|
Exhibit 10.2 TERM LOAN AGREEMENT dated as of
January 14, 2009 by and between ASHTON WOODS USA L.L.C.,
as Borrower and PARKMOUNT LAND DEVELOPMENT INC.,
as Lender
TERM LOAN AGREEMENT
THIS
TERM LOAN AGREEMENT (this "Agreement"), dated as of
January 14, 2009, is made by and between ASHTON WOODS USA
L.L.C., a Nevada limited liability company ("Borrower"), and
PARKMOUNT LAND DEVELOPMENT INC., a Canadian corporation ("Lender").
ARTICLE 1: DEFINITIONS
1.1
Defined Terms . As used in this Agreement, the terms set
forth in Exhibit "A" attached hereto and made a part
hereof shall have the meanings assigned therein. ARTICLE 2:
AMOUNT AND TERMS OF THE LOAN; PAYMENT
2.1
The Loan . Subject to the terms and conditions set forth
herein, Lender has agreed to make loan advances to Borrower in the
maximum aggregate original principal amount of up to FIVE MILLION
AND NO/100 DOLLARS ($5,000,000.00) (the "Loan"). The initial loan
advance shall be funded upon Borrower’s satisfaction of the
conditions to such initial advance described herein. The Loan shall
be repaid in accordance with this Agreement. The Loan is not a
revolving loan; amounts repaid may not be re-borrowed. Provided
there are no Events of Default hereunder and no events of default
under the Credit Agreement (as defined herein), Borrower may
request additional loan advances after the initial funding in an
amount not to exceed $5,000,000.00 less the amount previously
advanced hereunder on not less than five (5) Business
Days’ prior notice. Borrower shall provide to Lender all
documentation reasonably requested by Lender in connection with
such advances.
2.2
Interest Rate; Late Charge . Provided that no Event of
Default exists, the principal amount of the Loan outstanding from
time to time shall bear interest until paid at a fixed per annum
rate equal to the LIBOR Rate plus six (6%), as determined two
(2) London Banking Days prior to the date of this Agreement.
Interest shall be calculated based on a three hundred sixty
(360) day year and charged for the actual number of days
elapsed. In computing the number of days during which such interest
accrues, the day on which funds are initially advanced shall be
included regardless of the time of day such advance is made, and
the day on which funds are repaid shall be included unless
repayment is credited prior to close of business. All interest
hereunder shall be paid upon maturity. Whenever any payment to be
made hereunder shall be stated to be due on a day that is not a
Business Day, the payment shall be made on or before the last
Business Day prior to such due date. Notwithstanding any longer
period granted hereunder in connection with the occurrence of an
Event of Default and Lender’s acceleration remedies, if any
sum payable under this Agreement is not paid on or before the date
on which it is due, Borrower shall pay to Lender upon demand an
amount equal to the lesser of five percent (5%) of such unpaid sum
or the maximum amount permitted by applicable law to defray the
expenses incurred by Lender in handling and processing such
delinquent payment and to compensate Lender for the loss of the use
of such delinquent payment and such amount shall be secured by the
Mortgages and other Loan Documents.
2.3
Maximum Legal Interest. It is expressly stipulated and
agreed to be the intent of Borrower and Lender at all times to
comply with applicable state law or applicable
1
United States federal law (to the extent that it permits Lender
to contract for, charge, take, reserve, or receive a greater amount
of interest than under state law) and that this section shall
control every other covenant and agreement in this Agreement. If
the applicable law (state or federal) is ever judicially
interpreted so as to render usurious any amount called for under
this Agreement, or contracted for, charged, taken, reserved, or
received with respect to the Obligations, or if Lender’s
exercise of the option to accelerate the Maturity Date, or if any
prepayment by Borrower results in Borrower having paid any interest
in excess of that permitted by applicable law, then it is
Lender’s express intent that all excess amounts theretofore
collected by Lender shall be credited on the principal balance of
this Agreement and all other Obligations and the provisions of this
Agreement immediately be deemed reformed and the amounts thereafter
collectible hereunder and thereunder reduced, without the necessity
of the execution of any new documents, so as to comply with the
applicable law, but so as to permit the recovery of the fullest
amount otherwise called for hereunder or thereunder. All sums paid
or agreed to be paid to Lender for the use, forbearance, or
detention of the Obligations shall, to the extent permitted by
applicable law, be amortized, prorated, allocated, and spread
throughout the full stated term of this Agreement until payment in
full of the Obligations so that the rate or amount of interest on
account of the Obligations does not exceed the maximum lawful rate
from time to time in effect and applicable to the Obligations for
so long as the Obligations are outstanding. Notwithstanding
anything to the contrary contained herein, it is not the intention
of Lender to accelerate the maturity of any interest that has not
accrued at the time of such acceleration or to collect unearned
interest at the time of such acceleration.
