Exhibit 4.1
AMENDED AND RESTATED CREDIT AGREEMENT
DATED AS OF OCTOBER 8, 1999
AMONG
M.D.C. HOLDINGS, INC.
as Borrower
AND
THE BANKS NAMED HEREIN
as Banks
AND
BANK ONE, NA
as Administrative Agent
BANK UNITED OF TEXAS FSB
as Co-Agent
KEYBANK, NATIONAL ASSOCIATION
as Co-Agent
BANC ONE CAPITAL MARKETS, INC.
Lead Arranger and Sole Book Manager
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS.........................................................1
ARTICLE II
THE CREDITS........................................................22
2.1 Commitment............................................22
2.2 Required Payments.....................................22
2.3 Ratable Loans.........................................23
2.4 Types of Advances.....................................23
2.5 Fees; Reduction and Increase in Commitment............23
2.6 Minimum Amount of Each Advance........................26
2.7 Optional Principal Payments...........................26
2.8 Method of Selecting Types and Interest Periods for
New Advances........................................26
2.9 Conversion and Continuation of Outstanding Advances...27
2.10 Changes in Interest Rate, etc.........................28
2.11 Determination of Applicable Margins and Applicable
Unused Commitment Rate..............................28
2.12 Rates Applicable After Event of Default...............29
2.13 Method of Payment.....................................29
2.14 Notes; Telephonic Notices.............................30
2.15 Interest Payment Dates; Interest Basis................30
2.16 Notification of Advances, Interest Rates, Prepayments
and Commitment Reductions...........................30
2.17 Lending Installations.................................31
2.18 Non-Receipt of Funds by Administrative Agent..........31
2.19 Swing Line............................................31
2.20 Withholding Tax Exemption.............................33
2.21 Extension of Facility Maturity Date...................34
2.22 Term Out Period.......................................36
2.23 Replacement of Certain Banks..........................37
ARTICLE III
CHANGE IN CIRCUMSTANCES............................................38
3.1 Yield Protection......................................38
3.2 Changes in Capital Adequacy Regulations...............39
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3.3 Availability of Types of Advances.....................39
3.4 Funding Indemnification...............................40
3.5 Bank Statements; Survival of Indemnity................40
ARTICLE IV
THE LETTER OF CREDIT FACILITY......................................40
4.1 Facility Letters of Credit............................40
4.2 Limitations...........................................41
4.3 Conditions............................................41
4.4 Procedure for Issuance of Facility Letters of Credit..42
4.5 Duties of Issuing Bank................................44
4.6 Participation.........................................44
4.7 Compensation for Facility Letters of Credit...........46
4.8 Issuing Bank Reporting Requirements...................47
4.9 Indemnification; Nature of Issuing Bank's Duties......48
4.10 No Obligation to Issue................................49
4.11 Obligations of Issuing Bank and Other Banks...........49
ARTICLE V
CONDITIONS PRECEDENT...............................................50
5.1 Initial Advance.......................................50
5.2 Each Advance..........................................51
ARTICLE VI
REPRESENTATIONS AND WARRANTIES.....................................52
6.1 Existence and Standing................................52
6.2 Authorization and Validity............................52
6.3 No Conflict; Government Consent.......................53
6.4 Financial Statements..................................53
6.5 Material Adverse Change...............................53
6.6 Taxes.................................................53
6.7 Litigation and Contingent Obligations.................53
6.8 Subsidiaries..........................................54
6.9 ERISA.................................................54
6.10 Accuracy of Information...............................54
6.11 Regulation U..........................................54
6.12 Material Agreements...................................54
6.13 Labor Disputes and Acts of God........................55
6.14 Ownership.............................................55
6.15 Operation of Business.................................55
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6.16 Laws; Environment.....................................55
6.17 Investment Company Act................................56
6.18 Public Utility Holding Company Act....................56
6.19 Subordinated Indebtedness.............................56
6.20 Indenture Provisions..................................56
6.21 Year 2000 Compliance..................................56
ARTICLE VII
AFFIRMATIVE COVENANTS..............................................57
7.1 Financial Reporting...................................57
7.2 Use of Proceeds.......................................60
7.3 Notice of Event of Default............................60
7.4 Conduct of Business...................................60
7.5 Taxes.................................................60
7.6 Insurance.............................................60
7.7 Compliance with Laws..................................60
7.8 Maintenance of Properties.............................60
7.9 Inspection............................................61
7.10 Environment...........................................61
7.11 Year 2000 Compliance..................................61
7.12. New Guarantors........................................61
7.13. Change in Schedules...................................62
ARTICLE VIII
NEGATIVE COVENANTS.................................................62
8.1 Dividends; Repurchase of Stock........................62
8.2 Indebtedness..........................................62
8.3 Merger................................................64
8.4 Sale of Assets........................................64
8.5 Investments and Acquisitions..........................65
8.6 Liens.................................................67
8.7 Affiliates............................................69
8.8 Modifications to Certain Indebtedness.................70
8.9 Amendments of Indenture or Senior Notes...............70
8.10 Negative Pledge.......................................70
ARTICLE IX
FINANCIAL COVENANTS................................................70
9.1 Consolidated Tangible Net Worth Test..................70
9.2 Leverage Test; Fixed Charge Coverage Test.............71
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9.3 Spec Unit Inventory...................................72
9.4 Land Owned. ..........................................72
9.5 Consolidated Tangible Net Worth Floor. ...............73
ARTICLE X
EVENTS OF DEFAULT..................................................73
10.1 Representations and Warranties........................73
10.2 Non-payment...........................................73
10.3 Other Defaults........................................73
10.4 Other Indebtedness....................................73
10.5 Bankruptcy............................................74
10.6 Receiver..............................................74
10.7 Judgment..............................................75
10.8 Unfunded Liabilities..................................75
10.9 Withdrawal Liability..................................75
10.10 Increased Contributions...............................75
10.11 Change in Control.....................................75
10.12 Dissolution...........................................75
10.13 Guaranty..............................................75
10.14 Land Owned Covenant...................................76
10.15 Consolidated Tangible Net Worth Floor.................76
10.16 No Defaults. .........................................76
ARTICLE XI
ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES.....................76
11.1 Acceleration; Remedies................................76
11.2 Amendments............................................78
11.3 Preservation of Rights................................78
ARTICLE XIIG
GENERAL PROVISIONS.................................................79
12.1 Survival of Representations...........................79
12.2 Governmental Regulation...............................79
12.3 Taxes.................................................79
12.4 Headings..............................................79
12.5 Entire Agreement......................................79
12.6 Nature of Obligations; Benefits of this Agreement.....79
12.7 Expenses; Indemnification.............................80
12.8 Numbers of Documents..................................80
12.9 Accounting............................................80
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12.10 Severability of Provisions............................80
12.11 Nonliability of Banks and Issuing Bank................81
12.12 CHOICE OF LAW.........................................81
12.13 Arbitration...........................................81
12.14 CONSENT TO JURISDICTION...............................82
12.15 WAIVER OF JURY TRIAL..................................83
12.16 Confidentiality.......................................83
ARTICLE XIII
ADMINISTRATIVE AGENT...............................................83
13.1 Appointment...........................................83
13.2 Powers................................................83
13.3 General Immunity......................................84
13.4 No Responsibility for Loans, Recitals, etc............84
13.5 Action on Instructions of Banks.......................84
13.6 Employment of Administrative Agents and Counsel.......84
13.7 Reliance on Documents; Counsel........................85
13.8 Administrative Agent's Reimbursement and
Indemnification.....................................85
13.9 Rights as a Bank or Issuing Bank......................85
13.10 Bank Credit Decision..................................85
13.11 Successor Administrative Agent........................86
13.12 Administrative Agent's Fee............................86
ARTICLE XIV
RATABLE PAYMENTS...................................................87
14.1 Ratable Payments......................................87
ARTICLE XV
BENEFIT OF AGREEMENT, ASSIGNMENTS; PARTICIPATIONS..................87
15.1 Successors and Assigns................................87
15.2 Participations........................................87
15.2.1 Permitted Participants; Effect..............87
15.2.2 Voting Rights...............................88
15.2.3 Waiver of Setoff............................88
15.3 Assignments...........................................88
15.3.1 Permitted Assignments.......................88
15.3.2 Effect; Effective Date......................88
15.4 Dissemination of Information..........................89
15.5 Tax Treatment.........................................89
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ARTICLE XVI
NOTICES............................................................89
16.1 Giving Notice.........................................89
16.2 Change of Address.....................................90
ARTICLE XVII
COUNTERPARTS.......................................................90
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AMENDED AND RESTATED CREDIT AGREEMENT
THIS AGREEMENT is entered into as of October 8, 1999, among M.D.C.
HOLDINGS, INC., a Delaware corporation, as Borrower, the Banks listed on the
signature pages of this Agreement, BANK ONE, NA, as Administrative Agent and
BANK ONE, ARIZONA, N.A., as Prior Issuing Bank (solely for the purposes set
forth in Section 4.4(f)).
RECITALS
A. Bank One, Arizona, NA (to whose interest Bank One, NA, headquartered
in Chicago, Illinois, has succeeded), as agent, certain subsidiaries of M.D.C.
Holdings, Inc., as borrowers, and certain banks party thereto have entered into
that certain Credit Agreement dated April 10, 1996 (as amended, the "Original
Credit Agreement").
B. M.D.C. Holdings, Inc. has guaranteed the obligations of its
subsidiaries under the Original Credit Agreement.
C. M.D.C. Holdings, Inc., such subsidiaries of M.D.C. Holdings Inc.,
and Bank One, NA and the other Banks party hereto desire to have the Original
Credit Agreement amended and restated in its entirety to provide for (1) M.D.C.
Holdings, Inc. to be the borrower thereunder, (2) certain of its subsidiaries to
be guarantors thereunder and (3) certain other modifications of the terms
thereof, all as hereinafter provided.
NOW THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree
that the Original Credit Agreement is hereby amended and restated in its
entirety as follows:
ARTICLE I
DEFINITIONS
As used in this Agreement:
"AAA" is defined in Section 12.13.
"Acquisition" means any transaction, or any series of related
transactions, consummated on or after the date of this Agreement, by which
Borrower or any Guarantor (i) acquires any going concern or all or substantially
all of the assets of any firm, corporation or division thereof, whether through
purchase of assets, merger or otherwise or (ii) directly or indirectly acquires
(in one transaction or as the most recent transaction in a series of
transactions) at least a majority (in number of votes) of the securities of a
corporation which have ordinary voting power for the election of directors
(other than securities having such power only by reason of the happening of a
contingency) or a majority (by percentage or voting power) of the outstanding
partnership or other ownership interests of a partnership, joint venture,
limited liability company or other similar business organization.
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"Additional Bank" is defined in Section 2.5(d)(i).
"Adjusted Book Value of Land Owned" means, as of the last day of any
fiscal quarter, (i) the book value of all land owned by Borrower or any
Guarantor at such date, including without limitation Land Under Development,
Entitled Lots and Finished Lots but excluding any parcel of land on which a
Housing Unit is located, less (ii) an amount equal to the lesser of (A) fifty
percent (50%) of the book value of the land component of any Housing Unit with
respect to which a Housing Unit Closing occurred during the period of four
consecutive fiscal quarters ending on such date and (B) fifty percent (50%) of
Consolidated Tangible Net Worth as of such date.
"Adjusted Consolidated Tangible Net Worth" means, at any date, (a)
Consolidated Tangible Net Worth, plus (b) the lesser of (i) fifty percent (50%)
of the Subordinated Indebtedness of Borrower and Guarantors (taken as a whole on
a consolidated basis) and (ii) $100,000,000.00, less (C) the Net Worth of each
Non-Guarantor Subsidiary (taken as a whole on a consolidated basis).
"Administrative Agent" means Bank One, NA, in its capacity as
administrative agent for Banks pursuant to Article XIII, and not in its
individual capacity as a Bank, and any successor Administrative Agent appointed
pursuant to Article XIII.
"Advance" means a borrowing hereunder consisting of the aggregate
amount of the several Loans made by Banks (or Swing Line Advances made by Bank
One) to Borrower of the same Type and, in the case of a LIBOR Advance, for the
same Interest Period.
"Affected Bank" is defined in Section 2.23.
"Affiliate" of any Person means any other Person directly or indirectly
controlling, controlled by or under common control with such Person. A Person
shall be deemed to control another Person if the controlling Person beneficially
owns (within the meaning of Rule 13d-3 of the Securities Exchange Act of 1934,
as amended) 10% or more of any class of voting securities (or other ownership
interests) of the controlled Person or possesses, directly or indirectly, the
power to direct or cause the direction of the management or policies of the
controlled Person, whether through ownership of stock, by contract or otherwise.
"Aggregate Commitment" means the aggregate of the Commitments of all
Banks, as increased or reduced from time to time pursuant to the terms hereof.
As of the date of this Agreement, the Aggregate Commitment is $300,000,000.
"Agreement" means this Amended and Restated Credit Agreement, as it may
be amended or modified and in effect from time to time.
"Agreement Accounting Principles" is defined in Section 12.9.
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"Alternate Base Rate" means, for any day, a rate of interest per annum
equal to the higher of (i) the Corporate Base Rate for such day and (ii) the sum
of (a) the Federal Funds Effective Rate for such day plus (b) 1/2 of 1% per
annum.
"Applicable Floating Rate Margin" means, as at any date of
determination, the margin indicated in Section 2.11 as then applicable in the
determination of the Floating Rate.
"Applicable Letter of Credit Rate" means, as at any date of
determination, a rate per annum equal to the Applicable LIBOR Rate Margin.
"Applicable LIBOR Rate Margin" means, as at any date of determination,
the margin indicated in Section 2.11 as then applicable in the determination of
LIBOR Rates.
"Applicable Margin(s)" means the Applicable LIBOR Rate Margin and/or
the Applicable Floating Rate Margin, as the case may be.
"Applicable Unused Commitment Rate" means, as at any date of
determination, the rate per annum indicated in Section 2.11 as then applicable
in the determination of the Unused Commitment Fee under Section 2.5(a).
"Arranger" means Banc One Capital Markets, Inc.
"Article" means an article of this Agreement unless another document is
specifically referenced.
"Authorized Officer" means any one or more of the Chairman, President,
Senior Vice President or any Vice President, Chief Financial Officer, Treasurer,
or other officer of Borrower or a Guarantor, as applicable, acting singly or
together, in accordance with the applicable resolutions and bylaws of Borrower
or such Guarantor.
"Available Credit" means, at any date with respect to any Bank, the
amount (if any) by which such Bank's Commitment exceeds the sum of (i) the
outstanding principal balance of such Bank's Loans as of such date, plus (ii)
such Bank's ratable share (determined in accordance with Section 4.6) of the
Facility Letter of Credit Obligations as of such date.
"Bank One" means Bank One, NA (headquartered in Chicago, Illinois), in
its individual capacity, and its successors and assigns.
"Banks" means the lending institutions listed on the signature pages of
this Agreement and their respective successors and assigns.
"Borrower" means M.D.C. Holdings, Inc., a Delaware corporation, its
successors and assigns.
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"Borrowing Base" means, with respect to an Inventory Valuation Date for
which it is to be determined, an amount equal to the sum of the following assets
of Borrower and each Guarantor (but only to the extent that such assets are not
subject to any Liens other than Permitted Liens):
(i) the Receivables, multiplied by ninety percent (90%);
plus
(ii) the book value of Presold Units, multiplied by eighty
percent (80%); plus
(iii) the book value of Spec Units, multiplied by seventy
percent (70%); plus
(iv) the book value of Model Units, multiplied by seventy
percent (70%); plus
(v) the book value of Finished Lots, multiplied by seventy
percent (70%); plus
(vi) the book value of Land Under Development, multiplied by
fifty percent (50%); plus
(vii) the book value of Entitled Land, multiplied by thirty
percent (30%);
provided, however, that the aggregate of the amounts calculated pursuant to
clauses (v), (vi) and (vii) shall not exceed at any time forty percent (40%) of
the Borrowing Base.
"Borrowing Base Certificate" means a written certificate in a form
acceptable to Administrative Agent setting forth the amount of the Borrowing
Base with respect to the calendar month most recently completed, certified as
true and correct by an Authorized Officer of Borrower.
"Borrowing Date" means a date on which an Advance is made hereunder.
"Borrowing Notice" is defined in Section 2.8.
"Business Day" means (i) with respect to any borrowing, payment or rate
selection of LIBOR Advances, a day (other than a Saturday or Sunday) on which
banks generally are open in Chicago and New York for the conduct of
substantially all of their commercial lending activities and on which dealings
in United States dollars are carried on in the London interbank market, and (ii)
for all other purposes, a day (other than a Saturday or Sunday) on which banks
generally are open in Chicago and New York for the conduct of substantially all
of their commercial lending activities.
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"Capitalized Lease" of a Person means any lease of Property by such
Person as lessee which would be capitalized on a balance sheet of such Person
prepared in accordance with Agreement Accounting Principles.
"Capitalized Lease Obligations" of a Person means the amount of the
obligations of such Person under Capitalized Leases which would be shown as a
liability on a balance sheet of such Person prepared in accordance with
Agreement Accounting Principles.
"Cash Equivalents" means:
(a) U.S. Treasury bills and notes;
(b) GNMA securities;
(c) debt insured by other agencies guaranteed by the full
faith and credit of the United States of America;
(d) commercial paper rated either "A1" or better by S&P or
"P1" by Moody's;
(e) Dutch Auction Preferred Stocks (DAP) rated either "AA" or
better by S&P or "Aa2" or better by Moody's.
(f) certificates of deposit issued by commercial banks,
savings banks or savings and loan associations whose short-term debt is
rated either "A1" or better by S&P or "P1" or better by Moody's, or if
such an institution is a subsidiary whose short-term debt is unrated,
then its parent corporation must have such a rating;
(g) bankers acceptances issued by financial institutions that
meet the requirements for certificates of deposit;
(h) deposits in institutions having the same qualifications
required for investments in certificates of deposit;
(i) repurchase agreements collateralized by any otherwise
acceptable collateral as defined above; and
(j) money market accounts a majority of whose assets are
composed of items described by any of the foregoing clauses (a) through
(i) through brokerage firms deemed acceptable by Borrower's management.
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"Change in Control" means (a) as to Borrower, the acquisition by any
Person, or two or more Persons acting in concert, of beneficial ownership
(within the meaning of Rule 13d-3 of the Securities and Exchange Commission
under the Securities Exchange Act of 1934) of 50% or more of the outstanding
shares of voting stock of Borrower, or (b) as to any Guarantor, the acquisition
by any Person (except Borrower or one or more of the Guarantors), or two or more
Persons acting in concert of any beneficial ownership (within the meaning of
Rule 13d-3 of the Securities and Exchange Commission under the Securities
Exchange Act of 1934) of any of the outstanding shares of voting stock of such
Guarantor.
"Co-Agent" means each Bank, other than Administrative Agent and
Documentation Agent, whose Commitment is at least $45,000,000.00.
"Code" means the Internal Revenue Code of 1986, as amended, reformed or
otherwise modified from time to time.
"Commitment" means, for each Bank, the obligation of such Bank to make
Loans, and to participate in the Facility Letters of Credit in accordance with
Section 4.6(a), not exceeding the amount set forth opposite its signature below
or as set forth in any Notice of Assignment relating to any assignment that has
become effective pursuant to Section 15.3.2, as such amount may be modified from
time to time pursuant to the terms hereof.
"Commitment and Acceptance" is defined in Section 2.5(d)(i).
"Consolidated Indebtedness" means, at any date, the outstanding amount
of all Indebtedness (including without limitation any Subordinated Indebtedness)
of Borrower and Guarantors, without duplication, (taken as a whole on a
consolidated basis in conformity with Agreement Accounting Principles).
"Consolidated Indebtedness" shall specifically exclude:
(i) Indebtedness of any Non-Guarantor Subsidiary;
(ii) Any guarantees of the Indebtedness of HomeAmerican
Mortgage Corporation not to exceed in the aggregate $75,000,000; and
(iii) Indebtedness of Borrower and Guarantors evidenced by
existing and future guarantees (or other enhancements) in favor of Rock
Creek special districts not to exceed in the aggregate $30,000,000.
"Consolidated Interest Expense" means for any period, without
duplication, the aggregate amount of interest which, in conformity with
Agreement Accounting Principles, would be set opposite the caption "interest
expense" or any like caption on a consolidated income statement for Borrower and
Guarantors (specifically excluding the Non-Guarantor Subsidiaries), including,
without limitation, imputed interest included on Capitalized Lease Obligations,
all commissions, discounts and other fees and charges owed with respect to
Letters of Credit and bankers'
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acceptance financing, the net costs associated with Rate Hedging Obligations,
amortization of other financing fees and expenses, the interest portion of any
deferred payment obligation, amortization of discount or premiums, if any, and
all other noncash interest expense, other than interest and other charges
amortized to cost of sales. Consolidated Interest Expense includes, with respect
to Borrower and Guarantors (specifically excluding the Non-Guarantor
Subsidiaries), without duplication, all interest included as a component of cost
of sales for such period.
"Consolidated Interest Incurred" means for any period, without
duplication, the aggregate amount of interest which, in conformity with
Agreement Accounting Principles, would be set opposite the caption "interest
expense" or any like caption on a consolidated income statement for Borrower and
Guarantors (specifically excluding the Non-Guarantor Subsidiaries), including,
without limitation, imputed interest included on Capitalized Lease Obligations,
all commissions, discounts and other fees and charges owed with respect to
Letters of Credit and bankers' acceptance financing, the net costs associated
with Rate Hedging Obligations, amortization of other financing fees and
expenses, the interest portion of any deferred payment obligation, amortization
of discount or premium, if any, and all other noncash interest expense other
than interest and other charges amortized to cost of sales. Consolidated
Interest Incurred includes, with respect to Borrower and Guarantors, without
duplication, all capitalized interest for such period, all interest attributable
to discontinued operations for such period to the extent not set forth on the
income statement under the caption "interest expense" or any like caption, and
all interest actually paid by Borrower or any Guarantor (specifically excluding
the Non-Guarantor Subsidiaries) under any contingent obligation during such
period.
"Consolidated Net Income" means, for any period, the net income (or
loss) of Borrower on a consolidated basis for such period taken as a single
accounting period, determined in conformity with Agreement Accounting
Principles.
"Consolidated Senior Debt Borrowings" means, at any date, with respect
to Borrower and Guarantors, without duplication (taken as a whole on a
consolidated basis), the outstanding principal amount of all obligations
described in clauses (i), (iv) or (viii) of the definition of "Indebtedness"
(including the Obligations and the Senior Debt) calculated in accordance with
Agreement Accounting Principles but excluding (i) Indebtedness of any
Non-Guarantor Subsidiary, (ii) Indebtedness of Borrower to a Guarantor, a
Guarantor to Borrower or a Guarantor to another Guarantor, (iii) any
Subordinated Indebtedness and (iv) Indebtedness secured by collateral having a
value in excess of the amount of such Indebtedness.
"Consolidated Tangible Net Worth" means, at any date, the stockholders'
equity of Borrower determined on a consolidated basis in conformity with
Agreement Accounting Principles, less (i) its consolidated Intangible Assets,
and less (ii) loans and advances to directors, officers and employees of
Borrower but excluding (A) loans for purposes of exercising options to purchase
capital stock in Borrower to the extent not otherwise netted out in the
determination of stockholders' equity, and (B) any arms-length mortgage loans
made by any Subsidiary in the ordinary course of such Subsidiary's business, and
(C) any advances made to employees in the
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ordinary course of business for travel and other items, and (D) other such loans
and advances not to exceed $5,000,000 in the aggregate outstanding at any one
time, all determined as of such date. For purposes of this definition
"Intangible Assets" means the amount (to the extent reflected in determining
such consolidated stockholders' equity) of (1) all write-ups in the book value
of any asset owned by Borrower or any Subsidiary, (2) any amount, however
designated on the balance sheet, representing the excess of the purchase price
paid for assets or stock acquired over the value assigned thereto on the books
of Borrower or any Subsidiary, (3) all unamortized debt discount, goodwill,
patents, trademarks, service marks, trade names, copyrights, organization or
developmental expenses and other intangible items, and (4) all items that would
be considered intangible assets under Agreement Accounting Principles.
"Consolidated Tangible Net Worth Test" is defined in Section 9.1.
"Contribution Agreement" is defined in Section 5.1(x).
"Controlled Group" means all members of a controlled group of
corporations and all trades or businesses (whether or not incorporated) under
common control which, together with Borrower, a Guarantor or any of their
respective Subsidiaries, are treated as a single employer under Section 414 of
the Code.
"Conversion/Continuation Notice" is defined in Section 2.9.
"Corporate Base Rate" means a rate per annum equal to the corporate
base rate of interest announced by Bank One from time to time, changing when and
as said corporate base rate changes.
"Coverage Test Failure Quarter" is defined in Section 9.2(b).
"Dividend" means (i) any dividend paid or declared by Borrower or any
Guarantor, as applicable; (ii) any purchase, redemption, retirement or other
acquisition by Borrower or any Guarantor, as applicable, for value, or the
setting aside of any funds or issuance of any warrants for such purpose, of any
of the capital stock of Borrower or such Guarantor, as applicable, now or
hereafter outstanding or any interest therein; and (iii) as to any Guarantor,
any distribution of assets, properties, cash, rights, obligations or other
consideration or securities of such Guarantor, directly or indirectly, to
Borrower.
"Dollars" and the sign "$" mean lawful money of the United States of
America.
"EBITDA" means, for any period, without duplication, the following, all
as determined on a consolidated basis for Borrower and Guarantors (specifically
excluding the Non-Guarantor Subsidiaries) in conformity with Agreement
Accounting Principles,
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(i) the sum of the amounts for such period of (a) Consolidated
Net Income (specifically excluding for purposes of this definition net
income of the Non-Guarantor Subsidiaries but including, however, any
dividends and reimbursements of taxes paid by any Non-Guarantor
Subsidiary to Borrower or any Guarantor), (b) Consolidated Interest
Expense, (c) charges against income for all federal, state and local
taxes, (d) depreciation expense, (e) amortization expense, (f) other
non-cash charges and expenses, and (g) any losses arising outside of
the ordinary course of business which have been included in the
determination of such Consolidated Net Income, less
(ii) any gains arising outside of the ordinary course of
business which have been included in the determination of such
Consolidated Net Income.
"Entitled Land" means parcels of land owned by Borrower or any
Guarantor which are zoned for the construction of single-family dwellings,
whether detached or attached (excluding mobile homes); provided, however, that
the term "Entitled Land" shall not include Land under Development, Finished Lots
or any real property upon which the construction of Housing Units has commenced
(as described in the definition of "Housing Unit").
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and any rule or regulation issued thereunder.
"Event of Default" means an event described in Article X after the
expiration of any applicable cure or notice period provided in Article X.
"Excluded Taxes" is defined in Section 3.1(i).
"Existing Letters of Credit" is defined in Section 4.4(f).
"Extension Request" is defined in Section 2.21(a).
"Facility Increase Request" is defined in Section 2.5(d)(i).
"Facility Letter of Credit" means each Existing Letter of Credit and
any Letter of Credit issued by the Issuing Bank for the account of Borrower or
any Guarantor in accordance with Article IV.
"Facility Letter of Credit Fee" means a fee, payable with respect to
each Facility Letter of Credit issued by the Issuing Bank, in an amount per
annum equal to the product of (i) the Applicable Letter of Credit Rate
(determined as of the date on which the quarterly installment of such fee is
due) and (ii) the face amount of such Facility Letter of Credit. The Applicable
Letter of Credit Rate shall be adjusted, as applicable, from time to time,
effective on the first January 1,
-9-
April 1, June 1 or October 1 to occur on or after any change in the
Applicable LIBOR Rate Margin.
