Exhibit 10.12


 


FIRST ALLONGE AND MODIFICATION TO
MASTER


LOAN AGREEMENT AND OTHER LOAN
DOCUMENTS


 


THIS FIRST ALLONGE AND MODIFICATION
TO MASTER LOAN AGREEMENT AND OTHER LOAN DOCUMENTS, dated as
of the 30th day of May, 2001 (this “Agreement”), by and between PARKER &
LANCASTER CORPORATION, a Virginia corporation, and PARKER
LANCASTER & ORLEANS, INC., a Delaware corporation (together, the
“Borrowers”), and BANK OF AMERICA, N.A., a national banking
association (the “Noteholder”).


 


W I T N E S S E T H:


 


WHEREAS, the
Noteholder is the holder of a Promissory Note (Revolving Line of Credit) dated
March 9, 2000 (the “Note”), in the principal amount not to exceed at any time
outstanding Seventeen Million Five Hundred Thousand Dollars ($17,500,000), made
by Parker & Lancaster Corporation and payable to the order of the
Noteholder; and


 


WHEREAS, the Note
evidences a revolving line of credit loan (the “Loan”) made by the Noteholder
to Parker & Lancaster Corporation pursuant to (a) a Master Loan Agreement
dated March 9, 2000 (the “Loan Agreement”) between the Parker & Lancaster
Corporation and the Noteholder and (b) the other Loan Documents (as defined in
the Loan Agreement); and


 


WHEREAS, Parker
Lancaster & Orleans, Inc. became a co-borrower, jointly and severally, with
Parker & Lancaster Corporation under the Loan, the Note, the Loan Agreement
and the other Loan Documents pursuant to an Additional Borrower Joinder
Supplement and Loan Document Modification Agreement dated March 9, 2001 (the
“Joinder Agreement”) among Parker & Lancaster Corporation, Parker Lancaster
& Orleans, Inc., the Noteholder and Orleans


 

















 


Homebuilders, Inc., as guarantor (the “Guarantor”) (the defined terms
Note, Loan Agreement and Loan Documents shall hereinafter refer to those
documents, as modified by the Joinder Agreement); and


 


WHEREAS, the
Borrowers have requested that the Noteholder (a) increase the maximum
principal amount of the aggregate commitments that can be outstanding at any
time under the Loan from $17,500,000 to $25,000,000, (b) increase the maximum
principal amount of the Loan that can be outstanding at any time from
$17,500,000 to $25,000,000 and (c) modify and amend certain other terms
and conditions of the Loan; and


 


WHEREAS, the
Noteholder has agreed to grant such requests, and this Agreement will effect
such increase and modification of the Note, the Loan Agreement and certain
other Loan Documents;


 


NOW, THEREFORE, for
and in consideration of the premises and other good and valuable consideration,
and the mutual promises made herein, the parties agree as follows:


 


1.             Incorporation
of Recitals; Defined Terms.  The
Recitals to this Agreement are hereby incorporated by reference.  Capitalized terms used and not otherwise
defined herein shall have the meanings given to them in the Loan Agreement.


 


2.             Increase
in Maximum Principal Amount of Loan; Change in Interest Rate; Extension of
Maturity Date; Confirmation of Balance.  The Borrowers and the Noteholder hereby amend the Note to
substitute therein Twenty-Five Million Dollars ($25,000,000) as the maximum
principal amount of the Loan in the place and stead of $17,500,000 in each
instance where such amount appears.  The
Borrowers and the Noteholder


 


