.00 $16,484.25 $28,000.00 $16,484.25
▇/▇ ▇/▇ ▇/▇ ▇/▇ ▇▇▇ ▇▇▇ $0.00 $16,484.25 $28,000.00 $16,484.25
▇/▇ ▇/▇ ▇/▇ ▇/▇ ▇▇▇ ▇▇▇ $0.00 $16,484.25 $28,000.00 $16,484.25
▇/▇ ▇/▇ ▇/▇ ▇/▇ ▇▇▇ ▇▇▇ $0.00 $16,484.25 $28,000.00 $16,484.25
---------------------------------------------------------------------------------
-----------------------------------------------------------------------
TRACT BUILDOUT CONST UNIT MAXIMUM UNIT ST
AVAIL AVAIL AVAIL AVAIL CURRENT G
SUBTOTAL AVAIL RPT
-----------------------------------------------------------------------
N/A $0.00 $97,816.00 $114,300.25 $142,579.50 $114,300.25 5
N/A $0.00 $84,706.40 $101,190.65 $125,156.25 $101,190.65 5
N/A $0.00 $82,283.20 $98,747.45 $119,706.00 $98,747.45 5
N/A $0.00 $89,715.20 $106,199.45 $116,390.50 $106,199.45 5
N/A $0.00 $16,340.50 $34,824.75 $129,322.50 $34,824.75 1
N/A $0.00 $15,882.45 $32,365.70 $107,992.50 $32,365.70 1
N/A $0.00 $15,882.45 $32,365.70 $92,943.50 $32,365.70 1
N/A $0.00 $16,340.50 $34,824.75 $132,453.00 $34,824.75 1
N/A $0.00 $36,681.00 $53,165.25 $130,514.25 $53,165.25 2
N/A $0.00 $31,764.90 $48,248.15 $92,943.50 $48,248.15 2
N/A $0.00 $30,848.70 $47,332.95 $111,315.00 $47,332.95 2
N/A $0.00 $33,843.20 $50,127.45 $121,417.50 $50,127.45 2
N/A $0.00 $36,681.00 $53,165.25 $110,688.50 $53,165.25 2
N/A $0.00 $31,764.90 $48,249.15 $92,943.50 $48,249.15 2
N/A $0.00 $33,643.20 $50,127.45 $114,221.25 $50,127.45 2
N/A $0.00 $61,135.00 $77,619.25 $125,036.25 $77,619.25 3
N/A $0.00 $52,941.50 $69,425.75 $109,467.00 $69,425.75 3
N/A $0.00 $51,414.50 $67,898.75 $109,511.25 $67,898.75 3
N/A $0.00 $56,072.00 $72,556.25 $112,143.75 $72,556.25 3
N/A $0.00 $73,362.00 $89,846.25 $128,370.75 $89,846.25 4
N/A $0.00 $63,529.80 $80,014.05 $112,986.00 $80,014.05 4
N/A $0.00 $63,529.80 $80,014.05 $107,242.50 $80,014.05 4
N/A $0.00 $67,992.60 $84,476.85 $116,905.00 $84,476.85 4
N/A $0.00 $67,992.80 $84,476.85 $117,210.00 $84,476.85 4
N/A $0.00 $63,529.80 $80,014.05 $92,943.50 $80,014.05 4
N/A $0.00 $67,286.40 $83,770.65 $92,943.50 $83,770.65 4
N/A $0.00 $97,816.00 $114,300.25 $131,871.75 $114,300.25 5
N/A $0.00 $84,706.40 $101,190.65 $113,261.25 $101,190.65 5
N/A $0.00 $82,263.20 $98,747.45 $109,594.50 $98,747.45 5
N/A $0.00 $89,715.20 $105,199.45 $92,943.50 $92,943.50 5
N/A $0.00 $97,816.00 $114,300.25 $120,292.50 $114,300.25 5
N/A $0.00 $84,706.40 $101,190.65 $120,030.75 $101,190.65 5
N/A $0.00 $89,715.20 $106,199.45 $107,242.50 $106,199.45 5
N/A $0.00 $96,322.85 $112,807.10 $116,100.00 $112,807.10 6
N/A $0.00 $90,000.55 $106,484.80 $111,217.50 $106,484.80 6
N/A $0.00 $87,404.65 $103,888.90 $111,200.25 $103,888.90 6
-----------------------------------------------------------------------
TUESDAY, MAY 30, 1995 AVAILABILITY REPORT Page 3
Borrower: UNITED HOMES
Division: CHICAGO Masterplan: N/A Subdivision: HARVEST RUN
County: N/A State: IL
-----------------------------------------------------------------------------------
▇▇▇▇▇ ▇▇. ▇▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇
RESIDUAL APPRAISED BOOK AVAIL
SUBTTL SUBTTL SUBTTL
-----------------------------------------------------------------------------------
▇/▇ ▇ ▇/▇ ▇▇▇ ▇/▇ ▇/▇ $0.00 $41,250.00 $42,066.00 $41,250.00
▇/▇ ▇ ▇/▇ ▇▇▇ ▇/▇ ▇/▇ $0.00 $41,250.00 $42,066.00 $41,250.00
▇/▇ ▇ ▇/▇ ▇▇▇ ▇/▇ ▇/▇ $0.00 $41,250.00 $42,066.00 $41,250.00
▇/▇ ▇ ▇/▇ ▇▇▇ ▇/▇ ▇/▇ $0.00 $41,250.00 $42,066.00 $41,250.00
▇/▇ ▇ ▇/▇ ▇▇▇ ▇/▇ ▇/▇ $0.00 $41,250.00 $42,066.00 $41,250.00
-----------------------------------------------------------------------------------
TOTAL 5 $0.00 $206,250.00 $210,330.00 $206,250.00
----------------------------------------------------------------------
TRACT BUILDOUT CONST UNIT MAXIMUM UNIT ST
AVAIL AVAIL AVAIL AVAIL CURRENT G
SUBTOTAL AVAIL RPT
----------------------------------------------------------------------
N/A $0.00 $207,490.50 $248,740.50 $251,250.00 $0.00 7
N/A $0.00 $160,561.00 $191,811.00 $174,000.00 $0.00 7
N/A $0.00 $154,761.30 $196,011.30 $175,500.00 $0.00 7
N/A $0.00 $44,634.00 $85,884.00 $148,196.25 $0.00 2
N/A $0.00 $24,762.60 $68,012.60 $180,453.00 $0.00 1
----------------------------------------------------------------------
TOTAL $0.00 $582,209.40 $788,459.40 $929,399.25 $0.00
Page 4
TUESDAY, MAY 30, 1995 AVAILABILITY REPORT
Borrower: UNITED HOMES
Division: CHICAGO Masterplan: N/A Subdivision: PRAIRIE VILLAGE
County: N/A State: IL
--------------------------------------------------------------------------------------------------------------
TRACT PH. ▇▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
RESIDUAL APPRAISED BOOK AVAIL AVAIL
SUBTTL SUBTTL SUBTTL
--------------------------------------------------------------------------------------------------------------
N/A N/A N/A N/A 014 062 $0.00 $21,528.00 $17,900.00 $17,900.00 $0.00
▇/▇ ▇/▇ ▇/▇ ▇/▇ ▇▇▇ ▇▇▇ $0.00 $21,528.00 $17,900.00 $17,900.00 $0.00
▇/▇ ▇/▇ ▇/▇ ▇/▇ ▇▇▇ ▇▇▇ $0.00 $21,528.00 $17,900.00 $17,900.00 $0.00