"Facility Letter of Credit Obligations" means, at any date, the sum of
(i) the aggregate undrawn face amount of all outstanding Facility Letters of
Credit, plus (ii) the aggregate amount paid by an Issuing Bank on any Facility
Letters of Credit to the extent (if any) not reimbursed by Borrower or by Banks
under Section 4.4.
"Facility Maturity Date" means September 30, 2004, as the same may be
extended as provided in Section 2.21.
"Facility Rating" means the second highest of the publicly announced
ratings by any two (2) or more of Moody's, S&P, Fitch's Investment Service, and
Duff & Phelps Credit Rating Co., as selected by Borrower, on Borrower's
Indebtedness evidenced by this Agreement and the Notes; provided, however, (i)
if none of such ratings is from Moody's and S&P, there shall be no Facility
Rating, (ii) if the only such ratings are from Moody's and S&P, the Facility
Rating shall be the higher of the two ratings, and (iii) if there is only one
such rating, there shall be no Facility Rating, unless such rating is from
Moody's or S&P, in which event such rating shall be the Facility Rating. The
Facility Rating shall change if and when such rating(s) change.
"Facility Termination Date" means the earlier of (i) the Facility
Maturity Date, or (ii) the last day of the Term Out Period (if applicable) then
in effect, as calculated pursuant to Section 2.22.
"Federal Funds Effective Rate" means, for any day, an interest rate per
annum equal to the weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by Federal
funds brokers on such day, as published for such day (or, if such day is not a
Business Day, for the immediately preceding Business Day) by the Federal Reserve
Bank of New York, or, if such rate is not so published for any day which is a
Business Day, the average of the quotations at approximately 10:00 a.m., Chicago
time, for such day on such transactions received by Administrative Agent from
three (3) Federal funds brokers of recognized standing selected by
Administrative Agent in its sole discretion.
"Financial Covenant Test" means each of the Consolidated Tangible Net
Worth Test and the Leverage Test. The covenants set forth in Sections 9.3, 9.4
and 9.5 shall not constitute Financial Covenant Tests.
"Finished Lots" means parcels of land owned by Borrower or any
Guarantor which are duly recorded and platted for the construction of
single-family dwelling units, whether detached or attached (but excluding mobile
homes) and zoned for such use, with respect to which all requisite governmental
consents and approvals required for a building permit to be issued have been, or
could be, obtained; provided, however, that the term "Finished Lots" shall not
include any real property upon which the construction of a Housing Unit has
commenced (as described in the definition of "Housing Unit").
-10-
"Fixed Charge Coverage Test" is defined in Section 9.2(b).
"Fixed Charges Incurred" means, for any period, without duplication,
the sum of (i) Consolidated Interest Incurred for such period, plus (ii) rent
payable by Borrower or any Guarantor during such period under leases of homes
that, if owned by Borrower or a Guarantor, would constitute Model Units, plus
(iii) Dividends paid during such period by Borrower on any class of preferred
stock.
"Floating Rate" means, for any day, a rate per annum equal to (i) the
Alternate Base Rate for such day, plus (ii) the Applicable Floating Rate Margin,
in each case changing when and as the Alternate Base Rate changes.
"Floating Rate Advance" means an Advance which bears interest at the
Floating Rate.
"Floating Rate Loan" means a Loan which bears interest at the Floating
Rate.
"GAAP" means generally accepted accounting principles in effect from
time to time, consistently applied.
"Guarantors" 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, RICHMOND AMERICAN HOMES
OF COLORADO, INC., a Delaware corporation, RICHMOND AMERICAN HOMES OF NORTHERN
CALIFORNIA, INC., a Colorado corporation, MDC LAND CORPORATION, a Colorado
corporation, and RICHMOND AMERICAN CONSTRUCTION, INC., a Delaware corporation,
and their successors and assigns, and any Subsidiary that shall hereafter become
a Guarantor in accordance with Section 7.12 hereof, and any successors and
assigns of any of the foregoing. "Guarantor" means any one of the Guarantors.
"Guaranty" means a Guaranty, in substantially the form of Exhibit A,
duly executed by a Guarantor, as the same may be amended or modified and in
effect from time to time.
"Housing Unit" means a single-family dwelling (where construction has
commenced), whether detached or attached (including condominiums but excluding
mobile homes), including the parcel of land on which such dwelling is located,
that is or will be available for sale by Borrower or a Guarantor. The
construction of a Housing Unit shall be deemed to have commenced upon
commencement of the trenching for the foundation of the Housing Unit. Each
"Housing Unit" is either a Presold Unit, a Spec Unit or a Model Unit.
"Housing Unit Closing" means a closing of the sale of a Housing Unit by
Borrower or a Guarantor to a bona fide purchaser for value.
-11-
"Increase Date" is defined in Section 2.5(d)(ii).
"Indebtedness" of a Person means, without duplication, such Person's
(i) obligations for borrowed money,
(ii) obligations representing the deferred purchase price of
Property or services (other than (A) trade accounts payable and accrued
expenses arising or occurring in the ordinary course of such Person's
business, and (B) obligations evidenced by the Permitted Liens
described in clause (vi) of the definition of Permitted Liens),
(iii) obligations, whether or not assumed, secured by Liens
on, or payable out of the proceeds or production from, Property now or
hereafter owned or acquired by such Person (other than the obligations
evidenced by the Permitted Liens described in clause (vi) of the
definition of Permitted Liens),
(iv) obligations which are evidenced by notes, bonds,
debentures, or other similar instruments,
(v) Capitalized Lease Obligations,
(vi) net liabilities under Rate Hedging Obligations,
(vii) all liabilities and obligations of others of the kind
described in clauses (i) through (vi) and (viii) that such Person has
guaranteed or that is otherwise its legal liability, and
(viii) reimbursement obligations for which such Person is
obligated with respect to a Letter of Credit (which shall be included
in the face amount of such Letter of Credit, whether or not such
reimbursement obligations are due and payable), provided, however, that
Letters of Credit supporting performance obligations shall not be
included in Indebtedness.
Indebtedness includes, without limitation, in the case of Borrower, the
Obligations and the obligations evidenced by the Senior Notes and the documents
executed in connection therewith.
"Indenture" means that certain Senior Notes Indenture, dated as of
January 28, 1998, between Borrower and U.S. Bank National Association pursuant
to which the Senior Notes were issued.
"Interest Period" means, with respect to a LIBOR Advance, a period of
one, two, three or six months commencing on a Business Day selected by Borrower
pursuant to this Agreement.
-12-
Such Interest Period shall end on (but exclude) the day which corresponds
numerically to such date one, two, three or six months thereafter, provided,
however, that if there is no such numerically corresponding day in such next,
second, third or sixth succeeding month, such Interest Period shall end on the
last Business Day of such next, second, third or sixth succeeding month. If an
Interest Period would otherwise end on a day which is not a Business Day, such
Interest Period shall end on the next succeeding Business Day, provided,
however, that if said next succeeding Business Day falls in a new calendar
month, such Interest Period shall end on the immediately preceding Business Day.
No Interest Period shall extend beyond the Facility Termination Date (or, if the
provisions of Section 2.21(c) apply, the Previous Maturity Date).
"Inventory Valuation Date" means the last day of the most recent
calendar month with respect to which a Borrower is required to have delivered a
Borrowing Base Certificate pursuant to Section 7.1(vi) hereof.
"Investment" of a Person means any loan, advance, extension of credit
(other than accounts receivable arising in the ordinary course of business), or
contribution of capital by such Person to any other Person or any investment in,
or purchase or other acquisition of, the stock, partnership, joint venture or
limited liability company interests, notes, debentures or other securities of
any other Person made by such Person.
"Issuance Date" means the date on which a Facility Letter of Credit is
issued, amended or extended.
"Issuing Bank" means (i) solely with respect to the Existing Letters of
Credit, the Prior Issuing Bank, and (ii) with respect to all other Facility
Letters of Credit, Bank One or such other Bank as Borrower, Administrative Agent
and such other Bank may agree upon, that may from time to time issue Facility
Letters of Credit.
"Land Under Development" means parcels of land owned by Borrower or any
Guarantor which are zoned for the construction of single-family dwelling units,
whether attached or detached (excluding mobile homes) and upon which the
construction of site improvements has commenced and is proceeding; provided,
however, that the term "Land Under Development" shall not include (i) Finished
Lots, (ii) Entitled Land, (iii) any real property upon which the construction of
a Housing Unit has commenced, or (iv) vacant land held by Borrower or any
Guarantor for future development or sale and designated as inactive land in the
footnotes to Borrower's or such Guarantor's financial statements.
"Lending Installation" means, with respect to a Bank or Administrative
Agent, any office, branch, banking subsidiary of the holding company of a Bank
or Administrative Agent, or banking Affiliate of such Bank or Administrative
Agent located in each event in the United States.
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"Letter of Credit" means a letter of credit or similar instrument which
is issued by a financial institution upon the application of a Person or upon
which such Person is an account party or for which such Person is in any way
liable.
"Leverage Multiplier" means, at the date hereof, 2.15, as such amount
may hereafter be adjusted from time to time as provided in Section 9.2(c).
"Leverage Test" is defined in Section 9.2(a).
"LIBOR Advance" means an Advance which bears interest at a LIBOR Rate.
"LIBOR Base Rate" means, with respect to a LIBOR Advance for the
relevant Interest Period, the rate determined by the Administrative Agent to be
the rate at which deposits in U.S. dollars are offered by Bank One to
first-class banks in the London interbank market at approximately 11 a.m.
(London time) two Business Days prior to the first day of such Interest Period,
in the approximate amount of Bank One's relevant LIBOR Loan and having a
maturity approximately equal to such Interest Period.
"LIBOR Loan" means a Loan which bears interest at a LIBOR Rate.
"LIBOR Rate" means, with respect to a LIBOR Advance for the relevant
Interest Period, the sum of (i) the quotient of (a) the LIBOR Base Rate
applicable to such Interest Period, divided by (b) one minus the Reserve
Requirement (expressed as a decimal) applicable to such Interest Period, plus
(ii) the Applicable LIBOR Rate Margin. The LIBOR Rate shall be rounded to the
next higher multiple of 1/16 of 1% if the rate is not such a multiple.
"Lien" means any lien (statutory or other), mortgage, pledge,
hypothecation, assignment (the purpose of which is to grant a security
interest), deposit arrangement (the purpose of which is to grant a security
interest), encumbrance or other security agreement or arrangement of any kind or
nature whatsoever the purpose of which is to grant a security interest, whether
or not filed or recorded or otherwise perfected (including the interest of a
vendor or lessor under any conditional sale, any Capitalized Lease or any lease
deemed to constitute a security interest, any other title retention agreement).
"Loan" means, with respect to a Bank, such Bank's portion of any
Advance. For purposes of a Swing Line Advance, Bank One's portion of such
Advance is 100%.
"Loan Documents" means this Agreement, the Notes and any Reimbursement
Agreements.
"Material Adverse Effect" means a material adverse effect, based on
commercially reasonable standards, on (i) the business, Property, condition
(financial or otherwise), or results of operations of Borrower and Guarantors,
taken as a whole, (ii) the ability of Borrower to perform its obligations under
the Loan Documents, or (iii) the validity or enforceability under
-14-
applicable law of any of the Loan Documents or Guaranties or the rights or
remedies of Administrative Agent, Banks or any Issuing Bank thereunder (other
than as to clause (iii), a Material Adverse Effect resulting solely from the
acts or omissions of Administrative Agent and/or any Bank(s)). Items disclosed
by Borrower in its form 10-Q and form 10-K or any other filings with the
Securities and Exchange Commission shall not be deemed to have a Material
Adverse Effect solely because of such disclosure, and the existence and content
of such disclosure shall not be prima facie evidence of a Material Adverse
Effect.
"Model Unit" means a Housing Unit constructed initially for inspection
by prospective purchasers that is not intended to be sold until all or
substantially all other Housing Units in the applicable subdivision are sold.
"Moody's" means Moody's Investors Service, Inc.
"Multiemployer Plan" means a Plan maintained pursuant to a collective
bargaining agreement or any other arrangement as described in Section 3(37) of
ERISA to which Borrower, any Guarantor or any member of the Controlled Group is
a party to which more than one employer is obligated to make contributions.
"Net Worth" means, at any date as to each Non-Guarantor Subsidiary
(taken as a whole on a consolidated basis), the sum of (A) all stockholders'
equity of such Non-Guarantor Subsidiary, less (B) all loans, advances or other
sums paid by such Subsidiary to Borrower or any Guarantor and outstanding at
such date, all as determined in conformity with Agreement Accounting Principles.
"New Bank" is defined in Section 2.5(d)(i).
"Non-Guarantor Subsidiary" means each Subsidiary of Borrower that is
not a Guarantor. The Non-Guarantor Subsidiaries as of the date of this Agreement
are listed on Schedule 1.
"Non-Recourse Indebtedness" with respect to any Person means
Indebtedness of such Person (i) for which the sole legal recourse for collection
of principal and interest on such Indebtedness is against the specific property
identified in the instruments evidencing or securing such Indebtedness and such
property was acquired with the proceeds of such Indebtedness or such
Indebtedness was incurred within ninety (90) days after the acquisition of such
property and for which no other assets of such Person may be realized upon in
collection of principal or interest on such Indebtedness, or (ii) that
refinances Indebtedness described in clause (i) and for which the recourse is
limited to the same extent described in clause (i).
"Note" means a promissory note, in substantially the form of Exhibit B
hereto, duly executed by Borrower and payable to the order of a Bank in the
amount of its Commitment, including any amendment, modification, renewal or
replacement of such promissory note.
-15-
"Notice of Assignment" is defined in Section 15.3.2.
"Obligations" means all unpaid principal of and accrued and unpaid
interest on the Notes, the Facility Letter of Credit Obligations, all accrued
and unpaid fees and all expenses, reimbursements, indemnities and other
obligations of Borrower to Banks or to any Bank, Administrative Agent, any
Issuing Bank or any indemnified party hereunder arising under the Loan
Documents.
"Original Credit Agreement" is defined in Recital A.
"Participants" is defined in Section 15.2.1.
"PBGC" means the Pension Benefit Guaranty Corporation, or any successor
thereto.
"Permitted Liens" means, as to Borrower or any Guarantor, any of the
following:
(i) Liens for taxes, assessments or governmental charges or
levies on Borrower's or such Guarantor's Property if the same (A) shall
not at the time be delinquent or thereafter can be paid without
penalty, or (B) are being contested in good faith and by appropriate
proceedings and for which adequate reserves shall have been established
on Borrower's or such Guarantor's books in accordance with Agreement
Accounting Principles.
(ii) Liens imposed by law, such as carriers', warehousemen's,
mechanics' and materialmen's Liens and other similar Liens arising in
the ordinary course of business with respect to amounts that either (A)
are not yet delinquent, or (B) are delinquent but are being contested
in a timely manner in good faith by appropriate proceedings and for
which adequate reserves shall have been established on Borrower's or
Guarantor's books in accordance with Agreement Accounting Principles.
(iii) Utility easements, rights of way, zoning restrictions,
covenants, reservations, and such other burdens, encumbrances or
charges against real property, or other minor irregularities of title,
as are of a nature generally existing with respect to properties of a
similar character and which do not in any material way interfere with
the use thereof or the sale thereof in the ordinary course of business
of Borrower or such Guarantor.
(iv) Easements, dedications, assessment district or similar
Liens in connection with municipal financing and other similar
encumbrances or charges, in each case reasonably necessary or
appropriate for the development of real property of Borrower or such
Guarantor, and which are granted in the ordinary course of the business
of Borrower or such Guarantor, and which in the aggregate
-16-
do not materially burden or impair the fair market value or use of such
real property (or the project to which it is related) for the purposes
for which it is or may reasonably be expected to be held.
(v) Any option or right of first refusal to purchase real
property granted to the master developer or the seller of real property
that arises as a result of the non-use or non-development of such real
property by the Borrower or such Guarantor.
(vi) Any agreement or contract to participate in the income or
revenue or to pay lot premiums, in each case derived from the sale of
Housing Units and granted in the ordinary course of business to the
seller of the real property upon which the Housing Unit is constructed.
"Person" means any natural person, corporation, firm, joint venture,
partnership, limited liability company, association, enterprise, trust or other
entity or organization, or any government or political subdivision or any
agency, department or instrumentality thereof.
"Plan" means an employee pension benefit plan which is covered by Title
IV of ERISA or subject to the minimum funding standards under Section 412 of the
Code as to which Borrower, any Guarantor or any member of the Controlled Group
may have any liability.
"Presold Unit" means a Housing Unit owned by Borrower or any Guarantor
that is subject to a bona fide written agreement between Borrower or such
Guarantor and a third Person purchaser for sale in the ordinary course of
Borrower's or such Guarantor's business of such Housing Unit and the related
lot, accompanied by a cash earnest money deposit or down payment in an amount
that is customary, and subject only to ordinary and customary contingencies to
the purchaser's obligation to buy the Housing Unit and related lot.
"Previous Maturity Date" is defined in Section 2.21(c).
"Prior Banks" means the "Banks" as defined in the Original Credit
Agreement.
"Prior Issuing Bank" means Bank One, Arizona, N.A.
"Property" of a Person means any and all property, whether real,
personal, tangible, intangible, or mixed, of such Person, or other assets owned,
leased or operated by such Person.
"Public Indebtedness" means Indebtedness evidenced by notes,
debentures, or other similar instruments issued after the date of this Agreement
pursuant to either (i) a registered public offering or (ii) a private placement
of such instruments in accordance with an exemption from registration under the
Securities Act of 1933 and/or the Securities Exchange Act of 1934 or similar
law.
-17-
"Purchasers" is defined in Section 15.3.1.
"Rate Hedging Obligations" of a Person means any and all obligations of
such Person, whether absolute or contingent and howsoever and whensoever
created, arising, evidenced or acquired (including all renewals, extensions and
modifications thereof and substitutions therefor), under (i) any and all
agreements, devices or arrangements designed to protect at least one of the
parties thereto from the fluctuations of interest rates, exchange rates or
forward rates applicable to such party's assets, liabilities or exchange
transactions, including, but not limited to, dollar-denominated or
cross-currency interest rate exchange agreements, forward currency exchange
agreements, interest rate cap or collar protection agreements, forward rate
currency or interest rate options, puts and warrants, and (ii) any and all
cancellations, buy backs, reversals, terminations or assignments of any of the
foregoing.
"Receivables" means the net proceeds payable to, but not yet received
by, Borrower or any Guarantor following a Housing Unit Closing.
"Refinancing Indebtedness" means Indebtedness that refunds, refinances
or extends any Indebtedness (or that refunds, refinances or extends any refund,
refinancing or extension of such Indebtedness), but only to the extent that
(i) the Refinancing Indebtedness is subordinated to or pari
passu with the Obligations (or a Guarantor's obligations under its
Guaranty, as applicable) to the same extent as the Indebtedness being
refunded, refinanced or extended,
(ii) the Refinancing Indebtedness is scheduled to mature no
earlier than the then current maturity date of such Indebtedness,
(iii) such Refinancing Indebtedness is in an aggregate amount
that is equal to or less than the sum of the aggregate amount then
outstanding plus all amounts committed but undisbursed under the
Indebtedness being refunded, refinanced or extended,
(iv) the Person or Persons liable for the payment of such
Refinancing Indebtedness are the same Person or Persons (or
successor(s) thereto) that were liable for the Indebtedness being
refunded, refinanced or extended when such Indebtedness was initially
incurred, and
(v) such Refinancing Indebtedness is incurred within 120 days
after the Indebtedness being refunded, refinanced or extended is so
refunded, refinanced or extended.
"Regulation D" means Regulation D of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor thereto
or other regulation or official
-18-
interpretation of said Board of Governors relating to reserve requirements
applicable to member banks of the Federal Reserve System.
"Regulation U" means Regulation U of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor thereto
or other regulation or official interpretation of said Board of Governors
relating to the extension of credit by banks for the purpose of purchasing or
carrying margin stocks applicable to member banks of the Federal Reserve System.
"Reimbursement Agreement" means, with respect to a Facility Letter of
Credit, such form of application therefor and form of reimbursement agreement
therefor (whether in a single or several documents, taken together) as an
Issuing Bank may employ in the ordinary course of business for its own account,
with such modifications thereto as may be agreed upon by such Issuing Bank and
Borrower and as are not materially adverse (in the reasonable judgment of such
Issuing Bank and Administrative Agent) to the interests of Banks; provided,
however, in the event of any conflict between the terms of any Reimbursement
Agreement and this Agreement, the terms of this Agreement shall control.
"Rejecting Bank" is defined in Section 2.21(b).
"Related Business" means any of the following lines of business or
business activity of the type conducted by Borrower, Guarantors and their
Subsidiaries on the date hereof: (i) the home building business, (ii) the
residential mortgage loan business, (iii) the real estate development business,
(iv) the title insurance agency and settlement business, and (v) the insurance
agency business.
"Replacement Bank" is defined in Section 2.23.
"Reportable Event" means a reportable event as defined in Section 4043
of ERISA and the regulations issued under such Section, with respect to a Plan,
excluding, however, such events as to which the PBGC by regulation waived the
requirement of Section 4043(a) of ERISA that it be notified within thirty (30)
days of the occurrence of such event; provided, however, that a failure to meet
the minimum funding standard of Section 412 of the Code and of Section 302 of
ERISA shall be a Reportable Event regardless of the issuance of any such waiver
of the notice requirement in accordance with either Section 4043(a) of ERISA or
waiver of the funding requirements under Section 412(d) of the Code.
"Required Banks" means Banks in the aggregate having at least 66-2/3%
of the Aggregate Commitment or, if the Aggregate Commitment has been terminated,
Banks in the aggregate holding at least 66-2/3% of the aggregate unpaid
principal amount of the outstanding Advances.
-19-
"Reserve Requirement" means, with respect to an Interest Period, the
maximum aggregate reserve requirement (including all basic, supplemental,
marginal and other reserves) which is imposed under Regulation D on Eurocurrency
liabilities (as defined therein).
"S&P" means Standard & Poor's Ratings Services.
"SEC Filing" means any form 10-K, form 10-Q or form 8-K of Borrower
hereafter filed by Borrower with the Securities and Exchange Commission and
delivered to Administrative Agent pursuant to Section 7.1(xii).
"Section" means a numbered section of this Agreement, unless another
document is specifically referenced.
"Senior Debt" means the Senior Notes or, if the Senior Notes are
refinanced, the Refinancing Indebtedness with respect thereto.
"Senior Notes" means the 8-3/8% Senior Notes due 2008 of Borrower
issued in the original principal amount of $175,000,000 pursuant to the
Indenture.
"Senior Public Debt Rating" means the second highest of the publicly
announced ratings by any two (2) or more of Moody's, S&P, Fitch's Investment
Service, and Duff & Phelps Credit Rating Co., as selected by Borrower, on
Borrower's Senior Debt or other Public Indebtedness of Borrower that is pari
passu with the Obligations; provided, however, (i) if none of such ratings is
from Moody's and S&P, there shall be no Senior Public Debt Rating, (ii) if the
only such ratings are from Moody's or S&P, the Senior Public Debt Rating shall
be the higher of the two ratings, (iii) if there is only one rating, there shall
be no Senior Public Debt Rating, unless such rating is from Moody's or S&P, in
which event such rating shall be the Senior Public Debt Rating. The Senior
Public Debt Rating shall change if and when such rating(s) change.
"Significant Subsidiary" means any Non-Guarantor Subsidiary that has a
Net Worth equal to or exceeding $1,000,000.00.
"Single Employer Plan" means a Plan maintained by Borrower, any
Guarantor or any member of the Controlled Group for employees of Borrower, any
Guarantor or any member of the Controlled Group.
"Spec Unit" means any Housing Unit owned by Borrower or any Guarantor
that is not a Presold Unit or a Model Unit.
"Subordinated Indebtedness" means any Indebtedness of Borrower or any
Guarantor (a) which has a maturity date that is later than the Facility Maturity
Date and (b) the payment of which Indebtedness is subordinated to payment of the
Obligations or to such Guarantor's Guaranty of the Obligations (as applicable)
to the satisfaction of the Required Banks. Subordinated Indebtedness
-20-
shall specifically not include Indebtedness of any Guarantor to Borrower or
Borrower to any Guarantor.
"Subsidiary" of a Person means (i) any corporation more than 50% of the
outstanding securities having ordinary voting power for the election of the
board of directors of which shall at the time be beneficially owned (within the
meaning of Rule 13d-3 of the Securities Exchange Act of 1934, as amended)
directly or indirectly, by such Person or by one or more of its Subsidiaries or
by such Person and one or more of its Subsidiaries, or (ii) any partnership,
association, joint venture, limited liability company or similar business
organization more than 50% of the ownership interests having ordinary voting
power of which shall at the time be so owned or controlled. Unless otherwise
expressly provided, all references herein to a "Subsidiary" shall mean a direct
or indirect Subsidiary of Borrower.
"Substantial Portion" means, with respect to the Property of Borrower
and Guarantors, taken as a whole, Property which represents more than 10% of
Consolidated Tangible Net Worth, as would be shown in the consolidated financial
statements of Borrower as of the beginning of the fiscal quarter in which such
determination is made.
"Swing Line Advances" has the meaning set forth in Section 2.19.
"Swing Line Advance Maturity Date" means that day that is the second
Business Day following the date in which a Swing Line Advance was funded by Bank
One.
"Term Out Date" is defined in Section 2.22(a).
"Term Out Period" means the period of time commencing on the Term Out
Date and expiring on the Facility Termination Date.
"Transferee" is defined in Section 15.4.
"Type" means, with respect to any Advance, its nature as a Floating
Rate Advance or LIBOR Advance.
"Unfunded Liabilities" means the amount (if any) by which the present
value of all vested nonforfeitable benefits under all Single Employer Plans
exceeds the fair market value of the assets of such Plans allocable to such
benefits, all determined as of the then most recent valuation date for such
Plans, using the actuarial methods and assumptions utilized in the actuarial
report for each such Plan as of such date.
"Unmatured Event of Default" means an event which but for the lapse of
time or the giving of notice, or both, would constitute an Event of Default.
-21-
"Unused Commitment" means, at any date with respect to any Bank, the
amount (if any) by which such Bank's Commitment exceeds the sum of (i) the
outstanding principal balance of such Bank's Loans as of such date, plus (ii)
such Bank's ratable share (determined in accordance with Section 4.6) of the
outstanding amount of the Facility Letters of Credit.
"Unused Commitment Fee" means a fee payable by Borrower to each Bank
with respect to such Bank's Unused Commitment, calculated in accordance with
Section 2.5(a).
"Wholly-Owned Subsidiary" of a Person means (i) any Subsidiary all of
the outstanding voting securities (or the election of the board of directors) of
which shall at the time be beneficially owned (within the meaning of Rule 13d-3
of the Securities Exchange Act of 1934, as amended) directly or indirectly, by
such Person or one or more Wholly-Owned Subsidiaries of such Person, or by such
Person and one or more Wholly-Owned Subsidiaries of such Person, or (ii) any
partnership, association, joint venture, limited liability company or similar
business organization 100% of the ownership interests having ordinary voting
power of which shall at the time be so owned or controlled.
The foregoing definitions shall be equally applicable to both the
singular and plural forms of the defined terms.
ARTICLE II
THE CREDITS
2.1 Commitment. From and including the date of this Agreement and prior
to the Facility Termination Date, each Bank severally agrees, on the terms and
conditions set forth in this Agreement, to make Loans to Borrower and to
participate in Facility Letters of Credit (as provided in Article IV) from time
to time in amounts not to exceed in the aggregate at any one time outstanding
the amount of its Commitment; provided, however, that (i) a Bank shall not be
required to make any Loan or Loans in excess of the amount of such Bank's then
Available Credit, and (ii) the aggregate principal amount of all Consolidated
Senior Debt Borrowings outstanding at any time and from time to time shall not
exceed the Borrowing Base determined as of the most recent Inventory Valuation
Date. The Commitments to lend hereunder shall expire on the Facility Termination
Date.