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hereby amend the Note to
provide that the outstanding principal balance of the Loan shall bear interest
at the Eurodollar Rate (as hereinafter defined), plus 2.50 percent, per annum
(the “Rate”).  The Rate shall be
adjusted on the first business day of every month beginning on June 1, 2001 (the
“Adjustment Date”), and remain fixed until the next Adjustment Date.  If the Adjustment Date in any particular
month would otherwise fall on a day that is not a Business Day (as hereinafter
defined), the Adjustment Date for that particular month will be the first
Business Day immediately following thereafter. 
The “Eurodollar Rate” is a rate of interest equal to the one-month rate
of interest (rounded upwards, if necessary to the nearest 1/100 of 1%)
appearing on Telerate Page 3750 (or any successor page) as the one-month London
interbank offered rate for deposits in Dollars (as hereinafter defined) at
approximately 11:00 a.m. (London time) on the second preceding Business Day, as
adjusted from time to time in Noteholder’s sole discretion for then-applicable
reserve requirements, deposit insurance assessment rates and other regulatory
costs.  If for any reason such rate is
not available, the term “Eurodollar Rate” shall mean the rate of interest equal
to the one-month rate of interest (rounded upwards, if necessary to the nearest
1/100 of 1%) appearing on Reuters Screen LIBO Page as the one month London
interbank offered rate for deposits in Dollars at approximately 11:00 a.m.
(London time) on the second preceding Business Day, as adjusted from time to time
in Bank’s sole discretion for then-applicable reserve requirements, deposit
insurance assessment rates and other regulatory costs; provided, however, if
more than one rate is specified on Reuters Screen LIBO Page, the applicable
rate shall be the arithmetic mean of all such rates.  “Business Day” means any day other than a Saturday, Sunday, or
other day on which commercial banks in Charlotte, North


 


3

















 


Carolina, are closed and
a day on which dealings in Dollar deposits are also open for business in
London, England.  “Dollars” shall mean
the lawful money of the United States of America.  The Borrowers and Noteholder hereby amend the Note to provide
that the Maturity Date shall be extended from December 31, 2001 to December 31,
2002.  The Borrowers hereby agree to pay
to the Noteholder a non-refundable commitment fee of $31,250 in connection with
this Agreement, which fee shall be considered earned in full as of the date of
this Agreement but which fee shall be payable in monthly installments of
$2,604.17 each, beginning on July 1, 2001 and continuing on the first day of
each month until the commitment fee is paid in full; provided, however, that
any remaining unpaid portion of the commitment fee shall be due and payable in
full on the Noteholder’s demand therefor upon the occurrence of a Default or
termination of the credit facility evidenced by the Loan Agreement.  The payment terms for interest and principal
shall continue as presently stated in the Note.  In confirmation of the foregoing, the Borrowers, jointly and
severally,  promise to pay to the order
of the Noteholder, on the terms and conditions set forth in the Note, as such
terms are modified and amended herein, the principal amount of up to
$25,000,000 (hereby confirming that the principal amount of the Note shall not
at any time outstanding exceed such amount), or so much thereof as may be
outstanding from time to time, together with interest as provided in the Note;
provided, however, that the entire principal balance of the Note then unpaid,
all interest then unpaid and all other amounts then owing under any Loan
Document, shall be finally due and payable on December 31, 2002.


 


3.             Modification
of Loan Agreement.  The
Borrowers and the Noteholder hereby amend the Loan Agreement (a) to change the
maximum principal amount of the Loan that


 


4

















 


may be outstanding at any
time (and the aggregate commitments that may be outstanding under the Loan at
any time) stated therein from $17,500,000 to $25,000,000, (b) to modify Section
2.4(a) thereof to change 85% to 75% (LTVR for inventory Lots); (c) to modify
Section 2.4(c) thereof to change $2,500,000 to $4,500,000 (limit on aggregate
Loan proceeds advanced at any one time for inventory Lots); (d) to modify
Section 2(c) and 2(d) thereof to establish limits for Lots and Spec Units in
various subdivisions as set forth on Exhibit A attached hereto; (e) to modify
Section 2.4(e)(i) thereof to change 160 to 300 (limit on corporate inventory
Lots); and (f) to modify and restate Section 2.4(g) to provide that all
proceeds of the Loan disbursed in connection with the construction of each
individual Unit (a Contract Unit, a Spec Unit or a Model Unit) shall be due and
payable within twelve (12) months or less (as committed by the Lender with
respect to the subject property) after the first advance of the proceeds of the
Loan on such Unit and that all proceeds of the Loan disbursed in connection
with the purchase of each individual Lot shall be due and payable within twelve
(12) months or less (as committed by the Lender with respect to the subject
property) after the first advance of the proceeds of the Loan on such Lot and
that any extensions or renewals thereof shall be in Noteholder’s sole
discretion.  Notwithstanding the
foregoing or anything else in the Loan Agreement or the other Loan Documents to
the contrary, the Noteholder shall not be obligated to issue any new commitment
or make any first advance of the proceeds of the Loan for any Unit or Lot after
December 31, 2001 (the “Loan Period Termination Date”), as the Noteholder may
from time to time extend the Loan Period Termination Date in its sole
discretion, and all principal, interest and other amounts outstanding under the
Note and the other Loan Documents which were not previously due and


