$300,000,000 REVOLVING CREDIT FACILITY
AMENDED AND RESTATED REVOLVING LOAN AGREEMENT
among
DEL WEBB CORPORATION,
THE BANKS NAMED HEREIN,
BANK OF AMERICA NATIONAL
TRUST AND SAVINGS ASSOCIATION, as Agent,
and
BANK ONE, ARIZONA, NA, as Co-Agent
Dated as of June 27, 1995
TABLE OF CONTENTS
Page
----
Article 1 DEFINITIONS AND ACCOUNTING TERMS............................... 1
1.1 Defined Terms.................................................. 1
1.2 Use of Defined Terms........................................... 22
1.3 Accounting Terms............................................... 23
1.4 Rounding....................................................... 23
1.5 Exhibits and Schedules......................................... 23
1.6 References to "Borrower and its Subsidiaries".................. 23
1.7 Miscellaneous Terms............................................ 23
Article 2 LOANS.......................................................... 24
2.1 Loans-General.................................................. 24
2.2 Reference Rate Loans........................................... 25
2.3 Eurodollar Rate Loans.......................................... 25
2.4 Voluntary Reduction of Commitments............................. 26
2.5 Automatic Reduction of Commitments............................. 26
2.6 Optional Termination of Commitments............................ 26
2.7 Automatic Termination of Commitments........................... 26
2.8 Agent's Right to Assume Funds Available for Advances........... 26
2.9 Adjusting Purchase Payments.................................... 27
2.10 Substitute Credit Facility..................................... 27
2.11 Senior Debt.................................................... 27
2.12 Letters of Credit.............................................. 27
Article 3 PAYMENTS AND FEES.............................................. 32
3.1 Principal and Interest......................................... 32
3.2 Arrangement, Agency and Co-Agency Fees......................... 33
3.3 Underwriting Fee............................................... 33
3.4 Facility and Commitment Fees................................... 33
3.5 Increased Commitment Costs..................................... 34
3.6 Eurodollar Costs and Related Matters........................... 34
3.7 Late Payments.................................................. 37
3.8 Computation of Interest and Fees............................... 37
3.9 Non-Banking Days............................................... 38
3.10 Manner and Treatment of Payments............................... 38
3.11 Funding Sources................................................ 39
3.12 Failure to Charge Not Subsequent Waiver........................ 39
3.13 Agent's Right to Assume Payments Will be Made by Borrower...... 39
3.14 Fee Determination Detail....................................... 39
3.15 Survivability.................................................. 39
3.16 Accruals Under Original Loan Documents......................... 39
Article 4 REPRESENTATIONS AND WARRANTIES................................. 41
4.1 Existence and Qualification; Power; Compliance With Laws....... 41
4.2 Authority; Compliance With Other Agreements and Instruments
and Government Regulations..................................... 41
4.3 No Governmental Approvals Required............................. 42
4.4 Subsidiaries................................................... 42
4.5 Financial Statements........................................... 42
4.6 No Other Liabilities; No Material Adverse Changes.............. 43
4.7 Title to Property.............................................. 43
4.8 Intangible Assets.............................................. 43
4.9 Public Utility Holding Company Act............................. 43
4.10 Litigation..................................................... 43
4.11 Binding Obligations............................................ 43
4.12 No Default..................................................... 44
4.13 ERISA.......................................................... 44
4.14 Regulations G, T, U and X; Investment Company Act.............. 44
4.15 Disclosure..................................................... 44
4.16 Tax Liability.................................................. 44
4.17 Strategic Plan................................................. 45
4.18 Hazardous Materials............................................ 45
Article 5 AFFIRMATIVE COVENANTS (OTHER THAN INFORMATION AND
REPORTING REQUIREMENTS)........................................ 46
5.1 Payment of Taxes and Other Potential Liens..................... 46
5.2 Preservation of Existence...................................... 46
5.3 Maintenance of Properties...................................... 46
5.4 Maintenance of Insurance....................................... 46
5.5 Compliance With Laws........................................... 47
5.6 Inspection Rights.............................................. 47
5.7 Keeping of Records and Books of Account........................ 47
5.8 Compliance With Agreements..................................... 47
5.9 Use of Proceeds................................................ 47
5.10 New Guarantor Subsidiaries; Release of Certain Guaranties...... 47
5.11 Hazardous Materials Laws....................................... 47
5.12 Termination of GFB L/C......................................... 48
Article 6 NEGATIVE COVENANTS............................................. 49
6.1 Prepayment of Indebtedness..................................... 49
6.2 Payment of Subordinated Obligations............................ 49
6.3 Mergers and Sale of Assets..................................... 49
6.4 Hostile Tender Offers.......................................... 50
6.5 Distributions.................................................. 50
6.6 ERISA.......................................................... 50
6.7 Change in Nature of Business................................... 51
6.8 Liens.......................................................... 51
6.9 Indebtedness................................................... 52
6.10 Transactions with Affiliates................................... 53
6.11 Tangible Net Worth............................................. 53
6.12 Consolidated Fixed Charge Coverage............................. 53
6.13 Debt to Net Worth.............................................. 53
6.14 Adjusted Senior Debt to Net Worth.............................. 54
6.15 Liquidity...................................................... 54
6.16 Investments.................................................... 54
6.17 Unentitled Land................................................ 55
6.18 Unsold Homes in Production..................................... 55
6.19 Exempt Subsidiaries............................................ 56
6.20 Coventry Assets................................................ 56
Article 7 INFORMATION AND REPORTING REQUIREMENTS......................... 57
7.1 Financial and Business Information............................. 57
7.2 Compliance Certificates........................................ 59
Article 8 CONDITIONS..................................................... 60
8.1 Initial Advances, Etc.......................................... 60
8.2 Any Increasing Advance......................................... 61
8.3 Any Advance.................................................... 62
8.4 Return of Original Notes....................................... 62
Article 9 EVENTS OF DEFAULT AND REMEDIES UPON EVENT OF DEFAULT........... 63
9.1 Events of Default.............................................. 63
9.2 Remedies Upon Event of Default................................. 65
Article 10 THE AGENT...................................................... 67
10.1 Appointment and Authorization.................................. 67
10.2 Agent and Affiliates........................................... 67
10.3 Proportionate Interest in any Collateral....................... 67
10.4 Banks' Credit Decisions........................................ 67
10.5 Action by Agent................................................ 68
10.6 Liability of Agent............................................. 68
10.7 Indemnification................................................ 69
10.8 Successor Agent................................................ 70
10.9 No Obligations of Borrower..................................... 70
Article 11 MISCELLANEOUS.................................................. 71
11.1 Cumulative Remedies; No Waiver................................. 71
11.2 Amendments; Consents........................................... 71
11.3 Costs, Expenses and Taxes...................................... 71
11.4 Nature of Banks' Obligations................................... 72
11.5 Survival of Representations and Warranties..................... 73
11.6 Notices........................................................ 73
11.7 Execution of Loan Documents.................................... 73
11.8 Binding Effect; Assignment..................................... 73
11.9 Sharing of Setoffs............................................. 75
11.10 Indemnity by Borrower.......................................... 75
11.11 Nonliability of the Banks...................................... 76
11.12 No Third Parties Benefited..................................... 77
11.13 Further Assurances............................................. 77
11.14 Integration.................................................... 77
11.15 Governing Law.................................................. 78
11.16 Severability of Provisions..................................... 78
11.17 Headings....................................................... 78
11.18 Time of the Essence............................................ 78
11.19 Foreign Banks.................................................. 78
11.20 Hazardous Material Indemnity................................... 78
11.21 Reference to Arbitration....................................... 79
11.22 Confidentiality................................................ 80
11.23 Co-Agent....................................................... 80
AMENDED AND RESTATED REVOLVING LOAN AGREEMENT
Dated as of June 27, 1995
This AMENDED AND RESTATED REVOLVING LOAN AGREEMENT ("Agreement")
is entered into by and among Del Webb Corporation, a Delaware corporation
("Borrower"), each bank whose name is set forth on the signature pages of this
Agreement and each lender which may hereafter become a party to this Agreement
pursuant to Section 11.8 (collectively, the "Banks" and individually, a "Bank"),
Bank of America National Trust and Savings Association, a national banking
association, as Agent (the "Agent") and Bank One, Arizona, NA, as Co-Agent (the
"Co-Agent").
This Agreement is intended by the parties hereto as an amendment
and restatement of the Original Loan Agreement as of the effective date of this
Agreement. Amounts outstanding and committed under the Original Loan Agreement
and evidenced by the Original Notes shall, upon the effectiveness of this
Agreement, be deemed to be outstanding and committed hereunder and evidenced by
the Notes, subject, however, to all terms and conditions hereunder and under the
other Loan Documents, including without limitation the allocation of the
Commitments among the Banks as provided herein.
In consideration of the mutual covenants and agreements herein
contained, the parties hereto covenant and agree as follows:
Article 1
DEFINITIONS AND ACCOUNTING TERMS
--------------------------------
1.1 Defined Terms. As used in this Agreement, the following terms
shall have the meanings set forth below:
"Adjusted Commitments" means the Commitments as reduced by the
Commitment Reduction Amount on the Commitment Reduction Date.
"Adjusted Senior Debt" means, as of any date of determination,
Senior Debt as of that date minus (to the extent included in Senior Debt,
and without duplication) Non-Recourse Debt as of that date.
"Adjusted Total Indebtedness" means, as of any date of
determination, Total Indebtedness as of that date minus the aggregate
outstanding principal balance (but not in excess of $20,000,000) of
Non-Recourse Debt for wihich a corresponding Lien is permitted pursuant
to Section 6.8(d).
"Adjusting Purchase Payment(s)" has the meaning given that term in
Section 2.9.
"Advance" means any advance made or to be made by any Bank to
Borrower as provided in Article 2, and includes each Reference Rate
Advance and Eurodollar Rate Advance.
"Affiliate" means, as to any Person, any other Person which
directly or indirectly controls, or is under common control with, or is
controlled by, such Person. As used in this definition, "control" (and
the correlative terms, "controlled by" and "under common control with")
shall mean possession, directly or indirectly, of power to direct or
cause the direction of management or policies (whether through ownership
of securities or partnership or other ownership interests, by contract or
otherwise); provided that, in any event, any Person that owns, directly
or indirectly, 10% or more of the securities having ordinary voting power
for the election of directors or other governing body of a corporation
that has more than 100 record holders of such securities, or 10% or more
of the partnership or other ownership interests of any other Person that
has more than 100 record holders of such interests, will be deemed to
control such corporation or other Person.
"Agent" means Bank of America National Trust and Savings
Association, when acting in its capacity as the Agent under any of the
Loan Documents, or any successor Agent.
"Agent's Office" means the Agent's address as set forth on the
signature pages of this Agreement, or such other address as the Agent
hereafter may designate by written notice to Borrower and the Banks.
"Aggregate Effective Amount" means, as of any date of
determination, the sum of (a) the aggregate drawable face amount of all
Letters of Credit then outstanding plus (b) the aggregate amount paid by
the Issuing Bank under Letters of Credit that has not yet been reimbursed
to the Issuing Bank by Borrower pursuant to Section 2.12(d) or by way of
Advances made pursuant to Section 2.12(e).
"Agreement" means this Amended and Restated Revolving Loan
Agreement, either as originally executed or as it may from time to time
be supplemented, modified, amended, restated or extended.
"Bank of America" means Bank of America National Trust and Savings
Association.
"Banking Day" means any Monday, Tuesday, Wednesday, Thursday or
Friday, other than a day on which banks are authorized or required to be
closed in Arizona, California, Massachusetts, New York, Texas or North
Carolina.
"Borrower" means Del Webb Corporation, a Delaware corporation, and
its successors and permitted assigns.
"Cancelled Debt Facilities" means the debt instruments and/or
credit facilities identified on Schedule 1.1.
"Capital Expenditure" means any expenditure that is considered a
capital expenditure under Generally Accepted Accounting Principles,
including any amount which is required to be treated as an asset subject
to a Capital Lease Obligation.
"Capital Lease Obligations" means all monetary obligations of a
Person under any leasing or similar arrangement which, in accordance with
Generally Accepted Accounting Principles, is classified as a capital
lease.
"Cash" means, when used in connection with any Person, all
monetary and non-monetary items owned by that Person that are treated as
cash in accordance with Generally Accepted Accounting Principles,
consistently applied.
"Cash Equivalents" means, when used in connection with any Person,
that Person's Investments in:
(a) Government Securities due within one year after the date of
the making of the Investment;
(b) readily marketable direct obligations of any State of the
United States of America given on the date of such Investment a credit
rating of at least Aa by Moody's Investors Service, Inc. or AA by
Standard & Poor's Ratings Group, in each case due within one year from
the making of the Investment;
(c) certificates of deposit issued by, bank deposits in,
Eurodollar deposits through, bankers' acceptances of, and repurchase
agreements covering Government Securities executed by, any bank
incorporated under the Laws of the United States of America or any State
thereof and having on the date of such Investment combined capital,
surplus and undivided profits of at least $250,000,000, or total assets
of at least $5,000,000,000, in each case due within one year after the
date of the making of the Investment;
(d) certificates of deposit issued by, bank deposits in,
Eurodollar deposits through, bankers' acceptances of, and repurchase
agreements covering Government Securities executed by, any branch or
office located in the United States of America of a bank incorporated
under the Laws of any jurisdiction outside the United States of America
having on the date of such Investment combined capital, surplus and
undivided profits of at least $500,000,000, or total assets of at least
$15,000,000,000 in each case due within one year after the date of the
making of the Investment;
(e) repurchase agreements covering Government Securities executed
by a broker or dealer registered under Section 15(b) of the Securities
Exchange Act of 1934, as amended, having on the date of the Investment
capital of at least $100,000,000, due within 30 days after the date of
the making of the Investment; provided that the maker of the Investment
receives written confirmation of the transfer to it of record ownership
of the Government Securities on the books of a registered broker or
dealer, as soon as practicable after the making of the Investment;
(f) readily marketable commercial paper of corporations doing
business in and incorporated under the Laws of the United States of
America or any State thereof or of any corporation that is the holding
company for a bank described in clauses (c) or (d) above given on the
date of such Investment a credit rating of at least P-1 by Moody's
Investors Service, Inc. or A-1 by Standard & Poor's Ratings Group, in
each case due within 90 days after the date of the making of the
Investment;
(g) "money market preferred stock" issued by a corporation
incorporated under the Laws of the United States of America or any State
thereof given on the date of such Investment a credit rating of at least
Aa by Moody's Investors Service, Inc. and AA by Standard & Poor's Ratings
Group, in each case having an investment period not exceeding 50 days;
provided that (i) the amount of all such Investments issued by the same
issuer does not exceed $5,000,000 and (ii) the aggregate amount of all
such Investments does not exceed $15,000,000; and
(h) a readily redeemable "money market mutual fund" sponsored by a
bank described in clauses (c) or (d) hereof, or a registered broker or
dealer described in clause (e) hereof, that has and maintains an
investment policy limiting its investments primarily to instruments of
the types described in clauses (a) through (g) hereof and having on the
date of such Investment total assets of at least $1,000,000,000.
"Cash Land Acquisition Costs" means, for any fiscal period, cash
paid by Borrower and its Subsidiaries for land acquisitions during such
fiscal period, calculated in a manner consistent with that used in the
calculation of "Land acquisitions" as shown under the heading
"Reconciliation of net earnings to net cash used for operating
activities" in the financial statements delivered to Banks for the Fiscal
Quarter ending September 30, 1993.
"Certificate of a Responsible Official" means a certificate signed
by a Responsible Official of the Person providing the certificate.
"Change in Control" means any transaction or series of related
transactions (a) in which any Unrelated Person or two or more Unrelated
Persons acting in concert acquire beneficial ownership (within the
meaning of Rule 13d-3(a)(1) under the Securities Exchange Act of 1934, as
amended), directly or indirectly, of 50% or more of the Common Stock, (b)
in which any such Unrelated Person or Unrelated Persons acting in concert
acquire the concurrent beneficial ownership of 20% or more of the Common
Stock subsequent to the Closing Date if, while they continue to hold such
20% ownership, (i) at the first election for the board of directors of
Borrower subsequent to such acquisition, individuals who prior to such
election were directors of Borrower cease for any reason (other than
death or incapacity) to constitute 50% or more of the board of directors
of Borrower or (ii) if the terms of all directors of Borrower do not
expire at the date of such first election, then at the second election
for the board of directors of Borrower subsequent to such acquisition,
individuals who prior to such first election were directors of Borrower
cease for any reason (other than death or incapacity) to constitute 50%
or more of the board of directors of Borrower or (c) constituting a
"change in control" or other similar occurrence under documentation
evidencing or governing any Indebtedness of Borrower of $25,000,000 or
more which results in an obligation of Borrower to prepay, purchase,
offer to purchase, redeem or defease such Indebtedness. For purposes of
the foregoing, the term "Unrelated Person" means any Person other than
(a) a Subsidiary of Borrower or (b) an employee stock ownership plan or
other employee benefit plan covering the employees of Borrower and its
Subsidiaries.
"Closing Date" means the time and Banking Day on which the
conditions set forth in Section 8.1 are satisfied or waived. The Agent
shall notify Borrower and the Banks of the date that is the Closing Date.
"Co-Agent" means Bank One, Arizona, NA, when acting in its
capacity as the Co-Agent under any of the Loan Documents, or any
successor Co-Agent.
"Code" means the Internal Revenue Code of 1986, as amended or
replaced and as in effect from time to time.
"Commitments" means, collectively, the Line A Commitment and the
Line B Commitment. The respective Pro Rata Shares of the Banks with
respect to the Commitments are set forth in Schedule 1.2.
"Commitment Assignment and Acceptance" means a commitment
assignment and acceptance substantially in the form of Exhibit A.
"Commitment Reduction Amount" means the amount, determined as of
the Commitment Reduction Date, equal to the Commitments on that day minus
the sum of (a) the aggregate principal amount outstanding under the Notes
on that day plus (b) the maximum additional principal amount, if any,
that Borrower would be eligible to borrow hereunder on that day in
accordance with the provisions of Section 8.2.
"Commitment Reduction Date" means June 30, 1997.
"Common Stock" means the common stock of Borrower or its successor
by merger.
"Compliance Certificate" means a certificate in the form of
Exhibit B (or such modified form as the Agent may reasonably request),
properly completed and signed by a Senior Officer of Borrower.
"Consolidated Fixed Charge Coverage Ratio" means, with respect to
any date of determination, the least of such value (a) as calculated in
the manner specified for such term in the Indenture for the Public Senior
Debt, (b) as calculated in the manner specified for such term in the
Indenture for the Public 9-3/4% Senior Subordinated Debt and (c) as
calculated in the manner specified for such term in the Indenture for the
Public 9.00% Senior Subordinated Debt. In each case, such calculation
shall be made in accordance with the terms of such indenture as were
effective on the date of the certification specified in Section 8.1(a)(6)
of the Original Loan Agreement. Should the manner of any such calculation
become subject to dispute between Borrower and the Banks due to questions
of interpretation of such indenture and the incorporation of such terms
herein, the reasonable interpretation of the manner of calculation made
by the Banks shall be binding on the parties with respect to Sections
8.2(c) and 8.2(d) unless and until the Agent shall have received written
advice from the then current independent auditors of Borrower, in form
reasonably acceptable to the Agent, stating their opinion as to the
calculation of such amount.
"Consolidated Total Assets" means, as of any date of
determination, the amount of the consolidated total assets that should be
reflected as such on a consolidated balance sheet of Borrower and its
Subsidiaries on that date, prepared in accordance with Generally Accepted
Accounting Principles, plus any amount by which such assets may have
theretofore been written down to reflect a perceived decrease in market
value other than customary depreciation or amortization.
"Contractual Obligation" means, as to any Person, any provision of
any outstanding security issued by that Person or of any material
agreement, instrument or undertaking to which that Person is a party or
by which it or any of its Property is bound.
"Coventry Assets" means, as of any date of determination, the
amount of the total assets that should be reflected on a consolidated
balance sheet prepared solely for the Coventry Subsidiaries on that date,
prepared in accordance with Generally Accepted Accounting Principles,
plus any amount by which such assets may have theretofore been written
down to reflect a perceived decrease in market value other than customary
depreciation or amortization.
"Coventry Homes Projects" means, as of any date of determination,
all land purchase and home building projects of the Coventry Subsidiaries
on that date.
"Coventry Land Assets" means, as of any date of determination, the
amount of the Land Assets that should be reflected on a consolidated
balance sheet prepared solely for the Coventry Subsidiaries on that date,
prepared in accordance with Generally Accepted Accounting Principles,
plus any amount by which such assets may have theretofore been written
down to reflect a perceived decrease in market value other than customary
depreciation or amortization.
"Coventry Subsidiaries" means Del Webb's Coventry Homes, Inc., Del
Webb Homes, Inc. and Coventry of California, Inc., and their Subsidiaries
from time to time which, on the date of this Agreement, are Del Webb's
Coventry Homes Construction of Tucson Co., Del Webb's Coventry Homes of
Tucson, Inc., Del Webb's Coventry Homes Construction Co., Trovas Company
and Trovas Construction Co. Each Subsidiary of any Coventry Subsidiary
from time to time shall be a Coventry Subsidiary.
"Current Operating Projects" means collectively (a) Del Webb
Construction, Inc.'s, Del E. Webb Development Co., L.P.'s and Del Webb
Communities, Inc.'s approximately 6,575 acre residential community
development located near Phoenix, Arizona and commonly known as Sun City
West, (b) Del Webb Communities, Inc.'s approximately 1,000 acre
residential community development located near Tucson, Arizona and
commonly known as Sun City Tucson, (c) Del Webb Communities, Inc.'s
approximately 1,892 acre residential community development located near
Las Vegas, Nevada and commonly known as Sun City Las Vegas, (d) Del Webb
California Corp.'s approximately 1,574 acre residential community
development located near Palm Springs, California and commonly known as
Sun City Palm Springs, (e) the Coventry Homes Projects, (f) Terravita
Corp.'s and Terravita Homes Construction Co.'s approximately 803 acre
master planned residential land development located in Scottsdale,
Arizona, (g) Del E. Webb Foothill Corp.'s approximately 4,140 acre land
development project located in Phoenix, Arizona, (h) Del Webb California
Corp.'s approximately 1,200 acre residential community development
located in Roseville, California and commonly known as Sun City
Roseville, (i) Del Webb Home Construction Inc.'s approximately 4,000 acre
(including interests in acres) residential community development located
in Surprise, Arizona and commonly known as Sun City Grand, (j) Del E.
Webb Development Co., L.P.'s approximately 5,300 acre residential
community development located near Austin, Texas and commonly known as
Sun City Georgetown, (k) Del Webb Communities, Inc.'s approximately 560
acre residential community development located in Henderson, Nevada and
commonly known as Sun City MacDonald Ranch and (l) Del Webb Communities,
Inc.'s approximately 5,500 acre residential community development located
ead Island, South Carolina and commonly known as Sun City Hilton Head.
"Current Operating Projects" shall mean such projects as they may be
altered or expanded from time to time provided that any such expansion is
on substantially adjacent real property and is operated as part of a
single project.
"Debtor Relief Laws" means the Bankruptcy Code of the United
States of America, as amended from time to time, and all other applicable
liquidation, conservatorship, bankruptcy, moratorium, rearrangement,
receivership, insolvency, reorganization, or similar debtor relief Laws
from time to time in effect affecting the rights of creditors generally.
"Default" means any event that, with the giving of any applicable
notice or passage of time specified in Section 9.1, or both, would be an
Event of Default.
"Default Rate" means the interest rate prescribed in Section 3.7.
"Designated Deposit Account" means a deposit account to be
maintained by Borrower with Bank of America, as from time to time
designated by Borrower by written notification to Bank of America.
"Designated Eurodollar Market" means, with respect to any
Eurodollar Rate Loan, (a) the London Eurodollar Market, or (b) if prime
banks in the London Eurodollar Market are at the relevant time not
accepting deposits of Dollars, the Cayman Islands Eurodollar Market or
(c) if prime banks in the London and Cayman Islands Eurodollar Markets
are at the relevant time not accepting deposits of Dollars, such other
Eurodollar Market as may from time to time be selected by the Agent.
"Disposition" means the sale, transfer or other disposition
("Transfer") of any asset of Borrower or any of its Subsidiaries other
than (a) a Transfer constituting an Investment or a Distribution, (b) a
Transfer of inventory or other assets in the ordinary course of business
of Borrower or a Subsidiary on terms Borrower reasonably believes are
fair market terms, (c) a Transfer of assets constituting all or part of
the Spring Creek Project or Glen Harbor Project, (d) in the case of a
residential community development being developed by Borrower (i) a
Transfer of, or the payment for, common amenities and common areas made
to or for the benefit of the community association of such development or
(ii) a Transfer of, or the payment for, roads, sewers, utilities, and
other on- and off-site improvements, infrastructure items and/or other
assets associated with such development made to or for the benefit of a
governmental entity or utility in connection with such development, in
either such case provided that such disposition is reasonably necessary
or appropriate for the development or betterment of such development and
whether or not Borrower may at some future date receive total or partial
reimbursement (with or without interest) of the cost (or value) of such
Transfer or payment, or (e) a Transfer of the capital stock of a
Subsidiary that holds solely the assets of the Spring Creek Project or
the Glen Harbor Project.
"Disqualified Stock" means any capital stock, warrants, options or
other rights to acquire capital stock (but excluding any debt security
which is convertible, or exchangeable, for capital stock), which, by its
terms (or by the terms of any security into which it is convertible or
for which it is exchangeable), or upon the happening of any event,
matures or is mandatorily redeemable, pursuant to a sinking fund
obligation or otherwise, or is or may be redeemable at the option of the
holder thereof, in whole or in part.
"Distribution" means, with respect to any shares of capital stock
or any warrant or option to purchase an equity security or other equity
security issued by a Person, (i) the retirement, redemption, purchase, or
other acquisition for Cash or for Property (except capital stock that is
not Disqualified Stock) by such Person of any such security, (ii) the
declaration or (without duplication) payment by such Person of any
dividend in Cash or in Property (except capital stock that is not
Disqualified Stock) on or with respect to any such security, (iii) any
Investment by such Person in the holder of 5% or more of any such
security if a purpose of such Investment is to avoid characterization of
the transaction as a Distribution and (iv) any other payment in Cash or
Property (except capital stock that is not Disqualified Stock) by such
Person constituting a distribution under applicable Laws with respect to
such security.
"Dollars" or "$" means United States dollars.
"EBITDA" means, for any fiscal period, the sum of (a) Net Income
for that period, without taking into account any extraordinary loss
reflected in such Net Income, minus (b) any extraordinary gain reflected
in such Net Income, plus (c) depreciation, amortization and all other
non-cash expenses of Borrower and its Subsidiaries for that period, plus
(d) Interest Expense for that period, plus (e) the aggregate amount of
federal and state taxes on or measured by income of Borrower and its
Subsidiaries for that period (whether or not payable during that period),
in each case as determined in accordance with Generally Accepted
Accounting Principles and, in the case of items (c), (d) and (e), only to
the extent deducted in the determination of Net Income for that period.