2.2 Required Payments. Any outstanding Advances and all other unpaid
Obligations shall be paid in full by Borrower on the Facility Termination Date.
Additionally, if for any reason at any time either (i) the principal amount of
all Advances plus the aggregate amount of the Facility Letter of Credit
Obligations outstanding exceeds the Aggregate Commitment, or (ii) the aggregate
principal amount of all Consolidated Senior Debt Borrowings exceeds the
Borrowing Base determined as of the most recent Inventory Valuation Date, then
Borrower shall, within five (5) Business Days after notice from Administrative
Agent, make a payment to Administrative Agent for the benefit of Banks in an
amount equal to such excess principal amount.
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2.3 Ratable Loans. Each Advance hereunder, including without
limitation, any Advance made by the Banks pursuant to Section 2.19(d), but
excluding Swing Line Advances, shall consist of Loans made by the several Banks
ratably in proportion to the ratio that their respective Commitments bear to the
Aggregate Commitment. Swing Line Advances shall consist of Loans made by Bank
One.
2.4 Types of Advances. The Advances may be Floating Rate Advances or
LIBOR Advances, or a combination thereof, selected by Borrower in accordance
with Sections 2.8 and 2.9.
2.5 Fees; Reduction and Increase in Commitment.
(a) Unused Commitment Fee. Borrower agrees to pay to
Administrative Agent for the account of each Bank an Unused Commitment
Fee, at a rate per annum equal to the Applicable Unused Commitment
Rate, calculated on the basis of a 360-day year in accordance with this
Section from the date hereof and to and including the Facility
Termination Date, and payable quarterly in arrears on the first day of
each January, April, July and October hereafter and on the Facility
Termination Date. For each quarter (or portion thereof), the Unused
Commitment Fee shall be equal to (A) such Bank's average daily
Commitment during such quarter (or portion thereof) minus (B) such
Bank's "average daily outstandings" for the quarter (or portion
thereof) with respect to which the Unused Commitment Fee is being
computed, with the resulting number multiplied by (C) the Applicable
Unused Commitment Rate, and the final product divided by (D) four (4).
As used herein, "average daily outstandings" means the sum of
(i) the outstanding principal balance of such Bank's Loans (including,
with respect to Bank One only, the outstanding principal balance of
Swing Line Advances) plus (ii) such Bank's ratable share (determined in
accordance with Section 4.5) of the outstanding amount of the Facility
Letters of Credit, all calculated for each day during the quarter (or
portion thereof) for which the fee is being computed, divided by the
number of days in that quarter (or portion thereof). If the Unused
Commitment Fee is being computed for less than a full quarter, the
number used in clause (D) above shall be computed on a daily basis for
the number of days for which the fee is being computed. The Unused
Commitment Fee shall continue to be payable during the Term Out Period.
All accrued Unused Commitment Fees shall be payable on the
effective date of any termination of the obligations of Banks to make
Loans hereunder.
(b) Extension Fee. If the Facility Maturity Date is extended
pursuant to the provisions of Section 2.21, then Borrower shall pay an
extension fee for each such extension as provided in Section 2.21(d).
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(c) Reductions in Aggregate Commitment. Borrower may
permanently reduce the Aggregate Commitment in whole, or in part
ratably among Banks (in proportion to the ratio that their respective
Commitment bear to the Aggregate Commitment) in integral multiples of
$5,000,000 at any time or from time to time, upon at least three (3)
Business Days' written notice to Administrative Agent, which notice
shall specify the amount of any such reduction; provided, however, that
the amount of the Aggregate Commitment may not be reduced below the sum
of (i) the aggregate principal amount of the outstanding Advances plus
(ii) the Facility Letter of Credit Obligations.
(d) Increases in Aggregate Commitment.
(i) Subject to the provisions of Section 2.5(d)(v), Borrower
may, at any time and from time to time, request ("Facility Increase
Request"), by notice to Administrative Agent, Administrative Agent's
approval of an increase of the Aggregate Commitment within the
limitations hereinafter set forth, which Facility Increase Request
shall set forth the amount of such requested increase. Within twenty
(20) days of such Facility Increase Request, Administrative Agent shall
advise Borrower of its approval or disapproval thereof; failure to so
advise Borrower shall constitute disapproval. Upon approval of
Administrative Agent, the Aggregate Commitment may be so increased
either by having financial institutions (other than Banks then holding
a Commitment hereunder) approved by Borrower and Administrative Agent
("New Banks") become Banks hereunder and/or by having any one or more
of Banks then holding a Commitment hereunder (at their respective
election in their sole discretion) that have been approved by Borrower
and Administrative Agent increase the amount of their Commitments (any
such Bank that elects to increase its Commitment and any New Bank being
hereinafter referred to as a "Additional Bank"), provided that (A)
unless otherwise agreed by Borrower and Administrative Agent, the
Commitment of any New Bank shall not be less than $25,000,000 (and, if
in excess thereof, in integral multiples of $5,000,000), (B) unless
otherwise agreed by Borrower and Administrative Agent, the increase in
the Commitment of any Bank shall be not less than $10,000,000 (and, if
in excess thereof, in integral multiples of $5,000,000); (C) the
Aggregate Commitment shall not exceed $450,000,000; (D) Borrower and
each Additional Bank shall have executed and delivered a commitment and
acceptance (the "Commitment and Acceptance") substantially in the form
of Exhibit C hereto, and Administrative Agent shall have accepted and
executed the same; (E) Borrower shall have executed and delivered to
Administrative Agent a Note or Notes payable to the order of each
Additional Bank, each such Note to be in the amount of such Additional
Bank's Commitment or increased Commitment (as applicable); (F) Borrower
shall have delivered to Administrative Agent an opinion of counsel and
certificate of Borrower's general counsel (substantially similar
to the forms of opinion attached hereto as Exhibits E and F,
respectively, modified to apply to the increase in the Aggregate
Commitment and each Note and Commitment and Acceptance executed
and delivered in connection therewith); (G) Guarantors shall have
consented in writing to the new
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Commitments or increases in Commitments (as applicable) and shall have
agreed that their Guaranties continue in full force and effect; and (H)
Borrower and each Additional Bank shall otherwise have executed and
delivered such other instruments and documents as Administrative Agent
shall have reasonably requested in connection with such new Commitment
or increase in the Commitment (as applicable). The form and substance
of the documents required under clauses (D) through (H) above shall be
fully acceptable to Administrative Agent. Administrative Agent shall
provide written notice to Banks following any such increase in the
Aggregate Commitment hereunder and shall furnish to Banks copies of the
documents required under clauses (D), (F), (G) and (H) above.
(ii) On the effective date of any increase in the Aggregate
Commitment pursuant to the provisions hereof ("Increase Date"), which
Increase Date shall be mutually agreed upon by Borrower, each
Additional Bank and Administrative Agent, each Additional Bank shall
make a payment to Administrative Agent in an amount sufficient, upon
the application of such payments by all Additional Banks to the
reduction of the outstanding Floating Rate Advances held by Banks, to
cause the principal amount outstanding under the Floating Rate Loans
made by all Banks (including any Additional Bank) to be in the
proportion of their respective Commitments (as of such Increase Date).
Borrower hereby irrevocably authorizes each Additional Bank to fund to
Administrative Agent the payment required to be made pursuant to the
immediately preceding sentence for application to the reduction of the
outstanding Floating Rate Loans held by each Bank, and each such
payment shall constitute a Floating Rate Loan hereunder. Such
Additional Bank shall not participate in any LIBOR Advances that are
outstanding on the Increase Date, but, if Borrower shall at any time on
or after such Increase Date convert or continue any LIBOR Advance
outstanding on such Increase Date, Borrower shall be deemed to repay
such LIBOR Advance on the date of the conversion or continuation
thereof and then to reborrow as a LIBOR Advance a like amount on such
date so that each Additional Bank shall make a LIBOR Loan on such date
in its pro rata share of such LIBOR Advance. Each Additional Bank shall
also make a Loan in the amount of its pro rata share of all Advances
made on or after such Increase Date and shall otherwise have all of the
rights and obligations of a Bank hereunder on and after such Increase
Date. Notwithstanding the foregoing, upon the occurrence of an Event of
Default prior to the date on which an Additional Bank is holding Loans
equal to its pro rata share of all Advances hereunder, such Additional
Bank shall, upon notice from Administrative Agent, on or after the date
on which the Obligations are accelerated or become due following such
Event of Default, pay to Administrative Agent (for the account of the
other Banks, to which the Administrative Agent shall pay their pro rata
shares upon receipt) a sum equal to such Additional Bank's pro rata
share of each Advance then outstanding with respect to which such
Additional Bank does not then hold a Loan equal to its pro rata share
thereof.
(iii) On the Increase Date and the making of the Loans by an
Additional Bank in accordance with the provisions of the first sentence
of Section 2.5(d)(ii), such Additional Bank shall also be deemed to
have irrevocably and unconditionally purchased and received,
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without recourse or warranty, from Banks party to this Agreement
immediately prior to the Increase Date, an undivided interest and
participation in any Facility Letter of Credit then outstanding,
ratably, such that all Banks (including each Additional Bank) hold
participation interests in each such Facility Letter of Credit
in the proportion of their respective Commitments (as so increased).
(iv) Nothing contained herein shall constitute, or otherwise
be deemed to be, a commitment or agreement on the part of any Bank to
increase its Commitment hereunder at any time or a commitment or
agreement on the part of Borrower or Administrative Agent to give or
grant any Bank the right to increase its Commitment hereunder at any
time.
(v) Notwithstanding anything to the contrary contained herein,
Borrower may not request an increase in the Aggregate Commitment during
the Term Out Period, and, if Borrower has requested an increase in the
Aggregate Commitment prior to the Term Out Period but the Term Out
Period commences prior to the effective date of such increase, such
increase shall not take effect.
2.6 Minimum Amount of Each Advance. Except with respect to Swing Line
Advances, each Advance shall be in the minimum amount of $2,000,000 (and in
multiples of $1,000,000 if in excess thereof).
2.7 Optional Principal Payments. Borrower may at any time or from time
to time pay, without penalty or premium, all Floating Rate Advances outstanding
with respect to Borrower, or, in a minimum aggregate amount of $1,000,000 or any
integral multiple of $500,000 in excess thereof (except with respect to Swing
Line Advances), any portion of the outstanding Floating Rate Advances upon one
(1) Business Day's prior notice to Administrative Agent. Borrower may, (i) upon
one (1) Business Days' prior notice to Administrative Agent, pay, without
penalty or premium, any LIBOR Advance in full on the last day of the Interest
Period for such LIBOR Advance, and (ii) upon three (3) Business Days' prior
notice to Administrative Agent, prepay any LIBOR Advance in full prior to the
last day of the Interest Period for such LIBOR Advance, provided that Borrower
shall also pay at the time of such prepayment all amounts payable with respect
thereto pursuant to Section 3.4 hereof.
2.8 Method of Selecting Types and Interest Periods for New Advances.
Borrower shall select the Type of Advance and, in the case of each LIBOR
Advance, the Interest Period applicable to each Advance from time to time.
Borrower shall give Administrative Agent irrevocable notice (a "Borrowing
Notice") in the form of Exhibit D not later than (a) noon, Chicago time, one (1)
Business Day before the Borrowing Date of each Floating Rate Advance (except a
Swing Line Advance), (b) noon, Chicago time, three (3) Business Days before the
Borrowing Date of each LIBOR Advance, and (c) 2:00 p.m., Chicago time, on the
Borrowing Date of each Swing Line Advance, specifying:
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(i) the Borrowing Date, which shall be a Business Day, of
such Advance,
(ii) whether the Advance is a Swing Line Advance,
(iii) the aggregate amount of such Advance,
(iv) except in the case of a Swing Line Advance, the Type of
Advance selected; provided, however, that the aggregate number of LIBOR
Advances outstanding at any one time shall not exceed five (5), and
(v) in the case of each LIBOR Advance, the Interest Period
applicable thereto.
Not later than noon, Chicago time, on each Borrowing Date, each Bank shall make
available its Loan or Loans, in funds immediately available in Chicago to
Administrative Agent at its address specified pursuant to Article XVI.
Administrative Agent will make the funds so received from Banks available to the
applicable Borrower at Administrative Agent's aforesaid address. Disbursements
of Advances (other than Swing Line Advances) may be made not more frequently
than one time per Business Day. Disbursements of all Swing Line Advances to
Borrower may be made not more frequently than one time per Business Day, or on a
more frequent basis as Bank One may agree. Interest on all Advances shall be
calculated on the basis of a 360 day year, based on the actual days elapsed.
2.9 Conversion and Continuation of Outstanding Advances. Floating Rate
Advances shall continue as Floating Rate Advances unless and until such Floating
Rate Advances are converted into LIBOR Advances. Each LIBOR Advance shall
continue as a LIBOR Advance until the end of the then applicable Interest Period
therefor, at which time such LIBOR Advance shall be automatically converted into
a Floating Rate Advance unless Borrower shall have given Administrative Agent a
Conversion/Continuation Notice requesting that, at the end of such Interest
Period, such LIBOR Advance either continues as a LIBOR Advance for the same or
another Interest Period or be repaid. Subject to the terms of Section 2.6,
Borrower may elect from time to time to convert all or any part of an Advance of
any Type into any other Type or Types of Advances; provided, however, that any
conversion of any LIBOR Advance may be made on, and only on, the last day of the
Interest Period applicable thereto, and further provided that the aggregate
number of LIBOR Advances outstanding at any one time shall not exceed five (5).
Borrower shall give Administrative Agent irrevocable notice (a
"Conversion/Continuation Notice") of each conversion of an Advance or
continuation of a LIBOR Advance not later than noon, Chicago time, at least one
(1) Business Day, in the case of a conversion into a Floating Rate
Advance, or three (3) Business Days, in the case of a conversion into or
continuation of a LIBOR Advance, prior to the date of the requested conversion
or continuation, specifying:
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(i) the requested date which shall be a Business Day, of
such conversion or continuation;
(ii) the aggregate amount and Type of the Advance which is to
be converted or continued; and
(iii) the amount and Type(s) of Advance(s) into which such
Advance is to be converted or continued and, in the case of a
conversion into or continuation of a LIBOR Advance, the Interest Period
applicable thereto.
2.10 Changes in Interest Rate, etc. Each Floating Rate Advance shall
bear interest on the outstanding principal amount thereof, for each day from and
including the date such Advance is made or is converted from a LIBOR Advance
into a Floating Rate Advance pursuant to Section 2.9 to but excluding the date
it becomes due or is converted into a LIBOR Advance pursuant to Section 2.9
hereof, at a rate per annum equal to the Floating Rate for such day. Changes in
the rate of interest on any Advance maintained as a Floating Rate Advance will
take effect simultaneously with each change in the Floating Rate or in the
Applicable Floating Rate Margin. Each LIBOR Advance shall bear interest from and
including the first day of the Interest Period applicable thereto to (but not
including) the last day of such Interest Period at the interest rate determined
as applicable to such LIBOR Advance. No Interest Period may end after the
Facility Termination Date.
2.11 Determination of Applicable Margins and Applicable Unused
Commitment Rate.
(a) Facility Rating. The Applicable Margins and the Applicable
Unused Commitment Rate shall be determined by reference to the Facility
Rating or, if no Facility Rating exists, by reference to the Senior
Public Debt Rating, in accordance with the following table:
Facility or Applicable Applicable
Senior Debt LIBOR Rate Floating Rate Applicable Unused
Rating Margin (%) Margin (%) Commitment Rate (%)
- ----------- ----------- ------------- -------------------
BBB-/Baa3 or .950 0 0.200
higher
BB+/Ba1 1.15 0 0.225
BB/Ba2 1.35 0 0.250
BB-/Ba3 1.55 0.125 0.300
B+/B1 or 1.75 0.250 0.350
lower or no
rating
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(b) Adjustment of Margins. The Applicable Floating Rate Margin
and the Applicable Unused Commitment Rate shall be adjusted, as
applicable from time to time, effective on the first Business Day after
any change in the Facility Rating or the Senior Public Debt Rating, as
applicable. The Applicable LIBOR Rate Margin in respect of any LIBOR
Advance shall be adjusted, as applicable from time to time, effective
on the first day of the Interest Period for any LIBOR Advance after any
change in the Facility Rating or the Senior Public Debt Rating, as
applicable.
2.12 Rates Applicable After Event of Default. Notwithstanding anything
to the contrary contained in Section 2.8, 2.9 or 2.10, during the continuance of
an Event of Default the Required Banks may, at their option, by notice to
Borrower (which notice may be revoked at the option of the Required Banks
notwithstanding any provision of Section 11.2 requiring unanimous consent of
Banks to changes in interest rates), declare that no Advance may be made as,
converted into or continued as a LIBOR Advance. Notwithstanding anything to the
contrary contained in Section 2.8, 2.9 or 2.10, during the continuance of an
Unmatured Event of Default the Required Banks may, at their option, by notice to
Borrower (which notice may be revoked at the option of the Required Banks
notwithstanding any provision of Section 11.2 requiring unanimous consent of
Banks to changes in interest rates), declare that no Advance may be made as or
converted into a LIBOR Advance. During the continuance of an Event of Default,
the Required Banks may, at their option, by notice to Borrower (which notice may
be revoked at the option of the Required Banks notwithstanding any provision of
Section 11.2 requiring unanimous consent of Banks to changes in interest rates),
declare that (i) each LIBOR Advance shall bear interest for the remainder of the
applicable Interest Period at the rate otherwise applicable to such Interest
Period plus 2% per annum and (ii) each Floating Rate Advance shall bear interest
at a rate per annum equal to the Floating Rate otherwise applicable to the
Floating Rate Advance plus 2% per annum.
2.13 Method of Payment. All payments of the Obligations hereunder shall
be made, without setoff, deduction, or counterclaim, in immediately available
funds to Administrative Agent at Administrative Agent's address specified
pursuant to Article XVI, or at any other Lending Installation of Administrative
Agent specified in writing by Administrative Agent to Borrower, by 1:00 p.m.
(local time at the place of receipt) on the date when due (or with respect to
Swing Line Advances, in accordance with Section 2.19), and, except for Swing
Line Advances shall be applied ratably by Administrative Agent among Banks, in
proportion to the ratio that each Bank's Commitment bears to the Aggregate
Commitment. Each payment delivered to Administrative Agent for the account of
any Bank shall be delivered promptly by Administrative Agent to such Bank in the
same type of funds that Administrative Agent received at its address specified
pursuant to Article XVI or at any Lending Installation specified in a notice
received by Administrative Agent from such Bank. If Administrative Agent
receives, for the account of a Bank, a payment from Borrower and fails to remit
such payment to the Bank on the Business Day such payment is received (if
received by 1:00 p.m., Chicago time, by Administrative Agent) or on the next
Business Day (if received after 1:00 p.m., Chicago time, by Administrative
Agent),
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Administrative Agent shall pay to such Bank interest on such payment at a rate
per annum equal to the Federal Funds Effective Rate for each day for which such
payment is so delayed.
2.14 Notes; Telephonic Notices. Each Bank is hereby authorized to
record the principal amount of each of its Loans and each repayment on the
schedule attached to its Note; provided, however, that the failure to so record
shall not affect Borrower's obligations under such Note. Borrower hereby
authorizes Administrative Agent to extend, convert or continue Advances, effect
selections of Types of Advances and to transfer funds based on telephonic
notices made by any person or persons who Administrative Agent in good faith
believes to be acting on behalf of Borrower. Borrower agrees to deliver promptly
to Administrative Agent a written confirmation, if such confirmation is
requested by Administrative Agent, of each telephonic notice signed by an
Authorized Officer of Borrower. If the written confirmation differs in any
material respect from the action taken by Administrative Agent, the records of
Administrative Agent shall govern absent manifest error.
2.15 Interest Payment Dates; Interest Basis. Interest accrued on each
Advance shall be payable on the first day of each calendar month, commencing
with the first such date to occur after the date hereof, and on any date on
which the Advance is prepaid, whether due to acceleration or otherwise. Interest
shall be payable for the day an Advance is made but not for the day of any
payment on the amount paid if payment is received prior to noon (local time at
the place of receipt). If any payment of principal of or interest on an Advance
shall become due on a day which is not a Business Day, such payment shall be
made on the next succeeding Business Day, and such extension of time shall be
included in computing interest in connection with such payment.
2.16 Notification of Advances, Interest Rates, Prepayments and
Commitment Reductions. Promptly after receipt thereof, Administrative Agent will
notify each Bank of the contents of each Aggregate Commitment reduction notice,
Borrowing Notice, Conversion/Continuation Notice, and repayment notice received
by it hereunder. Administrative Agent will notify each Bank of the interest rate
applicable to each LIBOR Advance promptly upon determination of such interest
rate and will give each Bank prompt notice of each change in the Floating Rate,
the Applicable Margin or the Applicable Unused Commitment Rate.
2.17 Lending Installations. Each Bank may book its Loans at any Lending
Installation selected by such Bank and may change its Lending Installation from
time to time. All terms of this Agreement shall apply to any such Lending
Installation and the Notes shall be deemed held by each Bank for the benefit of
such Lending Installation. Each Bank may, by written or telex notice to
Administrative Agent and Borrower, designate a Lending Installation through
which Loans will be made by it and for whose account Loan payments are to be
made.
2.18 Non-Receipt of Funds by Administrative Agent. Unless the Borrower
or a Bank, as the case may be, notifies Administrative Agent prior to the date
on which such payment is due to Administrative Agent of (i) in the case of a
Bank, the proceeds of a Loan or (ii) in the case of
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Borrower, a payment of principal, interest, fees or other amounts due under the
Loan Documents to Administrative Agent for the account of Banks, that it does
not intend to make such payment, Administrative Agent may assume that such
payment has been made. Administrative Agent may, but shall not be obligated to,
make the amount of such payment available to the intended recipient in reliance
upon such assumption. If Borrower or such Bank, as the case may be, has not in
fact made such payment to Administrative Agent, the recipient of such payment
shall, on demand by Administrative Agent, repay to Administrative Agent the
amount so made available together with interest thereon in respect of each day
during the period commencing on the date such amount was so made available by
Administrative Agent until the date Administrative Agent recovers such amount at
a rate per annum equal to (a) in the case of payment by a Bank, the Federal
Funds Effective Rate for such day or (b) in the case of payment by Borrower, the
interest rate applicable to the relevant Advance.
2.19 Swing Line. Notwithstanding the minimum amount of an Advance that
may be requested and the minimum amount of an Advance repaid under this
Agreement, Banks desire to permit Advances to Borrower in amounts that may be
less than the minimum Advance amounts required under Section 2.6, and Banks
desire to permit Borrower to repay such Advances in amounts that may be less
than the minimum repayment amounts required under Section 2.7. Such Advances
made pursuant to this Section 2.19 shall be deemed to be Advances for purposes
of this Agreement and are referred to herein as "Swing Line Advances." Swing
Line Advances shall be requested, advanced, and repaid in accordance with the
provisions and limitations of this Agreement relating to all Advances, subject
to the following:
(a) Aggregate Limit. The aggregate amount of all outstanding
Swing Line Advances shall not exceed at any one time $20,000,000.
(b) Interest. Swing Line Advances bear interest at the greater
of (i) the Alternate Base Rate, minus 0.50% per annum and (ii) a rate
equal to the LIBOR Rate for a one-month Interest Period if such rate
had been selected by Borrower on the date Borrower requested such Swing
Line Advance (the use of such LIBOR
Rate in determining interest shall not affect the Swing Line Maturity
Date of any Swing Line Advance or cause any Swing Line Advance to
constitute a LIBOR Advance).
(c) Funding Swing Line Advances. Swing Line Advances shall be
funded by Bank One pursuant to the procedures set forth in Section 2.8
of this Agreement. The principal amount of each Swing Line Advance,
together with all accrued interest, shall be repaid by Borrower to Bank
One in same day funds by 4:00 p.m. (or such later time as may be
acceptable to Bank One), Chicago time, on the Swing Line Advance
Maturity Date.
(d) Repayment of Swing Line Advances. If Borrower fails to pay
any Swing Line Advances on the applicable Swing Line Advance Maturity
Date, then
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such Advances shall no longer be Swing Line Advances, but
shall continue to be Floating Rate Advances for purposes of this
Agreement. Each Bank shall be deemed to have irrevocably and
unconditionally purchased and received from Administrative Agent an
undivided interest and participation (ratably in proportion to the
ratio that such Bank's Commitment bears to the Aggregate Commitment) in
such Advances. In such event, as of 11:59 p.m., Chicago time, on the
Swing Line Advance Maturity Date, Administrative Agent shall notify
each Bank of the total principal amount of all matured Swing Line
Advances and each Bank's ratable share thereof. Upon receipt of such
notice, each Bank shall promptly and unconditionally pay to
Administrative Agent for the account of Bank One the amount of such
Bank's share (ratably in proportion to the ratio that such Bank's
Commitment bears to the Aggregate Commitment) of such payment in same
day funds, and Administrative Agent shall promptly pay such amount, and
any other amounts received by Administrative Agent for Bank One's
account pursuant to this Section 2.19(d), to Bank One. If
Administrative Agent so notifies such Bank prior to 10:00 a.m., Chicago
time, on any Business Day, such Bank shall make available to
Administrative Agent for the account of Bank One such Bank's share of
the amount of such payment on such Business Day in same day funds. If
Administrative Agent notifies such Bank after 10:00 a.m., Chicago time,
on any Business Day, such Bank shall make available to Administrative
Agent for the account of Bank One such Bank's share of the amount of
such payment on the next succeeding Business Day in same day funds. If
and to the extent such Bank shall not have so made its share of the
amount of such payment available to Administrative Agent for the
account of Bank One, such Bank agrees to pay to Administrative Agent
for the account of Bank One forthwith on demand such amount, together
with interest thereon, for each day from the date such payment was
first due until the date such amount is paid to Administrative Agent
for the account of Bank One, at the Federal Funds Effective Rate. The
failure of any Bank to make available to Administrative Agent for the
account of Bank One such Bank's share of any such payment shall not
relieve any other Bank of its obligation hereunder to make available to
Administrative Agent for the account of Bank One its share of any
payment on the date such payment is to be made.
(e) Advances. The payments made by Banks to Bank One in
reimbursement of Swing Line Advances shall constitute, and Borrower
hereby expressly acknowledges and agrees that such payments shall
constitute, Advances hereunder to Borrower and such payments shall for
all purposes be treated as Advances to Borrower (notwithstanding that
the amounts thereof may not comply with the provisions of Section 2.6
and 2.7(a)). Such Advances shall be Floating Rate Advances, subject to
Borrower's rights under Article II hereof.
2.20 Withholding Tax Exemption. At least five (5) Business Days prior
to the first date on which interest or fees are payable hereunder for the
account of any Bank, each Bank (if any)
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that is not incorporated under the laws of the United States of America, or a
state thereof, agrees that it will deliver to Borrower and Administrative Agent
two (2) duly completed copies of United States Internal Revenue Service Form
1001 or 4224, certifying in either case that such Bank is entitled to receive
payments under this Agreement and the Notes without deduction or withholding of
any United States federal taxes and an Internal Revenue Service Form W-8 or W-9
entitling such Bank to receive a complete exemption from United States tax
backup withholding. Each Bank which so delivers a Form 1001 or 4224 further
undertakes to deliver to Borrower and Administrative Agent two (2) additional
copies of such form (or a successor form) on or before the date that such form
expires (currently, three (3) successive calendar years for Form 1001 and one
(1) calendar year for Form 4224) or becomes obsolete or after the occurrence of
any event requiring a change in the most recent forms so delivered by it, and
such amendments thereto or extensions or renewals thereof as may be reasonably
requested by Borrower or Administrative Agent, in each case certifying that such
Bank is entitled to receive payments under this Agreement and the Notes without
deduction or withholding of any United States federal taxes, unless an event
(including without limitation any change in treaty, law or regulation) has
occurred prior to the date on which any such delivery would otherwise be
required which renders all such forms inapplicable or which would prevent such
Bank from duly completing and delivering any such form with respect to it and
such Bank advises Borrower and Administrative Agent that it is not capable of
receiving payments without any deduction or withholding of United States federal
tax.