 


5

















 


payable shall be due and
payable in full on the Maturity Date, as the Noteholder may from time to time
extend the Maturity Date in its sole discretion.  The Borrowers and the Noteholder further confirm that the term
“Guarantors,” as used in the Loan Agreement, now refers solely to Orleans
Homebuilders Inc.  The Loan shall
continue to be governed by the terms and conditions of the Loan Agreement (as
modified herein), and the proceeds of the Loan shall be advanced in accordance
with and subject to the conditions, requirements and procedures set forth in
the Loan Agreement (as modified herein).


 


4.             The
Borrowers’ Representations and Warranties.  The Borrowers hereby reaffirm all of the representations and
warranties set forth in the Note, the Loan Agreement and the other Loan
Documents, which shall be modified to the extent hereinafter set forth, and further
represent and warrant that (a) the Borrowers are the sole legal and beneficial
owners of the Land, Lots and Units (as each such term is defined in the Loan
Agreement), (b) the execution and delivery of this Agreement do not contravene,
result in a breach of, or constitute a default under, any deed of trust, loan
agreement, indenture or other contract or agreement to which the Borrowers are
a party or by which the Borrowers or any of their properties may be bound (nor
would such execution and delivery constitute such a default with the passage of
time or the giving of notice or both), and do not violate or contravene any
law, order, decree, rule, regulation or restriction to which the Borrowers or
the Land, Lots and Units are subject, (c) this Agreement and the other
documents which the Noteholder has required in connection herewith constitute
the legal, valid and binding obligations of the Borrowers and the parties
thereto other than the Noteholder, enforceable in accordance with their terms,
(d) the execution and delivery


 


6

















 


of, and performance
under, this Agreement and the other documents which the Noteholder has required
in connection herewith are within the Borrowers’ power and authority without
the joinder or consent of any other party and have been duly authorized by all
requisite action, and are not in contravention of any law or of the Borrowers’
articles of incorporation or by-laws or of any indenture, agreement or
undertaking to which the Borrowers are a party or by which they are bound,
(e) there exists no Default under the Note, the Loan Agreement or any
other Loan Document, (f) the Borrowers have no offsets, claims or defenses
with respect to the Loan, and (g)  the Borrowers are duly organized
Virginia and Delaware corporations, respectively, in good standing under
Virginia law and, in the case of Parker Lancaster & Orleans, Inc., Delaware
law.  The Borrowers further represent
and warrant that there is no suit, judicial or administrative action, claim,
investigation, inquiry, proceeding or demand pending (or, to the Borrowers’
knowledge, threatened) (i) against the Borrowers, the Guarantor or any
other person liable directly or indirectly for the Loan, or (ii) which
affects any of the Land, Lots or Units or the Borrowers’ title to any of the
Land, Lots or Units or (iii) which affects the validity, enforceability or
priority of any of the Loan Documents, and (h) the Land, Lots and Units comply
with, and shall continue to comply with, in all material respects, all
applicable Federal, state and local laws, statutes, ordinances and regulations,
including, without limitation, those relating to environmental matters.  The Borrowers agree to indemnify and hold
the Noteholder harmless against any loss, claim, damage, liability or expense
(including, without limitation, reasonable attorneys’ fees and charges)
incurred by the Noteholder, its directors, officers, employees, agents and
contractors as a result of any representation or warranty made by the Borrowers
herein which


 


7

















 


is untrue or inaccurate
in any material respect, and any such occurrence shall also, at the
Noteholder’s option, constitute a Default under the Note, the Loan Agreement
and the other Loan Documents.


