EXHIBIT 4.10(a)
FOURTH MODIFICATION AGREEMENT
THIS FOURTH MODIFICATION AGREEMENT ("Agreement") is entered into as of
December 31, 1998, among the Borrowers named herein, the Banks listed on the
signature pages of this Agreement, and BANK ONE, ARIZONA, NA, a national
banking association, as Agent. The parties hereto agree as follows:
RECITALS:
A. Agent, the banks named therein ("Banks") and RICHMOND AMERICAN
HOMES OF CALIFORNIA, INC., a Colorado corporation, RICHMOND AMERICAN HOMES
OF MARYLAND, INC., a Maryland corporation, RICHMOND AMERICAN HOMES OF NEVADA,
INC., a Colorado corporation, RICHMOND AMERICAN HOMES OF VIRGINIA, INC., a
Virginia corporation, RICHMOND AMERICAN HOMES OF ARIZONA, INC., a Delaware
corporation (formerly known as Richmond American Homes, Inc.), RICHMOND
AMERICAN HOMES OF COLORADO, INC., a Delaware corporation (formerly known as
Richmond Homes, Inc. I) and RICHMOND HOMES, INC. II, a Delaware corporation
(subsequently merged into Richmond Homes, Inc. I), as Borrowers
(collectively, the "Original Borrowers") entered into a Credit Agreement
dated as of April 10, 1996, an Agreement dated March 3, 1997, a First
Modification Agreement dated as of March 28, 1997, a Second Modification
Agreement dated as of October 29, 1997, and a Third Modification Agreement
dated as of June 2, 1998 (collectively, the "Credit Agreement"). Pursuant
to the Credit Agreement, Banks, among other things, established a credit
facility ("Credit Facility") for Original Borrowers, which is evidenced by
the Notes. Capitalized terms not otherwise defined herein shall have the
same meanings ascribed to such terms in the Credit Agreement.
B. Original Borrowers have requested that Banks add RICHMOND AMERICAN
HOMES OF NORTHERN CALIFORNIA, INC., a Colorado corporation ("Assuming
Borrower" and, together with Original Borrowers, "Borrowers") as a borrower
under the Credit Agreement. Banks have agreed to so modify the Credit
Facility and to amend the Credit Agreement and other Loan Documents on the
terms and subject to the conditions set forth in this Agreement.
AGREEMENTS:
For good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, Borrowers, Banks (as hereafter defined) and
Agent agree as follows:
SECTION 1. ACCURACY OF RECITALS.
The parties acknowledge the accuracy of the Recitals.
SECTION 2. MODIFICATION OF CREDIT AGREEMENT.
Effective as of the Effective Date (as hereafter defined), the Credit
Agreement shall be modified as follows:
2.1 The following definition is hereby amended in its entirety as set
forth in Article I:
"Borrowers" means RICHMOND AMERICAN HOMES OF CALIFORNIA, INC.,
a Colorado corporation, RICHMOND AMERICAN HOMES OF MARYLAND, INC., a
Maryland corporation, RICHMOND AMERICAN HOMES OF NEVADA, INC., a
Colorado corporation, RICHMOND AMERICAN HOMES OF VIRGINIA, INC., a
Virginia corporation, RICHMOND AMERICAN HOMES OF ARIZONA, INC., a
Delaware corporation (formerly known as Richmond American Homes,
Inc.), RICHMOND AMERICAN HOMES OF COLORADO, INC., a Delaware
corporation (formerly known as Richmond Homes, Inc. I), RICHMOND
AMERICAN HOMES OF NORTHERN CALIFORNIA, INC., a Colorado corporation,
and their successors and assigns, and any Subsidiary that shall
hereafter become a Borrower in accordance with Section 11.4 hereof,
and any successors and assigns of any of the foregoing. "Borrower"
means any one of the Borrowers.
2.2 The definition of "Convertible Subordinated Notes" is hereby
deleted from Article I of the Credit Agreement and such phrase is also
deleted in each place in the Credit Agreement that it appears.
SECTION 3. OTHER MODIFICATIONS; RATIFICATION OF LOAN DOCUMENTS.