"Eligible Assignee" means any commercial bank having a combined
capital and surplus of $100,000,000 or more that is (a) organized under
the Laws of the United States of America or any State thereof or (b)
organized under the Laws of any other country which is a member of the
Organization for Economic Cooperation and Development, or a political
subdivision of such a country, provided that (i) such bank is acting
through a branch or agency located in the United States of America and
(ii) is otherwise exempt from withholding of tax on interest and delivers
Form 1001 or Form 4224 pursuant to Section 11.19 at the time of any
assignment pursuant to Section 11.8.
"ERISA" means the Employee Retirement Income Security Act of 1974,
and any regulations issued pursuant thereto, as amended or replaced and
as in effect from time to time.
"Eurodollar Banking Day" means any Banking Day on which dealings
in Dollar deposits are conducted by and among banks in the Designated
Eurodollar Market.
"Eurodollar Base Rate" means, with respect to any Eurodollar Rate
Loan, the average of the interest rates per annum (rounded upward to the
nearest 1/100 of 1%) at which deposits in Dollars are offered by the
Eurodollar Reference Bank to prime banks in the Designated Eurodollar
Market at or about 11:00 a.m., local time in the locale of the Designated
Eurodollar Market, two (2) Eurodollar Banking Days before the first day
of the applicable Eurodollar Period in an aggregate amount approximately
equal to the amount of the Advance made by the Eurodollar Reference Bank
with respect to such Eurodollar Rate Loan and for a period of time
comparable to the number of days in the applicable Eurodollar Period. The
determination of the Eurodollar Base Rate by the Agent shall be
conclusive in the absence of manifest error.
"Eurodollar Lending Office" means, as to each Bank, its office or
branch so designated by written notice to Borrower and the Agent as its
Eurodollar Lending Office. If no Eurodollar Lending Office is designated
by a Bank, its Eurodollar Lending Office shall be its office at its
address for purposes of notices hereunder.
"Eurodollar Market" means a regular established market located
outside the United States of America by and among banks for the
solicitation, offer and acceptance of Dollar deposits in such banks.
"Eurodollar Obligations" means eurocurrency liabilities, as
defined in Regulation D.
"Eurodollar Period" means, as to each Eurodollar Rate Loan, the
period commencing on the date specified by Borrower pursuant to Section
2.1(b) and ending 1, 2, 3 or 6 months (or, with the written consent of
all of the Banks, any other period) thereafter, as specified by Borrower
in the applicable Request for Loan; provided that:
(a) The first day of any Eurodollar Period shall be a
Eurodollar Banking Day;
(b) Any Eurodollar Period that would otherwise end on a day
that is not a Eurodollar Banking Day shall be extended to the next
succeeding Eurodollar Banking Day unless such Eurodollar Banking
Day falls in another calendar month, in which case such Eurodollar
Period shall end on the next preceding Eurodollar Banking Day;
(c) No Eurodollar Period with respect to a Loan requested
under the Line A Commitment or Line B Commitment, as applicable,
shall extend beyond the next date on which such Commitment is to
be reduced in accordance with Section 2.5 unless the principal
amount of the corresponding Eurodollar Rate Loan plus the
principal amount of all then outstanding Eurodollar Rate Loans
under such Commitment having a Eurodollar Period ending after said
reduction date is less than the amount to which such Commitment is
expected to be reduced on said reduction date; and
(d) No Eurodollar Period shall extend beyond the Maturity
Date.
"Eurodollar Rate" means, with respect to any Eurodollar Rate Loan,
an interest rate per annum (rounded upward to the nearest 1/100 of one
percent) determined pursuant to the following formula:
Eurodollar Base Rate
Eurodollar --------------------
Rate = 1.00 - Eurodollar Reserve
Percentage
"Eurodollar Rate Advance" means an Advance made hereunder and
specified to be a Eurodollar Rate Advance in accordance with Article 2.
"Eurodollar Rate Loan" means a Loan made hereunder and specified
to be a Eurodollar Rate Loan in accordance with Article 2.
"Eurodollar Reference Bank" means Bank of America.
"Eurodollar Reserve Percentage" means, with respect to any
Eurodollar Rate Loan, the maximum reserve percentage (expressed as a
decimal, rounded upward to the nearest 1/100th of 1%) in effect on the
date the Eurodollar Base Rate for that Eurodollar Rate Loan is determined
(whether or not applicable to any Bank) under regulations issued from
time to time by the Federal Reserve Board for determining the maximum
reserve requirement (including any emergency, supplemental or other
marginal reserve requirement) with respect to eurocurrency funding
(currently referred to as "eurocurrency liabilities") having a term
comparable to the Interest Period for such Eurodollar Rate Loan. The
determination by the Agent of any applicable Eurodollar Reserve
Percentage shall be conclusive in the absence of manifest error.
"Event of Default" shall have the meaning provided in Section 9.1.
"Exempt Subsidiary" means a Subsidiary of Borrower that is created
after the Commitment Reduction Date (or that holds no material assets and
engages in no business activities prior to the Commitment Reduction Date)
and that has been (prior to the date such classification becomes
relevant) designated as such in writing by Borrower to the Banks provided
that no Subsidiary holding assets of any Current Operating Project may
become or remain an Exempt Subsidiary and provided further that no
Subsidiary holding real property that is (a) located within five (5)
miles of a Current Operating Project and (b) part of a master planned
residential community development, may become or remain an Exempt
Subsidiary.
"Federal Funds Rate" means, as of any date of determination, the
rate set forth in the weekly statistical release designated as H.15(519),
or any successor publication, published by the Federal Reserve Board
(including any such successor, "H.15(519)") for such date opposite the
caption "Federal Funds (Effective)". If for any relevant date such rate
is not yet published in H.15(519), the rate for such date will be the
rate set forth in the daily statistical release designated as the
Composite 3:30 p.m. Quotations for U.S. Government Securities, or any
successor publication, published by the Federal Reserve Bank of New York
(including any such successor, the "Composite 3:30 p.m. Quotations") for
such date under the caption "Federal Funds Effective Rate". If on any
relevant date the appropriate rate for such date is not yet published in
either H.15(519) or the Composite 3:30 p.m. Quotations, the rate for such
date will be the arithmetic mean of the rates for the last transaction in
overnight Federal funds arranged prior to 9:00 a.m. (New York City time)
on that date by each of three leading brokers of Federal funds
transactions in New York City selected by the Agent. For purposes of this
Agreement, any change in the Federal Funds Rate shall be effective as of
the opening of business on the effective date of such change.
"Fiscal Quarter" means the fiscal quarter of Borrower consisting
of a three month fiscal period ending on each September 30, December 31,
March 31 and June 30.
"Fiscal Year" means the fiscal year of Borrower consisting of a
twelve month fiscal period ending on each June 30.
"Generally Accepted Accounting Principles" means, as of any date
of determination, accounting principles (a) set forth as generally
accepted in then currently effective Opinions of the Accounting
Principles Board of the American Institute of Certified Public
Accountants, (b) set forth as generally accepted in then currently
effective Statements of the Financial Accounting Standards Board or (c)
that are then approved by such other entity as may be approved by a
significant segment of the accounting profession in the United States of
America. The term "consistently applied," as used in connection
therewith, means that the accounting principles applied are consistent in
all material respects to those applied at prior dates or for prior
periods.
"Glen Harbor Project" means the approximately 416 acre industrial
business park located in Glendale, Arizona held in joint venture by Del
E. Webb Cactus Development Corp. and Del E. Webb Glen Harbor Development
Corporation.
"Government Securities" means readily marketable (a) direct full
faith and credit obligations of the United States of America or
obligations guaranteed by the full faith and credit of the United States
of America and (b) obligations of an agency or instrumentality of, or
corporation owned, controlled or sponsored by, the United States of
America that are generally considered in the securities industry to be
implicit obligations of the United States of America.
"Governmental Agency" means (a) any international, foreign,
federal, state, county or municipal government, or political subdivision
thereof, (b) any governmental or quasi-governmental agency, authority,
board, bureau, commission, department, instrumentality or public body, or
(c) any court or administrative tribunal.
"Guarantor Subsidiary" means, as of any date of determination,
each Subsidiary of Borrower (a) that had on the last day of the Fiscal
Quarter then most recently ended total assets (determined in accordance
with Generally Accepted Accounting Principles) of $2,000,000 or more; or
(b) with respect to whose obligations any guaranty has been given by
Borrower or any other Subsidiary.
"Hazardous Materials" means substances defined as hazardous
substances pursuant to the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, 42 U.S.C. ss. 9601 et seq., or as
hazardous, toxic or pollutant pursuant to the Hazardous Materials
Transportation Act, 49 U.S.C. ss. 1801, et seq., the Resource
Conservation and Recovery Act, 42 U.S.C. ss. 6901, et seq., the Hazardous
Waste Control Law, California Health & Safety Code ss. 25100, et seq., or
in any other applicable Hazardous Materials Law, in each case as such
Laws are amended from time to time.
"Hazardous Materials Laws" means all federal, state or local laws,
ordinances, rules or regulations governing the disposal of Hazardous
Materials applicable to any of the Real Property.
"Indebtedness" means, as to any Person, without duplication, (a)
indebtedness of such Person for borrowed money or for the deferred
purchase price of Property or services (excluding trade and other
accounts payable incurred in the ordinary course of business and in
accordance with Borrower's or the Subsidiary's in question customary
trade terms and further excluding obligations with respect to home-buyer
deposits and obligations for local governmental assessments for local
services based upon real property ownership), including any guaranty for
any such indebtedness, (b) indebtedness of such Person of the nature
described in clause (a) that is non-recourse to the credit of such Person
but is secured by assets of such Person, to the extent of the value of
such assets, (c) Capital Lease Obligations of such Person, (d)
indebtedness of such Person arising under acceptance facilities or under
facilities for the discount of accounts receivable of such Person but not
contingent reimbursement obligations of such Person associated with
surety bonds issued in the ordinary course of such Person's business and
(e) any direct or contingent obligations of such Person under letters of
credit issued for the account of such Person.
"Intangible Assets" means assets that are considered intangible
assets under Generally Accepted Accounting Principles, including customer
lists, goodwill, computer software, copyrights, trade names, trademarks
and patents.
"Interest Differential" means, with respect to any prepayment of a
Eurodollar Rate Loan on a day other than the last day of the applicable
Interest Period and with respect to any failure to borrow a Eurodollar
Rate Loan on the date or in the amount specified in any Request for Loan,
(a) the per annum interest rate payable pursuant to Section 3.1(c) with
respect to the Eurodollar Rate Loan minus (b) the Eurodollar Rate on, or
as near as practicable to the date of the prepayment or failure to borrow
for a Eurodollar Rate Loan commencing on such date and ending on the last
day of the Interest Period of the Eurodollar Rate Loan so prepaid or
which would have been borrowed on such date.
"Interest Expense" means, with respect to any fiscal period, the
sum of (a) all interest, fees, charges and related expenses paid or
payable by Borrower and its Subsidiaries (without duplication) for that
fiscal period to a lender or seller in connection with borrowed money or
the deferred purchase price of assets that are considered "interest
expense" under Generally Accepted Accounting Principles, plus (b) the
portion of rent paid or payable (without duplication) by Borrower and its
Subsidiaries for that fiscal period under Capital Lease Obligations that
should be treated as interest in accordance with Financial Accounting
Standards Board Statement No. 13, in each case determined on a
consolidated basis in accordance with Generally Accepted Accounting
Principles, consistently applied.
"Interest Period" means, with respect to any Eurodollar Rate Loan,
the related Eurodollar Period.
"Investment" means, when used in connection with any Person, any
investment by or of that Person, whether by means of purchase or other
acquisition of stock or other securities of any other Person or by means
of a loan, advance creating a debt, capital contribution, guaranty or
other debt or equity participation or interest in any other Person,
including any partnership and joint venture interests of such Person.
Unless otherwise specified, the amount of any Investment shall be the
amount actually invested (or fair value thereof), without adjustment for
subsequent increases or decreases in the value of such Investment.
Notwithstanding the foregoing, the provision of credit to support a
surety bond issued to secure the performance of real estate development
work in the ordinary course of Borrower's or its Subsidiaries' business,
for the benefit of any Subsidiary of Borrower, shall not be considered an
Investment, although the payment by a Person providing credit on such a
surety bond shall be considered an Investment, nor shall any transaction
which is excluded from the definition of Disposition by virtue of clause
(d) thereof be considered an Investment.
"Issuing Bank" means Bank of America.
"Land Assets" means assets of a nature as have been historically
included by Borrower in the line items "Unamortized improvement and
amenity costs", "Unamortized capitalized interest", "Land held for
housing" and "Land held for future development or sale" in the notes to
its consolidated financial statements, provided that in any measurement
of Land Assets, only 75% of the amount of assets in the category
"Unamortized capitalized interest" shall be considered.
"Laws" means, collectively, all international, foreign, federal,
state and local statutes, treaties, rules, regulations, ordinances, codes
and administrative or judicial precedents.
"Letters of Credit" means the standby letters of credit issued by
the Issuing Bank under the Line A Commitment pursuant to Section 2.12,
either as originally issued or as the same may be supplemented, modified,
amended, renewed, extended or supplanted.
"Lien" means any mortgage, deed of trust, pledge, hypothecation,
assignment for security, security interest, encumbrance, claim, option,
lien or charge of any kind, whether voluntarily incurred or arising by
operation of Law or otherwise, affecting any Property, including any
agreement to grant any of the foregoing, any conditional sale or other
title retention agreement, any lease in the nature of a security
interest, and/or the filing of or agreement to give any financing
statement (other than a precautionary financing statement with respect to
a lease that is not in the nature of a security interest) under the
Uniform Commercial Code or comparable Law of any jurisdiction with
respect to any Property.
"Line A Commitment" means, subject to Sections 2.4 and 2.5,
$222,000,000. The respective Pro Rata Shares of the Banks with respect to
the Line A Commitment are set forth in Schedule 1.2.
"Line B Commitment" means, subject to Sections 2.4 and 2.5,
$78,000,000. The respective Pro Rata Shares of the Banks with respect to
the Line B Commitment are set forth in Schedule 1.2.
"Line A Note" means a promissory note made by Borrower to a Bank
evidencing the Advances under that Bank's Pro Rata Share of the Line A
Commitment, substantially in the form of Exhibit C, either as originally
executed or as the same may from time to time be supplemented, modified,
amended, renewed, extended or supplanted.
"Line B Note" means a promissory note made by Borrower to a Bank
evidencing the Advances under that Bank's Pro Rata Share of the Line B
Commitment, substantially in the form of Exhibit D, either as originally
executed or as the same may from time to time be supplemented, modified,
amended, renewed, extended or supplanted.
"Loan" means the aggregate of the Advances made at any one time by
the Banks pursuant to Article 2.
"Loan Compliance Certificate" means a certification by a Senior
Officer of Borrower or by C. Patrick Dempsey, as Assistant Treasurer of
Borrower, in the form of Exhibit E, or such other form as may reasonably
be required by the Agent from time to time, that is delivered in
connection with a Request for Loan in accordance with Section 8.2(g).
"Loan Documents" means, collectively, this Agreement, the Notes,
the Subsidiary Guaranty, any Request for Loan, any Compliance Certificate
and any other agreements of any type or nature hereafter executed and
delivered by Borrower or any of its Subsidiaries or Affiliates to the
Agent or to any Bank in any way relating to or in furtherance of this
Agreement, in each case either as originally executed or as the same may
from time to time be supplemented, modified, amended, restated, extended
or supplanted.
"Lot and Amenity Development Costs" means, for any fiscal period,
cash paid by Borrower and its Subsidiaries for lot development and
amenity development during such fiscal period, calculated in a manner
consistent with that used in the calculation of "Lot development" and
"Amenity development" as shown under the heading "Reconciliation of net
earnings to net cash used for operating activities" in the financial
statements delivered to Banks for the Fiscal Quarter ending September 30,
1993.
"Majority Banks" means (a) as of any date of determination if a
Commitment is then in effect, Banks having in the aggregate 66-2/3% or
more of the Commitments then in effect and (b) as of any date of
determination if the Commitments have then been terminated, Banks holding
Notes evidencing in the aggregate 66-2/3% or more of the aggregate
Indebtedness then evidenced by the Notes.
"Margin Stock" means "margin stock" as such term is defined in
Regulation G or U.
"Material Adverse Effect" means any set of circumstances or events
which (a) has or could reasonably be expected to have a material adverse
effect upon the validity or enforceability of any material Loan Document,
(b) is or could reasonably be expected to be material and adverse to the
condition (financial or otherwise) or business operations of Borrower and
its Subsidiaries, taken as a whole, or (c) materially impairs or could
reasonably be expected to materially impair the ability of Borrower and
its Guarantor Subsidiaries, taken as a whole, to perform the Obligations.
"Maturity Date" means December 31, 1999.
"Monthly Interest Period" means the first calendar day of each
month to the first calendar day of each succeeding month, calculated
from, and including, the first calendar day of each month to, but not
including, first calendar day of each succeeding month.
"Monthly Payment Date" means the fifth Banking Day of each
calendar month.
"Multiemployer Plan" means any employee benefit plan of the type
described in Section 4001(a)(3) of ERISA.
"Negative Pledge" means a Contractual Obligation that contains a
covenant binding on Borrower or any of its Subsidiaries that prohibits
Liens on any of its or their Property, other than (a) any such covenant
contained in a Contractual Obligation granting a Lien permitted under
Section 6.8 which affects only the Property that is the subject of such
permitted Lien and (b) any such covenant that does not apply to Liens
securing the Obligations.
"Net Change in Housing Inventory" means, for any fiscal period,
the net change in homes in production of Borrower and its Subsidiaries
during such fiscal period, calculated in a manner consistent with that
used in the calculation of "Net change in homes in production" as shown
under the heading "Reconciliation of net earnings to net cash used for
operating activities" in the financial statements delivered to Banks for
the Fiscal Quarter ending September 30, 1993.
"Net Income" means, with respect to any fiscal period, the
consolidated net income of Borrower and its Subsidiaries for that period,
determined in accordance with Generally Accepted Accounting Principles,
consistently applied.
"Non-Recourse Debt" means, as of any date of determination
(without duplication), any Indebtedness of Borrower or any of its
Subsidiaries on that date that is secured by a Lien on Property to the
extent the liability for such Indebtedness, and interest thereon, is
limited to the security of such Property, without the liability of any
Person for any such deficiency.
"Note" means any of the Line A Notes or Line B Notes.
"Obligations" means all present and future obligations of every
kind or nature of Borrower or any Party at any time and from time to time
owed to the Agent or the Banks or any one or more of them, under any one
or more of the Loan Documents, whether due or to become due, matured or
unmatured, liquidated or unliquidated, or contingent or noncontingent,
including obligations of performance as well as obligations of payment,
and including interest that accrues after the commencement of any
proceeding under any Debtor Relief Law by or against Borrower or any
Subsidiary or Affiliate of Borrower.
"Opinions of Counsel" means the favorable written legal opinions
of (a) Robertson C. Jones and (b) Gibson, Dunn & Crutcher, counsel to
Borrower and its Guarantor Subsidiaries, substantially in the form of
Exhibits F-1 and F-2, respectively, together with copies of all factual
certificates and legal opinions upon which such counsel has relied.
"Original Loan Agreement" means that certain Revolving Loan
Agreement, by and among Borrower, certain of the Banks and the Agent,
dated as of March 11, 1994, as amended by (i) that certain First
Amendment to Revolving Loan Agreement, dated as of July 1, 1994, (ii)
that certain Second Amendment to Revolving Loan Agreement, dated as of
August 10, 1994, (iii) that certain Third Amendment to Revolving Loan
Agreement, dated as of November 29, 1994 and (iv) that certain Fourth
Amendment to Revolving Loan Agreement, dated as of April 19, 1995,
pursuant to which certain of the Banks agreed to make revolving loans to
Borrower in the original aggregate principal amount of up to
$175,000,000.00, as such Original Loan Agreement existed immediately
prior to the effectiveness of this Agreement.
"Original Loan Documents" mean the Original Loan Agreement and the
Notes and the Subsidiary Guaranty delivered thereunder, as existing
immediately prior to the effectiveness of this Agreement.
"Original Notes" means those certain promissory notes delivered
under the Original Loan Agreement, as existing immediately prior to the
effectiveness of this Agreement.
"Party" means any Person other than the Agent, the Co-Agent and
the Banks, which now or hereafter is a party to any of the Loan
Documents.
"PBGC" means the Pension Benefit Guaranty Corporation or any
successor thereof established under ERISA.
"Pension Plan" means any "employee pension benefit plan" (as such
term is defined in Section 3(2) of ERISA), other than a Multiemployer
Plan, which is subject to Title IV of ERISA and is maintained by Borrower
or any of its Subsidiaries or to which Borrower or any of its
Subsidiaries contributes or has an obligation to contribute.
"Permitted Encumbrances" means:
(a) inchoate Liens incident to construction or maintenance of
Real Property; or Liens incident to construction or maintenance of
Real Property now or hereafter filed of record for which adequate
reserves have been set aside (or deposits made pursuant to
applicable Law) and which are being contested in good faith by
appropriate proceedings and have not proceeded to judgment,
provided that no such Real Property is subject to a material risk
of loss or forfeiture;
(b) Liens for taxes and assessments on Real Property which
are not yet past due; or Liens for taxes and assessments on Real
Property for which adequate reserves have been set aside and are
being contested in good faith by appropriate proceedings and have
not proceeded to judgment, provided that no such Real Property is
subject to a material risk of loss or forfeiture;
(c) minor defects and irregularities in title to any Real
Property which in the aggregate do not materially impair the fair
market value or use of the Real Property for the purposes for
which it is or may reasonably be expected to be held;
(d) easements, exceptions, reservations, or other agreements
of any nature that are reasonable and appropriate for the
development of the Real Property of Borrower or a Subsidiary which
in the aggregate 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;
(e) 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 a
Subsidiary, and which are granted in the ordinary course of the
business of such Borrower or Subsidiary, and which in the
aggregate 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;
(f) easements, exceptions, reservations, or other agreements
for the purpose of facilitating the joint or common use of
property in or adjacent to a commercial Real Property project
affecting Real Property which in the aggregate do not materially
burden or impair the fair market value or use of such property for
the purposes for which it is or may reasonably be expected to be
held;
(g) rights reserved to or vested in any Governmental Agency
to control or regulate, or obligations or duties to any
Governmental Agency with respect to, the use of any Real Property;
(h) rights reserved to or vested in any Governmental Agency
to control or regulate, or obligations or duties to any
Governmental Agency with respect to, any right, power, franchise,
grant, license, or permit;
(i) present or future zoning laws and ordinances or other
laws and ordinances restricting the occupancy, use, or enjoyment
of Real Property;
(j) statutory Liens, other than those described in clauses
(a) or (b) above, arising in the ordinary course of business with
respect to obligations which are not delinquent or are being
contested in good faith, provided that, if delinquent, appropriate
reserves have been set aside with respect thereto and no property
is subject to a material risk of loss or forfeiture;
(k) covenants, conditions, and restrictions affecting the use
of Real Property which in the aggregate do not materially impair
the fair market value or use of the Real Property for the purposes
for which it is or may reasonably be expected to be held;
(l) rights of tenants under leases and rental agreements
covering Real Property entered into in the ordinary course of
business of the Person owning such Real Property;
(m) Liens consisting of pledges or deposits to secure
obligations under workers' compensation laws or similar
legislation, including Liens of judgments thereunder which are not
currently dischargeable;
(n) Liens consisting of pledges or deposits of property to
secure performance in connection with operating leases made in the
ordinary course of business to which Borrower or a Subsidiary is a
party as lessee, provided the aggregate value of all such pledges
and deposits in connection with any such lease does not at any
time exceed 20% of the annual fixed rentals payable under such
lease;
(o) Liens consisting of deposits of property to secure bids
made with respect to, or performance of, contracts (other than
contracts creating or evidencing an extension of credit to the
depositor) in the ordinary course of business;
(p) Liens consisting of any right of offset, or statutory
bankers' lien, on bank deposit accounts maintained in the ordinary
course of business so long as such bank deposit accounts are not
established or maintained for the purpose of providing such right
of offset or bankers' lien;
(q) Liens consisting of deposits of property to secure
statutory obligations of Borrower or a Subsidiary of Borrower in
the ordinary course of its business;
(r) Liens, other than Liens for which the underlying
obligation calls for the payment of money, that were in existence
with respect to a parcel of Real Property prior to its acquisition
by Borrower or one of its Subsidiaries and that do not materially
impair the intended use of such Real Property;
(s) Liens created by or resulting from any litigation or
legal proceeding involving Borrower or a Subsidiary of Borrower in
the ordinary course of its business which is currently being
contested in good faith by appropriate proceedings, provided that
adequate reserves have been set aside and no material property is
subject to a material risk of loss or forfeiture;
(t) other non-consensual Liens incurred in the ordinary
course of business but not in connection with an extension of
credit, which do not in the aggregate, when taken together with
all other Liens, materially impair the value or use of the
Property of Borrower and its Subsidiaries, taken as a whole; and
(u) an interest, including an option, held by a Person under
a contract to purchase Real Property, the sale of which is not
prohibited under this Agreement.
"Person" means an individual or any entity, whether trustee,
corporation, general partnership, limited partnership, joint stock
company, trust, estate, unincorporated organization, business
association, firm, joint venture, Governmental Agency, or otherwise.
"Plant Expenditures" means, for any fiscal period, Borrower and
its Subsidiaries' aggregate cash expenditures made during such fiscal
period for the acquisition of furniture, fixtures and equipment.
"Property" means any interest in any kind of property or asset,
whether real, personal or mixed, or tangible or intangible.
"Pro Rata Share" means, with respect to each Bank, the percentage
of the Commitments set forth opposite the name of that Bank on Schedule
1.2.
"Public 9.00% Senior Subordinated Debt" means the Indebtedness
outstanding under Borrower's Indenture, dated February 11, 1994 with
respect to $100,000,000 of 9.00% Senior Subordinated Debentures due 2006.
"Public 9-3/4% Senior Subordinated Debt" means the Indebtedness
outstanding under Borrower's Indenture, dated March 8, 1993 with respect
to $100,000,000 of 9-3/4% Senior Subordinated Debentures due 2003.
"Public Senior Debt" means the Indebtedness outstanding under
Borrower's Indenture, dated April 15, 1992, with respect to $100,000,000
of 10-7/8% Senior Notes due 2000.
"Quarterly Payment Date" means the fifth Banking Day of each
January, April, July and October.
"Quarterly Period" means a period from the Closing Date until the
earlier of the next following June 30 or September 30 and each subsequent
three (3) month period commencing on the first calendar day of each
April, July, October and January thereafter.
"Real Property" means, as of any date of determination, all real
property then or theretofore owned, leased or occupied by Borrower or any
of its Subsidiaries.
"Reference Rate" means the rate of interest publicly announced
from time to time by Bank of America as its "reference rate." It is a
rate set by Bank of America based upon various factors including Bank of
America's costs and desired return, general economic conditions and other
factors, and is used as a reference point for pricing some loans, which
may be priced at, above, or below such announced rate. Any change in the
Reference Rate announced by Bank of America shall take effect at the
opening of business on the day specified in the public announcement of
such change.
