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REVOLVING CREDIT LOAN AGREEMENT
DATED AS OF APRIL 30, 1998
BY AND AMONG
SUNDANCE HOMES, INC.
AND
THE AFFILIATES OF SUNDANCE HOMES, INC., LISTED ON SCHEDULE 1.0
ATTACHED HERETO, AS BORROWERS,
LASALLE NATIONAL BANK,
AMERICAN NATIONAL BANK AND TRUST COMPANY OF CHICAGO,
AND
BANKBOSTON, N.A., AS LENDERS,
AND
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LASALLE NATIONAL BANK, AS AGENT FOR THE LENDERS
TABLE OF CONTENTS
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Article I. Definitions;Construction........................................................................................... -1-
1.1 Certain Definitions............................................................................................. -1-
1.2 Accounting Principles...........................................................................................-20-
Article II. The Credit Facility................................................................................................-20-
2.1 Revolving Credit Loans Generally...................................................................................-20-
(a) The Revolving Credit Commitment...........................................................................-20-
(b) Uses of Loan Advances.....................................................................................-21-
(c) Limitations on Permitted City Project Advances............................................................-21-
(d) Limitations on Permitted Suburban Project Advances........................................................-21-
(e) Limitations on Permitted Additional Advances..............................................................-21-
(f) Limitations on the Payment of Soft Costs..................................................................-22-
(g) Disbursement by Agent.....................................................................................-23-
(h) Joint Borrowings; Maturity Date...........................................................................-23-
2.2 All Loans, Advances and Reimbursement Obligations to Constitute One Loan..........................................-23-
2.3 Notes..............................................................................................................-23-
2.4 Making of Revolving Credit Loans; Frequency of Loan Requests.......................................................-23-
2.5 Interest Rate; Options.............................................................................................-24-
(a) Generally.................................................................................................-24-
(b) Prime Rate Portion........................................................................................-24-
(c) LIBOR Portions............................................................................................-24-
(d) Highest Rate..............................................................................................-25-
(e) Default Rate..............................................................................................-25-
(f) Computation of Interest...................................................................................-25-
(g) 201 North ▇▇▇▇▇...........................................................................................-25-
2.6 LIBOR Provisions...................................................................................................-26-
(a) Manner of Rate Selection..................................................................................-26-
(b) Change of Law.............................................................................................-26-
(c) Unavailability of Deposits or Inability to Ascertain Adjusted LIBOR......................................-26-
(d) Taxes and Increased Costs.................................................................................-27-
(e) Change in Capital Adequacy Requirements...................................................................-28-
(f) Funding Indemnity.........................................................................................-28-
2.7 Lending Branch.....................................................................................................-29-
2.8 Discretion of Lenders as the Manner of Funding.....................................................................-29-
2.9 Voluntary Prepayments and Reduction/Termination of Revolving Credit Commitment.....................................-29-
(a) No Prepayment Premium.....................................................................................-29-
(b) Notice of Prepayment......................................................................................-29-
(c) Termination of Facility....................................................................-30-
2.10 Mandatory Prepayments; Release of Liens.............................................................-30-
(a) Maximum Aggregate Loan Amount..............................................................-30-
(b) Partial Releases...........................................................................-30-
2.11 Payments............................................................................................-30-
(a) Obligations................................................................................-30-
(b) Location; Time.............................................................................-31-
(c) Application................................................................................-31-
(d) Reserve Account............................................................................-31-
(e) Allocation of Payments to Lenders..........................................................-32-
2.12 Statement of Account................................................................................-32-
2.13 Sundance as Agent...................................................................................-33-
2.14 Fees................................................................................................-33-
(a) Commitment Fees............................................................................-33-
(b) Unused Line Fee............................................................................-33-
(c) Letter of Credit Issuance Fee..............................................................-33-
(d) Administrative Fee.........................................................................-34-
(e) Release Fee................................................................................-34-
Article III. Letters of Credit..................................................................................-34-
3.1 General Terms.......................................................................................-34-
3.2 General Characteristics.............................................................................-34-
3.3 Applications........................................................................................-35-
3.4 Participation in Letters of Credit..................................................................-35-
3.5 Letters of Credit Outstanding at Maturity...........................................................-36-
Article IV. Collateral: General Terms..........................................................................-36-
4.1 Cross-Default Provisions............................................................................-36-
4.2 Protection of Collateral............................................................................-36-
4.3 Retention of Collateral.............................................................................-37-
4.4 No Waiver...........................................................................................-37-
Article V. Proposed Projects...................................................................................-37-
5.1 Submissions to Lenders for Proposed Projects........................................................-37-
5.2 Failure to Notify Borrowers of Approval.............................................................-37-
5.3 Additional Submissions to Agent.....................................................................-37-
5.4 Soft Cost Limitations...............................................................................-38-
5.5 Additional Terms for Approved Unique Projects.......................................................-39-
5.6 Unapproved Projects.................................................................................-39-
5.7 Lenders' Right of First Refusal on Financing Projects...............................................-39-
Article VI. Representations and Warranties......................................................................-39-
6.1 Organization and Qualification..............................................................................-39-
6.2 Executive Offices...........................................................................................-39-
6.3 Corporate Power; Authorization..............................................................................-39-
6.4 Execution and Binding Effect................................................................................-40-
6.5 Authorizations and Filings..................................................................................-40-
6.6 Financial Statements........................................................................................-40-
(a) Balance Sheets and Income Statements...................................................................-40-
(b) No Changes.............................................................................................-41-
(c) Non-Recourse Indebtedness; Subordinated Debt...........................................................-41-
6.7 Ownership of Property; Liens................................................................................-41-
6.8 No Default..................................................................................................-41-
6.9 Burdensome Restrictions.....................................................................................-42-
6.10 Labor Matters...............................................................................................-42-
6.11 Other Ventures..............................................................................................-42-
6.12 Taxes.......................................................................................................-42-
6.13 Pension and Welfare Plans...................................................................................-42-
6.14 Employment and Labor Agreements.............................................................................-43-
6.15 Patents, Trademarks, Copyrights and Licenses................................................................-43-
6.16 Environmental Matters.......................................................................................-43-
6.17 Financial Accounting Practices..............................................................................-43-
6.18 Regulation U................................................................................................-44-
6.19 Accurate and Complete Disclosure............................................................................-44-
6.20 Permits.....................................................................................................-44-
6.21 Ownership of the Borrowing Subsidiaries.....................................................................-44-
6.22 Compliance with Laws........................................................................................-44-
6.23 Litigation..................................................................................................-45-
6.24 Solvency....................................................................................................-45-
6.25 Indebtedness................................................................................................-45-
6.26 No Material Adverse Effect..................................................................................-45-
6.27 Depository Accounts.........................................................................................-45-
6.28 Current Approved Projects; Outstanding Contracts............................................................-45-
Article VII. Additional Conditions Precedent to Closing, Future Advances and Issuance of
Letters of Credit.........................................................................................-46-
7.1 Conditions to Closing.......................................................................................-46-
(a) Execution and Delivery of Loan Documents...............................................................-46-
(b) Documents and Other Agreements.........................................................................-46-
(c) Absence of Material Adverse Change.....................................................................-47-
7.2 Condition to Loans and Letters of Credit.....................................................................-48-
(a) Representations and Warranties; Events of Default and Defaults.........................................-48-
(b) Laws...................................................................................................-48-
(c) Payment of Fees........................................................................................-49-
(d) Details, Proceedings and Documents...................................................................-49-
7.3 Limit on Disbursements following Delivery of Borrowing Certificate...................................-49-
Article VIII. Affirmative Covenants.................................................................................-49-
8.1 Reporting and Information Requirements....................................................................-49-
(a) Annual Reports.......................................................................................-49-
(b) Semi-Annual Reports, Quarterly Reports & Daily Reports...............................................-50-
(c) Borrowing Certificate................................................................................-51-
(d) Compliance Certificates..............................................................................-51-
(e) Accountants' Certificates............................................................................-51-
(f) Other Reports and Information........................................................................-51-
(g) Further Information..................................................................................-52-
(h) Notice of Event of Default...........................................................................-52-
(i) Notice of Material Adverse Effect....................................................................-52-
(j) Notice of Material Proceedings.......................................................................-52-
(k) Notice of Other Material Defaults....................................................................-52-
(l) Pension Plans and Welfare Plans......................................................................-52-
8.2 Preservation of Existence and Franchises..................................................................-53-
8.3 Payment and Performance of Obligations....................................................................-53-
(a) Required Payments....................................................................................-53-
(b) Right to Contest.....................................................................................-53-
8.4 Visitation................................................................................................-54-
8.5 Financial Accounting Practices............................................................................-55-
8.6 Compliance with Laws......................................................................................-55-
8.7 Government Authorizations.................................................................................-55-
8.8 Maintenance of Properties.................................................................................-55-
8.9 Insurance.................................................................................................-55-
8.10 Agreements................................................................................................-56-
8.11 Banking Relationship......................................................................................-56-
8.12 Date Down Endorsements....................................................................................-56-
8.13 ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇.........................................................................................-56-
8.14 Closings through Title Insurer............................................................................-57-
8.15 Appraisals................................................................................................-57-
8.16 Condominiums..............................................................................................-57-
8.17 Supplemental Disclosure...................................................................................-58-
8.18 Other Subsidiaries........................................................................................-58-
8.19 ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇; Equity in Erie Tower.....................................................................-58-
Article IX. Negative Covenants.......................................................................................-58-
9.1 Mergers and Consolidations................................................................................-58-
9.2 Investments; Loans and Advances...........................................................................-59-
9.3 Capital Structure.........................................................................................-59-
9.4 Transactions with Affiliates..................................................................................-59-
9.5 Guaranteed Indebtedness.......................................................................................-59-
9.6 Liens.........................................................................................................-59-
9.7 Cancellation of Indebtedness..................................................................................-59-
9.8 Events of Default.............................................................................................-59-
9.9 ERISA.........................................................................................................-60-
9.10 Dispositions of Assets........................................................................................-60-
9.11 Continuation of or Change in Business.........................................................................-60-
9.12 Location of Principal Place of Business and Certain Records...................................................-60-
9.13 Name Change...................................................................................................-60-
9.14 Restrictions on Future Agreement..............................................................................-61-
9.15 Dividends and Related Distributions...........................................................................-61-
9.16 Fiscal Year...................................................................................................-61-
9.17 Models and Spec Homes.........................................................................................-61-
9.18 Bonds.........................................................................................................-61-
Article X. Financial Covenants..........................................................................................-62-
10.1 Consolidated Net Worth........................................................................................-62-
10.2 Liabilities to Consolidated Net Worth.........................................................................-62-
10.3 Liabilities and Letters of Credit to Consolidated Net Worth...................................................-62-
10.4 Consolidated Net Income.......................................................................................-62-
10.5 EBITDA........................................................................................................-63-
10.6 Ratio of Land Under Development to Net Worth..................................................................-63-
10.7 Limitation on Indebtedness and Equity Investments in Proposed Projects and
Unapproved Projects...........................................................................................-63-
Article XI. Defaults and Remedies.......................................................................................-63-
11.1 Events of Default.............................................................................................-63-
(a) Payment..................................................................................................-63-
(b) Misrepresentation........................................................................................-64-
(c) Specific Covenant Default................................................................................-64-
(d) General Covenant Default.................................................................................-64-
(e) Judgments................................................................................................-64-
(f) Garnishment or Attachment against Assets.................................................................-64-
(g) Failure to Obtain Consents or Approvals..................................................................-64-
(h) Involuntary Bankruptcy...................................................................................-65-
(i) Insolvency; Voluntary Bankruptcy.........................................................................-65-
(j) Loss of Permit...........................................................................................-65-
(k) Uninsured Loss...........................................................................................-65-
(l) Government Liens.........................................................................................-66-
(m) ERISA Events.............................................................................................-66-
(n) ▇▇▇▇▇▇▇▇▇................................................................................................-66-
(o) Unreimbursed Letter of Credit Draw............................................................................-66-
(p) Other Indebtedness............................................................................................-66-
(q) Loss of Priority..............................................................................................-67-
(r) ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇; Equity in Erie Tower.........................................................................-67-
(s) Kaco..........................................................................................................-67-
11.2 Consequences of a Default..........................................................................................-67-
(a) Automatic Acceleration........................................................................................-67-
(b) Acceleration by Agent.........................................................................................-67-
11.3 Letters of Credit..................................................................................................-67-
11.4 Payments Set Aside.................................................................................................-68-
11.5 Waivers by the Borrowers...........................................................................................-68-
11.6 Set-Off............................................................................................................-68-
11.7 Sharing of Set-Offs................................................................................................-69-
11.8 Cumulative Relief..................................................................................................-69-
11.9 No First Resort Obligation.........................................................................................-69-
Article XII. The Administrative Agent..........................................................................................-69-
12.1 Appointment........................................................................................................-69-
12.2 Delegation of Duties...............................................................................................-70-
12.3 Nature of Duties; Independent Credit Investigation.................................................................-70-
12.4 Exculpatory Provisions.............................................................................................-70-
12.5 Reimbursement and Indemnification..................................................................................-71-
12.6 Withholding Taxes..................................................................................................-71-
(a) Generally.....................................................................................................-71-
(b) Payments......................................................................................................-72-
12.7 Reliance by Agent..................................................................................................-73-
12.8 Individual Capacity................................................................................................-73-
12.9 Holders of a Note..................................................................................................-73-
12.10 Successors.........................................................................................................-73-
12.11 Unanimous Consent..................................................................................................-74-
12.12 Consent of Requisite Lenders.......................................................................................-76-
12.13 Release and Care of Collateral.....................................................................................-76-
12.14 Perfection by Possession...........................................................................................-77-
12.15 Enforcement........................................................................................................-77-
12.16 Dissemination of Information.......................................................................................-77-
Article XIII. Miscellaneous....................................................................................................-77-
13.1 Holidays...........................................................................................................-77-
13.2 Records............................................................................................................-78-
13.3 Substitution of Title Insurer......................................................................................-78-
13.4 Modifications, Amendments or Waivers...............................................................................-78-
13.5 General Indemnity..................................................................................................-78-
(a) Indemnified Persons........................................................................................-78-
(b) Litigation.................................................................................................-79-
(c) Generally..................................................................................................-80-
13.6 No Implied Waiver; Remedies.....................................................................................-80-
13.7 Notices.........................................................................................................-81-
13.8 Expenses; Taxes; Attorneys' Fees................................................................................-82-
13.9 Severability....................................................................................................-83-
13.10 Governing Law...................................................................................................-83-
13.11 Prior Understandings............................................................................................-83-
13.12 Duration; Survival..............................................................................................-83-
13.13 Counterparts....................................................................................................-84-
13.14 Successors and Assigns; Participants............................................................................-84-
(a) Successors and Assigns.....................................................................................-84-
(b) Lender Assignments and Participations Generally............................................................-84-
(c) Provision of Information to Participants...................................................................-86-
(d) Taxes......................................................................................................-86-
13.15 Lender's Failure to Pay Amounts Owing to Other Lenders; Federal Funds Rate......................................-86-
13.16 No Rights in the Borrowers; No Third Party Beneficiary Rights...................................................-86-
13.17 Time of Essence.................................................................................................-87-
13.18 Entire Agreement................................................................................................-87-
13.19 Section Titles..................................................................................................-87-
13.20 References......................................................................................................-87-
13.21 Reinstatement...................................................................................................-87-
13.22 Consent to Jurisdiction.........................................................................................-87-
13.23 Venue...........................................................................................................-88-
13.24 Advertisement...................................................................................................-88-
13.25 WAIVER OF JURY TRIAL............................................................................................-88-
Schedules and Exhibits
----------------------
Schedule 1.0 - List of Borrowing Subsidiaries
Schedule 1.1 - List of Additional Permitted Liens
Schedule 1.2 - Description of Kaco Loan Documents
Schedule 2.1 - Revolving Credit Commitment of each Lender
Schedule 3.4 - List of Letters of Credit
Schedule 5.1 - List of Required Deliveries for Proposed Projects
Schedule 6.1 - List of Jurisdictions in which Borrowers and Other
Subsidiaries are Qualified to do Business
Schedule 6.2 - List of Offices and Places of Business of each Borrower
Schedule 6.6 - Description of Non-Recourse Indebtedness and Subordinated
Debt (including list of assets securing Non-Recourse
Indebtedness and list of agreements pertaining to
Non-Recourse Indebtedness and Subordinated Debt)
Schedule 6.11 - List of Other Ventures
Schedule 6.13 - List of ERISA Obligations
Schedule 6.14 - List of Employment and Employee Related Agreements
Schedule 6.15 - List of Patents and Trademarks (with registration numbers)
Schedule 6.21 - List of Other Subsidiaries and Description of Capital
Stock of each Borrower and Other Subsidiary
Schedule 6.23 - List of Litigation
Schedule 6.25 - List of Guaranteed Indebtedness
Schedule 6.28 - List of City Projects, Suburban Projects and Unique
Projects (together with legal descriptions and list of
pending acquisition agreements)
Schedule 8.9 - Description of Insurance
Schedule 9.11 - List of Counties in which Borrowers Engage in Business
Schedule 9.17 - List of Models and Spec Homes for each Project
Exhibit A - Form of Borrowing Certificate
Exhibit B - Form of Amendment to Loan Documents
REVOLVING CREDIT LOAN AGREEMENT
THIS REVOLVING CREDIT LOAN AGREEMENT is dated as of April 30, 1998, by and
among SUNDANCE HOMES, INC., an Illinois corporation ("Sundance"), the BORROWING
SUBSIDIARIES (as defined below) listed on Schedule 1.0 attached hereto, LASALLE
NATIONAL BANK, a national banking association ("LaSalle"), AMERICAN NATIONAL
BANK AND TRUST COMPANY OF CHICAGO, a national banking association ("ANB"),
BANKBOSTON, N.A., a national banking association ("BankBoston") (LaSalle, ANB
and BankBoston are sometimes hereinafter referred to individually as a "Lender"
and collectively as the "Lenders"), and LASALLE NATIONAL BANK, a national
banking association, acting in its capacity as agent for the Lenders (the
"Agent").
RECITALS:
A. Sundance and its Subsidiaries are engaged in the businesses of land
acquisition, land development and the construction and sale of attached and
detached single-family homes, including condominiums, and residential loft
condominiums, and commercial development incidental thereto.
B. Sundance and the Borrowing Subsidiaries listed on Schedule 1.0
attached hereto have requested that the Lenders make a revolving credit facility
available to them in the maximum amount outstanding at any time of $80,000,000
to provide letters of credit and working capital and other amounts necessary for
them to operate their respective businesses.
C. The Lenders are willing to make such revolving credit facility
available upon the terms and subject to the conditions hereinafter set forth.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
Article I. Definitions; Construction.
--------- -------------------------
I.1 Certain Definitions. In addition to other words and terms defined
elsewhere in this Agreement, as used herein the following words and terms shall
have the following meanings, respectively, unless the context hereof otherwise
clearly requires (such meanings to be equally applicable to both the singular
and plural forms of the terms defined):
"Action Notice" shall have the meaning ascribed thereto in Section 12.11
below.
"Adjusted LIBOR" means a rate per annum determined by Agent in accordance
with the following formula: Adjusted LIBOR = LIBOR \ (100% - Reserve
Percentage).
"Adjusted Value" means, for any Project at any time, the Value of such
Project at such time minus the estimated cost to complete construction of such
Project as determined by Agent by reference to the most recent Borrowing
Certificate applicable to such Project.
"Affiliate", with respect to any Person, means any other Person which,
directly or indirectly through any parent corporation or other entity, owns or
controls, on an aggregate basis, including all beneficial ownership and
ownership or control as a trustee, guardian or other fiduciary, at least 5% of
such class or classes of outstanding Capital Stock (or other equity) having in
the aggregate ordinary voting power to elect a majority of the board of
directors (or other management) (irrespective of whether, at the time, stock of
any other class or classes (or holders of other equity or contract rights) shall
have or might have voting power by reason of the happening of any contingency)
of such Person, or which is controlled by or is under common control with such
Person, or any officers, directors or stockholders of such Person. For the
purpose of this definition, "control" means the possession, directly or
indirectly, of the power to direct or to cause the direction of management or
policies, whether through the ownership of voting securities, by contract or
otherwise. Neither Agent nor any Lender shall be deemed an Affiliate of each
other, any Borrower or any Other Subsidiary; however, each Borrower shall be
deemed an Affiliate of each of the other Borrowers and the Other Subsidiaries.
"Agent" means LaSalle, in its capacity as Agent for the Lenders hereunder,
and any successor appointed as provided in Section 12.1 below.
"Aggregate Revolving Credit Commitment" means the sum of the Revolving
Credit Commitments of all Lenders.
"Agreement" means this Revolving Credit Loan Agreement, including all
amendments, modifications, restatements and supplements hereto and any
appendices, exhibits or schedules to any of the foregoing.
"Application" shall have the meaning given such term in Section 3.3 below.
"Appraisal" means an appraisal in a form and prepared by an appraiser
commissioned by the Lenders.
"Approved City Project" means a City Project that has been approved by
Agent in accordance with the terms of Article V and Sections 12.11 and 12.12
below. The projects that have been deemed Approved City Projects as of the date
hereof are listed on Schedule 6.28 attached hereto.
"Approved Project" means an Approved Suburban Project, an Approved City
Project or an Approved Unique Project.
-2-
"Approved Suburban Project" means a Suburban Project that has been approved
by Agent in accordance with the terms of Article V and Sections 12.11 and 12.12
below. The projects that have been deemed Approved Suburban Projects as of the
date hereof are listed on Schedule 6.28 attached hereto.
"Approved Unique Project" means a project that is neither a Suburban
Project nor a City Project, but that has been approved in writing as a "Unique
Project" by the Lenders in accordance with the terms of Article V and Sections
12.11 below. The projects that have been deemed Approved Unique Projects as of
the date hereof are listed on Schedule 6.28 attached hereto.
"Assignment of Rents" means the Assignment of Rents and Leases of even date
herewith made by the Borrowers to the Agent for the benefit of the Lenders, as
the same may be amended, modified, supplemented or restated from time to time.
"Bankruptcy Code" means Title 11 of the United States Code, as amended from
time to time, or any successor statute.
"Benefit Plan" means each employee benefit plan (other than a Multiemployer
Plan), as defined in Section 3(3) of ERISA (i) which currently is, or has ever
been, maintained for employees of any Borrower, any Affiliate of any Borrower or
any ERISA Affiliate, or (ii) to which any Borrower, any Affiliate of any
Borrower or any ERISA Affiliate makes or is required to make or, within the past
six years either made, or was required to make, contributions.
"Bond Liability" means, at any time, the sum of (i) the aggregate amount
then available to be drawn or that may thereafter be drawn under Bonds then
outstanding, and (ii) all amounts that have theretofore been paid on a Bond and
that have not been reimbursed or repaid to the issuer thereof.
"Bonds" means those certain unsecured performance and completion bonds
issued on behalf of any Borrower or any Subsidiary of any Borrower.
"Borrowers" means, at any time, Sundance and the Borrowing Subsidiaries in
existence at such time.
"Borrowing Certificate" means a Borrowing Certificate in the form attached
hereto as Exhibit A.
"Borrowing Subsidiaries" means the Subsidiaries of Sundance listed on
Schedule 1.0 attached hereto and each Subsidiary of Sundance that is hereafter
formed and made a Borrowing Subsidiary (and, accordingly, a Borrower) as
required by Section 5.3(i) below.
-3-
"Budgeted Costs" means, for any Project, the total budgeted costs for the
acquisition, development and sale of such Project, including all hard and soft
costs of construction, as set forth in the budget for such Project.
"Business Day" means any day other than a Saturday, Sunday, public holiday
under the laws of the State of Illinois or other day on which banking
institutions are authorized or obligated to close in Chicago, Illinois, and if
the applicable day relates to a LIBOR Portion, Interest Period, or notice with
respect to a LIBOR Portion, a day in which dealings in United States dollar
deposits are also carried on in the London interbank market and banks are open
for business in London.
"Capital Stock" means, with respect to any Person, any and all shares,
interests, participations or other equivalents (however designated) of corporate
stock (or other equity interest), including each class of common stock and
preferred stock of such Person.
"Charges" means all federal, state, county, city, municipal, local, foreign
or other governmental (including, without limitation, PBGC) taxes, levies,
assessments or charges upon or relating to (i) the Obligations, (ii) any
Borrower's employees (other than taxes not required to be withheld), payroll,
income or gross receipts, (iii) any Borrower's or any Subsidiary of any
Borrower's ownership or use of any assets, or (iv) any other aspect of any
Borrower's or any Subsidiary of any Borrower's business.
"City Ordinance" means any county or municipal Law regulating the
Conversion of real property, including, without limitation, the City of Chicago
Condominium Ordinance, Chapter 100.2-12 of the Municipal Code of the City of
Chicago, as any such Law may from time to time be amended.
"City Project" means either (i) a for-sale residential loft, townhome or
condominium project that is being constructed by a Borrower within the City of
Chicago and that is three stories or less, or (ii) a for-sale residential loft,
townhome or condominium project that is being renovated by a Borrower within the
City of Chicago and that is not deemed or treated as a "high-rise" building
under the City of Chicago building code or other applicable City of Chicago laws
and ordinances; provided, however, that such renovation may not include
expansion beyond the existing exterior walls and roof of such building except in
connection with (a) the addition of a single floor and/or penthouse if such
addition requires no material structural modification of such building, and (b)
the addition of balconies to such building. Notwithstanding the foregoing, a
City Project may include real estate subject to commercial development so long
as such commercial real estate is incidental to the residential real estate
development.
"Closing Date" means the date on which the initial disbursement of the
proceeds of the Loan occurs.
-4-
"Code" means the Internal Revenue Code of 1986, as amended, and any
successor statute of similar import, and regulations thereunder, in each case as
in effect from time to time. References to sections of the Code shall be
construed to also refer to any successor sections.
"Collateral" means all assets, property and/or rights of any Borrower on or
in which a Lien is granted to Agent or any Lender (or to any agent, trustee or
other party acting on Agent's or such Lender's behalf) pursuant to this
Agreement or any other Loan Document or pursuant to any other agreement.
"Compliance Certificate" means a certificate in a form satisfactory to
Agent (i) stating that as of the date thereof no known Event of Default or
Default has occurred and is continuing or exists, or if an Event of Default or
Default has occurred and is continuing or exists, specifying in detail the
nature and period of existence thereof and any action with respect thereto taken
or contemplated to be taken by the Borrowers, (ii) setting forth and certifying
the calculation of each of the financial covenants set forth in Article X (but
only with respect to the fiscal quarter most recently ended), as well as the
number of Spec Homes and Models then under construction in each Project, (iii)
setting forth a report of the Borrowers' then outstanding Bonds, and (iv)
stating that the signer has personally reviewed this Agreement and that such
certificate is based on an examination made by or under the supervision of the
signer sufficient to assure that such certificate is accurate and includes all
material facts.
"Condominium Act" means any state Law regulating the conversion of real
property to condominiums, including, without limitation, the Illinois
Condominium Property Act, as any such Law may from time to time be amended.
"Condominium Declaration" means the document by which a parcel of real
property will be submitted to the Condominium Act, prepared in accordance with
the Condominium Act.
"Consolidated Net Income" of any Persons for any period means the aggregate of
the net income (or loss) of such Persons for such period, on a consolidated
basis, determined in accordance with GAAP consistently applied.
"Consolidated Net Worth" of any Persons means the excess of total assets of
such Persons over the total liabilities and reserves of such Persons computed on
a consolidated basis, as determined in accordance with GAAP consistently
applied, excluding, however, from the determination of total assets, accounts
receivable owing from any Affiliate of any of such Persons which is not a party
to this Agreement and all assets which would be classified as intangible assets
under GAAP, including, without limitation, goodwill, patents, trademarks, trade
names, copyrights, franchises and unamortized debt discount and expense,
organization costs and deferred research and development expense.
Notwithstanding the foregoing, deferred charges not to exceed $4,000,000 may be
included in total assets for the purposes of this definition, and deferred
charges in excess of $4,000,000 must be excluded from total assets.
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"Conversion" means the submission of a parcel of real property to the
Condominium Act by the recording of a Condominium Declaration, thereby
converting such parcel to condominium ownership.
"Corporate Overhead" with respect to a Project means the corporate
salaries, fees, costs and expenses incurred in connection with such Project.
"Default" means any event or condition that with notice, the passage of
time or both would constitute an Event of Default.
"Default Rate" means a rate per annum (based on a year of 360 days) which
shall be 3.5% above the Prime Rate, such interest rate to change automatically
from time to time effective as of the effective date of each change in the Prime
Rate.
"Disbursement Account" means Sundance's operating account, account number
▇▇▇▇▇▇▇ which Sundance maintains at LaSalle.
"Disbursement Agreement" means that certain Disbursement Agreement of even
date herewith by and among the Borrowers, Agent, and the Title Insurer, as the
same may be amended, modified, supplemented or restated from time to time,
pertaining, in part, to the procedures applicable to the sales of Units, the
application of proceeds from such sales to the Loans, and the release of the
Lenders' liens against such Units.
"Distribution" by a Person means any dividend or other distribution of any
nature (whether in cash, property, securities or otherwise) on account of or in
respect of any shares of the Capital Stock of such Person or on account of the
purchase, redemption, retirement or acquisition of any shares of the Capital
Stock (or warrants, options or rights therefor) of such Person.