▇/▇ ▇/▇ ▇/▇ ▇/▇ ▇▇▇ ▇▇▇ $0.00 $21,528.00 $17,900.00 $17,900.00 $0.00
▇/▇ ▇/▇ ▇/▇ ▇/▇ ▇▇▇ ▇▇▇ $0.00 $21,528.00 $17,900.00 $17,900.00 $0.00
▇/▇ ▇/▇ ▇/▇ ▇/▇ ▇▇▇ ▇▇▇ $0.00 $21,528.00 $17,900.00 $17,900.00 $0.00
▇/▇ ▇/▇ ▇/▇ ▇/▇ ▇▇▇ ▇▇▇ $0.00 $21,528.00 $17,900.00 $17,900.00 $0.00
▇/▇ ▇/▇ ▇/▇ ▇/▇ ▇▇▇ ▇▇▇ $0.00 $21,528.00 $17,900.00 $17,900.00 $0.00
▇/▇ ▇/▇ ▇/▇ ▇/▇ ▇▇▇ ▇▇▇ $0.00 $21,528.00 $17,900.00 $17,900.00 $0.00
▇/▇ ▇/▇ ▇/▇ ▇/▇ ▇▇▇ ▇▇▇ $0.00 $21,528.00 $17,900.00 $17,900.00 $0.00
▇/▇ ▇/▇ ▇/▇ ▇/▇ ▇▇▇ ▇▇▇ $0.00 $21,528.00 $17,900.00 $17,900.00 $0.00
▇/▇ ▇/▇ ▇/▇ ▇/▇ ▇▇▇ ▇▇▇ $0.00 $21,528.00 $17,900.00 $17,900.00 $0.00
▇/▇ ▇/▇ ▇/▇ ▇/▇ ▇▇▇ ▇▇▇ $0.00 $21,528.00 $17,900.00 $17,900.00 $0.00
▇/▇ ▇/▇ ▇/▇ ▇/▇ ▇▇▇ ▇▇▇ $0.00 $21,528.00 $17,900.00 $17,900.00 $0.00
▇/▇ ▇/▇ ▇/▇ ▇/▇ ▇▇▇ ▇▇▇ $0.00 $21,528.00 $17,900.00 $17,900.00 $0.00
▇/▇ ▇/▇ ▇/▇ ▇/▇ ▇▇▇ ▇▇▇ $0.00 $21,528.00 $17,900.00 $17,900.00 $0.00
▇/▇ ▇/▇ ▇/▇ ▇/▇ ▇▇▇ ▇▇▇ $0.00 $21,528.00 $17,900.00 $17,900.00 $0.00
▇/▇ ▇/▇ ▇/▇ ▇/▇ ▇▇▇ ▇▇▇ $0.00 $21,528.00 $17,900.00 $17,900.00 $0.00
▇/▇ ▇/▇ ▇/▇ ▇/▇ ▇▇▇ ▇▇▇ $0.00 $21,528.00 $17,900.00 $17,900.00 $0.00
▇/▇ ▇/▇ ▇/▇ ▇/▇ ▇▇▇ ▇▇▇ $0.00 $21,528.00 $17,900.00 $17,900.00 $0.00
▇/▇ ▇/▇ ▇/▇ ▇/▇ ▇▇▇ ▇▇▇ $0.00 $21,528.00 $17,900.00 $17,900.00 $0.00
▇/▇ ▇/▇ ▇/▇ ▇/▇ ▇▇▇ ▇▇▇ $0.00 $21,528.00 $17,900.00 $17,900.00 $0.00
▇/▇ ▇/▇ ▇/▇ ▇/▇ ▇▇▇ ▇▇▇ $0.00 $21,528.00 $17,900.00 $17,900.00 $0.00
▇/▇ ▇/▇ ▇/▇ ▇/▇ ▇▇▇ ▇▇▇ $0.00 $21,528.00 $17,900.00 $17,900.00 $0.00
▇/▇ ▇/▇ ▇/▇ ▇/▇ ▇▇▇ ▇▇▇ $0.00 $21,528.00 $17,900.00 $17,900.00 $0.00
▇/▇ ▇/▇ ▇/▇ ▇/▇ ▇▇▇ ▇▇▇ $0.00 $21,528.00 $17,900.00 $17,900.00 $0.00
▇/▇ ▇/▇ ▇/▇ ▇/▇ ▇▇▇ ▇▇▇ $0.00 $21,528.00 $17,900.00 $17,900.00 $0.00
▇/▇ ▇/▇ ▇/▇ ▇/▇ ▇▇▇ ▇▇▇ $0.00 $21,528.00 $17,900.00 $17,900.00 $0.00
▇/▇ ▇/▇ ▇/▇ ▇/▇ ▇▇▇ ▇▇▇ $0.00 $21,528.00 $17,900.00 $17,900.00 $0.00
▇/▇ ▇/▇ ▇/▇ ▇/▇ ▇▇▇ ▇▇▇ $0.00 $21,528.00 $17,900.00 $17,900.00 $0.00
▇/▇ ▇/▇ ▇/▇ ▇/▇ ▇▇▇ ▇▇▇ $0.00 $21,528.00 $17,900.00 $17,900.00 $0.00
▇/▇ ▇/▇ ▇/▇ ▇/▇ ▇▇▇ ▇▇▇ $0.00 $21,528.00 $17,900.00 $17,900.00 $0.00
▇/▇ ▇/▇ ▇/▇ ▇/▇ ▇▇▇ ▇▇▇ $0.00 $21,528.00 $17,900.00 $17,900.00 $0.00
-------------------------------------------------------------------------------------------------------------
TOTAL 33 $0.00 $710,424.00 $590,700.00 $590,700.00 $0.00
--------------------------------------------------------------------------------
CONST UNIT MAXIMUM UNIT ST
AVAIL AVAIL AVAIL CURRENT G
SUBTOTAL AVAIL RPT
--------------------------------------------------------------------------------
$13,547.25 $31,447.25 $96,675.00 $0.00 1
$10,636.95 $28,536.95 $87,425.00 $0.00 1
$12,204.60 $30,104.60 $82,425.00 $0.00 1
$12,493.95 $30,393.95 $74,685.00 $0.00 1
$13,656.45 $31,556.45 $88,425.00 $0.00 1
$13,656.45 $31,556.45 $90,307.50 $0.00 1
$12,204.60 $30,104.60 $82,425.00 $0.00 1
$12,493.95 $30,393.95 $87,675.00 $0.00 1
$11,683.70 $29,583.70 $74,926.00 $0.00 1
$10,636.95 $28,536.95 $60,642.40 $0.00 1
$13,547.25 $31,447.25 $96,675.00 $0.00 1
$13,656.45 $31,556.45 $88,425.00 $0.00 1
$12,204.60 $30,104.60 $83,771.25 $0.00 1
$12,493.95 $30,393.95 $86,175.00 $0.00 1
$11,683.70 $29,583.70 $74,925.00 $0.00 1
$10,636.95 $28,536.95 $67,425.00 $0.00 1
$13,547.25 $31,447.25 $95,550.00 $0.00 1
$13,547.25 $31,447.25 $92,550.00 $0.00 1
$12,204.60 $30,104.60 $84,896.25 $0.00 1
$12,493.95 $30,393.95 $87,300.00 $0.00 1
$13,656.45 $31,556.45 $89,550.00 $0.00 1
$13,656.45 $31,556.45 $89,550.00 $0.00 1
$12,204.60 $30,104.60 $83,550.00 $0.00 1
$12,493.95 $30,393.95 $74,685.00 $0.00 1
$11,663.70 $29,563.70 $75,675.00 $0.00 1
$10,636.95 $28,536.95 $59,085.00 $0.00 1
$13,547.25 $31,447.25 $79,235.00 $0.00 1
$13,656.45 $31,556.45 $89,550.00 $0.00 1
$12,204.60 $30,104.60 $83,550.00 $0.00 1
$12,493.95 $30,393.95 $74,685.00 $0.00 1
$11,663.70 $29,563.70 $75,675.00 $0.00 1
$10,636.95 $28,536.95 $59,085.00 $0.00 1
$13,547.25 $31,447.25 $79,235.00 $0.00 1
--------------------------------------------------------------------------------
$411,253.05 $1,001,953.05 $2,876,412.40 $0.00
Page 5
TUESDAY, MAY 30, 1995 AVAILABILITY REPORT
Borrower: UNITED HOMES
Division: CHICAGO Masterplan: N/A Subdivision: ROYAL HILL
County: N/A State: IL
-------------------------------------------------------------------------------------------------------------------------
TRACT PH. ▇▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇ CONST
RESIDUAL APPRAISED BOOK AVAIL AVAIL AVAIL
SUBTTL SUBTTL SUBTTL
-------------------------------------------------------------------------------------------------------------------------
▇/▇ ▇▇▇ ▇/▇ ▇▇▇ ▇/▇ ▇/▇ $0.00 $31,855.50 $19,862.00 $19,862.00 $0.00 $127,066.00
▇/▇ ▇▇▇ ▇/▇ ▇▇▇ ▇/▇ ▇/▇ $0.00 $31,855.50 $19,862.00 $19,862.00 $0.00 $141,338.70
▇/▇ ▇▇▇ ▇/▇ ▇▇▇ ▇/▇ ▇/▇ $0.00 $31,855.50 $19,862.00 $19,862.00 $0.00 $153,569.70
▇/▇ ▇▇▇ ▇/▇ ▇▇▇ ▇/▇ ▇/▇ $0.00 $31,855.50 $19,862.00 $19,862.00 $0.00 $152,689.00