"Reference Rate Advance" means an Advance made hereunder and
specified to be a Reference Rate Advance in accordance with Article 2.
"Reference Rate Loan" means a Loan made hereunder and specified to
be a Reference Rate Loan in accordance with Article 2.
"Regulation D" means Regulation D, as at any time amended, of the
Board of Governors of the Federal Reserve System, or any other regulation
in substance substituted therefor.
"Regulations G, T, U and X" means Regulations G, T, U and X, as at
any time amended, of the Board of Governors of the Federal Reserve
System, or any other regulations in substance substituted therefor.
"Request for Letter of Credit" means a Request for Loan
accompanied by a written request for a Letter of Credit substantially in
the form of Exhibit G, signed by a Responsible Official of Borrower, on
behalf of Borrower, and properly completed to provide all information
required to be included therein.
"Request for Loan" means a written request for a Loan
substantially in the form of Exhibit H, signed by a Responsible Official
of Borrower, on behalf of Borrower, and properly completed to provide all
information required to be included therein.
"Requirement of Law" means, as to any Person, the articles or
certificate of incorporation and by-laws or other organizational or
governing documents of such Person, and any Law, or judgment, award,
decree, writ or determination of a Governmental Agency, in each case
applicable to or binding upon such Person or any of its Property or to
which such Person or any of its Property is subject.
"Responsible Official" means (a) when used with reference to a
Person other than an individual, any corporate officer of such Person,
general partner of such Person, corporate officer of a corporate general
partner of such Person, or corporate officer of a corporate general
partner of a partnership that is a general partner of such Person, or any
other responsible official thereof duly acting on behalf thereof, and (b)
when used with reference to a Person who is an individual, such Person.
Any document or certificate hereunder that is signed or executed by a
Responsible Official of another Person shall be conclusively presumed to
have been authorized by all necessary corporate, partnership and/or other
action on the part of such other Person.
"Senior Debt" means, as of any date of determination, Total
Indebtedness as of that date, other than Subordinated Obligations.
"Senior Officer" means Borrower's (a) chief executive officer, (b)
president, (c) chief financial officer, (d) treasurer or (e) vice
president and controller.
"Special Eurodollar Circumstance" means the adoption, on or after
the date of this Agreement, of any Law or interpretation, or any change
therein or thereof, or any change in the interpretation or administration
thereof by any Governmental Agency, central bank or comparable authority
charged with the interpretation or administration thereof, or compliance
by any Bank or its Eurodollar Lending Office with any request or
directive (whether or not having the force of Law) of any such
Governmental Agency, central bank or comparable authority, or the
existence or occurrence of circumstances affecting the Designated
Eurodollar Market generally that are beyond the reasonable control of the
Banks.
"Specified Charges" means, as of the end of any Fiscal Quarter,
the sum of (a) Plant Expenditures for the four (4) Fiscal Quarters then
ending plus (b) Total Development Expenditures as of such date plus (c)
Interest Expense for the four (4) Fiscal Quarters then ending plus (d)
the aggregate amount of federal and state taxes on or measured by income
of Borrower and its Subsidiaries paid in Cash during the four (4) Fiscal
Quarters then ending.
"Spring Creek Project" means the approximately 473 acre mixed
use/industrial park in Colorado Springs, Colorado held by Del E. Webb
Spring Creek Corporation.
"Stockholders' Equity" means, as of any date of determination and
with respect to any Person, the consolidated stockholders' equity of the
Person as of that date determined in accordance with Generally Accepted
Accounting Principles; provided that there shall be excluded from
Stockholders' Equity any amount attributable to Disqualified Stock.
"Strategic Plan" means Borrower's 1995 Strategic Plan, delivered
to the Agent by Borrower under letter dated March 8, 1995.
"Subordinated Obligations" means, as of any date of determination
(without duplication), (a) the Public 9-3/4% Senior Subordinated Debt
outstanding as of such date, (b) the Public 9.00% Senior Subordinated
Debt outstanding as of such date, (c) the Swiss Franc Debt outstanding as
of such date and (d) any other Indebtedness of Borrower or any of its
Subsidiaries on that date which has been subordinated in right of payment
to the Obligations in a manner reasonably satisfactory to the Banks and
contains such other protective terms with respect to senior debt (such as
payment blockage) as the Banks may reasonably require. Subordination
provisions and protective terms with respect to senior debt under
Indebtedness issued publicly or pursuant to Securities and Exchange
Commission Rule 144A shall be deemed to be acceptable to the Banks if
they include all of those protections given to "Designated Senior Debt",
as that term is used in the Indentures for the Public 9-3/4% Senior
Subordinated Debt and the Public 9.00% Senior Subordinated Debt.
"Subsidiary" means, as of any date of determination and with
respect to any Person, any corporation or partnership (whether or not, in
either case, characterized as such or as a "joint venture"), whether now
existing or hereafter organized or acquired: (a) in the case of a
corporation, of which a majority of the securities having ordinary voting
power for the election of directors or other governing body (other than
securities having such power only by reason of the happening of a
contingency) are at the time beneficially owned by such Person and/or one
or more Subsidiaries of such Person, or (b) in the case of a partnership,
of which a majority of the partnership or other ownership interests are
at the time beneficially owned by such Person and/or one or more of its
Subsidiaries.
"Subsidiary Guaranty" means the continuing guaranty of the
Obligations to be executed and delivered by the Guarantor Subsidiaries
pursuant to Section 8.1(a)(3), in the form of Exhibit I, either as
originally executed or as it may from time to time be supplemented,
modified, amended, extended or supplemented.
"Substituted Credit Facilities" means (a) the Senior Credit
Agreement between Borrower and the Valley National Bank of Arizona, as
agent for certain lenders, dated July 17, 1989, as amended, and (b) the
Revolving Loan Agreement between Del Webb Communities Inc. and First
Interstate Bank of Nevada, as agent for certain lenders, dated June 23,
1988, as amended.
"Swiss Franc Debt" means the Indebtedness outstanding under
Borrower's Public Bond Issue Agreement, dated January 28, 1986, re Swiss
Francs 50'000'000 6-1/8% Subordinated Swiss Franc Bonds due 1996 and the
related Currency Exchange Agreement, dated January 28, 1986, between
Manufacturers Hanover Trust Company and Borrower.
"Tangible Net Worth" means, as of any date of determination, the
Stockholders' Equity of Borrower and its Subsidiaries on that date minus
the aggregate Intangible Assets (not including the value of any
intangible deferred tax assets that have been included in the calculation
of Intangible Assets for this purpose) of Borrower and its Subsidiaries
on that date.
"Total Development Expenditures" means, as of the last day of any
four (4) Fiscal Quarter period, Net Change in Housing Inventory plus Lot
and Amenity Development Costs plus Cash Land Acquisition Costs for such
four (4) Fiscal Quarter period, but in no event less than zero.
"Total Indebtedness" means, as of any date of determination
(without duplication), all Indebtedness of Borrower or any of its
Subsidiaries on that date.
"to the best knowledge of" means, when modifying a representation,
warranty or other statement of any Person, that the fact or situation
described therein is known by the Person (or, in the case of a Person
other than a natural Person, known by a Responsible Official of that
Person) making the representation, warranty or other statement, or with
the exercise of reasonable due diligence under the circumstances (in
accordance with the standard of what a reasonable Person in similar
circumstances would have done) should have been known by the Person (or,
in the case of a Person other than a natural Person, should have been
known by a Responsible Official of that Person).
"type", when used with respect to any Loan or Advance, means the
designation of whether such Loan or Advance is a Reference Rate Loan or
Advance, or a Eurodollar Rate Loan or Advance.
"Unentitled Land" means Real Property (other than Real Property
used and reasonably necessary for the general corporate and
administrative purposes of Borrower and its Subsidiaries) that does not
meet all of the following conditions: (a) its intended use is permissible
under the applicable General Plan, (b) its intended use is permissible
under the applicable Specific Plan, development agreement or by
applicable zoning, (c) the environmental impact report for the intended
use, if required, has been certified by the applicable Governmental
Agency, (d) the time to file any challenge to the environmental impact
report under the California Environmental Quality Act has passed without
such a lawsuit being filed or such a lawsuit has been finally resolved
successfully, and (e) in states other than California, a status
comparable to each of the foregoing, to the extent required, has been met
under applicable local Laws.
"Unsold Home" means a housing unit owned by Borrower or a
Guarantor Subsidiary with respect to which construction has begun
(measured by the laying of a foundation for such housing unit) and for
which a sales contract has not been entered into with, and a cash deposit
received from, a consumer purchaser of such housing unit.
1.2 Use of Defined Terms. Any defined term used in the plural shall refer
to all members of the relevant class, and any defined term used in the singular
shall refer to any one or more of the members of the relevant class.
1.3 Accounting Terms. All accounting terms not specifically defined in
this Agreement shall be construed in conformity with, and all financial data
required to be submitted by this Agreement shall be prepared in conformity with,
Generally Accepted Accounting Principles applied on a consistent basis, except
as otherwise specifically prescribed herein. In the event that Generally
Accepted Accounting Principles change during the term of this Agreement such
that the covenants contained in Sections 6.11 through 6.15 would then be
calculated in a different manner or with different components, (a) Borrower and
the Banks agree to amend this Agreement in such respects as are necessary to
conform those covenants as criteria for evaluating Borrower's financial
condition to substantially the same criteria as were effective prior to such
change in Generally Accepted Accounting Principles and (b) Borrower shall be
deemed to be in compliance with the covenants contained in the aforesaid
Sections during the 90 day period following any such change in Generally
Accepted Accounting Principles if and to the extent that Borrower would have
been in compliance therewith under Generally Accepted Accounting Principles as
in effect immediately prior to such change.
1.4 Rounding. Any financial ratios required to be maintained or achieved
by Borrower pursuant to this Agreement shall be calculated by dividing the
appropriate component by the other component, carrying the result to one place
more than the number of places by which such ratio is expressed in this
Agreement and rounding the result up or down to the nearest number (with a
round-up if there is no nearest number) to the number of places by which such
ratio is expressed in this Agreement.
1.5 Exhibits and Schedules. All Exhibits and Schedules to this Agreement,
either as originally existing or as the same may from time to time be
supplemented, modified or amended, are incorporated herein by this reference. A
matter disclosed on any Schedule shall be deemed disclosed on all Schedules.
1.6 References to "Borrower and its Subsidiaries". Any reference herein
to "Borrower and its Subsidiaries" or the like shall refer solely to Borrower
during such times, if any, as Borrower shall have no Subsidiaries.
1.7 Miscellaneous Terms. The term "or" is disjunctive; the term "and" is
conjunctive. The term "shall" is mandatory; the term "may" is permissive.
Masculine terms also apply to females; feminine terms also apply to males. The
term "including" is by way of example and not limitation. Unless otherwise
specified, reference to any document or agreement shall mean such document or
agreement as it may be amended or restated from time to time.
Article 2
LOANS
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2.1 Loans-General.
(a) Subject to the terms and conditions set forth in this
Agreement, at any time and from time to time from the Closing Date
through and including the Banking Day prior to the Maturity Date, each
Bank shall, pro rata according to that Bank's Pro Rata Share of the then
applicable Commitments, make Advances to Borrower in such amounts as
Borrower may request that do not exceed in the aggregate at any one time
outstanding the amount of that Bank's Pro Rata Share of the Commitments;
provided that, giving effect to the Loan of which such Advance is a part,
(i) the then outstanding principal indebtedness evidenced by the Line A
Notes plus the Aggregate Effective Amount shall not exceed the Line A
Commitment and (ii) the then outstanding principal indebtedness evidenced
by the Line B Notes shall not exceed the Line B Commitment. Subject to
the limitations set forth herein, Borrower may borrow, repay and reborrow
under the Commitments without premium or penalty.
(b) Subject to the next sentence, each Loan shall be made pursuant
to a Request for Loan which shall specify the requested (i) date of such
Loan, (ii) type of Loan, (iii) amount of such Loan, (iv) in the case of a
Eurodollar Rate Loan, the Interest Period for such Loan and (v) whether
such Loan is to be made under the Line A or Line B Commitment. Unless the
Agent has notified, in its sole and absolute discretion, Borrower to the
contrary, a Eurodollar Rate Loan (but not a Reference Rate Loan) may be
requested by telephone by a Responsible Official of Borrower, in which
case Borrower shall confirm such request by promptly delivering a Request
for Loan in person or by telecopier conforming to the preceding sentence
to the Agent. Borrower and the Agent may enter into a memorandum of
understanding setting forth specific procedures for such telephonic
requests; if the Agent complies with such procedures (or if no such
memorandum is entered into), Agent shall incur no liability whatsoever
hereunder in acting upon any telephonic request for loan purportedly made
by a Responsible Official of Borrower, which hereby agrees to indemnify
the Agent from any loss, cost, expense or liability as a result of so
acting.
(c) Promptly following receipt of a Request for Loan, the Agent
shall notify each Bank by telephone or telecopier (and if by telephone,
promptly confirmed by telecopier) of the date and type of the Loan, the
applicable Interest Period, the applicable Commitment, and that Bank's
Pro Rata Share of the Loan. Not later than 11:00 a.m., San Francisco
time, on the date specified for any Loan (which must be a Banking Day),
each Bank shall make its Pro Rata Share of the Loan in immediately
available funds available to the Agent at the Agent's Office. Upon
satisfaction or waiver of the applicable conditions set forth in Article
8, all Advances shall be credited on that date in immediately available
funds to the Designated Deposit Account.
(d) Unless the Majority Banks otherwise consent, each Reference
Rate Loan shall be an integral multiple of $1,000,000 and shall be not
less than $1,000,000 and each Eurodollar Loan shall be an integral
multiple of $1,000,000 and shall be not less than $10,000,000.
(e) The Advances made by each Bank shall be evidenced by that
Bank's Line A Note or Line B Note, as applicable.
(f) A Request for Loan shall be irrevocable upon the Agent's first
notification thereof.
(g) If no Request for Loan (or telephonic request for loan
referred to in the second sentence of Section 2.1(b), if applicable) has
been made within the requisite notice periods set forth in Sections 2.2
or 2.3 in connection with a Loan which, if made and giving effect to the
application of the proceeds thereof, would not increase the outstanding
principal Indebtedness evidenced by the Line A Notes or Line B Notes, as
applicable, then Borrower shall be deemed to have requested, as of the
date upon which the related then outstanding Loan is due pursuant to
Section 3.1(e)(i), a Reference Rate Loan under the Line A Commitment or
Line B Commitment, as applicable, in an amount equal to the amount
necessary to cause the outstanding principal Indebtedness evidenced by
the Notes to remain the same and the Banks shall make the Advances
necessary to make such Loan notwithstanding Sections 2.1(b) and 2.2.
(h) If a Loan is to be made on the same date that another Loan is
due and payable, Borrower or the Banks, as the case may be, shall make
available to the Agent the net amount of funds giving effect to both such
Loans and the effect for purposes of this Agreement shall be the same as
if separate transfers of funds had been made with respect to each such
Loan, provided that no such netting of payments shall be made of a Loan
under the Line A Commitment against the repayment of a Loan under the
Line B Commitment.
2.2 Reference Rate Loans. Each request by Borrower for a Reference Rate
Loan shall be made pursuant to a Request for Loan, with a concurrent telephone
notification, received by the Agent, at the Agent's Office (and such additional
office of the Agent as it may designate from time to time), not later than 1:00
p.m. San Francisco time, at least one (1) Banking Day before the date of the
requested Reference Rate Loan. All Loans shall constitute Reference Rate Loans
unless properly designated or redesignated as a Eurodollar Rate Loan pursuant to
Section 2.3.
2.3 Eurodollar Rate Loans.
(a) Each request by Borrower for a Eurodollar Rate Loan shall be
made pursuant to a Request for Loan (or telephonic or other request for
loan referred to in the second sentence of Section 2.1(b), if applicable)
received by the Agent, at the Agent's Office (and such additional office
of the Agent as it may designate from time to time), not later than 9:00
a.m., San Francisco time, at least three (3) Eurodollar Banking Days
before the first day of the applicable Eurodollar Period.
(b) On the date which is two (2) Eurodollar Banking Days before
the first day of the applicable Eurodollar Period, the Agent shall
confirm its determination of the applicable Eurodollar Rate (which
determination shall be conclusive in the absence of manifest error) and
promptly shall give notice of the same to Borrower and the Banks by
telephone or telecopier (and if by telephone, promptly confirmed by
telecopier).
(c) Unless the Agent and the Majority Banks otherwise consent, no
more than four (4) Eurodollar Rate Loans shall be outstanding at any one
time.
(d) Unless the Agent and the Majority Banks otherwise consent, no
Eurodollar Rate Loan may be requested during the existence of a Default
or Event of Default.
(e) Nothing contained herein shall require any Bank to fund any
Eurodollar Rate Advance in the Designated Eurodollar Market.
2.4 Voluntary Reduction of Commitments. Borrower shall have the right, at
any time and from time to time, without penalty or charge, upon at least three
(3) Banking Days prior written notice by a Responsible Official of Borrower to
the Agent, voluntarily to reduce, permanently and irrevocably, in aggregate
principal amounts in an integral multiple of $1,000,000 but not less than
$5,000,000, or to terminate, all of the then undisbursed portion of the Line A
Commitment or Line B Commitment, provided that any such reduction or termination
shall be accompanied by payment of all accrued and unpaid commitment fees with
respect to the portion of the Commitments being reduced or terminated. The Agent
shall promptly notify the Banks of any reduction of a Commitment under this
Section 2.4.
2.5 Automatic Reduction of Commitments. The Commitments shall
automatically reduce on the Commitment Reduction Date by an amount equal to the
Commitment Reduction Amount and shall further automatically reduce at the close
of business on each Quarterly Payment Date following the Commitment Reduction
Date by 10% of the Adjusted Commitments. For purposes of this Section 2.5, the
Line A Commitment shall first be reduced to zero, and thereafter the Line B
Commitment shall be reduced.
2.6 Optional Termination of Commitments. Following the occurrence of a
Change in Control, the Majority Banks may in their sole and absolute discretion
elect, at any time until sixty (60) days immediately subsequent to the later of
(a) such occurrence and (b) receipt of Borrower's written notice to the Agent of
such occurrence, to terminate the Commitments, in which case the Commitments
shall be terminated and reduced to zero effective on the date of such election.
2.7 Automatic Termination of Commitments. The Commitments shall
automatically terminate and be reduced to zero upon the occurrence of a
Disposition consisting of (a) all or substantially all of the assets of
Borrower, or (b) all or substantially all of the capital stock of any Guarantor
Subsidiary (except a Guarantor Subsidiary holding solely the assets of the Glen
Harbor Project or the Spring Creek Project), or (c) all or substantially all of
the assets of any Guarantor Subsidiary (not including those assets constituting
the Glen Harbor Project or Spring Creek Project).
2.8 Agent's Right to Assume Funds Available for Advances. Unless the
Agent shall have been notified by any Bank no later than the Banking Day or
Eurodollar Banking Day, as applicable, prior to the funding by the Agent of any
Loan that such Bank does not intend to make available to the Agent such Bank's
portion of the total amount of such Loan, the Agent may assume that such Bank
has made such amount available to the Agent on the date of the Loan and the
Agent may, in reliance upon such assumption, make available to Borrower a
corresponding amount. If the Agent has made funds available to Borrower based on
such assumption and such corresponding amount is not in fact made available to
the Agent by such Bank, the Agent shall be entitled to recover such
corresponding amount on demand from such Bank. If such Bank does not pay such
corresponding amount forthwith upon the Agent's demand therefor, the Agent
promptly shall notify Borrower and Borrower shall pay such corresponding amount
to the Agent. The Agent also shall be entitled to recover from such Bank
interest on such corresponding amount in respect of each day from the date such
corresponding amount was made available by the Agent to Borrower to the date
such corresponding amount is recovered by the Agent, at a rate per annum equal
to the daily Federal Funds Rate. Nothing herein shall be deemed to relieve any
Bank from its obligation to fulfill its share of the Commitments or to prejudice
any rights which the Agent or Borrower may have against any Bank as a result of
any default by such Bank hereunder.
2.9 Adjusting Purchase Payments. Principal amounts outstanding under the
Line A Commitment or the Line B Commitment of the Original Loan Agreement on the
effective date of this Agreement (the "Carryover Principal Balance") remain
outstanding under the Line A Commitment or Line B Commitment, as applicable,
hereunder. Concurrently with the effectiveness of this Agreement and the making
of the initial Loan as provided in Section 8.1, the Banks agree to purchase and
sell undivided interests in the Carryover Principal Balance by making or
receiving Adjusting Purchase Payments as specified in Schedule 2.9 (the
"Adjusting Purchase Payment(s)") so that the Carryover Principal Balance will be
properly allocated and owing to the Banks under the Notes in accordance with the
Pro-Rata Shares specified in Schedule 1.2. Each Bank making an Adjusting
Purchase Payment shall deliver it to the Agent together with its funding of its
initial Advance, and the Agent shall forward such Adjusting Purchase Payments to
the Banks entitled thereto promptly after receipt in accordance with the
allocations specified in Schedule 2.9. On the effective date of this Agreement,
in addition to any other Advances that may be made, each Bank shall be deemed as
having made an Advance in the amount of its Pro-Rata Share of the Carryover
Principal Balance.
2.10 Substitute Credit Facility. Borrower hereby requests, and the
parties hereto agree, that the Line B Commitment constitutes a restatement of
the Line B Commitment under the Original Loan Agreement and, as such, shall be
made available as and shall be designated as a Substitute Credit Facility (as
that term is defined in the Indenture evidencing the Public Senior Debt) with
respect to the Substituted Credit Facilities.
2.11 Senior Debt. Without limitation, all outstanding principal and
interest under the Notes constitutes "Senior Debt", as that term is defined in
the Indenture for the Public 9-3/4% Senior Subordinated Debt, the Indenture for
the Public 9.00% Senior Subordinated Debt and the Public Bond Issue Agreement
for the Swiss Franc Debt.
2.12 Letters of Credit.
(a) Subject to the terms and conditions hereof, at any time and
from time to time from the Closing Date through the Maturity Date, the
Issuing Bank shall issue such Letters of Credit under the Line A
Commitment as Borrower may request by a Request for Letter of Credit;
provided that (i) giving effect to all such Letters of Credit, the sum of
(A) the aggregate principal amount outstanding under the Line A Notes
plus (B) the Aggregate Effective Amount does not exceed the then
applicable Line A Commitment and (ii) the Aggregate Effective Amount
shall not exceed $5,000,000. Each Letter of Credit shall be in a form
acceptable to the Issuing Bank. The expiry date of any Letter of Credit
shall not extend more than one (1) year beyond its issuance date (unless
otherwise agreed by the Issuing Bank) nor, in any event, beyond the
Maturity Date. A Request for Letter of Credit shall be irrevocable absent
the consent of the Issuing Bank.
(b) Each Request for Letter of Credit shall be submitted to the
Issuing Bank, with a copy to the Agent, at least five (5) Banking Days
prior to the date upon which the related Letter of Credit is proposed to
be issued. The Agent shall promptly notify the Issuing Bank whether such
Request for Letter of Credit, and the issuance of a Letter of Credit
pursuant thereto, conforms to the requirements of this Agreement. Upon
receipt of favorable notice from the Agent, and promptly after issuing
each Letter of Credit, the Issuing Bank shall promptly notify the Agent,
and the Agent shall promptly notify the Banks, of the amount and terms
thereof.
(c) Upon the issuance of a Letter of Credit, each Bank shall be
deemed to have purchased a participation in such Letter of Credit from
the Issuing Bank in a proportion of the total equal to that Bank's Pro
Rata Share. Without limiting the scope and nature of each Bank's
participation in any Letter of Credit, to the extent that the Issuing
Bank has not been reimbursed by Borrower for any payment required to be
made by the Issuing Bank under any Letter of Credit, each Bank shall, pro
rata according to its Pro Rata Share, reimburse the Issuing Bank through
the Agent promptly upon demand for the amount of such payment. The
obligation of each Bank to so reimburse the Issuing Bank shall be
absolute and unconditional and shall not be affected by the occurrence of
an Event of Default or any other occurrence or event. Any such
reimbursement shall not relieve or otherwise impair the obligation of
Borrower to reimburse the Issuing Bank for the amount of any payment made
by the Issuing Bank under any Letter of Credit together with interest as
hereinafter provided. Each Bank that has reimbursed the Issuing Bank
pursuant to this Section 2.12(c) for its Pro-Rata Share of any payment
made by the Issuing Bank under a Letter of Credit shall thereupon acquire
a pro-rata participation, to the extent of such reimbursement, in the
claim of the Issuing Bank against Borrower under Section 2.12(d) and
shall share, in accordance with that pro-rata participation, in any
payment made by Borrower with respect to such claim.
(d) Borrower agrees to pay to the Issuing Bank through the Agent
an amount equal to any payment made by the Issuing Bank with respect to
each Letter of Credit no later than one (1) Banking Day after demand made
by the Issuing Bank therefor, together with interest on such amount from
the date of any payment made by the Issuing Bank. Interest on such amount
shall accrue at the Reference Rate until the second Banking Day following
the payment made by the Issuing Bank with respect to the Letter of
Credit, and at the Default Rate thereafter. The principal amount of any
such payment by Borrower shall be used to reimburse the Issuing Bank for
the payment made by it under the Letter of Credit. Should Borrower
request a Loan under the Line A Commitment for the purpose of making such
payment and make written request to the Agent to pay the proceeds of the
Loan directly to the Issuing Bank, then the amount to be so paid shall be
deducted from the Aggregate Effective Amount for purposes of Section
2.1(a) in connection with such Request for Loan.
(e) If Borrower fails to make the payment required by Section
2.12(d) within the time period therein set forth, in lieu of the
reimbursement to the Issuing Bank under Section 2.12(c) the Issuing Bank
may (but is not required to), without notice to or the consent of
Borrower, instruct the Agent to cause Advances to be made by the Banks
under the Line A Commitment in an aggregate amount equal to the amount
paid by the Issuing Bank with respect to that Letter of Credit and, for
this purpose, the conditions precedent set forth in Articles 2 and 8
shall not apply. The proceeds of such Advances shall be paid to the
Issuing Bank to reimburse it for the payment made by it under the Letter
of Credit.
(f) The issuance of any supplement, modification, amendment,
renewal, or extension to or of any Letter of Credit shall be subject to
such preconditions as the Issuing Bank may establish.