"EBITDA" of any Persons means, for any period, Consolidated Net Income of
such Persons for such period, plus all amounts deducted in determining such
Consolidated Net Income on account of (i) interest expenses (including, without
limitation, previously capitalized interest that is expensed or amortized to
cost of sales in such period), (ii) taxes based on or measured by income, and
(iii) depreciation and amortization expenses and other similar non-cash items,
all as determined on a consolidated basis in accordance with GAAP.
"Environmental Indemnity Agreement" means the Environmental Indemnity
Agreement of even date herewith made by the Borrowers for the benefit of the
Lenders.
"Environmental Laws" means all federal, state and local statutes, laws,
rules, regulations, ordinances, requirements, or rules of common law, including,
but not limited to, those listed or
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referred to in the definition of "Hazardous Materials" below, any judicial or
administrative interpretations thereof, and any judicial and administrative
consent decrees, orders or judgments, whether now existing or hereinafter
promulgated, relating to public health and safety and protection of the
environment.
"Environmental Report" means a phase 1 environmental report for a parcel of
real property certified to Agent and the Lenders, prepared by an environmental
engineering firm satisfactory to the Lenders pursuant to contract specifications
satisfactory to the Lenders and prepared in conformity with then current ASTM
standards, or such higher standards as they may specify, and containing a
certification by the engineering firm that the information therein contained is
true and correct.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, and any successor statute of similar import, together with the
regulations thereunder, in each case as in effect from time to time.
"ERISA Affiliate" means any corporation, partnership or other trade or
business (whether or not incorporated) that is, along with any Borrower, a
member of a controlled group of corporations or a controlled group of trades or
businesses, as described in Sections 414(b) and 414(c), respectively, of the
Code or Section 4001 of ERISA.
"Event of Default" means any of the Events of Default described in Section
11.1 hereof.
"Excess Availability" means, at any time, the amount by which (i) the sum
of (A) the aggregate Permitted City Project Advances at such time, (B) the
aggregate Permitted Suburban Project Advances at such time, and (C) the
aggregate Permitted Unique Project Advances at such time, exceeds (ii) the sum
of the outstanding principal balance of the Loans and the Letter of Credit
Liability at such time.
"Federal Funds Rate" means, for any day, the weighted average (rounded
upwards, if necessary, to the next 1/100th of 1%) of the rates on overnight
federal funds transactions with members of the Federal Reserve System arranged
by federal funds brokers, as published on the next succeeding Business Day by
the Federal Reserve Bank of New York, or, if such rate is not so published for
any day that is a Business Day, the average (rounded upwards, if necessary, to
the next 1/100th of 1%) of the quotations for such day for such transactions
received by Agent from three federal funds brokers of recognized standing
selected by it.
"Field Overhead" means the costs associated with field, supervisory and
management of the production related aspects of a Project.
"Fiscal Year" means the twelve-month period that ends on September 30th.
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"Fixed Rate" means the following:
(i) for each Interest Period that commences during the period from
the Closing Date through January 31, 1999, the Fixed Rate shall be the
applicable Adjusted LIBOR plus 3.00%, and
(ii) for each Interest Period that commences on or after February 1,
1999, the Fixed Rate shall be the lowest rate determined pursuant to
clauses (a), (b), (c) and (d) below:
(a) the applicable Adjusted LIBOR plus 3.00%, if the
Consolidated Net Worth of the Borrowers (excluding the net worth of
the Other Subsidiaries) as of September 30, 1998, is equal to or less
than $31,000,000;
(b) the applicable Adjusted LIBOR plus 2.75%, if (1) the
Consolidated Net Worth of the Borrowers (excluding the net worth of
the Other Subsidiaries) as of September 30, 1998, is greater than
$31,000,000, and (2) the Leverage Ratio is less than 2.0 to 1.0 as of
such date;
(c) the applicable Adjusted LIBOR plus 2.50%, if (1) the
Consolidated Net Worth of the Borrowers (excluding the net worth of
the Other Subsidiaries) as of September 30, 1998, is greater than
$34,000,000, and (2) the Leverage Ratio is less than 1.5 to 1.0 as of
such date;
(d) the applicable Adjusted LIBOR plus 2.25%, if (1) the
Consolidated Net Worth of the Borrowers (excluding the net worth of
the Other Subsidiaries) as of September 30, 1998, is greater than
$37,000,000, and (2) the Leverage Ratio is less than 1.25 to 1.0 as of
such date.
"Floating Rate" means the following:
(i) during the period from the Closing Date through January 31, 1999,
the Floating Rate shall be the Prime Rate plus .75%, and
(ii) from and after February 1, 1999, the Floating Rate shall be the
lowest rate determined pursuant to clauses (a), (b), (c) and (d) below:
(a) the Prime Rate plus .75%, if the Consolidated Net Worth of
the Borrowers (excluding the net worth of the Other Subsidiaries) as
of September 30, 1998, is equal to or less than $31,000,000;
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(b) the Prime Rate plus .50%, if (1) the Consolidated Net Worth
of the Borrowers (excluding the net worth of the Other Subsidiaries)
as of September 30, 1998, is greater than $31,000,000, and (2) the
Leverage Ratio is less than 2.0 to 1.0 as of such date;
(c) the Prime Rate plus .25%, if (1) the Consolidated Net Worth
of the Borrowers (excluding the net worth of the Other Subsidiaries)
as of September 30, 1998, is greater than $34,000,000, and (2) the
Leverage Ratio is less than 1.5 to 1.0 as of such date;
(d) the Prime Rate, if (1) the Consolidated Net Worth of the
Borrowers (excluding the net worth of the Other Subsidiaries) as of
September 30, 1998, is greater than $37,000,000, and (2) the Leverage
Ratio is less than 1.25 to 1.0 as of such date.
"GAAP" means generally accepted accounting principles in the United States
of America (as in effect from time to time) applied on a consistent basis.
"Guaranteed Indebtedness" means, as to any Person, any obligation of such
Person guaranteeing any indebtedness, lease, dividend, or other obligation
("primary obligations") of any other Person (the "primary obligor") in any
manner, including any obligation or arrangement of such Person (a) to purchase
or repurchase any such primary obligation, (b) to advance or supply funds (i)
for the purchase or payment of any such primary obligation or (ii) to maintain
working capital or equity capital of the primary obligor or otherwise to
maintain the net worth or solvency or any balance sheet condition of the primary
obligor, (c) to purchase property, securities or services primarily for the
purpose of assuring the owner of any such primary obligation of the ability of
the primary obligor to make payment of such primary obligation, or (d) to
indemnify the owner of such primary obligation against loss in respect thereof.
"Hazardous Materials" means any above or underground storage tanks,
flammables, explosives, accelerants, asbestos, radioactive materials, radon,
urea formaldehyde foam insulation, lead-based paint, polychlorinated biphenyls,
petroleum or petroleum based or related substances, hydrocarbons or like
substances and their additives or constituents, methane, hazardous materials,
hazardous wastes, toxic substances or related materials, and including, without
limitation, substances now or hereafter defined as "hazardous substances",
"hazardous materials", "toxic substances", "solid waste", or "hazardous wastes"
in, or which are otherwise regulated pursuant to, The Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended (42
U.S.C.(S)9601, et seq.), as amended by Superfund Amendments and Reauthorization
Act of 1986 (P.L. 99-499, 42 U.S.C.), The Toxic Substance Control Act of 1976 as
amended, (15 U.S.C. (S)2601 et seq.), The Resource Conservation and Recovery
Act, as amended (42 U.S.C. (S)6901, et seq.), The Hazardous Materials
Transportation Act, as amended (49 U.S.C. (S)1801, et seq.), The Clean Water
Act, as amended (42 U.S.C. (S)7401 et seq.), The
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Illinois Environmental Protection Act, as amended (415 ILCS 5/1 et seq.), any
so-called "Superfund" or "Superlien" law or any other Environmental Law.
"Indebtedness" means all liabilities, obligations and indebtedness of any
and every kind and nature, including, without limitation, the Obligations and
all obligations to trade creditors, whether heretofore, now or hereafter owing,
arising, due, or payable from any Borrower or Other Subsidiary to any Person and
howsoever evidenced, created, incurred, acquired, or owing, whether primary,
secondary, direct, contingent, fixed, or otherwise. Without in any way limiting
the generality of the foregoing, Indebtedness specifically includes (i) all
obligations or liabilities of any Person that are secured by any lien, claim,
encumbrance, or security interest upon property owned by any Borrower or Other
Subsidiary, even though such Borrower or Other Subsidiary has not assumed or
become liable for the payment thereof; (ii) all obligations or liabilities
created or arising under any lease of real or personal property or conditional
sale or other title retention agreement with respect to property used or
acquired by any Borrower or Other Subsidiary, even though the rights and
remedies of the lessor, seller or lender thereunder are limited to repossession
of such property; (iii) all unfunded pension fund obligations and liabilities;
and (iv) deferred taxes.
"Indemnified Persons" shall have the meaning set forth in Section 13.5(a)
below.
"Interest Period" means, with respect to any LIBOR Portion, the period
commencing on the creation, continuation or conversion date (as the case may be)
with respect to such LIBOR Portion and ending one, two or three months
thereafter as selected by a Borrower in the notice as provided herein; provided
that all of the foregoing provisions relating to Interest Periods are subject to
the following:
(i) if any Interest Period would otherwise end on a day which is
not a Business Day, that Interest Period shall be extended to the next
succeeding Business Day, unless in the case of an Interest Period for a
LIBOR Portion the result of such extension would be to carry such Interest
Period into another calendar month in which event such Interest Period
shall end on the immediately preceding Business Day unless the effect of
the same shall result in any premium or penalty;
(ii) no Interest Period for a LIBOR Portion may extend beyond the
Maturity Date;
(iii) the interest rate to be applicable to each LIBOR Portion for
the applicable Interest Period shall apply from and including the first day
of such Interest Period to but excluding the last day thereof; and
(iv) no Interest Period may be selected if after giving effect
thereto the Borrowers will be unable to make a principal payment scheduled
to be made during such
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Interest Period without paying part of a LIBOR Portion on a date other than
the last day of the Interest Period applicable thereto.
For purposes of determining an Interest Period, a month means a period starting
on one day in a calendar month and ending on a numerically corresponding day in
the next calendar month; provided, however, if an Interest Period begins on the
last day of a month or if there is no numerically corresponding day in the month
in which an Interest Period is to end, then such Interest Period shall end on
the last Business Day of such month unless the effect of the same shall result
in any premium or penalty.
"IRS" means the United States Internal Revenue Service.
"Kaco" means Kaco, Inc., an Illinois corporation.
"Kaco Loan Documents" means the loan documents described on Schedule 1.2
attached hereto pertaining to certain purchase money financing in favor of Kaco.
"Land Under Development" means all land owned by a Borrower or Other
Subsidiary forming a part of a Project (excluding residential loft condominium
projects, Approved Unique Projects and all Sold Units, Models and Spec Homes).
"Law" means any law (including common law), constitution, statute, treaty,
regulation, rule, ordinance, order, injunction, writ, decree or award of any
Official Body.
"Letter of Credit" shall have the meaning given such to term in Section 3.1
below.
"Letter of Credit Liability" means, at any time, the sum of (i) the
aggregate amount then available to be drawn or that may thereafter be drawn
under then outstanding Letters of Credit, and (ii) all amounts that have
theretofore been drawn on a Letter of Credit and that have not been reimbursed
or repaid to Agent.
"Leverage Ratio" means at any time the ratio of:
(i) the sum of (a) the consolidated Liabilities of the Borrowers
(excluding the Liabilities of the Other Subsidiaries) at such time minus
the amount of Subordinated Debt and Nonrecourse Indebtedness (to the extent
included in such Liabilities), and (b) the Letters of Credit Liability then
outstanding (to the extent not already included in such Liabilities), to
(ii) Consolidated Net Worth of the Borrowers (excluding (A) the net
worth of the Other Subsidiaries and (B) equity in the property subject to
the Non-Recourse
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Indebtedness deducted under clause (i) above) at such time
plus the amount of Subordinated Debt deducted under clause (i) above.
"Liabilities" of any Person or Persons means the aggregate amount of
liabilities (excluding contingent liabilities) of such Person or Persons
(computed on a consolidated basis, if applicable) and determined in accordance
with GAAP.
"LIBOR" means for each Interest Period, (i) the LIBOR Index Rate (as
defined below) for such Interest Period, if such rate is available, and (ii) if
the LIBOR Index Rate cannot be determined, the arithmetic average of the rate of
interest per annum (rounded upward, if necessary, to the nearest 1/100th of 1%)
at which deposits in United States dollars in immediately available funds are
offered to Agent at 11:00 a.m. (London, England time) two Business Days before
the beginning of such Interest Period by major banks in the interbank eurodollar
market for a period equal to such Interest Period and in an amount equal or
comparable to the applicable LIBOR Portion scheduled to be outstanding from the
Lenders during such Interest Period. "LIBOR Index Rate" means for any Interest
Period, the rate per annum (rounded upwards, if necessary, to the next higher
one hundred-thousandth of a percentage point) for deposits in United States
dollars for a period equal to such Interest Period which appears on the Telerate
Page 3750 (as defined below) as of 11:00 a.m. (London, England time) on the date
two Business Days before the commencement of such Interest Period. "Telerate
Page 3750" means the display designated as "Page 3750" on the Telerate Service
(or such other page as may replace Page 3750 on that service or such other
service as may be nominated by the British Bankers' Association Interest
Settlement Rates for United States dollar deposits). Each determination of
LIBOR made by Agent shall be presumed correct absent manifest error.
"LIBOR Portion" shall have the meaning given such term in Section 2.5(a)
herein.
"Lien" means any mortgage or deed of trust (including any leasehold
mortgage), pledge, hypothecation, assignment, lien, security interest, easement
or encumbrance, or preference, priority or other security agreement or
preferential arrangement of any kind or nature whatsoever (including, without
limitation, any lease intended as security or any title retention agreement or
any financing lease having substantially the same economic effect as any of the
foregoing, but not including operating leases of assets not owned by the
lessee), and the filing of, or agreement to give, any financing statement
perfecting a security interest under the Uniform Commercial Code of the State of
Illinois or comparable law of any jurisdiction.
"Loan" means any revolving credit loan made by any Lender to any Borrower
under the terms and conditions of this Agreement.
"Loan Documents" means this Agreement, the Notes, the Security Documents,
the Applications, the Subordination Agreements, the Disbursement Agreement, and
the
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Supplemental Documentation, as any and all of the foregoing may be amended,
modified or supplemented from time to time.
"Marketing Costs" means the costs associated with the sales and marketing
of a Project and the costs of furnishing any Models within such Project.
"Material Adverse Effect" means that any one or more of the following could
occur (i) a material adverse effect on the business operations, properties,
assets or condition (financial or otherwise) of the Borrowing Subsidiaries
individually or taken as a whole or of Sundance, (ii) any event or condition
which could materially adversely affect any Borrower's ability to perform under
the terms of any of the Loan Documents, or (iii) any material adverse effect on
the ability of a Lender or Agent to enforce the terms of any of the Loan
Documents.
"Maturity Date" means February 1, 2000, or such earlier date on which the
Aggregate Revolving Credit Commitment is terminated in whole pursuant to the
terms of this Agreement.
"Maximum Aggregate Loan Amount" means, at any time, $80,000,000 minus the
amount, if any, of the then outstanding Letter of Credit Liability.
"Model" means an attached or detached dwelling which is open for viewing by
prospective purchasers and which is not a Sold Unit.
"Mortgage" means the Mortgage of even date herewith among certain of the
Borrowers to Agent for the benefit of the Lenders, as the same may be amended,
modified, supplemented or restated from time to time.
"Multiemployer Plan" means a "multiemployer plan" as defined in Section
4001(a)(3) of ERISA which is maintained for employees of any Borrower or its
Subsidiaries or any ERISA Affiliate.
"Net Sales Proceeds" means, with respect to the sale of any Unit, the gross
sales price payable by the purchaser thereof, minus (i) all customary and
reasonable title insurance charges, escrow fees, legal fees, real estate taxes,
transfer taxes and real estate brokers' commissions (provided such commissions
do not exceed 2% of the gross sales price of such Unit, or 3% if owing to an
outside broker) due and payable by a Borrower as a result of such sale, and (ii)
the lesser of (a) the amount of ▇▇▇▇▇▇▇ money previously paid by such purchaser
to a Borrower in connection with such sale, or (b) 5% of the gross sales price
of such Unit. If the Unit being sold is a part of the Approved Project commonly
known as Bellchase and is subject to the lien of the Kaco Loan Documents, then
the amount owing to Kaco under the Kaco Loan Documents as a result of such sale
may also be deducted from the gross sales price of such Unit when determining
Net Sales Proceeds, if and only if (A) no Event of Default then exists, and (B)
Kaco is prepared to release the lien of the Kaco Loan Documents against such
Unit upon receipt of such amount.
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"Non-Recourse Indebtedness" means the purchase money Indebtedness of any
Borrower or Other Subsidiary incurred in connection with the acquisition of real
property; provided that in each case such Person shall have no liability for
such Indebtedness whatsoever and the sole recourse of the Person to whom such
Indebtedness is owed shall be against the real property encumbered by a mortgage
relating thereto.
"Note" means each Revolving Promissory Note of even date herewith in the
aggregate stated principal amount of $80,000,000 executed by the Borrowers and
delivered to a Lender under this Agreement, together with all extensions,
renewals, amendments or restatements thereof.
"Obligations" means all Loans, advances, debts, Reimbursement Obligations,
liabilities, and obligations, for monetary amounts (whether or not such amounts
are liquidated or determinable) owing at any time by one or more of the
Borrowers to either a Lender and/or Agent, and all covenants and duties
regarding such amounts, of any kind or nature, present or future, whether or not
evidenced by any note, agreement or other instrument, arising under any of the
Loan Documents. This term includes, without limitation, all interest,
prepayment fees, charges, expenses, attorneys' fees and any other sum chargeable
to one or more of the Borrowers under any of the Loan Documents.
"Official Body" means any government or political subdivision or any
agency, authority, bureau, central bank, commission, department or
instrumentality of either, or any court, tribunal, grand jury or arbitrator, in
each case whether foreign or domestic.
"Other Subsidiaries" means, at any time, Subsidiaries of Sundance that are
not Borrowers at such time.
"Participant" shall have the meaning set forth in Section 13.14(b) below.
"PBGC" means the Pension Benefit Guaranty Corporation and any entity
succeeding to any or all of its functions under ERISA.
"Pension Plan" means a "pension plan," as such term is defined in Section
3(2) of ERISA, which is subject to the provisions of Title IV of ERISA (other
than a Multiemployer Plan) and to which any Borrower or any of its Subsidiaries
or any ERISA Affiliate might have any liability, including any liability by
reason of being deemed to be a contributing sponsor under Section 4069 of ERISA.
"Permits" means any and all permits, authorizations, approvals,
registrations, rights of way, orders, waivers, variances or other licenses
issued or granted by any Official Body.
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"Permitted Additional Advances" means Loan advances to a Borrower that are
not being used to pay the costs associated with Approved Projects. Permitted
Additional Advances are subject to the limitations set forth in Section 2.1(e)
below and to the other general restrictions regarding Loan advances set forth in
this Agreement.
"Permitted City Project Advances" means, at any time, for any Approved City
Project, an amount equal to 65% (or 75%, if 50% or more of the Units within such
Approved City Project are Sold Units) of the Budgeted Costs for such Approved
City Project that have been incurred at such time (except that the Permitted
City Project Advances for Budgeted Costs comprising land and/or building
acquisition costs shall equal 50% of incurred costs); provided, however, that
the aggregate Permitted City Project Advances disbursed by the Lenders for any
Approved City Project at any time shall not exceed 70% of the Adjusted Value
thereof at such time.
"Permitted Encumbrances" means (i) Liens in favor of Agent or any Lender to
secure the Obligations; (ii) Liens for taxes or assessments or other
governmental charges or levies, either not yet due and payable or to the extent
that nonpayment thereof is permitted by Section 8.3(b) hereof; (iii) pledges or
deposits securing obligations under workmen's compensation, unemployment
insurance, social security or public liability laws or similar legislation
(other than in respect of a benefit plan subject to ERISA); (iv) leases to which
any Borrower is a party as lessee made in the ordinary course of business; (v)
workers', mechanics', suppliers', carriers', warehousemen's, landlords' or other
similar liens arising in the ordinary course of business for sums not yet
delinquent or being contested in good faith in accordance with Section 8.3(b)
herein, if such reserve or other appropriate provision, if any, as shall be
required by GAAP shall have been made therefor; (vi) deposits securing (in lieu
of surety, appeal or customs bonds) proceedings to which any Borrower is a
party; (vii) any attachment or judgment Lien, unless the judgment it secures
shall not, within thirty days after the entry thereof have been discharged or
execution thereof stayed pending appeal, or shall not have been discharged
within five days after the expiration of any such stay or is fully and
adequately covered by insurance and with respect to which the insurer has
acknowledged coverage in writing and any lis pendens provided the litigation
related thereto is being contested in accordance with Section 8.3(b) hereof;
(viii) zoning restrictions, easements, licenses, or other restrictions on the
use of real property (including those set forth in any recorded declarations of
covenants, conditions, easements and/or restrictions, condominium declarations
or homeowners' declarations approved by Agent or the Lenders)or other minor
irregularities in title thereto, so long as the same do not materially impair in
any Lender's judgment the present use, value or marketability of such real
property or otherwise have a Material Adverse Effect; (ix) Liens on fixtures
granted to lessors pursuant to leases; (x) contracts for Sold Units; (xi) the
Liens arising from Non-Recourse Indebtedness permitted under the terms of this
Agreement and the other Loan Documents, including Non-Recourse Indebtedness
evidenced by the Kaco Loan Documents; (xii) those Liens set forth on Schedule
1.1 attached hereto; and (xiii) extensions, renewals or replacements of any Lien
referred to in clauses (i) through (xi) above (provided that such extension,
renewal or replacement is granted in the ordinary course of business and limited
to the assets originally encumbered thereby and the
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amount of the Indebtedness secured thereby has been reduced from time to time by
payment or performance in accordance with the terms of such Indebtedness and has
not been increased in violation of the terms of this Agreement).
"Permitted Suburban Project Advances" means at any time for any Approved
Suburban Project, an amount equal to 85% of the Budgeted Costs for such Approved
Suburban Project that have been incurred at such time (except that the Permitted
Suburban Project Advances for Budgeted Costs comprising land and/or building
acquisition costs shall equal 50% of incurred costs); provided, however, that
the aggregate Permitted Suburban Project Advances disbursed by the Lenders for
any Approved Suburban Project at any time shall not exceed 75% of the Adjusted
Value thereof at such time.
"Permitted Unique Project Advances" means, at any time, for any Approved
Unique Project, the aggregate Loan amount that has been borrowed or may be
borrowed for or with respect to such Approved Unique Project pursuant to the
terms of Article V below.
"Person" means an individual, corporation, partnership, trust,
unincorporated association, joint venture, joint-stock company, government
(including political subdivisions), governmental authority or agency, or any
other entity.
"Plan" means the fiscal year operating plan summary of the Borrowers
prepared on a consolidated basis in scope and detail reasonably satisfactory to
the Lenders, as adopted by the Board of Directors of Sundance.
"Preferred Stock" means, with respect to any Person, any share of Capital
Stock of such Person or its Subsidiaries in respect of which a holder is
entitled to receive payment (whether in connection with dividends, liquidation
or otherwise) before any similar or other payment may be made with respect to
other Capital Stock of such Person or its Subsidiaries.
"Prime Rate" means the per annum rate of interest announced or published
publicly from time to time by LaSalle at its principal place of business in
Chicago, Illinois, as its prime or equivalent rate of interest, which rate is
not necessarily the lowest rate of interest charged by LaSalle with respect to
commercial loans.
"Prime Rate Portion" shall have the meaning given such term in Section
2.5(a) hereof.
"Project" means an Approved Project or an Unapproved Project.
"Proposed Project" means a proposed residential for-sale real estate
project that the Borrowers have requested be deemed an Approved Project in
accordance with the terms of Article V below.
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"Pro Rata Share" shall mean, with respect to any Lender, a fraction
(expressed as a percentage), the numerator of which shall be the amount of such
Lender's Revolving Credit Commitment and the denominator of which shall be the
Aggregate Revolving Credit Commitment (or if the Revolving Credit Commitments
have been terminated, then the numerator of such fraction shall be such Lender's
share of the Loans and Letter of Credit Liability then outstanding, and the
denominator of such fraction shall be the aggregate amount of the Loans and
Letter of Credit Liability then outstanding).
"Reimbursement Obligation" means the obligation of the Borrowers to
reimburse the Lenders for the amount of any draft drawn under a Letter of
Credit.
"Reportable Event" means any of the events described in Section 4043 of
ERISA, other than any such event for which the thirty day notice requirement has
been waived.
"Requisite Lenders" means Lenders whose Pro Rata Shares, in the aggregate,
are more than 50%.
"Reserve Percentage" means, for the purpose of computing Adjusted LIBOR,
the maximum rate of all reserve requirements (including, without limitation, any
marginal, emergency, supplemental or other special reserves) imposed by the
Board of Governors of the Federal Reserve System (or any successor) under
Regulation D on any Lender against Eurocurrency liabilities (as such term is
defined in Regulation D) for the applicable Interest Period as of the first day
of such Interest Period, but subject to any amendments to such reserve
requirement by such Board or its successor, and taking into account any
transitional adjustments thereto becoming effective during such Interest Period.
For purposes of this definition, LIBOR Portions shall be deemed to be
Eurocurrency liabilities as defined in Regulation D without benefit of or credit
for prorations, exemptions or offsets under Regulation D, except as permitted by
the Lenders in their commercially reasonable discretion.
"Revolving Credit Commitment" shall have the meaning given such term in
Section 2.1(a) below.
"▇▇▇▇▇▇▇▇▇" means ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇.
"Security Agreement" means the Security Agreement of even date herewith by
the Borrowers and Agent (on behalf of the Lenders), as the same may be amended,
modified, supplemented or restated from time to time.
"Security Documents" means the Mortgage, the Assignment of Rents, the
Environmental Indemnity Agreement, the Security Agreement, the Stock Pledge
Agreements, and such other documents and agreements which a Borrower executes in
favor of Agent (on behalf of the Lenders) granting a Lien upon its respective
assets.
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"Shareholder Notes" means those certain unsecured subordinated promissory
notes of certain of the Borrowers (i) in the stated principal amount of
$3,930,660 in favor of ▇▇▇▇▇▇▇▇▇, (ii) in the stated principal amount of
$262,500 in favor of the ▇▇▇▇▇▇▇▇▇ Descendants Trust U/A/D December 29, 1992,
and (iii) in the stated principal amount of $2,500,000 in favor of ▇▇▇▇▇▇▇▇▇.
"Soft Costs" means the Marketing Costs, Field Overhead, Corporate Overhead
and interest expenses set forth in each Project budget, which amounts shall
constitute 100% of the soft costs for such Project.
"Sold Unit" means a Unit that is subject to a written contract for the sale
of such Unit, made and entered into by and between a Borrower, or its duly
authorized agent, and a bona fide third party purchaser, on a form approved by
Agent, and (i) the consideration for such sale consists solely of cash, (ii) the
purchaser has deposited ▇▇▇▇▇▇▇ money thereunder in an amount not less than (a)
5% of such sale price with respect to conventionally financed Units or (b) the
minimum required percentage of the sale price under applicable programs of the
Federal Housing Administration and/or the Department of Veterans Affairs, (iii)
the purchaser thereunder has been pre-qualified by such Borrower, or its duly
authorized agent, for a mortgage loan on the basis of generally accepted ratios
of income to anticipated debt service on the proposed mortgage loan for such
Unit, and (iv) such contract contains no contingencies other than those
pertaining to the condition of title or otherwise permitted in writing by Agent.
"Solvent" means, with respect to a Person on a non-consolidated basis and a
particular transaction, that, upon consummation of the transaction and after
giving effect thereto, (i) the Person's financial condition shall be such that
the Person's property at a fair valuation will exceed its debts, (ii) the
present fair saleable value of the Person's assets will be greater than the
amount that will be required to pay its probable liability on its debts as such
debts become absolute and matured, (iii) the Person is paying its debts as they
become due, and intends and reasonably believes that it will be able to pay its
debts as they mature, and (iv) the property remaining in the Person will not be
an unreasonably small capital for the business in which the Person is engaged or
is about to engage. As used herein, "debts" includes any legal liability,
whether matured or unmatured, liquidated or unliquidated, absolute, fixed,
contested or contingent.
"Spec Homes" means any single-family homes (excluding condominium units and
Models), whether attached or detached, for which construction has commenced
(including construction of foundations) and which do not constitute Sold Units.
"Standard Notice" means an irrevocable notice provided to Agent by no later
than 11:00 a.m. Chicago time on a Business Day which is (i) not less than three
Business Days prior to the date specified therein for the making of a requested
Loan or the voluntary prepayment of any
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Loan, or (ii) not less than five Business Days prior to the date specified
therein for the issuance of a requested Letter of Credit.
"Stock Pledge Agreements" means the Stock Pledge Agreements of even date
herewith made by certain of the Borrowers to Agent for the benefit of the
Lenders, as the same may be amended, modified, supplemented or restated from
time to time, pursuant to which all of the stock of the Borrowing Subsidiaries
is pledged to Agent as collateral for the repayment of the Loans.
"Subordinated Debt" means Indebtedness of a Borrower or Other Subsidiary
that is owing to Persons other than the Lenders and is subordinated to the
Obligations.
"Subordination Agreements" means those certain Subordination Agreements of
even date herewith relating to the Shareholder Notes, as the same may be
amended, modified, supplemented or restated from time to time.