▇/▇ ▇▇▇ ▇/▇ ▇▇▇ ▇/▇ ▇/▇ $0.00 $31,855.50 $19,862.00 $19,862.00 $0.00 $127,068.00
▇/▇ ▇▇▇ ▇/▇ ▇▇▇ ▇/▇ ▇/▇ $0.00 $31,045.50 $31,131.00 $31,045.50 $0.00 $23,338.50
▇/▇ ▇▇▇ ▇/▇ ▇▇▇ ▇/▇ ▇/▇ $0.00 $31,045.50 $31,131.00 $31,045.50 $0.00 $25,422.60
▇/▇ ▇▇▇ ▇/▇ ▇▇▇ ▇/▇ ▇/▇ $0.00 $31,045.50 $31,131.00 $31,045.50 $0.00 $106,612.80
▇/▇ ▇▇▇ ▇/▇ ▇▇▇ ▇/▇ ▇/▇ $0.00 $31,045.50 $31,131.00 $31,045.50 $0.00 $119,320.20
▇/▇ ▇▇▇ ▇/▇ ▇▇▇ ▇/▇ ▇/▇ $0.00 $31,045.50 $31,131.00 $31,045.50 $0.00 $19,886.70
▇/▇ ▇▇▇ ▇/▇ ▇▇▇ ▇/▇ ▇/▇ $0.00 $31,045.50 $31,131.00 $31,045.50 $0.00 $129,960.75
▇/▇ ▇▇▇ ▇/▇ ▇▇▇ ▇/▇ ▇/▇ $0.00 $31,045.50 $31,131.00 $31,045.50 $0.00 $79,548.80
▇/▇ ▇▇▇ ▇/▇ ▇▇▇ ▇/▇ ▇/▇ $0.00 $31,045.50 $31,131.00 $31,045.50 $0.00 $93,590.40
▇/▇ ▇▇▇ ▇/▇ ▇▇▇ ▇/▇ ▇/▇ $0.00 $31,045.50 $31,131.00 $31,045.50 $0.00 $35,098.40
▇/▇ ▇▇▇ ▇/▇ ▇▇▇ ▇/▇ ▇/▇ $0.00 $31,045.50 $31,131.00 $31,045.50 $0.00 $47,257.10
▇/▇ ▇▇▇ ▇/▇ ▇▇▇ ▇/▇ ▇/▇ $0.00 $31,087.50 $28,570.00 $28,570.00 $0.00 $179,480.00
▇/▇ ▇▇▇ ▇/▇ ▇▇▇ ▇/▇ ▇/▇ $0.00 $31,087.50 $28,570.00 $28,570.00 $0.00 $157,043.00
▇/▇ ▇▇▇ ▇/▇ ▇▇▇ ▇/▇ ▇/▇ $0.00 $31,087.50 $28,570.00 $28,570.00 $0.00 $161,314.00
▇/▇ ▇▇▇ ▇/▇ ▇▇▇ ▇/▇ ▇/▇ $0.00 $31,087.50 $28,570.00 $28,570.00 $0.00 $127,070.00
▇/▇ ▇▇▇ ▇/▇ ▇▇▇ ▇/▇ ▇/▇ $0.00 $31,087.50 $28,570.00 $28,570.00 $0.00 $24,197.10
▇/▇ ▇▇▇ ▇/▇ ▇▇▇ ▇/▇ ▇/▇ $0.00 $31,087.50 $28,570.00 $28,570.00 $0.00 $161,314.00
▇/▇ ▇▇▇ ▇/▇ ▇▇▇ ▇/▇ ▇/▇ $0.00 $31,087.50 $28,570.00 $28,570.00 $0.00 $114,363.00
▇/▇ ▇▇▇ ▇/▇ ▇▇▇ ▇/▇ ▇/▇ $0.00 $31,087.50 $28,570.00 $28,570.00 $0.00 $45,806.70
▇/▇ ▇▇▇ ▇/▇ ▇▇▇ ▇/▇ ▇/▇ $0.00 $31,087.50 $28,570.00 $28,570.00 $0.00 $108,009.50
▇/▇ ▇▇▇ ▇/▇ ▇▇▇ ▇/▇ ▇/▇ $0.00 $31,087.50 $28,570.00 $28,570.00 $0.00 $101,656.00
▇/▇ ▇▇▇ ▇/▇ ▇▇▇ ▇/▇ ▇/▇ $0.00 $31,087.50 $28,570.00 $28,570.00 $0.00 $161,314.00
▇/▇ ▇▇▇ ▇/▇ ▇▇▇ ▇/▇ ▇/▇ $0.00 $31,087.50 $28,570.00 $28,570.00 $0.00 $19,658.25
-------------------------------------------------------------------------------------------------------------------------
TOTAL 27 $0.00 $842,782.50 $753,460.00 $752,605.00 $0.00 $2,743,001.20
--------------------------------------------------------------
UNIT MAXIMUM UNIT ST
AVAIL AVAIL CURRENT G
SUBTOTAL AVAIL RPT
--------------------------------------------------------------
$148,930.00 $115,842.75 $115,842.75 9
$161,200.70 $159,911.25 $159,911.25 7
$173,431.70 $163,361.25 $163,361.25 7
$172,551.00 $134,485.00 $134,485.00 9
$146,930.00 $140,458.50 $140,458.50 9
$54,384.00 $168,408.75 $54,384.00 1
$58,478.10 $179,161.50 $56,458.10 1
$137,658.30 $137,847.75 $137,658.30 5
$150,365.70 $149,162.25 $149,162.25 7
$50,932.20 $140,062.50 $50,932.20 1
$161,006.25 $163,871.25 $161,006.25 6
$110,592.30 $197,096.25 $110,592.30 4
$124,635.90 $118,113.75 $118,113.75 5
$66,141.90 $126,221.25 $66,141.90 2
$78,312.60 $156,703.50 $78,312.60 2
$208,050.00 $181,050.00 $181,050.00 9
$185,613.00 $170,100.00 $170,100.00 9
$189,884.00 $160,350.00 $160,350.00 9
$155,640.00 $138,825.00 $138,825.00 9
$52,767.10 $164,475.00 $52,767.10 1
$189,884.00 $154,731.00 $154,731.00 9
$142,933.00 $114,530.00 $114,530.00 7
$ 74,376.70 $157,590.00 $74,376.70 2
$136,579.50 $139,261.50 $136,579.50 6
$130,226.00 $119,258.25 $119,258.25 5
$189,884.00 $165,381.75 $165,381.75 9
$46,228.25 $129,697.50 $48,228.25 1
-------------------------------------------------------------
$3,495,606.20 $4,045,957.50 $3,213,007.95
Page 6
TUESDAY, MAY 30, 1995 AVAILABILITY REPORT
Borrower: UNITED HOMES
Division: CHICAGO Masterplan: N/A Subdivision: ROYAL HILL #8
County: N/A State: IL
-------------------------------------------------------------------------------------------------------------------------
TRACT PH. ▇▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇ CONST
RESIDUAL APPRAISED BOOK AVAIL AVAIL AVAIL
SUBTTL SUBTTL SUBTTL
-------------------------------------------------------------------------------------------------------------------------
▇/▇ ▇ ▇/▇ ▇▇▇ ▇/▇ ▇/▇ $0.00 $30,000.00 $19,000.00 $19,000.00 $0.00 $108,059.00
▇/▇ ▇ ▇/▇ ▇▇▇ ▇/▇ ▇/▇ $0.00 $30,000.00 $19,000.00 $19,000.00 $0.00 $104,559.00
▇/▇ ▇ ▇/▇ ▇▇▇ ▇/▇ ▇/▇ $0.00 $30,000.00 $19,000.00 $19,000.00 $0.00 $140,466.00
▇/▇ ▇ ▇/▇ ▇▇▇ ▇/▇ ▇/▇ $0.00 $30,000.00 $19,000.00 $19,000.00 $0.00 $141,311.00
-------------------------------------------------------------------------------------------------------------------------
TOTAL 4 $0.00 $120,000.00 $76,000.00 $76,000.00 $0.00 $494,395.00
--------------------------------------------------------------
UNIT MAXIMUM UNIT ST
AVAIL AVAIL CURRENT G
SUBTOTAL AVAIL RPT
--------------------------------------------------------------
$127,059.00 $136,675.00 $127,059.00 9
$123,559.00 $134,250.00 $123,559.00 9
$159,466.00 $153,750.00 $153,750.00 9
$160,311.00 $165,000.00 $160,311.00 9
--------------------------------------------------------------
$570,395.00 $589,675.00 $584,679.00
TUESDAY, MAY 30, 1995 AVAILABILITY REPORT Page 7
Borrower: UNITED HOMES