(g) The obligation of Borrower to pay to the Issuing Bank the
amount of any payment made by the Issuing Bank under any Letter of Credit
shall be absolute, unconditional, and irrevocable, subject only to
performance by the Issuing Bank of its obligations to Borrower under
California Uniform Commercial Code Section 5109. Without limiting the
foregoing, subject to California Uniform Commercial Code Section 5109,
Borrower's obligations shall not be affected by any of the following
circumstances:
(1) any lack of validity or enforceability of the Letter of
Credit, this Agreement, or any other agreement or instrument
relating thereto;
(2) any amendment or waiver of or any consent to departure
from the Letter of Credit, this Agreement, or any other agreement
or instrument relating thereto, with the consent of Borrower;
(3) the existence of any claim, setoff, defense, or other
rights which Borrower may have at any time against the Issuing
Bank, the Agent, the Co-Agent or any Bank, any beneficiary of the
Letter of Credit (or any persons or entities for whom any such
beneficiary may be acting) or any other Person, whether in
connection with the Letter of Credit, this Agreement, or any other
agreement or instrument relating thereto, or any unrelated
transactions;
(4) any demand, statement, or any other document presented
under the Letter of Credit proving to be forged, fraudulent,
invalid, or insufficient in any respect or any statement therein
being untrue or inaccurate in any respect whatsoever so long as
any such document appeared to comply with the terms of the Letter
of Credit;
(5) payment by the Issuing Bank in good faith under the
Letter of Credit against presentation of a draft or any
accompanying document which does not strictly comply with the
terms of the Letter of Credit;
(6) the existence, character, quality, quantity, condition,
packing, value or delivery of any property purported to be
represented by documents presented in connection with any Letter
of Credit or for any difference between any such property and the
character, quality, quantity, condition, or value of such property
as described in such documents;
(7) the time, place, manner, order or contents of shipments
or deliveries of property as described in documents presented in
connection with any Letter of Credit or the existence, nature and
extent of any insurance relative thereto;
(8) the solvency or financial responsibility of any party
issuing any documents in connection with a Letter of Credit;
(9) any failure or delay in notice of shipments or arrival
of any property;
(10) any error in the transmission of any message relating
to a Letter of Credit not caused by the Issuing Bank, or any delay
or interruption in any such message;
(11) any error, neglect or default of any correspondent of
the Issuing Bank in connection with a Letter of Credit;
(12) any consequence arising from acts of God, war,
insurrection, civil unrest, disturbances, labor disputes,
emergency conditions or other causes beyond the control of the
Issuing Bank;
(13) so long as the Issuing Bank in good faith determines
that the contract or document appears to comply with the terms of
the Letter of Credit, the form, accuracy, genuineness or legal
effect of any contract or document referred to in any document
submitted to the Issuing Bank in connection with a Letter of
Credit; and
(14) where the Issuing Bank has acted in good faith and
observed general banking usage, any other circumstances
whatsoever.
(h) The Issuing Bank shall be entitled to the protection accorded
to the Agent pursuant to Section 10.7.
(i) The Uniform Code of Practice for Documentary Credits, as
published in its most current version by the International Chamber of
Commerce, shall be deemed a part of this Section and shall apply to all
Letters of Credit to the extent not inconsistent with applicable Law.
(j) Concurrently with the issuance of each Letter of Credit,
Borrower shall pay a letter of credit origination fee to the Issuing
Bank, for the sole account of the Issuing Bank, in an amount established
from time to time by the Issuing Bank. Borrower shall also pay to the
Agent for the ratable account of the Banks in accordance with their Pro
Rata Shares, a standby letter of credit fee in an amount equal to 1.25%
per annum times the face amount of such Letter of Credit, which fee shall
be payable quarterly in arrears on each Quarterly Payment Date after the
issuance of the Letter of Credit and on the termination or expiration of
such Letter of Credit. The Agent shall promptly make available to the
Banks in immediately available funds, pro-rata according to their Pro
Rata Shares, the standby letter of credit fees which are for the account
of the Banks. Borrower shall also pay transfer fees, check fees, foreign
currency exchange fees and costs, and such other fees as the Issuing Bank
normally charges in connection with standby letters of credit and
activity pursuant thereto, which fees shall be solely for the account of
the Issuing Bank.
(k) To the extent of any inconsistency between the provisions of
this Agreement regarding Letters of Credit and those of Exhibit G, the
provisions of this Agreement shall govern, provided that the grant of
additional (though not contrary) rights or remedies to the Issuing Bank
under Exhibit G shall not be construed as inconsistent with the
provisions of this Agreement.
Article 3
PAYMENTS AND FEES
-----------------
3.1 Principal and Interest.
(a) Interest shall be payable on the outstanding daily unpaid
principal amount of each Advance from the date thereof until payment in
full is made and shall accrue and be payable at the rates set forth or
provided for herein before and after default, before and after maturity,
before and after judgment, and before and after the commencement of any
proceeding under any Debtor Relief Law, with interest on overdue interest
to bear interest at the Default Rate to the fullest extent permitted by
applicable Laws.
(b) Unless previously paid as provided in this Agreement, interest
accrued during each Monthly Interest Period on each Reference Rate Loan
shall be due and payable on the next succeeding Monthly Payment Date and
on the Maturity Date. Except as otherwise provided in Section 3.7, the
unpaid principal amount of any Reference Rate Loan shall bear interest at
a fluctuating rate per annum equal to the Reference Rate. Each change in
the interest rate under this Section 3.1(b) due to a change in the
Reference Rate shall take effect simultaneously with the corresponding
change in the Reference Rate.
(c) Unless previously paid as provided in this Agreement, interest
accrued during each Monthly Interest Period on each Eurodollar Rate Loan
shall be due and payable on the next succeeding Monthly Payment Date and
on the Maturity Date. Except as otherwise provided in Sections 3.1(d) and
3.7, the unpaid principal amount of any Eurodollar Rate Loan shall bear
interest at a rate per annum equal to the Eurodollar Rate for that
Eurodollar Rate Loan plus 1.95%.
(d) During the existence of a Default or Event of Default, the
Majority Banks may determine that any or all then outstanding Eurodollar
Rate Loans shall be converted to Reference Rate Loans. Such conversion
shall be effective upon notice to Borrower from the Majority Banks (or
from the Agent on behalf of the Majority Banks) and shall continue so
long as such Default or Event of Default continues to exist.
(e) If not sooner paid, the principal Indebtedness evidenced by
the Notes shall be payable as follows:
(i) the principal amount of each Eurodollar Rate Loan shall
be payable on the last day of the Interest Period for such Loan;
(ii) the amount, if any, by which (A) the outstanding
principal Indebtedness evidenced by the Line A Notes plus the
Aggregate Effective Amount at any time exceeds the Line A
Commitment or (B) the outstanding principal Indebtedness evidenced
by the Line B Notes at any time exceeds the Line B Commitment,
shall be payable immediately, and shall be applied to the
applicable Notes or, if no amount is then outstanding under the
applicable Notes, shall be applied and held in a manner specified
in Section 9.2(a)(2); and
(iii) the principal Indebtedness evidenced by the Notes shall
in any event be payable on the Maturity Date.
(f) The principal Indebtedness under the Notes may, at any time
and from time to time, voluntarily be paid or prepaid in whole or in part
without premium or penalty, except that with respect to any voluntary
prepayment under this Section 3.1(f), (i) any partial prepayment shall be
in an integral multiple of $1,000,000, (ii) the Agent shall have received
written notice of any prepayment by 9:00 a.m. San Francisco time on a
Banking Day on the date of prepayment in the case of a Reference Rate
Loan, and three (3) Banking Days, in the case of a Eurodollar Rate Loan,
before the date of prepayment, which notice shall identify the date and
amount of the prepayment and the Loan(s) being prepaid, and (iii) any
payment or prepayment of all or any part of any Eurodollar Rate Loan on a
day other than the last day of the applicable Interest Period shall be
subject to Section 3.6(d).
3.2 Arrangement, Agency and Co-Agency Fees. Borrower shall pay to Bank of
America arrangement and agency fees in amounts heretofore agreed upon in one or
more letter agreements between Borrower and Bank of America. Such fees are
solely for the account of Bank of America and are fully earned and nonrefundable
upon the applicable due dates. Borrower shall pay to the Co-Agent co-agency fees
in amounts heretofore agreed upon by letter agreement between Borrower and the
Co-Agent. Such fees are solely for the account of the Co-Agent and are fully
earned and nonrefundable upon the applicable due dates.
3.3 Underwriting Fee. On the Closing Date, Borrower shall pay to the
Agent, for the account of the Banks, allocated as indicated on Schedule 3.3
hereof, an underwriting fee equal to $156,250 (0.125% of $125,000,000). This
underwriting fee is fully earned on the Closing Date and is nonrefundable.
3.4 Facility and Commitment Fees.
(a) Facility Fee. From and after the Closing Date, Borrower shall
pay to the Agent, for the respective accounts of the Banks, pro rata
according to their Pro Rata Shares of the Commitments, a facility fee
equal to 0.125% per annum times the average daily amount of the
Commitments. The facility fee shall be payable quarterly in arrears on
each Quarterly Payment Date and on the Maturity Date.
(b) Commitment Fees. From and after the Closing Date, Borrower
shall pay to the Agent, for the respective accounts of the Banks, pro
rata according to their Pro Rata Shares of the Commitments, a commitment
fee equal to the following indicated percentage per annum times the
average daily amount by which the Commitments exceed the sum of the
aggregate principal Indebtedness evidenced by the Notes plus the
Aggregate Effective Amount. The commitment fee shall be payable quarterly
in arrears on each Quarterly Payment Date and on the Maturity Date.
For such days that the aggregate
principal indebtedness evidenced by the
Notes plus the Aggregate Effective
Amount exceeds 66% of the Commitments. 0.1875%
For such days that the aggregate
principal indebtedness evidenced by the
Notes plus the Aggregate Effective
Amount is less than or equal to 66% but
greater than 33% of the Commitments. 0.2500%
For such days that the aggregate
principal indebtedness evidenced by the
Notes plus the Aggregate Effective
Amount is equal to or less than 33%
of the Commitments. 0.3250%
3.5 Increased Commitment Costs. If any Bank shall determine that the
introduction after the Closing Date of any applicable law, rule, regulation or
guideline regarding capital adequacy, or any change therein or any change in the
interpretation or administration thereof by any central bank or other
Governmental Agency charged with the interpretation or administration thereof,
or compliance by such Bank (or its Eurodollar Lending Office) or any corporation
controlling the Bank, with any request, guidelines or directive regarding
capital adequacy (whether or not having the force of law) of any such central
bank or other authority, affects or would affect the amount of capital required
or expected to be maintained by such Bank or any corporation controlling such
Bank and (taking into consideration such Bank's or such corporation's policies
with respect to capital adequacy and such Bank's desired return on capital)
determines that the amount of such capital is increased, or the rate of return
on capital is reduced, as a consequence of its obligations under this Agreement,
then, within five (5) Banking Days after demand of such Bank, Borrower shall pay
to such Bank, from time to time as specified by such Bank, additional amounts
sufficient to compensate such Bank in light of such circumstances, to the extent
reasonably allocable to such obligations under this Agreement. Each Bank agrees
to endeavor promptly to notify Borrower of any event of which it has actual
knowledge, occurring after the Closing Date, which will cause it to make a
demand hereunder.
3.6 Eurodollar Costs and Related Matters.
(a) If, after the date hereof, the existence or occurrence of any
Special Eurodollar Circumstance:
(1) shall subject any Bank or its Eurodollar Lending Office
to any tax, duty or other charge or cost with respect to any
Eurodollar Rate Advance, any of its Notes evidencing Eurodollar
Rate Loans or its obligation to make Eurodollar Rate Advances, or
shall change the basis of taxation of payments to any Bank of the
principal of or interest on any Eurodollar Rate Advance or any
other amounts due under this Agreement in respect of any
Eurodollar Rate Advance, any of its Notes evidencing Eurodollar
Rate Loans or its obligation to make Eurodollar Rate Advances,
excluding, in the case of each Bank, the Agent, and each Eligible
Assignee, and any Affiliate or Eurodollar Lending Office thereof,
(i) taxes imposed on or measured in whole or in part by its
overall net income, gross income or gross receipts or capital and
franchise taxes imposed on it, by (A) any jurisdiction (or
political subdivision thereof) in which it is organized or
maintains its principal office or Eurodollar Lending Office or (B)
any jurisdiction (or political subdivision thereof) in which it is
"doing business" (unless it would not be doing business in such
jurisdiction (or political subdivision thereof) absent the
transactions contemplated hereby), (ii) any withholding taxes or
other taxes based on gross income imposed by the United States of
America (other than withholding taxes and taxes based on gross
income resulting from or attributable to any change in any law,
rule or regulation or any change in the interpretation or
administration of any law, rule or regulation by any Governmental
Agency after the date of this Agreement) or (iii) any withholding
taxes or other taxes based on gross income imposed by the United
States of America for any period with respect to which it has
failed to provide Borrower with the appropriate form or forms
required by Section 11.19, to the extent such forms are then
required by applicable Laws;
(2) shall impose, modify or deem applicable any reserve not
applicable or deemed applicable on the date hereof (including,
without limitation, any reserve imposed by the Board of Governors
of the Federal Reserve System, but excluding the Eurodollar
Reserve Percentage taken into account in calculating the
Eurodollar Rate), special deposit, capital or similar requirements
against assets of, deposits with or for the account of, or credit
extended by, any Bank or its Eurodollar Lending Office; or
(3) shall impose on any Bank or its Eurodollar Lending Office
or the Designated Eurodollar Market any other condition affecting
any Eurodollar Rate Advance, any of its Notes evidencing
Eurodollar Rate Loans, its obligation to make Eurodollar Rate
Advances or this Agreement, or shall otherwise affect any of the
same;
and the result of any of the foregoing, as determined by such Bank,
increases the cost to such Bank or its Eurodollar Lending Office of
making or maintaining any Eurodollar Rate Advance or in respect of any
Eurodollar Rate Advance, any of its Notes evidencing Eurodollar Rate
Loans or its obligation to make Eurodollar Rate Advances or reduces the
amount of any sum received or receivable by such Bank or its Eurodollar
Lending Office with respect to any Eurodollar Rate Advance, any of its
Notes evidencing Eurodollar Rate Loans or its obligation to make
Eurodollar Rate Advances (assuming such Bank's Eurodollar Lending Office
had funded 100% of its Eurodollar Rate Advance in the Designated
Eurodollar Market), then, within five (5) Banking Days after demand by
such Bank (with a copy to the Agent), Borrower shall pay to such Bank
such additional amount or amounts as will compensate such Bank for such
increased cost or reduction (determined as though such Bank's Eurodollar
Lending Office had funded 100% of its Eurodollar Rate Advance in the
Designated Eurodollar Market). Borrower hereby indemnifies each Bank
against, and agrees to hold each Bank harmless from and reimburse such
Bank within five (5) Banking Days after demand for (without duplication)
all costs, expenses, claims, penalties, liabilities, losses, legal fees
and damages incurred or sustained by each Bank in connection with this
Agreement, or any of the rights, obligations or transactions provided for
or contemplated herein, as a result of the existence or occurrence of any
Special Eurodollar Circumstance. A statement of any Bank claiming
compensation under this subsection and setting forth the additional
amount or amounts to be paid to it hereunder shall be conclusive in the
absence of manifest error. Each Bank agrees to endeavor promptly to
notify Borrower of any event of which it has actual knowledge, occurring
after the Closing Date, which will entitle such Bank to compensation
pursuant to this Section, and agrees to designate a different Eurodollar
Lending Office if such designation will avoid the need for or reduce the
amount of such compensation and will not, in the judgment of such Bank,
otherwise be materially disadvantageous to such Bank. If any Bank claims
compensation under this Section, Borrower may at any time, upon at least
four (4) Eurodollar Banking Days' prior notice to the Agent and such Bank
and upon payment in full of the amounts provided for in this Section
through the date of such payment plus any prepayment fee required by
Section 3.6(d), pay in full the affected Eurodollar Rate Advances of such
Bank or request that such Eurodollar Rate Advances be converted to
Reference Rate Advances.
(b) If, after the date hereof, the existence or occurrence of any
Special Eurodollar Circumstance shall, in the opinion of any Bank, make
it unlawful, impossible or impracticable for such Bank or its Eurodollar
Lending Office to make, maintain or fund its portion of any Eurodollar
Rate Loan, or materially restrict the authority of such Bank to purchase
or sell, or to take deposits of, Dollars in the Designated Eurodollar
Market, or to determine or charge interest rates based upon the
Eurodollar Rate, and such Bank shall so notify the Agent, then such
Bank's obligation to make Eurodollar Rate Advances shall be suspended for
the duration of such illegality, impossibility or impracticability and
the Agent forthwith shall give notice thereof to the other Banks and
Borrower. Upon receipt of such notice, the outstanding principal amount
of such Bank's Eurodollar Rate Advances, together with accrued interest
thereon, automatically shall be converted to Reference Rate Advances with
Interest Periods corresponding to the Eurodollar Loans of which such
Eurodollar Rate Advances were a part on either (1) the last day of the
Eurodollar Period(s) applicable to such Eurodollar Rate Advances if such
Bank may lawfully continue to maintain and fund such Eurodollar Rate
Advances to such day(s) or (2) immediately if such Bank may not lawfully
continue to fund and maintain such Eurodollar Rate Advances to such
day(s), provided that in such event the conversion shall not be subject
to payment of a prepayment fee under Section 3.6(d). Each Bank agrees to
endeavor promptly to notify Borrower of any event of which it has actual
knowledge, occurring after the Closing Date, which will cause that Bank
to notify the Agent under this Section 3.6(b), and agrees to designate a
different Eurodollar Lending Office if such designation will avoid the
need for such notice and will not, in the judgment of such Bank,
otherwise be disadvantageous to such Bank. In the event that any Bank is
unable, for the reasons set forth above, to make, maintain or fund its
portion of any Eurodollar Rate Loan, such Bank shall fund such amount as
a Reference Rate Advance for the same period of time, and such amount
shall be treated in all respects as a Reference Rate Advance. Any Bank
whose obligation to make Eurodollar Rate Advances has been suspended
under this Section 3.6(b) shall promptly notify the Agent and Borrower of
the cessation of the Special Eurodollar Circumstance which gave rise to
such suspension.
(c) If, with respect to any proposed Eurodollar Rate Loan:
(1) the Agent reasonably determines that, by reason of
circumstances affecting the Designated Eurodollar Market generally
that are beyond the reasonable control of the Banks, deposits in
Dollars (in the applicable amounts) are not being offered to any
Bank in the Designated Eurodollar Market for the applicable
Eurodollar Period; or
(2) the Majority Banks advise the Agent that the Eurodollar
Rate as determined by the Agent (i) does not represent the
effective pricing to such Banks for deposits in Dollars in the
Designated Eurodollar Market in the relevant amount for the
applicable Eurodollar Period, or (ii) will not adequately and
fairly reflect the cost to such Banks of making the applicable
Eurodollar Rate Advances;
then the Agent forthwith shall give notice thereof to Borrower and the
Banks, whereupon until the Agent notifies Borrower that the circumstances
giving rise to such suspension no longer exist, the obligation of the
Banks to make any future Eurodollar Rate Advances shall be suspended. If
at the time of such notice there is then pending a Request for Loan that
specifies a Eurodollar Rate Loan, such Request for Loan shall be deemed
to specify a Reference Rate Loan.
(d) Upon payment or prepayment of any Eurodollar Rate Advance,
(other than as the result of a conversion required under Section 3.6(b)),
on a day other than the last day in the applicable Eurodollar Period
(whether voluntarily, involuntarily, by reason of acceleration, or
otherwise), or upon the failure of Borrower (for a reason other than the
failure of a Bank to make an Advance) to borrow on the date or in the
amount specified for a Eurodollar Rate Loan in any Request for Loan,
Borrower shall pay to the appropriate Bank within five (5) Banking Days
after demand a prepayment fee or failure to borrow fee, as the case may
be, (determined as though 100% of the Eurodollar Rate Advance had been
funded in the Designated Eurodollar Market) equal to the sum of:
(1) principal amount of the Eurodollar Rate Advance prepaid
or not borrowed, as the case may be, times [number of days between
the date of prepayment or failure to borrow, as applicable, and
the last day in the applicable Eurodollar Period], divided by 360,
times the applicable Interest Differential (provided that the
product of the foregoing formula must be a positive number); plus
(2) all out-of-pocket expenses incurred by the Bank
reasonably attributable to such payment, prepayment or failure to
borrow.
Each Bank's determination of the amount of any prepayment fee payable
under this Section 3.6(d) shall be conclusive in the absence of manifest
error.
3.7 Late Payments. If any installment of principal or interest or any fee
or cost or other amount payable under any Loan Document to the Agent or any Bank
is not paid when due, it shall thereafter bear interest at a fluctuating
interest rate per annum at all times equal to the sum of the Reference Rate plus
3%, to the fullest extent permitted by applicable Laws. Accrued and unpaid
interest on past due amounts (including, without limitation, interest on past
due interest) shall be compounded monthly, on the last day of each calendar
month, to the fullest extent permitted by applicable Laws.
3.8 Computation of Interest and Fees. Computation of interest on
Eurodollar Rate Loans, Reference Rate Loans and all fees under this Agreement
shall be calculated on the basis of a year of 360 days and the actual number of
days elapsed. Borrower acknowledges that such latter calculation method will
result in a higher yield to the Banks than a method based on a year of 365 or
366 days. Interest shall accrue on each Loan for the day on which the Loan is
made. Interest shall not accrue on a Loan, or any portion thereof, for the day
on which the Loan or such portion is paid, except that any Loan that is repaid
on the same day on which it is made shall bear interest for one day.
3.9 Non-Banking Days. If any payment to be made by Borrower or any other
Party under any Loan Document shall come due on a day other than a Banking Day,
payment shall instead be considered due on the next succeeding Banking Day and
the extension of time shall be reflected in computing interest and fees.
3.10 Manner and Treatment of Payments.
(a) Each payment hereunder (except payments pursuant to Sections
3.5, 3.6, 11.3, 11.10 and 11.20) or on the Notes or under any other Loan
Document shall be made to the Agent, at the Agent's Office, for the
account of each of the Banks or the Agent, as the case may be, in
immediately available funds (for which evidence may be given by
notification of a Fed Funds reference number) not later than 11:00 a.m.,
San Francisco time, on the day of payment (which must be a Banking Day).
All payments received after 11:00 a.m., San Francisco time, on any
Banking Day, shall be deemed received on the next succeeding Banking Day.
The amount of all payments received by the Agent for the account of each
Bank shall be immediately paid by the Agent to the applicable Bank in
immediately available funds and, if such payment was received by the
Agent by 11:00 a.m., San Francisco time, on a Banking Day and not so made
available to the account of a Bank on that Banking Day, the Agent shall
reimburse that Bank for the cost to such Bank of funding the amount of
such payment at the Federal Funds Rate. All payments shall be made in
lawful money of the United States of America.
(b) Each payment or prepayment on account of any Loan shall be
applied pro rata according to the outstanding Advances made by each Bank
comprising such Loan.
(c) Each payment of any amount payable by Borrower or any other
Party under this Agreement or any other Loan Document shall be made free
and clear of, and without reduction by reason of, any taxes, assessments
or other charges imposed by any Governmental Agency, central bank or
comparable authority, excluding, in the case of each Bank, the Agent, the
Co-Agent and each Eligible Assignee, and any Affiliate or Eurodollar
Lending Office thereof, (i) taxes imposed on or measured in whole or in
part by its overall net income, gross income or gross receipts or capital
and franchise taxes imposed on it, by (A) any jurisdiction (or political
subdivision thereof) in which it is organized or maintains its principal
office or Eurodollar Lending Office or (B) any jurisdiction (or political
subdivision thereof) in which it is "doing business" (unless it would not
be doing business in such jurisdiction (or political subdivision thereof)
absent the transactions contemplated hereby), (ii) any withholding taxes
or other taxes based on gross income imposed by the United States of
America (other than withholding taxes and taxes based on gross income
resulting from or attributable to any change in any law, rule or
regulation or any change in the interpretation or administration of any
law, rule or regulation by any Governmental Agency after the date of this
Agreement) or (iii) any withholding taxes or other taxes based on gross
income imposed by the United States of America for any period with
respect to which it has failed to provide Borrower with the appropriate
form or forms required by Section 11.19, to the extent such forms are
then required by applicable Laws, (all such non-excluded taxes,
assessments or other charges being hereinafter referred to as "Taxes").
To the extent that Borrower is obligated by applicable Laws to make any
deduction or withholding on account of Taxes from any amount payable to
any Bank under this Agreement, Borrower shall (i) make such deduction or
withholding and pay the same to the relevant Governmental Agency and (ii)
pay such additional amount to that Bank as is necessary to result in that
Bank's receiving a net after-Tax amount equal to the amount to which that
Bank would have been entitled under this Agreement absent such deduction
or withholding. If and when receipt of such payment results in an excess
payment or credit to that Bank on account of such Taxes, that Bank shall
promptly refund such excess to Borrower.
3.11 Funding Sources. Nothing in this Agreement shall be deemed to
obligate any Bank to obtain the funds for any Loan or Advance in any particular
place or manner or to constitute a representation by any Bank that it has
obtained or will obtain the funds for any Loan or Advance in any particular
place or manner.
3.12 Failure to Charge Not Subsequent Waiver. Any decision by the Agent
or any Bank not to require payment of any interest (including interest arising
under Section 3.7), fee, cost or other amount payable under any Loan Document,
or to calculate any amount payable by a particular method, on any occasion shall
in no way limit or be deemed a waiver of the Agent's or such Bank's right to
require full payment of any interest (including interest arising under Section
3.7), fee, cost or other amount payable under any Loan Document, or to calculate
an amount payable by another method that is not inconsistent with this
Agreement, on any other or subsequent occasion.
3.13 Agent's Right to Assume Payments Will be Made by Borrower. Unless
the Agent shall have been notified by Borrower prior to the date on which any
payment to be made by Borrower hereunder is due that Borrower does not intend to
remit such payment, the Agent may, in its discretion, assume that Borrower has
remitted such payment when so due and the Agent may, in its discretion and in
reliance upon such assumption, make available to each Bank on such payment date
an amount equal to such Bank's share of such assumed payment. If Borrower has
not in fact remitted such payment to the Agent, each Bank shall forthwith on
demand repay to the Agent the amount of such assumed payment made available to
such Bank, together with interest thereon in respect of each day from and
including the date such amount was made available by the Agent to such Bank to
the date such amount is repaid to the Agent at the Federal Funds Rate.
3.14 Fee Determination Detail. The Agent, and any Bank, shall provide
reasonable detail to Borrower regarding the manner in which the amount of any
payment to the Agent and the Banks, or that Bank, under Article 3 has been
determined, concurrently with demand for such payment.
3.15 Survivability. All of Borrower's obligations under Sections 3.5 and
3.6 shall survive for ninety (90) days following the date on which the
Commitments are terminated and all Loans hereunder are fully paid. Following
such termination and repayment, and the expiration of any bankruptcy preference
or similar period, each Bank shall cancel and return its Notes to Borrower.
3.16 Accruals Under Original Loan Documents.
(a) The accrual of interest and fees payable by Borrower under the
Original Loan Documents shall be calculated as provided therein through
the effective date of this Agreement. Such fees include, without
limitation, those specified in Sections 3.2, 3.3 and 3.4 of the Original
Loan Agreement. All such accrued interest and fees through the effective
date of this Agreement shall, notwithstanding any provision of the
Original Loan Documents or hereunder to the contrary, be due on the
effective date of this Agreement and shall be payable immediately upon
submission of an invoice therefor to Borrower by the Agent. Upon receipt
by the Agent, all such amounts shall be promptly distributed by the Agent
in accordance with the terms of the Original Loan Documents.
