Exhibit 10.2
FIFTH AMENDMENT TO BORROWING
BASE
REVOLVING LINE OF CREDIT
AGREEMENT
This Fifth Amendment to Borrowing
Base Revolving Line of Credit Agreement (“ Amendment
”) is entered into as of December 15, 2008 between
WILLIAM LYON HOMES, INC., a California corporation, and WHITNEY
RANCH VILLAGE 5 LLC, a Delaware limited liability company
(individually and collectively as the context may require, “
Borrower ”) and WACHOVIA BANK, NATIONAL ASSOCIATION, a
national banking association (“ Lender ”),
formerly referenced as Agent for Wachovia Financial Services, Inc.,
a North Carolina corporation, which Amendment is consented to by
Guarantor WILLIAM LYON HOMES, a Delaware corporation (“
Guarantor ”).
RECITALS :
A. Borrower has received a revolving
line of credit from Lender in the maximum commitment amount of
$25,000,000.00 (the “ Loan ”) for the
acquisition and development of Approved Subdivisions pursuant to
the terms of that certain Borrowing Base Revolving Line of Credit
Agreement dated as of February 14, 2006, between Borrower and
Lender, and as amended by that certain First Amendment to Borrowing
Base Revolving Line of Credit Agreement dated as of
September 29, 2006, as further amended by that certain Second
Amendment to Borrowing Base Revolving Line of Credit Agreement
dated as of March 30, 2007, as further amended by that certain
Third Amendment to Borrowing Base Revolving Line of Credit
Agreement dated as of January 23, 2008, and as further amended
by that certain Fourth Amendment to Borrowing Base Revolving Line
of Credit Agreement dated as of May 14, 2008 (as the same may
be further amended, modified, extended, renewed, restated or
supplemented from time to time, the “ Loan Agreement
”) and as further evidenced by that certain Amended and
Restated Borrowing Base Secured Promissory Note executed by
Borrower and payable to the order of Lender (as amended, restated
and otherwise modified from time to time, the “ Note
”). Borrower Whitney Ranch Village 5 LLC (“ Whitney
Ranch ”) became party to the Loan Agreement and the Loan
Documents pursuant to that certain Joinder and Assumption Agreement
by and among Lender, Whitney Ranch and Borrower William Lyon Homes,
Inc. (“ William Lyon ”) dated as of
September 30, 2008. All capitalized terms used herein and not
otherwise defined shall have the meanings given to such terms in
the Loan Agreement.
B. The Loan is secured by, among
other things, duly recorded Construction Deeds of Trust and Fixture
Filing (With Assignment of Rents and Security Agreement), duly
filed UCC-1 Financing Statements naming Borrower as Debtor and
Lender as Secured Party, and certain other assignments
(collectively, as amended, restated and otherwise modified from
time to time, the “ Security Documents
”).
C. Guarantor has executed certain
documents in favor of Lender in connection with the Loan, including
that certain Payment and Completion Guaranty Agreement (together
with any other documents executed by any Guarantor in favor of
Lender in connection with the Loan, each as may be amended,
restated and otherwise modified from time to time, the “
Guarantor Documents ”).
D. The Note, the Security Documents,
the Guarantor Documents, and all other agreements, documents, and
instruments evidencing, securing, or otherwise relating to the
Loan, as may be amended, modified, extended or restated from time
to time, are sometimes referred to individually and collectively as
the “ Loan Documents ”. Hereinafter, the Loan
Documents shall mean such documents as modified in this
Amendment.
E. The parties desire to modify the
Loan Agreement and the Loan Documents as set forth
below.
AGREEMENT :
For good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the
parties agree as follows:
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1.
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ACCURACY OF
RECITALS .
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Borrower and Lender acknowledge the
accuracy of the recitals.
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2.
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MODIFICATION
OF LOAN AGREEMENT AND LOAN DOCUMENTS .
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2.1 Definitions .
2.1.1 The following definition of
“ Borrower Senior Credit Facility ” is hereby
added to Section 1.1 of the Loan Agreement:
“ Borrower Senior Credit
Facility ” means individually and collectively
(a) that certain Indenture dated as of March 17, 2003
among William Lyon Homes, Inc., the Guarantors (as defined
therein), and U.S. Bank National Association, as Trustee (as
amended, restated and otherwise modified from time to time);
(b) that certain Indenture dated as of February 6, 2004
among William Lyon Homes, Inc., the Guarantors (as defined
therein), and U.S. Bank National Association, as Trustee (as
amended, restated and otherwise modified from time to time); and
(c) and that certain Indenture dated as of November 22,
2004 among William Lyon Homes, Inc., the Guarantors (as defined
therein), and U.S. Bank National Association, as Trustee (as
amended, restated and otherwise modified from time to
time).
2.1.2 The definition of “
Compensating Balances ” in Section 1.1 of
the Agreement is hereby amended and restated as follows:
“ Compensating Balances
” means the aggregate amount of deposits of WLH and any
Affiliate of WLH maintained with Lender, including deposits in any
interest-bearing account; provided , however , that
such amount shall exclude the amount of any collateralized funds in
any deposit account, including, without limitation, those funds in
which Borrower has granted Lender a security interest in exchange
for the issuance of any letter of credit.
