1
EXHIBIT 10.15
__________________________________________
THIRD AMENDED AND RESTATED
LOAN AGREEMENT
Dated as of November 21, 1994
among
KAUFMAN AND BROAD HOME CORPORATION,
THE BANKS PARTY HERETO,
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION
and
THE FIRST NATIONAL BANK OF CHICAGO,
as Managing Agents
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION,
as Administrative Agent,
THE FIRST NATIONAL BANK OF CHICAGO,
as Documentation Agent
and
CREDIT LYONNAIS LOS ANGELES BRANCH,
NATIONSBANK OF TEXAS, N.A.,
and
NBD BANK, N.A.
as Co-Agents
__________________________________________
2
TABLE OF CONTENTS
Page
----
RECITALS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE 1 DEFINITIONS AND ACCOUNTING TERMS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.1 Defined Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.2 Use of Defined Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
1.3 Accounting Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
1.4 Rounding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
1.5 Miscellaneous Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
1.6 Exhibits and Schedules . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
1.7 References to "Borrower and its Subsidiaries" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
ARTICLE 2 LOANS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
2.1 Loans-General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
2.2 Alternate Base Rate Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
2.3 LIBOR Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
2.4 Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
2.5 Letters of Credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
2.6 Reduction of Commitment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
2.7 Administrative Agent's Right to Assume Funds
Available . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
ARTICLE 3 PAYMENTS; FEES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
3.1 Principal and Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
3.2 Commitment Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
3.3 Facility/Extension Fee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
3.4 Agency Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
3.5 Capital Adequacy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
3.6 LIBOR Fees and Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
3.7 Late Payments/Default Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
3.8 Computation of Interest and Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
3.9 Holidays . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
3.10 Payment Free of Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
3.11 Funding Sources . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
3.12 Failure to Charge or Making of Payment Not
Subsequent Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
3.13 Pro Rata Treatment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
3.14 Time and Place of Payments; Evidence of
Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
3.15 Administrative Agent's Right to Assume Payments
Will be Made . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
3.16 Survivability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
3.17 Bank Calculation Certificate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
-i-
3
ARTICLE 4 REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
4.1 Existence and Qualification; Power; Compliance
with Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
4.2 Authority; Compliance with Other Instruments and
Government Regulations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
4.3 No Governmental Approvals Required . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
4.4 Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
4.5 Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
4.6 No Other Liabilities; No Material Adverse
Effect . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
4.7 Title to Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
4.8 Intangible Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
4.9 Existing Indebtedness and Contingent Guaranty
Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
4.10 Governmental Regulation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
4.11 Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
4.12 Binding Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
4.13 No Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
4.14 Pension Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
4.15 Tax Liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
4.16 Regulation U . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
4.17 Environmental Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
4.18 Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
4.19 Projections . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
ARTICLE 5 AFFIRMATIVE COVENANTS (OTHER THAN INFORMATION AND REPORTING REQUIREMENTS) . . . . . . . . . . . . . . . . . 57
5.1 Payment of Taxes and Other Potential Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
5.2 Preservation of Existence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
5.3 Maintenance of Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
5.4 Maintenance of Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
5.5 Compliance with Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
5.6 Inspection Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
5.7 Keeping of Records and Books of Account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
5.8 Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
5.9 Subsidiary Guaranty . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
ARTICLE 6 NEGATIVE COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
6.1 Payment or Prepayment of Subordinated
Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
6.2 Dispositions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
6.3 Mergers and Sale of Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
6.4 Investments and Acquisitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
6.5 ERISA Compliance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
6.6 Change in Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
6.7 Liens and Negative Pledges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
6.8 Indebtedness and Contingent Guaranty
Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
6.9 Non-Recourse Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
-ii-
4
6.10 Subsidiary Indebtedness and Contingent Guaranty
Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
6.11 Money Market Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
6.12 Transactions with Affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
6.13 Minimum Consolidated Tangible Net Worth . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
6.14 Distributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
6.15 Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
6.16 Hostile Tender Offers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
6.17 Inventory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
6.18 Domestic Standing Inventory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
6.19 Investments in Certain Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
6.20 Land Fund Joint Venture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
ARTICLE 7 INFORMATION AND REPORTING REQUIREMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
7.1 Financial and Business Information of Borrower
and Its Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
7.2 Compliance Certificate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
ARTICLE 8 CONDITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
8.1 Initial Advances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
8.2 Any Increasing Advance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
8.3 Any Advance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
8.4 Any Letter of Credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
ARTICLE 9 EVENTS OF DEFAULT AND REMEDIES UPON EVENTS OF DEFAULT . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
9.1 Events of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
9.2 Remedies Upon Event of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