(b) To the extent that Borrower has prepaid a Facility Fee under
Section 3.3 of the Original Loan Agreement applicable to a period of time
following the Closing Date (and in place of the remedies specified in the
last sentence of such Section), Borrower shall be credited for such
prepayment against the first Facility Fee payment owing after the Closing
Date pursuant to Section 3.4(a) of this Agreement. The shares of such
first Facility Fee payment paid by the Agent to the Banks shall be
adjusted to reflect the shares of the prepayment credit that are
applicable to certain of the Banks.
Article 4
REPRESENTATIONS AND WARRANTIES
------------------------------
Borrower represents and warrants to the Banks, as of the date hereof and
as of the Closing Date, that:
4.1 Existence and Qualification; Power; Compliance With Laws. Borrower is
a corporation duly formed, validly existing and in good standing under the Laws
of Delaware. Borrower is duly qualified or registered to transact business and
is in good standing in each other jurisdiction in which the conduct of its
business or the ownership or leasing of its Properties makes such qualification
or registration necessary, except where the failure so to qualify or register
and to be in good standing would not constitute a Material Adverse Effect.
Borrower has all requisite corporate power and authority to conduct its
business, to own and lease its Properties and to execute and deliver each Loan
Document to which it is a Party and to perform its Obligations. All outstanding
shares of capital stock of Borrower are duly authorized, validly issued, fully
paid, non-assessable and no holder thereof has any enforceable right of
rescission under any applicable state or federal securities Laws. Borrower is in
compliance with all Laws and other legal requirements applicable to its
business, has obtained all authorizations, consents, approvals, orders, licenses
and permits from, and has accomplished all filings, registrations and
qualifications with, or obtained exemptions from any of the foregoing from, any
Governmental Agency that are necessary for the transaction of its business,
except where the failure so to comply, file, register, qualify or obtain
exemptions does not constitute a Material Adverse Effect.
4.2 Authority; Compliance With Other Agreements and Instruments and
Government Regulations. The execution, delivery and performance by Borrower and
each Guarantor Subsidiary of the Loan Documents to which it is a Party have been
duly authorized by all necessary corporate and/or partnership action, and do not
and will not:
(a) Require any consent or approval not heretofore obtained of any
partner, director, stockholder, security holder or creditor of such
Party;
(b) Violate or conflict with any provision of such Party's
charter, articles of incorporation or bylaws, as applicable;
(c) Result in or require the creation or imposition of any Lien
upon or with respect to any Property now owned or leased or hereafter
acquired by such Party;
(d) Violate any Requirement of Law applicable to such Party,
subject to obtaining the authorizations from, or filings with, the
Governmental Agencies described in Schedule 4.3;
(e) Result in a breach of or constitute a default under, or cause
or permit the acceleration of any obligation owed under, any indenture or
loan or credit agreement or any other Contractual Obligation to which
such Party is a party or by which such Party or any of its Property is
bound or affected;
and none of Borrower or any Guarantor Subsidiary is in violation of, or default
under, any Requirement of Law or Contractual Obligation, or any indenture, loan
or credit agreement described in Section 4.2(e), in any respect that constitutes
a Material Adverse Effect.
4.3 No Governmental Approvals Required. Except as set forth in Schedule
4.3 or previously obtained or made, no authorization, consent, approval, order,
license or permit from, or filing, registration or qualification with, any
Governmental Agency is or will be required to authorize or permit under
applicable Laws the execution, delivery and performance by Borrower and the
Guarantor Subsidiaries of the Loan Documents to which it is a Party. All
authorizations from, or filings with, any Governmental Agency described in
Schedule 4.3 will be accomplished as of the Closing Date or such other date as
is specified in Schedule 4.3.
4.4 Subsidiaries.
(a) Schedule 4.4 hereto correctly sets forth the names, form of
legal entity, number of shares of capital stock issued and outstanding,
number of shares owned by Borrower or a Subsidiary (specifying such
owner) and jurisdictions of organization of all Subsidiaries and
specifies which thereof, as of the Closing Date, are Guarantor
Subsidiaries. Except as described in Schedule 4.4, Borrower does not own
any capital stock, equity interest or debt security which is convertible,
or exchangeable, for capital stock or equity interests in any Person.
Unless otherwise indicated in Schedule 4.4, all of the outstanding shares
of capital stock, or all of the units of equity interest, as the case may
be, of each Subsidiary are owned of record and beneficially by Borrower,
there are no outstanding options, warrants or other rights to purchase
capital stock of any such Subsidiary, and all such shares or equity
interests so owned are duly authorized, validly issued, fully paid,
non-assessable, and were issued in compliance with all applicable state
and federal securities and other Laws, and are free and clear of all
Liens, except for Permitted Encumbrances.
(b) Each Subsidiary is a corporation or limited partnership duly
formed, validly existing and in good standing under the Laws of its
jurisdiction of organization, is duly qualified to do business as a
foreign organization and is in good standing as such in each jurisdiction
in which the conduct of its business or the ownership or leasing of its
properties makes such qualification necessary (except where the failure
to be so duly qualified and in good standing does not constitute a
Material Adverse Effect), and has all requisite power and authority to
conduct its business and to own and lease its Properties.
(c) Each Subsidiary is in compliance with all Laws and other
requirements applicable to its business and has obtained all
authorizations, consents, approvals, orders, licenses, and permits from,
and each such Subsidiary has accomplished all filings, registrations, and
qualifications with, or obtained exemptions from any of the foregoing
from, any Governmental Agency that are necessary for the transaction of
its business, except where the failure to be in such compliance, obtain
such authorizations, consents, approvals, orders, licenses, and permits,
accomplish such filings, registrations, and qualifications, or obtain
such exemptions, does not constitute a Material Adverse Effect.
4.5 Financial Statements. Borrower has furnished to the Banks (a) the
audited consolidated financial statements of Borrower and its Subsidiaries for
the Fiscal Year ended June 30, 1994 and (b) the unaudited consolidated financial
statements of Borrower and its Subsidiaries for the Fiscal Quarter ended March
31, 1995. The financial statements described in clauses (a) and (b) fairly
present in all material respects the financial condition, results of operations
and changes in financial position of Borrower and its Subsidiaries as of such
dates and for such periods, in conformity with Generally Accepted Accounting
Principles, consistently applied.
4.6 No Other Liabilities; No Material Adverse Changes. Borrower and its
Subsidiaries do not have any material liability or material contingent liability
not reflected or disclosed in the financial statements described in Section
4.5(b), other than liabilities and contingent liabilities arising in the
ordinary course of business since the date of such financial statements. Neither
Borrower nor any of its Subsidiaries has, as of the Closing Date, any
Indebtedness other than under the Loan Documents or as described on Schedule
4.6. As of the Closing Date, no circumstance or event has occurred that
constitutes a Material Adverse Effect since June 30, 1994, or, as of any date
subsequent to the Closing Date, since the Closing Date.
4.7 Title to Property. Borrower and its Subsidiaries have valid title to
the Property reflected in the financial statements described in Section 4.5(b),
other than immaterial items of Property and Property subsequently sold or
disposed of in the ordinary course of business, free and clear of all Liens,
other than Liens described in Schedule 6.8 or otherwise permitted by Section
6.8. Schedule 6.8 identifies, without limitation, all Liens on Property of
Borrower or any of its Subsidiaries securing an obligation to pay money.
4.8 Intangible Assets. Borrower and its Guarantor Subsidiaries own, or
possess the right to use to the extent necessary in their respective businesses,
all material trademarks, trade names, copyrights, patents, patent rights,
computer software, licenses and other Intangible Assets that are used in the
conduct of their businesses as now operated, and no such Intangible Asset, to
the best knowledge of Borrower, conflicts with the valid trademark, trade name,
copyright, patent, patent right or Intangible Asset of any other Person to the
extent that such conflict constitutes a Material Adverse Effect.
4.9 Public Utility Holding Company Act. Neither Borrower 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.
4.10 Litigation. Except for (a) any matter fully covered as to subject
matter and amount (subject to applicable deductibles and retentions) by
insurance for which the insurance carrier has not asserted lack of subject
matter coverage or reserved its right to do so, (b) any matter, or series of
related matters, involving a claim against Borrower or any of its Subsidiaries
of less than $1,000,000, (c) matters of an administrative nature not involving a
claim or charge against Borrower or any of its Subsidiaries and (d) matters set
forth in Schedule 4.10, there are no actions, suits, proceedings or
investigations pending as to which Borrower or any of its Subsidiaries have been
served or have received notice or, to the best knowledge of Borrower, threatened
against or affecting Borrower or any of its Subsidiaries or any Property of any
of them before any Governmental Agency.
4.11 Binding Obligations. Each of the Loan Documents to which Borrower or
any of its Guarantor Subsidiaries is a Party will, when executed and delivered
by such Party, constitute the legal, valid and binding obligation of such Party,
enforceable against such Party in accordance with its terms, except as
enforcement may be limited by Debtor Relief Laws or equitable principles
relating to the granting of specific performance and other equitable remedies as
a matter of judicial discretion.
4.12 No Default. No event has occurred and is continuing that is a
Default or Event of Default.
4.13 ERISA.
(a) With respect to each Pension Plan:
(i) such Pension Plan complies in all material respects with
ERISA and any other applicable Laws to the extent that
noncompliance could reasonably be expected to have a Material
Adverse Effect;
(ii) such Pension Plan has not incurred any "accumulated
funding deficiency" (as defined in Section 302 of ERISA) that
could reasonably be expected to have a Material Adverse Effect;
(iii) no "reportable event" (as defined in Section 4043 of
ERISA) has occurred that could reasonably be expected to have a
Material Adverse Effect; and
(iv) neither Borrower nor any of its Subsidiaries has engaged
in any non-exempt "prohibited transaction" (as defined in Section
4975 of the Code) that could reasonably be expected to have a
Material Adverse Effect.
(b) Neither Borrower nor any of its Subsidiaries has incurred or
expects to incur any withdrawal liability to any Multiemployer Plan that
could reasonably be expected to have a Material Adverse Effect.
4.14 Regulations G. T. U and X; Investment Company Act. No part of the
proceeds of any Loan hereunder will be used to purchase or carry, or to extend
credit to others for the purpose of purchasing or carrying, any Margin Stock in
violation of Regulations G, T, U and X. Neither Borrower nor any of its
Subsidiaries is or is required to be registered as an "investment company" under
the Investment Company Act of 1940.
4.15 Disclosure. No written statement made by a Senior Officer to the
Agent or any Bank in connection with this Agreement, or in connection with any
Loan, as of the date thereof contained any untrue statement of a material fact
or omitted a material fact necessary to make the statement made not misleading
in light of all the circumstances existing at the date the statement was made.
4.16 Tax Liability. Borrower and its Subsidiaries have filed all tax
returns which are required to be filed, and have paid, or made provision for the
payment of, all taxes with respect to the periods, Property or transactions
covered by said returns, or pursuant to any assessment received by Borrower or
any of its Subsidiaries, except (a) such taxes, if any, as are being contested
in good faith by appropriate proceedings and as to which adequate reserves have
been established and maintained and (b) immaterial taxes so long as no material
item or portion of Property of Borrower or any of its Subsidiaries is in
jeopardy of being seized, levied upon or forfeited.
4.17 Strategic Plan. The Strategic Plan was prepared in accordance with
Borrower's customary procedures therefor and, in the case of the first year's
budget, was approved by Borrower's board of directors and, in the case of
subsequent years, represents the final version thereof for such years that was
reviewed by Borrower's board of directors.
4.18 Hazardous Materials. To the best knowledge of Borrower, no condition
exists that violates any Hazardous Material Law affecting any Real Property
except for such violations that would not individually or in the aggregate have
a Meterial Adverse Effect. No Real Property now owned by Borrower or any of its
Subsidiaries, or any portion thereof, is or has been utilized by Borrower or any
of its Subsidiaries as a site for the manufacture of any Hazardous Materials. To
the extent that any Hazardous Materials are used, generated or stored by
Borrower or any of its Subsidiaries on any Real Property, or transported from
such Real Property by Borrower or any of its Subsidiaries, such use, generation,
storage and transportation are in compliance in all material respects with all
Hazardous Materials Laws.
Article 5
AFFIRMATIVE COVENANTS
---------------------
(OTHER THAN INFORMATION AND
--------------------------
REPORTING REQUIREMENTS)
----------------------
So long as any Advance remains unpaid, or any other Obligation remains
unpaid or unperformed, or any portion of a Commitment remains in force, Borrower
shall, and shall cause each of its Subsidiaries to, unless the Agent (with the
written approval of the Majority Banks) otherwise consents:
5.1 Payment of Taxes and Other Potential Liens. Pay and discharge
promptly all taxes, assessments and governmental charges or levies imposed upon
any of them, upon their respective Property or any part thereof and upon their
respective income or profits or any part thereof, except that Borrower and its
Subsidiaries shall not be required to pay or cause to be paid (a) any tax,
assessment, charge or levy that is not yet past due, or is being contested in
good faith by appropriate proceedings so long as the relevant entity has
established and maintains adequate reserves for the payment of the same or (b)
any immaterial tax, assessment, governmental charge or levy so long as (i) no
material item or portion of Property of Borrower and any of its Subsidiaries,
taken as a whole, is in jeopardy of being seized, levied upon or forfeited and
(ii) the failure to make such payment would not constitute a Material Adverse
Effect.
5.2 Preservation of Existence. Preserve and maintain their respective
existences in the jurisdiction of their formation and all material
authorizations, rights, franchises, privileges, consents, approvals, orders,
licenses, permits, or registrations from any Governmental Agency that are
necessary for the transaction of their respective business ("Authorizations"),
except where the failure to so preserve and maintain the existence of any
Subsidiary and such Authorizations would not constitute a Material Adverse
Effect and except that a merger permitted by Section 6.3 shall not constitute a
violation of this covenant; and qualify and remain qualified to transact
business in each jurisdiction in which such qualification is necessary in view
of their respective business or the ownership or leasing of their respective
Properties except where the failure to so qualify or remain qualified would not
constitute a Material Adverse Effect.
5.3 Maintenance of Properties. Maintain, preserve and protect all of
their then owned respective depreciable Properties in good order and condition,
subject to wear and tear in the ordinary course of business, and not permit any
waste of their respective Properties, except that the failure to maintain,
preserve and protect a particular item of depreciable Property that is not of
significant value, either intrinsically or to the operations of Borrower and its
Subsidiaries, taken as a whole, shall not constitute a violation of this
covenant.
5.4 Maintenance of Insurance. Maintain liability, casualty and other
insurance (subject to customary deductibles and retentions) with responsible
insurance companies in such amounts and against such risks as is carried by
responsible companies engaged in similar businesses and owning similar assets in
the general areas in which Borrower and its Subsidiaries operate.
5.5 Compliance With Laws. Comply, within the time period, if any, given
for such compliance by the relevant Governmental Agency or Agencies with
enforcement authority, with all Requirements of Law noncompliance with which
constitutes a Material Adverse Effect, except that Borrower and its Subsidiaries
need not comply with a Requirement of Law then being contested by any of them in
good faith by appropriate proceedings.
5.6 Inspection Rights. Upon reasonable notice, at any time during regular
business hours and as often as requested (but not so as to materially interfere
with the business of Borrower or any of its Subsidiaries), permit the Agent or
any Bank, or any authorized employee, agent or representative thereof, to
examine, audit and make copies and abstracts from the records and books of
account of, and to visit and inspect the Properties of, Borrower and its
Subsidiaries and to discuss the affairs, finances and accounts of Borrower and
its Subsidiaries with any of their officers, key employees or accountants and,
upon request, furnish promptly to the Agent or any Bank true copies of all
financial information made available to the board of directors or audit
committee of the board of directors of Borrower.
5.7 Keeping of Records and Books of Account. Keep adequate records and
books of account reflecting all financial transactions in conformity with
Generally Accepted Accounting Principles, consistently applied, and in material
conformity with all applicable requirements of any Governmental Agency having
regulatory jurisdiction over Borrower or any of its Subsidiaries.
5.8 Compliance With Agreements. Promptly and fully comply with all
Contractual Obligations under all material agreements, indentures, leases and/or
instruments to which any one or more of them is a party, whether such material
agreements, indentures, leases or instruments are with a Bank or another Person,
except for any such Contractual Obligations (a) the performance of which would
cause a Default or (b) then being contested by any of them in good faith by
appropriate proceedings or if the failure to comply with such agreements,
indentures, leases or instruments does not constitute a Material Adverse Effect.
5.9 Use of Proceeds. Use the proceeds of Loans solely for (a) retirement
of outstanding Indebtedness under the Substituted Credit Facilities and the
Cancelled Debt Facilities and (b) general working capital and corporate purposes
of Borrower and its Subsidiaries, provided that in no event shall the proceeds
of a Loan under the Line A Commitment be used to repay an outstanding Loan under
the Line B Commitment.
5.10 New Guarantor Subsidiaries; Release of Certain Guaranties. Cause
each of its Subsidiaries which hereafter becomes a Guarantor Subsidiary to
immediately execute and deliver to the Agent an instrument of joinder of the
Subsidiary Guaranty. Should the stock of a Subsidiary holding only the assets of
the Glen Harbor Project or the Spring Creek Project be transferred or such a
Subsidiary be disposed of by merger in accordance herewith to an entity that is
not an Affiliate of Borrower, then, subject to receipt of reaffirmations of
other Guarantor Subsidiaries and such other documentation as the Agent may
reasonably request, the Banks will release such Subsidiary from the Subsidiary
Guaranty.
5.11 Hazardous Materials Laws. Keep and maintain all Real Property and
each portion thereof in compliance in all material respects with all applicable
Hazardous Materials Laws and promptly notify the Agent in writing of (a) any and
all material enforcement, cleanup, removal or other governmental or regulatory
actions instituted, completed or threatened in writing by a Governmental Agency
pursuant to any applicable Hazardous Materials Laws, (b) any and all material
claims made or threatened in writing by any Person against Borrower relating to
damage, contribution, cost recovery, compensation, loss or injury resulting from
any Hazardous Materials and (c) discovery by any Senior Officer of Borrower of
any material occurrence or condition on any real property adjoining or in the
vicinity of such Real Property that could reasonably be expected to cause such
Real Property or any part thereof to be subject to any restrictions on the
ownership, occupancy, transferability or use of such Real Property under any
applicable Hazardous Materials Laws.
5.12 Termination of GFB L/C. Cause, within sixty (60) days following the
Closing Date, the GFB L/C (as defined in Section 8.1(a)(8)) to be terminated and
cause any collateral security for the reimbursement obligation with respect
thereto to be released.
Article 6
NEGATIVE COVENANTS
------------------
So long as any Advance remains unpaid, or any other Obligation remains
unpaid or unperformed, or any portion of a Commitment remains in force, Borrower
shall not, and shall not permit any of its Subsidiaries to, unless the Agent
(with the written approval of the Majority Banks or, if required by Section
11.2, of all of the Banks) otherwise consents:
6.1 Prepayment of Indebtedness. Pay any principal or interest on any
Indebtedness of Borrower or any of its Subsidiaries (other than Indebtedness
under the Notes) prior to the date when due, or make any payment or deposit with
any Person that has the effect of providing for the satisfaction of any
Indebtedness of Borrower or any of its Subsidiaries prior to the date when due,
in each case if an Event of Default then exists or would result therefrom.
6.2 Payment of Subordinated Obligations. Pay any (a) principal (including
sinking fund payments) or any other amount (other than scheduled interest
payments) with respect to any Subordinated Obligation except the Swiss Franc
Debt and as expressly permitted in the last sentence of this Section 6.2, or (b)
scheduled interest on any Subordinated Obligation, if an Event of Default
described in Sections 9.1(a) or 9.1(b) then exists or would result therefrom;
provided, however, that this Section 6.2 is in no way in limitation of any
additional rights the Banks may have to block payments with respect to any
Subordinated Obligation. In addition to the Swiss Franc Debt, the principal
amount of Subordinated Obligations may be prepaid or redeemed but only (A) if
(i) an Event of Default does not then exist and would not result therefrom and
(ii) Borrower has not received written notice from the Agent or a Bank that a
Default has occurred and such Default remains uncured; and (B) to the extent of
an amount equal to the sum of (x) the net cash proceeds from the issuance by
Borrower of its capital stock (that is not Disqualified Stock) after January 1,
1994 plus (y) the following percentages of new cash Subordinated Obligation
borrowings by Borrower after January 1, 1994, provided that such borrowings have
a maturity no earlier than one (1) year after the Maturity Date.
Principal Amount
Percentage Borrowed in Cash
---------- ----------------
-0- first $50,000,000
50% next $50,000,000
100% amounts over $100,000,000
6.3 Mergers and Sale of Assets.
(a) Merge or consolidate with or into any Person, except mergers
and consolidations of a Subsidiary of Borrower (other than a Coventry
Subsidiary or an Exempt Subsidiary) into Borrower or a Guarantor
Subsidiary (other than a Coventry Subsidiary or an Exempt Subsidiary)
with, if applicable, Borrower as the surviving entity, provided that
Borrower and each of its Subsidiaries has executed such amendments to the
Loan Documents as the Agent may reasonably determine are appropriate as a
result of such merger. This Section 6.3(a) shall not restrict a merger
implemented solely to effect a Disposition specified in clause (e) of the
definition of "Disposition."
(b) Make any Disposition of its Property other than the sale of
Property for cash and/or other Property which in the aggregate have the
fair equivalent value to the Property sold; provided, however, that no
Property shall be sold by way of Disposition (nor shall there be any
related sales of Property) if the value of the Property sold is in excess
of $5,000,000.
(c) Notwithstanding the foregoing provisions of this Section 6.3
or any other provision of this Agreement, the following Transfers of
Property (including Cash) for reasonably equivalent value are not
restricted:
(i) by and among Borrower and any of its wholly-owned
Subsidiaries that are not Coventry Subsidiaries or Exempt
Subsidiaries; or
(ii) by and among the Coventry Subsidiaries; or
(iii) by and among the Exempt Subsidiaries.
Notwithstanding the foregoing provisions of this Section 6.3 or any other
provision of this Agreement, Transfers of Property (including Cash) by
any directly or indirectly wholly-owned Subsidiary of Borrower to its
parent corporation(s) are not restricted.
6.4 Hostile Tender Offers. Make any offer to purchase or acquire, or
consummate a purchase or acquisition of, 5% or more of the capital stock of any
corporation or other business entity if the board of directors or management of
such corporation or business entity has notified Borrower that it opposes such
offer or purchase and such notice has not been withdrawn or superseded.
6.5 Distributions. As to Borrower and any Subsidiaries of Borrower which
are not wholly-owned Subsidiaries of Borrower, make any Distribution, whether
from capital, income or otherwise, and whether in Cash or other Property, unless
(a) such Distribution could have been made on the last day of the most recently
ended Fiscal Quarter without causing a violation of Section 6.11 as of such last
day of such Fiscal Quarter and (b) in the case of a Distribution by Borrower (i)
an Event of Default does not then exist and would not result therefrom and (ii)
Borrower has not theretofore received written notice from the Agent or a Bank
that a Default has occurred and such Default remains uncured, provided however
that a Distribution may be made if such Distribution constitutes a dividend on
capital stock of Borrower that was otherwise permissible to be made at the time
it was declared payable by Borrower's board of directors and that is in fact
paid within 60 days after such declaration.
6.6 ERISA.
(a) At any time, permit any Pension Plan to:
(i) engage in any non-exempt "prohibited transaction" (as
defined in Section 4975 of the Code);
(ii) fail to comply with ERISA or any other applicable Laws
to the extent that noncompliance could reasonably be expected to
have a Material Adverse Effect;
(iii) incur any material "accumulated funding deficiency" (as
defined in Section 302 of ERISA); or
(iv) terminate in any manner, which, with respect to each
event listed above, could reasonably be expected to result in a
Material Adverse Effect.
(b) Withdraw, completely or partially, from any Multiemployer Plan
if to do so could reasonably be expected to result in a Material Adverse
Effect.
6.7 Change in Nature of Business. Make any material change in the nature
of the business of Borrower and its Subsidiaries, taken as a whole. In addition,
Borrower shall not (except through a Subsidiary) engage, in any material
respect, in business activities other than acting as a holding company for its
Subsidiaries. In addition, no Coventry Subsidiary shall engage, in any material
respect, in business activities other than conventional single-family
residential home development and related activities (not to include
age-restricted planned community residential development).
6.8 Liens. Create, incur, assume or suffer to exist any Lien of any
nature upon or with respect to any of their respective Properties, whether now
owned or hereafter acquired, except:
(a) Permitted Encumbrances;
(b) Liens that may exist from time to time under the Loan
Documents;
(c) existing Liens disclosed in Schedule 6.8 and any renewals or
extensions thereof; provided that the obligations secured or benefited
thereby are not increased;
(d) Liens on Real Property acquired (whether before or after the
Closing Date) by Borrower or any of its Subsidiaries that (i) except as
permitted by clause (iii) of this Section 6.8(d), secure solely purchase
money indebtedness with respect to the Real Property, (ii) secure solely
Non-Recourse Debt and (iii) encumbered the Real Property at the time of
or in connection with its acquisition by Borrower or its Subsidiary or
were placed thereon to refinance or borrow an amount up to the purchase
price within 90 days after the acquisition;
(e) One or more Liens on Property of Coventry Subsidiaries that,
in each case, (i) secures solely Indebtedness of such Coventry
Subsidiaries that was incurred for the acquisition, development and/or
construction of the liened Property, or the refinancing thereof up to the
amount of the original borrowing, (ii) secures solely Indebtedness for
which the lender has recourse solely against such Coventry Subsidiaries
and the secured assets and not Borrower or any other Subsidiary of
Borrower, (iii) covers only Property that has a cost basis (calculated by
adding the acquisition cost to the cost of any capital improvements to
the Property) to Borrower and its Subsidiaries of not more than 150% of
the principal of the secured Indebtedness and (iv) was created after the
Commitment Reduction Date; and
(f) One or more Liens on Property of Exempt Subsidiaries that, in
each case, (i) secures solely Indebtedness of such Exempt Subsidiaries
that was incurred for the acquisition, development and/or construction of
the liened Property, or the refinancing thereof up to the amount of the
original borrowing, (ii) secures solely Non-Recourse Debt and (iii) was
created after the Commitment Reduction Date.