If a Bank does not provide duly executed forms to Borrower and
Administrative Agent within the time periods set forth in the preceding
paragraph, Borrower or Administrative Agent shall withhold taxes from payments
to such Bank at the applicable statutory rates and Borrower shall not be
required to pay any additional amounts as a result of such withholding. Upon the
reasonable request of Borrower or Administrative Agent, each Bank that has not
provided the forms or other documents, as provided above, on the basis of being
a "United States person," shall submit to Borrower and Administrative Agent a
certificate or other evidence to the effect that it is such a "United States
person."
2.21 Extension of Facility Maturity Date.
(a) Extension Requests. Borrower may request a one-year
extension of the Facility Maturity Date by submitting a request for an
extension to Administrative Agent no more than 48 months nor less than
46 months prior to the then scheduled Facility Maturity Date. At the
time of or prior to the delivery of such request, Borrower shall
propose to Administrative Agent the amount of the fees that Borrower
agrees to pay with respect to such one-year extension if approved by
Banks (such request for an extension, together with the fee proposal,
being herein referred to as the "Extension Request"). Promptly upon
(but not later than five (5) Business Days after) receipt of the
Extension Request, Administrative Agent shall notify each Bank of the
contents thereof and shall request each Bank to approve the Extension
Request. Each Bank approving the Extension Request shall deliver its
written approval no later than sixty (60) days after the date of the
Extension Request. If the approval of all Banks is received by
Administrative Agent within sixty (60) days after the date of the
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Extension Request (or as otherwise provided in Section 2.21(b)),
Administrative Agent shall promptly so notify Borrower and each Bank,
and the Facility Maturity Date shall be extended by one (1) year, and
in such event Borrower may thereafter request further extension(s) of
the then scheduled Facility Maturity Date in accordance with this
Section 2.21. If any Bank does not deliver to Administrative Agent such
Bank's written approval to any Extension Request within sixty (60) days
after the date of such Extension Request, the Facility Maturity Date
shall not be extended, except as otherwise provided in Section 2.21(b)
or 2.21(c).
(b) Rejecting Banks/Full Assignment. If (i) any Banks whose
pro rata shares of the Aggregate Commitment do not exceed 25% of the
Aggregate Commitment ("Rejecting Banks") shall not approve an Extension
Request, (ii) all rights and obligations of such Rejecting Banks under
this Agreement and under the other Loan Documents (including, without
limitation, their Commitment and all Loans owing to them) shall have
been assigned, within ninety (90) days following such Extension
Request, in accordance with Section 2.23, to one or more Replacement
Banks who shall have approved in writing such Extension Request at the
time of such assignment, and (iii) no other Bank shall have given
written notice to Administrative Agent of such Bank's withdrawal of its
approval of the Extension Request, Administrative Agent shall promptly
so notify Borrower and each Bank, and the Facility Maturity Date shall
be extended by one (1) year, and in such event Borrower may thereafter
request further extension(s) as provided in Section 2.21(a).
(c) Rejecting Banks/No Full Assignment. If (i) one or more
Rejecting Banks shall not approve an Extension Request, (ii) the
provisions of clause (ii) of Section 2.21(b) do not apply and (iii) no
other Bank shall have given written notice to Administrative Agent of
such Bank's withdrawal of its approval of the Extension Request,
Administrative Agent shall promptly notify Borrower and each Bank and
any Replacement Bank, and the Facility Maturity Date shall be
extended by one (1) year (subject to the limitations set forth in
this Section 2.21(c)), and in such event Borrower may thereafter
request further extension(s) as provided in Section 2.21(a); provided,
however, that (A) the Aggregate Commitment shall be automa tically
reduced, effective as of the Facility Maturity Date as determined
prior to such extension (the "Previous Maturity Date") and shall
equal the aggregate Commitments of the Banks who are not Rejecting
Banks and the Banks who are Replacement Banks; (B) all rights and
obligations of such Rejecting Banks under this Agreement and
under the other Loan Documents (including, without limita tion, their
Commitment and all Loans owing to them) shall either be (1) assigned to
Replacement Banks pursuant to Section 2.21(b), or (2) terminated,
effective as of the Previous Maturity Date (or such earlier date as
Borrower and Administrative
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Agent may designate, in which case the
reduction of the Aggregate Commitment provided for in the immediately
preceding sentence shall occur on such earlier date); (C) if and to the
extent such Rejecting Bank's Commitment is assigned to one or more
Replacement Banks, such assignment shall be effected in accordance with
the provisions of Section 2.23; and (D) if and to the extent such
Rejecting Bank's Commitment is terminated, Borrower shall pay to
Administrative Agent on the date of such termination, solely for the
account of such Rejecting Bank, all amounts due and owing such
Rejecting Bank hereunder or under any other Loan Document, including
without limitation the aggregate outstanding principal amount of the
Loans owed to such Rejecting Bank with respect to the terminated
Commitment, together with accrued interest thereon through the date of
such termination, all amounts payable under Sections 3.1 and 3.2 with
respect to such Rejecting Bank and all fees payable to such Rejecting
Bank hereunder with respect to the terminated Commitment (and payment
of such amount may not be waived except with the consent of each
Rejecting Bank, as more specifically provided in Section 11.2(i)); and
upon such Rejecting Bank's termination, such Rejecting Bank shall cease
to be a party hereto but shall continue to be entitled to the benefits
of Article III and Section 12.7, as well as to any fees accrued
hereunder and not yet paid, and shall continue to be obligated under
Section 13.8 with respect to obligations and liabilities accruing prior
to such termination of such Rejecting Bank's Commitment.
(d) Approval of Extension. Within ten (10) days after
Administrative Agent's notice to Borrower that all (or some, as
applicable) of Banks have approved an Extension Request (whether
pursuant to Section 2.21(a), (b) or (c)), Borrower shall pay to
Administrative Agent for the account of each Bank approving the
extension and each Replacement Bank an extension fee in the amount
provided in the Extension Request.
2.22 Term Out Period.
(a) Commencement of Term Out Period. If pursuant to the
provisions of Section 9.1 or 9.2(e) the Term Out Period shall commence,
the date of commencement thereof (as provided in Section 9.1 or 9.2(e),
as applicable) is herein referred to as the "Term Out Date", and the
provisions of this Section 2.22 shall apply.
(b) Term Out Period.
(i) The Facility Termination Date shall be that date
that is the day preceding the date that is 18 months after the
Term Out Date.
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(ii) From and after three (3) calendar months after
the Term Out Date, the Aggregate Commitment (and each Bank's
Commitment) in effect as of the Term Out Date shall be reduced
on the first day after the end of each three-month period by a
percentage of such Aggregate Commitment amount (or such Bank's
Commitment amount) as follows:
Percentage Percentage
of Commitment of Commitment
Period Reduction Remaining
------ ------------- -------------
3 calendar months after
Term Out Date 16.666% 83.334%
6 calendar months after
Term Out Date 16.667% 66.667%
9 calendar months after
Term Out Date 16.667% 50.000%
12 calendar months after
Term Out Date 16.666% 33.334%
15 calendar months after
Term Out Date 16.667% 16.667%
18 calendar months after
Term Out Date 16.667% 0%
2.23 Replacement of Certain Banks. In the event a Bank (the
"Affected Bank"):
(i) shall have requested compensation from Borrower under
Sections 3.1 or 3.2 to cover additional costs incurred by such Bank
that are not being incurred generally by the other Banks, or
(ii) shall have delivered a notice pursuant to Section 3.3
that such Affected Bank is unable to extend LIBOR Loans for reasons not
generally applicable to the other Banks, or
(iii) is a Rejecting Bank pursuant to Section 2.21,
then, in any such case, and at any time after such event occurs,
Borrower or Administrative Agent may make written demands on such
Affected Bank (with a
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copy to Administrative Agent in the case of a
demand by Borrower and a copy to Borrower in the case of a demand by
Administrative Agent) for the Affected Bank to assign, and such
Affected Bank shall assign, pursuant to one or more duly executed
assignment agreements in substantially the form provided for in Section
15.3.1, within five (5) Business Days after the date of such demand, to
one or more financial institutions that comply with the provisions of
Section 15.3, and that are selected by Borrower or Administrative
Agent, that are reasonably acceptable to Administrative Agent and
Borrower, that Borrower and/or Administrative Agent, as the case may
be, shall have engaged for such purpose (each, a "Replacement Bank"),
all of such Affected Bank's rights and obligations under this Agreement
and the other Loan Documents (including, without limitation, its
Commitment and all Loans owing to it) in accordance with Section 15.3.
If any Affected Bank fails to execute and deliver such assignment
agreements within thirty (30) days after demand, then such Affected
Bank shall have no further right to receive any amounts payable under
Sections 3.1 and 3.2 with respect to such Affected Bank.
Administrative Agent agrees, upon the occurrence of such events with
respect to an Affected Bank and upon written request of Borrower, to use its
reasonable efforts to obtain the commitments from one or more financial
institutions to act as a Replacement Bank. Administrative Agent is authorized,
but shall not be obligated to, execute one or more of such assignment agreements
as attorney-in-fact for any Affected Bank failing to execute and deliver the
same within five (5) Business Days after the date of such demand. Further, with
respect to such assignment, the Affected Bank shall have concurrently received,
in cash, all amounts due and owing to the Affected Bank hereunder or under any
other Loan Document, including without limitation the aggregate outstanding
principal amount of the Loans owed to such Bank, together with accrued interest
thereon through the date of such assignment, amounts payable under Sections 3.1
and 3.2 with respect to such Affected Bank and all fees payable to such Affected
Bank hereunder; provided that, upon such Affected Bank's replacement, such
Affected Bank shall cease to be a party hereto but shall continue to be entitled
to the benefits of Article III and Section 12.7, as well as to any fees accrued
hereunder and not yet paid, and shall continue to be obligated under Section
13.8 with respect to obligations and liabilities accruing prior to the
replacement of such Affected Bank.
ARTICLE III
CHANGE IN CIRCUMSTANCES
3.1 Yield Protection. If any law or any governmental or
quasi-governmental rule, regulation, policy, guideline or directive (whether or
not having the force of law), or any interpretation thereof, or the compliance
of any Bank therewith,
(i) subjects any Bank or any applicable Lending Installation
to any tax, duty, charge or withholding on or from payments due from
Borrower (excluding
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any taxes imposed on, or based on, or determined by
reference to the net income of any Bank or applicable Lending
Installation, including, without limitation, franchise taxes,
alternative minimum taxes and any branch profits tax (collectively,
"Excluded Taxes")), any taxes imposed on, or based on, or determined by
reference to or changes the basis of taxation of payments to any Bank
in respect of its Loans or other amounts due it hereunder (except for
Excluded Taxes),
(ii) imposes or increases or deems applicable any reserve,
assessment, insurance charge, special deposit or similar requirement
against assets of, deposits with or for the account of, or credit
extended by, any Bank or any applicable Lending Installation (other
than reserves and assessments taken into account in determining the
interest rate applicable to LIBOR Rates), or
(iii) imposes any other condition or requirement the result of
which is to increase the cost to any Bank or any applicable Lending
Installation of making, funding or maintaining loans or reduces any
amount receivable by any Bank or any applicable Lending Installation in
connection with loans, or requires any Bank or any applicable Lending
Installation to make any payment calculated by reference to the amount
of loans held or interest received by it, by an amount deemed material
by such Bank,
then, within fifteen (15) days after demand by such Bank, Borrower
shall pay such Bank that portion of such increased expense incurred or
reduction in an amount received which such Bank determines is
attributable to making, funding and maintaining its Loans and its
Commitment; provided, however, that Borrower shall not be required to
increase any such amounts payable to any Bank (1) if such Bank fails to
comply with the requirements of Section 2.20 hereof or (2) to the
extent that such Bank determines, in its sole reasonable discretion,
that it can, after notice from Borrower, through reasonable efforts,
eliminate or reduce the amount of tax liabilities payable (without
additional costs or expenses unless Borrower agrees to bear such
costs or expenses) or other disadvantages or risks (economic or
otherwise) to such Bank or Administrative Agent. If any Bank receives
a refund in respect of any amount described in clause (i), (ii) and
(iii) above for which such Bank has received payment from Borrower
hereunder, such Bank shall promptly notify Borrower of such refund and
such Bank shall repay the amount of such refund to Borrower, provided
that Borrower, upon the request of such Bank, agrees to return such
refund to such Bank in the event such Bank is required to repay such
refund. The determination as to whether any Bank has received a refund
shall be made by such Bank and such determination shall be conclusive
absent manifest error.
3.2 Changes in Capital Adequacy Regulations. If a Bank or Issuing Bank
determines the amount of capital required or expected to be maintained by such
Bank, any Lending
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Installation of such Bank or Issuing Bank or any corporation controlling such
Bank or Issuing Bank is increased as a result of a Change, then, within fifteen
(15) days after demand by such Bank or Issuing Bank, Borrower shall pay such
Bank or Issuing Bank the amount necessary to compensate for any shortfall in the
rate of return on the portion of such increased capital which such Bank or
Issuing Bank determines is attributable to this Agreement, its Loans or its
obligation to make Loans hereunder, or its issuance or maintenance of or
participation in, or commitment to issue, to maintain or to participate in, the
Facility Letters of Credit hereunder (after taking into account such Bank's or
Issuing Bank's policies as to capital adequacy). "Change" means (i) any change
after the date of this Agreement in the Risk-Based Capital Guidelines or (ii)
any adoption of or change in any other law, governmental or quasi-governmental
rule, regulation, policy, guideline, interpretation, or directive (whether or
not having the force of law) after the date of this Agreement which affects the
amount of capital required or expected to be maintained by any Bank, Issuing
Bank, Lending Installation or any corporation controlling any Bank or Issuing
Bank. "Risk-Based Capital Guidelines" means (A) the risk-based capital
guidelines in effect in the United States on the date of this Agreement,
including transition rules, and (B) the corresponding capital regulations
promulgated by regulatory authorities outside the United States implementing the
July 1988 report of the Basle Committee on Banking Regulation and Supervisory
Practices Entitled "International Convergence of Capital Measurements and
Capital Standards," including transition rules, and any amendments to such
regulations adopted prior to the date of this Agreement.
3.3 Availability of Types of Advances. If any Bank determines and
notifies Administrative Agent that maintenance of any of such Bank's LIBOR Loans
at a suitable Lending Installation would violate any applicable law, rule,
regulation or directive, whether or not having the force of law, Administrative
Agent shall suspend the availability of the affected Type of Advance and require
any LIBOR Advances of the affected Type to be repaid; or if the Required Banks
determine and notify Administrative Agent that (i) deposits of a type or
maturity appropriate to match fund LIBOR Advances are not available,
Administrative Agent shall suspend the availability of the affected Type of
Advance with respect to any LIBOR Advances made after the date of any such
determination, or (ii) an interest rate applicable to a Type of Advance does not
accurately reflect the cost of making a LIBOR Advance of such Type, then, if for
any reason whatsoever the provisions of Section 3.1 are inapplicable,
Administrative Agent shall suspend the availability of the affected Type of
Advance with respect to any LIBOR Advance made after the date of any such
determination.
3.4 Funding Indemnification. If any payment of a LIBOR Advance occurs
on a date which is not the last day of the applicable Interest Period, whether
because of acceleration, prepayment or otherwise, or a LIBOR Advance is not made
on the date specified by Borrower for any reason other than default by Banks,
Borrower will indemnify each Bank for any loss or cost or expense incurred by it
resulting therefrom, including, without limitation, any loss or cost in
liquidating or employing deposits acquired to fund or maintain the LIBOR
Advance.
3.5 Bank Statements; Survival of Indemnity. To the extent reasonably
possible, each Bank shall designate an alternate Lending Installation with
respect to its LIBOR Advances to
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reduce any liability of Borrower to such Bank under Sections 3.1 and 3.2 or to
avoid the unavailability of a Type of Advance under Section 3.3, so long as such
designation is not disadvantageous to such Bank. Each Bank or Issuing Bank shall
deliver a written statement of such Bank or Issuing Bank as to the amount due,
if any, under Sections 3.1, 3.2 or 3.4. Such written statement shall set forth
in reasonable detail the calculations upon which such Bank or Issuing Bank
determined such amount and shall be final, conclusive and binding on Borrower in
the absence of manifest error. Determination of amounts payable under such
Sections in connection with a LIBOR Advance shall be calculated as though each
Bank funded its LIBOR Advance through the purchase of a deposit of the type and
maturity corresponding to the deposit used as a reference in determining the
LIBOR Advance applicable to such Loan, whether in fact that is the case or not.
Unless otherwise provided herein, the amount specified in the written statement
shall be payable within three (3) days after receipt by Borrower of the written
statement. The obligations of Borrower under Sections 3.1, 3.2 and 3.4 shall
survive payment of the Obligations and termination of this Agreement.
ARTICLE IV
THE LETTER OF CREDIT FACILITY
4.1 Facility Letters of Credit. The Issuing Bank agrees, on the terms
and conditions set forth in this Agreement, to issue from time to time for the
account of Borrower or a Guarantor designated by Borrower, through such offices
or branches as it and Borrower may jointly agree, one or more Facility Letters
of Credit in accordance with this Article IV, during the period commencing on
the date hereof and ending on the Business Day prior to the Facility Termination
Date. Each Facility Letter of Credit shall be either (i) a standby letter of
credit to support obligations of Borrower or a Guarantor designated by Borrower,
contingent or otherwise, arising in the ordinary course of business, or (ii) a
documentary letter of credit in respect of the purchase of goods or services by
Borrower or such Guarantor in the ordinary course of business.
4.2 Limitations. No Issuing Bank shall issue, amend or extend, at any
time, any Facility Letter of Credit:
(i) if the aggregate maximum amount then available for drawing
under Letters of Credit issued by such Issuing Bank, after giving
effect to the Facility Letter of Credit or amendment or extension
thereof requested hereunder, shall exceed any limit imposed by law or
regulation upon such Issuing Bank;
(ii) if, after giving effect to the Facility Letter of Credit
or amendment or extension thereof requested hereunder, the aggregate
principal amount of the Facility Letter of Credit Obligations would
exceed $40,000,000;
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(iii) that, in the case of the issuance of a Facility Letter
of Credit, is in, or in the case of an amendment of a Facility Letter
of Credit, increases the face amount thereof by, an amount in excess of
the then Aggregate Available Credit;
(iv) if, after giving effect to the Facility Letter of Credit
or amendment or extension thereof requested hereunder, the aggregate
principal amount of all Consolidated Senior Debt Borrowings would
exceed the Borrowing Base
determined as of the most recent Inventory Valuation Date;
(v) if such Issuing Bank receives written notice from
Administrative Agent at or before noon, Chicago time, on the proposed
Issuance Date of such Facility Letter of Credit that one or more of the
conditions precedent contained in Sections 5.1 or 5.2, as applicable,
would not on such Issuance Date be satisfied, unless such conditions
are thereafter satisfied and written notice of such satisfaction is
given to such Issuing Bank by Administrative Agent;
(vi) that has an expiration date (taking into account any
automatic renewal provisions thereof) that is later than one (1) year
after the Issuance Date, or such later time as the Issuing Bank may
agree; provided, however in no event shall the expiration date be later
than the Business Day next preceding the scheduled Facility Termination
Date; or
(vii) that is in a currency other than Dollars, or that is not
consistent with the Uniform Customs and Practice for Documentary
Credits (1993 Revision), International Chamber of Commerce Publication
No. 500, as the same may be updated.
4.3 Conditions. In addition to being subject to the satisfaction of the
conditions contained in Sections 5.1 and 5.2, as applicable, the issuance of any
Facility Letter of Credit is subject to the satisfaction in full of the
following conditions:
(i) Borrower shall have delivered to the Issuing Bank at such
times and in such manner as the Issuing Bank may reasonably prescribe a
Reimbursement Agreement and such other documents and materials as may
be reasonably required pursuant to the terms thereof, and the proposed
Facility Letter of Credit shall be reasonably satisfactory to such
Issuing Bank in form and content; and
(ii) as of the Issuance Date no order, judgment or decree of
any court, arbitrator or governmental authority shall enjoin or
restrain such Issuing Bank from issuing the Facility Letter of Credit
and no law, rule or regulation applicable to such Issuing Bank and no
directive from and governmental authority with jurisdiction over the
Issuing Bank shall prohibit such Issuing Bank from issuing Letters of
Credit generally or from issuing that Facility Letter or Credit.
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4.4 Procedure for Issuance of Facility Letters of Credit.
(a) Request for Facility Letter of Credit. Borrower shall give
the Issuing Bank and Administrative Agent not less than five (5)
Business Days' prior written notice of any requested issuance of a
Facility Letter of Credit under this Agreement. Such notice shall
specify (i) the stated amount of the Facility Letter of Credit
requested, (ii) the requested Issuance Date, which shall be a Business
Day, (iii) the date on which such requested Facility Letter of Credit
is to expire, which date shall be in compliance with the requirements
of Section 4.2(vi), (iv) the purpose for which such Facility Letter of
Credit is to be issued (which shall be a purpose permitted pursuant to
Sections 4.1 and 7.2), and (v) the Person for whose benefit the
requested Facility Letter of Credit is to be issued. At the time such
request is made, Borrower shall also provide Administrative Agent and
the Issuing Bank with a copy of the form of the Facility Letter of
Credit it is requesting be issued.
(b) Issuing Bank. Within two (2) Business Days after receipt
of a request for issuance of a Facility Letter of Credit in accordance
with Section 4.4(a), the Issuing Bank shall approve or disapprove, in
its reasonable discretion, the form of such requested Facility Letter
of Credit, but the issuance of such approved Facility Letter of Credit
shall continue to be subject to the provisions of this Article IV. The
Issuing Bank shall use reasonable efforts to notify the Borrower of any
changes in the Issuing Bank's policies or procedures that could
reasonably be expected to affect adversely the Issuing Bank's approval
of the form of any requested Facility Letters of Credit.
(c) Confirmation of Issuance. Upon receipt of a request for
issuance of a Facility Letter of Credit in accordance with Section
4.4(a), Administrative Agent shall determine, as of the close of
business on the day it receives such request, whether the issuance of
such Facility Letter of Credit would be permitted under the provisions
of Sections 4.2(ii), (iii) and (iv) and, prior to the close of business
on the second Business Day after Administrative Agent received such
request, Administrative Agent shall notify the Issuing Bank and
Borrower (in writing or by telephonic notice confirmed promptly
thereafter in writing) whether issuance of the requested
Facility Letter of Credit would be permitted under the provisions of
Sections 4.2(ii), (iii) and (iv). If Administrative Agent notifies the
Issuing Bank and the applicable Borrower that such issuance would be so
permitted, then, subject to the terms and conditions of this Article IV
and provided that the applicable conditions set forth in Sections 5.1
and 5.2 have been satisfied, the Issuing Bank shall, on the requested
Issuance Date, issue the requested Facility Letter of Credit in
accordance with the Issuing Bank's usual and customary business
practices. The Issuing Bank shall give Administrative Agent written
notice, or telephonic notice
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confirmed promptly thereafter in writing, of the issuance of a Facility
Letter of Credit.
(d) Extension and Amendment. An Issuing Bank shall not extend
or amend any Facility Letter of Credit unless the requirements of this
Section 4.4 are met as though a new Facility Letter of Credit were
being requested and issued; provided, however, that if the Facility
Letter of Credit, as originally issued, sets forth such extension or
amendment, then the Issuing Bank shall so extend or amend the Facility
Letter of Credit upon the request of Borrower given in the manner set
forth in Section 4.4(a) and upon satisfaction of the terms and
conditions of Section 4.4(c).
(e) Other Letters of Credit. Any Bank may, but shall not be
obligated to, issue to Borrower or any Guarantor Letters of Credit
(that are not Facility Letters of Credit) for its own account, and at
its own risk. None of the provisions of this Article IV shall apply to
any Letter of Credit that is not a Facility Letter of Credit.
(f) Existing Letters of Credit. Pursuant to the Original
Credit Agreement, Prior Issuing Bank has issued prior to the date
hereof, and there are currently outstanding, those certain Letters of
Credit described in Schedule 4.4 hereto (as the same may be extended or
amended (but not increased) by Prior Issuing Bank in accordance with
this Agreement, the "Existing Letters of Credit"). The Existing Letters
of Credit shall remain outstanding after the date of this Agreement
and, from and after the date of this Agreement, shall constitute
Facility Letters of Credit for all purposes under this Agreement and
shall be subject to all terms and conditions hereof. On the date
hereof, simultaneously with the payment made to the Prior Banks under
Section 5.1(ix), the participation of the Prior Banks in the Existing
Letters of Credit shall terminate and Prior Issuing Bank shall be
deemed to have sold and transferred, and each Bank shall be deemed to
have irrevocably and unconditionally purchased and received from Prior
Issuing Bank, in each case without further action on the part of any
Person, an undivided interest and participation (ratably in proportion
to the ratio that such Bank's Commitment bears to the Aggregate
Commitment) in each such Existing Letter of Credit. Each Bank severally
agrees to fund any disbursements by the Prior Issuing Bank pursuant to
the Existing Letters of Credit by funding in accordance with Section
4.6. Prior Issuing Bank shall have all of the rights, duties and
obligations of the Issuing Bank but solely with respect to the Existing
Letters of Credit. Prior Issuing Bank shall not have the right, duty or
obligation to issue any Facility Letters of Credit other than the
Existing Letters of Credit heretofore issued and shall not increase the
face amount of any Existing Letter of Credit. Upon request by Borrower,
Prior Issuing Bank may extend or otherwise amend (but without
increasing the face amount thereof) any Existing Letter of Credit,
subject to and in
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accordance with the provisions of this Agreement. Prior Issuing Bank
joins in this Agreement solely for the purposes set forth in this
Section 4.4(f) and does not hold any Commitment or any other interest
as a Bank hereunder except the rights, duties and obligations as
Issuing Bank with respect to the Existing Letters of Credit.
4.5 Duties of Issuing Bank. Any action taken or omitted to be taken by
an Issuing Bank under or in connection with any Facility Letter of Credit, if
taken or omitted in the absence of willful misconduct or gross negligence, shall
not put such Issuing Bank under any resulting liability to any Bank or, assuming
that such Issuing Bank has complied with the procedures specified in Section
4.4, relieve any Bank of its obligations hereunder to such Issuing Bank. In
determining whether to pay under any Facility Letter of Credit, the Issuing Bank
shall have no obligation relative to Banks other than to confirm that any
documents required to be delivered under such Facility Letter of Credit appear
to have been delivered in compliance and that they appear to comply on their
face with the requirements of such Facility Letter of Credit.
4.6 Participation.
(a) Proportionate Share of Banks. Immediately upon issuance by
an Issuing Bank of any Facility Letter of Credit in accordance with
Section 4.4, each Bank shall be deemed to have irrevocably and
unconditionally purchased and received from such Issuing Bank, without
recourse or warranty, an undivided interest and participation (ratably
in proportion to the ratio that such Bank's Commitment bears to the
Aggregate Commitment) in such Facility Letter of Credit.