ARTICLE 10 THE ADMINISTRATIVE AGENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
10.1 Appointment and Authorization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
10.2 Administrative Agent and Affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
10.3 Banks' Credit Decisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82
10.4 Action by Administrative Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82
10.5 Liability of Administrative Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
10.6 Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84
10.7 Successor Administrative Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85
10.8 No Obligations of Borrower . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85
ARTICLE 11 MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86
11.1 Cumulative Remedies; No Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86
11.2 Amendments; Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86
11.3 Costs, Expenses and Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87
11.4 Nature of Banks' Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88
11.5 Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88
11.6 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89
11.7 Execution in Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89
-iii-
5
11.8 Binding Effect; Assignment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89
11.9 Sharing of Setoffs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90
11.10 Indemnity by Borrower . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90
11.11 Nonliability of Banks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 92
11.12 Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 92
11.13 No Third Parties Benefited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93
11.14 Other Dealings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93
11.15 Right of Setoff - Deposit Accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93
11.16 Further Assurances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93
11.17 Integration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93
11.18 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94
11.19 Severability of Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94
11.20 Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94
11.21 Conflict in Loan Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94
11.22 Waiver Of Jury Trial . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94
11.23 Purported Oral Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94
11.24 Hazardous Materials Indemnity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95
Exhibits
A - Compliance Certificate
B - Revolving Note
C - Request for Letter of Credit
D - Request for Loan
E - Request for Redesignation
F - Subsidiary Guaranty
Schedules
4.4 Subsidiaries
4.7 Existing Liens and Rights of Others
4.9 Existing Indebtedness and Contingent Obligations
6.4 Investments
6.8 Application of Section 6.8
-iv-
6
THIRD AMENDED AND RESTATED
LOAN AGREEMENT
Dated as of November 21, 1994
This Third Amended and Restated Loan Agreement ("Agreement")
is entered into by and among Kaufman and Broad Home Corporation, a Delaware
corporation ("Borrower"), each bank set forth on the signature pages of this
Agreement or which from time to time becomes party hereto (collectively, the
"Banks" and individually, a "Bank"), Bank of America National Trust and Savings
Association and The First National Bank of Chicago, as Managing Agents, Bank of
America National Trust and Savings Association, as Administrative Agent, The
First National Bank of Chicago, as Documentation Agent, and each of Credit
Lyonnais Los Angeles Branch, NationsBank of Texas, N.A., and NBD Bank, N.A. as
Co-Agents.
RECITALS
This Agreement is an amendment and restatement in full of that
certain Second Amended and Restated Loan Agreement, dated as of December 24,
1992, by and among Borrower, the Banks named therein and Bank of America
National Trust and Savings Association, as Agent (as heretofore amended, the
"Prior Loan Agreement"). Concurrently herewith, the parties hereto, and
Kaufman and Broad Mortgage Company, are entering that certain Override
Agreement of even date herewith (the "Override Agreement") respecting
allocations of credit availability between this Agreement and the Mortgage
Warehousing Agreement hereinafter described, and certain related matters.
Pursuant to the Override Agreement, the Banks party to the Prior Loan Agreement
have assigned their interests thereunder to the Banks party to this Agreement.
The Prior Loan Agreement, as amended and restated by this Agreement including
all loans made thereunder, continues in full force and effect from the date
thereof to the Closing Date and, at all times on and after the Closing Date.
WHEREFORE, 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:
-1-
7
"Acquisition" means any transaction, or any series of related
transactions, consummated after the Closing Date, by which Borrower
and/or any of its Subsidiaries directly or indirectly (a) acquires any
ongoing business or all or substantially all of the assets of any
firm, corporation or division thereof, whether through purchase of
assets, merger or otherwise, (b) acquires control of securities of a
corporation representing 50% or more of the ordinary voting power for
the election of directors or (c) acquires control of a 50% or more
ownership interest in any partnership, joint venture or other business
entity.
"Administrative Agent" means Bank of America or any successor
administrative agent.
"Administrative Agent's Office" means Bank of America National
Trust and Savings Association, Agency Management Services, 1455 Market
Street, San Francisco, California 94103, or such other office as the
Administrative Agent may designate in writing to Borrower and the
Banks.
"Advance" means an advance made or to be made to Borrower by a
Bank pursuant to Article 2.
"Affiliate" means, with respect 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" (including its correlative meanings, "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 which 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 any of the Administrative Agent, the Managing
Agents, the Co-Agents, the Documentation Agent, or any successor
agent.
"Agreement" means this Third Amended and Restated Loan
Agreement, either as originally executed or as it may from time to
time be supplemented, modified, amended, renewed, extended or
supplanted.
-2-
8
"Alternate Base Rate" means, as of any date of determination,
the rate per annum which is the greater of (a) the Reference Rate and
(b) the Federal Funds Rate plus one half percent (1/2%).
"Alternate Base Rate Advance" means an Advance made by a Bank
to fund its Pro Rata Share of an Alternate Base Rate Loan.
"Alternate Base Rate Loan" means a Loan made hereunder and
designated or redesignated as an Alternate Base Rate Loan in
accordance with Article 2, or converted to an Alternate Base Rate Loan
in accordance with Section 3.6.
"Applicable Commitment Fee Rate" means, as of any date of
determination, the commitment fee rate set forth below opposite the
Credit Rating Level as of such date:
Credit Rating Applicable Commitment
------------- ---------------------
Level Fee Rate
----- --------
I .25% (25 basis points)
II .30% (30 basis points)
III .35% (35 basis points)
"Applicable LIBOR Spread" means, as of any date of
determination, the interest rate spread set forth below opposite the
Credit Rating Level as of such date:
Credit Rating Applicable LIBOR
------------- ----------------
Level Spread
----- ------
I 1.05%
II 1.20%
III 1.35%
"Applicable Letter of Credit Fee" means, as of any date of
determination, the letter of credit fee set forth below under the
caption "Financial L/C's" (in the case of Financial Letters of Credit)
and under the caption "Performance L/C's" (in the case of Performance
Letters of Credit), in each case opposite the Credit Rating Level as
of such date:
Credit Rating Financial Performance
------------- --------- -----------
Level L/C's L/C's
----- ----- -----
I 0.9875% 0.8625%
II 1.1375% 1.0125%
III 1.2875% 1.1625%
-3-
9
"Authorizations" has the meaning set forth for that term in
Section 4.1.