3.1 As of the Effective Date, each reference in the Loan Documents to
any of the Loan Documents is hereby amended to be a reference to such document
as modified herein.
3.2 The Loan Documents are ratified and affirmed by Borrowers and
shall remain in full force and effect as modified herein.
SECTION 4. BORROWERS REPRESENTATIONS AND WARRANTIES.
Borrowers represent and warrant to Banks and Agent:
4.1 As of December 28, 1998, the outstanding principal balance of the
Notes is $40,000,000.00; interest has been paid through the due date.
4.2 Assuming Borrower is (a) a Wholly-Owned Subsidiary of Guarantor,
and (b) a Restricted Subsidiary, as defined in the Indenture.
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4.3 No Event of Default and no Unmatured Event of Default has
occurred and is continuing under any of the Loan Documents as modified
herein. The addition of Assuming Borrower as a Borrower shall not cause an
Event of Default or an Unmatured Event of Default to occur.
4.4 There has been no material adverse change in the financial
condition of any Borrower or Guarantor or any other person whose financial
statement has been delivered to Agent in connection with the Credit Facility
from the most recent financial statement received by Agent.
4.5 Each and all representations and warranties of Borrowers in the
Loan Documents are accurate on the date hereof, except as may have been
previously disclosed to Banks in writing.
4.6 Borrowers have no claims, counterclaims, defenses, or set-offs
with respect to the Credit Facility or the Loan Documents as modified herein.
4.7 The Loan Documents as modified herein are the legal, valid, and
binding obligation of Borrowers, enforceable against Borrowers in accordance
with their terms, subject to bankruptcy, insolvency or similar laws affecting
the enforcement of creditors' rights generally and general principles of
equity.
4.8 Each Borrower is validly existing under the laws of the State of
its formation or organization and has the requisite power and authority to
execute and deliver this Agreement and to perform the Loan Documents as
modified herein. The execution and delivery of this Agreement and the
performance of the Loan Documents as modified herein have been duly
authorized by all requisite action by or on behalf of each Borrower. This
Agreement has been duly executed and delivered on behalf of each Borrower.
SECTION 5. BORROWER COVENANTS.
Borrowers covenant with Agent and Banks as follows:
5.1 Borrowers shall execute, deliver, and provide to Agent such
additional agreements, documents, and instruments as reasonably required by
Agent to effectuate the intent of this Agreement.
5.2 Borrowers fully, finally, and absolutely and forever release and
discharge Agent and Banks and their present and former directors,
shareholders, officers, employees, agents, representatives, successors and
assigns, and their separate and respective heirs, personal representatives,
successors and assigns, from any and all actions, causes of action, claims,
debts, damages, demands, liabilities, obligations, and suits, of whatever
kind or nature, in law or equity of Borrowers, whether now known or unknown
to Borrowers, and whether contingent or matured, (i) in respect of the Credit
Facility, the Loan Documents, or the actions or omissions of Agent or
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Banks in respect of the Credit Facility or the Loan Documents and (ii)
arising from events occurring prior to the date of this Agreement.
SECTION 6. CONDITIONS PRECEDENT.