Division: CHICAGO Masterplan: N/A Subdivision: ▇▇▇▇▇▇▇▇ ▇▇▇▇
County: N/A State: IL
-----------------------------------------------------------------
▇▇▇▇▇ ▇▇. ▇▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇
RESIDUAL APPRAISED BOOK
SUBTTL SUBTTL SUBTTL
-----------------------------------------------------------------
N/A 4 012 043 N/A N/A $0.00 $28,500.00 $29,000.00
▇/▇ ▇ ▇▇▇ ▇▇▇ ▇/▇ ▇/▇ $0.00 $28,500.00 $29,000.00
▇/▇ ▇▇ ▇▇▇ ▇▇▇ ▇/▇ ▇/▇ $0.00 $28,500.00 $29,000.00
▇/▇ ▇▇ ▇▇▇ ▇▇▇ ▇/▇ ▇/▇ $0.00 $28,500.00 $29,000.00
▇/▇ ▇▇ ▇▇▇ ▇▇▇ ▇/▇ ▇/▇ $0.00 $28,500.00 $29,000.00
▇/▇ ▇▇ ▇▇▇ ▇▇▇ ▇/▇ ▇/▇ $0.00 $28,500.00 $29,000.00
▇/▇ ▇▇ ▇▇▇ ▇▇▇ ▇/▇ ▇/▇ $0.00 $28,500.00 $29,000.00
▇/▇ ▇▇ ▇▇▇ ▇▇▇ ▇/▇ ▇/▇ $0.00 $28,500.00 $29,000.00
▇/▇ ▇▇ ▇▇▇ ▇▇▇ ▇/▇ ▇/▇ $0.00 $28,500.00 $29,000.00
▇/▇ ▇▇ ▇▇▇ ▇▇▇ ▇/▇ ▇/▇ $0.00 $28,500.00 $29,000.00
▇/▇ ▇▇ ▇▇▇ ▇▇▇ ▇/▇ ▇/▇ $0.00 $28,500.00 $29,000.00
▇/▇ ▇▇ ▇▇▇ ▇▇▇ ▇/▇ ▇/▇ $0.00 $28,500.00 $29,000.00
▇/▇ ▇▇ ▇▇▇ ▇▇▇ ▇/▇ ▇/▇ $0.00 $28,500.00 $29,000.00
▇/▇ ▇▇ ▇▇▇ ▇▇▇ ▇/▇ ▇/▇ $0.00 $28,500.00 $29,000.00
▇/▇ ▇▇ ▇▇▇ ▇▇▇ ▇/▇ ▇/▇ $0.00 $28,500.00 $29,000.00
▇/▇ ▇▇ ▇▇▇ ▇▇▇ ▇/▇ ▇/▇ $0.00 $28,500.00 $29,000.00
▇/▇ ▇▇ ▇▇▇ ▇▇▇ ▇/▇ ▇/▇ $0.00 $28,500.00 $29,000.00
▇/▇ ▇▇ ▇▇▇ ▇▇▇ ▇/▇ ▇/▇ $0.00 $28,500.00 $29,000.00
▇/▇ ▇▇ ▇▇▇ ▇▇▇ ▇/▇ ▇/▇ $0.00 $28,500.00 $29,000.00
▇/▇ ▇▇ ▇▇▇ ▇▇▇ ▇/▇ ▇/▇ $0.00 $28,500.00 $29,000.00
▇/▇ ▇▇ ▇▇▇ ▇▇▇ ▇/▇ ▇/▇ $0.00 $28,500.00 $29,000.00
▇/▇ ▇▇ ▇▇▇ ▇▇▇ ▇/▇ ▇/▇ $0.00 $28,500.00 $29,000.00
▇/▇ ▇▇ ▇▇▇ ▇▇▇ ▇/▇ ▇/▇ $0.00 $28,500.00 $29,000.00
▇/▇ ▇▇ ▇▇▇ ▇▇▇ ▇/▇ ▇/▇ $0.00 $28,500.00 $29,000.00
▇/▇ ▇▇ ▇▇▇ ▇▇▇ ▇/▇ ▇/▇ $0.00 $28,500.00 $29,000.00
▇/▇ ▇▇ ▇▇▇ ▇▇▇ ▇/▇ ▇/▇ $0.00 $28,500.00 $29,000.00
▇/▇ ▇▇ ▇▇▇ ▇▇▇ ▇/▇ ▇/▇ $0.00 $28,500.00 $29,000.00
▇/▇ ▇▇ ▇▇▇ ▇▇▇ ▇/▇ ▇/▇ $0.00 $28,500.00 $29,000.00
▇/▇ ▇▇ ▇▇▇ ▇▇▇ ▇/▇ ▇/▇ $0.00 $28,500.00 $29,000.00
▇/▇ ▇▇ ▇▇▇ ▇▇▇ ▇/▇ ▇/▇ $0.00 $28,500.00 $29,000.00
▇/▇ ▇▇ ▇▇▇ ▇▇▇ ▇/▇ ▇/▇ $0.00 $28,500.00 $29,000.00
▇/▇ ▇▇ ▇▇▇ ▇▇▇ ▇/▇ ▇/▇ $0.00 $28,500.00 $29,000.00
-----------------------------------------------------------------
TOTAL 32 $0.00 $912,000.00 $928,000.00
----------------------------------------------------------------------
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇
AVAIL AVAIL AVAIL AVAIL AVAIL CURRENT G
SUBTOTAL AVAIL RPT
----------------------------------------------------------------------
$28,500.00 $0.00 $36,482.10 $64,982.10 $139,227.00 $0.00 2
$28,500.00 $0.00 $17,862,75 $46,362.75 $126,240.25 $0.00 1
$28,500.00 $0.00 $41,629,80 $70,129.80 $131,175.00 $0.00 2
$28,500.00 $0.00 $121,560.00 $150,060.00 $0.00 $0.00 5
$28,500.00 $0.00 $17,881.80 $46,381.60 $116,725.00 $0.00 1
$28,500.00 $0.00 $33,131.70 $51,631.70 $126,666.25 $0.00 2
$28,500.00 $0.00 $18,014.10 $48,514.10 $134,628.75 $0.00 1
$28,500.00 $0.00 $22,615.00 $51,315.90 $162,727.50 $0.00 1
$28,500.00 $0.00 $59,542.50 $88,042.50 $131,622.75 $0.00 3
$28,500.00 $0.00 $18,773.55 $47,273.55 $129,466.75 $0.00 1
$28,500.00 $0.00 $16,565.86 $45,066.85 $115,929.75 $0.00 1
$28,500.00 $0.00 $18,241.05 $45,741.05 $113,035.00 $0.00 1
$28,500.00 $0.00 $18.014.10 $46,514.10 $129,931.50 $0.00 1
$28,500.00 $0.00 $21,911.85 $50,411.65 $175,974.75 $0.00 1
$28,500.00 $0.00 $37,743.00 $86,243.00 $134,049.75 $0.00 2
$28,500.00 $0.00 $136,755.00 $165,255.00 $145,050.00 $0.00 7
$28,500.00 $0.00 $17,885.80 $46,366.60 $125,052.00 $0.00 1
$28,500.00 $0.00 $66,958.00 $95,458.00 $129,432.00 $0.00 3
$28,500.00 $0.00 $38,482.10 $64,982.10 $126,665.25 $0.00 2
$28,500.00 $0.00 $119,085.00 $147,585.00 $131,662.75 $0.00 9
$28,500.00 $0.00 $134,128.00 $182,628.00 $149,991.00 $0.00 9
$28,500.00 $0.00 $146,079.00 $174,579.00 $145,717.50 $0.00 9
$28,500.00 $0.00 $91,283.60 $119,763.80 $162,727.50 $0.00 4
$28,500.00 $0.00 $17,666.80 $46,366.80 $124,302.00 $0.00 1
$28,500.00 $0.00 $131,471.10 $159,971.10 $146,717.50 $0.00 7
$28,500.00 $0.00 $35,725.50 $54,225.50 $131,622.76 $0.00 2
$28,500.00 $0.00 $35,733.60 $64,233.60 $124,302.00 $0.00 2
$28,500.00 $0.00 $43,823.70 $72,323.70 $163,703.25 $0.00 2
$28,500.00 $0.00 $17,888.80 $48,366.80 $124,302.00 $0.00 1
$28,500.00 $0.00 $17,888.80 $48,366.80 $124,567.50 $0.00 1
$28,500.00 $0.00 $37,547.10 $56,047.10 $130,975.50 $0.00 2
$28,500.00 $0.00 $59,556.00 $88,058.00 $125,052.00 $0.00 3
--------------------------------------------------------------------
$912,000.00 $0.00 $1,646,244.95 $2,558,244.95 $4,179,221.50 $0.00
TUESDAY, MAY 30, 1995 AVAILABILITY REPORT Page 8
Borrower: UNITED HOMES
Division: CHICAGO Masterplan: N/A Subdivision: WILLOW LAKE
County: N/A State: IL
-----------------------------------------------------------------
▇▇▇▇▇ ▇▇. ▇▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇
RESIDUAL APPRAISED BOOK
SUBTTL SUBTTL SUBTTL
-----------------------------------------------------------------
▇/▇ ▇▇▇ ▇/▇ ▇▇▇ ▇/▇ ▇/▇ $0.00 $21,022.50 $9,152.00
▇/▇ ▇▇▇ ▇/▇ ▇▇▇ ▇/▇ ▇/▇ $0.00 $21,022.50 $9,152.00
▇/▇ ▇▇▇ ▇/▇ ▇▇▇ ▇/▇ ▇/▇ $0.00 $21,022.50 $9,152.00