"Bank" means any of the banks signatory to this Agreement,
their successors and permitted assigns.
"Bank of America" means Bank of America National Trust and
Savings Association, a national banking 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 California or New York.
"Bond Facility" means any bond facility pursuant to which a
municipality, or a community facilities district formed by a
municipality, at the request of Borrower or one of its Subsidiaries,
will issue bonds to finance a portion of the costs of acquisition of
and improvements to real property located in such municipality (or
district) by Borrower or one of its Subsidiaries (or to pay
development or "impact" fees in lieu thereof), and with respect to
which Borrower or one of its Subsidiaries will provide a letter of
credit or other reimbursement support. The real property that is the
subject of any such bond facility will be subject to a Lien for
special taxes to repay the Indebtedness evidenced by such bonds.
"Borrower" means Kaufman and Broad Home Corporation, a
Delaware corporation, and its successors and permitted assigns.
"Capital Lease" means, with respect to any Person, a lease of
any Property by that Person as lessee that is, or should be in
accordance with Financial Accounting Standards Board Statement No. 13,
recorded as a "capital lease" on a balance sheet of that Person
prepared in accordance with Generally Accepted Accounting Principles.
"Cash" means all monetary items (including currency, coin and
bank demand deposits) that are treated as cash under Generally
Accepted Accounting Principles.
"Cash Equivalents" means, with respect to any Person, that
Person's Investments in:
(a) Government Securities due within one year of
the making of the Investment;
(b) certificates of deposit issued by, deposits
in, bankers' acceptances of, and repurchase
-4-
10
agreements covering Government Securities executed by, (i)
any Bank or (ii) any bank and/or savings and loan association
doing business in and 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 $500,000,000 and which carries
on the date of such Investment a credit rating of P-1 or
higher by Moody's Investors Service, Inc. or A-1 or higher by
Standard & Poor's Corporation, in each case due within one
year after the date of the making of the Investment; and
(c) readily marketable commercial paper of (i)
any Bank that is a Bank as of the Closing Date or (ii)
corporations doing business in and 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 P-1 or higher
by Moody's Investors Service, Inc., of A-1 or higher by
Standard & Poor's Corporation, or F-1 or higher by Fitch
Investor Services, Inc., in each case due within one year of
the making of the Investment.
"Change in Control" has the meaning set forth for such term in
Section 3.1(f).
"Closing Date" means the time and Banking Day on which the
conditions set forth in Section 8.1 are satisfied or waived pursuant
to Section 11.2.
"Co-Agent" means any of Credit Lyonnais Los Angeles Branch,
NationsBank of Texas, N.A. or NBD Bank, N.A. or any successor or
additional co-agent. The Co-Agents, in their capacity as such, shall
have no duties under the Loan Documents beyond those of a Bank.
"Code" means the Internal Revenue Code of 1986, as amended or
replaced and as in effect from time to time.
"Commission" means the Securities and Exchange Commission and
any successor commission.
"Commitment" means, as of any date of determination, the
amount of the "KBHC Commitment" then in effect pursuant to the
Override Agreement.
"Commitment Assignment and Acceptance" means a commitment
assignment and acceptance prescribed by the Override Agreement.
-5-
11
"Common Stock" means the $1.00 par value common stock and
special common stock of Borrower.
"Compliance Certificate" means a compliance certificate in the
form of Exhibit A signed, on behalf of Borrower, by a Senior Officer
of Borrower.
"Consolidated Subsidiary" means, with respect to any Person
and as of any date of determination, a Subsidiary of that Person whose
financial statements should be consolidated with the financial
statements of the Person in accordance with Generally Accepted
Accounting Principles.
"Consolidated Tangible Net Worth" means, as of any date of
determination, the Tangible Net Worth of Borrower and its Consolidated
Subsidiaries on a consolidated basis; provided that any positive or
negative adjustment to such Tangible Net Worth attributable to foreign
currency translations shall be ignored.
"Contingent Guaranty Obligation" means, as to any Person, any
(a) direct or indirect guarantee of Indebtedness of, or other
obligation performable by, any other Person (other than a performance
obligation undertaken in the ordinary and usual course of business),
including any endorsement (other than for collection or deposit in the
ordinary course of business), co-making or sale with recourse of the
obligations of any other Person or (b) assurance given to an obligee
with respect to the performance of an obligation (other than a
performance obligation undertaken in the ordinary and usual course of
business) by, or the financial condition of, any other Person, whether
direct, indirect or contingent, including any purchase or repurchase
agreement covering such obligation or any collateral security
therefor, any agreement to provide funds (by means of loans, capital
contributions or otherwise) to such other Person, any agreement to
support the solvency or level of any balance sheet item of such other
Person, or any "keep-well", "take-or- pay", "through put" or other
arrangement of whatever nature having the effect of assuring or
holding harmless any obligee against loss with respect to any
obligation of such other Person. The amount of any Contingent
Guaranty Obligation shall be deemed to be an amount equal to the
stated or determinable amount of the related primary obligation
(unless the Contingent Guaranty Obligation is limited by its terms to
a lesser amount, in which case to the extent of such amount) or, if
not stated or determinable, the maximum reasonably anticipated
liability in respect thereof as determined by the Person in good
faith.