"Subsidiary" of any Person at any time means any corporation of which a
majority (by number of shares or number of votes) of any class of outstanding
Capital Stock normally entitled to vote for the election of one or more
directors or managers, as the case may be (regardless of any contingency which
does or may suspend or dilute the voting rights of such class), is at such time
beneficially owned directly or indirectly by such Person or one or more of its
Subsidiaries. Notwithstanding anything contained herein to the contrary, with
respect to any Borrower or Other Subsidiary, the term "Subsidiary" shall include
any partnership of which such Borrower or Other Subsidiary is a general partner
or any limited liability company of which such Borrower or Other Subsidiary is a
member.
"Suburban Project" means the projects identified as Suburban Projects on
Schedule 6.28 attached hereto and any other for-sale, three-story or less,
residential attached or detached single family home project that is being
constructed by a Borrower outside the City of Chicago and that includes no
commercial or retail development (unless otherwise permitted by the Lenders).
"Supplemental Documentation" means agreements, instruments, documents, and
other written matter relating to or necessary or reasonably desirable and
requested by Agent or any Lender to effect the transactions contemplated by this
Agreement or any other Loan Document.
"Survey" means a plat of survey of a parcel of real property acceptable to
the Title Insurer and Agent made by a surveyor licensed in the state in which
the particular parcel is located showing the legal description and area of such
parcel, access to and from such parcel to a dedicated roadway, all
encroachments, improvements, overlapping of improvements, set-back lines,
roadways, easements, fences, water courses that are either of record, apparent
or may be discovered by visible inspection. Each such Plat of Survey shall be
certified to the Borrower in title to such parcel, the Title Insurer, Agent and
the Lenders as having been prepared in
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accordance with the Minimum Standard Detail Requirements for Land Title Surveys
jointly established and adopted by the American Land Title Association and the
American Congress on Surveying and Mapping in 1992 and shall further identify
any portion of such parcel that lies within any area having special flood
hazards as designated by Federal Emergency Management Agency.
"Title Insurer" means Ticor Title Insurance Company, a California
corporation, or any replacement title insurer (i) selected by Borrowers and
approved by Agent (which approval shall not be unreasonably withheld or
delayed), or (ii) selected by Agent in accordance with the provisions of Section
13.3 below.
"Title Policies" means title insurance policies issued by the Title Insurer
(i) containing the respective legal descriptions of all real property in which a
Borrower has an interest, (ii) in the aggregate amount of $80,000,000, (iii)
insuring that title to such property is vested in a Borrower and that the
Mortgage on such parcels is a valid first lien thereon, free and clear of all
Liens (other than the Permitted Encumbrances), and (iv) otherwise in a form
satisfactory to Agent. Each Title Policy shall further contain (i) a 3.1 Zoning
Endorsement (or 3.0 Zoning Endorsement, if a 3.1 Zoning Endorsement is not
customarily issued for loan policies pertaining to projects similar to the
applicable Project), with parking coverage (modified for construction, if
applicable), (ii) a Revolving Credit Endorsement, (iii) a Comprehensive
Endorsement No. 1, (iv) a Variable Rate Endorsement, (v) a Real Estate Tax
Parcel Endorsement, (vi) a tie-in endorsement satisfactory to Agent, (vii) a
letter of credit endorsement, and (viii) such other endorsements as Agent may
require, all of which must be in a form satisfactory to Agent.
"Unapproved Project" means a Proposed Project that is not deemed by the
Lenders to be an Approved Project.
"Unit" means an attached or detached single family residential dwelling,
including a townhome or condominium or loft unit, that is a part of a Project.
"Value" means, for any Project at any time, the gross sales prices for all
Units within such Project as reasonably determined at such time by the Lenders
based upon the Appraisal for such Project.
The words "herein," "hereof" and "hereunder" and other words of similar
import refer to this Agreement as a whole, including the Exhibits and Schedules
hereto, as the same from time to time be amended, modified, restated or
supplemented and not to any particular section, subsection or clause contained
in this Agreement. The term "including" means including without limitation.
I.2 Accounting Principles. Except as otherwise provided in this Agreement,
all computations and determinations as to accounting or financial matters and
all financial
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statements to be delivered pursuant to this Agreement shall be made and prepared
in accordance with GAAP (including principles of consolidation where
appropriate), and all accounting or financial terms shall have the meanings
ascribed to such terms by GAAP.
Article II. The Credit Facility.
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II.1 Revolving Credit Loans Generally.
--------------------------------
(a The Revolving Credit Commitment. Subject to the terms and
conditions and relying upon the representations and warranties herein set
forth, and provided that there does not then exist any Default or Event of
Default, each Lender severally agrees (such agreement being herein called
such Lender's "Revolving Credit Commitment") to make Loans to each Borrower
at any time or from time to time on or after the date hereof to, but not
including, the Maturity Date in an amount or amounts such that the
aggregate outstanding principal amount of all Loans by such Lender and such
Lender's Pro Rata Share of the Letter of Credit Liability shall not exceed
at any time the Revolving Credit Commitment of such Lender at such time.
Subject to Section 2.9 hereof, each Lender's Revolving Credit Commitment
shall equal the amount set forth in Schedule 2.1 attached hereto. The
Lenders shall have no obligation to make Loans and Agent shall have no
obligation to issue Letters of Credit hereunder on or after the Maturity
Date (or such earlier date as may be applicable hereunder).
(b Uses of Loan Advances. Each Loan advance (other than Permitted
Additional Advances) must be used to pay the costs incurred in connection
with or allocated to an Approved Project.
(c Limitations on Permitted City Project Advances.
----------------------------------------------
(i Notwithstanding anything to the contrary set forth in this
Agreement (but subject to the provisions set forth in Section 2.1(e)
below), the Permitted City Project Advances applicable to an Approved
City Project may not be disbursed unless and until not less than 25%
of the Units comprising such Approved City Project are Sold Units and
Agent has received certified copies of the applicable sales contracts
for such Sold Units.
(ii The aggregate disbursements of Permitted City Project
Advances at any time may not exceed 50% of the aggregate outstanding
principal balance of the Loans at such time.
(d Limitations on Permitted Suburban Project Advances. The
aggregate disbursements of Permitted Suburban Project Advances for Budgeted
Costs comprising Land Under Development at any time (i) may not exceed 35%
of the aggregate
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outstanding principal balance of the Loans at such time, and (ii) may not exceed
50% of the aggregate costs incurred at any time for acquisition or development
of such Land Under Development.
(e Limitations on Permitted Additional Advances.
(i Except as otherwise provided in clause (iv) below and
subject to the terms set forth in clause (v) below, Permitted
Additional Advances may only be disbursed for the purpose of paying
(or reimbursing others for the payment of) the following incurred
costs attributable to designated Proposed Projects: (A) ▇▇▇▇▇▇▇ money
deposits on Proposed Projects, (B) marketing, model center and other
pre-development soft costs incurred in connection with Proposed
Projects, and (C) purchase option payments on Proposed Projects.
Permitted Additional Advances may also be used to pay not more than
50% of the Budgeted Costs for land and/or building acquisition costs
for a Suburban Project that has not then been deemed an Approved
Suburban Project, provided that such Suburban Project will contain
less than 250 Units (or such other amount as agreed upon by the
Lenders), and provided further that such Suburban Project is
concurrently added to the properties encumbered by the Mortgage and is
not subject to any Liens other than the Permitted Encumbrances.
(ii At no time may the aggregate outstanding amount of the
Permitted Additional Advances exceed the lesser of (A) Excess
Availability at such time, or (B) $5,000,000 minus the aggregate face
amount of any Letters of Credit then outstanding which are securing
the payment of amounts then owing or which may thereafter be owing in
connection with a Proposed Project or an Unapproved Project.
(iii If any Proposed Project becomes an Approved Project, any
Permitted Additional Advance made with respect to such Proposed
Project shall no longer be deemed a Permitted Additional Advance and,
instead, such advance must then be in compliance with the restrictions
on Permitted City Project Advances, Permitted Suburban Project
Advances or Permitted Unique Project Advances, as applicable.
(iv Notwithstanding anything to the contrary set forth in
clause (i) above, Permitted Additional Advances may be used to pay the
Budgeted Costs of an Approved City Project prior to the satisfaction
of the condition set forth in Section 2.1(c)(ii) above. If any
Permitted Additional Advances are made with respect to an Approved
City Project as aforesaid and the condition set forth in Section
2.1(c)(ii) is thereafter satisfied, such Permitted Additional Advances
shall no longer be deemed Permitted Additional Advances and, instead,
such advances
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must then be in compliance with the restrictions on Permitted City Project
Advances applicable to such Approved City Project.
(v If Permitted Additional Advances have been applied to the
payment of costs associated with a Proposed Project, and such Proposed
Project is not thereafter approved as an Approved Project or the
Borrowers elect not to invest additional amounts for the acquisition
or development of such Proposed Project, then such Permitted
Additional Advances must be repaid by the Borrowers (without the use
of other Loan proceeds) within 120 days of such failure to approve or
such election by the Borrowers, as applicable. Such 120 day repayment
period shall also commence if the Agent requests reasonably
satisfactory evidence that the development of the Proposed Project
will begin within eighteen months and is thereafter likely to be
diligently continued until completion, and the Borrowers fail to
provide such evidence within thirty days after receipt of such
request.
(f Limitations on the Payment of Soft Costs. Notwithstanding
anything in this Agreement to the contrary, the ratio of (i) Loan proceeds
disbursed to pay Soft Costs for any Approved City Project, Approved
Suburban Project or, except as otherwise agreed in writing by Agent,
Approved Unique Project, to (ii) total Soft Costs for such Project (as set
forth in the Budget therefor) may not exceed the ratio of (A) the aggregate
gross sales prices of the Sold Units within such Project to (B) the Value
of the Units with such Project.
(g Disbursement by Agent. The Borrowers hereby authorize Agent to
disburse for and on the behalf of the Borrowers and the Borrowers' account,
the proceeds of Loans made by the Lenders to the Disbursement Account at
the direction of the chief financial officer, controller or president of
Sundance, whether such direction is made in writing or orally (although
oral directions must be followed by written confirmation within one
Business Day), provided that the proceeds of any Loans made to pay a Lender
or Agent any fees or expenses owed to it by any Borrower shall be disbursed
directly to such Lender or Agent, as the case may be.
(h Joint Borrowings; Maturity Date. Within the limits of time and
amount set forth in this Section 2.1, and subject to the provisions of this
Agreement, each Borrower may borrow, repay and reborrow Loans hereunder, it
being agreed that each Borrower shall be liable, jointly and severally, for
the Obligations of all of the Borrowers. The Loans shall be due and
payable on the Maturity Date, or such earlier date in accordance with the
terms of this Agreement.
II.2 All Loans, Advances and Reimbursement Obligations to Constitute One
Loan. Notwithstanding the limitations on the line of credit set forth in Section
2.1, all loans and
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advances by Lenders to the Borrowers and the other Obligations owing by the
Borrowers under this Agreement and the other Loan Documents shall constitute one
loan and all indebtedness and obligations of the Borrowers to Lenders and/or
Agent under this Agreement and all the other Loan Documents shall constitute one
general obligation; however, the Borrowers hereby acknowledge that no Lender
shall be liable to the Borrowers for any failure by any other Lender to disburse
its Pro Rata Share of the Loan and that no Lender's Pro Rata Share shall be
increased or decreased as a result of such failure. The Borrowers agree that all
of the rights of Lenders and/or Agent set forth in this Agreement shall apply to
any restatement, amendment, modification of, or supplement to this Agreement and
the other Loan Documents.
II.3 Notes. The obligations of the Borrowers to repay the unpaid
principal amount of the Loans made by each Lender and to pay interest thereon
and to reimburse the Lenders for any draws on the Letters of Credit shall be
evidenced by the Notes. The date and amount of the Loans made and Letters of
Credit issued on behalf of each Borrower and payment of principal and draws on
the Letters of Credit, as applicable, with respect thereto shall be recorded on
the books and records of Agent, which books and records as between the Lenders
and the Borrowers shall constitute presumptive evidence of the accuracy of the
information therein recorded.
II.4 Making of Revolving Credit Loans; Frequency of Loan Requests .
Whenever a Borrower desires that the Lenders make a Loan to it, such Borrower
shall provide a Standard Notice to Agent setting forth (i) the date, which shall
be a Business Day, on which such Loan is to be made, and (ii) the total
principal amount of such Loan. Agent shall promptly give notice to each Lender
of the information contained in such Standard Notice and of the amount of such
Lender's Pro Rata Share of such Loan. On the date specified in such Standard
Notice each Lender shall wire immediately available funds in an amount equal to
its Pro Rata Share of such Loan to Agent by no later than noon, Chicago time.
Subject to the terms and provisions hereof and provided no Default or Event of
Default then exists, Agent shall before 2:00 P.M. Chicago time on the date
specified in such Standard Notice, make the amount of such Loan available to the
Borrowers in the Disbursement Account, but only to the extent received from the
Lenders. The Borrowers may request Loan disbursements not more frequently than
four times in any calendar month; provided, however, that each request in excess
of two during any month must be accompanied by a nonrefundable request fee of
$1,500, which fee shall be retained by Agent, and provided further that one
additional draw for the acquisition costs of a Project may be requested each
month without being subject to the foregoing limitations or fee.
II.5 Interest Rate; Options.
(a Generally. Subject to all of the terms and conditions of this
Agreement (including, without limitation, clause (g) below), portions of
the principal indebtedness evidenced by the Notes may, at the option of
Sundance acting on behalf of all the Borrowers, bear interest at the
Floating Rate (the "Prime Rate Portion") or at Fixed Rates (a "LIBOR
Portion") and Prime Rate Portions and LIBOR Portions may be converted
-24-
from time to time from one basis to the other. Notwithstanding anything
contained herein to the contrary, at no time may the Loans constituting the
LIBOR Portions exceed $70,000,000 in the aggregate. All of the indebtedness
evidenced by the Notes which is not part of a LIBOR Portion shall
constitute a single Prime Rate Portion of the Notes. All of the
indebtedness evidenced by the Notes which bears interest at a Fixed Rate
with reference to a particular Adjusted LIBOR for a particular Interest
Period shall constitute a single LIBOR Portion. Anything contained herein
to the contrary notwithstanding, the obligation of the Lenders to create,
continue or effect by conversion any LIBOR Portion shall be conditioned
upon the fact that at the time no Default or Event of Default shall have
occurred and be continuing.
(b Prime Rate Portion. The Borrowers shall pay interest to Agent for
the account of each Lender on the Prime Rate Portion of the Loans on the
first Business Day of each calendar month in an amount equal to the sum of
the products of (i) the unpaid principal amount of such Prime Rate Portion
on each day during the preceding calendar month, multiplied by (ii) a rate
equal to the applicable Floating Rate on such day divided by 360. Any
change in the Prime Rate resulting from a change in Agent's prime rate
shall be effective as of the date of the relevant change.
(c LIBOR Portions. Each LIBOR Portion shall bear interest for each
Interest Period selected therefor at the applicable Fixed Rate. Accrued and
unpaid interest on each LIBOR Portion shall be due and payable on the first
Business Day of each calendar month and on the last day of each Interest
Period applicable thereto. Sundance shall notify Agent on or before 11:00
a.m. (Chicago time) on the third Business Day preceding the end of an
Interest Period applicable to a LIBOR Portion whether such LIBOR Portion is
to continue as a LIBOR Portion, in which event Sundance shall notify Agent
of the new Interest Period selected therefor. If Sundance shall fail to so
notify Agent, such LIBOR Portion shall automatically be converted into and
added to the Prime Rate Portion as of and on the last day of such Interest
Period. Each LIBOR Portion shall be in a minimum amount of $1,000,000 or
such greater amount which is an integral multiple of $1,000,000. There
shall be no more than five separate LIBOR Portions in effect or outstanding
at any one time.
(d Highest Rate. In no contingency or event whatsoever shall the
interest rate charged with respect to the Loans pursuant to the terms of
this Agreement exceed the highest rate permissible under any law which a
court of competent jurisdiction shall, in a final determination, deem
applicable hereto. In the event that such a court determines that a Lender
has received interest hereunder in excess of the highest applicable rate,
such interest shall, in such Lender's sole discretion, be deemed repayment
of principal under the Loans or promptly refunded to the Borrowers.
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(e Default Rate. Upon the occurrence of an Event of Default and so
long as such Event of Default continues, except as otherwise expressly
provided herein, the Obligations shall bear interest for each day until
paid (before and after judgment) at the Default Rate and such interest
shall be due and payable on demand.
(f Computation of Interest. All interest on the Notes shall be
computed on the basis of a year of 360 days for the actual number of days
elapsed.
(g ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇. Notwithstanding anything herein to the contrary
(but subject to the terms of clause (e) above), until the date on which
either (i) Chicago Urban Properties, Inc., consummates the sale of the
property commonly known as 201 North ▇▇▇▇▇ in Chicago, Illinois, or (ii) an
equity investment is made by the Borrowers in the property commonly known
as Erie Tower at ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ in Chicago, Illinois, in accordance
with the terms of Section 8.19 below, a portion of the outstanding
principal balance of the Loans equal to $4,000,000 shall be neither a Prime
Rate Portion or a LIBOR Portion and, instead, shall bear interest at an
annual rate equal to the Prime Rate plus 2.0%. From and after the date of
such sale, the Borrowers may elect to make such $4,000,000 portion either a
Prime Rate Portion or a LIBOR Portion pursuant to the terms of clause (a)
above.
II.6 LIBOR Provisions.
----------------
(a Manner of Rate Selection. Sundance on behalf of the applicable
Borrower(s) shall notify Agent by 11:00 a.m. (Chicago time) at least three
Business Days prior to the date upon which Sundance requests that any LIBOR
Portion be created or that any part of the Prime Rate Portion be converted
into a LIBOR Portion (each such notice to specify in each instance the
amount thereof and the Interest Period selected therefor). If any request
is made to convert a LIBOR Portion into the Prime Rate Portion, such
conversion shall only be made so as to become effective as of the last day
of the Interest Period applicable thereto. All requests for the creation,
continuance and conversion of a LIBOR Portion or a Prime Rate Portion shall
be irrevocable.
(b Change of Law. Notwithstanding any other provisions of this
Agreement or the Notes, if at any time any Lender shall determine in good
faith that any change in applicable laws, treaties or regulations or in the
interpretation thereof by any governmental authority, central bank or
comparable agency charged with the administration thereof makes it unlawful
for such Lender to create or continue to maintain any LIBOR Portion, it
shall promptly so notify Sundance and the obligation of the Lenders to
create, continue or maintain any such LIBOR Portion under this Agreement
shall be suspended until it is no longer unlawful for such Lender to
create, continue or maintain such LIBOR Portion. If the continued
maintenance of any such LIBOR Portion is unlawful, Sundance, on behalf of
the relevant Borrower(s), hereby
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elects to convert the principal amount of the affected LIBOR Portion into
the Prime Rate Portion, subject to the terms and conditions of this
Agreement; provided, however, that if such conversion is not permitted by
the terms of this Agreement, the Borrowers shall, on demand prepay the
outstanding principal amount of the affected LIBOR Portion, together with
all interest accrued thereon and all other amounts payable to such Lender
with respect thereto under this Agreement, provided, further, that if upon
such payment the Borrowers shall then have the right hereunder to obtain
additional Loans pursuant to the provisions hereof, the Borrowers may
request such payment be readvanced to one or more of the Borrowers as part
of the Prime Rate Portion.
(c Unavailability of Deposits or Inability to Ascertain Adjusted
LIBOR. Notwithstanding any other provision of this Agreement or the Notes,
if prior to the commencement of any Interest Period, a Lender shall
determine in good faith that deposits in the amount of any LIBOR Portion
scheduled to be outstanding during such Interest Period are not readily
available to such Lender in the relevant market or, by reason of
circumstances affecting the relevant market, adequate and reasonable means
do not exist for ascertaining Adjusted LIBOR, then such Lender shall
promptly give notice thereof to Sundance and the obligations of the Lenders
to create, continue or effect by conversion any such LIBOR Portion in such
amount and for such Interest Period shall be suspended until such Lender
notifies the Borrowers that deposits in such amount and for the Interest
Period selected by them are readily available in the relevant market and
adequate and reasonable means exist for ascertaining Adjusted LIBOR.
(d Taxes and Increased Costs. With respect to any LIBOR Portion, if
any Lender shall determine in good faith that any change in any applicable
law, treaty, regulation or guideline (including, without limitation,
Regulation D of the Board of Governors of the Federal Reserve System), or
any new law, treaty, regulation or guideline, or any interpretation of any
of the foregoing by any governmental authority charged with the
administration thereof or any central bank or other fiscal, monetary or
other authority having jurisdiction over such Lender or its lending branch
or the LIBOR Portions contemplated by this Agreement (whether or not having
the force of law), shall:
(i impose, increase, or deem applicable any reserve, special
deposit or similar requirement against assets held by, or deposits in
or for the account of, or loans by, or any other acquisition of funds
or disbursements by such Lender which is not in any instance already
accounted for in computing the interest rate applicable to such LIBOR
Portion;
(ii subject such Lender or any LIBOR Portion to any tax
(including, without limitation, any United States interest
equalization tax or similar tax however named applicable to the
acquisition or holding of debt obligation and any interest or
penalties with respect thereto), duty, charge, stamp tax, fee,
deduction
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or withholding in respect of this Agreement or any LIBOR Portion,
except such taxes as may be measured by the overall net income or
gross receipts of such Lender or its lending branches and imposed by a
jurisdiction, or any political subdivision or taxing authority
thereof, in each case which has jurisdiction over such Lender's
principal executive office or lending branch;
(iii change the basis of taxation of payments of principal and
interest due from the Borrowers to such Lender hereunder or under the
Notes to the extent it evidences any LIBOR Portion (other than by a
change in taxation of the overall net income or gross receipts of
Agent or any Lender); or
(iv impose on such Lender any penalty with respect to the
foregoing or any other condition regarding this Agreement, its
disbursement, any LIBOR Portion or any Note to the extent it evidences
any LIBOR Portion;
and such Lender shall determine in good faith that the result of any of the
foregoing is to increase the cost (whether by incurring a cost or adding to
a cost) to such Lender of creating or maintaining any LIBOR Portion
hereunder or to reduce the amount of principal or interest received or
receivable by such Lender (without benefit of, or credit for, any
prorations, exemption, credits or other offsets available under any such
laws, treaties, regulations, guidelines or interpretations thereof), then
the Borrowers shall pay on demand to such Lender from time to time as
specified by such Lender such additional amounts as such Lender shall
reasonably determine are sufficient to compensate and indemnify them for
such increased cost or reduced amount. If any Lender makes such a claim for
compensation, it shall provide to the Borrowers a certificate setting forth
the computation of the increased cost or reduced amount as a result of any
event mentioned herein in reasonable detail and such certificate shall be
presumed correct and accurate.
(e Change in Capital Adequacy Requirements. If any Lender shall
determine that the adoption after the date hereof of any applicable law,
rule or regulation regarding capital adequacy, or any change in any
existing law, rule or regulation regarding capital adequacy, or any change
in the interpretation or administration thereof by any governmental
authority, central bank or comparable agency charged with the
interpretation or administration of any such law, rule or regulation
regarding capital adequacy, or compliance by a Lender (or any of its
branches) with any request or directive regarding capital adequacy (whether
or not having the force of law) of any such authority, central bank or
comparable agency, has or would have the effect of reducing the rate of
return on such Lender's capital with respect to any LIBOR Portion as a
consequence of its obligations hereunder or for that portion of the credit
which is the subject matter hereof relating to LIBOR portions to a level
below that which such Lender could have achieved but for such adoption,
change or compliance (taking into consideration such Lender's policies with
respect to liquidity and capital adequacy) by an
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amount deemed by such Lender to be material, then from time to time, within
fifteen days after demand by such Lender, the Borrowers shall pay to such
Lender such additional amount or amounts reasonably determined by such
Lender as will compensate such Lender for such reduction.
(f Funding Indemnity. In the event that Agent or any Lender shall
incur any loss, cost or expense (including any loss (including loss of
profit), cost or expense incurred by reason of the liquidation or
reemployment of deposits or other funds acquired or contracted to be
acquired by any Lender to fund or maintain any LIBOR Portion or the
relending or reinvesting of such deposits or other funds or amounts paid or
prepaid to Agent or any Lender) as a result of:
(i any payment of a LIBOR Portion on a date other than the last
day of the then applicable Interest Period for any reason, whether
before or after the occurrence of a Default or Event of Default, and
whether or not such payment is required by any provision of this
Agreement; or
(ii any failure by any Borrower to create, borrow, continue or
effect by conversion a LIBOR Portion on the date specified in a notice
given pursuant to this Agreement;
then upon the demand of Agent or any Lender, as the case may be, the
Borrowers shall pay to Agent or such Lender such amount as will reimburse
Agent or such Lender for such loss, cost or expense. If Agent or such
Lender requests such a reimbursement, it shall provide to the Borrowers a
certificate setting forth the computation of the loss, costs or expense
giving rise to the request for reimbursement in reasonable detail and such
certificate shall be presumed correct and accurate.
II.7 Lending Branch. Any Lender may, at its option, elect to make, fund or
maintain all or any portion of the Loans hereunder at such of its branches or
offices as such Lender may from time to time elect. To the extent reasonably
possible, each Lender shall designate an alternate branch or funding office with
respect to the LIBOR Portions to reduce any liability of the Borrowers to such
Lender under Section 2.6(d) hereof or to avoid the unavailability of an interest
rate option under Section 2.6(b) or 2.6(c) hereof, so long as such designation
is not otherwise disadvantageous to Agent or such Lender.
II.8 Discretion of Lenders as the Manner of Funding . Notwithstanding any
provision of this Agreement to the contrary, each Lender shall be entitled to
fund and maintain its funding of all or any part of its Note in any manner it
sees fit, it being understood, however, that for the purposes of this Agreement
all determinations hereunder shall be made as if such Lender had actually funded
and maintained each LIBOR Portion during each Interest Period applicable thereto
through the purchase of deposits in the relevant market in the amount of such
LIBOR
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Portion, having a maturity corresponding to such Interest Period, and bearing an
interest rate equal to the applicable Fixed Rate.
II.9 Voluntary Prepayments and Reduction/Termination of Revolving Credit
Commitment.
(a No Prepayment Premium. Subject to the Borrowers' obligations
under Section 2.6(f) above and Section 2.14 below and following delivery of
an applicable Standard Notice, the Borrowers shall have the right at their
option from time to time to voluntarily prepay all of their Loans and all
other Obligations (other than indemnification obligations hereunder) then
outstanding in whole at any time and terminate the Aggregate Revolving
Credit Commitment without penalty or premium (other than the amounts
payable pursuant to Section 2.6(f) above with respect to any LIBOR Portion
being prepaid).
(b Notice of Prepayment. Whenever the Borrowers desire to
voluntarily prepay the Loans and terminate the Aggregate Revolving Credit
Commitment, the Borrowers shall provide Standard Notice to each Lender
setting forth the date on which the proposed prepayment and termination of
the Aggregate Revolving Credit Commitment is to be made, which shall be a
Business Day not more than three Business Days following the date the
Standard Notice is given).
(c Termination of Facility. On the date specified in such Standard
Notice, the principal amounts of the Loans, together with interest on each
such principal amount to such date, and together with any fees and any
other amounts then owing to Agent or the Lenders under this Agreement or
the other Loan Documents, shall be due and payable in full, the Aggregate
Revolving Credit Commitment shall be terminated, subject to the provisions
of Section 3.5 below).
II.10 Mandatory Prepayments; Release of Liens.
---------------------------------------
(a Maximum Aggregate Loan Amount. If the unpaid principal amount of
the Borrowers' Loans exceeds the Maximum Aggregate Loan Amount at any time,
the Borrowers shall immediately make a prepayment of the Loans in an amount
equal to the amount of such excess).
(b Partial Releases. The Borrowers shall have the right to enter
into and perform sales contracts with creditworthy third party purchasers
of the Units on the form contract submitted to and approved in writing by
Agent, provided that (i) no Default or Event of Default then exists, and
(ii) the gross sales price for the Unit being sold is not less than 95% of
the minimum sales price therefor previously agreed upon in writing by the
Lenders. The Borrowers shall deliver to Agent a copy of each fully signed
contract
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within five days after Agent's request therefor. The Borrowers shall pay to
Agent an amount equal to at least 95% of the Net Sales Proceeds for the
Unit being sold concurrently with the closing of such sale, whereupon Agent
will issue a partial release of the Lien of the Security Documents covering
such Unit (provided the parties to the Disbursement Agreement have complied
with the other terms and conditions set forth therein).
II.11 Payments.
--------
(a Obligations. That portion of the Obligations consisting of):
-----------
(i Interest payable pursuant to this Agreement shall be payable
and shall be charged in accordance with the applicable provisions of
Section 2.5 hereof; provided that, with respect to any payment of
interest which becomes due hereunder, at any and all times any Loan is
outstanding hereunder, the Borrowers authorize and direct Agent to,
and Agent shall, cause such interest to be paid on such due date by
making a disbursement of the Loan directly to the Lenders);
(ii Costs, fees and expenses payable pursuant to this Agreement
or any other Loan Document shall be payable as and when provided in
this Agreement or any other Loan Document and, if not specified, on
demand; provided that, with respect to payment of any cost, fee or
expense which becomes due hereunder, Agent may cause such cost, fee or
expense to be paid on the 30th day following such due date by making a
disbursement of the Loan);
(iii The balance of the Obligations, if any, shall be payable as
and when provided in this Agreement or the other Loan Documents and,
if not specified, upon the termination of this Agreement or as and
when declared due by Agent pursuant to Section 11.2; and)
(iv All payments to be made in respect of principal, interest,
fees or other amounts due from a Borrower hereunder, under the Notes,
or under an Application (except as otherwise provided herein) shall be
paid to Agent for the benefit of the Lenders based upon their
respective Pro Rata Shares).