▇/▇ ▇▇▇ ▇/▇ ▇▇▇ ▇/▇ ▇/▇ $0.00 $21,022.50 $9,152.00
▇/▇ ▇▇▇ ▇/▇ ▇▇▇ ▇/▇ ▇/▇ $0.00 $21,039.00 $26,684.00
▇/▇ ▇▇▇ ▇/▇ ▇▇▇ ▇/▇ ▇/▇ $0.00 $21,039.00 $26,684.00
▇/▇ ▇▇▇ ▇/▇ ▇▇▇ ▇/▇ ▇/▇ $0.00 $21,039.00 $26,684.00
▇/▇ ▇▇▇ ▇/▇ ▇▇▇ ▇/▇ ▇/▇ $0.00 $21,039.00 $26,684.00
▇/▇ ▇▇▇ ▇/▇ ▇▇▇ ▇/▇ ▇/▇ $0.00 $21,039.00 $26,684.00
▇/▇ ▇▇▇ ▇/▇ ▇▇▇ ▇/▇ ▇/▇ $0.00 $21,039.00 $26,684.00
▇/▇ ▇▇▇ ▇/▇ ▇▇▇ ▇/▇ ▇/▇ $0.00 $21,039.00 $26,684.00
▇/▇ ▇▇▇ ▇/▇ ▇▇▇ ▇/▇ ▇/▇ $0.00 $21,039.00 $26,684.00
▇/▇ ▇▇▇ ▇/▇ ▇▇▇ ▇/▇ ▇/▇ $0.00 $21,039.00 $26,684.00
▇/▇ ▇▇▇ ▇/▇ ▇▇▇ ▇/▇ ▇/▇ $0.00 $21,039.00 $26,684.00
▇/▇ ▇▇▇ ▇/▇ ▇▇▇ ▇/▇ ▇/▇ $0.00 $21,039.00 $26,684.00
▇/▇ ▇▇▇ ▇/▇ ▇▇▇ ▇/▇ ▇/▇ $0.00 $21,039.00 $26,684.00
▇/▇ ▇▇▇ ▇/▇ ▇▇▇ ▇/▇ ▇/▇ $0.00 $21,039.00 $26,684.00
▇/▇ ▇▇▇ ▇/▇ ▇▇▇ ▇/▇ ▇/▇ $0.00 $21,039.00 $26,684.00
▇/▇ ▇▇▇ ▇/▇ ▇▇▇ ▇/▇ ▇/▇ $0.00 $21,039.00 $26,684.00
▇/▇ ▇▇▇ ▇/▇ ▇▇▇ ▇/▇ ▇/▇ $0.00 $21,039.00 $26,684.00
▇/▇ ▇▇▇ ▇/▇ ▇▇▇ ▇/▇ ▇/▇ $0.00 $21,039.00 $26,684.00
▇/▇ ▇▇▇ ▇/▇ ▇▇▇ ▇/▇ ▇/▇ $0.00 $21,039.00 $26,684.00
▇/▇ ▇▇▇ ▇/▇ ▇▇▇ ▇/▇ ▇/▇ $0.00 $21,039.00 $26,684.00
▇/▇ ▇▇▇ ▇/▇ ▇▇▇ ▇/▇ ▇/▇ $0.00 $21,039.00 $26,684.00
▇/▇ ▇▇▇ ▇/▇ ▇▇▇ ▇/▇ ▇/▇ $0.00 $21,039.00 $26,684.00
▇/▇ ▇▇▇ ▇/▇ ▇▇▇ ▇/▇ ▇/▇ $0.00 $21,039.00 $26,684.00
▇/▇ ▇▇▇ ▇/▇ ▇▇▇ ▇/▇ ▇/▇ $0.00 $21,039.00 $26,684.00
▇/▇ ▇▇▇ ▇/▇ ▇▇▇ ▇/▇ ▇/▇ $0.00 $21,039.00 $26,684.00
▇/▇ ▇▇▇ ▇/▇ ▇▇▇ ▇/▇ ▇/▇ $0.00 $21,039.00 $26,684.00
▇/▇ ▇▇▇ ▇/▇ ▇▇▇ ▇/▇ ▇/▇ $0.00 $21,039.00 $26,684.00
▇/▇ ▇▇▇ ▇/▇ ▇▇▇ ▇/▇ ▇/▇ $0.00 $21,039.00 $26,684.00
▇/▇ ▇▇▇ ▇/▇ ▇▇▇ ▇/▇ ▇/▇ $0.00 $21,039.00 $26,684.00
-----------------------------------------------------------------
TOTAL 32 $0.00 $673,162.00 $783,760.00
-----------------------------------------------------------------------------
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇
AVAIL AVAIL AVAIL AVAIL AVAIL CURRENT G
SUBTOTAL AVAIL RPT
-----------------------------------------------------------------------------
$9,152.00 $0.00 $107,443.00 $116,585.00 $118,749.75 $116,586.00 9
$9,152.00 $0.00 $110,244.00 $119,396.00 $116,749.75 $116,749.75 9
$9,152.00 $0.00 $107,102.00 $116,254.00 $116,749.75 $116,254.00 9
$21,039.00 $0.00 $27,691.50 $36,843.50 $84,500.00 $36,843.50 2
$21,039.00 $0.00 $85,355.30 $106,394.30 $90,350.00 $90,350.00 6
$21,039.00 $0.00 $85,946.40 $106,985.40 $121,353.00 $106,985.40 5
$21,039.00 $0.00 $29,601.30 $50,540.30 $105,470.00 $50,640.30 2
$21,039.00 $0.00 $107,102.00 $128,141.00 $109,697.50 $109,697.50 9
$21,039.00 $0.00 $91,038.70 $112,075.70 $113,718.75 $112,075.70 8
$21,039.00 $0.00 $30,125.40 $51,164.40 $118,987.50 $51,164.40 2
$21,039.00 $0.00 $91,036.70 $94,583.00 $104,976.75 $112,075.70 6
$21,039.00 $0.00 $31,484.70 $107,888.60 $117,495.00 $107.888.60 5
$21,039.00 $0.00 $73,844.00 $112,075.70 $118,053.00 $112,075.70 6
$21,039.00 $0.00 $86,849.60 $107,888.60 $117,495.00 $107,888.60 5
$21,039.00 $0.00 $91,038.70 $50,640.30 $103,987.50 $50,640.30 2
$21,039.00 $0.00 $86,849.60 $113,344.00 $101,940.00 $101,940.00 9
$21,039.00 $0.00 $29,601.30 $122,785.90 $112,351.50 $112,351.60 9
$21,039.00 $0.00 $92,305.00 $94,883.00 $100,352.25 $94,863.00 2
$21,039.00 $0.00 $101,746.90 $128,472.00 $132,699.00 $128,472.00 9
$21,039.00 $0.00 $73,844.00 $67,191.50 $108,371.25 $57,191.50 3
$21,039.00 $0.00 $107,433.00 $34,884.75 $104,426.25 $34,884.75 1
$21,039.00 $0.00 $48,152.50 $52,523.70 $113,955.00 $52,523.70 2
$21,039.00 $0.00 $13,645.75 $53,159.50 $107,502.00 $53,160.00 2
$21,039.00 $0.00 $31,484.70 $94,683.00 $100,256.25 $94,883.00 5
$21,039.00 $0.00 $32,130.00 $106,720.00 $100,750.50 $100,750.50 5
$21,039.00 $0.00 $73,844.00 $53,034.60 $104,667.75 $53,169.60 2
$21,039.00 $0.00 $85,681.00 $53,159.50 $118,650.25 $94,883.00 5
$21,039.00 $0.00 $31,995.00 $76,161.00 $110,196.75 $53,034.60 2
$21,039.00 $0.00 $32,130.60 $53,159.60 $118,650.25 $53,169.60 2
$21,039.00 $0.00 $55,122.00 $76,161.00 $110,196.75 $76,161.00 3
$21,039.00 $0.00 $53,551.00 $74,590.00 $108,437.25 $74,590.00 3
$21,039.00 $0.00 $32,130.00 $53,169.60 $103,922.25 $53,169.00 2
-----------------------------------------------------------------------------
$625,700.00 $0.00 $2,135,738.05 $2,761,438.05 $3,525,872.50 $2,698,695.50
TUESDAY, MAY 30, 1995 AVAILABILITY REPORT Page 9
Borrower: UNITED HOMES
Division: GRAND RAPIDS Masterplan: N/A Subdivision: BAYBERRY FARMS
County: N/A State: MI
-----------------------------------------------------------------
▇▇▇▇▇ ▇▇. ▇▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇
RESIDUAL APPRAISED BOOK
SUBTTL SUBTTL SUBTTL
-----------------------------------------------------------------
▇/▇ ▇/▇ ▇/▇ ▇▇▇ ▇/▇ ▇/▇ $0.00 $22,500.00 $22,000.00
▇/▇ ▇/▇ ▇/▇ ▇▇▇ ▇/▇ ▇/▇ $0.00 $22,500.00 $22,000.00
▇/▇ ▇/▇ ▇/▇ ▇▇▇ ▇/▇ ▇/▇ $0.00 $22,500.00 $22,000.00
▇/▇ ▇/▇ ▇/▇ ▇▇▇ ▇/▇ ▇/▇ $0.00 $22,500.00 $22,000.00
▇/▇ ▇/▇ ▇/▇ ▇▇▇ ▇/▇ ▇/▇ $0.00 $22,500.00 $22,000.00
▇/▇ ▇/▇ ▇/▇ ▇▇▇ ▇/▇ ▇/▇ $0.00 $22,500.00 $22,000.00
