BRIDGE LOAN AGREEMENT

 

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                                                                   Exhibit 10.32

 

                              BRIDGE LOAN AGREEMENT

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                  THIS BRIDGE LOAN AGREEMENT ("this Agreement"), made the 28th

day of July, 2004 by and between WACHOVIA BANK, NATIONAL ASSOCIATION, with an

office at PA 1245, 123 S. Broad Street, Philadelphia, Pennsylvania 19109

("Lender") and ORLEANS HOMEBUILDERS, INC., a Delaware corporation with an office

at One Greenwood Square, 3333 Street Road, Bensalem, Pennsylvania 19020

("Borrower").

 

                              W I T N E S S E T H :

 

 

                  A. Borrower is a corporation formed to acquire, through

various 100% owned affiliates, land in one or more of the States of

Pennsylvania, New Jersey, Delaware, Virginia, North Carolina, South Carolina,

New York, Illinois and Florida, to improve such land with residential dwellings,

and to sell such dwellings (the "Business").

 

                  B. Borrower has applied to Lender for a short term loan (i) to

finance Borrower's acquisition of Realen Homes, L.P., a Pennsylvania limited

partnership ("Realen") and to refinance certain outstanding indebtedness of

Realen and (ii) to provide Borrower with funds with which Borrower may, through

its wholly-owned affiliates, purchase land for residential development and

construct site improvements for residential development projects.

 

                  NOW, THEREFORE, the parties hereto, intending to be legally

bound hereby, agree as follows:

 

         1. Loan.

 

                  1.1. Subject to the terms and conditions herein set forth,

Lender agrees (i) to lend to Borrower a sum (the "Loan") and (ii) to issue for

the account of Borrower or wholly-owned affiliates of Borrower Completion

Assurance Agreements (as defined below), the aggregate amount of the Loan and of

Lender's obligations under Completion Assurance Agreements being in no event

more than $120,000,000 (the "Maximum Amount"). For purposes of this Agreement,

"Completion Assurance Agreement" means a letter of credit issued by Lender, or a

"set-aside" or "tri-party" agreement executed by Lender, whereby Lender assures

to a governmental authority the availability of funds for the completion of site

improvements that are to be constructed to serve a residential development

project.

 

                  1.2. The Loan shall be advanced by Lender in installments as

hereinafter provided and shall be evidenced by Borrower's note (the "Note")

executed simultaneously herewith.

 

                  1.3. The Loan shall bear interest on each day at the per annum

rate that is equal to (a), on that portion of the outstanding principal that

does not exceed $60,000,000, the sum of (i) the LIBOR Market Index Rate in

effect on such day plus (ii) two and one-quarter of one percent (2.25%) per

annum (that is, 225 "basis points") and (b), on that portion of the outstanding

principal balance that exceeds $60,000,000, the sum of (iii) the LIBOR Market

Index Rate in effect on such day plus (iv) two and one-half of one percent

(2.5%) per annum (that is, 250 "basis points"). For purposes of this Agreement,

"LIBOR Market Index Rate" means, for any day, the rate of one (1) month U.S.

Dollar deposits as reported on Telerate page 3750 as of 11 a.m., London time, on

such day, or if such day is not a London business day, then the immediately

preceding London business day (or, if not so reported, then as determined by

Lender from another recognized source or interbank quotation). Interest shall be

calculated on the basis of a 360-day year but charged for the actual number of

days in any year or part thereof.

 

 

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                  1.4. Commencing on September 1, 2004, and continuing on the

first business day of each succeeding month thereafter until and including the

month in which the Maturity Date occurs, the Borrower shall pay to Lender

interest in arrears through (and including) the last day of the immediately

preceding calendar month, on the outstanding principal balance of the Loan.

 

                   1.5. The entire outstanding principal balance of the Loan,

together with all accrued interest thereon and other amounts payable by Borrower

pursuant to this Agreement, shall be due and payable without notice or demand on

the Maturity Date. For purposes of this Agreement, "Maturity Date" means

November 30, 2004.

 

                  1.6. Borrower may prepay the Loan, in full or in part, at any

time and from time to time without penalty or premium.

 

                  1.7. All payments of principal, interest and other charges

hereunder and under the Note shall be made by Borrower without notice, set off

or counterclaim and in immediately available same day funds and shall be

delivered to Lender not later than 3:00 P.M. prevailing Eastern time on the date

due; funds received by Lender after that time shall be deemed to have been paid

by Borrower on the next succeeding Business Day (as defined in the Note). All

such payments shall be made by wire transfer to the account that Lender may from

time to time specify by written notice to Borrower.

 

         2. Advances; Completion Assurance Agreements.

 

                  2.1. Provided that no Event of Default has occurred and is

continuing, and subject to the terms and conditions set forth herein, commencing

on the date hereof and expiring on the Business Day immediately preceding the

Maturity Date, Lender shall make advances of the Loan to Borrower up to an

aggregate of the Maximum Amount, provided that no such advance shall be made if,

as a result thereof, the outstanding principal balance of the Loan would exceed

(i) the Maximum Amount minus (ii) the maximum aggregate liability of Lender

under all Completion Assurance Agreements by which Lender is then obligated.