2.4
Note . The Loan made by Lender pursuant hereto shall be
evidenced by the Note, payable to the order of Lender and
evidencing the obligation of Borrower to pay the aggregate unpaid
principal amount of the Loan, with interest thereon as prescribed
herein. The Note shall (a) be dated as of the date hereof,
(b) be stated to mature on the Maturity Date, and
(c) bear interest for the period from and including the date
thereof on the unpaid principal amount thereof from time to time
outstanding at the applicable interest rate per annum determined as
provided herein.
2.5
Payment and Maturity . A payment of all Obligations then
outstanding, including but not limited to all outstanding principal
and interest on the Loan, shall be due and payable by Borrower on
the Maturity Date.
2.6
Use of Proceeds . The proceeds of the Loan made hereunder
shall be used by Borrower for working capital and to fund
operations.
2.7
Security . This Agreement is evidence of the Loan. This
Agreement is secured by (a) the Guaranty Agreement,
(b) the Mortgages, and (c) the other Loan Documents.
ARTICLE 3: REPRESENTATIONS AND WARRANTIES
In
order to induce Lender to enter into this Agreement and to make the
Loan, Borrower hereby, represents and warrants to Lender that on
the date hereof:
3.1
Financial Statements . Borrower has heretofore furnished to
Lender the consolidated balance sheet and financial statement of
Borrower and the Guarantors as of August
2
31, 2008, certified by Borrower as true and correct. The
foregoing financial statement fairly presents, in all material
respects, the financial condition of Borrower and the Guarantors as
of the date thereof and the results of the operations of Borrower
and the Guarantors for the period then ended.
3.2
Existence; Compliance with Law . Each of Borrower and the
Guarantors (a) is duly organized or formed, as appropriate,
validly existing and in good standing under the laws of the
jurisdiction of its incorporation, formation or organization, as
appropriate, (b) has the requisite corporate, partnership or
limited liability company power and authority to conduct the
business in which it is currently engaged, (c) is qualified as
a foreign entity to do business under the laws of any jurisdiction
where the failure to so qualify would have a material adverse
effect on the business of Borrower and the Guarantors taken as a
whole, and (d) is in compliance with all Requirements of Law
except to the extent that the failure to comply therewith would
not, in the aggregate, have a material adverse effect on the
business, operations, property or financial or other condition of
Borrower and the Guarantors taken as a whole or would not
materially adversely affect the ability of Borrower or the
Guarantors to perform their respective obligations under the Loan
Documents.
3.3
Power; Authorization; Enforceable Obligations . Borrower and
each Guarantor has the corporate, partnership or limited liability
company (as applicable) power and authority to make, deliver and
perform the Loan Documents to which it is a party and (in the case
of Borrower) to borrow hereunder, and has taken all corporate or
other action necessary to be taken by it to authorize (a) (in the
case of Borrower) such borrowing on the terms and conditions of
this Agreement and the Note, and (b) the execution, delivery
and performance of the Loan Documents to which it is a party. No
consent, waiver or authorization of, or filing with any Person
(including without limitation any Governmental Authority) is
required to be made or obtained by Borrower in connection with the
borrowings hereunder or by Borrower or any Guarantor in connection
with the execution, delivery, performance, validity or
enforceability of the Loan Documents to which it is a party. This
Agreement has been, and the Note, the Mortgages and the Guaranty
Agreement will be, duly executed and delivered on behalf of
Borrower or each Guarantor (as the case may be), and this Agreement
constitutes, and the Note, the Mortgages and Guaranty Agreement
when executed and delivered hereunder will constitute, a legal,
valid and binding obligation of Borrower or the Guarantors (as the
case may be), enforceable against Borrower or the Guarantors (as
the case may be), in accordance with their terms, subject to the
effect, if any, of bankruptcy, insolvency, reorganization,
arrangement or other similar laws relating to or affecting the
rights of creditors generally and the limitations, if any, imposed
by the general principles of equity and public policy.