(b) Payment by Issuing Bank. In the event that an Issuing Bank
makes any payment under any Facility Letter of Credit and Borrower
shall not have repaid such amount to such Issuing Bank on or before the
date of such payment by such Issuing Bank, such Issuing Bank shall
promptly so notify Administrative Agent, which shall promptly so notify
each Bank. Upon receipt of such notice, each Bank
shall promptly and unconditionally pay to Administrative Agent for the
account of such Issuing Bank the amount of such Bank's share (ratably
in proportion to the ratio that such Bank's Commitment bears to the
Aggregate Commitment) of such payment in same day funds, and
Administrative Agent shall promptly pay such amount, and any other
amounts received by Administrative Agent for such Issuing Bank's
account pursuant to this Section 4.6(b), to such Issuing Bank. If
Administrative Agent so notifies such Bank prior to 10:00 a.m., Chicago
time, on any Business Day, such Bank shall make available to
Administrative Agent for the account of such Issuing Bank such Bank's
share of the amount of such payment on such Business Day in same day
funds. If and to the extent such Bank shall not have so made its share
of the amount of such payment available to Administrative Agent for the
account of such Issuing Bank, such Bank agrees to pay to Administrative
Agent for the account of such Issuing Bank forthwith on demand such
amount, together with interest thereon, for each day from the date such
payment was first
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due until the date such amount is paid to
Administrative Agent for the account of such Issuing Bank, at the
Federal Funds Effective Rate. The failure of any Bank to make available
to Administrative Agent for the account of such Issuing Bank such
Bank's share of any such payment shall not relieve any other Bank of
its obligation hereunder to make available to Administrative Agent for
the account of such Issuing Bank its share of any payment on the date
such payment is to be made.
(c) Advances. The payments made by Banks to an Issuing Bank in
reimbursement of amounts paid by it under a Facility Letter of Credit
shall constitute, and Borrower hereby expressly acknowledges and agrees
that such payments shall constitute, Advances hereunder to Borrower and
such payments shall for all purposes be treated as Advances to Borrower
(notwithstanding that the amounts thereof may not comply with the
provisions of Section 2.6). Such Advances shall be Floating Rate
Advances, subject to Borrower's rights under Article II hereof.
(d) Copies of Documents. Upon the request of Administrative
Agent or any Bank, an Issuing Bank shall furnish to the requesting
Administrative Agent or Bank copies of any Facility Letter of Credit or
Reimbursement Agreement to which such Issuing Bank is party and such
other documentation as may reasonably be requested by Administrative
Agent or the Bank.
(e) Obligations of Banks. The obligations of Banks to make
payments to Administrative Agent for the account of an Issuing Bank
with respect to a Facility Letter of Credit shall be irrevocable, not
subject to any qualification or exception whatsoever and shall be made
in accordance with, but not subject to, the terms and conditions of
this Agreement under all circumstances notwithstanding:
(i) any lack of validity or enforceability of this
Agreement, any Facility Letter of Credit (except where due to
the gross negligence or willful misconduct of the Issuing
Bank), or any of the other Loan Documents;
(ii) the existence of any claim, setoff, defense or
other right which Borrower may have at any time against a
beneficiary named in a Facility Letter of Credit or any
transferee of any Facility Letter of Credit (or any Person for
whom any such transferee may be acting), such Issuing Bank,
Administrative Agent, any Bank, or any other Person, whether
in connection with this Agreement, any Facility Letter of
Credit, the transactions contemplated herein or any unrelated
transactions (including any underlying transactions between
Borrower or any Subsidiary and the beneficiary named in any
Facility Letter of Credit) other than the defense of payment
in
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accordance with this Agreement or a defense based on the
gross negligence or willful misconduct of the Issuing Bank;
(iii) any draft, certificate or any other document
presented under the Facility Letter of Credit proving to be
forged, fraudulent, invalid or insufficient in any respect of
any statement therein being untrue or inaccurate in any
respect so long as the payment by the Issuing Bank under such
Facility Letter of Credit against presentation of such draft,
certificate or other document shall not have constituted gross
negligence or willful misconduct;
(iv) the surrender or impairment of any security for
the performance or observance of any of the terms of any of
the Loan Documents;
(v) any failure by Administrative Agent or the
Issuing Bank to make any reports required pursuant to Section
4.8; or
(vi) the occurrence of any Event of Default or
Unmatured Event of Default.
4.7 Compensation for Facility Letters of Credit.
(a) Payment of Facility Letter of Credit Fee. Borrower agrees
to pay to Administrative Agent, in the case of each outstanding
Facility Letter of Credit (including without limitation the Existing
Letters of Credit), the Facility Letter of Credit Fee therefor, payable
in quarterly installments in arrears, on the first day of January,
April, July, or October, as applicable, next following the Issuance
Date or, in the case of the Existing Letters of Credit, next following
the date hereof. The initial installment of the Facility Letter of
Credit Fees for the Existing Letters of Credit shall be a pro rata
portion of the annual Facility Letter of Credit Fee for the period
commencing on the date hereof and ending on the day preceding such
payment date, provided, however, that each Bank that is a party hereto
and that was also a party under the Original Credit Agreement hereby
acknowledges and agrees that there shall be credited against such
initial installment of the Facility Letter of Credit Fees payable to
such Bank hereunder a pro rata portion of the "Facility Letter of
Credit Fees" paid to such Bank under the Original Credit Agreement for
the calendar quarter ending September 30, 1999 (such pro rata portion
to be determined on a per diem basis, based on the number of days
remaining in such calendar quarter from and after the date of the
Advance hereunder). The initial installment of the Facility Letter of
Credit Fee for any Facility Letter of Credit hereafter issued shall be
a pro rata portion of the annual Facility Letter of Credit Fee for the
period commencing on the Issuance Date and
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ending on the day preceding such
payment date. Facility Letter of Credit Fees shall be calculated, on a
pro rata basis for the period to which such payment applies, for actual
days that will elapse during such period, on the basis of a 360 day
year. Administrative Agent shall promptly remit such Facility Letter of
Credit Fees, when paid, as follows: (i) to the Issuing Bank as an
issuance fee in an amount equal to the product of (A) 0.125% per annum
and (B) the face amount of the Facility Letters of Credit with respect
to which such Facility Letters of Credit Fees have been paid, and (ii)
the balance of such Facility Letter of Credit Fees to Banks (including
the Issuing Bank) (ratably in the proportion that each Bank's
Commitment bears to the Aggregate Commitment).
(b) Amounts Owed to Issuing Bank. An Issuing Bank shall have
the right to receive solely for its own account, and in addition to the
issuance fee provided for in Section 4.7(a)(i), such amounts as
Borrower may agree, in writing, to pay for such Issuing Bank's
out-of-pocket costs of issuing and servicing Facility Letters of
Credit.
4.8 Issuing Bank Reporting Requirements. Each Issuing Bank shall, no
later than the tenth day following the last day of each month, provide to
Administrative Agent a schedule of the Facility Letters of Credit issued by it,
in form and substance reasonably satisfactory to Administrative Agent, showing
the Issuance Date, account party, original face amount, amount (if any) paid
thereunder, expiration date and the reference number of each Facility Letter of
Credit outstanding at any time during such month and the aggregate amount (if
any) payable by Borrower to such Issuing Bank during the month pursuant to
Section 3.2. Copies of such reports shall be provided promptly to each Bank and
Borrower by Administrative Agent.
4.9 Indemnification; Nature of Issuing Bank's Duties.
(a) Indemnity. In addition to amounts payable as elsewhere
provided in this Article IV, Borrower hereby agrees to protect,
indemnify, pay and hold harmless Administrative Agent and each Bank and
Issuing Bank from and against any and all claims, demands, liabilities,
damages, losses, costs, charges and expenses (including reasonable
attorneys' fees) arising from the claims of third parties against
Administrative Agent, Issuing Bank or Bank as a consequence, direct or
indirect, of (i) the issuance of any Facility Letter of Credit for
Borrower other than, in the case of an Issuing Bank, as a result of its
willful misconduct or gross negligence, or (ii) the failure of an
Issuing Bank issuing a Facility Letter of Credit for Borrower to honor
a drawing under such Facility Letter of Credit as a result of any act
or omission, whether rightful or wrongful, of any present or future de
jure or de facto government or governmental authority.
(b) Assumption of Risk. As among Borrower, Banks,
Administrative Agent and the Issuing Bank, Borrower assumes all risks
of the acts and omissions
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of, or misuse of Facility Letters of Credit
by, the respective beneficiaries of such Facility Letters of Credit. In
furtherance and not in limitation of the foregoing, neither the Issuing
Bank nor Administrative Agent nor any Bank shall be responsible:
(i) for the form, validity, sufficiency, accuracy,
genuineness or legal effect of any document submitted by any
party in connection with the application for and issuance of
the Facility Letters of Credit, even if it should in fact
prove to be in any or all respects invalid, insufficient,
inaccurate, fraudulent or forged;
(ii) for the validity or sufficiency of any
instrument transferring or assigning or purporting to transfer
or assign a Facility Letter of Credit or the rights or
benefits thereunder or proceeds thereof, in whole or in part,
which may prove to be invalid or ineffective for any reason;
(iii) for failure of the beneficiary of a Facility
Letter of Credit to comply fully with conditions required in
order to draw upon such Facility Letter of Credit;
(iv) for errors, omissions, interruptions or delays
in transmission or delivery of any messages, by mail, cable,
telegraph, telex or otherwise, whether or not they be in
cipher;
(v) for errors in interpretation of technical
terms;
(vi) for any loss or delay in the transmission or
otherwise of any document required in order to make a drawing
under any Facility Letter of Credit or of the proceeds
thereof;
(vii) for the misapplication by the beneficiary of a
Facility Letter of Credit of the proceeds of any drawing under
such Facility Letter of Credit; and
(viii) for any consequences arising from causes
beyond the control of Administrative Agent, the Issuing Bank
and Banks including, without limitation, any act or omission,
whether rightful or wrongful, of any present or future de jure
or de facto government or governmental authority. None of the
above shall affect, impair, or prevent the vesting of any of
the Issuing Bank's rights or powers under this Section 4.9.
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(c) Good Faith. In furtherance and extension and not in
limitation of the specific provisions hereinabove set forth, any action
taken or omitted by an Issuing Bank under or in connection with the
Facility Letters of Credit or any related certificates, if taken or
omitted in good faith under commercially reasonable standards, shall
not put such Issuing Bank, Administrative Agent or any Bank under any
resulting liability to Borrower or relieve Borrower of any of its
obligations hereunder to any such Person.
(d) Certain Acts of Issuing Bank. Notwithstanding anything to
the contrary contained in this Section 4.9, Borrower shall have no
obligation to indemnify an Issuing Bank under this Section 4.9 in
respect of any liability incurred by such Issuing Bank arising
primarily out of the willful misconduct or gross negligence of such
Issuing Bank, as determined by a court of competent jurisdiction, or
out of the wrongful dishonor by such Issuing Bank of a proper demand
for payment made under the Facility Letters of Credit issued by such
Issuing Bank, unless such dishonor was made at the request of Borrower.
4.10 No Obligation to Issue. The Issuing Bank shall not at any time be
obligated to issue any Facility Letter of Credit if such issuance would conflict
with, or cause the Issuing Bank or any other Bank, to exceed any limits imposed
by any applicable law, rule or regulation.
4.11 Obligations of Issuing Bank and Other Banks. Except to the extent
that a Bank shall have agreed to be designated as an Issuing Bank, no Bank shall
have any obligation to accept or approve any request for, or to issue, amend or
extend, any Letter of Credit, and the obligations of the Issuing Bank to issue,
amend or extend any Facility Letter of Credit are expressly limited by and
subject to the provisions of this Article IV.
ARTICLE V
CONDITIONS PRECEDENT
5.1 Initial Advance. Banks shall not be required to make the initial
Advance hereunder, and the Issuing Bank shall not be required to issue the
initial Facility Letter of Credit hereunder, unless Borrower has paid to
Administrative Agent (a) the fees for the account of Banks set forth in the
letter of even date herewith from Borrower to Administrative Agent and Arranger
and (b) the fees for the account of Administrative Agent and Arranger set forth
in the letter agreement dated July 16, 1999 herewith among Administrative Agent,
Arranger and Borrower, and Borrower has furnished to Administrative Agent with
sufficient copies for Banks:
(i) Copies of the certificate of incorporation of
Borrower and each Guarantor, together with all amendments, and a
certificate of good standing, all certified by the appropriate
governmental officer in the jurisdiction of incorporation.
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(ii) Copies, certified by the Secretary or Assistant
Secretary of Borrower and each Guarantor, of each such corporation's
by-laws and of its Board of Directors' resolutions (and resolutions of
other bodies, if any are deemed necessary by counsel for any Bank)
authorizing the execution of the Loan Documents and the Guaranties.
(iii) Incumbency certificates, executed by the
Secretary or Assistant Secretary of Borrower and each Guarantor, which
shall identify by name and title and bear the signature of the officers
of the such corporation authorized to sign the Loan Documents and the
Guaranties (as applicable) and (if applicable) to make borrowings
hereunder and to request, apply for and execute Facility Letter of
Credit Reimbursement Agreements with respect to Facility Letters of
Credit hereunder, upon which certificates Administrative Agent, Banks
and the Issuing Bank shall be entitled to rely until informed of any
change in writing by Borrower or the applicable Guarantor.
(iv) A written opinion of Haligman Lottner Rubin &
Fishman, P.C., counsel to Borrower and Guarantors, addressed to
Administrative Agent and Banks in substantially the form of Exhibit E
hereto.
(v) A written opinion of General Counsel of Borrower,
addressed to Administrative Agent and Banks in substantially the form
of Exhibit F hereto.
(vi) Notes payable to the order of each of Banks.
(vii) Written money transfer instructions, in form
acceptable to Administrative Agent, addressed to Administrative Agent
and signed by an Authorized Officer, together with such other related
money transfer authorizations as Administrative Agent may have
reasonably requested.
(viii) Guaranties duly executed by Guarantors.
(ix) Evidence satisfactory to Administrative Agent of
payment in full (which payment may be made from the proceeds of the
initial Advance hereunder) of all obligations of Borrower and
Guarantors under the Original Credit Agreement (including without
limitation principal, accrued and unpaid interest and fees, and amounts
(if any) payable under Section 3.4 of the Original Credit Agreement).
(x) A contribution agreement ("Contribution
Agreement") among Guarantors in the form attached hereto as Exhibit G.
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(xi) Such other documents as any Bank or Issuing Bank
or their respective counsel may have reasonably requested.
5.2 Each Advance. Banks shall not be required to make any Advance
(other than (a) the conversion of an Advance of one Type to an Advance of
another Type that does not increase the aggregate amount of outstanding Advances
and (b) Advances pursuant to Section 2.19(d)), unless on the applicable
Borrowing Date, and an Issuing Bank shall not be required to issue, amend or
extend a Facility Letter of Credit unless on the applicable Issuance Date:
(i) There exists no Event of Default or Unmatured Event of
Default.
(ii) The representations and warranties contained in Article
VI are true and correct in all material respects as of such Borrowing
Date or Issuance Date except to the extent any such representation or
warranty is stated to relate solely to an earlier date, in which case
such representation or warranty shall be true and correct in all
material respects on and as of such earlier date and except for changes
permitted by this Agreement. Solely for purposes of this Section 5.2,
the representations and warranties in Sections 6.5 and 6.7 relate
solely to the date of this Agreement.
(iii) After the making of such Advance or issuance of such
Facility Letter of Credit, (A) the principal amount of all Advances
plus the aggregate amount of the Facility Letter of Credit Obligations
outstanding shall not exceed the Aggregate Commitment, and (B) the
aggregate principal amount of all Consolidated Senior Debt Borrowings
shall not exceed the Borrowing Base (determined as of the most recent
Inventory Valuation Date).
(iv) Borrower shall have delivered to Administrative Agent,
within the time period specified in Section 2.8, a duly completed
Borrowing Notice in substantially the form of Exhibit D hereto.
(v) All legal matters incident to (A) the making of such
Advance shall be reasonably satisfactory to Administrative Agent and
its counsel and (B) the issuance of such Facility Letter of Credit
shall be reasonably satisfactory to Administrative Agent, such Issuing
Bank and their respective counsel.
Each Borrowing Notice with respect to each such Advance and each
request for a Facility Letter of Credit shall constitute a representation and
warranty by Borrower that the conditions contained in Sections 5.2(i) and (ii)
have been satisfied.
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ARTICLE VI
REPRESENTATIONS AND WARRANTIES
Borrower represents and warrants to Banks and Administrative Agent
that:
6.1 Existence and Standing. Borrower is a corporation duly
incorporated, validly existing and in good standing under the laws of its
jurisdiction of incorporation and has all requisite authority to conduct its
business in each jurisdiction in which its business is conducted (except to the
extent that a failure to maintain such existence, good standing or authority
would not reasonably be expected to have and does not have a Material Adverse
Effect). Each Guarantor is a corporation duly incorporated, validly existing and
in good standing under the laws of its jurisdiction of incorporation and has all
requisite authority to conduct its business in each jurisdiction in which its
business is conducted (except to the extent that a failure to maintain such
existence, good standing or authority would not reasonably be expected to have
and does not have a Material Adverse Effect).
6.2 Authorization and Validity. Borrower has the corporate power and
authority to execute and deliver the Loan Documents and to perform its
obligations hereunder and thereunder. The execution and delivery by Borrower of
the Loan Documents and the performance of its obligations thereunder have been
duly authorized and the Loan Documents constitute legal, valid and binding
obligations of Borrower enforceable against Borrower in accordance with their
terms, subject to bankruptcy, insolvency or similar laws affecting the
enforcement of creditors' rights generally and general principles of equity.
Each Guarantor has the corporate power and authority to execute and deliver the
Guaranty delivered by it and to perform its obligations thereunder. The
execution and delivery by each Guarantor of such Guaranty and the performance of
its obligations thereunder have been duly authorized, and each Guaranty
constitutes the legal, valid and binding obligations of such Guarantor
enforceable against such Guarantor in accordance with its terms, subject to
bankruptcy, insolvency or similar laws affecting the enforcement of creditors'
rights generally and general principles of equity.
6.3 No Conflict; Government Consent. Neither the execution and delivery
by Borrower of the Loan Documents or by Guarantors of the Guaranties, nor the
consummation of the transactions herein contemplated, nor compliance with the
provisions hereof or thereof will violate in any material respect any law, rule,
regulation, order, writ, judgment, injunction, decree or award binding on
Borrower or any Guarantor or Borrower's or a Guarantor's certificate of
incorporation or bylaws or the provisions of any indenture (including without
limitation the Indenture), instrument or agreement to which Borrower or any
Guarantor is a party or is subject, or by which it, or its Property, is bound,
or conflict with or constitute a default thereunder, or result in the creation
or imposition of any Lien in, of or on the Property of Borrower or any Guarantor
pursuant to the terms of any such indenture, instrument or agreement. Except as
set forth on Schedule 6.3 hereto, no order, consent, approval, license,
authorization, or validation of, or filing, recording or registration with, or
exemption by, any governmental or public body or
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authority, or any subdivision thereof, is required to authorize, or is required
in connection with the execution, delivery and performance of, or the legality,
validity, binding effect or enforceability of, any of the Loan Documents or the
Guaranty.
6.4 Financial Statements. The June 30, 1999 unaudited consolidated and
consolidating financial statements of Borrower (and its Subsidiaries) delivered
to Banks were prepared pursuant to the rules and regulations of the Securities
and Exchange Commission. Such statements fairly present, in all material
respects, the financial condition and operations of Borrower and its
Subsidiaries on a consolidated or consolidating basis (as applicable) at such
date and the results of their operations for the period then ended on a
consolidated or consolidating basis (as applicable).
6.5 Material Adverse Change. Since the date of the financial statements
of Borrower described in Section 6.4, there has been no change in the business,
Property, condition (financial or otherwise) or results of operations of
Borrower and Guarantors (taken as a whole) that has had or would reasonably be
expected to have a Material Adverse Effect. The foregoing representation and
warranty is made solely as of the date of this Agreement.
6.6 Taxes. Borrower and each Guarantor have filed all United States
federal income tax returns and all other material tax returns which are required
to be filed and have paid all taxes due pursuant to said returns or pursuant to
any assessment received by Borrower or a Guarantor, except such taxes, if any,
as are being contested in good faith and as to which adequate reserves have been
provided. No tax Liens (except Permitted Liens) have been filed and no claims
are being asserted with respect to any such taxes that have had or would
reasonably be expected to have a Material Adverse Effect. The charges, accruals
and reserves on the books of Borrower and each Guarantor in respect of any taxes
or other governmental charges are adequate in accordance with Agreement
Accounting Principles.
6.7 Litigation and Contingent Obligations. Except as set forth in
Borrower's form 10-K report for the period ending December 31, 1998 or (with
respect to any litigation, arbitration, governmental investigation, proceeding
or inquiry commenced after the date hereof) in any SEC Filing, there is no
litigation, arbitration, governmental investigation, proceeding or inquiry
pending or, to the knowledge of any Authorized Officer, threatened against or
affecting Borrower or any Guarantor that has had or would reasonably be expected
to have a Material Adverse Effect. Other than any liability incident to such
litigation, arbitration or proceedings, neither Borrower nor any Guarantor have
any material contingent obligations not provided for or disclosed in the
financial statements (whether quarterly or annual) of Borrower and Guarantors
that have been most recently delivered by Borrower and Guarantors to
Administrative Agent that has had or would reasonably be expected to have a
Material Adverse Effect.
6.8 Subsidiaries. Schedule 6.8 hereto contains an accurate list of all
of the Subsidiaries of Borrower, setting forth their respective jurisdictions of
incorporation or formation and the percentage of their respective capital stock
or partnership interests owned by Borrower or its
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Subsidiaries. All of the issued and outstanding shares of capital stock of such
Subsidiaries have been duly authorized and validly issued and are fully paid and
non-assessable. All of the Non- Guarantor Subsidiaries are listed on Schedule 1
hereto.
6.9 ERISA. The Unfunded Liabilities of all Single Employer Plans do not
in the aggregate exceed $5,000,000. The withdrawal liabilities to Multiemployer
Plans of the Guarantor, Borrower and any other member of the Controlled Group do
not, and are not reasonably expected to, exceed $5,000,000 in the aggregate.
Each Plan complies in all material respects with all applicable requirements of
law and regulations, no Reportable Event has occurred with respect to any Plan,
neither Borrower, nor any Guarantor nor any other member of the Controlled Group
has withdrawn from any Multiemployer Plan or initiated steps to do so, and no
steps have been taken to terminate any Plan.
6.10 Accuracy of Information. All factual information heretofore or
contemporaneously furnished in writing by or on behalf of Borrower or any
Guarantor to Administrative Agent or any Issuing Bank for purposes of or in
connection with this Agreement or any transaction contemplated hereby is, and
all other such factual information hereafter furnished in writing by or on
behalf of Borrower or any Guarantor to Administrative Agent or any Issuing Bank
will be, true and accurate (taken as a whole), in all material respects, on the
date as of which such information is dated or certified and not incomplete by
omitting to state any material fact necessary to make such information (taken as
a whole) not misleading at such time.
6.11 Regulation U. Neither Borrower, nor any Guarantor nor any
Subsidiary is engaged principally, or as one of its important activities, in the
business of extending credit for the purpose of purchasing or carrying Margin
Stock (as defined in Regulation U).
6.12 Material Agreements. Neither Borrower nor any Guarantor is in
default in the performance, observance or fulfillment of any of the obligations,
covenants or conditions contained in (i) any agreement to which it is a party,
or (ii) any agreement or instrument evidencing or governing Indebtedness, which
default has had or would reasonably be expected to have a Material Adverse
Effect.
6.13 Labor Disputes and Acts of God. Neither the business nor the
Property of Borrower or of any Guarantor is affected by any fire, explosion,
accident, strike, lockout, or other labor dispute, drought, storm, hail,
earthquake, embargo, act of God or of the public enemy, or other casualty
(whether or not covered by insurance), which has had or would reasonably be
expected to have a Material Adverse Effect.
6.14 Ownership. Borrower and each Guarantor have title to, or valid
leasehold interests in, all of their respective properties and assets, real and
personal, including the properties and assets and leasehold interests reflected
in the financial statements referred to in Section 6.4 (except to the extent
that (i) such properties or assets have been disposed of in the ordinary course
of
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business or (ii) the failure to have such title has not had and would not
reasonably be expected to have a Material Adverse Effect).
6.15 Operation of Business. Borrower and each Guarantor possess all
licenses, permits, franchises, patents, copyrights, trademarks, and trade names,
or rights thereto, to conduct their respective businesses substantially as now
conducted, and as presently proposed to be conducted, with such exceptions as
have not had and would not reasonably be expected to have a Material Adverse
Effect.
6.16 Laws; Environment. Except as set forth in Borrower's form 10-K
report for the period ending December 31, 1998 and in Borrower's form 10-Q for
the period ending June 30, 1999 or (with respect to matters arising after the
date hereof) in any SEC Filing, Borrower and each Guarantor have duly complied,
and their businesses, operations and Property are in compliance, in all material
respects, with the provisions of all federal, state, and local statutes, laws,
codes, and ordinances and all rules and regulations promulgated thereunder
(including without limitation those relating to the environment, health and
safety). Except as set forth in the form 10-K described herein and in Borrower's
form 10-Q for the period ending June 30, 1999 or (with respect to matters
arising after the date hereof) in any SEC Filing, Borrower and each Guarantor
have been issued all required federal, state, and local permits, licenses,
certificates, and approvals relating to (1) air emissions; (2) discharges to
surface water or groundwater; (3) solid or liquid waste disposal; (4) the use,
generation, storage, transportation, or disposal of toxic or hazardous
substances or hazardous wastes (intended hereby and hereafter to include any and
all such materials listed in any federal, state, or local law, code, or
ordinance and all rules and regulations promulgated thereunder as hazardous); or
(5) other environmental, health or safety matters. Except in accordance with a
valid governmental permit, license, certificate or approval or as set forth in
the form 10-K described herein or (with respect to matters arising after the
date hereof) in any SEC Filing, to the best knowledge of Borrower, there has
been no material emission, spill, release, or discharge into or upon (1) the
air; (2) soils, or any improvements located thereon; (3) surface water or
groundwater; or (4) the sewer, septic system or waste treatment, storage or
disposal system servicing any Property of Borrower or a Guarantor, of any toxic
or hazardous substances or hazardous wastes at or from such Property. Neither
Borrower nor any Guarantor has received notice of any written complaint, order,
directive, claim, citation, or notice from any governmental authority or any
person or entity with respect to violations of law or damage by reason of
Borrower's or any Guarantor's (1) air emissions; (2) spills, releases, or
discharges to soils or improvements located thereon, surface water, groundwater
or the sewer, septic system or waste treatment, storage or disposal systems
servicing any Property; (3) solid or liquid waste disposal; (4) use, generation,
storage, transportation, or disposal of toxic or hazardous substances or
hazardous waste; or (5) other environmental, health or safety matters affecting
Borrower or any Guarantor or its business, operation or Property. Except as set
forth in the form 10-K described herein and in Borrower's form 10-Q for the
period ending June 30, 1999 or (with respect to matters arising after the date
hereof) in any SEC Filing, neither Borrower nor any Guarantor has any material
Indebtedness, obligation, or liability, absolute or contingent, matured or not
matured, with respect to the storage, treatment, cleanup, or disposal of any
solid
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wastes, hazardous wastes, or other toxic or hazardous substances (including
without limitation any such indebtedness, obligation, or liability with respect
to any current regulation, law or statute regarding such storage, treatment,
cleanup, or disposal). A matter will not constitute a breach of this Section
6.16 unless it is reasonably likely to result in a Material Adverse Effect.
6.17 Investment Company Act. Neither Borrower nor any Guarantor is an
"investment company" or a company "controlled" by an "investment company,"
within the meaning of the Investment Company Act of 1940, as amended.
6.18 Public Utility Holding Company Act. Neither Borrower nor any
Guarantor nor any Subsidiary is a "holding company" or a "subsidiary company" of
a "holding company," or an "affiliate" of a "holding company" or of a
"subsidiary company" of a "holding company," within the meaning of the Public
Utility Holding Company Act of 1935, as amended.
6.19 Subordinated Indebtedness. There is no Subordinated
Indebtedness outstanding as of the date of this Agreement.
6.20 Indenture Provisions. Each Guarantor is a Restricted
Subsidiary, as that term is defined in the Indenture. Each Guarantor is a
Wholly-Owned Subsidiary of Borrower.