(b Location; Time. All payments of principal, interest, fees and all
other Obligations payable hereunder and under the other Loan Documents
shall be made to Agent at its office located at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (or such other office or offices of Agent or
branch, subsidiary or affiliate thereof as may be designated in writing
from time to time by Agent to the Borrowers and the Lenders) no later than
2:00 P.M. Chicago time on the date any such payment is due and payable.
Payments received by Agent after 2:00 P.M. Chicago time shall be deemed
received as of
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the opening of business on the next Business Day. All such payments shall
be made in lawful money of the United States of America, in immediately
available funds at the place of payment, without setoff or counterclaim and
without reduction for, and free from, any and all present or future taxes,
levies, imposts, duties fees, charges, deductions, withholdings,
restrictions and conditions of any nature imposed by any government or any
political subdivision or taxing authority thereof (but excluding any taxes
imposed on or measured by the net income of Agent or any Lender). For the
purpose of computing interest hereunder payment shall be applied by Agent
on account of the Obligations on the day of deposit thereof to Agent prior
to 2:00 P.M. Chicago time. Notwithstanding anything to the contrary herein,
all such items of payment shall, solely for purposes of determining the
occurrence of an Event of Default, be deemed received upon actual receipt
by Agent, unless the same are subsequently dishonored for any reason
whatsoever).
(c Application. Unless Sundance on behalf of the Borrowers otherwise
directs and provided no other Obligations are then due and payable,
principal payments shall be applied first to the Prime Rate Portion until
payment in full thereof, with any balance applied to the LIBOR Portions in
the order in which their respective Interest Periods expire).
(d Reserve Account. Notwithstanding anything in this Section to the
contrary, if any payments made hereunder pursuant to the terms of the
Disbursement Agreement would repay the Prime Rate Portion in full and would
result in the payment of any LIBOR Portion prior to the expiration of its
applicable Interest Period, Sundance, on behalf of the Borrowers, may
provide written notice to Agent (not less than five Business Days prior to
the date of such payment) requesting Agent to pay into the Reserve Account
(as hereinafter defined) that portion of such payment that would otherwise
prepay such LIBOR Portion. If such notice is received by Agent, then Agent
shall deposit such portion of such payment into the Reserve Account rather
than using it to repay the LIBOR Portion, and such LIBOR Portion shall be
deemed to remain outstanding (and bearing interest) notwithstanding Agent's
receipt of such payment. The "Reserve Account" shall be an interest bearing
money market account maintained by Agent in its name on behalf of the
Lenders, and all amounts deposited into the Reserve Account shall be
applied against the Obligations. At such time as a LIBOR Portion with
respect to which a deposit has been made into the Reserve Account is
scheduled to mature, Agent shall apply such amount of the Reserve Account
balance payable under such LIBOR Portion to such LIBOR Portion. If no
Default or Event of Default then exists, on the first day of each calendar
quarter during the term hereof, Agent shall disburse to Sundance the
interest accrued on the Reserve Account to such date).
(e Allocation of Payments to Lenders. Provided no Event of Default
then exists, all payments of principal and interest in respect of
outstanding Loans, all payments
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of the fees described herein (excluding the administrative fees described
in Section 2.14(d) below) and all payments in respect to any other
Obligations shall be allocated among such of the Lenders as are entitled
thereto, in proportion to their respective Pro Rata Shares or otherwise as
provided herein. If an Event of Default has occurred and is continuing, all
payments remitted to Agent shall be applied, subject to the provisions of
this Agreement, (i) first, to pay Obligations in respect to any fees,
expense reimbursements or indemnities then due to Agent and the Lenders
from the Borrowers; (ii) second, to the ratable payment of any Obligations
other than those set forth in clauses (iii), (iv) and (v); (iii) third, to
pay interest due in respect of the Loans; (iv) fourth, to pay or prepay
principal of Loans; (v) and fifth, to pay (or to the extent such
Obligations are contingent, prepay or provide cash collateral in respect
of) Letter of Credit Liability. No later than the next Business Day
following the date on which Agent receives good funds from the Borrowers,
Agent shall distribute to each Lender at such address as such Lender may
designate in writing the portion of such funds which such Lender is
entitled to receive under the terms hereof, provided that Agent shall in no
event be bound to inquire into or determine the validity, scope or priority
of any interest or entitlement of any Lender. The order of priority
following an Event of Default is set forth herein solely to determine the
rights and priorities of the Lenders as among themselves, and may at any
time or from time to time be changed by the Lenders as they may elect
(without necessity of notice to or consent of or approval by the
Borrowers)).
II.12 Statement of Account. Agent shall provide Sundance and each Lender
with a statement of account for each Lender and Agent relating to Obligations on
a monthly basis between the twenty fifth day of such month and the first day of
the subsequent month. Each such statement of account shall be presumed correct
and accurate. The Borrowers agree to use their best efforts to deliver a
reconciliation of such statements of account to Agent within thirty days of the
delivery of such statement to Sundance.
II.13 Sundance as Agent. Each Borrower hereby irrevocably appoints and
authorizes Sundance to act as its agent and attorney-in-fact to request Loans to
be made to and Letters of Credit to be issued on behalf of any Borrower.
II.14 Fees.
----
(a Commitment Fees. As a result of the Lenders' agreement to make
the Loans, as reflected by their execution of this Agreement, the Lenders
have fully earned as additional compensation to them a non-refundable
commitment fee from the Borrowers in the amount of $300,000, which shall be
due and payable as follows: installments of $50,000 each shall be paid on
the Closing Date and on June 1, 1998, September 1, 1998, and December 1,
1998, and a final installment of $100,000 shall be paid on February 1,
1999; provided, however, that if the Revolving Credit Commitments are
terminated or the repayment of the Loan is accelerated, then the unpaid
balance of such fee shall become
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immediately due and payable. The Lenders shall share such commitment fees
based upon their respective Pro Rata Shares).
(b Unused Line Fee. The Borrowers shall pay to Agent for the account
of each Lender a non-refundable unused line fee equal to .25% of the Unused
Line Amount (as defined below) during the period commencing on the Closing
Date and ending on January 31, 1999, and during each twelve month period
thereafter, which amount shall be payable annually in arrears; provided,
however, that if the Revolving Credit Commitments are terminated or the
repayment of the Loan is accelerated, then a pro rata portion of such fee
shall become immediately due and payable. Agent shall provide the Borrowers
with a written invoice for such fee and the same shall be due on or before
the 15th day following delivery of such invoice. The Lenders shall share
such fee based upon their respective Pro Rata Shares. The "Unused Line
Amount" during any period shall equal (i) $80,000,000, minus (ii) the daily
average principal balance of the Loans outstanding during such period
(determined without regard to the actual amount of the Permitted Suburban
Project Advances, the Permitted City Project Advances, the Permitted Unique
Project Advances, and the Permitted Additional Advances during such
period), minus (iii) the daily average aggregate amount of the Letters of
Credit outstanding during such period).
(c Letter of Credit Issuance Fee. The Borrowers shall pay to Agent
for the account of each Lender based upon their respective Pro Rata Shares,
as consideration for the issuance of the Letters of Credit, a fee at the
rate of 1% per annum (computed on the basis of a year of 360 days and the
actual number of days of the stated term of the Letter of Credit) on the
amount available to be drawn on each Letter of Credit, such fee to be
payable in advance on the Closing Date (for outstanding Letters of Credit)
and on the issuance date (for Letters of Credit issued subsequent to the
date hereof) and on each anniversary of the issuance date of each
outstanding Letter of Credit).
(d Administrative Fee. The Borrowers shall pay to Agent, for its own
account and not for that of the Lenders, the following fees relating to the
administration of the line of credit created hereunder):
(i) Agent's standard administrative fees relating to the
issuance of Letters of Credit hereunder as such fees are from time to
time in effect.
(ii) A nonrefundable fee in the amount of $100,000 per year
payable in equal installments of $25,000 each on the Closing Date and
on last day of every third month thereafter; provided, however, that
if the Revolving Credit Commitments are terminated or the repayment of
the Loan is accelerated in any year, then the unpaid balance of such
fee for such year shall become immediately due and payable.
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(e) Release Fee. The Borrowers shall pay to Agent for the account of
each Lender based upon their respective Pro Rata Shares a release fee equal
to $500 per Unit upon the release of each Unit within the Project commonly
known as the Erie Centre Tower in Chicago, Illinois, from the lien of the
Mortgage. The release fee shall be additional compensation to the Lenders,
shall not reduce any other fee, interest payment or other compensation
payable to Agent or the Lenders and shall not be treated as a payment of
the principal balance of the Loans.
Article III. Letters of Credit.
----------- -----------------
III.1 General Terms. Subject to all of the terms and conditions hereof,
standby letters of credit may be issued for the account of any Borrower (such
letters of credit, as amended, modified, supplemented or replaced from time to
time in accordance with the terms of this Agreement, are hereinafter referred to
herein as the "Letters of Credit"), provided, that the aggregate outstanding
amount of the Letter of Credit Liability at any time shall in no event exceed
the lesser of (i) $20,000,000, or (ii) Excess Availability (prior to the
reduction for Letter of Credit Liability) at such time. The amount of any Letter
of Credit for all purposes of this Agreement, regardless of the original
issuance amount thereof, shall be the maximum amount which is then available to
be drawn thereunder. The Letters of Credit shall be issued by LaSalle, but each
of the other Lenders shall be obligated to reimburse LaSalle for their
respective Pro Rata Share of the amount of each draft drawn thereunder and,
accordingly, each Letter of Credit shall be deemed to utilize each Lender's
Revolving Credit Commitment in an amount equal to such Lender's Pro Rata Share
of such Letter of Credit.
III.2 General Characteristics. Each Letter of Credit issued hereunder shall
(i) be irrevocable, (ii) have a date of expiry no later than twenty-four months
from its date of issuance and expire no later than twelve months after the
Maturity Date, (iii) be payable against sight drafts in United States dollars,
(iv) conform to the general requirements of LaSalle for the issuance of letters
of credit as to form and substance, and (v) be a letter of credit which LaSalle
may lawfully issue. Letters of Credit shall only be issued for the following
purposes: (a) to secure the completion of onsite or offsite improvements as
required by and for the benefit of an Official Body, (b) to secure the payment
of all or a portion of the purchase price of an Approved Project, (c) to satisfy
landscaping or scaffolding construction requirements imposed by an Official
Body, (d) to secure the payment of ▇▇▇▇▇▇▇ money in connection with a Proposed
Project or an Unapproved Project (provided the aggregate face amount of Letters
of Credit issued for the purpose set forth in this clause (d) may not exceed
$2,000,000 in the aggregate), or (e) any other purpose agreed upon in writing by
all of the Lenders.
III.3 Applications. At the time any Borrower requests a Letter of Credit to
be issued (or prior to the first issuance of a Letter of Credit, in the case of
a continuing application) pursuant to a Standard Notice, the President or Chief
Financial Officer of such Borrower or
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Sundance shall execute and deliver to LaSalle the then current standard
application of LaSalle for such Letter of Credit (an "Application"). If LaSalle
is not reimbursed by the Borrowers for the amount of any draft drawn under a
Letter of Credit issued hereunder on the date such draft is paid by LaSalle
(which reimbursement may be made through disbursement of available Loan
proceeds), an Event of Default shall exist hereunder and the amount of such
draft shall bear interest (which interest shall be due and payable by the
Borrowers on demand) from and after the date such draft is paid at the Default
Rate in effect from time to time. This Agreement supersedes any terms of the
Applications which are contrary to or inconsistent with the terms hereof.
III.4 Participation in Letters of Credit. Each Lender shall participate
in the Letters of Credit issued by LaSalle (including those Letters of Credit
listed on Schedule 3.4 attached hereto) in an amount equal to its Pro Rata Share
of such Letters of Credit, which participation shall automatically arise upon
the issuance of each Letter of Credit (or, with respect to the Letters of Credit
listed on Schedule 3.4 attached hereto, upon the execution of this Agreement)
and shall be applied toward the Revolving Credit Commitment of each Lender when
the Letters of Credit are issued (or, with respect to those Letters of Credit
listed on Schedule 3.4 attached hereto, upon the execution of this Agreement).
Each Lender unconditionally agrees that if LaSalle is not reimbursed by the
Borrowers for the amount paid by it on any draft presented under a Letter of
Credit on the date of such payment, then such Lender shall pay to LaSalle its
Pro Rata Share of such amount (regardless of whether the Revolving Credit
Commitments of the Lenders have been terminated), and upon such payment such
Lender shall automatically receive its Pro Rata Share in all of the rights of
LaSalle in respect of such draft (including the right to obtain reimbursement
from the Borrowers for the amount of such draft, together with interest thereon
as provided for herein). If any Lender fails to honor its obligation to
reimburse LaSalle for such Lender's Pro Rata Share of the amount of any draft on
the date such draft is paid, then (i) each of the other Lenders shall be liable
for their respective pro rata shares of the payment due to LaSalle from the
defaulting Lender on the date notice of such failure is received by such other
Lenders, (ii) the defaulting Lender shall have no right to participate in any
recoveries from the Borrowers in respect of such draft, except as otherwise
provided below, and (iii) all amounts to which the defaulting Lender would
otherwise be entitled under the terms of this Agreement shall first be applied
to reimbursing the Lenders for their respective shares of the defaulting
Lenders' portion of the draft, together with interest thereon. Upon
reimbursement to the Lenders pursuant to clause (iii) above of the amounts
advanced by them in respect of the defaulting Lender's share of the draft and
their own share of the draft, together with interest thereon, the defaulting
Lender shall be entitled to its participation in LaSalle's rights of recovery
against the Borrowers in respect of the draft paid by LaSalle.
III.5 Letters of Credit Outstanding at Maturity. If any Letter of Credit
is outstanding on or after the 30th day preceding the Maturity Date or on the
date this Agreement is terminated in accordance with the terms of Section 2.9
above, or if an amount has then been drawn on a Letter of Credit which has not
been reimbursed or repaid, the Lenders may (i) require immediate
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delivery by the Borrowers to Agent (to hold on behalf of the Lenders) of cash
collateral of an amount equal to the then outstanding Letter of Credit
Liability, and (ii) enforce any of the other rights or remedies granted under
the Loan Documents, at equity or by law, by virtue of statute or otherwise.
Article IV. Collateral: General Terms.
---------- --------------------------
IV.1 Cross-Default Provisions. All Collateral which Agent or any Lender has
acquired or may at any time acquire from any Borrower or from any other source
in connection with the Obligations shall constitute collateral for each and
every one of the Obligations and for each Lender pari passu, without
apportionment or designation as to particular Obligations, and all Obligations,
howsoever and whensoever acquired, and Agent shall have the right, in its sole
discretion to determine the order in which the rights in or remedies against any
Collateral are to be exercised and which types of Collateral or which portions
of Collateral are to be proceeded against and the order of application of
proceeds of such Collateral as against particular Obligations.
IV.2 Protection of Collateral . Agent, in its sole and absolute discretion,
without waiving or releasing any obligation, liability or duty of the Borrowers
under this Agreement or the Loan Documents or any Default or Event of Default,
may for the purposes of protecting the validity and priority of any Lien granted
to Agent under this Agreement or any Loan Document, or the Collateral or any
part thereof at any time or times hereafter, but shall be under no obligation
to, pay, acquire and/or accept an assignment of any Lien or claim asserted by
any Person against the Collateral unless such Borrower or its insurer shall have
undertaken the defense of such claim, shall have been provided a cure or grace
period with respect to such Lien or claim, which cure or grace period has not
yet expired and shall have provided Agent with a bond or other security or
insurance coverage protecting Agent from loss or damage as a result of the
assertion of such Lien or claim, in which case Agent shall forbear from paying,
acquiring or accepting an assignment of the same for so long as the Borrowers
are diligently pursuing the cure of any default in connection therewith and the
Collateral and the security interests therein have not been materially impaired.
All reasonable sums paid by Agent in respect thereof and all costs, fees and
expenses, including reasonable attorneys' fees, court costs, expenses and other
charges relating thereto incurred by Agent on account thereof shall be part of
the Obligations payable by the Borrowers to Agent on demand.
IV.3 Retention of Collateral . Any and all monies, reserves and proceeds
and other property of any Borrower in the possession of Agent or any Lender at
any time or times hereafter are hereby pledged by each Borrower to Agent and the
Lenders as additional Collateral hereunder, and following the occurrence of a
Default may be held until the Obligations are paid in full or, at any time or
times following the occurrence of a Default, be applied on account of the
Obligations.
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IV.4 No Waiver . Except as set forth in Section 2.10(b) above, no
authorization is given by Agent or the Lenders pursuant to this Agreement or the
Loan Documents to sell any specified portion of the Collateral or any part
thereof, and no waiver by Agent or the Lenders in connection therewith shall
establish a custom or constitute a waiver of the prohibition contained in this
Agreement against such sales, with respect to any portion of the Collateral or
any part thereof not expressly covered by said authorization.
Article V. Proposed Projects.
--------- -----------------
V.1 Submissions to Lenders for Proposed Projects. If the Borrowers seek the
determination by the Lenders of whether a project may be deemed an Approved
Project, the applicable documents set forth on Schedule 5.1 attached hereto
(together with the written request for approval described in Section 5.2 below)
must be submitted to Agent and the Lenders for review and approval, which
approval may be granted or denied in their sole and absolute discretion.
Additionally, Agent shall obtain an Appraisal for such project which must be
reviewed and approved by the Lenders as aforesaid.
V.2 Failure to Notify Borrowers of Approval. A Proposed Project shall be
deemed an Unapproved Project if Agent fails to notify the Borrowers that the
Lenders have deemed the Proposed Project to be an Approved Project within sixty
days after Agent's written acknowledgment that it has received (a) the
Borrowers' written request for approval (which request, to be effective, shall
specifically refer to the aforementioned sixty day deemed approval provision),
and (b) all of the information required by Section 5.1 above.
V.3 Additional Submissions to Agent. Notwithstanding anything herein to the
contrary, no Proposed Project shall be deemed an Approved Project unless and
until each of the following documents are delivered to Agent, and the other
conditions set forth below are satisfied, all in a form, manner and substance
reasonably satisfactory to Agent:
(i) Unless Rembrandt Homes, Inc. will be taking title to the Proposed
Project, a new Subsidiary of a Borrower shall have been duly formed to take
title to the Proposed Project, and Rembrandt Homes, Inc. or such new
Subsidiary, together with all of the other Borrowers, has executed and
delivered an Amendment to Loan Documents in a form substantially similar to
the form attached hereto as Exhibit B (which Amendment shall, if
applicable, cause such new Subsidiary to become a Borrower hereunder and
subject the Proposed Project and all of the other assets of such new
Subsidiary, if applicable, to the Liens created by the Security Documents);
provided, however, that Rembrandt Homes, Inc. may only take title to
Suburban Projects;
(ii) A Title Policy insuring that the Mortgage creates a valid and
enforceable first lien on the good and marketable fee simple title to the
Proposed Project, subject to
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no Liens other than Permitted Encumbrances or those that have otherwise
been approved by Agent in writing;
(iii) UCC, tax lien, pending suit and judgment searches for the
Person acquiring title to the Proposed Project;
(iv) Payment of all reasonable costs and expenses (including expenses
associated with documentation, recording, title and consultant costs
incurred by Agent and the Lenders in conducting their due diligence,
appraisal fees, title insurance premiums, recording charges and taxes, and
reasonable counsel fees and disbursements) in connection with the review
and requested approval of the Proposed Project;
(v) Payment of all recording charges, filing fees, taxes, or other
expenses, including, but not limited to, intangibles taxes and documentary
stamp taxes incurred in connection with the granting to Agent of a
perfected first priority, lien on and security interest in the Proposed
Project;
(vi) Original certificates and copies of policies of insurance
required by Agent under the terms of this Agreement with respect to the
Proposed Project and the development thereof;
(vii) If requested by Agent, a feasibility study if the Project is to
be an Approved Unique Project and the Budgeted Costs for such Project
exceed $15,000,000; and
(viii) Such other certificates, opinions, documents, searches and
instruments relating to the Proposed Project as are reasonably requested by
Agent.
V.4 Soft Cost Limitations. The aggregate Marketing Costs for a Proposed
Project as set forth in the budget therefor shall not exceed 4% of the Value of
such Proposed Project. The aggregate Field Overhead for a Proposed Project as
set forth in the budget therefor shall not exceed 4% of the Value of such
Proposed Project. The aggregate Corporate Overhead for a Proposed Project as set
forth in the budget therefor shall not exceed 4% of the Value of such Proposed
Project. The aggregate interest expenses for a Proposed Project as set forth in
the budget therefor shall not exceed 3% of the Value of such Proposed Project.
The aggregate insurance, taxes and legal expenses for a Proposed Project as set
forth in the budget therefor shall not exceed 1% of the Value of such Proposed
Project.
V.5 Additional Terms for Approved Unique Projects. Agent shall have the
right to retain at the Borrowers' expense an inspecting architect in connection
with the development by a Borrower of an Approved Unique Project.
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V.6 Unapproved Projects. If a Project is not deemed an Approved Project in
accordance with the terms of this Article 5, an Other Subsidiary may take title
to such Project as an Unapproved Project and finance the acquisition and
development thereof with loans from Persons other than the Lenders, provided
that the Borrowers remain in compliance with the other terms and conditions of
this Agreement.
V.7 Lenders' Right of First Refusal on Financing Projects. ' Neither the
Borrowers nor any Subsidiary of a Borrower shall borrow funds from a Person
other than the Lenders in connection with the acquisition or development of a
project without first requesting approval of such project as an Approved Project
in accordance with the terms hereof.
Article VI. Representations and Warranties. Each Borrower hereby represents
and warrants to Agent and each Lender that:
VI.1 Organization and Qualification. Each Borrower and Other Subsidiary is
a corporation duly organized, validly existing and in good standing under the
laws of its jurisdiction of incorporation and has full corporate power to own,
operate and lease its properties and to carry on its business as now conducted.
Each Borrower and Other Subsidiary is duly qualified to do business as a foreign
corporation and is in good standing in each jurisdiction in which such
qualification is required for the conduct of such Person's business. Each
jurisdiction in which a Borrower or Other Subsidiary is qualified to conduct
business is set forth in Schedule 6.1 attached hereto.
VI.2 Executive Offices. The location of each Borrower's and Other
Subsidiary's chief executive office, principal place of business, and other
offices and places of business are set forth on Schedule 6.2 hereto, and are the
sole offices and places of business of each Borrower and Other Subsidiary,
provided that such locations may change hereunder in accordance with the
delivery of the notice required by Section 9.12 hereof.
VI.3 Corporate Power; Authorization. The execution and delivery by each
Borrower of the Loan Documents (to the extent they are parties thereto), and the
performance of the obligations required thereby, (i) are within such Person's
corporate power; (ii) have been duly authorized by all necessary or proper
corporate action; (iii) are not in contravention of any provision of such
Person's respective certificates or articles of incorporation or by-laws; (iv)
will not, to the best knowledge of the Borrowers, violate any law or regulation,
or any order or decree of any court or governmental instrumentality; (v) will
not conflict with or result in the breach or termination of, constitute a
default under or accelerate any performance required by, any indenture,
mortgage, deed of trust, lease, agreement or other instrument to which any
Borrower or any Subsidiary of any Borrower is a party or by which any Borrower
or any Subsidiary of any Borrower or any of their property is bound; (vi) will
not result in the creation or imposition of any Lien upon any of the property of
any Borrower; and (vii) do not require the consent or approval of any Person.
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VI.4 Execution and Binding Effect. This Agreement and the other Loan
Documents have been duly and validly executed and delivered by each Borrower and
constitute the legal, valid and binding obligation of the Borrowers, enforceable
in accordance with the terms hereof and thereof, except as such enforceability
may be limited by bankruptcy, insolvency, reorganization, moratorium or other
laws affecting creditors' rights and except as may be limited by the exercise of
judicial discretion in applying general principles of equity (regardless of
whether considered in a proceeding in equity or at law).
VI.5 Authorizations and Filings. No authorization, consent, approval,
license, exemption or other action by, and no registration, qualification,
designation, declaration or filing with, any Official Body is or will be
necessary in connection with the execution, performance and delivery of this
Agreement, the Notes, any other Loan Document, consummation of the transactions
herein or therein contemplated, performance of or compliance with the terms and
conditions hereof or thereof or to ensure the legality, validity, and
enforceability hereof or thereof.
VI.6 Financial Statements.
--------------------
(a) Balance Sheets and Income Statements. All of the following
consolidated balance sheets and consolidated and consolidating statements
of income, retained earnings and cash flows of the Borrowers and Other
Subsidiaries, copies of which have been furnished to Agent prior to the
date of this Agreement, have been prepared in conformity with GAAP
consistently applied throughout the periods involved and present fairly the
consolidated and consolidating financial position of each Borrower and the
Borrowers, as the case may be, in each case as of the dates thereof, and
the results of operations and cash flow for the periods then ended (as to
the unaudited interim financial statements, subject to normal year-end
audit adjustments and the absence of footnotes):
(i) the unaudited consolidated balance sheet of the Borrowers as
of December 31, 1997, and internally prepared unaudited consolidated
balance sheet of the Borrowers as of March 31, 1998, and the related
consolidated statements of income, retained earnings and cash flows
for the period then ended; and
(ii) the audited consolidated balance sheet of the Borrowers as
of September 30, 1997, and the related consolidated and consolidating
statements of income, retained earnings and cash flows for the years
then ended, with the unqualified opinion thereon of Price Waterhouse
LLP.
(b) No Changes. Except as otherwise permitted by this Agreement, since
the most recent date of audited financial statements provided to Agent
there has been (i) no material adverse change in the business, financial or
other conditions of the Borrowing Subsidiaries taken as a whole, or
Sundance, or in the projections or prospects of the
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Borrowers (on a consolidated basis), (ii) no material increase in the
Indebtedness (other than as disclosed in Schedules attached hereto); (iii)
no material decrease in the consolidated assets of the Borrowers, and (iv)
no dividends or other distributions have been declared, paid or made upon
any shares of Capital Stock of any Borrower, nor have any shares of Capital
Stock of any Borrower or the Other Subsidiaries been redeemed, retired,
purchased or otherwise acquired for value by any Borrower since September
30, 1997 (other than as disclosed in Schedules attached hereto).
(c) Non-Recourse Indebtedness; Subordinated Debt. Schedule 6.6 (i)
describes the Non-Recourse Indebtedness and Subordinated Debt, as the case
may be, of each Borrower and Other Subsidiary as of the date hereof, (ii)
describes the assets of any such Borrower or Other Subsidiary securing such
Non-Recourse Indebtedness, and (iii) lists the agreements, documents and
instruments relating to the Non-Recourse Indebtedness and Subordinated
Debt, as the case may be, described in the preceding clauses (i) and (ii).
True, correct and complete copies of each of the agreements, documents and
instruments listed on Schedule 6.6 have been delivered to Agent.
VI.7 Ownership of Property; Liens. Each Borrower and Other Subsidiary has
good, indefeasible and merchantable title to and ownership, free and clear of
all Liens other than Permitted Encumbrances, of all the assets and properties of
every kind and nature (tangible and intangible, real and personal) required to
carry on its business as presently conducted, including, without limitation, all
property reflected in the financial statements described in Section 6.6 above
and reflected in the financial statements delivered to Agent pursuant to Section
8.1 below.
VI.8 No Default. No Borrower or Other Subsidiary is known by a Borrower to
be in default, nor, to the actual knowledge of any executive officer of each
Borrower, is any third party in default, (i) under or with respect to any
contract, agreement, lease or other instrument to which a Borrower or Other
Subsidiary is a party, except for any default which (either individually or
collectively with other defaults arising out of the same event or events) could
not reasonably be expected to have a Material Adverse Effect, or (ii) under or
with respect to any contract, agreement, lease or other instrument relating to
indebtedness for borrowed money to which a Borrower or Other Subsidiary is a
party. No known Default or Event of Default has occurred and is continuing.
VI.9 Burdensome Restrictions. No contract, lease, agreement or other
instrument to which any Borrower or Other Subsidiary is a party or is bound and
no provision of applicable Law or governmental regulation could reasonably be
expected to have a Material Adverse Effect.
VI.10 Labor Matters. There are no strikes or other labor disputes against
any Borrower or with respect to any Project pending or, to any Borrower's
knowledge, threatened which could have a Material Adverse Effect. Hours worked
by and payment made to employees of each Borrower and Other Subsidiaries have
not been in violation of the Fair Labor Standards Act or
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any other applicable Law dealing with such matters which could reasonably be
expected to have a Material Adverse Effect. All payments due from any Borrower
or Other Subsidiary on account of employee health and welfare insurance have
been paid when due (taking into account any grace periods) and all such payments
which are not yet due have been accrued as a liability on the books of such
Borrower or Other Subsidiary.
VI.11 Other Ventures. No Borrower or Other Subsidiary is engaged in any
joint venture or partnership with any other Person, except as set forth in
Schedule 6.11 attached hereto.