The agreements of Banks and Agent and the modifications contained herein
shall not be binding upon Banks and Agent until Borrowers have executed and
delivered this Agreement and Agent has received, at Borrowers' expense, all
of the following on or before December 31, 1998 (the "Effective Date"), and
each of which shall be in form and content satisfactory to Agent and Banks
and shall be subject to approval by Agent and Banks:
6.1 An original of this Agreement fully executed by Borrowers and
Guarantor;
6.2 A Replacement Promissory Note payable to the order of Bank One,
Arizona, NA in the amount of $75,000,000.00, in the form attached hereto as
EXHIBIT A, fully executed by Borrowers, which shall be deemed to be a Note
for all purposes under the Credit Agreement;
6.3 A Replacement Promissory Note payable to the order of Bank United
in the amount of $75,000,000.00, in the form attached hereto as EXHIBIT B,
fully executed by Borrowers, which shall be deemed to be a Note for all
purposes under the Credit Agreement;
6.4 A Replacement Promissory Note payable to the order of KeyBank
National Association in the amount of $50,000,000.00, in the form attached
hereto as EXHIBIT C, fully executed by Borrowers, which shall be deemed to be
a Note for all purposes under the Credit Agreement;
6.5 A Promissory Note payable to the order of Bank of America
National Trust and Savings Association, assignee of NationsBank, N.A., in
the amount of $50,000,000.00, in the form attached hereto as EXHIBIT D, fully
executed by Borrowers, which shall be deemed to be a Note for all purposes
under the Credit Agreement;
6.6 A Replacement Promissory Note payable to the order of Sanwa Bank
California in the amount of $25,000,000.00, in the form attached hereto as
EXHIBIT E, fully executed by Borrowers, which shall be deemed to be a Note
for all purposes under the Credit Agreement;
6.7 A Promissory Note payable to the order of AmSouth Bank in the
amount of $25,000,000.00, in the form attached hereto as EXHIBIT F, fully
executed by Borrowers, which shall be deemed to be a Note for all purposes
under the Credit Agreement;
6.8 With respect to Assuming Borrower, Borrowers have furnished to
Agent with sufficient copies for Banks:
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(i) Copies of the certificate of incorporation of
Assuming Borrower, together with all amendments, and a certificate of
good standing, all certified by the appropriate governmental officer
in the jurisdiction of incorporation.
(ii) Copies, certified by the Secretary or Assistant
Secretary of Assuming Borrower, of its by-laws and of its Board of
Directors' resolutions authorizing the execution of this Agreement and
the assumption of Borrowers' obligations under the Loan Documents.
(iii) Incumbency certificates, executed by the Secretary or
Assistant Secretary of Assuming Borrower, which shall identify by name
and title and bear the signature of the officers authorized to sign
this Agreement and to make borrowings under the Loan Documents and to
request, apply for and execute Facility Letter of Credit Reimbursement
Agreements with respect to Facility Letters of Credit, upon which
certificates Agent, Banks and the Issuing Bank shall be entitled to
rely until informed of any change in writing by Assuming Borrower.
(iv) A written certificate of General Counsel of
Guarantor, addressed to Agent and Banks in substantially the form of
EXHIBIT G hereto.
6.9 Such resolutions or authorizations and such other documents as
Agent may require relating to the existence and good standing of each
Original Borrower and Guarantor, and the authority of any person executing
this Agreement or other documents on behalf of each Original Borrower and
Guarantor;
6.10 Payment of all the internal and external costs and expenses
incurred by Agent in connection with this Agreement (including, without
limitation, inside and outside attorneys and processing costs, expenses, and
fees).
SECTION 7. ASSUMPTION BY ASSUMING BORROWER.
7.1 Assuming Borrower hereby assumes the obligation for payment of
the indebtedness evidenced by the Notes and for the performance of all
covenants, conditions, provisions and agreements under the Loan Documents,
as the same are amended hereby. Assuming Borrower hereby covenants, promises
and agrees (i) to pay the Notes at the times, in the manner and in all other
respects as therein provided or as it may be modified in writing between the
obligor and the holder thereof; (ii) to perform each and all of the
covenants, conditions, provisions and agreements in the Loan Documents, as
the same are amended hereby, to be performed by Borrowers, at the time, in
the manner and in all other respects as therein provided; and (iii) to be
bound by each and every term, condition and provision of the Credit
Agreement, the Notes, and the other Loan Documents, as the same are amended
hereby, as though such documents and instruments had originally been made,
executed and delivered by Assuming Borrower.
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7.2 Banks hereby consent to the foregoing assumption by Assuming
Borrower. Such consent shall in no way affect the liability or obligations
of Original Borrowers under the Credit Agreement, the Notes and the other
Loan Documents, as the same are amended hereby, nor the liability of
Guarantor. Such consent shall not constitute a consent to any further
assumption by any other party.
7.3 Original Borrowers hereby acknowledge and agree that their
liability, obligations and agreements under the Credit Agreement, the Notes,
and the other Loan Documents, as the same are amended hereby, shall continue
unaffected hereby.