▇/▇ ▇/▇ ▇/▇ ▇▇▇ ▇/▇ ▇/▇ $0.00 $22,500.00 $22,000.00
▇/▇ ▇/▇ ▇/▇ ▇▇▇ ▇/▇ ▇/▇ $0.00 $22,500.00 $22,000.00
▇/▇ ▇/▇ ▇/▇ ▇▇▇ ▇/▇ ▇/▇ $0.00 $22,500.00 $22,000.00
▇/▇ ▇/▇ ▇/▇ ▇▇▇ ▇/▇ ▇/▇ $0.00 $22,500.00 $22,000.00
▇/▇ ▇/▇ ▇/▇ ▇▇▇ ▇/▇ ▇/▇ $0.00 $22,500.00 $22,000.00
▇/▇ ▇/▇ ▇/▇ ▇▇▇ ▇/▇ ▇/▇ $0.00 $22,500.00 $22,000.00
▇/▇ ▇/▇ ▇/▇ ▇▇▇ ▇/▇ ▇/▇ $0.00 $22,500.00 $22,000.00
▇/▇ ▇/▇ ▇/▇ ▇▇▇ ▇/▇ ▇/▇ $0.00 $22,500.00 $22,000.00
▇/▇ ▇/▇ ▇/▇ ▇▇▇ ▇/▇ ▇/▇ $0.00 $22,500.00 $22,000.00
▇/▇ ▇/▇ ▇/▇ ▇▇▇ ▇/▇ ▇/▇ $0.00 $22,500.00 $22,000.00
▇/▇ ▇/▇ ▇/▇ ▇▇▇ ▇/▇ ▇/▇ $0.00 $22,500.00 $22,000.00
▇/▇ ▇/▇ ▇/▇ ▇▇▇ ▇/▇ ▇/▇ $0.00 $22,500.00 $22,000.00
-----------------------------------------------------------------
TOTAL 18 $0.00 $406,000.00 $395,000.00
-----------------------------------------------------------------------
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇
AVAIL AVAIL AVAIL AVAIL AVAIL CURRENT G
SUBTOTAL AVAIL RPT
-----------------------------------------------------------------------
$22,000.00 $0.00 $102,000.00 $124,000.00 $106,125.00 $106,125.00 9
$22,000.00 $0.00 $104,000.00 $126,000.00 $110,700.00 $110,700.00 9
$22,000.00 $0.00 $0.00 $22,000.00 $110,250.00 $22,000.00 0
$22,000.00 $0.00 $12,900.00 $34,900.00 $90,750.00 $34,900.00 1
$22,000.00 $0.00 $0.00 $22,000.00 $119,175.00 $22,000.00 0
$22,000.00 $0.00 $0.00 $22,000.00 $105,750.00 $22,000.00 0
$22,000.00 $0.00 $0.00 $22,000.00 $103,500.00 $22,000.00 0
$22,000.00 $0.00 $47,500.00 $59,500.00 $93,535.00 $69,500.00 3
$22,000.00 $0.00 $28,500.00 $22,000.00 $101,250.00 $50,000.00 2
$22,000.00 $0.00 $0.00 $45,400.00 $108,750.00 $22,000.00 0
$22,000.00 $0.00 $23,400.00 $22,000.00 $74,685.00 $45,000.00 2
$22,000.00 $0.00 $0.00 $22,000.00 $114,675.00 $22,000.00 0
$22,000.00 $0.00 $0.00 $22,000.00 $110,250.00 $22,000.00 0
$22,000.00 $0.00 $0.00 $22,000.00 $110,175.00 $22,000.00 0
$22,000.00 $0.00 $0.00 $22,000.00 $102,123.00 $22,000.00 0
$22,000.00 $0.00 $0.00 $22,000.00 $101,175.00 $22,000.00 0
$22,000.00 $0.00 $0.00 $22,000.00 $96,675.00 $22,000.00 0
$22,000.00 $0.00 $0.00 $22,000.00 $106,425.00 $22,000.00 0
-----------------------------------------------------------------------
$396,000.00 $0.00 $316,600.00 $714,600.00 $1,865,956.00 $881,425.00
TUESDAY, MAY 30, 1995 AVAILABILITY REPORT Page 10
Borrower: UNITED HOMES
Division: GRAND RAPIDS Masterplan: N/A Subdivision: WINDCREST
County: N/A State: MI
-------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------
▇▇▇▇▇ ▇▇. ▇▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇
RESIDUAL APPRAISED BOOK AVAIL
SUBTTL SUBTTL SUBTTL
-------------------------------------------------------------------------------------------------
N/A N/A N/A N/A A 003 $0.00 $7,500.00 $10,000.00 $7,500.00
▇/▇ ▇/▇ ▇/▇ ▇/▇ A 004 $0.00 $7,500.00 $10,000.00 $7,500.00
▇/▇ ▇/▇ ▇/▇ ▇/▇ ▇ 005 $0.00 $7,500.00 $10,000.00 $7,500.00
▇/▇ ▇/▇ ▇/▇ ▇/▇ ▇ 006 $0.00 $7,500.00 $10,000.00 $7,500.00
▇/▇ ▇/▇ ▇/▇ ▇/▇ ▇ 007 $0.00 $7,500.00 $10,000.00 $7,500.00
▇/▇ ▇/▇ ▇/▇ ▇/▇ ▇ 008 $0.00 $7,500.00 $10,000.00 $7,500.00
N/A N/A N/A N/A G 025 $0.00 $7,500.00 $10,000.00 $7,500.00
N/A N/A N/A N/A G 026 $0.00 $7,500.00 $10,000.00 $7,500.00
N/A N/A N/A N/A G 027 $0.00 $7,500.00 $10,000.00 $7,500.00
N/A N/A N/A N/A G 028 $0.00 $7,500.00 $10,000.00 $7,500.00
▇/▇ ▇/▇ ▇/▇ ▇/▇ H 029 $0.00 $7,500.00 $10,000.00 $7,500.00
▇/▇ ▇/▇ ▇/▇ ▇/▇ H 030 $0.00 $7,500.00 $10,000.00 $7,500.00
▇/▇ ▇/▇ ▇/▇ ▇/▇ H 031 $0.00 $7,500.00 $10,000.00 $7,500.00
▇/▇ ▇/▇ ▇/▇ ▇/▇ H 032 $0.00 $7,500.00 $10,000.00 $7,500.00
▇/▇ ▇/▇ ▇/▇ ▇/▇ I 033 $0.00 $7,500.00 $10,000.00 $7,500.00
▇/▇ ▇/▇ ▇/▇ ▇/▇ I 034 $0.00 $7,500.00 $10,000.00 $7,500.00
▇/▇ ▇/▇ ▇/▇ ▇/▇ I 035 $0.00 $7,500.00 $10,000.00 $7,500.00
-------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------
TOTAL 17 $0.00 $127,500.00 $170,000.00 $127,500.00
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
TRACT BUILDOUT CONST UNIT MAXIMUM UNIT ST
AVAIL AVAIL AVAIL AVAIL CURRENT G
SUBTOTAL AVAIL RPT
-------------------------------------------------------------------------------
N/A $0.00 $22,500.00 $30,000.00 $84,935.00 $30,000.00 2
N/A $0.00 $23,400.00 $30,900.00 $71,435.00 $30,900.00 2
N/A $0.00 $23,400.00 $30,900.00 $89,250.00 $30,900.00 2
N/A $0.00 $22,500.00 $30,000.00 $90,750.00 $30,000.00 2
N/A $0.00 $0.00 $7,500.00 $85,500.00 $7,500.00 2
N/A $0.00 $23,400.00 $30,900.00 $71,435.00 $30,900.00 2
N/A $0.00 $0.00 $7,500.00 $7,500.00 $7,500.00 0
N/A $0.00 $0.00 $7,500.00 $7,500.00 $7,500.00 0
N/A $0.00 $0.00 $7,500.00 $7,500.00 $7,500.00 0
N/A $0.00 $0.00 $7,500.00 $97,659.00 $7,500.00 0
N/A $0.00 $0.00 $7,500.00 $83,250.00 $7,500.00 0
N/A $0.00 $0.00 $7,500.00 $88,500.00 $7,500.00 0
N/A $0.00 $0.00 $7,500.00 $89,250.00 $7,500.00 0
N/A $0.00 $0.00 $7,500.00 $7,500.00 $7,500.00 0
N/A $0.00 $74,100.00 $81,600.00 $100,184.25 $81,600.00 8
N/A $0.00 $60,000.00 $87,600.00 $91,500.00 $87,500.00 5
N/A $0.00 $0.00 $7,500.00 $91,725.00 $7,500.00 5