VI.12 Taxes. Each Borrower and Other Subsidiary has filed all federal,
state and local tax returns and other reports it is required by law to file and
has paid, to the extent due and payable, all Charges (other than Charges which
are being contested pursuant to Section 8.3(b) herein). The reserves and
provisions for taxes on the books of Sundance and each of its Subsidiaries are
adequate for all open years and for its current fiscal period.
VI.13 Pension and Welfare Plans. Each Pension Plan complies and has been
administered in accordance with all applicable Laws in all material respects; no
Reportable Event has occurred and is continuing with respect to any Pension Plan
which could have a Material Adverse Effect; no Borrower, Other Subsidiary, or
any ERISA Affiliate has withdrawn from any Multi-employer Plan in a "complete
withdrawal" or a "partial withdrawal" as defined in Section 4203 or 4205 of
ERISA, respectively which could have a Material Adverse Effect; no steps have
been instituted by any Borrower or Other Subsidiary to terminate any Pension
Plan which could have a Material Adverse Effect; no contribution failure has
occurred with respect to any Pension Plan which has resulted in the imposition
of a Lien under Section 302(f) of ERISA upon any of the assets of a Borrower or
Other Subsidiary; no condition exists or event or transaction has occurred in
connection with any Pension Plan or Multiemployer Plan which could result in the
incurrence by a Borrower or Other Subsidiary or any ERISA Affiliate of any
liability, fine or penalty which is material in amount; and no Borrower, Other
Subsidiary, or ERISA Affiliate is a "contributing sponsor" as defined in Section
4001(a)(13) of ERISA of a "single-employer plan" as defined in Section
4001(a)(15) of ERISA which has two or more contributing sponsors at least two of
whom are not under common control. Except as listed in Schedule 6.13, no
Borrower, Other Subsidiary or any ERISA Affiliate, to the extent that a Borrower
or Other Subsidiary has joint and several liability with such ERISA Affiliate to
pay such benefits, maintains or has any liability to pay any medical benefits
under any employee welfare benefit plan within the meaning of Section 3(1) of
ERISA to former employees thereof or to current employees with respect to claims
incurred after the termination of their employment (other than as required by
Section 4980B of the Code or Part 6 of Subtitle B of Title 1 of ERISA), other
than with respect to any course of treatment initiated on or prior to
termination of employment.
VI.14 Employment and Labor Agreements. Except as set forth on Schedule
6.14, there are no employment agreements pursuant to which any members of
management of any Borrower or Other Subsidiary are employed and there are no
collective bargaining agreements or other
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labor agreements covering any employees of any Borrower or Other Subsidiary. A
true and complete copy of each such agreement set forth on Schedule 6.14 has
been furnished to Agent. Each Borrower and the Other Subsidiaries are in
compliance with the terms and conditions of all such collective bargaining
agreements and other labor agreements except where the failure to so comply
could reasonably be expected to have a Material Adverse Effect. No labor
contract is scheduled to expire prior to the Maturity Date.
VI.15 Patents, Trademarks, Copyrights and Licenses. Each Borrower and
Other Subsidiary owns all material licenses, patents, patent applications,
copyrights, service marks, trademarks, trademark applications, and trade names
necessary to continue to conduct its business as now conducted by them, each of
which is listed, together with Patent and Trademark Office application or
registration numbers, where applicable, on Schedule 6.15 hereto. Each Borrower
and Other Subsidiary conducts its respective businesses without infringement or
claim of infringement of any license, patent, copyright, service ▇▇▇▇,
trademark, trade name, trade secret or other intellectual property right of
others, except where such infringement or claim of infringement could not
reasonably be expected to have a Material Adverse Effect. Except as set forth in
Schedule 6.15 hereto, to the best knowledge of each Borrower, there is no
infringement or claim of infringement by others of any material, license,
patent, copyright, service ▇▇▇▇, trademark, trade name, trade secret or other
intellectual property right of any Borrower or Other Subsidiary which
infringement could reasonably be expected to have a Material Adverse Effect.
VI.16 Environmental Matters. All real property and any facilities located
thereon owned, leased, used, operated or under development by any Borrower or
Other Subsidiary or, to the knowledge of any Borrower after due inquiry, any
predecessor in interest of such Person, have been, and continue to be, owned,
leased, used, operated or under development in compliance with all applicable
Environmental Laws.
VI.17 Financial Accounting Practices. Each Borrower and Other Subsidiary
makes and keeps books, records and accounts which, in reasonable detail,
accurately and fairly reflect their respective transactions and dispositions of
their respective assets and each maintains a system of internal accounting
controls sufficient to provide reasonable assurances that (i) transactions are
executed in accordance with management's general or specific authorization, (ii)
transactions are recorded as necessary to permit preparation of financial
statements in conformity with GAAP and to maintain accountability for assets,
(iii) access to assets is permitted only in accordance with management's general
or specific authorization, and (iv) the recorded accountability for assets is
compared with the existing assets at reasonable intervals and appropriate action
is taken with respect to any differences.
VI.18 Regulation U. Each Borrower's execution and delivery of this
Agreement or any other Loan Document does not directly or indirectly violate or
result in a violation of Section 7 of the Securities and Exchange Act of 1934,
as amended, or any regulations issued pursuant thereto, including, without
limitation, regulations G, U, T and X of the Board of Governors of the
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Federal Reserve System, and no Borrower or Other Subsidiary owns any "margin
stock," within the meaning of said regulations, or is engaged in the business of
extending credit to others for such purpose, and no part of the proceeds of any
borrowing hereunder will be used to purchase or carry any "margin stock" or to
extend credit to others for the purpose of purchasing or carrying any "margin
stock."
VI.19 Accurate and Complete Disclosure. No representation or warranty made
by any Borrower under this Agreement or any other Loan Document and no statement
made by any Borrower or any Other Subsidiary in any financial statement,
certificate, report, exhibit or document furnished by any Borrower or any Other
Subsidiary to Agent and/or any Lender pursuant to or in connection with this
Agreement is false or misleading in any material respect (including by omission
of material information necessary to make such representation, warranty or
statement not misleading) as of the date made (or hereafter remade, if
applicable).
VI.20 Permits. Each Borrower and Other Subsidiary own or possess, and are
current and in good standing with respect to, all Permits from an Official Body
as are necessary to be obtained in connection with the operation of such
Borrower's or Other Subsidiary's business as heretofore and now conducted and to
own or lease and operate the properties now owned or leased by it.
VI.21 Ownership of the Borrowing Subsidiaries. As of the date of this
Agreement, there exists no Subsidiary of any Borrower other than the Borrowing
Subsidiaries listed on Schedule 1.0 attached hereto and the Other Subsidiaries
listed on Schedule 6.21 attached hereto. Sundance owns directly or indirectly
all of the issued and outstanding Capital Stock of each Borrowing Subsidiary and
Other Subsidiary free and clear of all Liens (other than the Liens created by
the Loan Documents). All of the issued and outstanding shares of the Capital
Stock of each Borrower and Other Subsidiary have been duly and validly
authorized and issued and are fully paid and nonassessable. There are no
outstanding options, warrants or other rights to purchase any Capital Stock of
any Borrower or Other Subsidiary other than as disclosed in Schedule 6.21
attached hereto. Schedule 6.21 sets forth the authorized Capital Stock of each
Borrower and Other Subsidiary and the issued and outstanding shares of each
class of Capital Stock of each Borrower and Other Subsidiary.
VI.22 Compliance with Laws. No Borrower or Other Subsidiary is known by
the Borrowers to be in violation of or subject to any contingent liability on
account of any Law (including but not limited to ERISA, the Code, any applicable
occupational and health or safety Law, Environmental Law, including but not
limited to any Law regulating the business in which they are engaged or the use,
maintenance or operation of the real and personal properties owned or possessed
by them). No Borrower or any agent thereof has received any written notice
alleging any such violation.
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VI.23 Litigation. Except as set forth on Schedule 6.23, there is no
action, suit, proceeding, government investigation or arbitration (whether or
not purportedly on behalf of any Borrower or any Other Subsidiary) at law or in
equity or before or by any federal, state, municipal or other governmental
department, commission, board, bureau, agency or instrumentality, domestic or
foreign, pending or, to the knowledge of any Borrower, threatened against or
affecting any Borrower or Other Subsidiary or any property of any Borrower or
Other Subsidiary, nor to the knowledge of any Borrower does a state of fact
exist which is reasonably likely to give rise to such proceedings.
VI.24 Solvency. The Borrowers are and each one of them is at all times
while any of the Obligations remain unpaid shall be Solvent on both an
individual and on a consolidated basis.
VI.25 Indebtedness. Except for the Obligations, operating leases permitted
hereunder, trade payables arising in the ordinary course of business, the
Shareholder Notes, the Bonds, Subordinated Debt listed on Schedule 6.6, Non-
Recourse Indebtedness listed on Schedule 6.6, and any other Indebtedness
expressly permitted to be incurred in accordance with this Agreement, no
Borrower or Other Subsidiary has any Indebtedness, including, without
limitation, any letters of credit. Without limiting the foregoing, except as set
forth in Schedule 6.25 attached hereto, no Borrower or Other Subsidiary has any
Guaranteed Indebtedness. No Borrower or Other Subsidiary is in default in the
payment when due of any Indebtedness, and, since the date of the most recent
audited financial statements delivered to Agent, the accounts payable of the
Borrowers and Other Subsidiaries have been paid in a commercially reasonable
manner or in a manner otherwise acceptable to its suppliers and creditors and in
a manner which does not threaten to disrupt the business relationship between
any Borrower or any Other Subsidiary, as the case may be, and its material
suppliers and creditors.
VI.26 No Material Adverse Effect. No event has occurred since the date of
the most recent audited financial statements delivered to Agent which has had,
or could reasonably be expected to have, a Material Adverse Effect.
VI.27 Depository Accounts. No Borrower or Other Subsidiary owns or
otherwise maintains any depository account at any bank or other financial
institution other than LaSalle and ANB, except such other accounts permitted in
writing by LaSalle and ANB.
VI.28 Current Approved Projects; Outstanding Contracts. Schedule 6.28 sets
forth a true, correct and complete list, as of the date hereof, of the Approved
Projects, and attached thereto is a true, correct and complete legal description
thereof. As of the date hereof, except as set forth on Schedule 6.28 hereof, no
Borrower, nor any Subsidiary of any Borrower is a party to any agreement,
contract or commitment for its acquisition, lease or occupancy of any real
property.
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Article VII. Additional Conditions Precedent to Closing, Future Advances
and Issuance of Letters of Credit.
VII.1 Conditions to Closing. This Agreement shall become effective upon the
Closing Date, provided that the following conditions precedent have been
satisfied or waived in writing by Agent:
(a) Execution and Delivery of Loan Documents. This Agreement and all
other Loan Documents, or counterparts thereof where permitted, shall have
been duly executed by and delivered to Agent and each Lender (and where
applicable, to each Borrower).
(b) Documents and Other Agreements. Agent and each Lender, as
applicable, shall have received all of the following, each in form and
substance satisfactory to Agent:
(i) A Certificate of Secretary of each Borrower and each
Subsidiary of each Borrower, together with true and correct copies of
the Articles of Incorporation and By-Laws of each Borrower, and all
amendments thereto, true and correct copies of the resolutions of the
Board of Directors of each Borrower authorizing the execution,
delivery and performance of this Agreement and the other Loan
Documents to be executed by such Borrower, and the names of the
officer or officers of such Borrower authorized to sign said
documents, together with a sample of the true signature of each such
officer;
(ii) The written opinion of ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, counsel
for the Borrowers addressed to Agent and each Lender in a form
reasonably satisfactory to Agent and the Lenders;
(iii) Certificates of good standing for each Borrower from the
Secretaries of State of each Borrower's state of incorporation and
each state in which such Borrower is doing business, dated not more
than ten days prior to the Closing Date;
(iv) A Borrowing Certificate;
(v) A Subordination Agreement relating to each Shareholder
Note;
(vi) Stock certificates of the Borrowers (together with
assignments in blank);
(vii) The Disbursement Agreement;
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(viii) A Title Policy with respect to each Approved Project in
the amount of $80,000,000 issued by the Title Company insuring that
the Mortgage will be a first priority lien upon the fee simple title
to such Approved Project to the extent of advances made by Lender from
time to time under this Agreement, subject to no liens, claims,
exceptions or encumbrances except the Permitted Exceptions and
containing the endorsements reasonably required by Agent based upon
its review of the Title Policy and Survey;
(ix) A Survey with respect to each Approved Project;
(x) Certified copies of all documents appearing on Schedule B
of the Title Policies;
(xi) Copies of all Permits which are necessary for the
development and use of each Approved Project;
(xii) Satisfactory UCC searches (i.e., showing no Liens other
than Permitted Exceptions), together with tax lien, judgment and
litigation searches conducted in the appropriate jurisdictions by a
search firm acceptable to Agent with respect to each Borrower;
(xiii) An Environmental Report with respect to each Approved
Project. Each such report shall confirm the absence of any Hazardous
Materials on, under or affecting the parcel therein described;
(xiv) An Appraisal of each Approved Project;
(xv) A Compliance Certificate; and
(xvi) All such other documents reasonably requested by Agent or
a Lender, in its sole discretion.
(c) Absence of Material Adverse Change . Since December 31, 1997,
there shall have been (i) no material adverse changes in the business,
financial or other conditions of any Borrower or the Borrowers taken as a
whole, or in the projections or prospects of any Borrower or the Borrowers
on a consolidated basis, (ii) no material increase in the Indebtedness
(other than inter-Borrower liabilities) of any Borrower, and (iii) no
material decrease in the assets of any Borrower or the consolidated assets
of the Borrowers.
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VII.2 Condition to Loans and Letters of Credit. The obligation of each
Lender to make any Loan to or Agent to issue any Letter of Credit for the
benefit of a Borrower hereunder is further subject to satisfaction of each of
the following further conditions:
(a) Representations and Warranties; Events of Default and Defaults.
The representations and warranties on behalf of the Borrowers and their
Subsidiaries contained herein (except (i) for those contained in Section
6.6, which shall be applicable to the most recent audited financial
statements delivered by the Borrowers and their Subsidiaries pursuant to
Section 8.1 below, and (ii) to the extent such representation and warranty
specifically relates to an earlier date, then only with respect to such
date, and (iii) for changes permitted or contemplated by this Agreement)
and in each of the other Loan Documents shall be true in all material
respects on and as of the date of each Loan and the date of issuance of
each Letter of Credit hereunder with the same effect as though made on and
as of each such date. On the date of each Loan and of the issuance of each
Letter of Credit hereunder no Event of Default and no Default with respect
to any Borrower shall have occurred and be continuing or exist or shall
occur or exist after giving effect to the Loan or the issuance of the
Letter of Credit to be made on such date. Any request by a Borrower for any
Loan or Letter of Credit hereunder shall constitute a representation and
warranty by such Borrower that (x) the representations and warranties on
behalf of each of the Borrowers and their Subsidiaries contained herein and
in each of the other Loan Documents are true and correct in all material
respects on and as of the date of such request with the same effect as
though made on and as of the date of such request and (y) on the date of
such request no known Event of Default and no known Default with respect to
any Borrower has occurred and is continuing or exists or will occur or
exist after giving effect to such Loan or issuance of such Letter of Credit
(for this purpose such Loan being deemed to have been made and such Letter
of Credit being deemed to have been issued on the date of such request).
Failure of Agent to receive notice from a Borrower to the contrary before
such Loan is made or such Letter of Credit is issued shall constitute a
further representation and warranty by the Borrowers that (1) the
representations and warranties contained in the first sentence of this
Section are true and correct in all material respects on and as of the date
of such Loan or issuance of such Letter of Credit with the same effect as
though made on and as of the date of such Loan or issuance of such Letter
of Credit and (2) on the date of the Loan or issuance of the Letter of
Credit no known Event of Default or known Default with respect to any
Borrower has occurred and is continuing or exists or will occur or exist
after giving effect to such Loan or issuance of such Letter of Credit.
(b) Laws. On the date of each Loan and issuance of each Letter of
Credit and after giving effect thereto, each Lender's Loan and Agent's
Letter of Credit shall be, in the reasonable opinion of such Lender or
Agent, as applicable, in full compliance with all Laws applicable to such
Loan or issuance of such Letter of Credit and neither the making of such
Loan, the issuance of such Letter of Credit, nor the use of the proceeds
thereof
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shall violate or be inconsistent with any Law applicable to such Loan or
issuance of such Letter of Credit.
(c) Payment of Fees. On the date of each Loan and/or the issuance of
each Letter of Credit, all fees and expenses (to the extent reimbursement
for such expenses has been sought) due and payable to Agent and/or any
Lender on or before such date hereunder shall have been paid to Agent
and/or such Lender in immediately available funds.
(d) Details, Proceedings and Documents. On the date of each Loan
and/or issuance of each Letter of Credit all legal details and proceedings
in connection with the transactions contemplated by this Agreement shall be
reasonably satisfactory to Agent and Agent shall have received all such
counterpart originals or certified or other copies of such documents and
proceedings in connection with such transactions, in form and substance
satisfactory to Agent, as Agent may from time to time request.
VII.3 Limit on Disbursements following Delivery of Borrowing Certificate.
Notwithstanding anything in this Agreement to the contrary, the Lenders shall
not be required to disburse any proceeds of the Loans or issue any Letter of
Credit during the three Business Days following the date on which the Borrowers
deliver each Borrowing Certificate required by Section 8.1(c) below, regardless
of whether a Default or Event of Default then exists.
Article VIII. Affirmative Covenants. Each Borrower covenants with Agent
as follows, unless Agent shall otherwise consent in writing:
VIII.1 Reporting and Information Requirements.
(a) Annual Reports.
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(i) As soon as practicable, and in any event within 90 days after
the close of each Fiscal Year of Sundance, each Borrower shall furnish
or cause to be furnished to Agent and each Lender consolidated
statements of income, retained earnings and cash flows of the
Borrowers and their consolidated Subsidiaries for such Fiscal Year and
consolidated balance sheets of the Borrowers as of the close of such
Fiscal Year, and notes to each, all in reasonable detail, setting
forth in comparative form the corresponding figures for the preceding
Fiscal Year, with such consolidated statements and balance sheet to be
prepared in accordance with GAAP, certified without qualification as
to its scope of audit or the financial condition of any Borrower as a
going concern by an accounting firm employed by the Borrowers and
reasonably satisfactory to Agent. Each balance sheet furnished under
this Section 6.1(a) shall be accompanied by a schedule prepared and
signed by the Chief Financial Officer of each Borrower categorizing
the assets and liabilities set forth in each such balance sheet as
either current assets or liabilities or long-term assets or
liabilities, as the case may be, and in each case in accordance with
GAAP.
(ii) No later than September 30 of each year, the Borrowers shall
deliver to Agent and the Lenders the Plan for the fiscal year
commencing on October 1 of such year.
(b) Semi-Annual Reports, Quarterly Reports & Daily Reports.
(i) As soon as practicable, and in any event within 45 days after
the end of each of the first three quarters of each Fiscal Year of
Sundance, the Borrowers shall furnish or cause to be furnished to
Agent and each Lender, in scope and detail satisfactory to the
Lenders, a separate profit and loss statement with respect to each
Project.
(ii) As soon as practicable, and in any event within 45 days
after the end of each of the first three quarters of each Fiscal Year
of Sundance, the Borrowers shall furnish or cause to be furnished to
Agent and each Lender, in scope and detail satisfactory to the
Lenders, (A) unaudited consolidated statements of income, retained
earnings and cash flows for the Borrowers and the Other Subsidiaries
for such quarter and for the period from the beginning of Sundance's
then current Fiscal Year to the end of such quarter, and unaudited
consolidated balance sheet of the Borrowers and the Other
Subsidiaries as of the end of such quarter to be prepared in
accordance with GAAP, (B) financial and cash flow projections for each
Borrower and the Other Subsidiaries on a consolidated basis for the
twelve month period immediately subsequent to each such quarter, and
(C) cash flow projections with respect to each Project.
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(iii) As soon as practicable, and in any event within 45 days
after the end of each quarter of each Fiscal Year of Sundance, the
Borrowers shall furnish to Agent an aging accounts payable schedule in
a form reasonably satisfactory to Agent.
(iv) At the close of business for Sundance each day on which any
Borrower is open for business, the Borrowers shall furnish or cause to
be furnished to Agent, a copy of the signed closing statements for all
closings that occurred that day and shall furnish on a weekly basis,
in scope and detail satisfactory to the Lenders, a report of closings
on Sold Units for such week, together with a report of the gross
proceeds from each such sale.
Each interim statement furnished under this Section shall include notes
setting forth material changes in accounting policies or principles and
contingencies, and, with respect to any balance sheet, be accompanied by a
schedule prepared and signed by the Chief Financial Officer of each
Borrower categorizing the assets and liabilities set forth in each such
balance sheet as either current assets or liabilities or long-term assets
or liabilities, as the case may be, and in each case as determined in
accordance with GAAP.
(c) Borrowing Certificate. By no later than the twenty-first day of
each calendar month (or on a more frequent basis as the Lenders may deem
appropriate), the Borrowers shall furnish to Agent and each Lender the
Borrowing Certificate signed by the Chairman, President, Chief Financial
Officer or Controller of Sundance, with the blanks appropriately completed,
setting forth the Maximum Aggregate Loan Amount as of the date of such
Borrowing Certificate and the other information required therein.
(d) Compliance Certificates. As soon as practicable, and in any event
within 45 days after the end of each quarter ending December 31, March 31,
and June 30, and within 90 days after the end of each quarter ending
September 30, the Borrowers shall deliver or cause to be delivered to Agent
and each Lender a Compliance Certificate dated as of the last day of such
quarter signed on behalf of each Borrower by its Chairman, President, Chief
Financial Officer or Controller.
(e) Accountants' Certificates. Each set of year-end audited
consolidated and consolidating statements and balance sheets delivered
pursuant to Section 8.1(a) hereof shall be accompanied by (i) a statement
from such accountants in reasonable detail showing the calculations used in
determining the financial covenants under Article X, (ii) a report from
such accountants to the effect that in connection with their audit
examination, nothing with respect to accounting matters, has come to their
attention to cause them to believe that an Event of Default or Default had
occurred or, if anything has come to their attention to cause them to
believe that an Event of Default or Default had occurred, a description of
such Event of Default or Default which had occurred (the
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statement and report referred to in clause (i) and (ii) above shall be in
form and substance previously acceptable to Lenders), or such other report
reasonably satisfactory to the Lenders, (iii) a statement from such
accountants addressed to the Borrowers and the Other Subsidiaries, with a
copy addressed to Agent and each Lender, acknowledging that the Lenders
intend to rely upon such financial statements.
(f) Other Reports and Information. Promptly upon their becoming
available, the Borrowers shall deliver or cause to be delivered to Agent
and each Lender a copy of (i) all regular or special reports or effective
registration statements which any Borrower or Other Subsidiary shall file
with the United States Securities and Exchange Commission (or any successor
thereto) or any securities exchange, (ii) all reports, proxy statements,
financial statements and other information distributed by any Borrower or
Other Subsidiary to all its stockholders, bondholders or the financial
community in general, and (iii) any written reports submitted to any
Borrower or Other Subsidiary by independent accountants in connection with
any annual, interim or special audit of the financial statements of any
Borrower or Other Subsidiary, and (iv) all annual attorneys' letters to
Borrower's independent certified public accountants.
(g) Further Information. Each Borrower will promptly furnish or
cause to be furnished to Agent and each Lender such other information and
in such form as any of Agent or any Lender may reasonably request.
(h) Notice of Event of Default. Promptly upon, but in any event
within five Business Days after, an executive officer of any Borrower
becoming aware of any Event of Default or Default such Borrower shall give
Agent notice thereof, together with a written statement of its Chief
Executive Officer or Chief Financial Officer setting forth the details
thereof and any action with respect thereto taken or contemplated to be
taken by such Borrower.
(i) Notice of Material Adverse Effect. Promptly upon, but in any
event within five Business Days after, an executive officer of any Borrower
becoming aware thereof, such Borrower shall give Agent notice of any
development or other information which could have a Material Adverse
Effect.
(j) Notice of Material Proceedings. Promptly upon, but in any event
within five Business Days after, an executive officer of any Borrower
becoming aware thereof, such Borrower shall give Agent notice of the
commencement, existence or threat of any proceeding by or before any
Official Body or by any other Person against or affecting such Borrower or
an Other Subsidiary which, if adversely decided, could have a Material
Adverse Effect or could reasonably be expected to result in a Borrower or
Other Subsidiary incurring expenses or other liabilities in an amount in
excess of $250,000 in any one instance.
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(k) Notice of Other Material Defaults. Promptly upon, but in any
event no later than five Business Days after, an executive officer of any
Borrower becoming aware of any material default by any Borrower or Other
Subsidiary under any agreement or instrument to which it or by which it or
any of its properties may be bound, such Borrower shall give Agent notice
thereof, together with a written statement of the Chief Executive Officer
or Chief Financial Officer of such Borrower setting forth the details
thereof, if such agreement or instrument or the consequences of such
default or claim are material to the business, operations or financial
condition of the enterprise comprised of the Borrowers taken as a whole or
any Borrower or Other Subsidiary.
(l) Pension Plans and Welfare Plans. Promptly upon, but in any event
within five Business Days after, an executive officer of any Borrower
becoming aware of any of the following, such Borrower shall give Agent
notice thereof; the occurrence of a Reportable Event with respect to any
Pension Plan; the filing of a notice of intent to terminate a Pension Plan
by any Borrower or Other Subsidiary, or any ERISA Affiliate; the
institution of proceedings to terminate a Pension Plan by the PBGC or any
other Person which, if such proceedings are instituted with respect to an
ERISA Affiliate, could have a Material Adverse Effect; the withdrawal in a
"complete withdrawal" or a "partial withdrawal" as defined in Sections 4203
and 4205, respectively, by any Borrower or Other Subsidiary or any ERISA
Affiliate (to the extent such withdrawal could have a Material Adverse
Effect) from any Multiemployer Plan; the failure of any Borrower or Other
Subsidiary or any ERISA Affiliate to make a required contribution to any
Pension Plan including, but not limited to, any failure to pay an amount
sufficient to give rise to a Lien under Section 302(f) of ERISA; the taking
of any action with respect to a Pension Plan which could result in the
requirement that any Borrower or Other Subsidiary, or any ERISA Affiliate
furnish a bond or other security to the PBGC or such Pension Plan; the
occurrence of any event with respect to any Pension Plan which could result
in the incurrence by any Borrower or Other Subsidiary or any ERISA
Affiliate of any liability, fine or penalty which is material in amount;
the establishment of a new plan subject to ERISA or an amendment to any
existing plan subject to ERISA which will result in a material increase in
contributions or benefits under such plan or the incurrence of any material
increase in the liability of a Borrower or Other Subsidiary (or any ERISA
Affiliate to the extent there is joint and several liability with a
Borrower or Other Subsidiary), including, but not limited to, plans
providing welfare benefits to retirees.
VIII.2 Preservation of Existence and Franchises. Each Borrower and Other
Subsidiary shall maintain its corporate existence, rights and franchises in full
force and effect in its jurisdiction of incorporation. Each Borrower and Other
Subsidiary shall qualify and remain qualified as a foreign corporation in each
jurisdiction where required by the nature of such entity's business.
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VIII.3 Payment and Performance of Obligations.
(a) Required Payments. Subject to Section 8.3(b) below, each Borrower
and Other Subsidiary shall (i) perform, pay and discharge or cause to be
paid and discharged all its Indebtedness as and when due and payable, and
(ii) pay and discharge or cause to be paid and discharged promptly all (A)
Charges imposed upon it, its income and profits, or any of its property
(real, personal or mixed), and (B) lawful claims for labor, materials,
supplies and services or otherwise before any thereof shall become in
default.
(b) Right to Contest. Each Borrower and Other Subsidiary may contest,
by proper legal actions or proceedings, the validity or amount of any
Indebtedness referred to in Section 8.3(a)(i) (other than the Obligations)
or any Charges, Liens or claims arising under Section 8.3(a)(ii) (other
than those relating to the Obligations), provided that such Person gives
Agent advance notice of its intention to contest the validity or amount of
any such Indebtedness, Charge, Lien or claim, and that at the time of
commencement of any such action or proceeding, and during the pendency
thereof (i) no Default or Event of Default arising from the failure to pay
a Charge, Indebtedness, Lien or claim shall have occurred and be continuing
(provided that no Default or Event of Default arising solely from any such
failure to pay or discharge shall be deemed to exist if the Borrowers
comply with the terms of clauses (ii) through (vii) in this Section); (ii)
adequate reserves with respect thereto are maintained on the books of such
Person in accordance with GAAP, (iii) such contest operates to suspend
collection of the contested Indebtedness, Charges or claims and is
maintained and prosecuted continuously with diligence; (iv) none of the
assets of such Borrower having an aggregate fair market value in excess of
$100,000 would be subject to forfeiture by reason of the institution or
prosecution of such contest; (v) no Lien shall exist for such Charges or
claims during such action or proceeding; (vi) such Person shall promptly
pay or discharge such contested Indebtedness, Charges and all additional
charges, interest, penalties and expenses, if any, and shall deliver to
Agent evidence acceptable to Agent of such compliance, payment or
discharge, if such contest is terminated or discontinued adversely to such
Person; and (vii) Agent has not advised such Person in writing that Agent
reasonably believes that nonpayment or nondischarge thereof could have a
Material Adverse Effect. Notwithstanding clause (v) above (but without
affecting the other requirements hereunder), with respect to mechanics'
liens and/or real estate taxes, a Lien may exist so long as the Borrowers
either (A) maintain with Agent (for the benefit of Lenders) a deposit of
cash or negotiable securities satisfactory to Agent in an amount
sufficient, as reasonably determined by Agent, to pay and discharge or to
assure compliance with the matter under contest in the event of a final
determination thereof adverse to the Borrowers and prior to any sale or
forfeiture, or (B) obtain title insurance coverage over such Lien on the
Title Policy with respect thereto. The Borrowers agree to prosecute and
contest such Lien diligently and by appropriate legal proceedings which
will prevent the enforcement of the matter under contest and will not
impair the Lien of the Security
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Documents or interfere with the normal conduct of business on the subject
real property. On final disposition of such contest, any cash or securities
in Agent's possession not required to pay or discharge or assure compliance
with the matter contested shall be returned to the Borrowers without
interest.
