Attached files
| file | filename |
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| EX-99.1 - ORLEANS HOMEBUILDERS INC | v182290_ex99-1.htm |
| EX-10.2 - ORLEANS HOMEBUILDERS INC | v182290_ex10-2.htm |
| EX-10.1 - ORLEANS HOMEBUILDERS INC | v182290_ex10-1.htm |
| EX-99.2 - ORLEANS HOMEBUILDERS INC | v182290_ex99-2.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): April 21, 2010
(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.
On April
21, 2010, Orleans Homebuilders, Inc. (the “Company”) entered into a
Debtor-in-Possession Loan Agreement (the “DIP Loan Agreement”) among the
Company, certain affiliates of the Company, Wells Fargo Bank, National
Association, as Administrative Agent (the “Agent”), Wells Fargo Securities, LLC,
as Lead Arranger and Bookrunner, and the lenders party thereto. The
Bankruptcy Court for the District of Delaware (the “Bankruptcy Court”) presiding
over the bankruptcy cases of the Company and certain of its affiliates (the
“Debtors”) entered an order (the “Order”) on April 16, 2010 which, among other
things, authorized the Debtors to enter into the DIP Loan
Agreement.
The DIP
Loan Agreement provides the Company a $20 million revolving loan facility, which
amount may be increased to $25 million upon approval by a majority of the
revolving loan lenders of a request by the Company’s Chief Restructuring Officer
and there being no default or potential event of default under the DIP Loan
Agreement. The DIP Loan Agreement also provides for the issuance of
up to $15 million of letters of credit as well as $80 million of term
loans which consist of a roll-up of a portion of the pre-petition
credit agreement indebtedness of certain of the pre-petition
lenders.
The
Company may only make draws under the DIP Loan Agreement subject to a budget,
satisfactory to the Agent, which sets forth the anticipated uses of funds drawn
under the DIP Loan Agreement, subject to variance which generally cannot
exceed $2 million. The Company will update the budget on
an approximately 6-week cycle, which, upon approval, will reset the variance
amount to zero. The budgets will reflect, among other things,
anticipated receipts from the retail sale of housing units; cost-to-complete of
housing units beyond the stage of foundation and footing; certain payments with
respect to pre-petition accounts payable that are being paid in connection with
the order of the Bankruptcy Court for payments to certain critical vendors; and
restructuring, bankruptcy and financing costs.
The DIP
Loan Agreement contains affirmative, negative and financial
covenants. Among the most significant covenants are those that
generally limit the Company’s cash position to $5 million; require the Company
to maintain a 2:1 ratio of appraised value (as defined) to outstandings (net of
cash) under the DIP Loan Agreement; generally limit construction to housing
progressed beyond the foundation and footing stage as of March 1, 2010; and
require the Company to comply with certain milestones (subject to 30-day
extension by the Agent) regarding either a sale of substantially all its assets
or confirmation of a plan of reorganization to be effected by July
2010.
All of
the Company’s obligations under the DIP Loan Agreement are granted superpriority
administrative claim status and are secured by a first priority security
interest in and lien in substantially all of the Company’s assets (other than
avoidance actions), subject to valid and unavoidable liens that were in
existence on March 1, 2010, or that could be asserted after such date but relate
back to such date or earlier under applicable law and that under applicable law
are senior to, and have not been subordinated to, the liens of the pre-petition
lenders under the Company’s credit agreement. The foregoing
superpriority claim and liens are also subject to a carve-out for all
fees required to be paid to the clerk of the Bankruptcy Court and the statutory
fees of the US Trustee plus an aggregate amount, not to exceed $2,500,000, for
payment of fees and expenses to the Company’s or the unsecured creditor
committee’s professionals. In addition, the DIP Loan Agreement sets
forth the agreement of the lenders that the unsecured portion of any claim
relating to either the pre-petition debt or the indebtedness under the DIP Loan
Agreement shall be subordinate with respect to the first $4 million derived
solely from the proceeds of any avoidance action to or for the benefit of
unsecured creditors.