6.9 Indebtedness. Create, incur or assume any Indebtedness (other than
accrual of interest) except the following but only if a Default or Event of
Default does not then exist and would not result therefrom and only if such
Indebtedness is otherwise permissible under the Indenture for the Public Senior
Debt (as in existence on the date of this Agreement):
(a) Non-Recourse Debt for which the corresponding Lien is
otherwise permissible under Section 6.8(d) or 6.8(f), provided that such
Indebtedness is in compliance with the requirements of such Section,
(b) Indebtedness of a Coventry Subsidiary for which a
corresponding Lien is otherwise permissible under Section 6.8(e),
provided that all such Indebtedness is in compliance with the
requirements of such Section and provided further that the aggregate
principal amount of all such Indebtedness does not, on any date of
determination, exceed the total amount by which the Commitments have been
reduced through that date pursuant to Section 2.5,
(c) Indebtedness incurred pursuant to commitments and proposed
commitments therefor that are identified on Schedule 6.9 (including
replacements of such commitments), but only to the maximum amount
available shown on such Schedule,
(d) Indebtedness that constitutes Subordinated Obligations so long
as no principal repayment (or any nature of reserve therefor) is due
until at least one (1) year after the Maturity Date,
(e) Indebtedness outstanding under the Notes,
(f) Indebtedness constituting a refinancing on not materially less
favorable terms of Indebtedness permitted under this Section 6.9,
(g) Indebtedness constituting reimbursement obligations incurred
with respect to standby letters of credit issued in the ordinary course
of Borrower's and its Subsidiaries real estate development business,
(h) Indebtedness by and among Borrower and its Subsidiaries, so
long as such Indebtedness is not otherwise restricted hereunder (such as
under Section 6.16(d) with respect to certain Investments),
(i) Unsecured Indebtedness incurred by Borrower (and any guaranty
of such Indebtedness by a Subsidiary), provided that any such unsecured
Indebtedness having an initial maturity of one (1) year or less and
outstanding under either a working capital facility or a bid line of
credit shall be limited to an aggregate principal amount outstanding at
any one time of $25,000,000 and, provided further, that a guaranty of any
such unsecured Indebtedness by one or more Subsidiaries shall be
permissible only if such unsecured Indebtedness constitutes a loan of
money (or a reimbursement obligation under a letter of credit) and only
if the credit instrument evidencing such unsecured Indebtedness expressly
states that the funds loaned thereunder are being made available to
Borrower solely for the general working capital and corporate purposes of
Borrower and its Subsidiaries, without any portion thereof being required
to be used for any particular purpose, and
(j) A guaranty of the Public Senior Debt by a Guarantor
Subsidiary.
6.10 Transactions with Affiliates. After into any transaction of any kind
with any Affiliate of Borrower other than (a) salary, bonus, employee stock
option and other compensation arrangements and indemnification arrangements with
directors or officers in the ordinary course of business, (b) transactions
between or among Borrower and its Guarantor Subsidiaries (other than Coventry
Subsidiaries or Exempt Subsidiaries), (c) Investments in Subsidiaries
specifically permitted in Sections 6.16(d)(ii) and (iii) and (d) transactions on
overall terms at least as favorable to Borrower and its Guarantor Subsidiaries
as would be the case in an arm's-length transaction between unrelated parties of
equal bargaining power.
6.11 Tangible Net Worth. Permit Tangible Net Worth, as of the last day of
any Fiscal Quarter ending on or after June 30, 1995, to be less than the sum of
(a) $200,000,000 plus (b) an amount equal to 75% of the cumulative Net Income
earned in all Fiscal Quarters ending after December 31, 1994 (with no deduction
for a net loss in any such Fiscal Quarter), plus (c) an amount equal to 50% of
the aggregate cumulative increases in Stockholders' Equity after December 31,
1994 by reason of the issuance and sale of capital stock by Borrower (including
upon any conversion or exchange of debt securities of Borrower into such capital
stock).
6.12 Consolidated Fixed Charge Coverage. Permit the Consolidated Fixed
Charge Coverage Ratio, as of the last day of any Fiscal Quarter ending on or
after June 30, 1995, to be less than 1.75:1.00.
6.13 Debt to Net Worth. Permit the ratio of (a) Adjusted Total
Indebtedness to (b) Tangible Net Worth, each as of any Fiscal Quarter ending on
or after June 30, 1995, to be greater than the ratio set forth below opposite
the period during which such Fiscal Quarter ends:
Period Ratio
------ -----
June 30, 1995 through
March 31, 1996 2.75:1.00
April 1, 1996 through
March 31, 1997 2.35:1.00
April 1, 1997 and thereafter 2.15:1.00
6.14 Adjusted Senior Debt to Net Worth. Permit the ratio of Adjusted
Senior Debt to Tangible Net Worth, each as of any Fiscal Quarter ending on or
after June 30, 1995, to be greater than the ratio set forth below opposite the
period during which such Fiscal Quarter ends:
Period Ratio
------ -----
June 30, 1995 through
March 31, 1996 1.90:1.00
April 1, 1996 through
March 31, 1997 1.70:1.00
April 1, 1997 through
March 31, 1998 1.50:1.00
April 1, 1998 and thereafter 1.25:1.00
6.15 Liquidity. Permit, as of the last day of any Fiscal Year, beginning
June 30, 1995, the ratio of EBITDA for such Fiscal Year to Specified Charges for
such Fiscal Year to be less than (a) 0.50:1.00 for the Fiscal Year ending June
30, 1995 or (b) 0.75:1.00 for the Fiscal Years ending June 30, 1996 or
thereafter, provided that any such failing shall not constitute an Event of
Default under Section 9.1(c) unless and until Borrower shall also permit, as of
the last day of the immediately succeeding Fiscal Quarter, the ratio of EBITDA
for the four (4) Fiscal Quarter period then ending to Specified Charges for such
four (4) Fiscal Quarter period to also be less than said specified ratio.
6.16 Investments. Make or suffer to exist any Investment, other than:
(a) Investments in existence on the Closing Date and disclosed on
Schedule 6.16;
(b) Investments consisting of Cash and Cash Equivalents;
(c) Investments consisting of or evidencing the extension of
credit to customers of Borrower and its Subsidiaries in the ordinary
course of business and any Investments received in satisfaction or
partial satisfaction thereof;
(d) Investments of Borrower in any of its Subsidiaries and
Investments of any Subsidiary in Borrower or another Subsidiary provided
that (i) the book value of Investments in Subsidiaries that engage in
activities other than the acquisition, development, construction or
financing of residential real estate as a material portion of their
business activities shall not exceed, in the aggregate at any date of
determination, more than 10% of Tangible Net Worth as of the end of the
then most recently ended Fiscal Quarter (ii) the book value of
Investments in Subsidiaries that are not Guarantor Subsidiaries shall not
exceed, in the aggregate at any date of determination, $5,000,000; and
(iii) at no time shall the aggregate cumulative dollar amount of
Investments (net of cumulative cash payments made by Exempt Subsidiaries
to Borrower and its wholly-owned Subsidiaries which are not Coventry
Subsidiaries or Exempt Subsidiaries on account of such Investments) in
all Exempt Subsidiaries exceed the lesser of (A) $35,000,000 or (B) 50%
of the cumulative amount of Net Income (giving account to any net loss),
as of the most recently ended Fiscal Quarter, from and after the Fiscal
Quarter beginning January 1, 1996. All references to "Investments" in
clauses (i) through (iii) shall specifically include guaranties, as
provided in the definition of "Investments". The termination or release
(in whole or in part) of any such guaranty that is treated as an
Investment (in the absence of payment thereunder) shall thereupon result
in a corresponding reduction in the measured amount of such Investment;
(e) Investments received in connection with the settlement of a
bona fide dispute with another Person; and
(f) Investments representing all or a portion of the sales price
for Property sold to another Person.
(g) Investments (i) consisting of readily marketable securities
actively traded on a public exchange or (ii) in Persons (other than
Subsidiaries), each of which Persons does not, as a material portion of
its business, engage in activities other than those related to the
acquisition, development, construction or financing of residential real
estate, provided that (A) the cumulative dollar amount of Investments
under clause (i) (net of cumulative cash payments in respect of such
Investments) shall at no time exceed $2,000,000 and (B) the cumulative
dollar amount of Investments under clauses (i) and (ii) (net of
cumulative cash payments in respect of such Investments) shall at no time
exceed $10,000,000.
6.17 Unentitled Land.
(a) Permit the total amount of Borrower's and its Subsidiaries'
Cash investment in Unentitled Land that (i) is part of Current Operating
Projects other than Coventry Homes Projects or (ii) is part of a Coventry
Homes Project for which home sale closings have commenced (including in
either case, without limitation, all Cash expenditures reasonably
allocated to the acquisition, development, maintenance and holding of
such Unentitled Land) to exceed 25% of Tangible Net Worth at any time on
or after June 30, 1995; or
(b) Permit the total amount of Borrower's and its Subsidiaries
Cash investment in Unentitled Land that (i) is not part of Current
Operating Projects or (ii) is part of a Coventry Homes Project for which
home sale closings have not yet commenced (including in either case,
without limitation, all Cash expenditures reasonably allocated to the
acquisition, development, maintenance and holding of such Unentitled
Land) to exceed 10% of Tangible Net Worth at any time on or after June
30, 1995.
6.18 Unsold Homes in Production. For any two (2) consecutive Fiscal
Quarters, beginning with the Fiscal Quarter ending March 31, 1995:
(a) Permit the number of Unsold Homes (other than (i) Unsold Homes
that are part of the Coventry Homes Projects, (ii) Unsold Homes included
in development projects with respect to which, on the date of
determination, 12 months has not elapsed since the closing of the sale of
the first housing unit, (iii) Unsold Homes that are held by an Exempt
Subsidiary if such Unsold Home has been pledged to secure financing
described in Section 6.8(f) and (iv) Unsold Homes within any Current
Operating Project that are then being used as sales models or as vacation
apartments for marketing purposes (collectively, "Excluded Unsold
Homes")), as of the end of such Fiscal Quarters to exceed the applicable
percentage shown below of the number of housing unit sale closings of
Borrower and its Guarantor Subsidiaries (other than sale closings of
housing units that are Excluded Unsold Homes) that occurred in the twelve
(12) months immediately prior to each such Fiscal Quarter end:
Applicable
Any Fiscal Quarter Ending Percentage
------------------------- ----------
September 30th 35%
December 31st 35%
March 31st 30%
June 30th 25%; or
(b) Permit the number of Unsold Homes that are part of the
Coventry Homes Projects as of the end of such Fiscal Quarters to exceed
25% of the number of housing unit sale closings in the Coventry Homes
Projects that occurred in the twelve (12) months immediately prior to
each such Fiscal Quarter end.
6.19 Exempt Subsidiaries. Permit any Exempt Subsidiary to hold an
ownership interest in any Subsidiary that is not also an Exempt Subsidiary.
6.20 Coventry Assets. Permit, as of the last day of any Fiscal Quarter,
beginning June 30, 1995, the ratio of Coventry Assets to Consolidated Total
Assets to be greater than 0.20:1.00 or the ratio of Coventry Land Assets to
Consolidated Total Assets to be greater than 0.15:1.00.
Article 7
INFORMATION AND REPORTING REQUIREMENTS
--------------------------------------
7.1 Financial and Business Information. So long as any Advance remains
unpaid, or any other Obligation remains unpaid or unperformed, or any portion of
a Commitment remains in force, Borrower shall, unless the Agent (with the
written approval of the Majority Banks) otherwise consents, deliver to the Agent
and the Banks, at Borrower's sole expense:
(a) As soon as practicable, and in any event within 60 days after
the end of each Fiscal Quarter (other than the fourth Fiscal Quarter in
any Fiscal Year), (i) the consolidated balance sheet of Borrower and its
Subsidiaries as at the end of such Fiscal Quarter and the consolidated
statement of operations for each Fiscal Quarter, and its statement of
cash flows for the portion of the Fiscal Year ended with such Fiscal
Quarter and (ii) the consolidating (in accordance with past consolidating
practices of Borrower) balance sheets and statements of operations as at
and for the portion of the Fiscal Year ended with such Fiscal Quarter,
all in reasonable detail. Such financial statements shall be certified by
a Senior Officer of Borrower as fairly presenting the financial
condition, results of operations and cash flows of Borrower and its
Subsidiaries in accordance with Generally Accepted Accounting Principles
(other than footnote disclosures), consistently applied, as at such date
and for such periods, subject only to normal year-end accruals and audit
adjustments;
(b) As soon as practicable, and in any event within 120 days after
the end of each Fiscal Year (including the Fiscal Year ending June 30,
1995), (i) the consolidated balance sheet of Borrower and its
Subsidiaries as at the end of such Fiscal Year and the consolidated
statements of operations, shareholders' equity and cash flows, in each
case of Borrower and its Subsidiaries for such Fiscal Year and (ii)
consolidating (in accordance with past consolidating practices of
Borrower) balance sheets and statements of operations, in each case as at
and for the Fiscal Year, all in reasonable detail. In the case of clause
(i), such financial statements shall be prepared in accordance with
Generally Accepted Accounting Principles, consistently applied, and such
consolidated balance sheet and consolidated statements shall be
accompanied by a report and opinion of KPMG Peat Marwick or other
independent public accountants of recognized standing selected by
Borrower and reasonably satisfactory to the Majority Banks, which report
and opinion shall be prepared in accordance with generally accepted
auditing standards as at such date, and shall not be subject to any
qualifications or exceptions as to the scope of the audit nor to any
other qualification or exception reasonably determined by the Majority
Banks in their good faith business judgment to be adverse to the
interests of the Banks. Such accountants' report and opinion shall be
accompanied by a certificate stating that, in making the examination
pursuant to generally accepted auditing standards necessary for the
certification of such financial statements and such report, such
accountants have obtained no knowledge of any Default or, if, in the
opinion of such accountants, any such Default shall exist, stating the
nature and status of such Default, and stating that such accountants have
reviewed Borrower's financial calculations as at the end of such Fiscal
Year (which shall accompany such certificate) under Sections 6.11 through
6.15, have read such Sections (including the definitions of all defined
terms used therein) and that nothing has come to the attention of such
accountants in the course of such examination that would cause them to
believe that the same were not calculated by Borrower in the manner
prescribed by this Agreement. In the case of clause (ii), such financial
statements shall be certified by a Senior Officer of Borrower as fairly
presenting the financial condition, results of operations and cash flows
of Borrower and its Subsidiaries in accordance with Generally Accepted
Accounting Principles (other than footnote disclosures), consistently
applied, as at such date and for such periods;
(c) As soon as practicable, and in any event within 60 days after
the commencement of each Fiscal Year (including the Fiscal Year beginning
July 1, 1995), a budget by Fiscal Quarter for that Fiscal Year and a
strategic plan by Fiscal Year for the three Fiscal Years following the
budgeted year, including for the Fiscal Year just commenced, projected
consolidated balance sheets, statements of operations and statements of
cash flow and, for the next three succeeding Fiscal Years, projected
consolidated condensed balance sheets and statements of operations and
cash flow, of Borrower and its Subsidiaries, all in reasonable detail;
(d) Promptly after request by the Agent or any Bank, copies of any
detailed audit reports, management letters or recommendations submitted
to the board of directors (or the audit committee of the board of
directors) of Borrower by independent accountants in connection with the
accounts or books of Borrower or any of its Subsidiaries, or any audit of
any of them;
(e) Promptly after the same are available, copies of each annual
report, proxy or financial statement or other report or communication
sent to the shareholders of Borrower, and copies of all annual, regular,
periodic and special reports and registration statements which Borrower
may file or be required to file with the Securities and Exchange
Commission under Sections 13 or 15(d) of the Securities Exchange Act of
1934 and not otherwise required to be delivered to the Banks pursuant to
other provisions of this Section 7.1;
(f) Except as prohibited by Law, promptly after request by the
Agent or any Bank, copies of any other report or other document that was
filed by Borrower or any of its Subsidiaries with any Governmental
Agency;
(g) Promptly upon a Senior Officer becoming aware, and in any
event within five (5) Banking Days after becoming aware, of the
occurrence of any (i) "reportable event" (as such term is defined in
Section 4043 of ERISA) or (ii) "prohibited transaction" (as such term is
defined in Section 406 of ERISA or Section 4975 of the Code) in
connection with any Pension Plan or any trust created thereunder,
telephonic notice specifying the nature thereof, and, no more than five
(5) Banking Days after such telephonic notice, written notice again
specifying the nature thereof and specifying what action Borrower or any
of its Subsidiaries is taking or proposes to take with respect thereto,
and, when known, any action taken by the Internal Revenue Service with
respect thereto;
(h) As soon as practicable, and in any event within two Banking
Days after a Senior Officer becomes aware of the existence of any
condition or event which constitutes a Default, telephonic notice
specifying the nature and period of existence thereof, and, no more than
two Banking Days after such telephonic notice, written notice again
specifying the nature and period of existence thereof and specifying what
action Borrower or any of its Subsidiaries are taking or propose to take
with respect thereto;
(i) Promptly upon a Senior Officer becoming aware that (i) any
Person commenced a legal proceeding with respect to a claim against
Borrower or any of its Subsidiaries that is $500,000 or more in excess of
the amount thereof that is fully covered by insurance, (ii) any creditor
or lessor under a written credit agreement or material lease has asserted
a default thereunder on the part of Borrower or any of its Subsidiaries,
(iii) any Person commenced a legal proceeding with respect to a claim
against Borrower or any of its Subsidiaries under a contract that is not
a credit agreement or material lease in excess of $500,000 or which
otherwise may reasonably be expected to result in a Material Adverse
Effect, or (iv) any labor union has notified Borrower of its intent to
strike Borrower or any of its Subsidiaries on a date certain and such
strike would involve more than 100 employees of Borrower and its
Subsidiaries, a written notice describing the pertinent facts relating
thereto and what action Borrower or its Subsidiaries are taking or
propose to take with respect thereto;
(j) No later than 7 days prior to its creation, written notice of
any Lien to be created pursuant to Section 6.8(e) or (f), together with a
reasonably detailed description of such Lien and the Indebtedness to be
secured thereby; and
(k) Such other data and information as from time to time may be
reasonably requested by the Agent, any Bank (through the Agent) or the
Majority Banks.
7.2 Compliance Certificates. So long as any Advance remains unpaid, or
any other Obligation remains unpaid or unperformed, or any portion of a
Commitment remains outstanding, Borrower shall deliver to the Agent and the
Banks, at Borrower's sole expense, concurrently with the financial statements
required pursuant to Sections 7.1(a) and 7.1(b), a Compliance Certificate signed
by a Senior Officer.
Article 8
CONDITIONS
----------
8.1 Initial Advances, Etc. The effectiveness of this Agreement as an
amendment and restatement of the Original Loan Agreement, and the effectiveness
of the other Loan Documents as amendments and restatements of the other Original
Loan Documents, and the obligation of each Bank to make the initial Advance to
be made by it and, if applicable, to make or accept an Adjusting Purchase
Payment, and the obligation of the Issuing Bank to issue any Letter of Credit
are subject to the following conditions precedent, each of which must be
satisfied unless all of the Banks, in their sole and absolute discretion, shall
agree otherwise:
(a) The Agent shall have received all of the following, each of
which shall be originals unless otherwise specified, each properly
executed by a Responsible Official of each party thereto, each dated as
of the Closing Date and each in form and substance satisfactory to the
Agent and its legal counsel (unless otherwise specified or, in the case
of the date of any of the following, unless the Agent otherwise agrees or
directs):
(1) at least one (1) executed counterpart of this Agreement,
together with arrangements satisfactory to the Agent for
additional executed counterparts, sufficient in number for
distribution to the Banks and Borrower;
(2) a Line A Note and a Line B Note executed by Borrower in
favor of each Bank, each such Note in a principal amount equal to
that Bank's Pro Rata Share of the applicable Commitment;
(3) the Subsidiary Guaranty executed by each Guarantor
Subsidiary;
(4) with respect to Borrower and each Guarantor Subsidiary,
such documentation as may be required to establish the due
organization, valid existence and good standing of Borrower and
each such Subsidiary, its qualification to engage in business in
each material jurisdiction in which it is engaged in business or
required to be so qualified, its authority to execute, deliver and
perform any Loan Documents to which it is a Party, the identity,
authority and capacity of each Responsible Official thereof
authorized to act on its behalf, including certified copies of
articles of incorporation and amendments thereto, bylaws and
amendments thereto, certificates of good standing and/or
qualification to engage in business, tax clearance certificates,
certificates of corporate resolutions, incumbency certificates,
Certificates of Responsible Officials, and the like;
(5) the Opinions of Counsel;
(6) a Certificate of a Responsible Official certifying that
the attached copies of (i) the Indenture for the Public Senior
Debt, (ii) the Indenture for the Public 9-3/4% Senior Subordinated
Debt, (iii) the Public Bond Issue Agreement for the Swiss Franc
Debt and (iv) the Indenture for the Public 9.00% Senior
Subordinated Debt are true, current and complete copies;
(7) a Certificate of a Responsible Official signed by a
Senior Officer certifying that the conditions specified in
Sections 8.1(a)(8), 8.1(d) and 8.1(e) have been satisfied;
(8) evidence that:
(i) all indebtedness outstanding under the Cancelled
Debt Facilities is being repaid with proceeds of the initial
Advances, with the exception of the reimbursement obligation
under a letter of credit in the approximate amount of
$609,000 outstanding under Guaranty Federal Bank's facility
designated "Coventry Homes - PHX - Land Acquisition Loan"
(the "GFB L/C");
(ii) all further credit availability (and any
commitment therefor) under the Cancelled Debt Facilities is
being terminated concurrently with the initial Advances; and
(iii) all collateral security for and with respect to
the Cancelled Debt Facilities (except as may secure the
reimbursement obligation under the GFB L/C) will be released
promptly following the initial Advances,
such evidence may consist of payoff and collateral release demand
letters from applicable lenders and, if requested by the Agent,
the delivery of collateral release documents to the Agent or the
creation of satisfactory escrow arrangements for the payoff and
release of liens with respect to Cancelled Debt Facilities; and
(9) such other assurances, certificates, documents, consents
or opinions as the Agent reasonably may require.
(b) The fees payable pursuant to Sections 3.2 and 3.3 shall have
been paid and any accrued interest and fees under the Original Loan
Documents shall have been paid as specified in Section 3.16.
(c) The reasonable costs and expenses of the Agent in connection
with the preparation of the Loan Documents payable pursuant to Section
11.3, and invoiced to Borrower prior to the Closing Date, shall have been
paid.
(d) The representations and warranties of Borrower contained in
Article 4 shall be true and correct.
(e) Borrower and any other Parties shall be in compliance with all
the terms and provisions of the Loan Documents, and giving effect to the
initial Advance no Default or Event of Default shall have occurred and be
continuing.
(f) The Consolidated Fixed Charge Coverage Ratio shall be no less
than 3.00:1.00.
8.2 Any Increasing Advance. The obligation of each Bank to make any
Advance which would increase the principal amount outstanding under the Notes
and the obligation of the Issuing Bank to issue a Letter of Credit are subject
to the following conditions precedent:
(a) except (i) for representations and warranties which expressly
speak as of a particular date or are no longer true and correct as a
result of a change which is permitted by this Agreement or (ii) as
disclosed by Borrower and approved in writing by the Majority Banks, the
representations and warranties contained in Article 4 (other than
Sections 4.4(a), 4.6 (first sentence), and 4.10), shall be true and
complete on and as of the date of the Advance as though made on that
date;
(b) other than matters described in Schedule 4.10 or not
required as of the Closing Date to be therein described, there shall not
be then pending or threatened any action, suit, proceeding or
investigation against or affecting Borrower or any of its Subsidiaries or
any Property of any of them before any Governmental Agency that
constitutes a Material Adverse Effect;
(c) the Consolidated Fixed Charge Coverage Ratio shall be no less
than 2.25:1.00;
(d) in the case of any Letter of Credit or any Advance with
respect to the Line A Commitment, the Consolidated Fixed Charge Coverage
Ratio shall be no less than 3.00:1.00;
(e) the Agent shall have timely received a Request for Loan in
compliance with Article 2 (or telephonic or other request for loan
referred to in the second sentence of Section 2.1(b), if applicable) and
the Issuing Bank shall, in the case of a Letter of Credit, have received
a Request for Letter of Credit in compliance with Article 2;
(f) the Agent shall have received, in form and substance
satisfactory to the Agent, such other assurances, certificates, documents
or consents related to the foregoing as the Agent or Majority Banks
reasonably may require; and
(g) the Agent shall have received, concurrently with the
corresponding Request for Loan (or, if applicable, the telephonic notice
thereof, under Section 2.1(b)), a fully and accurately completed Loan
Compliance Certificate, dated the date the Loan is to be made, and, on
the date of the Loan, Borrower and its Subsidiaries shall be in
compliance with all requirements specified thereon with respect to the
nature and amount of the requested Loan.
8.3 Any Advance. The obligation of each Bank to make any Advance is
subject to the condition precedent that, except as provided for in Section
2.1(g), the Agent shall have timely received a Request for Loan in compliance
with Article 2 (or telephonic or other request for loan referred to in the
second sentence of Section 2.1(b), if applicable).
8.4 Return of Original Notes. Upon the effectiveness of this Agreement,
including the delivery by Borrower of all documents required under Section 8.1,
the Banks holding the Original Notes shall return them to Borrower, in each case
marked "Cancelled and Replaced."