VIII.4 Visitation. Each Borrower and the Other Subsidiaries shall permit
such persons as Agent or any Lender may designate to visit and inspect at any
time any of the properties of such Borrower or Other Subsidiary to examine its
books and records and take copies and extracts therefrom and to discuss its
affairs with its officers, employees, banking and other financial institutions,
and independent accountants, as well as make available such information and
records as Agent or such Lender may request, with prior knowledge of one or more
executive officers at such times and as often as Agent or a Lender may request,
including, without limitation, field audits to be conducted at the Borrowers'
expense by accountants selected by Lenders. Without limiting the foregoing, each
Borrower and Other Subsidiary shall permit such Persons as the Lenders may
designate to visit and inspect the construction activities of each Borrower and
Other Subsidiary once per calendar quarter or more often as Lenders may
reasonably determine, each such inspection to be at the Borrowers' sole cost and
expense. Such officers, employees, banking and other financial institutions, and
independent accountants may discuss with Agent or any of the Lenders the affairs
of the Borrowers and the Other Subsidiaries, as well as make available such
information and records as Agent or any Lender may request. On or before the
Closing Date, the Borrowers and the Other Subsidiaries shall deliver a letter
addressed to such independent accountants instructing them to comply with the
provisions of this Section.
VIII.5 Financial Accounting Practices. Each Borrower and Other Subsidiary
shall make and keep books, records and accounts which, in reasonable detail,
accurately and fairly reflect its transactions and dispositions of its assets
and maintain a system of internal accounting controls sufficient to provide
reasonable assurances that (a) transactions are executed in accordance with
management's general or specific authorization, (b) transactions are recorded as
necessary (i) to permit preparation of financial statements (other than monthly
financial statements) in conformity with GAAP and (ii) to maintain
accountability for assets, (c) access to assets is permitted only in accordance
with management's general or specific authorization and (d) the recorded
accountability for assets is compared with the existing assets at reasonable
intervals and appropriate action is taken with respect to any differences.
VIII.6 Compliance with Laws. Each Borrower and Other Subsidiary shall
comply with all applicable Laws and requirements (including but not limited to
ERISA, the Code, and any applicable tax Law, product safety Law, occupational
safety or health Law, and Environmental Law) in all respects.
VIII.7 Government Authorizations. Each Borrower and Other Subsidiary shall
at all times obtain and maintain in force all authorizations, consents,
approvals, licenses, exemptions
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and other actions by, and all registrations, qualifications, designations,
declarations and other filings with, any Official Body necessary in connection
with (i) the execution and delivery of this Agreement, the Notes and/or the
other Loan Documents, consummation of the transactions herein or therein
contemplated, performance of or compliance with the terms and conditions hereof
or thereof or to ensure the legality, validity and enforceability hereof or
thereof or (ii) the ownership and operation of the properties of any Borrower or
Other Subsidiary and the conduct of their respective business.
VIII.8 Maintenance of Properties. Each Borrower and Other Subsidiary
shall at all times maintain, preserve and protect all of its patents,
trademarks, service marks, and trade names, and maintain or cause to be
maintained in good repair, working order and condition (ordinary wear and tear
alone excepted) the properties used or useful in its business and now or
hereafter owned, leased or otherwise possessed by it and shall make or cause to
be made all needful and proper repairs, renewals, replacements and improvements
thereto consistent with industry practices so that the business carried on in
connection therewith may be properly and advantageously conducted at all times.
VIII.9 Insurance. The Borrowers shall, at their sole expense, maintain
such insurance policies and certificates (with premiums prepaid) evidencing
builder's risk insurance, all-risk, fire and extended coverage, hazard and
comprehensive liability insurance, including contractual liability, and
workmen's compensation insurance for not less than one year, and such other
insurance as Agent reasonably requires covering the Projects, in such form, with
such endorsements, in such amounts, with deductibles and with such carriers as
shall be acceptable to Agent, and naming each Lender and Agent as an additional
insured party on all liability policies and as mortgagee/additional loss payee
on the builder's risk and other property damage policies and containing a
prohibition against cancellation for nonpayment of premiums or any other reason
or modification without thirty days prior written notice to Agent. Any provision
of this Section to the contrary notwithstanding, all insurance policies required
to be carried under this Agreement shall provide expressly that they shall not
be rendered invalid by a waiver of the right of subrogation by any insured and
that the insurer shall have no right to be subrogated to Agent or any Lender.
The Borrowers shall deliver (or cause to be delivered) to Agent either (i) an
original of each such insurance policy, or (ii) a copy of each such policy
certified by the issuing agent as being a true, correct and complete copy of the
original. Schedule 8.9 hereto lists all insurance currently maintained by each
Borrower and/or Other Subsidiary, together with a summary of the terms of such
insurance.
VIII.10 Agreements. Each Borrower and Other Subsidiary shall perform,
within any required time period (after giving effect to any applicable grace
periods), all of its obligations and enforce all of its rights under each
agreement to which it is a party, including, without limitation, collective
bargaining agreements and leases to which any such Borrower or Other Subsidiary
is a party. No Borrower or Other Subsidiary shall terminate or modify in any
manner
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adverse to any such Person any provision of any agreement to which it is a party
which termination or modification could have a Material Adverse Effect.
VIII.11 Banking Relationship. Each Borrower shall maintain all of its
deposit, investment and disbursement accounts with LaSalle and ANB, except as
otherwise agreed to in writing by LaSalle and ANB.
VIII.12 Date Down Endorsements. Within thirty days of the end of each
three month period ending January 31, April 30, July 31 and October 31 during
the term of this Agreement, the Borrowers shall, at their sole cost and expense,
cause the Title Insurer to issue to Agent a date down endorsement with respect
to each Title Policy previously issued to Agent by the Title Insurer with
respect to each Project that extends the effective date of the Title Policy to
the date of the endorsement, which date shall be no earlier than the last day of
such three month period, and includes no additional exceptions to title other
than the Permitted Exceptions and sets forth the aggregate amount of lien
waivers received by the Title Insurer allocated to work performed on or in
connection with such Project or materials provided thereto during such three
month period, which amount must equal the aggregate amount of lienable costs
incurred for such Project as set forth in the Borrowing Certificates applicable
to such three month period.
VIII.13 ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇. At all times until his death or permanent
disability, ▇▇▇▇▇▇▇▇▇ shall serve as the Chairman and Chief Executive Officer of
Sundance, devoting substantially all of his business time and attention to the
Borrowers; provided, however, that, in the event of ▇▇▇▇▇▇▇▇▇'▇ death or
permanent disability, Sundance shall, within sixty days from the date of such
occurrence, employ and elect another person as Chairman and Chief Executive
Officer of Sundance, which person must be approved by the Lenders in accordance
with Sections 12.11 and 12.12 below.
VIII.14 Closings through Title Insurer. Each Borrower shall close the sale
of any home, condominium, townhome or Unit owned by such Borrower only through
the Title Insurer acting as disbursing agent or escrow agent in connection with
such sale in accordance with the terms of the Disbursement Agreement.
VIII.15 Appraisals. Appraisals on each parcel of real property
constituting Collateral may be obtained by Agent at the Borrowers' sole cost and
expense at any time that Agent reasonably believes a material financial change
has occurred with respect to the Borrowers or such Collateral.
VIII.16 Condominiums. As to each condominium Project, the following
covenants shall apply:
(a) The property report, if any, required by the City Ordinance for
each such Project subject to conversion has been or will be prepared in
accordance with the requirements of the City Ordinance and all sales and
marketing activity has been and will
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be conducted in accordance with the provisions of the Condominium Act and
City Ordinance and all other applicable Laws.
(b) No Unit shall be offered for sale unless and until a property
report, if applicable, together with all exhibits thereto has been
delivered to and reviewed and approved by Agent. Agent shall have the right
to approve the form of Unit sales contract, Condominium Declaration, terms
of sale and sales prices for the Units, none of which, once approved, shall
be modified without Agent's prior written consent.
(c) All ▇▇▇▇▇▇▇ money deposits received from purchasers of Units
shall be deposited in escrow with a Lender or if not escrowed with a
Lender, shall be held in a manner that is in compliance with the
requirements of applicable Law.
(d) Upon a Conversion, the Borrowers shall cause the condominium
association created thereby to be operated in accordance with the
provisions of the Condominium Act and shall cause the board of managers to
administer such parcel in accordance with the requirements of the
Condominium Act.
(e) A Borrower shall not have the right to convert to condominium any
real property until a minimum of 25% of the Units which such Borrower
intends to construct in such Conversion property constitute Sold Units, and
the sale of 50% of such percentage of Units are closed at one time pursuant
to a mass closing procedure (which may occur over the course of thirty
consecutive days) satisfactory to Agent.
(f) The Borrowers will comply with the provisions of the Condominium
Act and the Condominium Declaration as to the payment of maintenance fees
and assessments due to any applicable condominium association.
(g) The Borrowers will not vote to withdraw all or any portion of the
Project from the provisions of the Condominium Act, without the prior
written approval of Agent.
(h) The Borrowers will not vote to distribute any insurance proceeds
subject to the administration by the association to the Unit owners
thereof, but will distribute such proceeds in the manner provided herein.
VIII.17 Supplemental Disclosure. From time to time as may be necessary
(in the event that such information is not otherwise delivered by any Borrower
or Other Subsidiary to Agent or the Lenders pursuant to this Agreement), so long
as there are Obligations outstanding, each Borrower will, as promptly as is
reasonable under the circumstances after any executive officer of a Borrower has
knowledge with respect thereto, and at least quarterly, supplement or amend and
deliver to Agent and/or the Lenders, as applicable, each Schedule or
representation herein with respect to any matter hereafter arising which, if
existing or occurring at the date of this
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Agreement, would have been required to be set forth or described in such
Schedule or representation as an exception to such representation or which is
necessary to correct any information in such Schedule or representation which
has been rendered inaccurate thereby.
VIII.18 Other Subsidiaries. Each of the Other Subsidiaries shall (i)
maintain bank accounts and books and records separate from those of the
Borrowers, (ii) be organized solely for the purpose of owning an Unapproved
Project and own no assets other than the Unapproved Project, (iii) conduct no
business other than developing and selling such Unapproved Project, and (iv)
conduct its business affairs separate and apart from those of the Borrowers.
VIII.19 ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇; Equity in Erie Tower. Concurrently with the sale
by Chicago Urban Properties, Inc., of the property commonly known as ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, not less than $4,000,000 of proceeds from such sale
shall be applied to the payment (or reimbursement) of costs incurred in
connection with construction of the property commonly known as Erie Tower at ▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ in Chicago, Illinois, as an equity investment (unless such
amount has previously been invested by the Borrowers in such property).
Article IX. Negative Covenants. Each Borrower covenants to Agent as
follows, unless Agent shall otherwise consent in writing:
IX.1 Mergers and Consolidations. No Borrower shall directly or indirectly,
by operation of law or otherwise, merge with, consolidate with, acquire all or
substantially all of the assets or Capital Stock of, or otherwise combine with,
any Person nor create or acquire any new Subsidiary (except as expressly
required by this Agreement).
IX.2 Investments; Loans and Advances. No Borrower shall make, retain or
have any investment in (through the direct or indirect holding of securities,
partnership interests or otherwise), or make or accrue loans or advances to any
Person, including an Other Subsidiary; provided, however, that Sundance shall be
permitted hereunder to make one or more investments in any of the Borrowing
Subsidiaries in the form of a cash contribution to the capital of such Borrowing
Subsidiary.
IX.3 Capital Structure. No Borrowing Subsidiary shall issue or agree to
issue any of its respective authorized but not outstanding shares of Capital
Stock (including treasury shares). Sundance shall not issue or have outstanding
(i) any class or series of Capital Stock that, by its terms or by the terms of
any security into which it is convertible or exchangeable, is, or upon the
happening of an event or passage of time could be, required to be redeemed or
repurchased, in whole or in part, or has, or upon the happening of an event or
passage of time would have, a redemption or similar payment due, in either case,
on or prior to the Maturity Date, or (ii) any Preferred Stock.
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IX.4 Transactions with Affiliates . No Borrower shall enter into or be a
party to any transaction with any Affiliate of a Borrower, except (i) as
expressly permitted by this Agreement, and (ii) in the ordinary course of and
pursuant to the reasonable requirements of such Borrower's or business, provided
such transaction is upon fair and reasonable terms that are fully disclosed to
Agent and are no less favorable to such Borrower than would be obtained in a
comparable arm's length transaction with a Person not an Affiliate of such
Borrower, provided further that neither Agent nor a Lender shall be deemed an
Affiliate of any Borrower for any purpose.
IX.5 Guaranteed Indebtedness. No Borrower shall incur or permit to exist
any Guaranteed Indebtedness, except as disclosed in Schedule 6.25.
IX.6 Liens. No Borrower shall create, permit or suffer to exist, and each
Borrower will defend its properties and assets against and take such other
action as is necessary to remove, any Lien on any of its properties or assets,
except Permitted Encumbrances.
IX.7 Cancellation of Indebtedness. No Borrower shall cancel or release,
wholly or partly, any claim or debt owing to it, except for reasonable
consideration or in the ordinary course of business, and except that Sundance
may cancel or release any claim or debt owing to it from a Borrowing Subsidiary,
provided that no adverse effect on such Borrowing Subsidiary results therefrom.
IX.8 Events of Default. No Borrower shall take or fail to take any action,
which act or failure would constitute a material breach under any other
contract, lease, mortgage, deed of trust or instrument to which it is a party or
by which it or any of its property, is bound, or any document creating a Lien.
IX.9 ERISA. No Borrower or Other Subsidiary shall directly or indirectly,
permit, any condition to exist in connection with any Pension Plan which
constitutes grounds for the PBGC to institute proceedings to have such Pension
Plan terminated or a trustee appointed to administer such Pension Plan. No
Borrower or Other Subsidiary shall, or allow any ERISA Affiliate to, fail to
make a required contribution if such failure is sufficient to give rise to a
Lien under Section 302(f) of ERISA, or engage in, or permit to exist or occur,
or permit any of its ERISA Affiliates to permit to exist or occur, any other
condition, event or transaction with respect to any Pension Plan which would
result in the incurrence by such Person of any liability, fine or penalty which
is material in amount.
IX.10 Dispositions of Assets. Other than in the ordinary course of its
business of selling Units or bulk sales of lots or with respect to the public
dedication or donation of real property required by Law in connection with the
zoning, annexation or development of any Project of such Borrower or Subsidiary
of such Borrower, no Borrower nor any of its Subsidiaries shall sell, convey,
assign, lease, abandon or otherwise transfer or dispose of, voluntarily or
involuntarily any of its assets (other than obsolete equipment no longer used or
useful in the
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conduct of such Borrower's or Subsidiary's business) which individually or in
the aggregate had an original cost of $100,000 or more.
IX.11 Continuation of or Change in Business. Except as expressly permitted
under the provisions of this Agreement, no Borrower or Other Subsidiary shall
engage in any business except the business of developing, constructing and
selling residential, for-sale housing (whether attached or detached) as
conducted as of the date hereof and shall not conduct its business except in the
jurisdictions of Illinois set forth in Schedule 9.11 hereto and shall not
directly or indirectly engage in any other business which would substantially
alter the nature of its business or its assets as conducted on the date hereof
or would involve the acquisition, construction, development or sale of projects
other than Approved Projects or other projects permitted under the express
provisions of this Agreement.
IX.12 Location of Principal Place of Business and Certain Records. No
Borrower or Other Subsidiary shall change the location of its principle place of
business or remove its books and records from the locations set forth in
Schedule 6.2, or keep any of such books and records at any other office(s) or
location(s) unless (i) such Person gives Agent written notice thereof and of the
new location of said books and records at least thirty days prior thereto, and
(ii) the other office or location is within the continental United States of
America.
IX.13 Name Change. No Borrower or Other Subsidiary will change its name,
identity or corporate structure in any manner unless such Person has given Agent
at least thirty days' prior written notice thereof and has taken all action (or
made arrangements to take such action substantially simultaneously with such
change if it is impossible to take such action in advance) necessary or
reasonably requested by Agent.
IX.14 Restrictions on Future Agreement. Each Borrower agrees that until
the Obligations have been fully satisfied, no Borrower shall, without Agent's
prior written consent, enter into any agreement which is inconsistent with the
Obligations, and each Borrower further agrees that it will not take any action,
or permit any action to be taken by others subject to its control, including
licensees, or fail to take any action, which would affect the validity or
enforcement of the rights transferred to a Lender or Agent under this Agreement.
IX.15 Dividends and Related Distributions. No Distributions shall be made
by Sundance to either the record or beneficial owners of the Capital Stock of
Sundance; provided, however, that, if no Default or Event of Default shall then
exist or be created thereby, Sundance may make Distributions to the record
owners of its Capital Stock in any Fiscal Year, provided that (i) Consolidated
Net Worth of the Borrowers (excluding the net worth of the Other Subsidiaries)
is, and following such Distribution shall remain, in excess of $31,000,000, and
(ii) the aggregate amount of such Distributions, together with principal
payments made on Shareholder Notes, in any Fiscal Year shall not exceed fifty
percent of Consolidated Net Income of the Borrowers (excluding the net worth of
the Other Subsidiaries) for the immediately
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preceding Fiscal Year minus the amount of any Distributions, together with
principal payments made on Shareholder Notes, in such Fiscal Year.
IX.16 Fiscal Year. No Borrower shall change its Fiscal Year.
IX.17 Models and Spec Homes. No Borrower shall construct more than five
Models in any Approved Suburban Project (or eight, if such Project has more than
one product type). No Borrower shall construct more than ten Spec Homes (not
including Spec Homes that are townhomes) in any Approved Suburban Project, nor
shall the Borrowers construct more than 100 Spec Homes (not including Spec Homes
that are townhomes) in the aggregate in all Approved Projects. The Borrowers
shall not construct more than fifteen townhome (i.e., attached) Spec Homes in
the aggregate in all Approved Projects. No other Models or Spec Homes shall be
constructed in any Approved Project without the prior written consent of Agent.
Schedule 9.17 sets forth all Models and Spec Homes of the Borrowers existing as
of the date hereof.
IX.18 Bonds. No Bond shall be issued by any insurer having a Best's rating
of less than A. All Bonds remain unsecured (except that a Bond may be secured by
a Letter of Credit) and the aggregate amount of the face value of all Bonds
outstanding at any one time shall not exceed $15,000,000 without the written
consent of the Lenders.
IX.19 Restrictions on Costs for Projects other than Approved Projects. No
Borrower may incur any hard costs of construction (including costs associated
with the demolition or grading of a site) in connection with any Proposed
Project or a project that has not been submitted to the Lenders for approval as
an Approved Project pursuant to the terms of Article V above.
Article X. Financial Covenants.
X.1 Consolidated Net Worth. On June 30, 1998, and on each September 30,
December 31, March 31 and June 30 thereafter during the term of this Agreement,
Consolidated Net Worth of the Borrowers (excluding the net worth of the Other
Subsidiaries) shall not be less than (i) $27,752,000 plus (ii) 50% of
Consolidated Net Income of the Borrowers (excluding that of the Other
Subsidiaries) during the period commencing on January 1, 1998, and ending on
such date (provided that the amount added pursuant to this clause (ii) may not
be less than zero).
X.2 Liabilities to Consolidated Net Worth. The ratio of (a) the
consolidated Liabilities of the Borrowers (excluding the Liabilities of the
Other Subsidiaries) minus the amount of Subordinated Debt included in such
Liabilities, to (b) Consolidated Net Worth of the Borrowers (excluding the net
worth of the Other Subsidiaries) plus the amount of Subordinated Debt deducted
under clause (a) shall not be:
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(i) in excess of 2.0 to 1.0, as of the last day of each quarter
through and including the quarter ending June 30, 1998,
(ii) in excess of 2.25 to 1.0, as of the last day of each quarter
from and after the quarter ending September 30, 1998, through and including
the quarter ending September 30, 1999, and
(iii) in excess of 1.75 to 1.0, as of the last day of each quarter
from and after the quarter ending December 31, 1999.
X.3 Liabilities and Letters of Credit to Consolidated Net Worth. At all
times, the Leverage Ratio shall not be:
(i) in excess of 2.5 to 1.0, as of the last day of each quarter
through and including the quarter ending June 30, 1998,
(ii) in excess of 2.75 to 1.0, as of the last day of each quarter
from and after the quarter ending September 30, 1998, through and including
the quarter ending September 30, 1999, and
(iii) in excess of 2.25 to 1.0, as of the last day of each quarter
from and after the quarter ending December 31, 1999.
X.4 Consolidated Net Income. For each Fiscal Year, the Consolidated Net
Income of the Borrowers (excluding that of the Other Subsidiaries) and the
Consolidated Net Income of the Borrowers (including the Other Subsidiaries)
shall not be less than $1.00.
X.5 EBITDA. During each four quarter period, the ratio of EBITDA of the
Borrowers to the interest of the Borrowers incurred during such period shall not
be less than 1.5 to 1.0.
X.6 Ratio of Land Under Development to Net Worth. At all times, the ratio
of (i) the historical cost of any Land Under Development to (ii) Consolidated
Net Worth of the Borrowers (excluding the net worth of the Other Subsidiaries)
shall not be more than 1.5 to 1.0.
X.7 Limitation on Indebtedness and Equity Investments in Proposed Projects
and Unapproved Projects. At no time may the sum of (a) Indebtedness (excluding
Permitted Indebtedness, as defined below) of the Borrowers and Other
Subsidiaries, and (b) the Borrowers' and Other Subsidiaries' equity investments
in Proposed Projects (and projects not yet submitted to Agent and the Lenders
for approval) and Unapproved Projects, exceed, in the aggregate, 10% of
Consolidated Net Worth of the Borrowers and Other Subsidiaries. At no time may
the sum of (a) Indebtedness (excluding Permitted Indebtedness, as defined below)
of the Borrowers, and (b) the Borrowers' equity investments in Proposed Projects
(and projects not yet submitted to Agent
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and the Lenders for approval) and Unapproved Projects, exceed, in the aggregate,
10% of Consolidated Net Worth of the Borrowers (excluding the net worth of the
Other Subsidiaries). As used herein, "Permitted Indebtedness" shall mean (i) the
Loans, Letters of Credit and other Obligations, (ii) trade credit incurred to
acquire goods, supplies, services, including without limitation, obligations
incurred to employees for compensation for services rendered in the ordinary
course of business, or merchandise on terms similar to those granted to
purchasers in similar lines of business as such Person and incurred in the
ordinary and normal course of business, (iii) lease payment obligations under
leases which such Person is not prohibited from entering into pursuant to the
terms hereof, (iv) all deferred taxes, (v) all unfunded pension and other
employee benefit plan obligations and liabilities, but only to the extent they
are permitted to remain unfunded under applicable law and only to the extent, in
the case of the "amount of unfunded benefit liabilities" (within the meaning of
Section 4001(a)(18) of ERISA) under any ERISA Plan (other than any Multiemployer
Plan), such amount of unfunded benefit liabilities does not exceed $100,000 as
of any date, (vi) the Bonds; (vii) the Non-Recourse Indebtedness listed on
Schedule 6.6 attached hereto or otherwise consented to in writing by the
Lenders; and (viii) Subordinated Debt listed on Schedule 6.6 attached hereto or
otherwise consented to in writing by the Lenders.
Article XI. Defaults and Remedies.
XI.1 Events of Default. An Event of Default shall mean the occurrence or
existence of one or more of the following events or conditions (whatever the
reason for such Event of Default and whether voluntary, involuntary or effected
by operation of Law):
(a) Payment. The Borrowers shall fail to pay (i) any interest on the
Loan or principal when due (whether resulting from maturity, declaration or
otherwise), (ii) any Obligation payable on demand within five days after
such demand, and/or (iii) any other Obligation within ten days after
written receipt of notice thereof; or
(b) Misrepresentation. Any representation or warranty made by a
Borrower under this Agreement or any Loan Document or any statement made by
a Borrower or Other Subsidiary in any financial statement, certificate,
report, exhibit or document furnished to Agent or a Lender pursuant to this
Agreement or any other Loan Document shall prove to be false or misleading
in any material respect; or
(c) Specific Covenant Default. Any Borrower shall breach any covenant
contained in Sections 2.10 (Mandatory Prepayments; Release of Liens), 8.9
(Insurance), 8.11 (Banking Relationship), 8.14 (Closings through Title
Insurer), or 8.19 (201 North ▇▇▇▇▇) or Article IX (Negative Covenants) or
Article X (Financial Covenants) hereof; or
(d) General Covenant Default. Any Borrower shall breach any other
covenant, condition or provision hereof or of any other Loan Document and
such breach shall not have been remedied for a period of thirty days after
the earlier of a Borrower's
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knowledge or notice thereof to such Borrower from Agent; provided, however,
that if such breach by its nature cannot reasonably be cured within such
thirty days, then no Event of Default shall exist hereunder if such
Borrower diligently commences and continues to pursue such remedy, provided
that (i) such breach is capable of being cured, (ii) such breach does not
cause any Material Adverse Effect, and (iii) in no event shall the period
within which such Borrower may attempt to remedy such breach extend beyond
ninety days from the date of the notice relating thereto, or such
Borrower's knowledge thereof. The foregoing cure period is intended only to
apply in circumstances not referred to in any of the other paragraphs of
this Section, and a Borrower's right to a grace or cure period, if any,
with respect to such other circumstances are to be governed by the
provisions of such other paragraphs; or
(e) Judgments. One or more final judgments for the payment of money
shall have been entered against any Borrower or the Borrowers, which
judgment or judgments exceed $250,000 in the aggregate (exclusive of those
judgments for which the Borrowers' insurer has acknowledged coverage), and
such judgment or judgments shall have remained undischarged and unstayed
for a period of sixty consecutive days; or
(f) Garnishment or Attachment against Assets. A writ or warrant of
attachment, garnishment, execution, distraint or similar process shall have
been issued against any of the assets of any Borrower which shall have
remained undischarged and unstayed for a period of sixty consecutive days;
or
(g) Failure to Obtain Consents or Approvals. Any authorization,
consent, approval, license, exemption, registration, qualification,
designation, declaration, filing or other action or undertaking now or
hereafter made by or with any Official Body in connection with this
Agreement, a Note or any other Loan Document or any such action or
undertaking now or hereafter necessary to make this Agreement, a Note or
any other Loan Document legal, valid, enforceable and admissible in
evidence is not obtained or shall have ceased to be in full force and
effect or shall have been modified or amended or shall have been held to be
illegal or invalid; or
(h) Involuntary Bankruptcy. A proceeding shall have been instituted in
respect of a Borrower:
(i) seeking to have an order for relief entered in respect of
such Person, or seeking a declaration or entailing a finding that such
Person is insolvent or a similar declaration or finding, or seeking
dissolution, winding-up, charter revocation or forfeiture,
liquidation, reorganization, arrangement, adjustment, composition or
other similar relief with respect to such Person, its assets or its
debts under any law relating to bankruptcy, insolvency, relief of
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debtors or protection of creditors, termination of legal entities or
any other similar law now or hereafter in effect, or
(ii) seeking appointment of a receiver, trustee, custodian,
liquidator, assignee, sequestrator or other similar official for such
Person or for all or any substantial part of its property,
and such proceeding shall result in the entry, making or grant of any such
order for relief, declaration, finding, relief or appointment, or such
proceeding shall remain undismissed and unstayed for a period of sixty
consecutive days; or
(i) Insolvency; Voluntary Bankruptcy. Any Borrower or Other Subsidiary
shall become insolvent or admit in writing its inability to pay its debts
as they mature, or otherwise become generally unable to pay its debts as
they become due, or voluntarily suspend transaction of business or cease to
conduct its business as now conducted (whether voluntarily or
involuntarily), or make a general assignment for the benefit of creditors,
or institute a proceeding described in Section 11.1(h)(i) hereof or consent
to any such order for relief, declaration, finding or relief described
therein, or institute a proceeding described in Section 11.1(h)(ii) hereof
or consent to any such appointment or to the taking of possession by any
such official of all or any substantial part of its property whether or not
any such proceeding is instituted, or dissolve, windup or liquidate itself
or any substantial part of its property, or take any action in furtherance
of any of the foregoing; or
(j) Loss of Permit. Any Permit material to the business, operations or
financial condition of any Borrower shall be terminated, suspended or
revoked; or
(k) Uninsured Loss. There shall occur any uninsured damage to, or
loss, theft, or destruction of, any of the properties or assets of any
Borrower or Trust in excess of $250,000; or
(l) Government Liens. A notice of lien or assessment is filed or
recorded with respect to all or any of any Borrower's assets by the United
States, or any department, agency or instrumentality thereof, or by any
state, county, municipal or other governmental agency, including, without
limitation, the PBGC, or if any taxes or debts owing at any times hereafter
to any one of these becomes a lien or encumbrance upon any such Person's
assets and the same is not released within thirty days after the same
becomes a lien or encumbrance; provided that such Person shall have the
right to contest by appropriate proceedings any such lien, levy or
assessment if such Person provides Agent with a bond or indemnity
satisfactory to Agent assuring the payment of such lien, levy or
assessment; or
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(m) ERISA Events. Any of the following events if such event could have
a Material Adverse Effect: (i) the existence of a Reportable Event, (ii)
the withdrawal of a Borrower or any ERISA Affiliate from a Pension Plan
during a plan year in which it was a "substantial employer" as defined in
Section 4001(a)(2) of ERISA, (iii) the occurrence of an obligation to
provide affected parties with a written notice of intent to terminate a
Pension Plan in a distress termination under Section 4041 of ERISA, (iv)
the institution by PBGC of proceedings to terminate any Pension Plan, (v)
any event or condition which would require the appointment of a trustee to
administer a Pension Plan, (vi) the withdrawal of a Borrower or any ERISA
Affiliate from a Multi-employer Plan, and (vii) any event that would give
rise to a Lien under Section 302(f) of ERISA; or
(n) ▇▇▇▇▇▇▇▇▇. ▇▇▇▇▇▇▇▇▇ and the ▇▇▇▇▇▇▇▇▇ Descendants Trust U/A/D
December 29, 1992, together shall cease to maintain on an aggregate basis
beneficial ownership of Capital Stock (or other equity) having in the
aggregate the ordinary voting power needed to elect the board of directors
of Sundance; or
(o) Unreimbursed Letter of Credit Draw. Agent is not reimbursed by the
Borrowers for a draft drawn under a Letter of Credit issued hereunder on
the date demand is made for such reimbursement by Agent; or
(p) Other Indebtedness. Any Borrower (i) shall default in any payment
of principal of or interest on any one or more obligations for Indebtedness
of $100,000 or more beyond any period of grace with respect thereto or, if
such obligation or obligations is or are payable or repayable on demand,
shall fail to pay or repay such obligation or obligations when demanded or
(ii) shall breach or default in the performance or observance of any
covenant, term or condition in any agreement or instrument (other than the
Loan Documents) by which such obligation or obligations for Indebtedness of
$100,000 or more is or are created, secured or evidenced if the effect of
such default or breach (x) is to cause, or to permit the holder or holders
of such obligation or obligations (or a trustee or agent on behalf of such
holder or holders) to cause, all or part of such obligation or obligations
to become due before its or their otherwise stated maturity or (y) could
have a Material Adverse Effect on such Borrower; or
(q) Loss of Priority. The Loan Documents after delivery thereof shall
for any reason (other than pursuant to the terms thereof) cease to create a
valid and perfected first priority lien on the Collateral (subject to
Permitted Encumbrances) purported to be covered hereby or thereby.