-6-
12
"Contractual Obligation" means, as to any Person, any
provision of any outstanding Securities 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, other than,
in the case of Borrower and its Subsidiaries, any of the Loan
Documents.
"Credit Rating Level" means, as of any date of determination,
the credit rating level set forth below opposite the specified credit
ratings of Borrower's senior unsecured debt then in effect:
Credit Rating Credit Ratings
------------- --------------
Level
-----
I Any two of the following credit
ratings:
S&P: BBB- or better
Moody's: Baa3 or better
Duff: BBB- or better
II Level I does not apply and any
two of the following credit
ratings:
S&P: BB+ or better
Moody's: Ba2 or better
Duff: BBB- or better
III Neither Level I nor Level II
applies.
For purposes of the foregoing, "S&P" means Standard & Poor's Rating
Group, a division of McGraw Hill, Inc., "Moody's" means Moody's
Investors Service, Inc. and "Duff" means Duff & Phelps Credit Rating
Co. The Credit Rating Levels in effect as of any date shall be as set
forth in the then most recent Officer's Certificate delivered to the
Administrative Agent, attaching such evidence of the Credit Ratings,
as may be reasonably required by the Administrative Agent.
"Curable KBMC Default" means a Material KBMC Default or a
Material KBMC Event of Default that can be cured by the payment of
money, including those arising under the following Sections of the
Mortgage Warehousing Agreement: 10.1, 10.2, 10.3, 10.4, 10.5, 10.21,
11.1(a), 11.1(e), 11.1(g), 11.1(h), 11.1(m), 11.1(o) and 11.1(q).
-7-
13
"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, 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 notice or
passage of time or both, would be an Event of Default.
"Default Rate" means the interest rate described in Section
3.7.
"Designated Deposit Account" means a demand deposit account to
be maintained by Borrower with Bank of America, as from time to time
designated by Borrower by written notification to the Administrative
Agent.
"Disposition" means the sale, transfer or other disposition of
any of the capital stock of any Significant Subsidiary or of all or
substantially all of the assets of any Significant Subsidiary.
"Distribution" means, with respect to any shares of capital
stock or any warrant or right to acquire shares of capital stock or
any other equity security issued by a Person, (a) the retirement,
redemption, purchase, or other acquisition for value (other than for
common stock of such Person) by such Person of any such security, (b)
the declaration or payment by such Person of any dividend in Cash or
in Property (other than in common stock of such Person) on or with
respect to any such security, and (c) any Investment by such Person in
any holder of 5% or more of the capital stock (or other equity
securities) of such Person, if a purpose of such Investment is to
avoid the characterization of the transaction between such Person and
such holder as a Distribution under clause (a) or (b) above. In
addition, to the extent any loan or advance by Borrower to one of its
Subsidiaries is deemed to be an "Investment" for purposes of this
Agreement, then any principal payment made by such Subsidiary in
respect of such loan or advance shall be considered a Distribution for
purposes of Section 6.19(a)(ii).
"Documentation Agent" means The First National Bank of
Chicago. The Documentation Agent shall have no duties under the Loan
Documents beyond those of a Bank.
"Dollars" means the national currency of the United States of
America.
-8-
14
"Domestic Adjusted Interest Expense" means, with respect to
any fiscal period of Borrower and its Consolidated Subsidiaries (other
than any Financial Subsidiary or Foreign Subsidiary), the aggregate
amount of interest, fees, charges and related expenses paid or payable
to a lender in connection with borrowed money that is treated as
interest (including without limitation accretion of original issue
discount on long-term debt existing during such fiscal period) and the
interest portion of any capitalized lease payment of Borrower and such
Consolidated Subsidiaries.
"Domestic Adjusted Operating Income" means, with respect to
any fiscal period of Borrower and its Consolidated Subsidiaries (other
than any Financial Subsidiary), (a) the consolidated gross revenues of
Borrower and its Consolidated Subsidiaries (other than any Financial
Subsidiary) for that fiscal period, minus (b) construction and land
costs for that fiscal period, minus (c) selling, general and
administrative expenses for that fiscal period, minus (d) with respect
to Foreign Subsidiaries, on a consolidated basis, consolidated gross
revenues during that fiscal period, minus (i) construction and land
costs for that fiscal period, minus (ii) selling, general and
administrative expenses for that fiscal period, plus (e) interest
income earned by Borrower and its Consolidated Subsidiaries (other
than any Foreign Subsidiary) during that fiscal period, plus (f)
dividend and royalty payments paid in Cash by a Foreign Subsidiary or
a Financial Subsidiary to Borrower or any of its Guarantor
Subsidiaries, plus (g) Domestic Adjusted Interest Expense which had
previously been capitalized and has been amortized during that fiscal
period to the aggregate cost of sales of Borrower and its Domestic
Subsidiaries, plus (h) non-Cash losses and gains incurred or earned by
Borrower and its Consolidated Subsidiaries (other than any Financial
Subsidiary or any Foreign Subsidiary) in connection with the
abandonment of options to purchase Property, plus (i) non-Cash Net
Realizable Value Adjustments to Inventory located in the United States
of America, plus (j) depreciation expense for that fiscal period,
minus (k) Cash Investments made by Borrower during such fiscal period
in Financial Subsidiaries and Foreign Subsidiaries, all as reported on
the financial statements of Borrower and its Consolidated Subsidiaries
delivered to the Banks pursuant to Section 7.1.