Borrower may request an advance of the Loan by delivering to Lender a completed

"Notice of Borrowing" in the form attached hereto as Exhibit 2.1 no later than

1:00 p.m. on the Business Day Borrower desires such advance to be made. Notices

of Borrowing may be signed by any one of Benjamin D. Goldman, James Thompson or

Joseph A. Santangelo on behalf of Borrower.

 

                  2.2. Provided that no Event of Default has occurred and is

continuing, and subject to the terms and conditions set forth herein, Borrower

may request, and Lender shall issue or execute, Completion Assurance Agreements

to assure governmental authorities of the completion of site improvements be

constructed by any wholly-owned affiliate of Borrower. No Completion Assurance

Agreement shall be issued or executed by Lender if, as a result thereof, (i) the

maximum aggregate liability of Lender under all Completion Assurance Agreements

then outstanding or in effect plus (ii) the outstanding principal balance of the

Loan would exceed the Maximum Amount.

 

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                  2.2.1. Borrower shall request the issuance of a letter of

credit as a Completion Assurance Agreement by submitting to Lender a completed

Application and Agreement for Irrevocable Standby Letter of Credit, on Lender's

customary form, at least three (3) Business Days before Borrower desires the

letter of credit to be issued. Borrower shall request Lender's execution of a

"set-aside" or "tri-party" agreement by delivering to Lender, at least three (3)

Business Days before Borrower desires Lender to execute the same, a final and

completed copy of the requested agreement (which agreements must be in form and

content acceptable to Lender in good faith).

 

                  2.2.2. Any payment made by Lender pursuant to a Completion

Assurance Agreement shall be deemed to be an advance of the Loan that was

requested by Borrower pursuant to Section 2.1, notwithstanding that Borrower did

not provide Lender with a Notice of Borrowing.

 

                  2.2.3. Borrower shall pay to Lender quarterly in arrears, when

billed, a fee based on the amount available to be drawn under all letters of

credit issued by Lender as Completion Assurance Agreements, such fee to be

calculated on the basis of a 365 day year at the rate of one percent (1.0%) per

annum.

 

                  2.3. If at the time Borrower pays in full the outstanding

principal balance of the Loan Lender is not fully released, by the beneficiaries

thereof, from Lender's liabilities under each Completion Assurance Agreement,

Borrower shall on the Maturity Date deposit with Lender cash in the sum equal to

the aggregate amount of Lender's maximum potential liabilities under the

Completion Assurance Agreements. Such sum shall be placed in a restricted,

interest bearing account with Lender (the "Account"). In the event that Lender

thereafter makes payment to any beneficiary of a Completion Assurance Agreement

pursuant to the terms thereof, Borrower shall immediately reimburse Lender in

the amount of Lender's payment to the beneficiary. In order to secure such

obligation of Borrower, Borrower shall execute and deliver to Lender, at the

time the Account is created, a collateral assignment of the Account to Lender,

on Lender's customary form. Borrower may withdraw funds from the Account from

time to time, provided that (i) at the time of each such withdrawal Borrower has

reimbursed Lender for all amounts theretofore paid by Lender pursuant to the

Completion Assurance Agreements and (ii) at no time shall the amount in the

Account be less than the then-current aggregate amount of Lender's maximum

potential liabilities under the Completion Assurance Agreements.

 

         3. Conditions to Closing the Loan.

 

            The agreement of Lender's to enter into this Agreement is subject

to the condition precedent that, on or before the date hereof, Lender shall have

received all of the following documents, each in form and substance satisfactory

to the Lender; and each of the actions described below shall have occurred:

 

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                  3.1. The Note, duly executed by the Borrower.

 

                  3.2. An executed Notice of Borrowing for any advance of the

Loan Borrower then requires.

 

                  3.3. Certified copies of all corporate action taken by

Borrower, including resolutions of its Board of Directors, authorizing the

execution, delivery and performance of the Note and this Agreement.

 

                  3.4. An incumbency and signature certificate (dated as the

date of this Agreement) of the Secretary of Borrower, certifying the names and

true signatures of the officers of Borrower authorized to sign the Note and this

Agreement.

 

                  3.5. A copy of the Articles of Incorporation and the By-laws

of Borrower, certified as true and correct by its Secretary.

 

                  3.6. A Subsistence Certificate for Borrower, issued within

thirty (30) days prior to the date hereof, from the state of Borrower's

incorporation.