6.21 Year 2000 Compliance. Borrower and each Guarantor has (i)
initiated a review and assessment of all areas within its and each of its
Subsidiaries' business and operations that could be adversely affected by the
"Year 2000 Problem" (that is, the risk that computer applications used by
Borrower or any Guarantor or any of their Subsidiaries) may be unable to
recognize and perform properly date-sensitive functions involving certain dates
prior to, and any date after, December 31, 1999), (ii) developed a plan and time
line for addressing the Year 2000 Problem on a timely basis, and (iii) to date,
implemented that plan in accordance with that timetable. Borrower reasonably
believes that all computer applications of Borrower and any Guarantor that are
material to the business operations of Borrower, each Guarantor and their
respective Subsidiaries will on a timely basis be able to perform properly
date-sensitive functions for all dates before and after December 31, 1999 (that
is, be "Year 2000 compliant"); provided, however, that Borrower shall not be in
breach of the representation and warranty in this sentence unless the failure of
any such computer applications to perform on a timely basis could reasonably be
expected to have a Material Adverse Effect.
ARTICLE VII
AFFIRMATIVE COVENANTS
During the term of this Agreement, unless the Required Banks shall
otherwise consent in writing:
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7.1 Financial Reporting. Borrower will maintain, and each Guarantor
will maintain, a system of accounting established and administered in accordance
with GAAP, and furnish to Banks:
(i) Within 100 days after the close of each fiscal year, (A)
an unquali fied (or qualified as reasonably acceptable to
Administrative Agent) audited consolidated financial statements of
Borrower certified by one of the "Big Five" accounting firms or other
nationally recognized independent certified public accountants,
reasonably acceptable to Banks, prepared in accordance with GAAP on a
consolidated basis, including balance sheets as of the end of such
fiscal year and statements of income and retained earnings and a
statement of cash flows, in each case setting forth in comparative form
the figures for the preceding fiscal year, and (B) unaudited financial
statements, prepared in accordance with GAAP (excluding footnotes) on a
consolidating basis for Borrower (and its Subsidiaries), including
balance sheets as of the end of such fiscal year and statements of
income and retained earnings and a statement of cash flows, in each
case setting forth in comparative form the figures for the preceding
fiscal year.
(ii) Within sixty (60) days after the close of the first three
(3) quarterly periods of each fiscal year, for Borrower, on a
consolidated basis and on a consolidating basis, unaudited financial
statements, including balance sheets as of the end of such period,
statements of income and retained earnings, and a statement of cash
flows for the portion of the fiscal year ending with such fiscal
period, all certified by an Authorized Officer. All such balance sheets
shall set forth in comparative form figures for the preceding year end.
All such income statements shall reflect current period and
year-to-date figures.
(iii) Annually, together with the financial statements
described in clause (i) above, a copy of the business plan of Borrower
and each Guarantor (on a consolidated basis) for the upcoming two (2)
fiscal years, including, as to Borrower, a consolidated balance sheet,
statement of income and projection of cash flows.
(iv) Within sixty (60) days of the end of each of the first
three quarterly periods of each fiscal year, a quarterly variance
analysis comparing actual quarterly results versus projected quarterly
results for the fiscal quarter most recently ended, including an
analysis of revenues, Housing Unit Closings and operating profits (by
operating division) for such period, and such other items as are
reasonably requested by Administrative Agent, together with a written
explanation of material variances.
(v) Within 100 days after the end of each fiscal year, a
variance analysis comparing actual annual results versus the business
plan for the fiscal year most
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recently ended, including an analysis of
revenues, Housing Unit Closings and operating profits (by operating
division) for such period, and such other items as are reasonably
requested by Administrative Agent, together with a written explanation
of material variances.
(vi) By the twenty-fifth day of each calendar month, a
Borrowing Base Certificate of an Authorized Officer of Borrower, with
respect to the Inventory Valuation Date occurring on the last day of
the immediately preceding calendar month.
(vii) Within sixty (60) days after the end of each quarterly
period of each fiscal year, a report identifying as to Borrower and its
Subsidiaries the inventory of real estate operations, including land
and Housing Units as of such date, designated in the same categories as
are identified in Borrower's corporate status report currently
delivered to Administrative Agent; such summary shall include a
delineation of sold or unsold items in each category.
(viii) Within sixty (60) days after the end of each of the
first three quarterly periods, and within one hundred (100) days after
the end, of each fiscal year, a certificate of an Authorized Officer of
Borrower as to Borrower's compliance with the Financial Covenant Tests
in the form of Exhibit G hereto.
(ix) Within 270 days after the close of each fiscal year, a
statement of the Unfunded Liabilities of each Single Employer Plan,
certified as correct by an actuary enrolled under ERISA (which
requirement may be satisfied by the delivery of the most recent
actuarial valuation of each such Single Employer Plan).
(x) As soon as possible and in any event within ten (10) days
after Borrower knows that any Reportable Event has occurred with
respect to any Plan, a statement, signed by an Authorized Officer of
Borrower, describing said Reportable Event and the action which
Borrower proposes to take with respect thereto.
(xi) As soon as possible, and in any event within thirty (30)
days after Borrower knows or has reason to know that any circumstances
exist that constitute grounds entitling the PBGC to institute
proceedings to terminate a Plan subject to ERISA with respect to
Borrower or any member of the Controlled Group and promptly but in any
event within two (2) Business Days of receipt by Borrower, any
Guarantor or any member of the Controlled Group of notice that the PBGC
intends to terminate a Plan or appoint a trustee to administer the
same, and promptly but in any event within five (5) Business Days of
the receipt of notice concerning the imposition of withdrawal liability
in excess of $500,000 with respect to Borrower, any Guarantor or any
member of the Controlled Group, a
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certificate of an Authorized Officer
setting forth all relevant details of such event and the action which
Borrower proposes to take with respect thereto.
(xii) Promptly after the sending or filing thereof, copies of
all proxy statements, financial statements, SEC Filings (exclusive of
exhibits unless otherwise requested by Administrative Agent), and
reports which Borrower sends to its stockholders, and copies of all
regular (except form S-8), periodic, and special reports, and all
effective registration statements (exclusive of exhibits unless
otherwise requested by Administrative Agent) which Borrower is required
to file with the Securities and Exchange Commission or any governmental
authority which may be substituted therefor, or with any national
securities exchange.
(xiii) Promptly after the commencement thereof, notice of all
actions, suits and proceedings before any court or governmental
department, commission, board, bureau, agency, or instrumentality,
domestic or foreign, affecting Borrower or a Guarantor (a) which, if
determined adversely to Borrower or Guarantor, could reasonably be
expected to have a Material Adverse Effect or (b) in which liability in
excess of $2,500,000 (in the aggregate with respect to any action, suit
or proceeding) is claimed and alleged against Borrower or such
Guarantor.
(xiv) As soon as possible and in any event within ten (10)
days after receipt by Borrower or any Guarantor, a copy of (a) any
written notice or claim to the effect that Borrower or any Guarantor is
or may be liable to any Person as a result of the release of any toxic
or hazardous waste or substance into the environment, and (b) any
notice alleging any violation of any federal, state or local
environmental, health or safety law or regulation by Borrower or any
Guarantor which, in the case of either (a) or (b), could reasonably be
expected to have a Material Adverse Effect or could result in liability
to Borrower or any Guarantor in excess of $2,500,000 (in the aggregate
with respect to any notice or claim).
(xv) Promptly after the occurrence of any change in the
business, Property, condition (financial or otherwise) or results of
operations of Borrower and Guarantors (taken as a whole) that has had
or would reasonably be expected to have a Material Adverse Effect,
notice thereof.
(xvi) Such other information (including non-financial
information) as Administrative Agent may from time to time reasonably
request.
7.2 Use of Proceeds. Subject to the limitations contained in this
Agreement, Borrower will use the proceeds of Advances for its or any one or more
Guarantor's own acquisition, development and/or holding of real property and the
construction of improvements in connection with the home building or other
Related Businesses of Borrower or such Guarantor (including payment of
reimbursement obligations with respect to Facility Letters of Credit), and any
other
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use permitted within the definition of "Real Property Indebtedness" under
the Indenture, and to repay outstanding Advances (and, in the case of the
initial Advance, to repay amounts outstanding under the Original Credit
Agreement).
7.3 Notice of Event of Default. Borrower will give prompt notice in
writing to Administrative Agent of the occurrence of (i) any Event of Default or
Unmatured Event of Default and (ii) any other development, financial or
otherwise, that has had or would be reasonably expected to have a Material
Adverse Effect.
7.4 Conduct of Business. Except as otherwise permitted under this
Agreement, Borrower and each Guarantor will carry on and conduct business in the
same general manner and in substantially the same fields of enterprise as
presently conducted and to do all things necessary to remain duly incorporated,
validly existing and in good standing as a domestic corporation in their
respective jurisdictions of incorporation and maintain all requisite authority
to conduct business in each jurisdiction in which business is conducted;
provided, however, that nothing contained herein shall prohibit the dissolution
of any Guarantor as long as Borrower or another Guarantor succeeds to the
assets, liabilities and business of the dissolved Guarantor.
7.5 Taxes. Borrower and each Guarantor will pay prior to delinquency
all taxes, assessments and governmental charges and levies upon them or their
income, profits or Property, except (i) those that solely encumber property
abandoned or in the process of being abandoned and with respect to which there
is no recourse to Borrower or any Subsidiary; (ii) those that are being
contested in good faith by appropriate proceedings and with respect to which
adequate reserves have been established in accordance with GAAP, and (iii) to
the extent that the failure to do so would not reasonably be expected to have
and does not have a Material Adverse Effect.
7.6 Insurance. Borrower and each Guarantor will maintain with
financially sound and reputable insurance companies insurance on all their
Property in such amounts and covering such risks as is consistent with sound
business practice, and Borrower will furnish to Administrative Agent upon
request full information as to the insurance carried.
7.7 Compliance with Laws. Borrower and each Guarantor will comply with
all laws, rules, regulations, orders, writs, judgments, injunctions, decrees or
awards to which it may be subject, except to the extent that the failure to do
so would not reasonably be expected to have and does not have a Material Adverse
Effect.
7.8 Maintenance of Properties. Borrower and each Guarantor will do all
things necessary to maintain, preserve, protect and keep its Property in good
repair, working order and condition, except to the extent that the failure to do
so would not reasonably be expected to have and does not have a Material Adverse
Effect.
7.9 Inspection. Borrower and each Guarantor will permit Administrative
Agent and Banks, by their respective representatives and agents, to inspect any
of the Property, corporate (or
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partnership) books and financial records of Borrower and such Guarantor to
examine and make copies of the books of accounts and other financial records of
Borrower and such Guarantor, and to discuss the affairs, finances and accounts
of Borrower and such Guarantor with, and to be advised as to the same by, their
respective officers at such reasonable times and intervals as Administrative
Agent may designate.
7.10 Environment. Borrower and each Guarantor will (i) comply, in all
material respects, with the provisions of all federal, state, and local
environmental, health, and safety laws, codes and ordinances, and all rules and
regulations issued thereunder; (ii) promptly contain and remove or otherwise
remediate any hazardous discharge from or affecting the Property of Borrower or
any Guarantor, to the extent required by and in compliance with all applicable
laws; (iii) promptly pay any fine or penalty assessed in connection therewith or
contest the same in good faith; and (iv) permit Administrative Agent to inspect
such Property, to conduct tests thereon, and to inspect all books,
correspondence, and records pertaining thereto at reasonable hours and places;
and (v) at the request of the Required Banks, and at Borrower's expense, provide
a report of a qualified environmental engineer, satisfactory in scope, form, and
content to the Required Banks, and such other and further assurances reasonably
satisfactory to the Required Banks that any new condition or occurrence
hereafter identified in any SEC Filing has been corrected; provided that a
failure to comply with the provisions of clauses (i) through (v) of this Section
7.10 shall not constitute an Event of Default or an Unmatured Event of Default
unless such noncompliance has resulted in or is reasonably likely to result in a
Material Adverse Effect.
7.11 Year 2000 Compliance. Borrower will notify promptly Administrative
Agent in the event that (i) Borrower or any Guarantor discovers or determines
that any computer application that is material to its or any of its
Subsidiaries' business and operations will not be Year 2000 compliant (as that
term is defined in Section 6.21) on a timely basis; and that (ii) such failure
to be Year 2000 compliant on a timely basis could reasonably be expected to have
a Material Adverse Effect.
7.12. New Guarantors. If, as of the end of any calendar quarter,
any Subsidiary of Borrower (whether now existing or hereafter created or
acquired but excluding Lion Warranty Corporation, Lion Insurance Company,
HomeAmerican Mortgage Corporation, American Home Title & Escrow Company and
American Home Insurance Agency, Inc.) that is not a Guarantor shall be a
Significant Subsidiary, then, unless the Required Banks shall otherwise consent
in writing, Borrower shall, within forty-five (45) days of the end of such
quarter, (i) cause such Significant Subsidiary to execute and deliver to
Administrative Agent a Guaranty and an amendment to the Contribution Agreement
pursuant to which such Guarantor shall become a party thereunder and (ii)
deliver or cause to be delivered, by and with respect to such Significant
Subsidiary, certificates, opinions and other documents substantially similar to
those referred to in Sections 5.1(i), (ii), (iii), and (iv) and such other
documents as any Bank or Issuing Bank or their respective counsel may reasonably
request; all of the foregoing shall be in form and substance satisfactory to
Administrative Agent.
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7.13. Change in Schedules. Promptly following the occurrence of but in
any event not later than forty-five (45) days following any quarter in which
there shall occur any event or circumstance as a result of which either of
Schedules 1 or 6.8 ceases to be accurate in all material respects, Borrower
shall furnish to Administrative Agent the applicable revised Schedule and shall
certify that such revised Schedule is true, correct and complete in all material
respects, and such revised Schedule shall be substituted for the applicable
Schedule hereunder.
ARTICLE VIII
NEGATIVE COVENANTS
During the term of the Agreement, unless the Required Banks shall
otherwise consent in writing:
8.1 Dividends; Repurchase of Stock. Borrower will not, directly or
indirectly, declare, make or pay, or incur any liability to make or pay, or
cause or permit to be declared, made or paid, any Dividend, or purchase, or
incur any obligation to purchase, any capital stock of Borrower either (a)
during the Term-Out Period or (b) if, prior to or after giving effect to the
declaration and payment of any Dividend or purchase of such stock, there shall
exist any Event of Default under this Agreement or any violation of any
Financial Covenant Test (without regard to whether the Term Out Period has
commenced).
8.2 Indebtedness. Neither Borrower nor any Guarantor will create, incur
or suffer to exist any Indebtedness, except, without duplication and without
duplication as to Borrower and Guarantors:
(i) The Loans.
(ii) Indebtedness existing on the date hereof (and not
otherwise permitted under this Section 8.2) and described in Schedule
8.2) hereto and Refinancing Indebtedness with respect thereto.
(iii) Indebtedness of Borrower's mortgage lending and
financial asset management Subsidiaries.
(iv) Rate Hedging Obligations.
(v) Intercompany Indebtedness between Borrower, any
Guarantor and/or any Subsidiary (subject to the limitations contained
in Section 8.5(xii)).
(vi) Trade accounts payable and accrued expenses arising or
occurring in the ordinary course of business.
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(vii) Indebtedness constituting Capitalized Lease
Obligations.
(viii) Indebtedness with respect to Letters of Credit
(including Facility Letters of Credit) in an aggregate face amount
outstanding at any time not to exceed $50,000,000.
(ix) Indebtedness secured by purchase-money Liens permitted
under Section 8.6(iii).
(x) Subordinated Indebtedness.
(xi) Non-Recourse Indebtedness incurred in the ordinary
course of business.
(xii) Performance bonds, completion bonds, guarantees of
performance, and guarantees of Indebtedness of a special district
entered into in the ordinary course of business.
(xiii) Indebtedness of a Person existing as of the time of the
Acquisition of such Person by Borrower or any Guarantor, provided that,
after giving effect to such Acquisition, Borrower is in compliance with
the terms of this Agreement (including without limitation the Financial
Covenant Tests).
(xiv) Indebtedness evidenced by the Senior Notes and
Refinancing Indebtedness with respect thereto.
(xv) Public Indebtedness, so long as such Indebtedness is
either Subordinated Indebtedness or pari passu with the Obligations (or
Guarantors' obligations under the Guaranties, if applicable).
(xvi) Indebtedness of Borrower or a Guarantor secured by a
Lien on real property owned by Borrower or such Guarantor, where (A)
the real property is not related to Housing Units or Land Under
Development, and (B) the aggregate outstanding amount of such
Indebtedness, plus all amounts committed but undisbursed in connection
with such Indebtedness, does not exceed seventy-five percent (75%) of
the fair market value of the real property encumbered by such Lien.
(xvii) Indebtedness, except Public Indebtedness, not otherwise
permitted by this Section 8.2 in an aggregate amount outstanding at any
time not to exceed $35,000,000.
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(xviii) From and after, but not prior to, the first to occur
of (A) the Term Out Date and (B) the day that is two years prior to the
Facility Maturity Date (as the same may be extended pursuant to this
Agreement), Indebtedness secured by a Lien permitted under Section
8.6(xxii).
(xix) Indebtedness of Borrower which arises pursuant to a
guarantee of payment or collection executed by Borrower, guaranteeing
the Indebtedness of one or more Guarantors which is permitted under
clauses (i) through (xviii) of this Section 8.2.
8.3 Merger. Neither Borrower nor any Guarantor will merge or
consolidate with or into any other Person, unless:
(i) any Guarantor is merging with any other Guarantor;
(ii) any Guarantor is merging with Borrower, and Borrower
is the continuing corporation;
((iii)) a Non-Guarantor Subsidiary is merging with Borrower
or any Guarantor, and Borrower or a Guarantor, as applicable, is the
continuing corporation;
(iv) no Event of Default shall exist or shall occur after
giving effect to such transaction;
(v) after giving effect to such transaction, Borrower
shall be in compliance with the Financial Covenant Tests;
(vi) (a) the other Person to the transaction is in a
Related Business or, (b) if not in a Related Business, the aggregate
net worth of the acquired entities of all such transactions during any
24-month period shall not exceed $15,000,000, and Borrower or a
Guarantor, if involved in the merger, is the continuing corporation;
and
(vii) the transaction is not otherwise prohibited under
this Agreement.
8.4 Sale of Assets. Neither Borrower nor any Guarantor will lease, sell
or otherwise dispose of its Property, in a single transaction or a series of
transactions, to any other Person (other than Borrower or another Guarantor)
except for (i) sales or leases in the ordinary course of business, (ii) leases,
sales or other dispositions of its Property that, together with all other
Property of Borrower and Guarantors previously leased, sold or disposed of
(other than in the ordinary course of business) as permitted by this Section
during the month in which any such lease, sale or other disposition occurs, do
not constitute a Material Portion of the Property of
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Borrower and Guarantors (taken as a whole) and (iii) transfers of assets by a
Guarantor to another Guarantor (including any Subsidiary that becomes a
Guarantor by executing and delivering a Guaranty to Administrative Agent at the
time at which such assets are transferred to such Subsidiary).
For purposes of this Section 8.4, "Material Portion" means, with
respect to the Property of Borrower and Guarantors (taken as a whole), Property
which represents more than 25% of the book value of all assets of Borrower and
Guarantors (taken as a whole). If a Material Portion of the Property of Borrower
and Guarantors (taken as a whole) is leased, sold or disposed of in violation of
this Section 8.4, Borrower shall pay to Administrative Agent for the benefit of
Banks at the time of such lease, sale or disposal, all amounts owed by Borrower
pursuant to Section 2.2, taking into account the effect of such lease, sale or
disposal.
8.5 Investments and Acquisitions. Neither Borrower nor any Guarantor
will make or suffer to exist any Investments (including without limitation,
loans and advances to, and other Investments in, Subsidiaries), or commitments
therefor, or to create any Subsidiary or to become or remain a partner in any
partnership or joint venture, or to make any Acquisition of any Person, except:
(i) Investments in Cash Equivalents.
(ii) Loans or advances made to officers, directors or
employees of Borrower or any Guarantor or any Subsidiary.
(iii) Carryback loans made in the ordinary course of business
in conjunction with the sale of Property of Borrower or such Guarantor.
(iv) Investments in interests in issuances of collateralized
mortgage obligations, mortgages, mortgage loan servicing or other
mortgage related assets.
(v) Investments in contract rights granted by, entitlements
granted by, interests in securities issued by, or tangible assets of,
political subdivisions or enterprises thereof related to the home
building or real estate operations of Borrower or any Guarantor or any
Subsidiary, including without limitation Investments in special
districts as described in Section 8.2(xii).
(vi) Investments in existing Subsidiaries (subject, in the
case of Non- Guarantor Subsidiaries, to be provisions of Section
8.5(xv)) and other Investments in existence on the date hereof.
(vii) Investments in Subsidiaries (subject, in the case of
Non-Guarantor Subsidiaries, to the provisions of Section 8.5(xv)) or
other Persons whose primary
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business is not a Related Business in an aggregate amount outstanding
at any one time not to exceed $15,000,000.
(viii) The Acquisition of or Investment in a business or
entity engaged primarily in a Related Business, provided that (a)
immediately upon the consummation of any such Acquisition or Investment
Borrower and each Guarantor is in compliance with the terms, covenants
and conditions of this Agreement (including without limitation the
Financial Covenant Tests and the provisions of Section 8.5(xv)), and
(b) Borrower shall deliver to Administrative Agent a certificate,
signed by an Authorized Officer, certifying to the best knowledge of
Borrower, that, on the date of, and taking into account, the
consummation of such Acquisition, and based on the reasonable
assumptions set forth in such Certificate, no Event of Default has
occurred and is continuing, and Borrower is in compliance with the
Financial Covenant Tests.
(ix) The creation of new Subsidiaries engaged primarily in a
Related Business (or the purpose of which is principally to preserve
the use of a name in which such business is conducted), subject to the
limitations contained in Section 8.5(xv).
(x) Stock, obligations or securities received in
satisfaction of debts owing to Borrower or any Guarantor in the
ordinary course of business.
(xi) Pledges or deposits in cash by Borrower or a Guarantor
to support surety bonds, performance bonds or guarantees of completion
in the ordinary course of business.
(xii) Loans representing intercompany Indebtedness between
Borrower, any Guarantor and/or any Subsidiary, subject to the
limitations contained in Section 8.5(xv).
(xiii) Investments pursuant to Borrower's or a Guarantor's
employment compensation plans or agreements.
(xiv) Payments on account of the purchase, redemption or
other acquisition or retirement for value, or any payment in respect of
any amendment (in anticipation of or in connection with any such
retirement, acquisition or defeasance) in whole or in part, of any
shares of capital stock or other securities of Borrower, but only to
the extent the same is permitted under the Indenture.
(xv) Investments in Non-Guarantor Subsidiaries, provided
that (A) as to loans by Borrower or any such Guarantor to Non-Guarantor
Subsidiaries, the aggregate outstanding amount of such loans shall not
at any time on or before
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March 31, 2000 exceed $50,000,000 or at any time thereafter exceed
$30,000,000 and (B) after March 31, 2000, the aggregate outstanding
amount of all Investments in Non-Guarantor Subsidiaries shall not
at any time exceed $50,000,000.
(xvi) Investments, in addition to those enumerated in this
Section 8.5, in an aggregate amount outstanding at any time not to
exceed $5,000,000.
8.6 Liens. Neither Borrower nor any Guarantor will create, incur, or
suffer to exist any Lien in, of or on the Property of Borrower or any Guarantor,
except:
(i) Permitted Liens.
(ii) Liens for taxes, assessments or governmental charges or
levies which solely encumber property abandoned or in the process of
being abandoned and with respect to which there is no recourse to
Borrower or any Guarantor or any Subsidiary.
(iii) Purchase-money Liens on any Property hereafter acquired
or the assumption of any Lien on Property existing at the time of such
acquisition (and not created in contemplation of such acquisition), or
a Lien incurred in connection with any conditional sale or other title
retention or a Capitalized Lease; provided that
(a) Any Property subject to any of the foregoing is
acquired by Borrower or any Guarantor in the ordinary course
of its respective business and the Lien on any such Property
attaches to such asset concurrently or within ninety (90) days
after the acquisition thereof;
(b) The obligation secured by any Lien so created,
assumed, or existing shall not exceed ninety percent (90%) of
the cost the Property covered thereby by Borrower or any
Guarantor acquiring the same; and
(c) Each Lien shall attach only to the Property so
acquired.
(iv) Liens existing on the date hereof (and not otherwise
permitted under this Section 8.6) and described in Schedule 8.6 hereto
and Liens securing Refinancing Indebtedness with respect thereto, but
only to the extent such Liens encumber the same collateral in whole or
in part as the previous Liens securing the Indebtedness being refunded,
refinanced or extended.
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(v) Liens incurred in the ordinary course of business not
otherwise permitted by this covenant, provided that the aggregate
amount of Indebtedness secured by such Liens outstanding at any time
shall not exceed $25,000,000.
(vi) Judgments and similar Liens arising in connection with
court proceedings; provided the execution or enforcement thereof is
stayed and the claim is being contested in good faith.
(vii) Liens securing Non-Recourse Indebtedness of Borrower or
any Guarantor, where the amount of such Indebtedness is greater than
fifty percent (50%) of the fair market value of the Property encumbered
by the Liens.
(viii) Liens existing with respect to Indebtedness of a Person
acquired in an Acquisition permitted by this Agreement.
(ix) Liens arising out of pledges or deposits under worker's
compensation laws, unemployment insurance, old age pensions, or other
social security or retirement benefits, or similar legislation.
(x) Liens incurred or deposits made to secure the
performance of tenders, bids, leases, statutory obligations, surety and
appeal bonds, progress payments, government contracts, utility services
and other obligations of like nature in each case incurred in the
ordinary course of business.
(xi) Leases or subleases granted to others not materially
interfering with the ordinary course of business of Borrower or any
Guarantor.
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(xii) Any interest in or title of a lessor to property
subject to any Capitalized Lease Obligations.
(xiii) Liens in favor of the trustee named therein arising
under the Indenture and liens for trustee's fees and similar costs
under any Refinancing Indebtedness of the Senior Notes.
(xiv) Any option, contract or other agreement to sell or
purchase an asset or participate in the income or revenue derived
therefrom.
(xv) Any legal right of, or right granted in good faith to,
a lender or lenders to which Borrower or a Guarantor may be indebted
to offset against, or appropriate and apply to the payment of, such
Indebtedness any and all balances, credits, deposits, accounts, or
monies of Borrower or a Guarantor with or held by such lender or
lenders.
(xvi) Any pledge or deposit of cash or property by Borrower
or any Guarantor in conjunction with obtaining surety and performance
bonds and letters of credit required to engage in constructing on-site
and off-site improvements or as otherwise required by political
subdivisions or other governmental authorities in the ordinary course
of business.
(xvii) Liens incurred in the ordinary course of business as
security for Borrower's or any Guarantor's obligations with respect to
indemnification in favor of title insurance providers.
(xviii) Letters of Credit, bonds or other assets pledged to
secure insurance in the ordinary course of business.
(xix) Liens on assets securing warehouse lines of credit and
other credit facilities to finance the operations of Borrower's
mortgage lending Subsidiaries and/or financial asset management
Subsidiaries and Liens related to issuances of CMOs and
mortgage-related securities, so long as such assets are owned by such
mortgage lending Subsidiaries and financial asset Subsidiaries.
(xx) Liens described in Section 8.2(xvi) securing the
Indebtedness described therein, so long as (i) each such Lien attaches
only to the real property described in Section 8.2(xvi) and (ii) the
obligation secured by such Lien is limited to repayment of the
Indebtedness permitted under Section 8.2(xvi).
(xxi) Any other Liens; provided, however, that such Liens
under this clause (xxi) do not at any time attach to Property with a
book value, in the aggregate, in excess of $15,000,000.