"Domestic Adjusted Tangible Net Worth" means, as of any date
of determination, Consolidated Tangible Net Worth on that date minus
(a) an amount equal to 100% of the aggregate Tangible Net Worth of
Foreign Subsidiaries of Borrower and its Subsidiaries on that date,
minus (b) the
-9-
15
amount by which the aggregate Investments of Borrower on that date
in Domestic Joint Ventures exceed 10% times the difference between
Consolidated Tangible Net Worth and the aggregate Tangible Net Worth
of Foreign Subsidiaries as of that date, and minus (c) the aggregate
amount of intercompany receivables owed to Borrower and its Domestic
Subsidiaries by any Foreign Subsidiary as of that date.
"Domestic Indebtedness" means, as of any date of
determination, the total outstanding Indebtedness of Borrower and its
Domestic Subsidiaries (other than Financial Subsidiaries) as of the
last day of the most recently ended Fiscal Quarter.
"Domestic Interest Coverage Ratio" means, with respect to any
Fiscal Quarter of Borrower and its Consolidated Subsidiaries (other
than any Financial Subsidiary), the ratio of (a) Domestic Adjusted
Operating Income for the twelve month period ending on the last day of
such Fiscal Quarter to (b) Domestic Adjusted Interest Expense (without
including accretion of original issue discount on long-term debt
existing during such fiscal period) for the twelve month period ending
on the last day of such Fiscal Quarter.
"Domestic Joint Venture" means a Joint Venture (a) that is
organized under the laws of the United States of America or any state
thereof and (b) the majority of the assets of which (as reflected on a
balance sheet of such Joint Venture prepared in accordance with
Generally Accepted Accounting Principles) is located in the United
States of America.
"Domestic Lending Office" means, with respect to each Bank,
its office, branch or affiliate identified on the signature pages
hereof as its Domestic Lending Office or such other office, branch or
affiliate as such Bank may hereafter designate as its Domestic Lending
Office by notice to the Borrower and the Administrative Agent.
"Domestic Standing Inventory" means, as of any date of
determination, all items of unsold housing inventory (other than Model
Homes) of Borrower and its Domestic Subsidiaries, and with respect to
which either (a) 90% of the direct construction costs has been
incurred on such date or (b) at least ten months has elapsed from the
date its construction was commenced through and including such date.
Construction for purposes of this definition shall be deemed to have
commenced upon the pouring of foundation concrete.
-10-
16
"Domestic Subsidiary" means, with respect to any Person and as
of any date of determination, a Subsidiary of such Person (a) that is
organized under the Laws of the United States of America or any state
thereof and (b) the majority of the assets of which (as reflected on a
balance sheet of such Subsidiary prepared in accordance with Generally
Accepted Accounting Principles) is located in the United States of
America; provided that in no event shall Kaufman and Broad
International or KBMHG be considered a Domestic Subsidiary of
Borrower.
"Domestic Unimproved Land" means, as of any date of
determination, real Property located in the United States of America
(including real Property owned by the Land Fund Joint Venture for at
least four years) (a) owned by Borrower or any of its Subsidiaries if
on that date there has been expended by Borrower and its Subsidiaries
less than 50% of the physical construction costs reasonably estimated
by Borrower (in accordance with its past practices as of the Closing
Date) to bring such real Property to "finished lot" status and (b)
owned by other Persons but which, if owned by Borrower or any of its
Subsidiaries on that date, would have satisfied the requirement set
forth in clause (a), if on that date Borrower or any of its Domestic
Subsidiaries holds an option to purchase such real Property for which
it has paid an amount equal to 20% or more of the purchase price
provided for in such option to purchase. The "book value" with
respect to Domestic Unimproved Land referred to in Section 6.17 shall
be calculated as if the option to purchase had been exercised as of
the date of determination, and otherwise in accordance with Generally
Accepted Accounting Principles, consistently applied.
"Domestic Unimproved Unmapped Land" means, as of any date of
determination, Domestic Unimproved Land that is not then covered by a
"tentative" or "final" subdivision map in compliance with applicable
Laws respecting subdivision maps or, in the opinion of the
Administrative Agent, an equivalent entitlement that authorizes the
development of real Property.
"ERISA" means, at any date, the Employee Retirement Income
Security Act of 1974 and the regulations thereunder, all as the same
shall be in effect at such date.
"ERISA Affiliate" means, with respect to any Person, any other
Person (or any trade or business, whether or not incorporated) that is
under common control with that Person within the meaning of Section
414 of the Code.
-11-
17
"Event of Default" has the meaning set forth for that term in
Section 9.1.
"Federal Funds Rate" means the rate per annum equal to the
weighted average (rounded upwards, if necessary, to the nearest
1/100th of one percent) of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by
Federal funds brokers as published for such day (or, if such day is
not a Banking Day, for the next preceding Banking Day) by the Federal
Reserve Bank of New York, or, if such rate is not so published for any
day which is a Banking Day, the average, the average (rounded upwards,
if necessary, to the nearest 1/100th of one percent) of the quotations
for such day on transactions received by the Administrative Agent from
three Federal funds brokers of recognized standing selected by the
Administrative Agent.