3.4
No Legal Bar . The execution, delivery and performance of
this Agreement and the Note, the borrowing hereunder and the use of
the proceeds thereof and the execution, delivery and performance by
the Guarantors of the Guaranty Agreement and the Mortgages
(a) do not violate any Requirement of Law or Contractual
Obligation of Borrower or any of the Guarantors, (b) do not
contravene the articles of incorporation, charter, bylaws,
partnership agreement, articles or certificate of formation,
operating agreement or other organizational documents of Borrower
or any of the Guarantors and (c) do not result in, or require,
the creation or imposition of any Lien (other than the Lien of the
Loan Documents) on any of its properties or revenues pursuant to
any Requirement of Law or Contractual Obligation.
3
3.5
No Defaults on Outstanding Judgments or Orders . Borrower
and each Guarantor have satisfied all unstayed and unappealed
judgments in excess of $1,000,000 in the aggregate (that are not
covered by insurance), and neither Borrower nor any Guarantor is in
default with respect to any judgments in excess of $1,000,000 in
the aggregate (that are not covered by insurance), or any material
writ, injunction, decree, rule, or regulation of any court,
arbitrator, or federal, state, municipal, or other governmental
authority, commission, board, bureau, agency, or instrumentality,
domestic or foreign applicable to Borrower or any Guarantor.
3.6
Ownership and Liens . Borrower and each Guarantor have title
to, or valid leasehold interests in, all of their respective
properties and assets, real and personal, including the properties
and assets and leasehold interests reflected in the financial
statements referred to in Section 4.1 hereof (other than any
properties or assets disposed of in the ordinary course of
business), and none of the properties and assets owned by Borrower
or any Guarantor and none of their leasehold interests is subject
to any Lien, except for Liens permitted herein or approved by
Lender.
3.7
Operation of Business . Borrower and each Guarantor possess
all material licenses, permits, franchises, patents, copyrights,
trademarks, and trade names, or rights thereto, required to conduct
their respective businesses substantially as now conducted and as
presently proposed to be conducted and neither Borrower nor any
Guarantor is in violation of any valid rights of others with
respect to any of the foregoing where the failure to possess such
licenses, permits, franchises, patents, copyrights, trademarks,
trade names or rights thereto or the violation of the valid rights
of others with respect thereto may, in any one case or in the
aggregate, adversely affect in any material respect the financial
condition, operations, properties, or business of Borrower or any
Guarantor or the ability of Borrower and the Guarantors, taken as a
whole, to perform their respective obligations under the Loan
Documents to which they are a party.
3.8
Taxes . All income tax liabilities or income tax obligations
of Borrower and each Guarantor that are due (other than those being
contested in good faith by appropriate proceedings) have been paid
or have been accrued by or reserved for by Borrower.
3.9
Compliance with Laws . Borrower and the Guarantors are in
compliance in all material respects with applicable statutes,
regulations and ordinances in connection with the operation of
their business, including without limitation statutes, regulations
or ordinances relating to environmental matters, of any
governmental entity, or any agency thereof. ARTICLE 4:
CONDITIONS PRECEDENT
4.1
Conditions to Initial Loan(s) . The obligation of the Lender
to make the Loan is subject to the satisfaction of the following
conditions precedent on or prior to the date hereof:
(a)
Note . Lender shall have received the Note, conforming to
the requirements hereof and duly executed and delivered by a duly
authorized officer of Borrower.
(b)
Guaranty Agreements . The Guaranty Agreement shall have been
duly executed and delivered by all Guarantors to Lender.