(xxii) From and after, but not prior to, the first to occur
of (A) the Term Out Date and (B) the day that is two years prior to the
Facility Maturity Date (as the same may be extended pursuant to this
Agreement), Liens incurred in the ordinary course of business not
otherwise permitted by this covenant, provided that (1) the Liens
encumber real property owned by the obligor of the applicable
Indebtedness, provided that Borrower or any Guarantor may be the
obligor of such Indebtedness and Borrower or any Guarantor may
guarantee such Indebtedness, and (2) the obligations secured by any
Lien shall not exceed eighty percent (80%) of the fair market value of
the real property encumbered thereby (if the obligations do not relate
to the construction of improvements on, or development of, the real
property) or eighty percent (80%) of the value of the real property
encumbered thereby as if all improvements to be located thereon have
been completed (if the obligations relate to the construction of
improvements on the real property), as applicable.
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Notwithstanding anything herein to the contrary, neither Borrower nor any
Guarantor will, create, incur, or suffer to exist any Lien in, of or on the
capital stock of any Guarantor.
8.7 Affiliates. Neither Borrower nor any Guarantor will enter into any
transaction (including, without limitation, the purchase or sale of any Property
or service) with, or make any payment or transfer to, any Affiliate (other than
a Subsidiary) except (i) in the ordinary course of business and pursuant to the
reasonable requirements of Borrower's or such Guarantor's business and upon fair
and reasonable terms no less favorable to Borrower or such Guarantor than
Borrower or such Guarantor would obtain in a comparable arms-length transaction,
(ii) Investments permitted under Section 8.5, (iii) pursuant to employment
compensation plans and agreements, and (iv) with officers, directors and
employees of Borrower or any Subsidiary so long as the same are duly authorized
pursuant to the articles of incorporation or bylaws (or procedures conducted in
accordance therewith) of Guarantor or Borrower.
8.8 Modifications to Certain Indebtedness. Neither Borrower nor any
Guarantor will make any amendment or modification to the subordination
provisions of any indenture, note or other agreement evidencing or governing (i)
as to Borrower, any Subordinated Indebtedness, and (ii) as to any Guarantor,
Indebtedness that has been subordinated to Guarantor's obligations under the
Guaranty.
8.9 Amendments of Indenture or Senior Notes. Neither Borrower nor any
Guarantor will amend or modify the Indenture or the Senior Notes, except for
amendments or modifications that do not (i) impose upon Borrower or any
Guarantor obligations not contained therein as of the date of this Agreement
(except as otherwise hereinafter provided), (ii) change the definition of Real
Property Indebtedness or change any subordination provisions, or (iii) otherwise
adversely affect Borrower or any Guarantor. Nothing contained in this Section
8.9 shall (a) prohibit issuance by Borrower of additional Senior Notes pursuant
to the Indenture, provided the same does not violate any other provision of this
Agreement or (b) prohibit any Guarantor from guarantying the obligations of
Borrower under the Senior Notes and Indenture.
8.10 Negative Pledge. Neither Borrower nor any Guarantor will directly
or indirectly enter into any agreement (other than (A) this Agreement, (B) the
Indenture and any indenture or similar agreement executed in connection with any
Refinancing Indebtedness of the Senior Notes and (C) any indenture or similar
agreement executed in connection with any Public Indebtedness permitted under
Section 8.2(xv)) with any Person that prohibits or restricts or limits the
ability of Borrower or Guarantors to create, incur, pledge or suffer to exist
any Lien in favor of Banks granted pursuant to the terms of this Agreement upon
any real property assets of Borrower or any Guarantor; provided, however, that
those agreements creating Liens permitted under Sections 8.6(iii), (iv), (vii),
(viii), (xix), (xx) and (xxii) may prohibit, restrict or limit other Liens on
those assets encumbered by the Liens created by such agreements.
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ARTICLE IX
FINANCIAL COVENANTS
During the term of this Agreement, unless the Required Banks shall
otherwise consent in writing:
9.1 Consolidated Tangible Net Worth Test. Consolidated Tangible Net
Worth shall not be less than (i) $238,000,000 plus (ii) fifty percent (50%) of
Consolidated Net Income earned after December 31, 1998 (excluding any quarter in
which there is a loss but applying Consolidated Net Income thereafter first to
such loss before determining fifty percent (50%) of such amount for purposes of
this calculation) plus (iii) fifty percent (50%) of the net proceeds of capital
stock issued by Borrower after December 31, 1998 (the "Consolidated Tangible Net
Worth Test"). Borrower's compliance with the foregoing covenant shall be
measured on a quarterly basis, based on the financial statements delivered to
Administrative Agent pursuant to Section 7.1. Borrower's failure to satisfy the
Consolidated Tangible Net Worth Test shall not constitute an Event of Default or
an Unmatured Event of Default; provided, however, that (a) if Borrower fails to
satisfy the Consolidated Tangible Net Worth at the end of any fiscal quarter,
then, except as otherwise provided in clause (b) below, the Term Out Period
shall commence on the first day following such fiscal quarter as provided in
Section 2.22 and (b) if the amount by which Borrower's Consolidated Tangible Net
Worth Test at the end of a fiscal quarter fails to meet the Consolidated
Tangible Net Worth Test is equal to or less than the amount by which goodwill
(as shown on such financial statements) increased during such fiscal quarter as
a result of an Acquisition consummated during such fiscal quarter, the Term Out
Period shall not commence unless and until Borrower fails to satisfy the
Consolidated Tangible Net Worth Test at the end of the succeeding fiscal
quarter, in which event the Term Out Period shall commence on the first day
following such succeeding fiscal quarter.
9.2 Leverage Test; Fixed Charge Coverage Test.
(a) Leverage Test. Consolidated Indebtedness shall not exceed
the product of (i) the then applicable Leverage Multiplier multiplied
by (ii) Adjusted Consolidated Tangible Net Worth (the "Leverage Test").
(b) Fixed Charge Coverage Test. If at any time Borrower shall
fail to maintain, for two (2) consecutive fiscal quarters, a ratio,
determined as of the last day of each fiscal quarter for the
four-quarter period ending on such day, of (i) EBITDA for such period
to (ii) Fixed Charges Incurred for such period, of at least 1.75 to 1.0
(the "Fixed Charge Coverage Test"), then the Leverage Multiplier for
the same fiscal quarter with respect to which Borrower shall have so
failed the Fixed Charge Coverage Test (i.e., the second of such two (2)
consecutive fiscal quarters, which quarter is herein referred to as the
"Coverage Test Failure Quarter"), shall be decreased as follows: (i) if
the Leverage Multiplier for the
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fiscal quarter preceding the Coverage Test Failure Quarter was 2.15,
the Leverage Multiplier shall be decreased by 0.25 to 1.90; and (ii)
if the Leverage Multiplier for the fiscal quarter preceding the
Coverage Test Failure Quarter was less than 2.15, the Leverage
Multiplier shall be decreased by 0.10.
(c) Adjustment of Leverage Multiplier. If at any time at which
the Leverage Multiplier is less than 2.15, Borrower shall satisfy the
Fixed Charge Coverage Test (which for purposes of this Section 9.2(c)
shall be deemed satisfied only if, on the same day on which Borrower
satisfies the Fixed Charge Coverage Test, Borrower is also in
compliance with the Leverage Test), then the Leverage Multiplier,
effective as of the fiscal quarter immediately following the fiscal
quarter with respect to which Borrower shall have so satisfied the
Fixed Charge Coverage Test, shall be increased as follows: (i) upon
satisfaction of the Fixed Charge Coverage Test on a date on which the
Leverage Multiplier is 1.90, the Leverage Multiplier for the next
fiscal quarter shall be increased to 2.15; and (ii) upon satisfaction
of the Fixed Charge Coverage Test on a date on which the Leverage
Multiplier is less than 1.90, the Leverage Multiplier for the next
fiscal quarter shall be increased by 0.10. In no event shall the
Leverage Multiplier exceed 2.15.
(d) Effectiveness of Change in Leverage Multiplier. Any
decrease of the Leverage Multiplier provided for in this Section 9.2
shall be effective as of the Coverage Test Failure Quarter as provided
in Section 9.2(b), and the Leverage Multiplier (as so decreased) shall
remain in effect thereafter unless and until adjusted as provided in
Section 9.2(b) or (c). Any increase in the Leverage Multiplier shall be
effective as of the fiscal quarter next succeeding the fiscal quarter
in which Borrower satisfies the Fixed Charge Coverage Test as provided
in Section 9.2(c), and the Leverage Multiplier (as so increased) shall
remain in effect thereafter unless and until adjusted as provided in
Section 9.2(b) or (c)
(e) Measure of Compliance. Borrower's satisfaction of the
Fixed Charge Coverage Test shall be measured on a quarterly basis,
based on the financial statements delivered to Administrative Agent
pursuant to Section 7.1. A failure to satisfy the Leverage Test or the
Fixed Charge Coverage Test shall not constitute an Event of Default or
an Unmatured Event of Default; provided, however, if Borrower fails to
satisfy the Leverage Test for two (2) consecutive fiscal quarters (the
first of which may be the Coverage Test Failure Quarter), then the Term
Out Period shall commence on the day following such fiscal quarter as
provided in Section 2.22.
9.3 Spec Unit Inventory. Borrower will not at any time permit the
aggregate number of all Spec Units owned by Borrower or any Guarantor to exceed
the greater of (i) fifty percent (50%) of the number of Housing Unit Closings
during the preceding twelve (12) months, or (ii) one hundred ten percent (110%)
of the number of Housing Unit Closings during the preceding six
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(6) months. A failure to satisfy the requirements of this Section 9.3 shall not
constitute an Event of Default or an Unmatured Event of Default but any Spec
Units owned by Borrower or Guarantors in excess of the foregoing requirements
shall not be included in the Borrowing Base.
9.4 Land Owned. Borrower will not at any time permit the ratio of (i)
the Adjusted Book Value of Land Owned to (ii) Consolidated Tangible Net Worth,
to exceed 1.25 to 1.00. Borrower's compliance with the covenant in this Section
9.4 shall be measured on a quarterly basis based on the financial statements
delivered to Administrative Agent pursuant to Section 7.1.
9.5 Consolidated Tangible Net Worth Floor. Consolidated Tangible Net
Worth shall not be less than $150,000,000. Borrower's compliance with the
foregoing covenant shall be measured on a quarterly basis, based on the
financial statements delivered to Administrative Agent pursuant to Section 7.1.
ARTICLE X
EVENTS OF DEFAULT
The occurrence of any one or more of the following events shall
constitute an Event of Default:
10.1 Representations and Warranties. Any representation or warranty
made or deemed made by or on behalf of Borrower or any Guarantor to Banks, the
Issuing Bank or Administrative Agent under or in connection with this Agreement,
any Loan Document, or any certificate or information delivered in connection
with this Agreement or any other Loan Document shall not be true and correct in
any material respect on the date as of which made, and, with respect to any
matter which is reasonably capable of being cured, Borrower or such Guarantor,
as applicable, shall have failed to cure the occurrence causing the
representation or warranty to be materially untrue or incorrect within thirty
(30) days after notice thereof by Administrative Agent to Borrower.
10.2 Non-payment. Nonpayment of principal of any Note when due
(including without limitation non-payment under clause (D) of Section 2.21(c)),
or nonpayment of interest upon any Note or of any fees or other obligations
under any of the Loan Documents within five (5) days after billing therefor by
Administrative Agent or Banks.
10.3 Other Defaults. The breach by Borrower (other than a breach which
constitutes an Event of Default under any other Section of this Article X) of
any of the terms or provisions of this Agreement which is not remedied within
thirty (30) days after notice thereof to Borrower.
10.4 Other Indebtedness.
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(a) Failure of Borrower or any Guarantor to pay when due
(after any applicable grace period and after notice from the holder
thereof) any Indebtedness (other than Non-Recourse Indebtedness) equal
to or exceeding $5,000,000 (in the aggregate); or
(b) The default (after any applicable grace period and after
notice from the holder thereof) by Borrower or any Guarantor in the
performance of any term, provision or condition contained in any
agreement under which any Indebtedness (other than Non-Recourse
Indebtedness) equal to or exceeding $5,000,000 (in the aggregate) was
created or is governed; or
(c) Any other event shall occur or condition exist (after any
applicable grace period and after notice from the holder thereof), the
effect of which is to cause, or to permit the holder or holders of any
Indebtedness (other than Non- Recourse Indebtedness) of Borrower or any
Guarantor equal to or exceeding $5,000,000 to cause such Indebtedness
to become due prior to its stated maturity; or
(d) Any Indebtedness (other than Non-Recourse Indebtedness) of
Borrower or any Guarantor equal to or exceeding $5,000,000 (in the
aggregate) shall be declared to be due and payable or required to be
prepaid (other than by a regularly scheduled payment) prior to the
stated maturity thereof (after any applicable grace period and after
notice from the holder thereof); or
(e) Borrower or any Guarantor shall not pay, or shall admit in
writing its inability to pay, its debts generally as they become due.
10.5 Bankruptcy. Borrower or any Guarantor shall:
(i) have an order for relief entered with respect to it
under the Federal bankruptcy laws as now or hereafter in effect;
(ii) make an assignment for the benefit of creditors;
(iii) apply for, seek, consent to, or acquiesce in, the
appointment of a receiver, custodian, trustee, examiner, liquidator or
similar official for it or any Substantial Portion of the Property of
Borrower and Guarantors;
(iv) institute any proceeding seeking an order for relief
under the Federal bankruptcy laws as now or hereafter in effect or
seeking to adjudicate it a bankrupt or insolvent, or seeking
dissolution, winding up, liquidation, reorganization, arrangement,
adjustment or composition of it or its debts under any law relating to
bankruptcy, insolvency or reorganization or relief of debtors or fail
to file, within
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the applicable time period for the filing thereof, an answer or other
pleading denying the material allegations of any such proceeding filed
against it; or
(v) fail to contest in good faith any appointment or
proceeding described in Section 10.6.
10.6 Receiver. A receiver, trustee, examiner, liquidator or similar
official shall be appointed for Borrower or any Guarantor or any Substantial
Portion of the Property of Borrower and Guarantors without the application,
approval or consent of Borrower or any Guarantor, or a proceeding described in
Section 10.5(iv) shall be instituted against Borrower or any Guarantor and such
appointment continues undischarged or such proceeding continues undismissed or
unstayed for a period of sixty (60) consecutive days.
10.7 Judgment. Borrower or any Guarantor shall fail within thirty (30)
days to pay, bond or otherwise discharge any judgment or order for the payment
of money in excess of $10,000,000 which has not been stayed on appeal or is not
otherwise being appropriately contested in good faith.
10.8 Unfunded Liabilities. The Unfunded Liabilities of all Single
Employer Plans shall exceed in the aggregate $5,000,000 or any Reportable Event
shall occur in connection with any Plan, which Reportable Event has had or would
reasonably be expected to have a Material Adverse Effect.
10.9 Withdrawal Liability. Borrower, any Guarantor or any member of the
Controlled Group shall have been notified by the sponsor of a Multiemployer Plan
that it has incurred withdrawal liability to such Multiemployer Plan in an
amount which, when aggregated with all other amounts required to be paid to
Multiemployer Plans by Borrower or any Guarantor or any other member of the
Controlled Group as withdrawal liability (determined as of the date of such
notification), exceeds $5,000,000 or requires payments exceeding $2,000,000 per
annum; provided, however, that such event shall not constitute an Event of
Default as long as Borrower, such Guarantor or the Controlled Group member, as
applicable, is contesting in good faith the imposition of withdrawal liability.
10.10 Increased Contributions. Borrower, any Guarantor, or any other
member of the Controlled Group shall have been notified by the sponsor of a
Multiemployer Plan that such Multiemployer Plan is in reorganization, if as a
result of such reorganization the aggregate annual contributions of Borrower,
Guarantors and the other members of the Controlled Group (taken as a whole) to
all Multiemployer Plans which are then in reorganization have been or will be
increased over the amounts contributed to such Multiemployer Plans for the
respective plan years of each such Multiemployer Plan immediately preceding the
plan year in which the reorganization occurs by an amount exceeding $5,000,000.
10.11 Change in Control. Any Change in Control shall occur.
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10.12 Dissolution. The dissolution or liquidation of Borrower or any
Guarantor shall occur, except as permitted under Section 8.3.
10.13 Guaranty. Any Guaranty shall fail to remain in full force or
effect with respect to any Guarantor or any action shall be taken by any
Guarantor to discontinue or to assert the invalidity or unenforceability of any
Guaranty, or any Guarantor shall fail to comply with any of the terms or
provisions of any Guaranty, or any Guarantor denies that it has any further
liability under any Guaranty or gives notice to such effect.
10.14 Land Owned Covenant. The breach by Borrower of the covenant
contained in Section 9.4 which is not remedied within thirty (30) days following
the day (being the last day of the applicable quarter) on which such breach
occurs.
10.15 Consolidated Tangible Net Worth Floor. The breach by Borrower
of the covenant contained in Section 9.5.
10.16 No Defaults. The occurrence of any of the following events shall
specifically not be an Event of Default or an Unmatured Event of Default under
this Agreement:
(a) The breach of any Financial Covenant Test (except that the
breach by Borrower of the covenant in Section 9.5 shall constitute an
Event of Default (notwithstanding that it also constitutes a breach of
a Financial Covenant Test).
(b) If any Guarantor shall apply for, seek, consent to, or
acquiesce in, the appointment of a receiver, custodian, trustee,
examiner, liquidator or similar official for it or for a Significant
Amount of its Property, or if a receiver, custodian, trustee, examiner,
liquidator or similar official shall be appointed for any Guarantor
without its application, approval or consent for it or for a
Significant Amount of its Property; provided, however, that upon the
occurrence and during the continuation of the foregoing, all Property
of such Guarantor shall be automatically excluded from the Borrowing
Base; and provided further, that upon any such appointment for any
Property of any Guarantor that is not a Significant Amount of its
Property (which appointment shall not be an Event of Default or
Unmatured Event of Default under this Agreement), such Property shall
be automatically excluded from the Borrowing Base. "Significant
Amount" means, with respect to the Property of such Guarantor and
its Subsidiaries, taken as a whole, Property which represents
more than 10% of the book value of the assets of such Guarantor
as would be shown on the financial statements of such Guarantor
as of the beginning of the fiscal quarter in which such determination
is made, all as determined in accordance with Agreement Accounting
Principles.
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ARTICLE XI
ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES
11.1 Acceleration; Remedies.
(a) If any Event of Default described in Section 10.5 or 10.6
occurs with respect to Borrower, the obligations of Banks to make Loans
and of the Issuing Bank to issue Facility Letters of Credit hereunder
shall automatically terminate and the Obligations shall immediately
become due and payable without any election or action on the part of
Administrative Agent, the Issuing Bank or any Bank. If any other Event
of Default occurs, the Required Banks may terminate or suspend the
obligations of Banks to make Loans and of the Issuing Bank to issue
Facility Letters of Credit hereunder, or declare the Obligations to be
due and payable, or both, whereupon the Obligations shall become
immediately due and payable, without presentment, demand, protest or
notice of any kind, all of which Borrower hereby expressly waives. If,
within five (5) days after acceleration of the maturity of the
Obligations or termination of the obligations of Banks to make Loans
hereunder as a result of any Event of Default (other than any Event of
Default as described in Section 10.5 or 10.6 with respect to Borrower)
and before any judgment or decree for the payment of the Obligations
due shall have been obtained or entered, the Required Banks (in their
sole discretion) shall so direct, Administrative Agent shall, by notice
to Borrower, rescind and annul such acceleration and/or termination.
(b) Upon the occurrence of any Event of Default and upon the
directive of the Required Banks, Administrative Agent or (but only upon
directive of the Required Banks) any Bank shall proceed to protect,
exercise and enforce the rights and remedies of Administrative Agent
and Banks under the Loan Documents and the Guaranties against Borrower,
any Guarantor and any other party and such other rights and remedies as
are provided by law or equity.
(c) The order and manner in which Banks' rights and remedies
are to be exercised shall be determined by the Required Banks in their
sole discretion, and all payments received by Administrative Agent and
Banks, or any of them, shall be applied first to the costs and expenses
(including attorneys' fees and disbursements) of Administrative Agent
and of Banks, and thereafter paid pro rata to each Bank in the same
proportions that each Bank's Commitment bears to the Aggregate
Commitment, without priority or preference among Banks. Regardless of
how each Bank may treat payments for the purpose of its own accounting,
for the purpose of computing Borrower's obligations hereunder and under
the Notes, payments shall be applied first, to the costs and expenses
of Administrative Agent and Banks, as set forth above, second, to the
payment of accrued and unpaid interest due under any Loan Documents to
and including the date of such application (ratably, and without
duplication, according to the accrued and unpaid
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interest due under
each of the Loan Documents), and third, to the payment of all other
amounts (including principal and fees) then owing to Administrative
Agent or Banks under the Loan Documents. No application of payments
will cure any Event of Default, or prevent acceleration, or continued
acceleration, of amounts payable under the Loan Documents, or prevent
the exercise, or continued exercise, of rights or remedies of Banks
hereunder or thereunder or at law or in equity.
11.2 Amendments. Subject to the provisions of this Article XI, the
Required Banks (or Administrative Agent with the consent in writing of the
Required Banks) and Borrower may enter into agreements supplemental hereto for
the purpose of adding or modifying any provisions to the Loan Documents or
changing in any manner the rights of Banks or Borrower hereunder or waiving any
Event of Default hereunder; provided, however, that (a) no such supplemental
agreement shall, without the consent of the Required Banks, amend the definition
of the term "Borrowing Base" or the definition of any defined term contained in
the definition of the term "Borrowing Base" and (b) no such supplemental
agreement shall, without the consent of each Bank and Issuing Bank affected
thereby:
(i) Extend the maturity of any Loan or Note or forgive all
or any portion of the principal amount thereof, or reduce the rate of,
or extend the time of payment of, interest or fees thereon;
(ii) Release any Guarantor from any of its obligations under
its Guaranty;
(iii) Change the percentage specified in the definition of
Required Banks;
(iv) Increase the amount of the Commitment of any Bank
hereunder, or permit Borrower to assign its rights under this
Agreement;
(v) Amend any provisions of this Agreement relating to
Facility Letters of Credit;
(vi) Amend the percentage set forth in Section 2.21(b);
(vii) Amend any provisions of this Agreement relating to Swing
Line Advances without the consent of Bank One; or
(viii) Amend this Section 11.2, Section 12.7, Section 14.1 or
Section 15.2.3.
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No amendment of any provision of this Agreement relating to Administrative Agent
shall be effective without the written consent of Administrative Agent.
Administrative Agent may waive payment or reduce the amount of the fees referred
to in Section 13.12 or the fee required under Section 15.3.2 without obtaining
the consent of any other party to this Agreement.
11.3 Preservation of Rights. No delay or omission of any Bank or
Issuing Bank or Administrative Agent to exercise any right under the Loan
Documents shall impair such right or be construed to be a waiver of any Event of
Default or an acquiescence therein, and the making of a Loan or the issuance,
amendment or extension of a Facility Letter of Credit notwithstanding the
existence of an Event of Default or the inability of Borrower to satisfy the
conditions precedent to such Loan or Facility Letter of Credit shall not
constitute any waiver or acquiescence. Any single or partial exercise of any
such right shall not preclude other or further exercise thereof or the exercise
of any other right, and no waiver, amendment or other variation of the terms,
conditions or provisions of the Loan Documents whatsoever shall be valid unless
in writing signed by Banks (and, if applicable, Administrative Agent) required
pursuant to Section 11.2, and then only to the extent in such writing
specifically set forth. All remedies contained in the Loan Documents or by law
afforded shall be cumulative and all shall be available to Administrative Agent,
the Issuing Bank and Banks until the Obligations have been paid in full.
ARTICLE XII
GENERAL PROVISIONS
12.1 Survival of Representations. All representations and warranties of
Borrower contained in this Agreement shall survive delivery of the Notes and the
making of the Loans and the issuance, amendment or extension of any Facility
Letter of Credit herein contemplated.
12.2 Governmental Regulation. Anything contained in this Agreement
to the contrary notwithstanding, no Bank or Issuing Bank shall be obligated to
extend credit to Borrower in violation of any limitation or prohibition provided
by any applicable statute or regulation effective after the date of this
Agreement.
12.3 Taxes. Any recording, intangible, filing or stamp fees or taxes or
other similar assessments or charges made by any governmental or revenue
authority in respect of the Loan Documents shall be paid by Borrower, together
with interest and penalties, if any.
12.4 Headings. Section headings in the Loan Documents are for
convenience of reference only, and shall not govern the interpretation of any of
the provisions of the Loan Documents.
12.5 Entire Agreement. The Loan Documents and the letter agreement(s)
referred to in this Agreement embody the entire agreement and understanding
among Borrower, Administrative
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Agent and Banks and supersede all prior agreements and understandings among
Borrower, Administrative Agent, and Banks relating to the subject matter
thereof.
12.6 Nature of Obligations; Benefits of this Agreement.
(a) The respective obligations of Banks hereunder are several
and not joint and no Bank shall be the partner or agent of any other
(except to the extent to which Administrative Agent is authorized to
act as such). The failure of any Bank to perform any of its obligations
hereunder shall not relieve any other Bank from any of its obligations
hereunder.
(b) This Agreement shall not be construed so as to confer any
right or benefit upon any Person other than the parties to this
Agreement and their respective successors and assigns.
12.7 Expenses; Indemnification. Borrower shall reimburse Administrative
Agent for any reasonable outside attorneys' fees and costs paid or incurred by
Administrative Agent in connection with the preparation, negotiation, execution,
delivery, review, amendment, modification, and administration of the Loan
Documents. Borrower also agrees to reimburse Administrative Agent, Banks and
each Issuing Bank for any reasonable costs and out-of-pocket expenses (including
reasonable outside attorneys' fees and time charges of attorneys for
Administrative Agent, Banks and such Issuing Bank) paid or incurred by
Administrative Agent, any Bank or such Issuing Bank in connection with the
collection and enforcement of the Loan Documents. Borrower further agrees to
indemnify Administrative Agent and each Bank or Issuing Bank, its directors,
officers and employees against all losses, claims, damages, penalties,
judgments, liabilities and expenses (including, without limitation, all expenses
of litigation or preparation therefor whether or not Administrative Agent or any
Bank or Issuing Bank is a party thereto) which any of them may pay or incur
arising out of or relating to this Agreement, the other Loan Documents, the
transactions contemplated hereby or the direct or indirect application or
proposed application of the proceeds of any Loan hereunder (except to the extent
arising due to the gross negligence or willful misconduct of the indemnified
Person or the failure of the indemnified Person to comply with regulatory
requirements applicable to it). The obligations of Borrower under this Section
shall survive the termination of this Agreement.
12.8 Numbers of Documents. All statements, notices, closing documents,
and requests hereunder shall be furnished to Administrative Agent with
sufficient counterparts so that Administrative Agent may furnish one to each of
Banks.
12.9 Accounting. Except as provided to the contrary herein, all
accounting terms used herein shall be interpreted and all accounting
determinations hereunder shall be made in accordance with GAAP applied on a
basis consistent with the consolidated audited financial statements of Borrower
as of December 31, 1994 ("Agreement Accounting Principles"). If any change in
GAAP from the principles used in preparing such statements would have a material
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effect upon the results of any calculation required by or compliance with any
provision of this Agreement, then such calculation shall be made or calculated
and compliance with such provision shall be determined using accounting
principles used in preparing the consolidated audited financial statements of
Borrower as of December 31, 1994.
12.10 Severability of Provisions. Any provision in any Loan Document
that is held to be inoperative, unenforceable, or invalid in any jurisdiction
shall, as to that jurisdiction, be inoperative, unenforceable, or invalid
without affecting the remaining provisions in that jurisdiction or the
operation, enforceability, or validity of that provision in any other
jurisdiction, and to this end the provisions of all Loan Documents are declared
to be severable.