"Financial Letter of Credit" means any standby letter of
credit issued pursuant to this Agreement, other than a Performance
Letter of Credit.
"Financial Subsidiary" means (a) the Mortgage Company, so long
as it continues to engage in the mortgage banking business, and its
Subsidiaries and (b) any other Subsidiary of Borrower that (i) is
engaged primarily in the business of origination, marketing, and
servicing of residential mortgage loans, the sale of servicing rights,
or the financing of long term residential mortgage loans, (ii) holds
not less than 95% of its total assets in the form of Cash, Cash
Equivalents, notes and mortgages receivable, Cash held by a trustee
for the benefit of such Subsidiary or other financial instruments and
(iii) is the subject of an Officer's Certificate of Borrower delivered
to the Administrative Agent stating that such Subsidiary is a
Financial Subsidiary within the meaning hereof.
"Fiscal Quarter" means each of the fiscal quarters of Borrower
ending on each February 28 (or 29, if a leap year), May 31, August 31
and November 30.
"Fiscal Year" means each of the fiscal years of Borrower
ending on each November 30.
"Foreign Subsidiary" means, with respect to any Person, a
Subsidiary of that Person which is not a Domestic Subsidiary and with
respect to Borrower,includes Kaufman and Broad International, a
California corporation, but excludes KBMHG.
"Generally Accepted Accounting Principles" means, as of any
date of determination, accounting principles set
-12-
18
forth as "generally accepted" in then currently effective Statements
of the Auditing Standards Board of the American Institute of Certified
Public Accountants, or, if such Statements are not then in effect,
accounting principles that are then 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 to financial statements of a
Person as of any date or for any period are consistent in all material
respects (subject to Section 1.3) to those applied to financial
statements of that Person as of prior dates and for prior periods.
"Governmental Agency" means (a) any 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, (c) any court
or administrative tribunal, or (d) any arbitration tribunal or other
non-governmental authority to whose jurisdiction a Person has
consented, in each case whether of the United States of America or any
other nation.
"Government Securities" means (a) readily marketable direct
full faith and credit obligations of the United States of America or
obligations unconditionally 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.
"Guarantor Subsidiary" means any Domestic Subsidiary which is
a Significant Subsidiary, other than the Financial Subsidiaries.
"Indebtedness" means, with respect to any Person, (a) all
indebtedness of such Person for borrowed money, (b) that portion of
the obligations of such Person under Capital Leases which should
properly be recorded as a liability on a balance sheet of that Person
prepared in accordance with Generally Accepted Accounting Principles,
(c) any obligation of such Person that is evidenced by a promissory
note or other instrument representing an extension of credit to such
Person, whether or not for borrowed money, (d) any obligation of such
Person for the deferred purchase price of Property or services (other
than trade or other accounts payable in the ordinary course of
business in accordance with customary industry terms), (e) any
obligation of the types referred to in clauses (a) through (d) above
that is secured by a Lien
-13-
19
(other than a Permitted Encumbrance) on assets of such Person, whether
or not that Person has assumed such obligation or whether or not such
obligation is non-recourse to the credit of such Person, but only to
the extent of the fair market value of the assets so subject to the
Lien, (f) obligations of such Person arising under acceptance
facilities or under facilities for the discount of accounts receivable
of such Person, (g) any obligation of such Person under letters of
credit issued for the account of such Person and that is not otherwise
a Contingent Guaranty Obligation and (h) any obligation of such Person
under a Swap Agreement.
"Intangible Assets" means assets that are considered
intangible assets under Generally Accepted Accounting Principles,
including (a) customer lists, goodwill, computer software, unamortized
deferred charges, unamortized debt discount, capitalized research and
development costs and other intangible assets and (b) any write-up in
book value of any asset subsequent to its acquisition, but excluding
any existing write-up in book value of any asset acquired by Borrower
or any of its Subsidiaries prior to the Closing Date, as such write-up
may decrease (but not increase) from time to time.
"Interest Period" means, as to each LIBOR Loan, a period of
one, two, three or six months (and, to the extent funding is available
therefor to the Administrative Agent, nine or twelve months), as
designated by Borrower; provided that (a) the first day of each
Interest Period must be a LIBOR Market Day, (b) any Interest Period
that would otherwise end on a day that is not a LIBOR Market Day shall
be extended to the next succeeding LIBOR Market Day, unless such LIBOR
Market Day falls in the next calendar month, in which case the LIBOR
Period shall end on the next preceding LIBOR Market Day, and (c) no
Interest Period may extend beyond the Maturity Date.
"Investment" means, with respect to any Person, any investment
by that Person, whether by means of purchase or other acquisition of
capital stock or other Securities of any other Person or by means of
loan, advance, capital contribution, guarantee, or other debt or
equity participation or interest in any other Person, including any
partnership or joint venture interest in any other Person; provided
that an Investment of a Person shall not include any trade or account
receivable arising in the ordinary course of the business of such
Person. The amount of any Investment shall be the amount actually
invested, without adjustment for subsequent increases or decreases in
the market value of such Investment.
-14-
20
"Issuing Bank" means Bank of America and, with the consent of
the subject Bank and the approval of the Administrative Agent, any
other Bank as may be designated by Borrower from time to time.