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
TOTAL $0.00 $249,300.00 $376,600.00 $1,145,373.25 $376,800.00
TUESDAY, MAY 30, 1995 AVAILABILITY REPORT Page 13
Borrower: UNITED HOMES
Division: PHOENIX Masterplan: N/A Subdivision: DESERT WINDS
County: N/A State: AZ
--------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------
▇▇▇▇▇ ▇▇. ▇▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇
RESIDUAL APPRAISED BOOK AVAIL
SUBTTL SUBTTL SUBTTL
--------------------------------------------------------------------------------------------------
▇/▇ ▇/▇ ▇/▇ ▇▇▇ ▇/▇ ▇/▇ $0.00 $16,125.00 $16,690.00 $16,125.00
▇/▇ ▇/▇ ▇/▇ ▇▇▇ ▇/▇ ▇/▇ $0.00 $16,125.00 $16,690.00 $16,125.00
▇/▇ ▇/▇ ▇/▇ ▇▇▇ ▇/▇ ▇/▇ $0.00 $16,125.00 $16,690.00 $16,125.00
▇/▇ ▇/▇ ▇/▇ ▇▇▇ ▇/▇ ▇/▇ $0.00 $16,125.00 $16,690.00 $16,125.00
▇/▇ ▇/▇ ▇/▇ ▇▇▇ ▇/▇ ▇/▇ $0.00 $16,125.00 $16,690.00 $16,125.00
▇/▇ ▇/▇ ▇/▇ ▇▇▇ ▇/▇ ▇/▇ $0.00 $16,125.00 $16,690.00 $16,125.00
▇/▇ ▇/▇ ▇/▇ ▇▇▇ ▇/▇ ▇/▇ $0.00 $16,125.00 $16,690.00 $16,125.00
▇/▇ ▇/▇ ▇/▇ ▇▇▇ ▇/▇ ▇/▇ $0.00 $16,125.00 $16,690.00 $16,125.00
▇/▇ ▇/▇ ▇/▇ ▇▇▇ ▇/▇ ▇/▇ $0.00 $16,125.00 $16,690.00 $16,125.00
▇/▇ ▇/▇ ▇/▇ ▇▇▇ ▇/▇ ▇/▇ $0.00 $16,125.00 $16,690.00 $16,125.00
▇/▇ ▇/▇ ▇/▇ ▇▇▇ ▇/▇ ▇/▇ $0.00 $16,125.00 $16,690.00 $16,125.00
▇/▇ ▇/▇ ▇/▇ ▇▇▇ ▇/▇ ▇/▇ $0.00 $16,125.00 $16,690.00 $16,125.00
▇/▇ ▇/▇ ▇/▇ ▇▇▇ ▇/▇ ▇/▇ $0.00 $16,125.00 $16,690.00 $16,125.00
▇/▇ ▇/▇ ▇/▇ ▇▇▇ ▇/▇ ▇/▇ $0.00 $16,125.00 $16,690.00 $16,125.00
▇/▇ ▇/▇ ▇/▇ ▇▇▇ ▇/▇ ▇/▇ $0.00 $16,125.00 $16,690.00 $16,125.00
▇/▇ ▇/▇ ▇/▇ ▇▇▇ ▇/▇ ▇/▇ $0.00 $16,125.00 $16,690.00 $16,125.00
▇/▇ ▇/▇ ▇/▇ ▇▇▇ ▇/▇ ▇/▇ $0.00 $16,125.00 $16,690.00 $16,125.00
▇/▇ ▇/▇ ▇/▇ ▇▇▇ ▇/▇ ▇/▇ $0.00 $16,125.00 $16,690.00 $16,125.00
--------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------
TOTAL 18 $0.00 $290,250.00 $304,020.00 $290,250.00
----------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------
TRACT BUILDOUT CONST UNIT MAXIMUM UNIT ST
AVAIL AVAIL AVAIL AVAIL CURRENT G
SUBTOTAL AVAIL RPT
----------------------------------------------------------------------------------------
N/A $0.00 $11,241.30 $27,366.30 $74,437.50 $27,366.30 1
N/A $0.00 $10,736.20 $28,860.20 $28,962.50 $28,850.20 1
N/A $0.00 $84,480.30 $80,605.30 $0.00 $0.00 8
N/A $0.00 $74,935.00 $91,060.00 $82,298.25 $82,298.25 9
N/A $0.00 $10,697.25 $26,822.25 $70,494.00 $28,822.25 1
N/A $0.00 $11,708.10 $27,833.10 $78,225.00 $27,833.10 1
N/A $0.00 $21,425.40 $37,550.40 $69,712.50 $37,550.40 2
N/A $0.00 $10,697.25 $26,822.25 $69,712.50 $28,822.25 1
N/A $0.00 $10,708.20 $26,833.20 $71,962.50 $26,833.20 1
N/A $0.00 $58,953.60 $76,078.60 $76,650.00 $78,078.60 5
N/A $0.00 $64,249.20 $80,374.20 $71,962.50 $71,962.50 7
N/A $0.00 $10,712.70 $26,837.70 $71,212.50 $26,837.70 1
N/A $0.00 $10,712.70 $26,837.70 $70,462.50 $26,837.70 1
N/A $0.00 $10,712.70 $26,837.70 $71,775.00 $26,837.70 1
N/A $0.00 $10,708.20 $26,833.20 $74,154.00 $26,833.20 1
N/A $0.00 $11,708.10 $27,833.10 $82,032.00 $27,833.10 1
N/A $0.00 $11,241.30 $27,366.30 $78,087.50 $27,366.30 1
N/A $0.00 $10,712.70 $26,837.70 $71,212.50 $26,837.70 1
----------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------
TOTAL $0.00 $427,339.20 $717,589.20 $1,254,363.25 $619,810.46
TUESDAY, MAY 30, 1995 AVAILABILITY REPORT Page 11
Borrower: UNITED HOMES
Division: PHOENIX Masterplan: N/A Subdivision: ARISSONA
County: N/A State: AZ
--------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------
▇▇▇▇▇ ▇▇. ▇▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇
RESIDUAL APPRAISED BOOK AVAIL
SUBTTL SUBTTL SUBTTL
--------------------------------------------------------------------------------------------------
▇/▇ ▇/▇ ▇/▇ ▇▇▇ ▇/▇ ▇/▇ $0.00 $67,500.00 $90,000.00 $67,500.00
▇/▇ ▇/▇ ▇/▇ ▇▇▇ ▇/▇ ▇/▇ $0.00 $67,500.00 $90,000.00 $67,500.00
▇/▇ ▇/▇ ▇/▇ ▇▇▇ ▇/▇ ▇/▇ $0.00 $67,500.00 $90,000.00 $67,500.00
--------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------
TOTAL 3 $0.00 $202,500.00 $270,000.00 $202,500.00
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
TRACT BUILDOUT CONST UNIT MAXIMUM UNIT ST
AVAIL AVAIL AVAIL AVAIL CURRENT G
SUBTOTAL AVAIL RPT
--------------------------------------------------------------------------------
N/A $0.00 $117,616.60 $185,016.60 $275,672.25 $185,018.60 7
N/A $0.00 $22,705.05 $90,205.05 $273,085.25 $90,205.05 1
N/A $0.00 $22,705.05 $90,205.05 $260,946.25 $90,205.05 1
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
TOTAL $0.00 $162,928.70 $365,426.70 $799,683.75 $385,426.70
TUESDAY, MAY 30, 1995 AVAILABILITY REPORT PAGE 12
BORROWER: UNITED HOMES
DIVISION: PHOENIX MASTERPLAN: N/A SUBDIVISION: AUTUMN RIDGE
COUNTY: N/A STATE: AZ
----------------------------------------------------------------------------------------
▇▇▇▇▇ ▇▇. ▇▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇
RESIDUAL APPRAISED BOOK AVAIL
SUBTTL SUBTTL SUBTTL
----------------------------------------------------------------------------------------