Five
business days after the agent notifies the Company of an Event of Default under
the DIP Loan Agreement, the automatic stay will be automatically lifted and the
DIP lenders can take any and all actions in furtherance of their rights and
remedies as if no bankruptcy cases with respect to the Debtors were pending
under the Bankruptcy Code; provided, however, that the Debtors shall be
permitted to pay all postpetition expenses (other than the carve-out expenses
which shall be payable from the carve-out) that they incurred prior to the
giving of such notice so long as such expenses (at the time of incurrence) were
permitted under the budget.
2
In
connection with the DIP Loan Agreement, On April 21, 2010, the Company also
entered into a Security Agreement (the “Security Agreement”) among the Company
and certain affiliates of the Company (collectively, the “Borrowers”) and the
Agent. Pursuant to the Security Agreement, the Borrowers
secured its indebtedness under the DIP Loan Agreement by granting the Agent a
first priority lien on all of its real, personal and mixed property, with
certain exceptions. The Security Agreement also includes
various representations, warranties, covenants, and indemnification and other
provisions, which are customary for a transaction of this
nature.
The DIP
Loan Agreement, the Security Agreement and the Order are filed as Exhibits 10.1,
10.2 and 99.1, respectively, to this Form 8-K, and each statement made herein
regarding the DIP Loan Agreement, the Security Agreement or the Order is
qualified in its entirety by reference to such exhibits. The DIP Loan Agreement,
the Security Agreement and the Order have been included to provide investors and
security holders with information regarding their respective
terms. They are not intended to provide any other factual information
about the Company. The DIP Loan Agreement and the Security Agreement
contain representations and warranties by the Company made solely for the
benefit of the lenders. These representations and warranties were
made as of specific dates, may be subject to important qualifications and
limitations agreed to by the parties in connection with negotiating the terms of
the DIP Loan Agreement and Security Agreement, and may have been included
therein for the purpose of allocating risk between the parties rather than to
establish matters as facts.
On April
22, 2010 the Company issued a press release announcing the DIP Loan Agreement
and Security Agreement, a copy of which is furnished herewith as
Exhibit 99.2.
Cautionary Statement for
Purposes of the “Safe Harbor” Provisions of the Private Securities Litigation
Reform Act of 1995
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 any sale of the Company or its assets; the ability of the
Company to enter into new financing arrangements, including without limitation
the DIP financing; required bankruptcy court approvals; potential restructurings
of the Company’s liabilities; any value that may be provided by the Company’s
unsecured creditors or its equity holders; payments on its 8.52% Trust Preferred
Securities and the Junior Subordinated Notes; potential strategic transactions,
including refinancing, recapitalization and sale transactions involving the
Company; 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 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 the DIP Credit
Facility; 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. 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 and March 22, 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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Debtor-in-Possession
Loan Agreement, dated as of April 21, 2010, among Orleans Homebuilders,
Inc., certain affiliates of Orleans Homebuilders, Inc., Wells Fargo Bank,
National Association, Wells Fargo Securities, LLC, and the lenders party
thereto (filed herewith)
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10.2
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Security
Agreement, dated as of April 21, 2010, among Orleans Homebuilders, Inc.,
certain affiliates of Orleans Homebuilders, Inc., and Wells Fargo Bank,
National Association (filed herewith)
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99.1
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Order
dated April 16, 2010 (furnished herewith).
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99.2
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Press
release of Orleans Homebuilders, Inc. dated April 22, 2010 (furnished
herewith).
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4
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:
April 27, 2010
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Orleans
Homebuilders, Inc.
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By:
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/s/ Lawrence J. Dugan
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Name: Lawrence
J. Dugan
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Title: Vice
President and Secretary
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5
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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10.1
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Debtor-in-Possession
Loan Agreement, dated as of April 21, 2010, among Orleans Homebuilders,
Inc., certain affiliates of Orleans Homebuilders, Inc., Wells Fargo Bank,
National Association, Wells Fargo Securities, LLC, and the lenders party
thereto (filed herewith)
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10.2
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Security
Agreement, dated as of April 21, 2010, among Orleans Homebuilders, Inc.,
certain affiliates of Orleans Homebuilders, Inc., and Wells Fargo Bank,
National Association (filed herewith)
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99.1
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Order
dated April 16, 2010 (furnished herewith).
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99.2
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Press
release of Orleans Homebuilders, Inc. dated April 22, 2010 (furnished
herewith).
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6