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2.1.3 The following definition of
“ Gardenia Project ” is hereby added to
Section 1.1 of the Loan Agreement:
“ Gardenia Project
” means that certain Approved Subdivision located in Los
Angeles County, California added to the Borrowing Base pursuant to
that certain Project Addendum by and between Lender and William
Lyon dated as of August 22, 2007.
2.1.4 The definition of “
Guarantor Senior Credit Facility ” in
Section 1.1 of the Loan Agreement is hereby deleted in
its entirety.
2.1.5 The definition of “
Interest Rate ” in Section 1.1 of the Loan
Agreement is hereby amended and restated in its entirety to provide
as follows:
“ Interest Rate ”
means, at the election of Borrower in connection with any Advance
Request pursuant to Section 2.2(a) (and otherwise
subject to the provisions of Section 2.3 and
Section 3 of the Note), either:
(a) At such time as the amount of
Compensating Balances is equal to or greater than $10,000,000,
(i) the LIBOR Rate plus 3.00%, or (ii) the Prime Rate
plus 1.50%, in either case, rounded upwards to the nearest
one-eighth percent (.125%), or
(b) At such time as the amount of
Compensating Balances is equal to or greater than $5,000,000 but
less than $10,000,000, (i) the LIBOR Rate plus 3.50%, or
(ii) the Prime Rate plus 2.00%, in either case, rounded
upwards to the nearest one-eighth percent (.125%), or
(c) At such time as the amount of
Compensating Balances is less than $5,000,000, (i) the LIBOR
Rate plus 4.00%, or (ii) the Prime Rate plus 2.50%, in either
case, rounded upwards to the nearest one-eighth percent
(.125%);
provided , however , that in no event shall the
Interest Rate be less than five and one-half of one percent
(5.5%).
As used herein, “ LIBOR
Based Rate ” means an Interest Rate based on the LIBOR
Rate, and “ Prime Based Rate ” means an Interest
Rate based on the Prime Rate. LIBOR Based Rates shall be adjusted
from time to time as of each Interest Rate Adjustment Date. Prime
Based Rates shall be adjusted from time to time as and when the
Prime Rate is adjusted. Borrower may not elect to convert or
otherwise change the Interest Rate except in connection with an
Advance Request. Interest shall accrue on the entire outstanding
balance of the Loan at the Interest Rate selected by Borrower until
such time as Borrower elects to convert such Interest Rate to the
other available Interest Rate (i.e., LIBOR Based Rate or Prime
Based Rate); provided that the applicable Interest Rate shall be
the Default Rate at any time an Event of Default has occurred and
is continuing. In the
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event no such Interest Rate election
is made by Borrower, the Interest Rate shall be deemed to be the
LIBOR Based Rate.
2.1.6 The definition of “
Maximum Allowed Advance ” in Section 1.1
of the Loan Agreement is hereby amended to add the following
subsection (f):
(f) Notwithstanding anything herein
to the contrary, the maximum advance rate with respect to any Land
Under Development, A&D Completed Lots or Model Units within the
Gardenia Project shall be equal to the following:
(i) With respect to all Land Under
Development, regardless of plan type:
(A) 65% of the Appraised Value of
such Land Under Development until December 31, 2008, on which
date the advance rate shall be reduced to 25% of the Appraised
Value of such Land Under Development; and
(B) 25% of the Appraised Value of
such Land Under Development from January 1, 2009 until
March 31, 2009, on which date the advance rate shall be
reduced to 0% of the Appraised Value of such Land Under
Development.
(ii) With respect to all A&D
Completed Lots, regardless of plan type:
(A) 75% of the Appraised Value of
such A&D Completed Lots until December 31, 2008, on which
date the advance rate shall be reduced to 40% of the Appraised
Value of such A&D Completed Lots; and
(B) 40% of the Appraised Value of
such A&D Completed Lots from January 1, 2009 until
March 31, 2009, on which date the advance rate shall be
reduced to 0% of the Appraised Value of such A&D Completed
Lots.
(iii) With respect to all Model
Units only, regardless of plan type:
(A) 75% of the Appraised Value of
such Model Units until December 31, 2008, on which date the
advance rate shall be reduced to 40% of the Appraised Value of such
Model Units; and
(B) 40% of the Appraised Value of
such Model Units from January 1, 2009 until March 31,
2009, on which date the advance rate shall be reduced to 0% of the
Appraised Value of such Model Units.
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2.2 Reduction in Availability
. Borrower acknowledges and agrees that the current Available
Commitment Amount with respect to the Gardenia Project is
$5,944,525. Notwithstanding anything in the Loan Agreement to the
contrary, including without limitation
Section 2.4(b)(ii) thereof, as a result of the
reduction in the Maximum Allowed Advance with respect to the
Gardenia Project, the Available Commitment
