Attached files
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| EX-10.1 - ORLEANS HOMEBUILDERS INC | v188020_ex10-1.htm |
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
FORM
8-K
CURRENT
REPORT
PURSUANT
TO SECTION 13 OR 15(d) OF THE
SECURITIES
EXCHANGE ACT OF 1934
Date of
report (Date of earliest event reported): June 7, 2010
Orleans
Homebuilders, Inc.
(Exact
Name of Registrant as Specified in Charter)
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Delaware
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1-6830
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59-0874323
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||
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(State
or Other Jurisdiction
of
Incorporation)
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(Commission
File
Number)
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(IRS
Employer
Identification
No.)
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3333
Street Road, Suite 101, Bensalem, PA
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19020
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(Address
of Principal Executive Offices)
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(Zip
Code)
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Registrant’s
telephone number, including area code: (215) 245-7500
Not
Applicable
(Former
Name or Former Address, if Changed Since Last Report)
Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions (see
General Instruction A.2. below):
o Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
o Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
o Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
o Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
Item
1.01 Entry into a Material Definitive Agreement
Effective June 7, 2010, Greenwood
Financial, Inc., Orleans Homebuilders, Inc. and certain subsidiaries of Orleans
Homebuilders, Inc., as borrowers (collectively, the “Borrowers”), certain
financial institutions party thereto, Wells Fargo Bank, National Association, as
administrative agent for lenders (the “Agent”) entered into the First Amendment
to Debtor-in-Possession Loan Agreement dated as of June 7, 2010 (the
“Amendment”) amending that certain Debtor-in-Possession Loan Agreement dated as
of April 21, 2010 by and among the Borrowers, the lenders party thereto and the
Agent (as amended, the “DIP Loan Agreement”). The summary of the
material terms of the Amendment set forth below is qualified in its entirety by
reference to the text of the First Amendment, a copy of which is attached hereto
as Exhibit 10.1 and incorporated herein by reference.
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·
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The
revolving sublimit was increased to $25 million from $20
million.
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·
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The
collateral value ratio financial covenant was
eliminated.
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·
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The
amount of cash and cash equivalents that Borrowers generally may hold was
increased from $5 million to $7.5
million.
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·
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The
amount by which aggregate actual disbursements made by the Borrowers on
the items in the Budget other than Permitted Vendor Payments may exceed
the Budget on a weekly basis was increased to 25% from 15%, generally
subject to a cap which was increased from $2 million to $3
million.
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·
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The
negative covenant restricting the Borrowers’ ability to start new
construction on homes was modified to allow the Borrowers to begin such
new construction with the approval of the Majority of Revolving Lenders,
subject to certain conditions. Prior to the Amendment,
beginning new construction was prohibited by the DIP Loan
Agreement.
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·
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The
deadlines by which the Borrowers must take certain actions in connection
with the Borrowers’ Chapter 11 Cases were extended as follows (subject to
extension by up to 30 days at the discretion of the Majority Revolving
Lenders):
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o
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File
their joint disclosure statement and joint plan of reorganization with the
Bankruptcy Court no later than July 13, 2010; obtain Bankruptcy Court
approval of the joint disclosure statement no later than August 30,
2010; and obtain confirmation of their plan of reorganization
no later than September 28, 2010;
or
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o
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File
their motion under Bankruptcy Code Section 363(b) to sell substantially
all of their assets and approve bidding procedures no later than August
12, 2010; obtain Bankruptcy Court approval of bidding procedures no later
than September 1, 2010; conduct an auction of all or substantially all of
their assets no later than October 5, 2010; obtain Bankruptcy Court
approval of such sale to the successful bidder no later than October 6,
2010; and close the sale and receipt by the lenders of the sale proceeds
no later than October 18, 2010.