 

                  3.7. An opinion directed to Lender and issued by counsel to

Borrower (who must be an attorney-at-law licensed to practice in Pennsylvania)

that (i) Borrower is duly organized, validly existing, and in good standing in

the state of its incorporation and is authorized to do business in all

jurisdictions where such authorization is required, (ii) Borrower has the power

to enter into the transactions contemplated by this Agreement; (iii) the

transactions contemplated by this Agreement do not violate any provision of any

law, charter, restriction, by-law, or any other document known to such counsel,

affecting Borrower; (iv) the Note and this Agreement have been executed and

delivered by, and constitute the valid and binding obligations of, Borrower,

enforceable in accordance with their terms, except as limited by applicable

bankruptcy or other laws affecting creditor's rights generally; (v) the Loan and

the payment thereof in accordance with the terms of this Agreement and the Note

shall not violate any applicable usury laws; and (vi) such other matters

relating to the transactions contemplated herein as Lender or Lender's counsel

may reasonably request.

 

                  3.8. The most recent Financial Statements (as defined below)

of Borrower.

 

                  3.9. Borrower shall have executed and delivered to Wachovia

Capital Markets, LLC ("WCM") a "mandate letter" authorizing WCM to procure, on

behalf of Borrower from financial institutions acceptable to Borrower,

commitments to provide Borrower and its Affiliates a secured revolving credit

facility in the aggregate amount of $400,000,000 and that is otherwise

sufficient to enable Borrower to repay, upon the closing thereof, the Loan and

all other indebtedness for borrowed money then owing by Borrower and its

affiliates, as shown on Borrower's financial statements.

 

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                  3.10. Such other and further documents as may be required

reasonably by the Lender in order to consummate the transactions contemplated

hereunder.

 

         4. Representation and Warranties.

 

            Borrower hereby makes the following representations and warranties

which, to the knowledge of Borrower, are true and correct on the date hereof:

 

                  4.1. Use of Proceeds. The proceeds of the Loan shall be used

by Borrower only to (i) purchase Realen, to repay indebtedness of Realen and to

pay the costs of the closing of the Loan, (ii) to purchase land for residential

development as part of Borrower's Business and (iii) to pay for the construction

of on- and off-site improvements that will serve residential development

projects that are part of Borrower's Business.

 

                  4.2. Incorporation, Good Standing, and Due Qualification.

Borrower is a corporation duly incorporated, validly existing, and in good

standing under the laws of the State of Delaware, has the corporate power and

authority to own its assets and to transact the Business, and is duly qualified

as a foreign corporation and in good standing under the laws of each other

jurisdiction in which such qualification is required.

 

                  4.3. Corporate Power and Authority. The execution, delivery,

and performance by Borrower of the Note and this Agreement have been duly

authorized by all necessary corporate action and do not and will not (i) require

any consent or approval of the shareholders of Borrower; (ii) contravene

Borrower's charter or bylaws; (iii) violate any provision of or cause or result

in a breach of or constitute a default under any law, rule, regulation

(including, without limitation, Regulation U of the Board of Governors of the

Federal Reserve System), order, writ, judgment, injunction, decree,

determination, or award presently in effect having applicability to Borrower;

(iv) cause or result in a breach of or constitute a default under any indenture

or loan or credit agreement or any other agreement, lease, or instrument to

which Borrower is a party or by which it or its properties may be bound or

affected or; (v) cause or result in or require the creation or imposition of any

lien upon or with respect to any of the properties now owned or hereafter

acquired by Borrower except as contemplated by this Agreement.

 

                  4.4. Legally Enforceable Agreement. This Agreement is, and the

Note when delivered under this Agreement will be, legal, valid, and binding

obligations of Borrower, enforceable against it in accordance with the

respective terms thereof, except to the extent that such enforcement may be

limited by applicable bankruptcy, insolvency, and other similar laws affecting

creditors' rights generally.

 

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                  4.5. Financial Statements; Accuracy of Information. The

Financial Statements of Borrower for the period ending March 31, 2004 heretofore

delivered to Lender are true and correct and represent fairly the financial

position as of the date thereof and the results of Borrower's operations or

affairs for the period indicated, and show (including the footnotes) all known

liabilities, direct or contingent, of Borrower as of the date thereof, all in

accordance with GAAP consistently applied. Since the date of such financial

statements, there has been no material adverse change in condition, financial or

otherwise, of Borrower or in its Business and properties and, since such date,

Borrower has not incurred, other than in the ordinary course of business or as

previously disclosed by Borrower to Lender in writing, any indebtedness,

liabilities, obligations or commitments, contingent or otherwise. No

information, exhibit, or report furnished by Borrower to Lender in connection

with the negotiation of this Agreement contained any material misstatement of

fact or omitted to state a material fact or any fact necessary to make the

statement contained therein not materially misleading. All projections delivered

by Borrowers to Lender were made on a reasonable basis and in good faith. Except

as disclosed to Lender in writing, Borrower has no material contingent

liabilities (including liabilities for taxes), unusual forward or long-term

commitments or unrealized or anticipated losses from unfavorable commitments.

 

                  4.6. Conflicts. The execution, delivery and performance of

this Agreement and the Note will not violate any provision of any indenture,

agreement, or oth