12.11 Nonliability of Banks and Issuing Bank. The relationship between
Borrower and Banks and Administrative Agent shall be solely that of borrower and
lender. Neither Administrative Agent nor any Bank or Issuing Bank shall have any
fiduciary responsibilities to Borrower. Neither Administrative Agent nor any
Bank or Issuing Bank undertakes any responsibility to Borrower to review or
inform Borrower of any matter in connection with any phase of Borrower's
business or operations.
12.12 CHOICE OF LAW. THE LOAN DOCUMENTS (OTHER THAN THOSE CONTAINING A
CONTRARY EXPRESS CHOICE OF LAW PROVISION) SHALL BE CONSTRUED IN ACCORDANCE WITH
THE INTERNAL LAWS (AND NOT THE LAW OF CONFLICTS) OF THE STATE OF ILLINOIS, BUT
GIVING EFFECT TO FEDERAL LAWS APPLICABLE TO NATIONAL BANKS.
12.13 Arbitration. Subject to the provisions of this Section 12.13,
Borrower, Banks and Administrative Agent agree to submit to binding arbitration
any and all claims, disputes and controversies between or among them (and their
respective employees, officers, directors, attorneys, and other agents if
permitted by law or a contract between them and such persons) relating to this
Agreement and the Loan Documents and the negotiation, execution,
collateralization, administration, repayment, modification, extension or
collection thereof or arising thereunder. Such arbitration shall proceed in
Chicago, Illinois, shall be governed by Illinois law and shall be conducted in
accordance with the Commercial Arbitration Rules of the American Arbitration
Association (the "AAA"), as modified in this Section 12.13. Judgment upon the
award rendered by each arbitrator(s) may be entered in any court having
jurisdiction.
(a) Nothing in the preceding paragraph, nor the exercise of
any right to arbitrate thereunder, shall limit the right of any party
hereto (1) subject to provisions of applicable law, to exercise
self-help remedies such as setoff or repossession or other self-help
remedies provided in this Agreement or any other Loan Document; or (2)
to obtain provisional or ancillary remedies such as replevin,
injunctive relief, attachment, or appointment of a receiver from a
court having jurisdiction, before, during or after the pendency of any
arbitration proceeding, or (3) to defend or obtain injunctive or other
equitable relief from a court of
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competent jurisdiction against the foregoing or assert mandatory
counterclaims, if any, prior to and during the pendency of a
determination in arbitration of issues of performance, default,
damages and other such claims and disputes.
(b) Arbitration hereunder shall be before a three-person panel
of neutral arbitrators, consisting of one person from each of the
following categories: (1) an attorney who has practiced in the area of
commercial real estate law for at least ten (10) years; (2) a person
with at least ten (10) years' experience in real estate lending; and
(3) a person with at least ten (10) years' experience in the
homebuilding industry. The AAA shall submit a list of persons meeting
the criteria outlined above for each category of arbitrator, and the
parties shall select one person from each category in the manner
established by the AAA.
(c) In any dispute between the parties that is arbitratable
hereunder, where the aggregate of all claims and the aggregate of all
counterclaims is an amount less than Fifty Thousand And No/100ths
Dollars ($50,000), the arbitration shall be before a single neutral
arbitrator to be selected in accordance with the Commercial Rules of
the American Arbitration Association and shall proceed under the
Expedited Procedures of said Rules.
(d) In any arbitration hereunder, the arbitrators shall decide
(by documents only or with a hearing, at the arbitrators' discretion)
any pre-hearing motions which are substantially similar to pre-hearing
motions to dismiss for failure to state a claim or motions for summary
adjudication.
(e) In any arbitration hereunder, discovery shall be permitted
in accordance with the Illinois Code of Civil Procedure. Scheduling of
such discovery may be determined by the arbitrators, and any discovery
disputes shall be finally determined by the arbitrators.
(f) The Illinois rules of evidence shall control the admission
of evidence at the hearing in any arbitration conducted hereunder;
provided, however, no error by the arbitrators in application of the
rules of evidence shall be grounds, as such, for vacating the
arbitrators' award.
(g) Notwithstanding any AAA rule to the contrary, the
arbitration award shall be in writing and shall specify the factual and
legal basis for the award, including findings of fact and conclusions
of law.
(h) Each party shall each bear its own costs and expenses and
an equal share of the arbitrators' costs and administrative fees of
arbitration.
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12.14 CONSENT TO JURISDICTION. BORROWER AND EACH BANK HEREBY
IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF ANY UNITED STATES
FEDERAL OR ILLINOIS STATE COURT SITTING IN CHICAGO, ILLINOIS IN ANY ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO ANY LOAN DOCUMENTS AND BORROWER AND
EACH BANK HEREBY IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR
PROCEEDING MAY BE HEARD AND DETERMINED IN ANY SUCH COURT AND IRREVOCABLY WAIVES
ANY OBJECTION IT MAY NOW OR HEREAFTER HAVE AS TO THE VENUE OF ANY SUCH SUIT,
ACTION OR PROCEEDING BROUGHT IN SUCH A COURT OR THAT SUCH COURT IS AN
INCONVENIENT FORUM. NOTHING IN THIS SECTION 12.14 SHALL LIMIT THE RIGHT OF
ADMINISTRATIVE AGENT OR ANY BANK OR ISSUING BANK TO BRING PROCEEDINGS AGAINST
BORROWER IN THE COURTS OF ANY OTHER JURISDICTION. SUBJECT TO THE PROVISIONS OF
SECTION 12.13, UNLESS PROHIBITED BY LAW, ANY JUDICIAL PROCEEDING BY BORROWER
AGAINST ADMINISTRATIVE AGENT OR ANY BANK OR ISSUING BANK OR ANY AFFILIATE OF
ADMINISTRATIVE AGENT OR ANY BANK OR ISSUING BANK INVOLVING, DIRECTLY OR
INDIRECTLY, ANY MATTER IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH
ANY LOAN DOCUMENT SHALL BE BROUGHT IN A COURT IN CHICAGO, ILLINOIS.
12.15 WAIVER OF JURY TRIAL. SUBJECT TO THE PROVISIONS OF SECTION 12.13,
BORROWER, ADMINISTRATIVE AGENT AND EACH BANK AND ISSUING BANK HEREBY WAIVE TRIAL
BY JURY IN ANY JUDICIAL PROCEEDING INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER
(WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT OF,
RELATED TO, OR CONNECTED WITH ANY LOAN DOCUMENT OR THE RELATIONSHIP ESTABLISHED
THEREUNDER.
12.16 Confidentiality. Each Bank and Administrative Agent agree to use
commercially reasonable efforts to keep confidential any financial reports and
other information from time to time supplied to them by Borrower hereunder to
the extent that such information is not and does not become publicly available
through or with the consent or acquiescence of Borrower, except for disclosure
(i) to Administrative Agent and the other Banks or to a Transferee, (ii) to
legal counsel, accountants, and other professional advisors to a Bank,
Administrative Agent or a Transferee, (iii) to regulatory officials, (iv) to any
Person as required by law, regulation, or legal process, (v) to any Person in
connection with any legal proceeding to which that Bank is a party, and (vi)
permitted by Section 15.4. Any Bank or Administrative Agent disclosing such
information shall use commercially reasonable efforts to advise the Person to
whom such information is disclosed of the foregoing confidentiality agreement
and to direct such Person to comply therewith.
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ARTICLE XIII
ADMINISTRATIVE AGENT
13.1 Appointment. Bank One is hereby appointed Administrative Agent
hereunder and under each other Loan Document, and each of Banks irrevocably
authorizes Administrative Agent to act as the agent of such Bank. Administrative
Agent agrees to act as such upon the express conditions contained in this
Article XIII. Administrative Agent shall not have a fiduciary relationship in
respect of Borrower, any Bank or the Issuing Bank by reason of this Agreement.
13.2 Powers. Administrative Agent shall have and may exercise such
powers under the Loan Documents as are specifically delegated to Administrative
Agent by the terms of each thereof, together with such powers as are reasonably
incidental thereto. Administrative Agent shall have no implied duties to Banks,
or any obligation to Banks to take any action thereunder except any action
specifically provided by the Loan Documents to be taken by Administrative Agent.
Administrative Agent shall have the sole and exclusive right to take any actions
or to give any notices relating to this Agreement pursuant to the Indenture.
13.3 General Immunity. Neither Administrative Agent (in its capacity as
Administrative Agent and not in its capacity as a Bank) nor any of its
directors, officers, agents or employees shall be liable to Borrower or any Bank
for action taken or omitted to be taken by it or them hereunder or under any
other Loan Document or in connection herewith or therewith except for its or
their own gross negligence or willful misconduct.
13.4 No Responsibility for Loans, Recitals, etc. Neither Administrative
Agent nor any of its directors, officers, Administrative Agents or employees
shall be responsible for or have any duty to ascertain, inquire into, or verify
(i) any statement, warranty or representation made in connection with any Loan
Document or any borrowing or any request for the issuance, amendment or
extension of any Facility Letter of Credit hereunder; (ii) the performance or
observance of any of the covenants or agreements of any obligor under any Loan
Document or Reimbursement Agreement, including, without limitation, any
agreement by an obligor to furnish information directly to each Bank; (iii) the
satisfaction of any condition specified in Article IV or V, except receipt of
items required to be delivered to Administrative Agent; or (iv) the validity,
effectiveness or genuineness of any Loan Document (including without limitation
any Reimbursement Agreement) or any other instrument or writing furnished in
connection with any of the foregoing. Administrative Agent shall have no duty to
disclose to Banks information that is not required to be furnished by Borrower
to Administrative Agent at such time, but is voluntarily furnished by Borrower
to Administrative Agent (either in its capacity as Administrative Agent or in
its individual capacity).
13.5 Action on Instructions of Banks. Administrative Agent shall in all
cases be fully protected in acting, or in refraining from acting, hereunder and
under any other Loan Document in accordance with written instructions signed by
the Required Banks (except as otherwise
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provided in Section 11.2), and such instructions and any action taken or failure
to act pursuant thereto shall be binding on all of Banks and on all holders of
Notes. Administrative Agent shall be fully justified in failing or refusing to
take any action hereunder and under any other Loan Document unless it shall
first be indemnified to its satisfaction by Banks pro rata against any and all
liability, cost and expense that it may incur by reason of taking or continuing
to take any such action.
13.6 Employment of Administrative Agents and Counsel. Administrative
Agent may execute any of its duties as Administrative Agent hereunder and under
any other Loan Document by or through employees, agents, and attorneys-in-fact
and shall not be answerable to Banks, except as to money or securities or other
Property received by it or its authorized Administrative Agents, for the default
or misconduct of any such agents or attorneys-in-fact selected by it with
reasonable care. Administrative Agent shall be entitled to advice of counsel
concerning all matters pertaining to the agency hereby created and its duties
hereunder and under any other Loan Document.
13.7 Reliance on Documents; Counsel. Administrative Agent shall be
entitled to rely upon any Note, notice, consent, certificate, affidavit, letter,
telegram, statement, paper or document believed by it to be genuine and correct
and to have been signed or sent by the proper person or persons, and, in respect
to legal matters, upon the opinion of counsel selected by Administrative Agent,
which counsel may be employees of Administrative Agent.
13.8 Administrative Agent's Reimbursement and Indemnification. Banks
agree to reimburse and indemnify Administrative Agent ratably in proportion to
their respective Commitments (i) for any amounts not reimbursed by Borrower for
which Administrative Agent is entitled to reimbursement by Borrower under the
Loan Documents, (ii) for any other expenses incurred by Administrative Agent on
behalf of Banks, in connection with the preparation, execution, delivery,
administration and enforcement of the Loan Documents, and (iii) for any
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind and nature whatsoever which may be
imposed on, incurred by or asserted against Administrative Agent in any way
relating to or arising out of the Loan Documents or any other document delivered
in connection therewith or the transactions contemplated thereby, or the
enforcement of any of the terms thereof or of any such other documents, provided
that no Bank shall be liable for any of the foregoing to the extent they arise
from the gross negligence or willful misconduct of Administrative Agent. The
obligations of Banks under this Section 13.8 shall survive payment of the
Obligations and termination of this Agreement.
13.9 Rights as a Bank or Issuing Bank. In the event Administrative
Agent is a Bank, Administrative Agent shall have the same rights and powers
hereunder and under any other Loan Document as any Bank and may exercise the
same as though it were not Administrative Agent, and the term "Bank" or "Banks"
shall, at any time when Administrative Agent is a Bank, unless the context
otherwise indicates, include Administrative Agent in its individual capacity. In
the event Administrative Agent is an Issuing Bank, Administrative Agent shall
have the rights and
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powers of the Issuing Bank hereunder and may exercise the same as though it were
not Administrative Agent, and the term "Issuing Bank" shall, at any time when
Administrative Agent is the Issuing Bank, unless the context otherwise
indicates, include and mean Administrative Agent in its capacity as the Issuing
Bank. Administrative Agent may accept deposits from, lend money to, and
generally engage in any kind of trust, debt, equity or other transaction, in
addition to those contemplated by this Agreement or any other Loan Document,
with Borrower or any of its Subsidiaries in which Borrower or such Subsidiary is
not restricted hereby from engaging with any other Person.
13.10 Bank Credit Decision. Each Bank acknowledges that it has,
independently and without reliance upon Administrative Agent or any other Bank
and based on the financial statements prepared by Borrower and Guarantors and
such other documents and information as it has deemed appropriate, made its own
credit analysis and decision to enter into this Agreement and the other Loan
Documents. Each Bank also acknowledges that it will, independently and without
reliance upon Administrative Agent or any other Bank and based on such documents
and information as it shall deem appropriate at the time, continue to make its
own credit decisions in taking or not taking action under this Agreement and the
other Loan Documents.
13.11 Successor Administrative Agent. Administrative Agent may resign
at any time by giving written notice thereof to Banks and Borrower, such
resignation to be effective upon the appointment of a successor Administrative
Agent or, if no successor Administrative Agent has been appointed, sixty (60)
days after the retiring Administrative Agent gives notice of its intention to
resign. Administrative Agent may be removed at any time with or without cause by
written notice received by Administrative Agent from the Required Banks, such
removal to be effective on the date specified by such Banks. The consent of
Borrower shall be required prior to any removal of Administrative Agent becoming
effective; provided, however, that if an Event of Default has occurred and is
continuing, the consent of Borrower shall not be required. Upon any such
resignation or removal, the Required Banks shall have the right to appoint, on
behalf of a Borrower and Banks, a successor Administrative Agent. Any Bank can
be a successor Administrative Agent upon the approval of the Required Banks. Any
other successor Administrative Agent shall be appointed only with the prior
reasonable consent of Borrower. If no successor Administrative Agent shall have
been so appointed by the Required Banks within forty-five (45) days after the
resigning Administrative Agent's giving notice of its intention to resign, then
the resigning Administrative Agent may appoint, on behalf of Borrower and Banks,
a successor Administrative Agent.
If Administrative Agent has resigned or been removed and no successor
Administrative Agent has been appointed, Banks may perform all the duties of
Administrative Agent hereunder and Borrower shall make all payments in respect
of the Obligations to the applicable Bank and for all other purposes shall deal
directly with Banks. No successor Administrative Agent shall be deemed to be
appointed hereunder until such successor Administrative Agent has accepted the
appointment. Any such successor Administrative Agent shall be a commercial bank
or federal savings bank having capital and retained earnings of at least
$50,000,000. Upon the acceptance
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of any appointment as Administrative Agent hereunder by a successor
Administrative Agent, such successor Administrative Agent shall thereupon
succeed to and become vested with all the rights, powers, privileges and duties
of the resigning or removed Administrative Agent. Upon the effectiveness of the
resignation or removal of Administrative Agent, the resigning or removed
Administrative Agent shall be discharged from its duties and obligations
hereunder and under the Loan Documents. After the effectiveness of the
resignation or removal of an Administrative Agent, the provisions of this
Article XIII shall continue in effect for the benefit of such Administrative
Agent in respect of any actions taken or omitted to be taken by it while it was
acting as the Administrative Agent hereunder and under the Loan Documents.
13.12 Administrative Agent's Fee. Borrower agrees to pay to
Administrative Agent, for its own account, the fees agreed to by Borrower and
Administrative Agent pursuant to that certain letter agreement of dated July 16,
1999, or as otherwise agreed from time to time.
ARTICLE XIV
RATABLE PAYMENTS
14.1 Ratable Payments. If any Bank (whether by common law right of
setoff or otherwise) has payment made to it upon its Loans (other than payments
received pursuant to Sections 3.1, 3.2 or 3.4) in a greater proportion than that
received by any other Bank, such Bank agrees, promptly upon demand, to purchase
a portion of the Loans held by the other Banks so that after such purchase each
Bank will hold its ratable proportion of Loans. If any Bank, whether in
connection with common law right of setoff or amounts which might be subject to
common law right of setoff or otherwise, receives collateral or other protection
for its Obligations or such amounts which may be subject to setoff, such Bank
agrees, promptly upon demand, to take such action necessary such that all Banks
share in the benefits of such collateral ratably in proportion to their Loans.
In case any such payment is prevented, restricted or otherwise impeded by legal
process, or otherwise, appropriate further adjustments shall be made.
ARTICLE XV
BENEFIT OF AGREEMENT, ASSIGNMENTS; PARTICIPATIONS
15.1 Successors and Assigns. The terms and provisions of the Loan
Documents shall be binding upon and inure to the benefit of Borrower,
Administrative Agent, Banks and the Issuing Bank and their respective successors
and assigns, except that (i) Borrower shall not have the right to assign its
rights or obligations under the Loan Documents (except as otherwise permitted
under Section 8.3), and (ii) any assignment by any Bank must be made in
compliance with Section 15.3. Notwithstanding clause (ii) of this Section, any
Bank may at any time, without the consent of Borrower or Administrative Agent,
assign all or any portion of its rights under this Agreement and its Notes to a
Federal Reserve Bank; provided, however, that no such assignment shall release
the transferor Bank from its obligations hereunder. Administrative Agent may
treat the payee of any
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Note as the owner thereof for all purposes hereof unless and until such payee
complies with Section 15.3 in the case of an assignment thereof or, in the case
of any other transfer, a written notice of the transfer is filed with
Administrative Agent. Any assignee or transferee of a Note agrees by acceptance
thereof to be bound by all the terms and provisions of the Loan Documents. Any
request, authority or consent of any Person, who at the time of making such
request or giving such authority or consent is the holder of any Note, shall be
conclusive and binding on any subsequent holder, transferee or assignee of such
Note or of any Note or Notes issued in exchange therefor.
15.2 Participations.
15.2.1 Permitted Participants; Effect. Any Bank may, in the
ordinary course of its business and in accordance with applicable law, at any
time sell to one or more banks or other Persons that are not, and that are not
Affiliates of a Person, in the home building business ("Participants")
participating interests in any Loan owing to such Bank, any Note held by such
Bank, any Commitment of such Bank or any other interest of such Bank under the
Loan Documents in an amount of not less than $2,000,000. In the event of any
such sale by a Bank of participating interests to a Participant, such Bank's
obligations under the Loan Documents shall remain unchanged, such Bank shall
remain solely responsible to the other parties hereto for the performance of
such obligations, such Bank shall remain the holder of any such Note for all
purposes under the Loan Documents, all amounts payable by Borrower under this
Agreement shall be determined as if such Bank has not sold such participating
interests, and Borrower, Administrative Agent and the Issuing Bank shall
continue to deal solely and directly with such Bank in connection with such
Bank's rights and obligations under the Loan Documents.
15.2.2 Voting Rights. Each Bank shall retain the sole right to
approve, and/or grant its consent to, without the consent of any Participant,
any amendment, modification or waiver or other matter relating to any provision
of the Loan Documents.
15.2.3 Waiver of Setoff. Each Participant shall be deemed to
have waived any and all rights of setoff, including any common law right of
setoff, in respect of its participating interest in amounts owing under the Loan
Documents.
15.3 Assignments.
15.3.1 Permitted Assignments. Any Bank may, in the ordinary
course of its business and in accordance with applicable law, at any time assign
to one or more banks or other financial institutions that are not, and that are
not Affiliates of a Person, in the home building business ("Purchasers") all or
any part of its rights and obligations under the Loan Documents in the amount of
not less than $10,000,000, provided that each such assignment shall be of a
constant, and not a varying, percentage of the assigning Bank's rights and
obligations under the Loan Documents; and provided further, that immediately
following such assignment, the assigning Bank either (i) shall retain a
Commitment of not less than one-half (1/2) of the amount of such
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assigning Bank's initial Commitment as set forth on the signature pages of this
Agreement (or, if such assigning Bank initially became a party by assignment,
the amount of the Commitment initially assigned to it, or (ii) shall have
assigned all of its Commitment and have no remaining interest in the
Obligations. Such assignment shall be substantially in the form of Exhibit I
hereto or in such other form as may be agreed to by the parties thereto. The
consent of Borrower and Administrative Agent shall be required prior to an
assignment becoming effective; provided, however, that if an Event of Default
has occurred and is continuing, the consent of Borrower shall not be required.
15.3.2 Effect; Effective Date. Upon (i) delivery to
Administrative Agent of a notice of assignment, substantially in the form
attached as Exhibit "1" to Exhibit I hereto (a "Notice of Assignment"), together
with any consents required by Section 15.3.1, and (ii) payment by the Bank of a
$5,000 fee to Administrative Agent for processing such assignment, such
assignment shall become effective on the effective date specified in such Notice
of Assignment. The Notice of Assignment shall contain a representation by the
Purchaser to the effect that none of the consideration used to make the purchase
of the Commitment and Loans under the applicable assignment agreement are "plan
assets" as defined under ERISA and that the rights and interests of the
Purchaser in and under the Loan Documents will not be "plan assets" under ERISA.
On and after the effective date of such assignment, such Purchaser
shall for all purposes be a Bank party to this Agreement and any other Loan
Document executed by Banks and shall have all the rights and obligations of a
Bank under the Loan Documents, to the same extent as if it were an original
party hereto, and no further consent or action by Borrower, Banks or
Administrative Agent shall be required to release the transferor Bank with
respect to the percentage of the Aggregate Commitment and Loans assigned to such
Purchaser. Upon the consummation of any assignment to a Purchaser pursuant to
this Section 15.3.2, the transferor Bank, Administrative Agent and Borrower
shall make appropriate arrangements so that replacement Notes are issued to such
transferor Bank and new Notes or, as appropriate, replacement Notes, are issued
to such Purchaser, in each case in principal amounts reflecting their
Commitment, as adjusted pursuant to such assignment.
15.4 Dissemination of Information. Borrower authorizes each Bank to
disclose to any Participant or Purchaser or any other Person acquiring an
interest in the Loan Documents by operation of law (each a "Transferee") and any
prospective Transferee any and all non-public information in such Bank's
possession concerning the creditworthiness of Borrower, Guarantors and their
Subsidiaries; provided that each Transferee and prospective Transferee agrees to
be bound by Section 12.16 of this Agreement.
15.5 Tax Treatment. If any interest in any Loan Document is transferred
to any Transferee which is organized under the laws of any jurisdiction other
than the United States or any State thereof, the transferor Bank shall cause
such Transferee, concurrently with the effectiveness of such transfer, to comply
with the provisions of Section 2.19.
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ARTICLE XVI
NOTICES
16.1 Giving Notice. Except as otherwise permitted by Section 2.14 with
respect to borrowing notices, all notices and other communications provided to
any party hereto under this Agreement or any other Loan Document shall be in
writing or by telex or by facsimile and addressed or delivered to such party at
its address set forth below its signature hereto or at such other address as may
be designated by such party in a notice to the other parties. Any notice, if
mailed and properly addressed with postage prepaid, shall be deemed given when
received; any notice, if transmitted by telex or facsimile, shall be deemed
given when transmitted (answerback confirmed in the case of telexes).
16.2 Change of Address. Borrower, Administrative Agent, any Bank and
the Issuing Bank may each change the address for service of notice upon it by a
notice in writing to the other parties hereto.
ARTICLE XVII
COUNTERPARTS
This Agreement may be executed in any number of counterparts, all of
which taken together shall constitute one agreement, and any of the parties
hereto may execute this Agreement by signing any such counterpart. This
Agreement shall be effective when it has been executed by Borrower,
Administrative Agent, and all Banks and each party has notified Administrative
Agent by telex or telephone, that it has taken such action.
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IN WITNESS WHEREOF, Borrower, Banks, and Administrative Agent have
executed this Agreement as of the date first above written.
BORROWER:
M.D.C. HOLDINGS, INC.,
a Delaware corporation
By: /s/ John J. Heaney
-----------------------------------------
Name: John J. Heaney, Senior Vice President
3600 South Yosemite, Suite 900
Denver, Colorado 80237
Attention: John J. Heaney
Commitments BANKS:
$75,000,000.00 BANK ONE, NA, Individually
as Administrative Agent and Issuing Bank
By: /s/ F. Patt Schiewitz
-----------------------------------------
Name: F. Patt Schiewitz, Managing Director
1 Bank One Plaza
Chicago, Illinois 60670
Attention: Chris Flynn
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$75,000,000.00 BANK UNITED OF TEXAS FSB, a federal
savings bank
By: /s/ Thomas S. Griffin
----------------------------------------
Name: Thomas S. Griffin, Vice President
5963 LaPlace Court
Suite 205
Carlsbad, California 92008
Attention: Thomas S. Griffin
$50,000,000.00 KEYBANK NATIONAL ASSOCIATION, a national
banking association
By: /s/ Paul Holden VP
-----------------------------------------
Name: Paul Holden
Title:
Southeast Branch
3600 South Yosemite Street
Suite 210
Denver, Colorado 80237
Attention: Paul Holden
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$35,000,000.00 GUARANTY FEDERAL BANK, F.S.B.
By: /s/ Randy Reid
-----------------------------------------
Name: Randy Reid,
Vice President
8333 Douglas Avenue
10th Floor
Dallas, Texas 75225
Attention: Randy Reid
$25,000,000.00 SANWA BANK CALIFORNIA, a California
corporation
By: /s/ Kurt Mair
-----------------------------------------
Name: Kurt Mair,
Assistant Vice President
4041 MacArthur Boulevard, Suite 100
Newport Beach, California 92660
Attention: Kurt Mair
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$25,000,000.00 AMSOUTH BANK, an Alabama banking
corporation
By: /s/ Ronny Hudspeth
-----------------------------------------
Name: Ronny Hudspeth,
Senior Vice President
Sonat Tower
1900 Fifth Avenue, North, 9th Floor
Birmingham, Alabama 35203
$15,000,000.00 COMERICA BANK, a Michigan corporation
By: /s/ Scott Helmer
-----------------------------------------
Name: Scott Helmer,
Vice President
500 Woodward Avenue, M/C 3256
Detroit, Michigan 48226
Attention: Scott Helmer
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PRIOR ISSUING BANK:
BANK ONE, ARIZONA, N.A.
By: /s/ F. Patt Schiewitz
-----------------------------------------
Name: F. Patt Schiewitz
1 Bank One Plaza
Chicago, IL 60670
Attention: Chris Flynn
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LIST OF SCHEDULES AND EXHIBITS
EXHIBITS:
Exhibit A Form of Guaranty
Exhibit B Form of Note
Exhibit C Form of Commitment and Acceptance
Exhibit D Form of Borrowing Notice
Exhibit E Form of Opinion of Haligman Lottner Rubin & Fishman, P.C.
Exhibit F Form of Opinion of General Counsel
Exhibit G Form of Contribution Agreement
Exhibit H Form of Compliance Certificate of Authorized Officer (Financial
Covenant Tests)
Exhibit I Form of Assignment (with Form of Notice of Assignment attached)
SCHEDULES:
Schedule 1 Non-Guarantor Subsidiaries
Schedule 4.4 Existing Letters of Credit
Schedule 6.3 Required Orders, Consents and Approvals
Schedule 6.8 Subsidiaries
Schedule 8.2 Existing Indebtedness
Schedule 8.6 Existing Liens