"Joint Venture" means any joint venture or limited partnership
(i) in which Borrower or any Domestic Subsidiary of Borrower is, with
respect to any joint venture, a partner or, with respect to any
limited partnership, the general partner, and (ii) which has at least
one partner that is not an Affiliate of Borrower or any Subsidiary of
Borrower.
"Joint Venturers" means, collectively, Borrower and certain
pension funds or a joint venture comprised of such pension funds which
are parties to the Land Fund Joint Venture.
"KBMHG" means Kaufman and Broad Multi-Housing Group, Inc., a
Subsidiary of Borrower.
"Land Fund Joint Venture" means that certain land fund created
by the Joint Venturers on or about August 30, 1989 for the purpose of
acquiring unimproved real Property and processing it into legally
sub-divided lots.
"Laws" means, collectively, all foreign, federal, state and
local statutes, treaties, codes, ordinances, rules, regulations and
controlling precedents of any Governmental Agency.
"Letter of Credit" means a Financial Letter of Credit or a
Performance Letter of Credit.
"Letter of Credit Usage" means, as of any date of
determination, the aggregate undrawn face amount of outstanding
Letters of Credit plus the aggregate amount of unreimbursed draws
under Letters of Credit (that is, draws for which no Alternate Base
Rate Loan was made pursuant to Section 2.5).
"LIBOR" means, for each LIBOR Loan, that rate per annum,
determined solely by the Administrative Agent, pursuant to the
following formula (with each component expressed as a decimal and
rounded upward to the nearest 1/100 of 1%):
London Interbank Offered Rate for that LIBOR Loan
1.00 - Reserve Percentage
"LIBOR Advance" means an Advance made by a Bank to fund its
Pro Rata Share of a LIBOR Loan.
-15-
21
"LIBOR Lending Office" means, with respect to each Bank, its
office, branch or affiliate identified on the signature page hereof as
its LIBOR Lending Office or such other office, branch or affiliate as
such Bank may hereafter designate as its LIBOR Lending Office by
notice to Borrower and the Administrative Agent.
"LIBOR Loan" means a Loan made hereunder and designated or
redesignated as a LIBOR Loan in accordance with Article 2.
"LIBOR Market" means the London, England market established by
and among banks for the solicitation, offer and acceptance of Dollar
deposits in such banks.
"LIBOR Market Day" means any Banking Day on which commercial
banks are open for international business (including dealing in Dollar
deposits) in London, England.
"Lien" means any mortgage, deed of trust, pledge,
hypothecation, assignment for security, security interest,
encumbrance, 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 other
than an agreement which gives to a Person the right to become equally
and ratably secured with any other Person other than the
Administrative Agent and the Banks with respect to the Obligations) to
whom a Lien is granted on any item of Property) 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.
"Loan" means any of the groups of Advances made at any one
time by the Banks.
"Loan Documents" means, collectively, this Agreement, the
Notes, the Subsidiary Guaranty, the Override Agreement and any other
agreement or instrument that may hereafter be executed and delivered
by Borrower or a Subsidiary of Borrower in favor of the Banks relating
to or in furtherance of this Agreement.
"London Interbank Offered Rate" means, for each LIBOR Loan,
the per annum rate (rounded upward to the nearest 1/100 of 1%),
determined solely by the Administrative Agent, at which Bank of
America's branch in London,
-16-
22
England would offer deposits of Dollars in the LIBOR Market at or
about 11:00 a.m., London time, on the day two LIBOR Market Days
preceding the first day of the applicable Interest Period for
approximately the same time period as the applicable Interest Period
and in an amount approximately equal to Bank of America's Pro Rata
Share of that LIBOR Loan.
"Majority Banks" means, as of any date of determination, Banks
holding in the aggregate at least 51% of the principal Indebtedness
then evidenced by the Notes or, if there is then no such outstanding
Indebtedness, Banks having in the aggregate at least a 51% Pro Rata
Share of the Commitment.
"Managing Agent" means either of Bank of America National
Trust and Savings Association or The First National Bank of Chicago.
Except as set forth in the Override Agreement, the Managing Agents
shall have no duties under the Loan Documents beyond those of a Bank.
"Material Adverse Effect" means any circumstance or event, or
any set of circumstances or events which, individually or when
aggregated with any other circumstances or events, (a) has or probably
will have any material adverse effect upon the validity or
enforceability of any Loan Document, (b) is or probably will be
material and adverse to the condition (financial or otherwise) or
operations of Borrower and its Subsidiaries, taken as a whole, (c)
materially impairs or probably will materially impair the ability of
Borrower and its Subsidiaries, taken as a whole, to perform the
Obligations or (d) were initiated or approved by Borrower or any of
its Subsidiaries and which materially impairs or probably will
materially impair the ability of the Banks to enforce any material
legal remedy pursuant to the Loan Documents.
"Material KBMC Default" means an event which, with the giving
of notice or passage of time or both, would become a Material KBMC
Event of Default.
"Material KBMC Event of Default" means any "Event of Default"
described in Section 11.1(a), 11.1(b) (but only to the extent the
same relates to failure to comply with a covenant contained in
Sections 10.1 through 10.23, inclusive, of the Mortgage Warehousing
Agreement and, in the case of Sections 10.16, 10.19, 10.20 and 10.22,
only to the extent the failure to comply has a Material Adverse
Effect), 11.1(d) (but only to the extent that the misrepresentation
therein described has a Material Adverse
-17-
23
Effect) and11.1(e) through 11.1(q), inclusive, of the Mortgage
Warehousing Agreement.