(r) ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇; Equity in Erie Tower. The sale by Chicago Urban
Properties, Inc. of the property commonly known as 201 North ▇▇▇▇▇ in
Chicago, Illinois, fails to close on or before July 31, 1998 (or such later
date as agreed upon in writing by the Lenders), and the Borrowers have
failed to make not less than a $4,000,000 equity
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investment in the property commonly known as Erie Tower at ▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ in Chicago, Illinois.
(s) Kaco. The occurrence of a default under the Kaco Loan Documents,
which default is not cured or waived within any applicable cure periods.
XI.2 Consequences of a Default.
(a) Automatic Acceleration. Upon the occurrence and continuation of an
Event of Default specified in subsection (h) or (i) of Section 11.1 above, all
of the Obligations shall, without demand, notice, or legal process of any kind,
be declared, and immediately shall become, due and payable, and the Aggregate
Revolving Commitment shall terminate immediately.
(b) Acceleration by Agent. If any Event of Default specified in any of
subsections (a) through (g) and (j) through (q) of Section 11.1 above shall
occur and be continuing, the Agent shall (i) by notice to the Borrowers, declare
the Revolving Credit Commitment of each Lender terminated, and any Obligations
payable hereunder or under any other Loan Document shall become due and payable
without presentment, demand, protest or further notice of any kind, all of which
are hereby expressly waived, and an action therefor shall immediately accrue;
and/or (ii) by notice to the Borrowers, declare the unpaid principal amount of
any Note, interest accrued thereon and all other Obligations owing by any of the
Borrowers hereunder or under any other Loan Document to be immediately due and
payable without presentment, demand, protest or further notice of any kind, all
of which are hereby expressly waived, and an action therefor shall immediately
accrue, whereupon the Lenders may avail themselves of any other remedies
conferred upon them at law or in equity and by the terms of the other Loan
Documents.
XI.3 Letters of Credit. The Borrowers shall, without notice or demand from
Agent, immediately pay to Agent an amount equal to the full undrawn stated
amount of each Letter of Credit if any Event of Default described in subsections
(h) or (i) of Section 11.1 above has occurred. If any Event of Default other
than an Event of Default described in subsections (h) and (i) of Section 11.1
above has occurred and is continuing, the Borrowers shall, upon demand of Agent,
also make the aforementioned payment to Agent. The Borrowers hereby acknowledge
and agree that Agent and the Lenders would not have an adequate remedy at law
for failure of the Borrowers to make any such payment when due and that Agent
and/or any Lender shall have the right to require the Borrowers to specifically
perform such undertaking whether or not any draws have been made under the
Letters of Credit. If (x) any such Letter of Credit terminates without any draws
having been made thereunder, and (y) there are no other outstanding Letters of
Credit (which are not fully cash collateralized) or outstanding and unpaid
Reimbursement Obligations, and (z) there are no outstanding Loans or other
amounts payable hereunder or under any of the other Loan Documents then, in such
event, Agent agrees to return any sums paid by the Borrowers under this Section
in respect of such expired or terminated Letter of Credit.
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XI.4 Payments Set Aside. To the extent that the Borrowers make a payment
or payments to Agent or a Lender or Agent or a Lender exercises its rights of
set-off, and such payment or payments or the proceeds of such enforcement or
set-off or any part thereof are subsequently invalidated, declared to be
fraudulent or preferential, set-aside and/or required to be repaid to a trustee,
receiver or any other party under any bankruptcy law, state or federal law,
common law or equitable cause, then to the extent of such recovery, the
obligation or part thereof originally intended to be satisfied shall be revived
and continued in full force and effect as if such payment had not been made or
such enforcement or set-off had not occurred.
XI.5 Waivers by the Borrowers. Except as otherwise provided for in this
Agreement and applicable law, each Borrower waives (i) presentment, demand and
protest and notice of presentment, dishonor, notice of intent to accelerate,
notice of acceleration, protest, default, nonpayment, maturity, release,
compromise, settlement, extension or renewal of any or all commercial paper,
accounts, contract rights, documents, instruments, chattel paper and guaranties
at any time held by Agent on which any Borrower may in any way be liable and
hereby ratifies and confirms whatever Agent may do in this regard. Each Borrower
acknowledges that it has been advised by counsel of its choice with respect to
this Agreement, the other Loan Documents and the transactions evidenced by this
Agreement and the other Loan Documents.
XI.6 Set-Off. If the unpaid principal amount of any Note, interest accrued
thereon or any other amount owing by a Borrower hereunder or under any Loan
Document or under any Note or otherwise shall have become due and payable (by
acceleration or otherwise), each Lender shall have the right, in addition to all
other rights and remedies available to it, without notice to such Borrower, to
set-off against and to appropriate and apply to such due and payable amounts any
debt owing to, and any other funds held in any manner for the account of, any
Borrower by such Lender including, without limitation, all funds in all deposit
accounts (whether time or demand, general or special, provisionally credited or
finally credited, or otherwise) now or hereafter maintained by any Borrower with
a Lender. Such right shall exist whether or not such Lender shall have given
notice or made any demand hereunder or under any Note or under any other Loan
Document, whether or not such debt owing to or funds held for the account of
such Borrower is or are matured or unmatured, and regardless of any right or
remedy available to such Lender. The Borrowers hereby consent to and confirm the
foregoing arrangements and confirm the Lenders' rights of banker's lien and set-
off. Nothing in this Agreement shall be deemed a waiver or prohibition of or
restriction on each Lender's rights of banker's lien or set-off.
XI.7 Sharing of Set-Offs. Each Lender agrees that if it shall, by
exercising any right of set-off or counterclaim or otherwise, receive payment of
a proportion of the aggregate amount of principal and interest due with respect
to a Note or any other Loan Document which is greater than the amount to which
it is entitled based upon its Pro Rata Share, the Lender receiving such
proportionately greater payment shall pay to such other Lenders their applicable
Pro Rata Share of the amount recovered by exercising such right, and such other
adjustments shall be made, as
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may be required so that all such payments of principal and interest with respect
to a Note or any other Loan Document shall be shared by the Lenders based upon
their respective Pro Rata Shares; provided, however, that nothing in this
Section shall impair the right of any Lender to exercise any right or set-off or
counterclaim it may have and to apply the amount subject to such exercise to the
payment of indebtedness of the Borrowers other than their indebtedness under a
Note or any other Loan Document. The Borrowers agree, to the fullest extent they
may effectively do so under applicable Law, that any holder of a participation
in a Note, whether or not required pursuant to the foregoing arrangements, may
exercise rights of set-off or counterclaim and other rights with respect to such
participation as fully as if such holder of a participation were a direct
creditor of any of such the Borrowers in the amount of such participation.
XI.8 Cumulative Relief. The rights and remedies provided under this
Agreement are cumulative and may be exercised singly or concurrently, and are
not exclusive of any rights and remedies provided by law or equity.
XI.9 No First Resort Obligation. In order to realize hereon and to
exercise the rights granted Agent and each Lender hereunder and under applicable
law, there shall be no obligation on the part of Agent and/or a Lender at any
time to first resort for payment to any security property, liens or any other
rights or remedies whatsoever, and Agent and each Lender shall have the right to
enforce this Agreement irrespective of whether other proceedings or steps are
pending seeking resort to or realization upon or from any of the foregoing.
Article XII. The Administrative Agent.
XII.1 Appointment. For the convenience of the parties hereto, LaSalle
National Bank is appointed Agent hereunder and under each of the other Loan
Documents for the Lenders with such powers as are specifically delegated to
Agent by the terms of this Agreement and the other Loan Documents (including the
power to act as collateral agent and hold the Collateral for the Lenders),
together with such other powers as are reasonably incidental thereto, and by its
execution hereof LaSalle accepts such agency, solely for the purposes herein set
forth. Agent shall have no authority to enforce, nor any duty or responsibility
for the enforcement of, any of the terms hereof or of the other Loan Documents,
except as expressly permitted hereunder or as otherwise requested by the Lenders
in accordance with the terms hereof or the Intercreditor Agreement. Agent is
authorized and empowered to amend, modify, or waive any provisions of this
Agreement or the other Loan Documents on behalf of the Lenders subject to the
requirement that consent of certain of the Lenders be obtained in certain
instances as provided in Sections 12.11 and 12.12 below. Agent and the Lenders
may at any time discuss or otherwise share information relating to the credit
facility created hereby or otherwise relating to the Borrowers or Other
Subsidiaries.
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XII.2 Delegation of Duties. Agent may perform any of its duties hereunder
by or through agents or employees and shall be entitled to rely on advice of
counsel concerning all matters pertaining to its duties hereunder and
thereunder.
XII.3 Nature of Duties; Independent Credit Investigation. Agent shall have
no duties or responsibilities except those expressly set forth in this Agreement
and any other Loan Documents. The duties of Agent shall be mechanical and
administrative in nature; Agent shall not have by reason of this Agreement or
any other Loan Document a fiduciary relationship in respect of any Lender; and
nothing in this Agreement or any other Loan Document, expressed or implied, is
intended to or shall be so construed as to impose upon Agent any obligations in
respect of this Agreement or any other Loan Document except as expressly set
forth herein or therein. Each Lender expressly acknowledges (i) that Agent has
not made any representations or warranties to it and that no act by Agent
hereafter taken, including any review of the affairs of the Borrowers, shall be
deemed to constitute any representation or warranty by Agent to any Lender; (ii)
that it has made and will make its own independent investigation of the
financial condition and affairs, and its own appraisal of the creditworthiness,
of the Borrowers in connection with this Agreement; (iii) that it has made its
own independent investigation of the legal matters relating to this Agreement,
the Notes and the other Loan Documents to be issued to it hereunder; and (iv)
that Agent shall have no duty or responsibility, either initially or on a
continuing basis, to provide any Lender with any credit or other information,
whether coming into its possession before the making of any Loans or the
issuance of any Letters of Credit hereunder or at any time or times thereafter,
except for notices, reports or other information, if any, expressly required to
be furnished to the Lenders by Agent hereunder.
XII.4 Exculpatory Provisions. Neither Agent nor any of its directors,
officers, employees or agents shall be liable to any Lender for any action taken
or omitted to be taken by it hereunder or under a Note or other Loan Documents,
or in connection herewith or therewith, unless caused by its own gross
negligence or willful misconduct. Subject to the immediately preceding sentence,
in performing its functions and duties hereunder on behalf of the Lenders, Agent
shall exercise the same care which it would exercise in dealing with loans for
its own account, but Agent (i) may consult with legal counsel, independent
public accountants and other experts selected by it and shall not be liable for
any action taken or omitted to be taken by it in accordance with the advice of
such counsel, accountants or experts; (ii) makes no warranty or representations
to any Lender for any statements, warranties or representatives made in or in
connection with this Agreement or the other Loan Documents; (iii) shall not be
responsible in any manner to any of the Lenders for the effectiveness,
enforceability, genuineness, validity or the due execution of this Agreement,
the Notes or any of the other Loan Documents, or for any recital,
representation, warranty, document, certificate, report or statement herein or
therein made or furnished under or in connection with this Agreement, and (iv)
shall not be under any obligation to any of the Lenders to ascertain or to
inquire as to the performance or observance of any of the terms, covenants or
conditions hereof or thereof on the part of the Borrowers or any other Person,
or the financial condition of the Borrowers or Other Subsidiaries or the
existence or
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possible existence of any Event or Default and/or Default or to inspect the
property (including the books and records) of the Borrowers and the Other
Subsidiaries.
XII.5 Reimbursement and Indemnification. Each Lender agrees to reimburse
and indemnify Agent (as agent and not as a Lender, and to the extent not
reimbursed by the Borrowers) based upon its Pro Rata Share for and against any
and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind or nature
whatsoever which may be imposed on, incurred by or asserted against Agent, in
its capacity as such, in any way relating to or arising out of this Agreement,
the Notes, or the other Loan Documents or any action taken or omitted by Agent
hereunder or thereunder, provided that no Lender shall be liable for any portion
of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements to the extent that the same
result from Agent's gross negligence or willful misconduct. Without limitation
of the foregoing, each Lender agrees to reimburse Agent promptly upon demand for
such Lender's Pro Rata Share of any out-of-pocket expenses (including counsel
fees) incurred by Agent in connection with the preparation, execution, delivery,
administration, modification, amendment or enforcement (whether through
negotiations, legal proceedings or otherwise) of, or legal advice in respect of
rights or responsibilities under, this Agreement and each other Loan Document,
to the extent that Agent is not reimbursed for such expenses by the Borrowers.
XII.6 Withholding Taxes.
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(a) Generally. Each Lender represents and warrants to the Borrowers
and Agent that under any applicable Law (as in effect on the date hereof
or, if later, on the date such Lender became a party to this Agreement) no
taxes will be required to be withheld by Agent or a Borrower with respect
to any payments to be made to such Lender in respect of any of the Loans.
Prior to the date that any interest payment is due on any Loan, each Lender
that is organized under the Laws of any jurisdiction other than the United
States or any state thereof hereby agrees to (i) furnish to Agent and the
Borrowers either U.S. Internal Revenue Service Form 4224 or U.S. IRS Form
1001 (wherein such Lender claims entitlement to complete exemption from
U.S. federal withholding tax on all interest payments hereunder); (ii)
furnish to Agent and the Borrowers an IRS Form W-8 or W-9 or successor
applicable form, as the case may be (wherein such Lender claims exemption
from U.S. federal backup withholding tax on all interest payments
hereunder); (iii) provide to Agent and the Borrowers a new Form 4224, Form
1001, Form W-8 or Form W-9 upon the obsolescence of any previously
delivered form and comparable statements in accordance with applicable U.S.
Laws and regulations together with any and all amendments thereto, duly
executed and completed by such Lender (stating in each case that such
Lender remains exempt from U.S. federal withholding and backup withholding
tax unless there has been a change in law prior to the date that the
applicable form must be delivered that renders any such form inapplicable,
in which case such Lender must deliver the relevant form reflecting such
changes in law); and (iv) comply from time to time with all applicable U.S.
Laws and regulations with regard to such withholding and backup withholding
tax exemptions.
(b) Payments. Any and all payments by a Borrower for the account of
Agent or any Lender (each a "Payee") under any Loan Document shall be made
free and clear of, and without deduction for, any and all present or future
taxes, levies, imposts, deductions, charges or withholdings, and all
liabilities with respect thereto, other than deductions or withholdings, in
the case of any Payee, for (i) taxes to the extent that such taxes would
not have been imposed if the only connection between such Payee and the
jurisdiction imposing such tax were the activities of such Payee pursuant
to or in respect of the Loan Documents, including, without limitation,
entering into, lending money or extending credit pursuant to, receiving
payments under, or enforcing, any Loan Documents, and the activities of
such Payee pursuant to or in respect of similar agreements or loan
documents, and (ii) United States withholding tax payable with respect to
payments under the Loan Documents under laws (including, without
limitation, any statute, treaty, ruling, determination or regulation) in
effect on the date hereof or, if later, on the date such Payee became a
party to this Agreement, but without deduction for any United States
withholding tax payable as a result of any change in such laws occurring
after such date and (iii) any taxes, levies, imposts, duties, charges,
fees, deductions, withholdings arising after the date hereof, solely as a
result of or attributable to such Lender (x) changing its designated office
as of the date hereof to any other office or (y) designating an additional
office located in any other jurisdiction (all taxes, levies,
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imposts, deductions, charges, withholdings and liabilities other than those
for which deductions are permitted above being hereinafter referred to as
"Taxes"). If any Taxes shall be required by law to be deducted from or in
respect of any sum payable under the Loan Documents to any Payee (i) the
sum payable by the Borrowers shall be increased as may be necessary so that
after making all required deductions (including deductions applicable to
additional sums payable under this Section) such Payee receives an amount
equal to the sum it would have received had no such deductions been made,
(ii) the Borrowers shall make such deductions and (iii) the Borrowers shall
pay the full amount deducted to the relevant taxation authority or other
authority in accordance with applicable law. The Borrowers shall not,
however, be required to pay any amounts pursuant to clause (i) of the
immediately preceding sentence for the account of any Payee organized under
the laws of a jurisdiction outside of the United States, unless such Payee
has timely provided to the Borrowers such documentation as it is required
to furnish under Section 12.6(a). If Taxes are incorrectly or illegally
paid or assessed, and if any Lender or Agent contests the assessment of
such Taxes, such Lender or Agent shall refund, to the extent of any refund
made to such Lender or Agent, any amounts paid by the Borrowers under this
Section in respect of such Taxes together with any interest received by
such Lender or Agent on such refund from the applicable taxing authority.
XII.7 Reliance by Agent. Agent shall be entitled to rely upon any
writing, telegram, telex or teletype message, resolution, notice, consent,
certificate, letter, cablegram, statement, order or other document or
conversation by telephone or otherwise believed by it to be genuine and correct
and to have been signed, sent or made by the proper party or parties, and, with
respect to all legal matters pertaining to the Loan Documents, upon opinions of
counsel and other professional advisers selected by Agent. Agent may refuse to
take any action hereunder unless it shall first be indemnified to its
satisfaction by the Lenders against any and all liability and expense which may
be incurred by it by reason of taking or continuing to take any such action.
XII.8 Individual Capacity. With respect to its Revolving Credit Commitment
and the Note held by it in its individual capacity, LaSalle shall have the same
rights, obligations and powers hereunder as any other Lender and may exercise
the same as though it were not Agent, and the terms "Lenders" or "holder of a
Note" shall, unless the context hereof otherwise indicates, include LaSalle in
its individual capacity.
XII.9 Holders of a Note. Agent may deem and treat the payee of any Note
as the owner of such Note for all purposes hereof unless and until written
notice of the assignment or transfer thereof shall have been filed with Agent.
Any request, authority or consent of any party who at the time of making such
request or giving such authority or consent is the holder of any Note shall be
conclusive and binding on any subsequent holder, transferee or assignee of such
Note or of any Note issued in exchange therefor.
XII.10 Successors.
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(a) Resignation. Agent may resign at any time by giving written notice
thereof to the Lenders and the Borrowers. Upon any such resignation, the
Lenders shall agree upon a successor Agent. If no successor Agent shall
have been agreed upon and appointed and shall have accepted such
appointment within thirty days after the retiring Agent's giving of notice
of resignation, then the retiring Agent may, on behalf of the Lenders,
appoint a successor Agent which shall be a commercial lender organized
under the Laws of the United States of America or any state thereof, or a
foreign lender with a branch or agency located in the United States of
America, and having a combined capital and surplus of at least
$100,000,000. Upon the acceptance by a successor Agent of its appointment
as Agent hereunder, such successor Agent shall thereupon succeed to and
become vested with all the rights, powers, privileges and duties of the
retiring Agent, and the retiring Agent shall be discharged from its duties
under this Agreement. After any retiring Agent's resignation hereunder as
Agent, the provisions of this Article shall inure to its benefit as to any
actions taken or omitted by it while it was Agent under this Agreement.
(b) Replacement upon Breach of Duties. The occurrence of any of the
following events shall constitute an "Agent Default" under this Agreement:
(i) the insolvency of Agent, (ii) the filing by or against Agent of a
petition under any provision of bankruptcy law, or of an assignment for the
benefit of creditors, and any involuntary petition or action has not been
dismissed or enjoined within sixty days of its filing, or (iii) a breach by
the Agent of any covenant or agreement herein, and such breach has not been
cured by Agent within sixty days after the Lenders' (other than LaSalle)
notice to Agent of the occurrence of said breach. If an Agent Default has
occurred and is continuing, the Lenders (other than LaSalle), following
written notice to Agent, may replace Agent with a successor Agent, which
successor shall be a commercial lender organized under the Laws of the
United States of America or any state thereof, or a foreign lender with a
branch or agency located in the United States of America, and having a
combined capital and surplus of at least $100,000,000. Upon the acceptance
by a successor Agent of its appointment as Agent hereunder, such successor
Agent shall thereupon succeed to and become vested with all the rights,
powers, privileges and duties of the Agent being replaced, and the Agent
being replaced shall be discharged from its duties under this Agreement.
After the replacement of an Agent hereunder, the provisions of this Article
shall inure to its benefit as to any actions taken or omitted by it while
it was Agent under this Agreement.
XII.11 Unanimous Consent. Notwithstanding anything in this Agreement to
the contrary, Agent shall not take any of the following actions without (i)
notifying each Lender in writing of Agent's desire to take such action (such
notice being referred to herein as an "Action Notice"), and (ii) receiving the
written consent of each Lender to the proposed action described in the Action
Notice within fifteen Business Days after receipt by such Lender of such Action
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Notice (provided, however, that if any such Lender neither consents nor objects
in writing to the action described in an Action Notice on or before the last day
of said fifteen day period, such Lender, for the purpose of determining whether
the condition set forth in this clause (ii) has been satisfied, shall be deemed
to have (A) objected to the proposed action if such proposed action is of the
type set forth in clauses (c), (d), (e), (h), (i) or (j) below, and (B)
consented to all other actions:
(a) Waive an Event of Default that arises from the failure of the
Borrowers to make a principal or interest payment on the Loans on the date
such payment is due and payable;
(b) Waive an Event of Default that arises from the breach of a
financial covenant set forth in Article X (Financial Covenants)
(c) Waive an Event of Default that arises from the occurrence of an
event described in Section 11.1(h) (Involuntary Bankruptcy) or Section
11.1(i) (Insolvency; Voluntary Bankruptcy);
(d) Extend the Maturity Date;
(e) Amend the Aggregate Revolving Credit Commitment or any Lender's
Pro Rata Share;
(f) Amend the terms of Section 2.14 (Fees);
(g) Amend the definition of "Requisite Lenders";
(h) Amend the definition of "Fixed Rate", "Floating Rate", "Permitted
City Project Advances", "Permitted Suburban Project Advances" or "Permitted
Unique Project Advances" as set forth in this Agreement;
(i) Amend the dates on which payments of principal or interest are due
under this Agreement or the amount of any such payment;
(j) Release a Borrower from its obligations under this Agreement or
the other Loan Documents;
(k) Amend the terms of Section 13.4 (Modifications, Amendments or
Waivers) or Section 13.14 (Successors and Assigns; Participants);
(l) Approve the incurrence of additional Subordinated Debt or
Guaranteed Indebtedness by any Borrower after the date hereof;
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(m) Amend the terms of Section 2.1(e) (Limitations on Permitted
Additional Advances);
(n) Deem a Proposed Project to be an Approved City Project or an
Approved Unique Project (provided, however, that nothing in this Section is
intended to shorten or otherwise modify the Project approval period set
forth in Article V above);
(o) Amend the terms of Article X (Financial Covenants), Article XI
(Defaults and Remedies) or Article XII (The Administrative Agent);
(p) Amend the terms of Section 8.13 (▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇) or waive an
Event of Default that arises from a breach of the covenants set forth in
such Section;
(q) Amend the terms of any provision of this Agreement or any of the
other Loan Documents that requires the consent of or action by all of the
Lenders;
(r) Consent to a request by the Borrowers regarding the modification
of any terms of any Borrower's Subordinated Debt, Non-Recourse
Indebtedness, or Guaranteed Indebtedness or any other Indebtedness
permitted under this Agreement owing by a Borrower or Other Subsidiary to a
third party; or
(s) Amend the terms of this Section or Section 12.12 below.
All references within this Agreement to matters requiring the approval or
consent of the Lenders shall mean that such matters require the unanimous
approval or consent of the Lenders, and all references within this Agreement to
matters to be determined by the Lenders shall mean such matters require the
unanimous determination by the Lenders.
XII.12 Consent of Requisite Lenders. Notwithstanding anything in this
Agreement to the contrary, Agent shall not take any of the following actions
without (i) providing each Lender with an Action Notice setting forth the
Agent's desire to take such action, and (ii) receiving the written consent of
the Requisite Lenders to the proposed action described in the Action Notice
within fifteen Business Days after receipt by the Lenders of such Action Notice
(provided, however, that if a Lender neither consents nor objects in writing to
the action described in an Action Notice on or before the last day of said
fifteen day period, such Lender shall be deemed to have consented to such action
for the purpose of determining whether the condition set forth in this clause
(ii) has been satisfied):
(a) Waive any Events of Default other than the Events of Default
described in clauses (a), (b) and (c) of Section 12.11 above;
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(b) Declare all of the Obligations to be immediately due and payable
pursuant to the terms of Section 11.2(b) (Acceleration by Agent);
(c) Pursue any other particular remedy granted to Agent and/or the
Lenders upon the occurrence of an Event of Default as set forth in this
Agreement or the other Loan Documents;
(d) Deem a Proposed Project to be an Approved Suburban Project
(provided, however, that nothing in this Section is intended to shorten or
otherwise modify the Project approval period set forth in Article V above);
or
(e) Amend the terms of any Section of this Agreement or the other Loan
Documents except those Sections that are listed in Section 12.11 above.
Notwithstanding the foregoing, the Requisite Lenders may, at any time, require
any action set forth in this Section 12.13 to be taken by written notice of such
action from the Requisite Lenders to the other Lenders, Agent and the Borrowers.
XII.13 Release and Care of Collateral. The Lenders hereby irrevocably
authorize Agent, at its option and in its discretion, to release any Lien
granted to or held by Agent upon any property covered by the Security Documents
(i) upon termination of the Revolving Credit Commitments and written
confirmation from the Lenders that all of the Obligations have been paid and
satisfied; or (ii) constituting property being sold or disposed of if the
Borrowers certify to Agent that the sale or disposition is made in compliance
with the provisions of this Agreement (and Agent may rely in good faith
conclusively on any such certificate, without further inquiry). Each Lender
agrees to confirm in writing, upon request by Agent or the Borrowers, the
authority to release any property covered by the Security Documents conferred
upon Agent under the preceding sentence. Agent shall have no obligation
whatsoever to any Lender or any other Person to assure that the property covered
by the Security Documents exists or is owned by the Borrowers or is cared for,
protected or insured or has been encumbered or that the Liens granted to Agent
have been properly or sufficiently or lawfully created, perfected, protected or
enforced or are entitled to any particular priority, or to exercise at all or in
any particular manner or under any duty of care, disclosure or fidelity, or to
continue exercising, any of the rights, authorities and powers granted or
available to Agent in this Section or in any of the Loan Documents, it being
understood and agreed that in respect of the property covered by the Security
Documents or any act, omission or event related thereto, Agent may act in any
manner it may deem appropriate, in its reasonable discretion, given Agent's
interest in property covered by the Security Documents as a Lender.
XII.14 Perfection by Possession. Agent and each Lender hereby appoint each
other as agents for the purpose of perfecting security interests in Collateral
which, in accordance with Article 9 of the Uniform Commercial Code in any
applicable jurisdiction, can be perfected only
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by possession. Should any Lender (other than Agent) obtain possession of any
such Collateral, such Lender shall notify Agent thereof, and, promptly upon
Agent's request therefor, shall deliver such Collateral to Agent or in
accordance with Agent's instructions.