Article 9
EVENTS OF DEFAULT AND REMEDIES UPON EVENT OF DEFAULT
----------------------------------------------------
9.1 Events of Default. The existence or occurrence of any one or more of
the following events, whatever the reason therefor and under any circumstances
whatsoever, shall constitute an Event of Default:
(a) Borrower fails to pay any principal Indebtedness on any Note
on the date when due or fails to pay to the Issuing Bank the amount drawn
under any Letter of Credit as required under Section 2.12(d); or
(b) Borrower fails to pay any interest on any Note, or any fees
under Sections 3.2, 3.3 or 3.4 or any portion thereof, within five (5)
Banking Days after the date when due; or fails to pay any other fee or
amount payable to the Banks under any Loan Document, or any portion
thereof, within five (5) Banking Days after written notice of such
failure; or
(c) Borrower fails to comply with any of the covenants contained
in Sections 5.2, 5.9, 6.1, 6.2, 6.3, 6.4, 6.5, 6.7, 6.11, 6.12, 6.13,
6.14, 6.15, 6.16, 6.18, or 7.1(h), and, in the case of Sections 6.4, 6.7
or 6.16 only, ten (10) days have elapsed without cure after either a
Senior Officer of Borrower has actual knowledge of such failing or the
Agent shall have given Borrower notice of such failing; or
(d) Borrower, any of its Guarantor Subsidiaries or any other Party
fails to perform or observe any other covenant or agreement (not
specified in clauses (a), (b) or (c) above) contained in any Loan
Document on its part to be performed or observed within ten (10) days
after the giving of notice by the Agent on behalf of the Majority Banks
of such Default; or
(e) Any representation or warranty of Borrower or any of its
Subsidiaries made in any Loan Document, or in any certificate or other
writing delivered by Borrower pursuant to any Loan Document, proves to
have been incorrect when made or reaffirmed in any material respect; or
(f) Borrower or any of its Guarantor Subsidiaries (i) fails to pay
the principal, or any principal installment, of any present or future
Indebtedness for borrowed money of $1,500,000 or more (other than
Non-Recourse Debt specified in Section 6.8(d)), or any guaranty of
present or future Indebtedness for borrowed money of $1,500,000 or more,
on its part to be paid, when due (or within any stated grace period),
whether at the stated maturity, upon acceleration, by reason of required
prepayment or otherwise or (ii) fails to perform or observe any other
term, covenant or agreement on its part to be performed or observed, or
suffers any event to occur, in connection with any present or future
indebtedness for borrowed money of $1,500,000 or more (other than
Non-Recourse Debt specified in Section 6.8(d)), or of any guaranty of
present or future indebtedness for borrowed money of $1,500,000 or more,
if as a result of such failure or sufferance any holder or holders
thereof (or an agent or trustee on its or their behalf) has the right to
declare such indebtedness due before the date on which it otherwise would
become due; or
(g) Any event occurs which gives the holder or holders of any
Subordinated Obligation (or an agent or trustee on its or their behalf)
the right to declare such indebtedness due before the date on which it
otherwise would become due, or the right to require the issuer thereof to
redeem or purchase, or offer to redeem or purchase, all or any portion of
any Subordinated Obligation; or
(h) Any Loan Document, at any time after its execution and
delivery and for any reason other than the agreement of the Banks or
satisfaction in full of all the Obligations ceases to be in full force
and effect or is declared by a court of competent jurisdiction to be null
and void, invalid or unenforceable in any respect which, in any such
event in the reasonable opinion of the Majority Banks, is materially
adverse to the interests of the Banks; or any Party thereto denies that
it has any or further liability or obligation under any Loan Document, or
purports to revoke, terminate or rescind same; or
(i) A final judgment against Borrower or any of its Guarantor
Subsidiaries is entered for the payment of money in excess of $1,000,000
and, absent procurement of a stay of execution, such judgment remains
unsatisfied for thirty (30) calendar days after the date of entry of
judgment, or in any event later than five (5) days prior to the date of
any proposed sale thereunder; or any writ or warrant of attachment or
execution or similar process is issued or levied against all or any
material part of the Property of any such Person and is not released,
vacated or fully bonded within thirty (30) calendar days after its issue
or levy; or
(j) Borrower or any of its Guarantor Subsidiaries (other than a
Guarantor Subsidiary that holds as its principal assets the Spring Creek
Project or the Glen Harbor Project) institutes or consents to the
institution of any proceeding under a Debtor Relief Law relating to it or
to all or any part of its Property, or is unable or admits in writing its
inability to pay its debts as they mature, or makes an assignment for the
benefit of creditors; or applies for or consents to the appointment of
any receiver, trustee, custodian, conservator, liquidator, rehabilitator
or similar officer for it or for all or any part of its Property; or any
receiver, trustee, custodian, conservator, liquidator, rehabilitator or
similar officer is appointed without the application or consent of that
Person and the appointment continues undischarged or unstayed for sixty
(60) calendar days; or any proceeding under a Debtor Relief Law relating
to any such Person or to all or any part of its Property is instituted
without the consent of that Person and continues undismissed or unstayed
for sixty (60) calendar days; or
(k) The occurrence of an Event of Default (as such term is or may
hereafter be specifically defined in any other Loan Document) under any
other Loan Document; or
(l) Any determination is made by a court of competent jurisdiction
that the Public 9-3/4% Senior Subordinated Debt, the Public 9.00% Senior
Subordinated Debt, the Swiss Franc Debt or any other Subordinated
Obligation is not subordinated in accordance with its terms to the
principal or interest under the Notes; or
(m) Any Pension Plan maintained by Borrower or any of its
Subsidiaries is determined to have a material "accumulated funding
deficiency" as that term is defined in Section 302 of ERISA and the
result is a Material Adverse Effect.
9.2 Remedies Upon Event of Default. Without limiting any other rights or
remedies of the Agent or the Banks provided for elsewhere in this Agreement, or
the Loan Documents, or by applicable Law, or in equity, or otherwise:
(a) Upon the occurrence, and during the continuance, of any Event
of Default other than an Event of Default described in Section 9.1(j):
(1) the commitment to make Advances and all other obligations
of the Agent or the Banks and all rights of Borrower and any other
Parties under the Loan Documents shall be suspended without notice
to or demand upon Borrower, which are expressly waived by
Borrower, except that all of the Banks or the Majority Banks (as
the case may be, in accordance with Section 11.2) may waive an
Event of Default or, without waiving, determine, upon terms and
conditions satisfactory to the Banks or Majority Banks, as the
case may be, to reinstate the Commitments and make further
Advances, which waiver or determination shall apply equally to,
and shall be binding upon, all the Banks;
(2) the Issuing Bank may, with the approval of the Majority
Banks, demand immediate payment by Borrower of an amount equal to
the aggregate drawable face amount of all then outstanding Letters
of Credit to be held by the Issuing Bank in an interest-bearing
cash collateral account as collateral hereunder, and Borrower
hereby grants to the Agent, on behalf of the Banks, a security
interest in such funds and any such account to secure the
Obligations; and
(3) the Majority Banks may request the Agent to, and the
Agent thereupon shall, terminate the Commitments and/or declare
all or any part of the unpaid principal of all Notes, all interest
accrued and unpaid thereon and all other amounts payable under the
Loan Documents to be forthwith due and payable, whereupon the same
shall become and be forthwith due and payable, without protest,
presentment, notice of dishonor, demand or further notice of any
kind, all of which are expressly waived by Borrower.
(b) Upon the occurrence of any Event of Default described in
Section 9.1(j):
(1) the commitment to make Advances and all other obligations
of the Agent or the Banks and all rights of Borrower and any other
Parties under the Loan Documents shall terminate without notice to
or demand upon Borrower, which are expressly waived by Borrower;
(2) an amount equal to the aggregate drawable face amount of
all then outstanding Letters of Credit shall be immediately due
and payable to the Issuing Bank without notice to or demand upon
Borrower, which are expressly waived by Borrower, to be held by
the Issuing Bank in an interest-bearing cash collateral account as
collateral hereunder, and Borrower hereby grants to the Agent, on
behalf of the Banks, a security interest in such funds and any
such account to secure the Obligations; and
(3) the unpaid principal of all Notes, all interest accrued
and unpaid thereon and all other amounts payable under the Loan
Documents shall be forthwith due and payable, without protest,
presentment, notice of dishonor, demand or further notice of any
kind, all of which are expressly waived by Borrower.
(c) Upon the occurrence of any Event of Default, the Agent or (but
only upon directive of the Majority Banks) any of the Banks, without
notice to (except as expressly provided for in any Loan Document) or
demand upon Borrower, which are expressly waived by Borrower (except as
to notices expressly provided for in any Loan Document), may proceed to
protect, exercise and enforce the rights and remedies of the Agent and
the Banks under the Loan Documents against Borrower and any other Party
and such other rights and remedies as are provided by Law or equity.
(d) The order and manner in which the Banks' rights and remedies
are to be exercised shall be determined by the Majority Banks in their
sole discretion, and all payments received by the Agent and the Banks, or
any of them, shall be applied first to the costs and expenses (including
attorneys' fees and disbursements and the allocated costs of attorneys
employed by the Agent) of the Agent and of the Banks, and thereafter paid
pro rata to the Banks in the same proportions that the aggregate
Obligations owed to each Bank under the Loan Documents bear to the
aggregate Obligations owed under the Loan Documents to all the Banks,
without priority or preference among the 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 the
Agent and the 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 interest due under each of the Loan Documents),
and third, to the payment of all other amounts (including principal and
fees) then owing to the Agent or the 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 the Banks hereunder or thereunder or at Law or in equity.
Article 10
THE AGENT
---------
10.1 Appointment and Authorization. Subject to Section 10.8, each Bank
hereby irrevocably appoints and authorizes the Agent to take such action as
agent on its behalf and to exercise such powers under the Loan Documents as are
delegated to the Agent by the terms thereof or are reasonably incidental, as
determined by the Agent, thereto. This appointment and authorization is intended
solely for the purpose of facilitating the servicing of the Loans and does not
constitute appointment of the Agent as trustee for any Bank or as representative
of any Bank for any other purpose and, except as specifically set forth in the
Loan Documents to the contrary, the Agent shall take such action and exercise
such powers only in an administrative and ministerial capacity.
10.2 Agent and Affiliates. Bank of America (and each successor Agent) has
the same rights and powers under the Loan Documents as any other Bank and may
exercise the same as though it was not the Agent, and the term "Bank" or "Banks"
includes Bank of America in its individual capacity. Bank of America (and each
successor Agent) and its Affiliates may accept deposits from, lend money to and
generally engage in any kind of banking, trust or other business with Borrower,
any Subsidiary thereof, or any Affiliate of Borrower or any Subsidiary thereof,
as if it was not the Agent and without any duty to account therefor to the
Banks. Bank of America (and each successor Agent) need not account to any other
Bank for any monies received by it for reimbursement of its costs and expenses
as Agent hereunder, or (except as expressly provided elsewhere herein) for any
monies received by it in its capacity as a Bank hereunder. The Agent shall not
be deemed to hold a fiduciary relationship with any Bank and no implied
covenants, functions, responsibilities, duties, obligations or liabilities shall
be read into this Agreement or otherwise exist against the Agent.
10.3 Proportionate Interest in any Collateral. The Agent, on behalf of
all the Banks, shall hold in accordance with the Loan Documents all items of any
collateral or interests therein received or held by the Agent. Subject to the
Agent's and the Banks' rights to reimbursement for their costs and expenses
hereunder (including attorneys' fees and disbursements and other professional
services and the allocated costs of attorneys employed by the Agent or a Bank)
and subject to the application of payments in accordance with Section 9.2(d),
each Bank shall have an interest in the Banks' interest in any collateral or
interests therein in the same proportions that the aggregate Obligations owed
such Bank under the Loan Documents bear to the aggregate Obligations owed under
the Loan Documents to all the Banks, without priority or preference among the
Banks.
10.4 Banks' Credit Decisions. Each Bank agrees that it has, independently
and without reliance upon the Agent, any other Bank or the directors, officers,
agents, employees or attorneys of the Agent or of any other Bank, and instead in
reliance upon information supplied to it by or on behalf of Borrower and upon
such other information as it has deemed appropriate, made its own independent
credit analysis and decision to enter into this Agreement. Each Bank also agrees
that it shall, independently and without reliance upon the Agent, any other Bank
or the directors, officers, agents, employees or attorneys of the Agent or of
any other Bank, continue to make its own independent credit analyses and
decisions in acting or not acting under the Loan Documents.
10.5 Action by Agent.
(a) The Agent may assume that no Default has occurred and is
continuing, unless the Agent has received notice from Borrower stating
the nature of the Default or has received notice from a Bank stating the
nature of the Default and that such Bank considers the Default to have
occurred and to be continuing.
(b) The Agent has only those obligations under the Loan Documents
as are expressly set forth therein.
(c) Both before and after any Default, the Agent shall be required
to act or not act upon the instructions of the Majority Banks (or all of
the Banks, to the extent required by Section 11.2) and those instructions
shall be binding upon the Agent and all the Banks, provided that the
Agent shall not be required to act or not act if to do so would be
contrary to any Loan Document or to applicable Law or would result, in
the reasonable judgment of the Agent, in a risk of liability to the
Agent. The Agent may, without the consent of the Majority Banks, take
such actions and exercise such discretion as is specified herein. In
addition, should the Agent propose a course of conduct with respect to
the administration of the Loan Documents in writing to the Banks and
should the Majority Banks (or any of the Banks, if unanimous approval of
such action is required under Section 11.2) fail, for five (5) Banking
Days after the receipt of notice from the Agent of the proposed course of
action, to instruct the Agent to the contrary, then the Agent, in its
sole discretion, may act or not act as the Agent deems advisable pursuant
to such course of conduct.
(d) The Agent shall have no liability to any Bank for acting, or
not acting, as instructed by the Majority Banks (or all the Banks, if
required under Section 11.2) or as permitted under clause (c), above,
notwithstanding any other provision hereof.
10.6 Liability of Agent. Either the Agent nor any of its directors,
officers, agents, employees or attorneys shall be liable for any action taken or
not taken by them under or in connection with the Loan Documents, except for
their own gross negligence or willful misconduct. Without limitation on the
foregoing, the Agent and its directors, officers, agents, employees and
attorneys:
(a) May treat the payee of any Note as the holder thereof until
the Agent receives notice of the assignment or transfer thereof, in form
satisfactory to the Agent, signed by the payee, and may treat each Bank
as the owner of that Bank's interest in the Obligations for all purposes
of this Agreement until the Agent receives notice of the assignment or
transfer thereof, in form satisfactory to the Agent, signed by that Bank.
(b) May consult with legal counsel (including in-house legal
counsel), accountants (including in-house accountants) and other
professionals or experts selected by it, or with legal counsel,
accountants or other professionals or experts for Borrower and/or its
Subsidiaries or the Banks, and shall not be liable for any action taken
or not taken by it in good faith in accordance with any advice of such
legal counsel, accountants or other professionals or experts.
(c) Shall not be responsible to any Bank for any statement,
warranty or representation made in any of the Loan Documents or in any
notice, certificate, report, request or other statement (written or oral)
given or made in connection with any of the Loan Documents.
(d) Except to the extent expressly set forth in the Loan
Documents, shall have no duty to ask or inquire as to the performance or
observance by Borrower or its Subsidiaries of any of the terms,
conditions or covenants of any of the Loan Documents or to inspect any
collateral or the Property, books or records of Borrower or its
Subsidiaries.
(e) Will not be responsible to any Bank for the due execution,
legality, validity, enforceability, genuineness, effectiveness,
sufficiency or value of any Loan Document, any other instrument or
writing furnished pursuant thereto or in connection therewith, or any
collateral.
(f) Will not incur any liability by acting or not acting in
reliance upon any Loan Document, notice, consent, certificate, statement,
request or other instrument or writing believed by it to be genuine and
signed or sent by the proper party or parties.
(g) Will not incur any liability for any arithmetical error in
computing any amount paid or payable by Borrower or any Subsidiary or
Affiliate thereof or paid or payable to or received or receivable from
any Bank under any Loan Document, including, without limitation,
principal, interest, commitment fees, Advances and other amounts;
provided that, promptly upon discovery of such an error in computation,
the Agent, the Banks and (to the extent applicable) Borrower and/or its
Subsidiaries or Affiliates shall make such adjustments as are necessary
to correct such error and to restore the parties to the position that
they would have occupied had the error not occurred.
10.7 Indemnification. Each Bank shall, ratably in accordance with its Pro
Rata Share of the Commitments, indemnify and hold the Agent and its directors,
officers, agents, employees and attorneys harmless against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind or nature whatsoever (including,
without limitation, attorneys' fees and disbursements and allocated costs of
attorneys employed by the Agent) that may be imposed on, incurred by or asserted
against it or them in any way relating to or arising out of the Loan Documents
(other than losses incurred by reason of the failure of Borrower to pay the
indebtedness represented by the Notes) or any action taken or not taken by it as
Agent thereunder, except such as result from its own gross negligence or willful
misconduct. Without limitation on the foregoing, each Bank shall reimburse the
Agent upon demand for that Bank's Pro Rata Share of any out-of-pocket cost or
expense incurred by the Agent in connection with the negotiation, preparation,
execution, delivery, amendment, waiver, restructuring, reorganization (including
a bankruptcy reorganization), enforcement or attempted enforcement of the Loan
Documents, to the extent that Borrower or any other Party is required by Section
11.3 to pay that cost or expense but fails to do so upon demand. If payment is
made by Borrower or another Party to the Agent for such cost or expense after
reimbursement to the Agent by a Bank, the Agent shall reimburse such Bank, as
applicable. Nothing in this Section 10.7 shall entitle the Agent to recover any
amount from the Banks if and to the extent that such amount has theretofore been
recovered from Borrower or any of its Subsidiaries.
10.8 Successor Agent. The Agent may, and at the request of the Majority
Banks shall, resign as Agent upon thirty (30) days notice to the Banks and
Borrower. If the Agent shall resign as Agent under this Agreement, the Majority
Banks shall appoint from among the Banks a successor managing agent for the
Banks, which successor managing agent shall be approved by Borrower (and such
approval shall not be unreasonably withheld). If no successor managing agent is
appointed prior to the effective date of the resignation of the Agent, the Agent
may appoint, after consulting with the Banks and Borrower, a successor managing
agent from among the Banks. Upon the acceptance of its appointment as successor
managing agent hereunder, such successor managing agent shall succeed to all the
rights, powers and duties of the retiring Agent and the term "Agent" shall mean
such successor managing agent and the retiring Agent's appointment, powers and
duties as Agent shall be terminated. After any retiring Agent's resignation
hereunder as Agent, the provisions of this Article 10, and Sections 11.3, 11.10
and 11.20, shall inure to its benefit as to any actions taken or omitted to be
taken by it while it was Agent under this Agreement.
10.9 No Obligations of Borrower. Nothing contained in this Article 10
shall be deemed to impose upon Borrower any obligation in respect of the due and
punctual performance by the Agent of its obligations to the Banks under any
provision of this Agreement, and Borrower shall have no liability to the Agent
or any of the Banks in respect of any failure by the Agent or any Bank to
perform any of its obligations to the Agent or the Banks under this Agreement.
Without limiting the generality of the foregoing, where any provision of this
Agreement relating to the payment of any amounts due and owing under the Loan
Documents provides that such payments shall be made by Borrower to the Agent for
the account of the Banks, Borrower's obligations to the Banks in respect of such
payments shall be deemed to be satisfied upon the making of such payments to the
Agent in the manner provided by this Agreement.
Article 11
MISCELLANEOUS
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11.1 Cumulative Remedies; No Waiver. The rights, powers, privileges and
remedies of the Agent and the Banks provided herein or in any Note or other Loan
Document are cumulative and not exclusive of any right, power, privilege or
remedy provided by Law or equity. No failure or delay on the part of the Agent
or any Bank in exercising any right, power, privilege or remedy may be, or may
be deemed to be, a waiver thereof; nor may any single or partial exercise of any
right, power, privilege or remedy preclude any other or further exercise of the
same or any other right, power, privilege or remedy. The terms and conditions of
Article 8 hereof are inserted for the sole benefit of the Agent and the Banks;
the same may be waived in whole or in part, with or without terms or conditions,
in respect of any Loan without prejudicing the Agent's or the Banks' rights to
assert them in whole or in part in respect of any other Loan.
11.2 Amendments; Consents. No amendment, modification, supplement,
extension, termination or waiver of any provision of this Agreement or any other
Loan Document, no approval or consent thereunder, and no consent to any
departure by Borrower or any other Party therefrom, may in any event be
effective unless in writing signed by the Majority Banks (and, in the case of
any amendment, modification or supplement of or to any Loan Document to which
Borrower is a Party, signed by Borrower), and then only in the specific instance
and for the specific purpose given; and, without the approval in writing of all
the Banks, no amendment, modification, supplement, termination, waiver or
consent may be effective:
(a) To amend or modify (i) the amount or payment terms of
principal or interest payable on the Notes, (ii) the amount of the
Commitments, (iii) the amount or payment terms of any commitment or other
fee or amount payable to the Banks generally under the Loan Documents;
(b) To extend the term of the Commitments or to release a
guarantor under the Subsidiary Guaranty (except as provided in Section
5.10);
(c) To amend the provisions of the definition of "Majority Banks",
Section 9.2(d), 10.3, 11.2, 11.9 or 11.10; or
(d) To amend any provision of this Agreement that expressly
requires the consent or approval of all the Banks.
Any amendment, modification, supplement, termination, waiver or consent pursuant
to this Section 11.2 shall apply equally to, and shall be binding upon, all the
Banks and the Agent. The provisions of Article 10 and the provisions of the Loan
Documents dealing with the rights and responsibilities of the Agent may not be
amended without the consent of the Agent.
11.3 Costs, Expenses and Taxes. Borrower shall pay within five (5)
Banking Days after demand, accompanied by an invoice therefor, the reasonable
costs and expenses of the Agent in connection with the negotiation, preparation,
syndication, execution and delivery of the Loan Documents and any amendment
thereto or waiver thereof. Borrower shall also pay on demand, accompanied by an
invoice therefor, the reasonable costs and expenses of the Agent and the Banks
in connection with the refinancing, restructuring, reorganization (including a
bankruptcy reorganization) and enforcement or attempted enforcement of the Loan
Documents, and any matter related thereto. The foregoing costs and expenses
shall include filing fees, recording fees, title insurance fees, appraisal fees,
search fees, and other out-of-pocket expenses and the reasonable fees and
out-of-pocket expenses of any legal counsel (including allocated costs of
in-house legal counsel employed by the Agent or any Bank), independent public
accountants and other outside experts retained by the Agent or any Bank, whether
or not such costs and expenses are incurred or suffered by the Agent or any Bank
in connection with or during the course of any bankruptcy or insolvency
proceedings of Borrower or any Subsidiary thereof. Such costs and expenses shall
also include, in the case of any amendment or waiver of any Loan Document
requested by Borrower, the administrative costs of the Agent reasonably
attributable thereto. Borrower shall pay any and all documentary and other
taxes, excluding, in the case of each Bank, the Agent, and each Eligible
Assignee, and any Affiliate or Eurodollar Lending Office thereof, (i) taxes
imposed on or measured in whole or in part by its overall net income, gross
income or gross receipts or capital and franchise taxes imposed on its by (A)
any jurisdiction (or political subdivision thereof) in which it is organized or
maintains its principal office or Eurodollar Lending Office or (B) any
jurisdiction (or political subdivision thereof) in which it is "doing business"
(unless it would not be doing business in such jurisdiction (or political
subdivision thereof) absent the transactions contemplated hereby), (ii) any
withholding taxes or other taxes based on gross income imposed by the United
States of America (other than withholding taxes and taxes based on gross income
resulting from or attributable to any change in any law, rule or regulation or
any change in the interpretation or administration of any law, rule or
regulation by any governmental authority) or (iii) any withholding taxes or
other taxes based on gross income imposed by the United States of America for
any period with respect to which it has failed to provide Borrower with the
appropriate form or forms required by Section 11.19, to the extent such forms
are then required by applicable Laws, and all costs, expenses, fees and charges
payable or determined to be payable in connection with the filing or recording
of this Agreement, any other Loan Document or any other instrument or writing to
be delivered hereunder or thereunder, or in connection with any transaction
pursuant hereto or thereto, and shall reimburse, hold harmless and indemnify the
Agent and the Banks from and against any and all loss, liability or legal or
other expense with respect to or resulting from any delay in paying or failure
to pay any such tax, cost, expense, fee or charge or that any of them may suffer
or incur by reason of the failure of any Party to perform any of its
Obligations. Any amount payable to the Agent or any Bank under this Section 11.3
shall bear interest from the tenth day following the date of demand for payment
at the Default Rate.
11.4 Nature of Banks' Obligations. The obligations of the Banks hereunder
are several and not joint or joint and several. Nothing contained in this
Agreement or any other Loan Document and no action taken by the Agent or the
Banks or any of them pursuant hereto or thereto may, or may be deemed to, make
the Banks a partnership, an association, a joint venture or other entity, either
among themselves or with Borrower or any Affiliate of Borrower. Each Bank's
obligation to make any Advance pursuant hereto is several and not joint or joint
and several. A default by any Bank will not increase the Pro Rata Share of the
Commitments attributable to any other Bank. Any Bank not in default may, if it
desires, assume in such proportion as the nondefaulting Banks agree the
obligations of any Bank in default, but is not obligated to do so. The Agent
agrees that it will use its best efforts either to induce the other Banks to
assume the obligations of a Bank in default or to obtain another Bank,
reasonably satisfactory to Borrower, to replace such a Bank in default.
11.5 Survival of Representations and Warranties. All representations and
warranties contained herein or in any other Loan Document, or in any certificate
or other writing delivered by or on behalf of any one or more of the Parties to
any Loan Document, will survive the making of the Loans hereunder and the
execution and delivery of the Notes, and have been or will be relied upon by the
Agent and each Bank, notwithstanding any investigation made by the Agent or any
Bank or on their behalf.
11.6 Notices. Except as otherwise expressly provided in the Loan
Documents, all notices, requests, demands, directions and other communications
provided for hereunder or under any other Loan Document must be in writing and
must be mailed, telegraphed, telecopied or delivered to the appropriate party at
the address set forth on the signature pages of this Agreement or other
applicable Loan Document or, as to any party to any Loan Document, at any other
address as may be designated by it in a written notice sent to all other parties
to such Loan Document in accordance with this Section 11.6. Except as otherwise
expressly provided in any Loan Document, if any notice, request, demand,
direction or other communication required or permitted by any Loan Document is
given by mail it will be effective on the earlier of receipt or the third
calendar day after deposit in the United States mail with first class or airmail
postage prepaid; if given by telegraph or cable, when delivered to the telegraph
company with charges prepaid; if given by telecopier, when sent; or if given by
personal delivery (including delivery by courier), when delivered. If a notice
is being given of the occurrence of a Default or Event of Default, the Person
giving the notice shall use reasonable efforts to either give or supplement such
notice with a notice by telecopy.
11.7 Execution of Loan Documents. Unless the Agent otherwise specifies
with respect to any Loan Document, (a) this Agreement and any other Loan
Document may be executed in any number of counterparts and any party hereto or
thereto may execute any counterpart, each of which when executed and delivered
will be deemed to be an original and all of which counterparts of this Agreement
or any other Loan Document, as the case may be, when taken together will be
deemed to be but one and the same instrument and (b) execution of any such
counterpart may be evidenced by a telecopier transmission of the signature of
such party. The execution of this Agreement or any other Loan Document by any
party hereto or thereto will not become effective until counterparts hereof or
thereof, as the case may be, have been executed by all the parties hereto or
thereto.
11.8 Binding Effect; Assignment.
(a) This Agreement and the other Loan Documents to which Borrower
is a Party will be binding upon and inure to the benefit of Borrower, the
Agent, the Co-Agent, each of the Banks, and their respective successors
and assigns, except that Borrower may not assign its rights or
responsibilities hereunder or thereunder or any interest herein or
therein without the prior written consent of all the Banks. Each Bank
represents that it is not acquiring its Note with a view to the
distribution thereof within the meaning of the Securities Act of 1933, as
amended (subject to any requirement that disposition of such Note must be
within the control of such Bank). Any Bank may at any time pledge its
Note or any other instrument evidencing its rights as a Bank under this
Agreement to a Federal Reserve Bank, but no such pledge shall release
that Bank from its obligations hereunder or grant to such Federal Reserve
Bank the rights of a Bank hereunder absent foreclosure of such pledge.
(b) From time to time following the Closing Date, each Bank may
assign to one or more Eligible Assignees a portion of its Pro Rata Share
of the Commitments; provided that (i) in no event shall an assignment be
made that would reduce the remaining Pro Rata Share of the Commitment
held by the assigning Bank below $10,000,000 (ii) such Eligible Assignee
shall be subject to the prior reasonable approval of the Agent and
Borrower, (iii) such assignment shall be evidenced by a Commitment
Assignment and Acceptance, a copy of which shall be furnished to the
Agent as hereinbelow provided, (iv) the assignment shall not assign a Pro
Rata Share of the Commitments equivalent to less than $10,000,000, (v)
any such assignment must be made pro-rata with respect to the Line A and
Line B Commitments, and (vi) the effective date of any such assignment
shall be as specified in the Commitment Assignment and Acceptance, but
not earlier than the date which is five (5) Banking Days after the date
the Agent has received the Commitment Assignment and Acceptance. Upon the
effective date of such Commitment Assignment and Acceptance, the Eligible
Assignee named therein shall be a Bank for all purposes of this
Agreement, with the Pro Rata Share of the Commitments therein set forth
and, to the extent of such Pro Rata Share, the assigning Bank shall be
released from its further obligations under this Agreement. Borrower
agrees that it shall execute and deliver (against delivery by the
assigning Bank to Borrower of its Notes) to such assignee Bank, Notes
evidencing that assignee Bank's Pro Rata Share of the Line A and Line B
Commitments, and to the assigning Bank, Notes evidencing the remaining
balance Pro Rata Share retained by the assigning Bank. Other than as
specifically permitted under Sections 11.8(a), 11.8(b), or 11.8(e), or as
may be approved by the Majority Banks, no Bank shall be permitted to
assign or otherwise transfer (including by participation) its interest in
the Commitments, any Loan or any of the Loan Documents.