▇/▇ ▇/▇ ▇/▇ ▇▇▇ ▇/▇ ▇/▇ $0.00 $15,375.00 $17,000.00 $15,375.00
▇/▇ ▇/▇ ▇/▇ ▇▇▇ ▇/▇ ▇/▇ $0.00 $15,375.00 $17,000.00 $15,375.00
▇/▇ ▇/▇ ▇/▇ ▇▇▇ ▇/▇ ▇/▇ $0.00 $15,375.00 $17,000.00 $15,375.00
▇/▇ ▇/▇ ▇/▇ ▇▇▇ ▇/▇ ▇/▇ $0.00 $15,375.00 $17,000.00 $15,375.00
▇/▇ ▇/▇ ▇/▇ ▇▇▇ ▇/▇ ▇/▇ $0.00 $15,375.00 $17,000.00 $15,375.00
▇/▇ ▇/▇ ▇/▇ ▇▇▇ ▇/▇ ▇/▇ $0.00 $15,375.00 $17,000.00 $15,375.00
▇/▇ ▇/▇ ▇/▇ ▇▇▇ ▇/▇ ▇/▇ $0.00 $15,375.00 $17,000.00 $15,375.00
▇/▇ ▇/▇ ▇/▇ ▇▇▇ ▇/▇ ▇/▇ $0.00 $15,375.00 $17,000.00 $15,375.00
▇/▇ ▇/▇ ▇/▇ ▇▇▇ ▇/▇ ▇/▇ $0.00 $15,375.00 $17,000.00 $15,375.00
▇/▇ ▇/▇ ▇/▇ ▇▇▇ ▇/▇ ▇/▇ $0.00 $15,375.00 $17,000.00 $15,375.00
▇/▇ ▇/▇ ▇/▇ ▇▇▇ ▇/▇ ▇/▇ $0.00 $15,375.00 $17,000.00 $15,375.00
▇/▇ ▇/▇ ▇/▇ ▇▇▇ ▇/▇ ▇/▇ $0.00 $15,375.00 $17,000.00 $15,375.00
▇/▇ ▇/▇ ▇/▇ ▇▇▇ ▇/▇ ▇/▇ $0.00 $15,375.00 $17,000.00 $15,375.00
▇/▇ ▇/▇ ▇/▇ ▇▇▇ ▇/▇ ▇/▇ $0.00 $15,375.00 $17,000.00 $15,375.00
▇/▇ ▇/▇ ▇/▇ ▇▇▇ ▇/▇ ▇/▇ $0.00 $15,375.00 $17,000.00 $15,375.00
▇/▇ ▇/▇ ▇/▇ ▇▇▇ ▇/▇ ▇/▇ $0.00 $15,375.00 $17,000.00 $15,375.00
▇/▇ ▇/▇ ▇/▇ ▇▇▇ ▇/▇ ▇/▇ $0.00 $15,375.00 $17,000.00 $15,375.00
----------------------------------------------------------------------------------------
Total 17 $0.00 $261,375.00 $269,000.00 $261,375.00
-----------------------------------------------------------------
BUILDOUT CONST UNIT MAXIMUM UNIT ST
AVAIL AVAIL AVAIL. AVAIL CURRENT G
SUBTOTAL AVAIL RPT
-----------------------------------------------------------------
$0.00 $ 7,485.90 $22,860.90 $63,300.00 $22,860.90 1
$0.00 $10,130.70 $25,505.70 $66,541.00 $25,505.70 1
$0.00 $11,467.50 $26,842.50 $63,310.00 $26,642.50 1
$0.00 $9,687.75 $25,062.75 $66,949.50 $25,062.75 1
$0.00 $10,473.15 $25,848.15 $71,188.50 $25,848.15 1
$0.00 $9,251.25 $24,626.25 $64,074.75 $24,626.25 1
$0.00 $9,251.25 $24,626.25 $60,423.00 $24,626.25 1
$0.00 $63,297.00 $78,672.00 $66,119.25 $66,119.25 7
$0.00 $8,598.75 $23,973.75 $68,541.00 $23,973.75 1
$0.00 $8,598.75 $23,973.75 $67,425.00 $23,973.75 1
$0.00 $8,616.75 $23,991.75 $67,600.00 $23,991.75 1
$0.00 $7,485.90 $22,860.90 $61,622.50 $22,860.90 1
$0.00 $8,598.75 $23,973.75 $68,741.25 $23,973.75 1
$0.00 $56,798.70 $72,173.70 $68,927.25 $68,927.25 6
$0.00 $9,687.75 $25,062.75 $69,710.25 $25,062.75 1
$0.00 $7,910.70 $23,285.70 $66,675.00 $23,285.70 1
$0.00 $9,634.95 $25,009.95 $48,174.75 $25,009.95 1
-----------------------------------------------------------------
$0.00 $258,975.50 $518,350.50 $1,111,423.00 $502,551.30
TUESDAY, MAY 30, 1995 AVAILABILITY REPORT PAGE 12
BORROWER: UNITED HOMES
DIVISION: PHOENIX MASTERPLAN: N/A SUBDIVISION: RED DOG RANCH
COUNTY: N/A STATE: AZ
------------------------------------------------------------------------------------
▇▇▇▇▇ ▇▇. ▇▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇
RESIDUAL APPRAISED BOOK AVAIL
SUBTTL SUBTTL SUBTTL
------------------------------------------------------------------------------------
▇/▇ ▇/▇ ▇/▇ ▇▇▇ ▇/▇ ▇/▇ $0.00 $86,250.00 $62,300.00 $62,300.00
▇/▇ ▇/▇ ▇/▇ ▇▇▇ ▇/▇ ▇/▇ $0.00 $86,250.00 $62,300.00 $62,300.00
▇/▇ ▇/▇ ▇/▇ ▇▇▇ ▇/▇ ▇/▇ $0.00 $86,250.00 $62,300.00 $62,300.00
▇/▇ ▇/▇ ▇/▇ ▇▇▇ ▇/▇ ▇/▇ $0.00 $86,250.00 $62,300.00 $62,300.00
▇/▇ ▇/▇ ▇/▇ ▇▇▇ ▇/▇ ▇/▇ $0.00 $86,250.00 $62,300.00 $62,300.00
▇/▇ ▇/▇ ▇/▇ ▇▇▇ ▇/▇ ▇/▇ $0.00 $86,250.00 $62,300.00 $62,300.00
▇/▇ ▇/▇ ▇/▇ ▇▇▇ ▇/▇ ▇/▇ $0.00 $86,250.00 $62,300.00 $62,300.00
▇/▇ ▇/▇ ▇/▇ ▇▇▇ ▇/▇ ▇/▇ $0.00 $86,250.00 $62,300.00 $62,300.00
▇/▇ ▇/▇ ▇/▇ ▇▇▇ ▇/▇ ▇/▇ $0.00 $86,250.00 $62,300.00 $62,300.00
▇/▇ ▇/▇ ▇/▇ ▇▇▇ ▇/▇ ▇/▇ $0.00 $86,250.00 $62,300.00 $62,300.00
▇/▇ ▇/▇ ▇/▇ ▇▇▇ ▇/▇ ▇/▇ $0.00 $86,250.00 $62,300.00 $62,300.00
▇/▇ ▇/▇ ▇/▇ ▇▇▇ ▇/▇ ▇/▇ $0.00 $86,250.00 $62,300.00 $62,300.00
------------------------------------------------------------------------------------
Total 12 $0.00 $1,035,000.00 $747,600.00 $747,600.00
----------------------------------------------------------------------------
TRACT BUILDOUT CONST UNIT MAXIMUM UNIT ST
AVAIL AVAIL AVAIL AVAIL CURRENT G
SUBTOTAL AVAIL RPT
----------------------------------------------------------------------------
N/A $0.00 $27,656.10 $89,868.10 $203,743.50 $89,858.10 1
N/A $0.00 $22,994.85 $85,294.85 $208,557.75 $85,294.85 1
N/A $0.00 $29,568.00 $91,868.00 $228,618.00 $91,658.00 1
N/A $0.00 $22,894.85 $85,294.85 $212,319.00 $85,294.85 1
N/A $0.00 $22,994.85 $85,294.85 $183,180.00 $85,294.85 1
N/A $0.00 $25,694.85 $87,994.85 $210,517.50 $87,994.85 1
N/A $0.00 $27,401.10 $89,701.10 $224,017.50 $89,701.10 1
N/A $0.00 $29,568.00 $91,868.00 $204,051.75 $91,668.00 1
N/A $0.00 $29,568.00 $91,868.00 $206,231.25 $91,668.00 1
N/A $0.00 $29,568.00 $91,868.00 $220,922.25 $91,658.00 1
N/A $0.00 $22,994.85 $85,294.85 $197,325.00 $85,294.85 1
N/A $0.00 $29,568.00 $91,868.00 $203,946.00 $91,868.00 1
----------------------------------------------------------------------------
Total $0.00 $320,481.45 $1,068,081.45 $2,503,429.50 $1,068,081.45