XII.15 Enforcement. Each Lender agrees that it will not have any right
individually to enforce or seek to enforce any Security Document or to realize
upon any Collateral unless instructed to do so by Agent in accordance with the
terms of this Agreement, it being understood and agreed that such rights and
remedies may be exercised only by Agent on behalf of all of the Lenders.
XII.16 Dissemination of Information. Agent will use commercially
reasonable efforts to provide the Lenders with any information received by Agent
from the Borrowers or any other Person which is required to be provided by Agent
to a Lender hereunder, provided that Agent shall not be liable to any Lender for
any failure to do so, except to the extent that such failure is attributable to
Agent's gross negligence or willful misconduct.
Article XIII. Miscellaneous.
XIII.1 Holidays. Except as otherwise provided herein, whenever any payment
or action to be made or taken hereunder or under a Note shall be stated to be
due on a day which is not a Business Day, such payment or action shall be made
or taken on the next following Business Day and such extension of time shall be
included in computing interest or fees, if any, in connection with such payment
or action.
XIII.2 Records. The amount of the outstanding principal balance of the
Loans and Letter of Credit Liability, any unpaid interest accrued thereon, the
interest rate or rates applicable thereto and each Lender's Revolving Credit
Commitment shall at all times be ascertained from the records of Agent, which
shall be conclusive absent manifest error.
XIII.3 Substitution of Title Insurer. If Agent reasonably believes that
the existing Title Insurer is not complying with the requirements of this
Agreement or is not otherwise performing its duties in a reasonably satisfactory
manner, Agent may notify Sundance in writing of such belief and set forth in
reasonable detail such Title Insurer's deficiencies. If such deficiencies are
not corrected within thirty days after receipt of Agent's notice, Agent may, at
the Borrowers' expense, replace such Title Insurer with another Title Insurer
selected by the Borrowers and approved by Agent, which approval shall not be
unreasonably withheld (provided that Agent may select such Title Insurer if the
Borrowers fail to select a satisfactory replacement within five days following
the end of such thirty day period).
XIII.4 Modifications, Amendments or Waivers. Subject to the terms of
Article XII above, the Lenders and such of the Borrowers as are then party
thereto (or any other party thereto, as the case may be) may from time to time
enter into written agreements amending or
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changing any provision of this Agreement or any other Loan Document or the
rights of a Lender or the Borrowers or such party hereunder or thereunder or may
grant waivers or consents to a departure from the due performance of the
obligations of the Borrowers or other party thereto hereunder or thereunder, any
such agreement, waiver or consent made with such written consent being effective
to bind all Lenders; provided, however, that if Agent notifies the Borrowers
that a Subsidiary of a Borrower is to be designated as a Borrowing Subsidiary,
then the Borrowers agree to execute and shall cause such Subsidiary to execute
an amendment to this Agreement to reflect such designation and make such
Subsidiary a party to this Agreement, whereupon all representations, warranties,
covenants and other terms herein shall be applicable to such Subsidiary as if it
were a Borrowing Subsidiary and party to this Agreement as of the date hereof.
In addition, the Borrowers shall cause such Subsidiary to execute, deliver, file
and perform all documents and agreements reasonably required by Agent to
accomplish the foregoing and to grant to Agent and each Lender all rights and
benefits to which it is entitled under any of the Loan Documents. Any agreement,
waiver or consent referred to in this Section must be in writing and shall be
effective only to the extent specifically set forth in such writing. In the case
of any such waiver or consent relating to any provision hereof, any Event of
Default or Default so waived or consented to shall be deemed to be cured and not
continuing, but no such waiver or consent shall extend to any other or
subsequent Event of Default or Default or impair any right consequent thereto.
XIII.5 General Indemnity.
(a) Indemnified Persons. Without limiting any other provision of this
Agreement or of any other Loan Document, the Borrowers hereby jointly and
severally indemnify each Lender, Agent and their respective directors,
officers, employees, Affiliates and agents (collectively, "Indemnified
Persons") against, and agree to hold each such Indemnified Person harmless
from, any and all claims, damages and liabilities, including claims brought
by any shareholder or former shareholder of any Borrower, and related
expenses, including reasonable counsel fees and expenses, incurred by such
Indemnified Person arising out of any claim, litigation, investigation or
proceeding (whether or not such Indemnified Person is a party thereto)
relating to any transactions, services or matters that are the subject or
arise in connection with or as a result of this Agreement or the
transactions contemplated hereby (including, without limitation, relating
to the properties or business of any Borrower, or any breach by a Borrower
in the performance or observance of any representation, warranty, covenant
or condition in this Agreement or any other Loan Document); provided,
however, that such indemnity shall not apply to any such losses, claims,
damages, or liabilities or related expenses determined by a court of
competent jurisdiction to have arisen from the gross negligence or willful
misconduct of such Indemnified Person, and if such Indemnified Person is a
director, officer, employee, Affiliate or agent of a Lender or Agent, then,
to the extent of such gross negligence or willful misconduct, such
indemnity shall not apply to such Lender or Agent, as applicable.
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(b) Litigation. If any litigation or proceeding is brought against
any Indemnified Person in respect of which indemnity may be sought against
the Borrowers pursuant to this Section, such Indemnified Person shall
promptly notify the Borrowers in writing of the commencement of such
litigation or proceeding, but the omission so to notify the Borrowers shall
not relieve the Borrowers from any other obligation or liability which it
may have to any Indemnified Person, except that no Borrower waives any
rights for damages incurred by it on account of such delay. Failure of the
Indemnified Person to timely notify the Borrowers of the commencement of
such litigation or proceeding shall not relieve the Borrowers of their
obligations under this Section, except to the extent that such failure
prejudices the Borrowers' ability to defend such litigation or proceeding.
In case any such litigation or proceeding shall be brought against any
Indemnified Person and such Indemnified Person shall notify the Borrowers
of the commencement of such litigation or proceeding, the Borrowers shall
be entitled to participate in such litigation or proceeding and, after
written notice from the Borrowers to such Indemnified Person, to assume the
defense of such litigation or proceeding with counsel of its choice at its
expense, provided that such counsel is satisfactory to the Indemnified
Person in the exercise of its reasonable judgment. Notwithstanding the
election of the Borrowers to assume the defense of such litigation or
proceeding, such Indemnified Person shall have the right to employ separate
counsel and to participate in the defense of such litigation or proceeding,
and the Borrowers shall bear the reasonable fees, costs and expenses of
such separate counsel if (i) the use of counsel chosen by the Borrowers to
represent such Indemnified Person would present such counsel with a
conflict of interest; (ii) the defendants in, or targets of, any such
litigation or proceeding include both an Indemnified Person and any
Borrower, and such Indemnified Person shall have reasonably concluded that
there may be legal defenses available to it which are different from or
additional to those available to any Borrower (in which case the Borrowers
shall not have the right to direct the defense of such action on behalf of
the Indemnified Person); (iii) the Borrowers shall not have employed
counsel satisfactory to such Indemnified Person in the exercise of the
Indemnified Person's reasonable judgment to represent such Indemnified
Person within a reasonable time after notice of the institution of such
litigation or proceeding; or (iv) the Borrowers shall authorize such
Indemnified Person to employ separate counsel at the expense of the
Borrowers, provided that the Borrowers shall not be liable for the fees,
costs and expenses of more than one separate counsel at the same time for
all such Indemnified Persons in connection with the same action and any
separate but substantially similar or related action in the same
jurisdiction. The Borrowers shall not consent to the entry of any judgment
or enter into any settlement in any such litigation or proceeding unless
such judgment or settlement includes as an unconditional term thereof the
giving by the claimant or plaintiff to such Indemnified Person of a release
from all liability in respect to such claim or litigation.
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(c) Generally. The agreements of the Borrowers in this Section shall
be in addition to any liability that the Borrowers may otherwise have. All
amounts due under this Section shall be payable within ten days of written
demand therefor.
XIII.6 No Implied Waiver; Remedies. No course of dealing and no delay or
failure of Agent or any Lender in exercising any right, power or privilege under
this Agreement, a Note, any other Loan Document or any other documents or
instruments executed pursuant to or in connection herewith shall affect any
other or future exercise thereof or exercise of any other right, power or
privilege except as and to the extent that the assertion of any such right,
power or privilege shall be barred by an applicable statute of limitations; nor
shall any single or partial exercise of any such right, power or privilege or
any abandonment or discontinuance of steps to enforce such a right, power or
privilege preclude any further exercise thereof or of any other right, power or
privilege. In addition, to the extent that Agent or any Lender may have
acquiesced in any noncompliance by making any Loans or issuing any Letters of
Credit, such acquiescence shall not be deemed to constitute a waiver by Agent or
any Lender of any continuing or future Obligation of any Borrower with respect
to future Loans, Letters of Credit or otherwise. The rights and remedies of
Agent and the Lenders under this Agreement, the Notes, the other Loan Documents
or any other documents or instruments executed pursuant to or in connection
herewith are cumulative and not exclusive of any other rights or remedies which
Agent and any Lender would otherwise have. In no event shall Agent or any Lender
be liable to any Borrower for consequential damages, whatever the nature of a
breach by such Lender or Agent of its obligations under this Agreement, or of
the other Loan Documents, and all the Borrowers hereby waive all claims for
consequential damages. No Lender nor Agent shall be in breach under this
Agreement, or under any other Loan Documents, unless a written notice
specifically setting forth the claim of any Borrower shall have been given to
such Lender or Agent, as applicable, within 60 days after such Borrower first
had knowledge of, or reasonably should have had knowledge of, the occurrence of
the event which such Borrower alleges gave rise to such claim and such Lender
does not remedy or cure such breach, if there be any, promptly thereafter.
XIII.7 Notices. All notices, communications and waivers under this Loan
Agreement and the other Loan Documents shall be in writing and shall be (i)
delivered in person or (ii) mailed, postage prepaid, either by registered or
certified mail, return receipt requested, or (iii) sent by overnight express
carrier, addressed in each case as follows:
To Agent or LaSalle: c/o LaSalle National Bank
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇. ▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
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With copy to: Schwartz, Cooper, ▇▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, Chtd.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇▇▇▇, Esq.
To ANB: American National Bank and Trust Company of Chicago
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
With copy to: ▇▇▇▇▇ & Lardner
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
To BankBoston: BankBoston, N.A.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇. ▇▇▇▇▇ ▇▇▇▇
With copy to: Long, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇.▇., ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
To any Borrower: c/o Sundance Homes, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
With copy to: ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
or to any other address as to any of the parties hereto, as such party shall
designate in a written notice to the other parties hereto. All notices sent
pursuant to the terms of this Section shall be deemed received (i) if personally
delivered, then on the date of delivery, (ii) if sent by overnight, express
carrier, then on the next Business Day immediately following the day sent, or
(iii) if sent by registered or certified mail, then on the earlier of the third
Business Day following the day sent or when actually received. For purposes of
this Agreement, notice provided by Agent or any Lender to Sundance shall be
deemed to be effective notice to any and all the Borrowers.
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Sundance hereby agrees that upon receiving notice from Agent or any Lender, it
shall distribute such notice to each Borrower in a prompt and timely fashion.
XIII.8 Expenses; Taxes; Attorneys' Fees. The Borrowers, jointly and
severally, agree to pay or cause to be paid and to save Agent and each Lender
(and their successors and assigns) harmless against liability for the payment of
all reasonable out-of-pocket expenses, including but not limited to reasonable
fees and expenses of counsel for Agent and/or each Lender, travel expenses, fees
and costs of accountants, and environmental and appraisal costs and expense, all
incurred from time to time (i) arising in connection with the negotiation,
preparation, execution, delivery, administration (provided, however, that with
respect to field audits conducted by accountants designated by Agent or any
Lender, the Borrowers shall only reimburse Agent and the Lenders for the costs
of such audits in an amount not to exceed $25,000 in any Fiscal Year),
syndication, participation, and sale of any Lender's interest in this Agreement,
interpretation and performance of this Agreement, the Notes, any other Loan
Document and any documents, instruments or transactions pursuant to or in
connection herewith, (ii) relating to any requested amendments (or amendments or
other documents required by Agent or any Lender on account of the designation of
additional Subsidiaries as the Borrowers), waivers or consents to, or to any
restructurings, work-outs or refinancings of the credit under this Agreement,
the Notes, any other Loan Document or any such other documents or instruments
(iii) relating to asset valuations of the Borrowers, or (iv) relating to any
reorganization, bankruptcy or any other proceedings to which any Borrower or its
property becomes subject. The Borrowers, jointly and severally, further agree to
pay or cause to be paid and to save Agent and each Lender harmless against
liability for the payment of all reasonable expenses, including but not limited
to reasonable fees and expenses of counsel for Agent and/or each Lender,
incurred by Agent or such Lenders from time to time in connection with the
enforcement by Agent and/or Lenders of this Agreement, the Notes or any other
Loan Document; provided that the Borrowers shall not be liable under the
foregoing indemnity agreement in respect of any liabilities, claims, damages,
losses or expenses to the extent that the same are determined in a final
judgment by a court of competent jurisdiction to have resulted primarily from
the willful misconduct or gross negligence of the party seeking indemnity. The
Borrowers, jointly and severally, agree to pay all stamp, document, transfer,
recording or filing taxes or fees and similar impositions now or hereafter
determined by Agent to be payable in connection with this Agreement, the Notes,
any other Loan Document, or any other documents, instruments or transactions
pursuant to or in connection herewith, and the Borrowers, jointly and severally,
agree to save Agent and each Lender harmless from and against any and all
present or future claims, liabilities or losses with respect to or resulting
from any omission to pay or delay in paying any such taxes, fees or impositions.
In the event of a determination adverse to a Borrower of any action at law or
suit in equity in relation to this Agreement, the Notes or the Loan Documents,
the Borrowers, jointly and severally, will pay, in addition to all other sums
which such Borrower may be required to pay, a reasonable sum for attorney's fees
incurred by Agent and/or any Lender or the holder of such Note in connection
with such action or suit. All of the foregoing fees, costs and expenses shall be
part of the Obligations and payable on demand.
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XIII.9 Severability. The provisions of this Agreement and the other Loan
Documents are intended to be severable. In the event that any provision of this
Agreement is deemed to be invalid by reason of the operation of law, or by
reason of the interpretation placed thereon by any administrative agency or any
court, the Borrowers and the Lenders shall negotiate an equitable adjustment in
the provisions of the same in order to effect, to the maximum extent permitted
by law, the purpose of this Agreement, and the validity and enforceability of
the remaining provisions, or portions or applications thereof, shall not be
affected thereby and shall remain in full force and effect.
XIII.10 Governing Law. This Agreement, the Notes and all other Loan
Documents shall be deemed to be contracts and obligations under the laws of the
State of Illinois and for all purposes shall be governed by, construed and
enforced in accordance with the internal laws (as opposed to conflicts of law
provisions) of said State, and any applicable laws of the United States.
XIII.11 Prior Understandings. This Agreement, the Notes, and the other
Loan Documents supersede all prior understandings, discussions, communications
and agreements, whether written or oral, among the parties hereto relating to
the transactions provided for herein.
XIII.12 Duration; Survival. All representations and warranties of the
Borrowers and the other parties to the Loan Documents contained herein or
therein or made in connection herewith or therewith shall survive the making of
and shall not be waived by the execution and delivery of this Agreement, the
Notes and the other Loan Documents, any investigation by Agent or any Lender, or
the making of any Loan or the issuance of any Letter of Credit hereunder. All
covenants and agreements of the Borrowers and such parties contained herein or
in any other Loan Document shall continue in full force and effect from and
after the date hereof so long as the Borrowers may borrow and/or a Letter of
Credit may be issued hereunder and until payment in full of the Notes, interest
thereon, fees and all other Obligations of the Borrowers under this Agreement,
the Notes or any other Loan Document (other than obligations in the nature of
continuing indemnities or expense reimbursement obligations not yet due and
payable); provided, however, that notwithstanding anything to the contrary in
this Agreement, all obligations of the Borrowers to make payments to or to
indemnify Agent or any Lender under any Loan Document (including the
Environmental Indemnity) shall survive the payment in full of the Notes and of
all other Obligations of the Borrowers thereunder and hereunder.
XIII.13 Counterparts. This Agreement and any other Loan Document may be
executed in any number of counterparts and by the different parties hereto on
separate counterparts each of which, when so executed, shall be deemed an
original, but all such counterparts shall constitute but one and the same
instrument.
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XIII.14 Successors and Assigns; Participants.
(a) Successors and Assigns . This Agreement shall be binding upon and
inure to the benefit of the Borrowers, the Lenders, Agent, all future
holders of the Notes, and their respective successors and permitted
assigns, except that no Borrower may assign or transfer any of its rights
or obligations under this Agreement or any interest herein without the
prior written consent of the Lenders. The successors and assigns of the
parties shall include, without limitation, a receiver, trustee and/or
debtor-in-possession of or for any Borrower.
(b) Lender Assignments and Participations Generally.
(i) No Lender may assign its rights, benefits and obligations
under this Agreement to any other Person without the prior written
consent of the other Lenders, which consent shall not be unreasonably
withheld; provided, however, that a Lender may assign such rights,
benefits and obligations to an Affiliate of such Lender without the
consent of the other Lenders or the Borrowers if prior notice of such
assignment is provided to each of them. In the event of an assignment
by a Lender, the assignee shall have, to the extent of such
assignment, the same rights, benefits and obligations as the other
Lenders and the Lender making such assignment shall be relieved of the
assigned obligations and shall no longer be entitled to the assigned
rights or benefits. The Borrowers hereby acknowledge and agree that
any such assignment shall create a direct obligation of the Borrowers
to the assignee, and the Borrowers, the Agent and the other Lenders
hereby acknowledge and agree that such assignee shall be deemed a
"Lender" hereunder.
(ii) Any Lender may, in the ordinary course of its commercial
banking or asset-based lending business and in accordance with
applicable law, at any time sell to one or more financial institutions
or other entities ("Participants") participating interests in any Loan
owing to such Lender, any Note held by such Lender, the Revolving
Credit Commitment of such Lender or any other interest of such Lender
hereunder, and the Borrowers shall use their best efforts to cooperate
with, and assist any Lender in its effort to sell such participating
interests. A Participant shall not be deemed a "Lender" hereunder, and
if a Lender sells a participating interest, such Lender's obligations
under this Agreement to the other parties to this Agreement shall
remain unchanged, such Lender shall remain solely responsible for the
performance thereof, and the Borrowers and Agent shall continue to
deal solely and directly with such Lender in connection with such
Lender's rights and obligations under this Agreement. The Borrowers
agree that if amounts outstanding under this Agreement and/or the
Notes are due and unpaid, or shall have been declared or shall have
become due and payable upon the
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occurrence of an Event of Default, each Participant shall be deemed to
have the right of setoff in respect of its participating interest in
amounts owing under this Agreement and any Note to the same extent as
if the amount of its participating interest were owing directly to it
as a Lender under this Agreement or any Note. The Borrowers also agree
that each Participant shall be entitled to the benefits of Sections
13.5 and 13.8 with respect to its participation in the Loans
outstanding from time to time, provided that no Participant shall be
entitled to receive any greater amount pursuant to such Sections than
the transferor Lender would have been entitled to receive in respect
of the amount of the participation transferred by such transferor
Lender to such Participant had no such transfer occurred. The
Borrowers shall not be responsible for the payment of any fees, costs
and/or expenses incurred by the Lenders in regard to any such
participations. A Participant shall not be entitled to require the
Lender from which it acquired its participating interest to take or
omit to take any action under this Agreement or the other Loan
Documents, except with respect to actions directly effecting (i) any
reduction in the principal amount, interest rate or fees payable with
respect to the Loan in which such Participant participates; (ii) any
increase of the aggregate principal amount of the Loan in which such
Participant participates; (iii) any extension of the Maturity Date, or
any extension of any date fixed for any payment of interest or fees
payable with respect to the Loan in which such Participant
participates; (iv) any change of the percentage of Lenders required
for the Agent or the Lenders or any of them to take any action under
this Agreement or the other Loan Documents; (v) any release of
Collateral (except if the sale, disposition or release of such
Collateral is expressly permitted under this Agreement or any other
Loan Document); (vi) any amendment or waiver of this Section or the
definitions of terms used in this Section insofar as such definitions
affect the substance hereof; (vii) any consent to the assignment,
delegation or other transfer by any Borrower of any of its rights and
obligations under any Loan Document; (viii) any change in the form in
which interest is required to be paid; and (ix) any increase in the
Loan advance rate for an Approved Project.
(iii) Each Lender, including each assignee who is hereafter
deemed to be a Lender, and each Participant shall retain a Revolving
Credit Commitment of an amount equal to not less than $5,000,000.
(c) Provision of Information to Participants. Subject to such
Participant first executing and delivering a confidentiality agreement in
the form previously executed by the Lenders or otherwise reasonably
satisfactory to the Borrowers, each Borrower authorizes each Lender to
disclose to any Participant and any prospective Participant any and all
confidential financial and other information in such Lender's possession
concerning the Borrowers and their affiliates which has been delivered to
such Lender by or on behalf of the Borrowers pursuant to this Agreement or
which has been delivered to
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such Lender by or on behalf of the Borrowers in connection with such
Lender's credit evaluation of the Borrowers and their affiliates prior to
becoming a party to this Agreement.
(d) Taxes. If any interest in this Agreement or the Notes is
transferred to any transferee which is organized under the laws of any
jurisdiction other than the United States or any State thereof, the
transferor Lender shall cause such transferee, concurrently with the
effectiveness of such transfer, (i) to represent to the transferor Lender
(for the benefit of the transferor Lender, Agent, and the Borrowers) that
under applicable law and treaties (as then in effect) no taxes will be
required to be withheld by Agent, the Borrowers or the transferor Lender
with respect to any payments to be made to such transferee in respect of
the Loans, (ii) to furnish to the transferor Lender either IRS Form 4224 or
IRS Form 1001 (wherein such transferee claims entitlement to complete
exemption from U.S. federal withholding tax on all interest payments
hereunder) and (iii) to agree (for the benefit of the transferor Lender,
Agent, and the Borrowers) to provide the transferor Lender a new Form 4224
or Form 1001 upon the expiration or obsolescence of any previously
delivered form and comparable statements in accordance with applicable U.S.
laws and regulations and amendments duly executed and completed by such
transferee, and to comply from time to time with all applicable U.S. laws
and regulations with regard to such withholding tax exemption.
XIII.15 Lender's Failure to Pay Amounts Owing to Other Lenders; Federal
Funds Rate. If Agent or a Lender pays an amount to or on behalf of another
Lender under this Agreement or the other Loan Documents in the belief or
expectation that a related payment has been or will be received by Agent or such
Lender from the Borrowers and such related payment is not so received, then
Agent or such Lender shall be entitled to recover such amount from the non-
paying Lender, without set-off, counterclaim or deduction of any kind, together
with interest thereon, for each day from and including the date such amount is
made available by Agent or such Lender to but excluding the date of repayment to
Agent or such Lender, at the greater of the Federal Funds Rate or a rate
determined by Agent in accordance with banking industry rules on interbank
compensation.
XIII.16 No Rights in the Borrowers; No Third Party Beneficiary Rights. The
Borrowers acknowledge and agree that none of the obligations of Agent to the
Lenders shall create or confer any rights whatsoever (including, without
limitation, third party beneficiary rights) on or in any of the Borrowers. In
addition, the parties agree that Agent and the Lenders may amend any provision
of this Agreement which relates solely to the rights and obligations between
them, without any consent or approval required by any of the Borrowers. Without
limiting the foregoing, the Borrowers acknowledge and agree that nothing in this
Agreement or any other Loan Document creates or shall be deemed to create any
third party beneficiary rights whatsoever.
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XIII.17 Time of Essence. Time is of the essence of this Agreement, the
Notes and the other Loan Documents.
XIII.18 Entire Agreement. The parties hereto agree that this Agreement and
the other Loan Documents, together with the Schedules and Exhibits attached
hereto and thereto, represent the entire agreement and understanding of the
parties hereto with reference to the transactions contemplated herein and
therein, and no party shall claim that any party hereto has any right or
obligation regarding the transactions contemplated herein other than as stated
in this Agreement, the other Loan Documents, or any amendment hereto duly
adopted pursuant to the terms hereof. Without limiting the foregoing, nothing
contained in any disclosure document prepared by any Borrower or in any other
document (except the Loan Documents) shall constitute any consent, waiver or
agreement of Agent or a Lender nor may it be used in any manner whatsoever to
interpret, modify or otherwise affect this Agreement or any other Loan Document.
XIII.19 Section Titles. The section titles and table of contents contained
in this Agreement are for convenience only and shall be without substantive
meaning or content of any kind whatsoever.
XIII.20 References. All references contained herein to any laws, statutes,
rules, regulations, or similar provisions shall include all amendments thereto
and any successor provisions.
XIII.21 Reinstatement. This Agreement shall remain in full force and
effect and continue to be effective should any petition be filed by or against
any Borrower for liquidation or reorganization, should any Borrower become
insolvent or make an assignment for the benefit of creditors or should a
receiver or trustee be appointed for all or any significant part of any
Borrower's assets, and shall continue to be effective or be reinstated, as the
case may be, if at any time payment and performance of the Obligations, or any
part thereof, is, pursuant to applicable law, rescinded or reduced in amount, or
must otherwise be restored or returned by any obligee of the Obligations,
whether as a "voidable preference", "fraudulent conveyance", or otherwise, all
as though such payment or performance had not been made. In the event that any
payment, or any part thereof, is rescinded, reduced, restored or returned, the
Obligations shall be reinstated and deemed reduced only by such amount paid and
not so rescinded, reduced, restored or returned.
XIII.22 Consent to Jurisdiction. As a further inducement to Agent and each
Lender to enter into this Agreement, each Borrower covenants and agrees (i) that
the state and federal courts within ▇▇▇▇ County, Illinois, shall have
jurisdiction of any action or proceeding relating to, or arising under or in
connection with this Agreement and each Borrower consents to personal
jurisdiction of such courts and waives any objection to such courts'
jurisdiction, (ii) that service of any summons and complaint or other process in
any such action or proceeding may be made by registered or certified mail
directed to Sundance's address stated herein or to such other
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address as Sundance may by written notice provide to Agent and each such Lender.
Service so made shall be deemed to be service upon Sundance and each of the
other the Borrowers, and each Borrower hereby irrevocably appoints Sundance as
its attorney in fact to accept such service. Service so made shall be deemed
completed upon the earlier of actual receipt or five days after the same shall
have been posted as aforesaid, each Borrower hereby waiving personal service
thereof. Nothing in this Section shall affect the right of Agent or a Lender to
serve legal process in any other manner permitted by law or affect the right of
Agent or a Lender to bring any action or proceeding against any Borrower or its
property in the courts of any other jurisdiction or effectuate any judgment
entered by a court of competent jurisdiction.
XIII.23 Venue. Each Borrower, Agent and each Lender agree that any claim
or suit between or among any of the parties hereto relating to, or arising under
or in connection with this Agreement or the other Loan Documents or any
transactions contemplated hereby or thereby shall be brought only in and decided
by the state or federal courts located in the ▇▇▇▇ County, Illinois, (except as
provided in the last sentence of the previous Section), such courts being a
proper forum in which to adjudicate such claim or suit, and each party hereby
waives any objection to such venue and waives any claim that such claim or suit
has been brought in an inconvenient forum.
XIII.24 Advertisement. Either Agent and/or any Lender may at any time
advertise the existence of the credit facility created for the Borrowers
hereunder.
XIII.25 WAIVER OF JURY TRIAL. ALL OF THE PARTIES TO THIS AGREEMENT WAIVE
TO THE FULLEST EXTENT PERMITTED BY LAW ANY RIGHT TO TRIAL BY JURY IN ANY CIVIL
ACTION OR CIVIL PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS UNDER THIS AGREEMENT
OR ANY OF THE DOCUMENTS OR INSTRUMENTS EXECUTED AND DELIVERED PURSUANT HERETO,
OR OTHERWISE RELATING TO THIS AGREEMENT OR SUCH OTHER DOCUMENTS AND INSTRUMENTS,
OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY, AND AGREE THAT ANY SUCH
ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY. THE
PARTIES HERETO WAIVE TO THE FULLEST EXTENT PERMITTED BY LAW ALL RIGHT TO TRIAL
BY JURY IN ANY ACTION, SUIT OR PROCEEDING BROUGHT TO ENFORCE OR DEFEND ANY
RIGHTS OR REMEDIES UNDER, OR ARISING IN CONNECTION WITH OR RELATING TO THIS
AGREEMENT, THE NOTE OR ANY OF THE OTHER LOAN DOCUMENTS.
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IN WITNESS WHEREOF, the parties hereto have duly authorized, executed and
delivered this Agreement as of the date first above written.
AGENT: LENDERS:
------ --------
LASALLE NATIONAL BANK, a national LASALLE NATIONAL BANK, a national banking
banking association, as agent for association
the Lenders
By: By:
-------------------------- ----------------------------------
Title: Title:
-------------------------- ----------------------------------
AMERICAN NATIONAL BANK AND TRUST COMPANY
OF CHICAGO, a national banking
association
By:
----------------------------------
Title:
----------------------------------
BANKBOSTON, N.A., a national banking
association
By:
----------------------------------
Title:
----------------------------------
BORROWERS:
----------
SUNDANCE HOMES, INC., an Illinois
corporation
By:
--------------------------
Title:
--------------------------
[INSERT SIGNATURE LINES FOR OTHER
BORROWERS]
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SCHEDULE 1.0
------------
LIST OF BORROWING SUBSIDIARIES