(c) By executing and delivering a Commitment Assignment and
Acceptance, the Eligible Assignee thereunder acknowledges and agrees
that: (i) other than the representation and warranty that it is the legal
and beneficial owner of the Pro Rata Share of the Commitments being
assigned thereby free and clear of any adverse claim, the assigning Bank
has made no representation or warranty and assumes no responsibility with
respect to any statements, warranties or representations made in or in
connection with this Agreement or the execution, legality, validity,
enforceability, genuineness or sufficiency of this Agreement or any other
Loan Document; (ii) the assigning Bank has made no representation or
warranty and assumes no responsibility with respect to the financial
condition of Borrower or the performance by Borrower of the Obligations;
(iii) it has received a copy of this Agreement, together with copies of
the most recent financial statements delivered pursuant to Section 7.1
and such other documents and information as it has deemed appropriate to
make its own credit analysis and decision to enter into such Commitment
Assignment and Acceptance; (iv) it will, independently and without
reliance upon the Agent, the Co-Agent or any 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; (v) it appoints and authorizes the Agent to take
such action and to exercise such powers under this Agreement as are
delegated to the Agent by this Agreement; and (vi) it will perform in
accordance with their terms all of the obligations which by the terms of
this Agreement are required to be performed by it as a Bank.
(d) The Agent shall maintain at the Agent's Office a copy of each
Commitment Assignment and Acceptance delivered to it. After receipt of a
completed Commitment Assignment and Acceptance executed by any Bank and
an Eligible Assignee, and receipt of an assignment fee of $2,500 from
such Eligible Assignee, Agent shall, promptly following the effective
date thereof, provide to Borrower and the Banks a revised Schedule 1.2
giving effect thereto.
(e) Each Bank may from time to time grant participations to a
commercial bank Affiliate of such Bank in a portion of its Pro-Rata Share
of the Commitments; provided, however, that (i) such Bank's obligations
under this Agreement shall remain unchanged, (ii) such Bank shall remain
solely responsible to the other parties hereto for the performance of
such obligations, (iii) the participating banks or other financial
institutions shall not be a Bank hereunder for any purposes except, if
the participation agreement so provides, for the purposes of Sections
3.5, 3.6, 11.10 and 11.21, (iv) Borrower, the Agent and the other Banks
shall continue to deal solely and directly with such Bank in connection
such Bank's rights and obligations under this Agreement and (v) the
holder of such participation shall not be provided under its
participation agreement with consent or approval rights with respect to
any matters concerning the Loan Documents or the Loans except for those
matters designated as requiring the consent or approval of all of the
Banks under Section 11.2.
11.9 Sharing of Setoffs. Each Bank severally agrees that if it, through
the exercise of any right of setoff, banker's lien or counterclaim against
Borrower, or otherwise, receives payment of the Obligations held by it that is
ratably more than any other Bank, through any means, receives in payment of the
Obligations held by that Bank, then, subject to applicable Laws: (a) The Bank
exercising the right of setoff, banker's lien or counterclaim or otherwise
receiving such payment shall purchase, and shall be deemed to have
simultaneously purchased, from the other Bank a participation in the Obligations
held by the other Bank and shall pay to the other Bank a purchase price in an
amount so that the share of the Obligations held by each Bank after the exercise
of the right of setoff, banker's lien or counterclaim or receipt of payment
shall be in the same proportion that existed prior to the exercise of the right
of setoff, banker's lien or counterclaim or receipt of payment; and (b) Such
other adjustments and purchases of participations shall be made from time to
time as shall be equitable to ensure that all of the Banks share any payment
obtained in respect of the Obligations ratably in accordance with each Bank's
share of the Obligations immediately prior to, and without taking into account,
the payment; provided that, if all or any portion of a disproportionate payment
obtained as a result of the exercise of the right of setoff, banker's lien,
counterclaim or otherwise is thereafter recovered from the purchasing Bank by
Borrower or any Person claiming through or succeeding to the rights of Borrower,
the purchase of a participation shall be rescinded and the purchase price
thereof shall be restored to the extent of the recovery, but without interest.
Each Bank that purchases a participation in the Obligations pursuant to this
Section 11.9 shall from and after the purchase have the right to give all
notices, requests, demands, directions and other communications under this
Agreement with respect to the portion of the Obligations purchased to the same
extent as though the purchasing Bank were the original owner of the Obligations
purchased.
11.10 Indemnity by Borrower. Borrower agrees to indemnify, save and hold
harmless the Agent, the Co-Agent and each Bank and their directors, officers,
agents, and employees (collectively the "Indemnitees") from and against: (a) Any
and all claims, demands, actions or causes of action (except a claim, demand,
action, or cause of action for any amount excluded from the definition of
"Taxes" in Section 3.10(c)) if the claim, demand, action or cause of action
arises out of or relates to any act or omission (or alleged act or omission) of
Borrower, its Affiliates or any of its officers, directors or shareholders
relating to the Commitments, the use or contemplated use of proceeds of any
Loan, or the relationship of Borrower and the Banks under this Agreement; (b)
Any administrative or investigative proceeding by any Governmental Agency
arising out of or related to a claim, demand, action or cause of action
described in clause (a) above; and (c) Any and all liabilities, losses, costs or
expenses (including attorneys' fees and the allocated costs of attorneys
employed by any Indemnitee and disbursements of such attorneys and other
professional services) that any Indemnitee suffers or incurs as a result of the
assertion of any foregoing claim, demand, action or cause of action; provided
that no Indemnitee shall be entitled to indemnification for any loss caused by
its own gross negligence or willful misconduct or for any loss asserted against
it by another Indemnitee. If any claim, demand, action or cause of action is
asserted against any Indemnitee, such Indemnitee shall promptly notify Borrower,
but the failure to so promptly notify Borrower shall not affect Borrower's
obligations under this Section unless such failure materially prejudices
Borrower's right to participate in the contest of such claim, demand, action or
cause of action, as hereinafter provided. Such Indemnitee may (and shall, if
requested by Borrower in writing) contest the validity, applicability and amount
of such claim, demand, action or cause of action and shall permit Borrower to
participate in such contest. Any Indemnitee that proposes to settle or
compromise any claim or proceeding for which Borrower may be liable for payment
of indemnity hereunder shall give Borrower written notice of the terms of such
proposed settlement or compromise reasonably in advance of settling or
compromising such claim or proceeding and shall obtain Borrower's prior consent
(which shall not be unreasonably withheld). In connection with any claim,
demand, action or cause of action covered by this Section 11.10 against more
than one Indemnitee, all such Indemnitees shall be represented by the same legal
counsel (which may be a law firm engaged by the Indemnitees or attorneys
employed by an Indemnitee or a combination of the foregoing) selected by the
Indemnitees and reasonably acceptable to Borrower; provided, that if such legal
counsel determines in good faith that representing all such Indemnitees would or
could result in a conflict of interest under Laws or ethical principles
applicable to such legal counsel or that a defense or counterclaim is available
to an Indemnitee that is not available to all such Indemnitees, then to the
extent reasonably necessary to avoid such a conflict of interest or to permit
unqualified assertion of such a defense or counterclaim, each Indemnitee shall
be entitled to separate representation by legal counsel selected by that
Indemnitee and reasonably acceptable to Borrower, with all such legal counsel
using reasonable efforts to avoid unnecessary duplication of effort by counsel
for all Indemnitees; and further provided that the Agent (as an Indemnitee)
shall at all times be entitled to representation by separate legal counsel
(which may be a law firm or attorneys employed by the Agent or a combination of
the foregoing). Any obligation or liability of Borrower to any Indemnitee under
this Section 11.10 shall survive the expiration or termination of this Agreement
and the repayment of all Loans and the payment and performance of all other
Obligations owed to the Banks.
11.11 Nonliability of the Banks. Borrower acknowledges and agrees that:
(a) Any inspections of any Property of Borrower made by or through
the Agent or the Banks are for purposes of administration of the Loan
only and Borrower is not entitled to rely upon the same (whether or not
such inspections are at the expense of Borrower);
(b) By accepting or approving anything required to be observed,
performed, fulfilled or given to the Agent or the Banks pursuant to the
Loan Documents, neither the Agent nor the Banks shall be deemed to have
warranted or represented the sufficiency, legality, effectiveness or
legal effect of the same, or of any term, provision or condition thereof,
and such acceptance or approval thereof shall not constitute a warranty
or representation to anyone with respect thereto by the Agent or the
Banks;
(c) The relationship between Borrower, on the one hand, and the
Agent, the Co-Agent and/or any of the Banks, on the other, is, and shall
at all times remain, solely that of a borrower and lenders; neither the
Agent, the Co-Agent nor the Banks shall under any circumstance be
construed to be partners or joint venturers of Borrower or its
Affiliates; neither the Agent, the Co-Agent nor the Banks shall under any
circumstance be deemed to be in a relationship of confidence (other than
as specified in Section 11.22) or trust or a fiduciary relationship with
Borrower or its Affiliates, or to owe any fiduciary duty to Borrower or
its Affiliates; neither the Agent, the Co-Agent nor the Banks undertake
or assume any responsibility or duty to Borrower or its Affiliates to
select, review, inspect, supervise, pass judgment upon or inform Borrower
or its Affiliates of any matter in connection with their Property or the
operations of Borrower or its Affiliates; Borrower and its Affiliates
shall rely entirely upon their own judgment with respect to such matters;
and any review, inspection, supervision, exercise of judgment or supply
of information undertaken or assumed by the Agent, the Co-Agent or the
Banks in connection with such matters is solely for the protection of the
Agent, the Co-Agent and the Banks and neither Borrower nor any other
Person is entitled to rely thereon; and
(d) Neither the Agent, the Co-Agent nor the Banks shall be
responsible or liable to any Person for any loss, damage, liability or
claim of any kind relating to injury or death to Persons or damage to
Property caused by the actions, inaction or negligence of Borrower and/or
its Affiliates and Borrower hereby indemnifies and holds the Agent, the
Co-Agent and the Banks harmless from any such loss, damage, liability or
claim.
11.12 No Third Parties Benefited. This Agreement is made for the purpose
of defining and setting forth certain obligations, rights and duties of
Borrower, the Agent, the Co-Agent and the Banks in connection with the Loans,
and is made for the sole benefit of Borrower, the Agent, the Co-Agent and the
Banks, and the Agent's, the Co-Agent's and the Banks' successors and assigns.
Except as provided in Sections 11.8 and 11.10, no other Person shall have any
rights of any nature hereunder or by reason hereof.
11.13 Further Assurances. Borrower and its Subsidiaries shall, at their
expense and without expense to the Banks or the Agent, do, execute and deliver
such further acts and documents as any Bank or the Agent from time to time
reasonably requires for the assuring and confirming unto the Banks or the Agent
of the rights hereby created or intended now or hereafter so to be, or for
carrying out the intention or facilitating the performance of the terms of any
Loan Document.
11.14 Integration. This Agreement, together with the other Loan
Documents, comprises the complete and integrated agreement of the parties on the
subject matter hereof and supersedes all prior agreements, written or oral, on
the subject matter hereof. In the event of any conflict between the provisions
of this Agreement and those of any other Loan Document, the provisions of this
Agreement shall control and govern; provided that the inclusion of supplemental
rights or remedies in favor of the Agent or the Banks in any other Loan Document
shall not be deemed a conflict with this Agreement. Each Loan Document was
drafted with the joint participation of the respective parties thereto and shall
be construed neither against nor in favor of any party, but rather in accordance
with the fair meaning thereof.
11.15 Governing Law. Except to the extent otherwise provided therein,
each Loan Document shall be governed by, and construed and enforced in
accordance with, the local Laws of California.
11.16 Severability of Provisions. Any provision in any Loan Document that
is held to be inoperative, unenforceable or invalid as to any party or in any
jurisdiction shall, as to that party or jurisdiction, be inoperative,
unenforceable or invalid without affecting the remaining provisions or the
operation, enforceability or validity of that provision as to any other party or
in any other jurisdiction, and to this end the provisions of all Loan Documents
are declared to be severable.
11.17 Headings. Article and Section headings in this Agreement and the
other Loan Documents are included for convenience of reference only and are not
part of this Agreement or the other Loan Documents for any other purpose.
11.18 Time of the Essence. Time is of the essence of the Loan Documents.
11.19 Foreign Banks. Each Bank that is incorporated under the Laws of a
jurisdiction other than the United States of America or any state thereof shall
deliver to Borrower (with a copy to the Agent), within twenty days after the
Closing Date (or after accepting an assignment interest herein pursuant to
Section 11.8, if applicable) two duly completed copies, signed by a Responsible
Official, of either Form 1001 (relating to such Person and entitling it to a
complete exemption from withholding on all payments to be made to such Person by
Borrower pursuant to this Agreement) or Form 4224 (relating to all payments to
be made to such Person by Borrower pursuant to this Agreement) of the United
States Internal Revenue Service or such other evidence (including, if reasonably
necessary, Form W-9) satisfactory to Borrower and the Agent that no withholding
under the federal income tax laws is required with respect to such Person.
Thereafter and from time to time, each such Person shall (a) promptly submit to
Borrower (with a copy to the Agent), such additional duly completed and signed
copies of one of such forms (or such successor forms as shall be adopted from
time to time by the relevant United States taxing authorities) as may then be
available under then current United States laws and regulations to avoid, or
such evidence as is satisfactory to Borrower and the Agent of any available
exemption from, United States withholding taxes in respect of all payments to be
made to such Person by Borrower pursuant to this Agreement and (b) take such
steps as shall not be materially disadvantageous to it, in the reasonable
judgment of such Bank, and as may be reasonably necessary (including the
re-designation of its Eurodollar Lending Office, if any) to avoid any
requirement of applicable laws that Borrower make any deduction or withholding
for taxes from amounts payable to such Person.
11.20 Hazardous Material Indemnity. Borrower hereby agrees to indemnify,
hold harmless and defend (by counsel reasonably satisfactory to the Agent) the
Agent, the Co-Agent and each of the Banks and their respective directors,
officers, employees, agents, successors and assigns from and against any and all
claims, losses, damages, liabilities, fines, penalties, charges, administrative
and judicial proceedings and orders, judgments, remedial action requirements,
enforcement actions of any kind, and all costs and expenses incurred in
connection therewith (including but not limited to reasonable attorneys' fees
and the allocated costs of attorneys employed by the Agent, the Co-Agent or any
Bank, and expenses to the extent that the defense of any such action has not
been assumed by Borrower), arising directly or indirectly, in whole or in part,
out of (i) the presence on or under any Real Property of any Hazardous
Materials, or any releases or discharges of any Hazardous Materials on, under or
from any Real Property and (ii) any activity carried on or undertaken on or off
any Real Property by Borrower or any of its predecessors in title, whether prior
to or during the term of this Agreement, and whether by Borrower or any
predecessor in title or any employees, agents, contractors or subcontractors of
Borrower or any predecessor in title, or any third persons at any time occupying
or present on any Real Property, in connection with the handling, treatment,
removal, storage, decontamination, clean-up, transport or disposal of any
Hazardous Materials at any time located or present on or under any Real
Property. The foregoing indemnity shall further apply to any residual
contamination on or under any Real Property, or affecting any natural resources,
and to any contamination of any property or natural resources arising in
connection with the generation, use, handling, storage, transport or disposal of
any such Hazardous Materials, and irrespective of whether any of such activities
were or will be undertaken in accordance with applicable Laws, but the foregoing
indemnity shall not apply to Hazardous Materials on any Real Property, the
presence of which is caused solely by the Agent, the Co-Agent or the Banks.
Borrower hereby acknowledges and agrees that, notwithstanding any other
provision of this Agreement or any of the other Loan Documents to the contrary,
the obligations of Borrower under this Section shall be unlimited personal
corporate obligations of Borrower and shall not be secured by any deed of trust
on any Real Property.
11.21 Reference to Arbitration.
(a) Mandatory Arbitration. Any controversy or claim between any
Party or group of Parties, on the one hand, and the Agent, the Co-Agent
or any Bank, or any group thereof, on the other hand, including but not
limited to those arising out of or relating to this Agreement or any
agreements or instruments relating hereto or delivered in connection
herewith and any claim based on or arising from an alleged tort, shall at
the request of any party be determined by arbitration. The arbitration
shall be conducted in accordance with the United States Arbitration Act
(Title 9, U.S. Code), notwithstanding any choice of law provision in this
Agreement, and under the Commercial Rules of the American Arbitration
Association ("AAA"). The arbitrators shall give effect to statutes of
limitation in determining any claim. Any controversy concerning whether
an issue is arbitrable shall be determined by the arbitrators. Judgment
upon the arbitration award may be entered in any court having
jurisdiction. The institution and maintenance of an action for judicial
relief or pursuit of a provisional or ancillary remedy shall not
constitute a waiver of the right of any party, including the plaintiff,
to submit the controversy or claim to arbitration if any other party
contests such action for judicial relief.
(b) Real Property Collateral. Should real property collateral
hereafter be taken by the Banks to secure the Obligations, then,
notwithstanding the provisions of Section 11.21(a), no controversy or
claim shall be submitted to arbitration without the consent of all
parties if, at the time of the proposed submission, such controversy or
claim arises from or relates to an obligation to the Bank which is
secured by such real property collateral. If all parties do not consent
to submission of such a controversy or claim to arbitration, the
controversy or claim shall be determined as provided in Section 11.21(c).
(c) Judicial Reference. A controversy or claim which is not
submitted to arbitration as provided and limited in Sections 11.21(a) and
(b) shall, at the request of any party, be determined by a reference in
accordance with California Code of Civil Procedure Sections 638 et seq.
If such an election is made, the parties shall designate to the court a
referee or referees selected under the auspices of the AAA in the same
manner as arbitrators are selected in AAA-sponsored proceedings. The
presiding referee of the panel, or the referee if there is a single
referee, shall be an active attorney or retired judge. Judgment upon the
award rendered by such referee or referees shall be entered in the court
in which such proceeding was commenced in accordance with California Code
of Civil Procedure Sections 644 and 645.
(d) Provisional Remedies, Self-Help and Foreclosure. No provision
of this Section 11.21 shall limit the right of any party to this
Agreement to exercise self-help remedies such as setoff, to foreclose
against collateral or to obtain provisional or ancillary remedies from a
court of competent jurisdiction before, after, or during the pendency of
any arbitration or other proceeding. The exercise of a remedy does not
waive the right of any party to resort to arbitration or reference.
Should real property collateral hereafter be taken by the Banks to secure
the Obligations, then, at the Banks' option, foreclosure under any deed
of trust or mortgage may be accomplished either by exercise of power or
sale under the deed of trust or mortgage or by judicial foreclosure.
11.22 Confidentiality. Each Bank agrees to hold any confidential
information that it may receive from Borrower or Agent pursuant to this
Agreement in confidence, except for disclosure: (a) To other Banks; (b) To legal
counsel and accountants or other professional advisors to Borrower or any Bank,
provided that the recipient has accepted such information subject to a
confidentiality agreement substantially similar to this Section 11.22; (c) To
regulatory officials having jurisdiction over that Bank; (d) As required by Law
or legal process or in connection with any legal proceeding to which that Bank
is involved and that relates in some manner to the Loan Documents; and (e) To
another financial institution in connection with a disposition or proposed
disposition to that financial institution of all or part of that Bank's
interests hereunder or a participation interest in one of its Notes, provided
that the recipient has accepted such information subject to a confidentiality
agreement substantially similar to this Section 11.22. For purposes of the
foregoing, "confidential information" shall mean the Strategic Plan, the
information provided pursuant to Section 7.1(c) and any other written
information respecting Borrower or its Subsidiaries provided to the applicable
Bank and designated thereon to be confidential, other than (i) information
previously filed with any Governmental Agency and available to the public, (ii)
information previously published in any public medium from a source other than,
directly or indirectly, that Bank, and (iii) information disclosed by Borrower
to any Person not associated with Borrower without a confidentiality agreement
substantially similar to this Section 11.22. Nothing in this Section shall be
construed to create or give rise to any fiduciary duty on the part of the Agent
or the Banks to Borrower.
11.23 Co-Agent. Each Bank acknowledges that it has not relied, and will
not rely, upon the Co-Agent in deciding to enter into this Agreement or in
taking or not taking any action hereunder. The Co-Agent shall have no right,
power, obligation, liability, responsibility or duty under this Agreement or the
other Loan Documents other than those applicable to all Banks and in its
capacity as such.
11.24 Purported Oral Amendments. BORROWER EXPRESSLY ACKNOWLEDGES THAT
THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS MAY ONLY BE AMENDED OR MODIFIED, OR
THE PROVISIONS HEREOF OR THEREOF WAIVED OR SUPPLEMENTED, BY AN INSTRUMENT IN
WRITING THAT COMPLIES WITH SECTION 11.2. BORROWER AGREES THAT IT WILL NOT RELY
ON ANY COURSE OF DEALING, COURSE OF PERFORMANCE, OR ORAL OR WRITTEN STATEMENTS
BY ANY REPRESENTATIVE OF THE AGENT OR ANY BANK THAT DOES NOT COMPLY WITH SECTION
11.2 TO EFFECT AN AMENDMENT, MODIFICATION, WAIVER OR SUPPLEMENT TO THIS
AGREEMENT OR THE OTHER LOAN DOCUMENTS.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first above written.
DEL WEBB CORPORATION BANK OF AMERICA NATIONAL
TRUST AND SAVINGS ASSOCIATION,
as Agent
By: /s/ John A. Spencer
-----------------------------------
John A. Spencer
Senior Vice President By: /s/ Daniel G. Farthing
---------------------------------
Daniel G. Farthing
Vice President
Address:
Del Webb Corporation Address:
2231 East Camelback Road, Suite 400
Phoenix, Arizona 85016 Bank of America National Trust and
Savings Association
Attention: Treasurer Agency Management Services
1455 Market Street, 13th Floor
Telephone: (602) 808-8000 San Francisco, California 94103
Telecopier: (602) 808-8097
Attention: Mr. Daniel G. Farthing
Vice President
With a copy to:
Telephone: (415) 622-4931
Del Webb Corporation Telecopier: (415) 622-4894
2231 East Camelback Road, Suite 400
Phoenix, Arizona 85016
Attn: General Counsel
Telephone: (602) 808-8000
Telecopier: (602) 808-8097
BANK ONE, ARIZONA, NA, as the Co-Agent BANK OF AMERICA NATIONAL
TRUST AND SAVINGS ASSOCIATION,
as a Bank
By: /s/ Rhonda R. Williams
----------------------------------- By: /s/ Carol Smith
Rhonda R. Williams ---------------------------------
Assistant Vice President Carol Smith
Vice President
Address:
Address:
Bank One, Arizona, NA
Bank One Center Bank of America National Trust and
241 North Central Avenue, 20th Floor Savings Assocation
Phoenix, Arizona 85004-2267 CRESG-L.A. - Unit No. 1357
555 S. Flower Street, 6th Floor
Attention: Ms. Rhonda R. Williams, Los Angeles, California 90071
Assistant Vice President
Attention: Ms. Carol Smith,
Telephone: (602) 221-1783 Vice President
Telecopier: (602) 221-1372
Telephone: (213) 228-5286
Telecopier: (213) 228-5391
BANK ONE, ARIZONA, NA, as a Bank
THE FIRST NATIONAL BANK OF BOSTON,
a national banking association
By: /s/ Rhonda R. Williams
-----------------------------------
Rhonda R. Williams By: /s/ Kevin C. Hake
Assistant Vice President ---------------------------------
Kevin C. Hake
Vice President
Address:
Bank One, Arizona, NA
Bank One Center Address:
241 North Central Avenue, 20th Floor
Phoenix, Arizona 85004-2267 The First National Bank of Boston
400 Perimeter Center Terrace
Attention: Ms. Rhonda R. Williams, Atlanta, Georgia 30346
Assistant Vice President
Attention: Mr. Kevin C. Hake
Telephone: (602) 221-1783 Vice President
Telecopier: (602) 221-1372
Telephone: (404) 390-6584
Telecopier: (404) 391-9811
GUARANTY FEDERAL BANK, F.S.B. Eurodollar Lending Office
-------------------------
Credit Lyonnais Cayman Island Branch
By: /s/ Richard V. Thompson c/o Credit Lyonnais
----------------------------------- 515 South Flower Street, Suite 2200
Richard V. Thompson Los Angeles, California 90071
Vice President
Attention: Mr. David Miller,
Vice President
Address:
Telephone: (213) 362-5900
Guaranty Federal Bank, F.S.B. Telecopier: (213) 623-3437
8333 Douglas Avenue, 10th Floor
Dallas, Texas 75225
Attention: Mr. Richard V. Thompson, NATIONSBANK, N.A. (CAROLINAS),
Vice President formerly known as NationsBank of
South Carolina, N.A.
Telephone: (214) 360-1963
Telecopier: (214) 360-1661
By: /s/ Robert L. Whittemore
---------------------------------
Robert L. Whittemore
CREDIT LYONNAIS CAYMAN ISLAND BRANCH Vice President
Address:
By: /s/ Thierry F. Vincent
----------------------------------- NationsBank, N.A. (Carolinas)
Thierry F. Vincent 1901 Main Street, 4th Floor
Authorized Signatory Columbia, South Carolina 29201
Attention: Mr. Robert L. Whittemore
Vice President
CREDIT LYONNAIS LOS ANGELES BRANCH
Telephone: (803) 733-9650
Telecopier: (803) 733-9660
By: /s/ Thierry F. Vincent
--------------------------------------
Thierry F. Vincent
Vice President and Manager
Domestic Lending Office
-----------------------
Credit Lyonnais Los Angeles Branch
515 South Flower Street, Suite 2200
Los Angeles, California 90071
Attention: Mr. David Miller,
Vice President
BANK OF HAWAII FIRST UNION NATIONAL BANK OF
NORTH CAROLINA
By: /s/ Joseph T. Donalson
----------------------------------- By: /s/ Carolyn Eskridge
Joseph T. Donalson ---------------------------------
Vice President Carolyn Eskridge
Vice President
Address:
Address:
Bank of Hawaii
c/o First National Bank of Arizona First Union National Bank of
1839 South Alma School Road, Suite 150 North Carolina
Mesa, Arizona 85210 301 South College Street, TW-8
Charlotte, North Carolina 28288-0600
Attention: Mr. Joseph T. Donalson
Vice President Attention: Ms. Carolyn Eskridge
Vice President
Telephone: (602) 752-8020
Telecopier: (602) 752-8007 Telephone: (704) 383-5374
Telecopier: (704) 374-7102