4
(c)
Proceedings of Borrower . Lender shall have received a copy
of the resolutions (in form and substance satisfactory to Lender)
of the board of directors of Borrower authorizing (i) the
execution, delivery and performance, of this Agreement,
(ii) the consummation of the transactions contemplated hereby,
(iii) the borrowings herein provided for, and (iv) the
execution, delivery and performance of the Note and the other
documents provided for in this Agreement, all certified by the
secretary or other appropriate representative of Borrower as of the
date hereof. Such certificate shall state that the resolutions set
forth therein have not been amended, modified, revoked or rescinded
as of the date hereof.
(d)
Proceedings of Guarantors . Lender shall have received a
copy of the respective resolutions (in form and substance
reasonably satisfactory to Lender) of the board of directors,
management committee or other governing body of each of the
Guarantors (or of Borrower or another Subsidiary of Borrower as the
sole shareholder or sole member of the applicable Guarantor where
appropriate), each resolution authorizing the execution, delivery
and performance of the Guaranty Agreement, all certified by the
Secretary or Assistant Secretary (or other person in a comparable
position) of the respective Guarantor (or Borrower or Subsidiary)
as of the date hereof. Such certificate shall state that the
resolutions set forth therein have not been amended, modified,
revoked or rescinded as of the date hereof.
(e)
Incumbency Certificate of Borrower . Lender shall have
received a certificate of the secretary, manager or other
appropriate representative of Borrower, dated the date hereof, as
to the incumbency and signature of the officer(s), members or
managers of each executing this Agreement, the Note and any
certificate or other documents to be executed and delivered by
Borrower pursuant hereto or thereto.
(f)
Incumbency Certificates of Guarantors . Lender shall have
received a certificate of the Secretary (or other person in a
comparable position) of each of the Guarantors, dated the date
hereof, as to the incumbency and signatures of the officer(s) (or
other person(s) in a comparable position) of each executing the
Guaranty Agreement.
(g)
No Proceeding or Litigation; No Injunctive Relief . No
action, suit or proceeding before any arbitrator or any
Governmental Authority shall have been commenced, no investigation
by any Governmental Authority shall have been commenced and no
action, suit, proceeding or investigation by any Governmental
Authority shall have been threatened, against Borrower or any
Guarantor or any of the officers, directors or managers of Borrower
or any Guarantor, seeking to restrain, prevent or change the
transactions contemplated by this Agreement in whole or in part or
questioning the validity or legality of the transactions
contemplated by this Agreement or seeking damages in connection
with such transactions.
(h)
No Default or Event of Default . No Default or Event of
Default shall have occurred and be continuing hereunder prior to or
after giving effect to the making of the Loan.
(i)
Additional Matters . All corporate and other proceedings and
all other documents and legal matters in connection with the
transactions contemplated by the Loan Documents shall be reasonably
satisfactory in form and substance to Lender.
5
(j)
Compliance with Laws . Borrower and the Guarantors shall be
in compliance in all material respects with applicable statutes,
regulations and ordinances in connection with the operation of
their business, including without limitation statutes, regulations
or ordinances relating to environmental matters, of any
governmental entity, or any agency thereof.
(k)
Legal Opinion of Counsel to Borrower . Lender shall have
received an executed legal opinion of Borrower’s counsel and
other local counsel to Borrower and the Guarantors granting the
Mortgages, dated as of the date hereof and addressed to Lender in
form and substance reasonably satisfactory to Lender.
(l)
Fee . Borrower shall have paid to Lender a fee in the amount
of one-half of one percent (.5%) of the amount of the Loan. ARTICLE
5: DEFAULTS, EVENTS OF DEFAULT; DISTRIBUTION OF PROCEEDS AFTER
EVENT OF DEFAULT
Upon
the occurrence of any of the following events:
(1) Borrower
shall fail to make any payment under the Note or fail to pay any
fee, charge or other amount payable hereunder, and such failure
shall continue uncured for five (5) Business Days; or
(2) any
representation or warranty made or deemed made by Borrower or any
Guarantor herein, in any other Loan Document or which is contained
in any certificate, document or financial or other statement
furnished at any time under or in connection herewith or therewith,
shall prove to have been incorrect in any material respect on or as
of the date made or deemed made; or
(3) (a) Borrower
or any Guarantor or shall commence any case, proceeding or other
action (i) under any existing or future law of any juri
|