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In
addition to the material terms described above, the Amendment contains other
provisions, including provisions amending the procedures pursuant to which the
Agent may “credit bid” the indebtedness outstanding under the DIP Loan
Agreement, and adding provisions requiring Borrowers to reimburse any single
lender designated by Majority Revolving Lenders for all reasonable out of pocket
expenses incurred by such single lender and its affiliates and to pay certain
other expenses of such lender and its affiliates, in each case relating to the
DIP Loan Agreement.
Capitalized
terms used above and not otherwise defined have the meanings provided in the DIP
Loan Agreement.
2
Forward
Looking Statements
Certain
information included herein and in other Company statements, reports and SEC
filings is or may be forward-looking within the meaning of the Private
Securities Litigation Reform Act of 1995, including, but not limited to,
statements concerning the anticipated filing of a plan of reorganization and the
timing and contents thereof; potential emergence form Chapter 11 and the timing
thereof; the potential preservation of the Company’s name and operations; any
sale of the Company or its assets; potential restructurings of the
Company’s liabilities; required bankruptcy court approvals; potential strategic
transactions, including refinancing, reorganizations, recapitalization and sale
transactions involving the Company; the state of new construction; payments to
trade creditors, employees, or customers; anticipated and potential asset sales;
anticipated liquidity; and strategic transactions and alternatives including but
not limited to the sale or restructuring of the Company. Such
forward-looking information involves important risks and uncertainties that
could significantly affect actual results and cause them to differ materially
from expectations expressed herein and in other Company statements, reports and
SEC filings. These risks and uncertainties include the Company’s
ability to operate under the terms of the DIP Loan Agreement; the Company’s
ability to obtain court approval with respect to motions relating to the
bankruptcy filings; the ability of the Company to develop, confirm and
consummate one or more plans of reorganization with respect to the Chapter 11
proceeding; the ability of the Company to obtain and maintain normal terms with
vendors and service providers and to maintain contracts critical to its
operations; the ability of the Company to continue to attract buyers of its
homes; the ability to continue normal business operations; the potential adverse
impact of the Chapter 11 proceedings; the ability of the Company to attract,
motivate and/or retain key executives and employees; access to liquidity; local,
regional and national economic conditions; the effects of governmental
regulation; the competitive environment in which the Company operates;
fluctuations in interest rates; changes in home prices; the availability of
capital; our ability to engage in a financing or strategic transaction; the
availability and cost of labor and materials; our dependence on certain key
employees; and weather conditions. In addition, the Company does not
anticipate that it will make any distribution with respect to its currently
outstanding equity securities, whether in connection with the bankruptcy
proceedings or otherwise. Additional information concerning
factors the Company believes could cause its actual results to differ materially
from expected results is contained in Item 1A of the Company’s Annual Report on
Form 10-K/A for the fiscal year ended June 30, 2008 filed with the SEC and
subsequently filed Quarterly Reports on Form 10-Q, as well as the Current
Reports on Form 8-K and press releases filed with the Securities and Exchange
Commission on August 14, 2009, October 6, 2009, November 5, 2009, December 9,
2009, December 23, 2009, February 1, 2010 February 19, 2010, March 3, 2010,
March 11, 2010, March 22, 2010, April 20, 2010, April 22, 2010, April 27, 2010 and May 25, 2010.
3
Item
9.01 Financial Statements and Exhibits.
(d)
Exhibits
The
following exhibits are filed or furnished with this Current Report on
Form 8-K:
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Exhibit No.
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Description
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10.1
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First
Amendment to Debtor-In-Possession Loan Agreement (filed
herewith).
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SIGNATURE
Pursuant
to the requirements of the Securities Exchange Act of 1934, the Registrant has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
Dated:
June 11, 2010
| Orleans Homebuilders, Inc. | |||
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By:
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/s/ Lawrence J. Dugan | |
| Name: Lawrence J. Dugan | |||
| Title: Vice President and General Counsel | |||
4
EXHIBIT
INDEX
The
following exhibits are filed or furnished with this Current Report on
Form 8-K:
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Exhibit No.
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Description
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|
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10.1
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First
Amendment to Debtor-In-Possession Loan Agreement (filed
herewith).
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5