SECTION 8. GENERAL.
8.1 The Loan Documents as modified herein contain the complete
understanding and agreement of Borrowers, Banks and Agent in respect of the
Credit Facility and supersede all prior representations, warranties,
agreements, arrangements, understandings, and negotiations. No provision of
the Loan Documents as modified herein may be changed, discharged,
supplemented, terminated, or waived except in a writing signed by the parties
thereto.
8.2 The Loan Documents as modified herein shall be binding upon and
shall inure to the benefit of Borrowers, Banks and Agent and their
successors and assigns; provided, however, Borrowers may not assign any of
their rights or delegate any of their obligations under the Loan Documents
and any purported assignment or delegation shall be void.
8.3 This Agreement shall be governed by and construed in accordance
with the laws of the State of Arizona, without giving effect to conflicts of
law principles.
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8.4 This Agreement may be executed in one or more counterparts, each
of which shall be deemed an original and all of which together shall
constitute one and the same document. Signature pages may be detached from
the counterparts and attached to a single copy of this Agreement to
physically form one document.
IN WITNESS WHEREOF, Borrowers, Banks, and Agent have executed this
Agreement as of the date set forth above.
BORROWERS:
ATTEST: RICHMOND AMERICAN HOMES OF
CALIFORNIA, INC., a Colorado corporation
/s/ Daniel S. Japha By: /s/ John J. Heaney
- ----------------------------- --------------------------------
Name: John J. Heaney
Title: Vice President
ATTEST: RICHMOND AMERICAN HOMES OF
MARYLAND, INC., a Maryland corporation
/s/ Daniel S. Japha By: /s/ John J. Heaney
- ----------------------------- --------------------------------
Name: John J. Heaney
Title: Vice President
ATTEST: RICHMOND AMERICAN HOMES OF NEVADA,
INC., a Colorado corporation
/s/ Daniel S. Japha By: /s/ John J. Heaney
- ----------------------------- --------------------------------
Name: John J. Heaney
Title: Vice President
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ATTEST: RICHMOND AMERICAN HOMES OF VIRGINIA,
INC., a Virginia corporation
/s/ Daniel S. Japha By: /s/ John J. Heaney
- ----------------------------- --------------------------------
Name: John J. Heaney
Title: Vice President
ATTEST: RICHMOND AMERICAN HOMES OF ARIZONA,
INC., a Delaware corporation, formerly
known as Richmond American Homes, Inc.
/s/ Daniel S. Japha By: /s/ John J. Heaney
- ----------------------------- --------------------------------
Name: John J. Heaney
Title: Vice President
ATTEST: RICHMOND AMERICAN HOMES OF
COLORADO, INC., a Delaware corporation,
formerly known as Richmond Homes, Inc. I,
successor by merger to Richmond Homes,
Inc. II
/s/ Daniel S. Japha By: /s/ John J. Heaney
- ----------------------------- --------------------------------
Name: John J. Heaney
Title: Vice President
ATTEST: RICHMOND AMERICAN HOMES OF NORTHERN
CALIFORNIA, INC., a Colorado corporation
/s/ Daniel S. Japha By: /s/ John J. Heaney
- ----------------------------- --------------------------------
Name: John J. Heaney
Title: Vice President
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COMMITMENTS BANKS AND AGENT:
$75,000,000.00 BANK ONE, ARIZONA, NA, a national banking
association, Individually and as Agent
By: /s/ Rhonda R. Williams
--------------------------------
Name: Rhonda R. Williams
Title: Vice President
$75,000,000.00 BANK UNITED, a federal savings bank
By: /s/ Thomas S. Griffin
--------------------------------
Name: Thomas S. Griffin
Title: Vice President
$50,000,000.00 KEYBANK NATIONAL ASSOCIATION, a national
banking association formerly known as KEY
BANK OF COLORADO, a Colorado state bank
By: /s/ Paul Holden
--------------------------------
Name: Paul Holden
Title: Vice President
$50,000,000.00 BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION
By: /s/ Michael V. Atkins
--------------------------------
Name: Michael V. Atkins
------------------------------
Title: Vice President
-----------------------------
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$25,000,000.00 SANWA BANK CALIFORNIA, a California
corporation
By: /s/ Kurt Mair