 


5.             Other
Terms and Conditions.  Without
limiting any other provision of this Agreement, not later than the date of the
Borrowers’ and Guarantor’s execution and delivery to the Noteholder of this
Agreement and the other documents which the Noteholder has required in
connection herewith and to which they are a party, and prior to any further
advance of the proceeds of the Loan, the Borrowers shall deliver to the
Noteholder such certificates of fact or good standing, organizational documents
and consents or resolutions as the Noteholder may reasonably require for the
Borrowers and the Guarantor, opinions of counsel to the Borrowers and the
Guarantor and title bringdown endorsements and other appropriate title policy
endorsements as the Noteholder may reasonably require.  The Borrowers shall pay directly, or
reimburse the Noteholder for, all out-of-pocket costs and expenses, including,
without limitation, reasonable attorneys’ fees and charges, title charges and
the like, which are attributable to the transaction set forth in this Agreement.


 


6.             Confirmation
of Existing Terms.  The Loan
Documents (other than the Deed of Trust and Guaranty, which are being modified
and amended on a simultaneous basis pursuant to other documents dated of even
date herewith) are hereby modified and amended to conform to the provisions of
this Agreement.  In all other respects
the Note, the Loan Agreement and such other Loan Documents shall remain
unaffected, unchanged and unimpaired by reason of the provisions of this Agreement.  The Borrowers ratify and reaffirm their
joint and several


 


8

















 


indebtedness, duties and
obligations under the Loan Documents (as modified and amended herein).  The execution and delivery of this Agreement
shall not constitute a novation of the debt evidenced by the Note and the other
Loan Documents.


 


7.             Successors
and Assigns.  This Agreement
shall be binding upon, and inure to the benefit of, the parties hereto and
their respective heirs, personal representatives, successors and assigns.


 


8.             Borrower’s
Liability.  The Borrowers shall
be deemed jointly and severally liable for their obligations hereunder and the
singular shall include the plural and vice versa.  The Borrowers hereby confirm that references to the Borrowers or any
one Borrower herein shall mean and apply to the Borrowers and each of them,
jointly and severally.


 


9.             Counterparts.  This Agreement may be executed in two or
more counterparts which, when taken together, shall constitute but one and the
same document.


 


[Executions Begin on Next Page]


 


9

















 


WITNESS the
following executions and seals made pursuant to due authorization.


 


	
   

  	
   

  	
  Borrowers

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  PARKER
  & LANCASTER CORPORATION,

  a Virginia corporation

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  Joseph A. Santangelo

  	
  (SEAL)

  
	
   

  	
   

  	
  Name:

  	
  Joseph A. Santangelo

  	
   

  
	
   

  	
   

  	
  Title:

  	
  Chief Financial Officer

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  PARKER
  LANCASTER & ORLEANS, INC.,

  a Delaware corporation

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  Joseph A. Santangelo

  	
  (SEAL)

  
	
   

  	
   

  	
  Name:

  	
  Joseph A. Santangelo

  	
   

  
	
   

  	
   

  	
  Title:

  	
  Chief Financial Officer

  	
   

  
						



 


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  Noteholder

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  BANK
  OF AMERICA, N.A.,

  a national banking association

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  Charles
  C. Payne, Jr.

  	
  (SEAL)

  
	
   

  	
   

  	
  Name:

  	
  Charles C. Payne, Jr.

  	
   

  
	
   

  	
   

  	
  Title:

  	
  Vice President

  	
   

  
								



 


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