--------------------------------
Name: Kurt Mair
Title: Assistant Vice President
$25,000,000.00 AMSOUTH BANK, an Alabama banking
corporation
By: /s/ Ronny Hudspeth
--------------------------------
Name: Ronny Hudspeth
Title: Vice President
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CONSENT AND AGREEMENT OF GUARANTOR
With respect to the Fourth Modification Agreement, dated December 31,
1998 ("Agreement"), among the Borrowers named therein, the Banks listed on
the signature pages of the Agreement, and BANK ONE, ARIZONA, NA, a national
banking association, as Agent, the undersigned ("Guarantor") agrees for the
benefit of Agent and Banks as follows:
1. Guarantor acknowledges (i) receiving a copy of and reading the
Agreement, (ii) the accuracy of the Recitals in the Agreement, and (iii) the
effectiveness of (A) the Guaranty dated April 10, 1996 executed by the
undersigned for the benefit of Banks and Agent, as previously modified and as
modified herein (the "Guaranty"), and (B) that letter agreement referred to
in Sections 5.1 and 13.12 of the Credit Agreement (the "Letter Agreement").
The Guaranty and the Letter Agreement, as modified herein, are referred to
individually and collectively as the "Guarantor Documents."
2. Guarantor consents to the assumption of the Loan Documents by
Assuming Borrower, the modification of the Loan Documents and all other
matters in the Agreement.
3. Guarantor fully, finally, and forever releases and discharges
Agent, Banks and theirs successors, assigns, directors, officers, employees,
agents, and representatives from any and all actions, causes of action,
claims, debts, demands, liabilities, obligations, and suits of whatever kind
or nature, in law or equity, that Guarantor has or in the future may have,
whether known or unknown, (i) in respect of the Credit Facility, the Loan
Documents, the Guarantor Documents, or the actions or omissions of Agent or
Banks in respect of the Credit Facility, the Loan Documents, or the Guarantor
Documents and (ii) arising from events occurring prior to the date hereof.
4. Guarantor agrees that all references, if any, to the Notes, the
Credit Agreement, and any other Loan Documents in the Guarantor Documents
shall be deemed to refer to such agreements, documents, and instruments as
modified by the Agreement.
5. Guarantor reaffirms the Guarantor Documents and agrees that the
Guarantor Documents continue in full force and effect and remain unchanged,
except as specifically modified by this Consent and Agreement of Guarantor.
6. Guarantor agrees that the Loan Documents, as modified by the
Agreement, and the Guarantor Documents, as modified by this Consent and
Agreement of Guarantor, are the legal, valid, and binding obligations of
Borrowers and the undersigned, respectively, enforceable in accordance with
their terms against Borrowers and the undersigned, respectively, subject to
bankruptcy, insolvency or similar laws affecting the enforcement of
creditors' rights generally and general principles of equity.
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7. Guarantor agrees that Guarantor has no claims, counterclaims,
defenses, or offsets with respect to the enforcement against Guarantor of the
Guarantor Documents.
8. Guarantor represents and warrants that there has been no material
adverse change in the financial condition of any Guarantor from the most
recent financial statement received by Agent.
9. Guarantor is validly existing under the laws of the State of its
formation or organization and has the requisite power and authority to
execute and deliver this Agreement and to perform the Guarantor Documents as
modified herein. The execution and delivery of this Agreement and the
performance of the Guarantor Documents as modified herein have been duly
authorized by all requisite action by or on behalf of Guarantor. This
Agreement has been duly executed and delivered on behalf of Guarantor.
DATED as of the date of the Agreement.
ATTEST: M.D.C. HOLDINGS, INC., a Delaware
corporation
/s/ Daniel S. Japha By: /s/ John J. Heaney
- ----------------------------- --------------------------------
Name: John J. Heaney
Title: Vice President and Treasurer
GUARANTOR
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