"Maturity Date" means December 31, 1997.
"Model Homes" means housing units which have been completed,
furnished and landscaped and are used in the marketing efforts with
respect to a residential home project, provided that up to twenty
percent (20%) of the total number of residential home projects may
each have up to six units that may be considered Model Homes, and in
all other residential home projects no more than four units shall be
considered Model Homes.
"Mortgage Company" means Kaufman and Broad Mortgage Company,
an Illinois corporation and a wholly owned Financial Subsidiary of
Borrower.
"Mortgage Warehousing Agreement" means that certain Loan
Agreement dated as of September 15, 1993 among Mortgage Company, the
banks party thereto and Credit Lyonnais Los Angeles Branch, as agent
for the banks, as heretofore amended and as further amended as of the
Closing Date and as the same may from time to time be amended or
modified.
"Mortgage Warehousing Guaranty" means Borrower's Guaranty
dated September 15, 1993, as amended or modified from time to time, of
up to $30,000,000 of the obligations of Mortgage Company under the
Mortgage Warehousing Agreement in the event of a "Delivery Failure",
as defined in such Guaranty.
"Multiemployer Plan" means any employee benefit plan of a type
described in Section 4001(a)(3) of ERISA.
"Net Orders" means, as of any date of determination, the
number of items of housing inventory that are in the process of being
sold and with respect to which a purchase contract has been signed, as
reported in Borrower's filings with the Securities Exchange
Commission.
"Net Realizable Value Adjustment" means the reporting
adjustment required pursuant to Generally Accepted Accounting
Principles to reflect a decrease in the book value of inventory below
its historical cost.
"Non-Recourse Indebtedness" means Indebtedness incurred in
connection with the purchase or improvement of Property (a) that is
secured solely by the Property purchased or improved, (b) with respect
to which the holder of such Indebtedness has recourse only to such
-18-
24
Property, and (c) that is otherwise non-recourse (whether by contract
or under applicable Law) to any Person.
"Note" means any of the promissory notes issued by Borrower to
each Bank evidencing Advances by that Bank of its Pro Rata Share under
the Commitment substantially in the form of Exhibit B, either as
originally executed or the same may from time to time be supplemented,
modified, amended, renewed, extended or supplanted.
"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 Administrative 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, andincluding interest
that accrues to the extent permitted by applicable Law after the
commencement of any proceeding under any Debtor Relief Law by or
against Borrower.
"Officer's Certificate" means, when used with reference to any
Person, a certificate signed by a Senior Officer of such Person.
"Opinions of Counsel" means the favorable written legal
opinions of Sidley & Austin, special counsel to Borrower, and Barton
P. Pachino, General Counsel of Borrower to be delivered pursuant to
the Override Agreement.
"Override Agreement" means that certain Override Agreement of
even date herewith among Borrower, Mortgage Company, the Agents and
the Banks, as the same may from time to time be amended or modified.
"Party" means any Person other than the Banks or the Agents
which now or hereafter is a party to any of the Loan Documents.
"PBGC" means the Pension Benefit Guaranty Corporation or any
successor thereto established under ERISA.
"Pension Plan" means any "employee pension benefit plan" (as
such term is defined in ERISA) which is subject to Title IV of ERISA
and which is maintained for employees of Borrower or any of its ERISA
Affiliates.
"Performance Letter of Credit" means any standby letter of
credit issued pursuant to this Agreement to
-19-
25
assure completion of performance of a nonfinancial or commercial
obligation of Borrower or any of its Subsidiaries.
"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 and which are being contested in good faith by
appropriate proceedings and have not proceeded to judgment,
provided that, by reason of nonpayment of the obligations
secured by such Liens, no material 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, by reason of nonpayment of the obligations
secured by such Liens, no material 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 for the purpose of pipelines, conduits, cables,
wire communication lines, power lines and substations,
streets, trails, walkways, drainage, irrigation, water,
utilities, and sewerage purposes, dikes, canals, ditches, the
removal of oil, gas, coal, or other minerals, and other like
purposes affecting real property, facilities, or equipment
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;
(e) easements, exceptions, reservations, or other
agreements for the purpose of facilitating the joint or common
use of property in a shopping center or similar real property
project affecting real property which in the aggregate do not
materially burden or impair the fair market value or use of
such
-20-
26
property for the purposes for which it is or may reasonably be
expected to be held;
(f) rights reserved to or vested in any
Governmental Agency to control or regulate the use of any
real property;
(g) any obligations or duties affecting any real
property to any Governmental Agency with respect to any right,
power, franchise, grant, license, or permit;
(h) present or future zoning laws and ordinances
or other laws and ordinances restricting the occupancy, use,
or enjoyment of real property;
(i) statutory Liens, including warehouseman's
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, adequate reserves
have been set aside with respect thereto and, by reason of
nonpayment, no material property is subject to a material risk
of loss or forfeiture;
(j) 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;
(k) 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;
(l) 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;
(m) 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 the
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 25% of the
annual fixed rentals payable under such lease;
-21-
27
(n) Liens consisting of deposits of property to
secure statutory obligations of the Borrower or a Subsidiary
of Borrower in the ordinary course of its business; and
(o) Liens consisting of deposits of property to
secure (or in lieu of) surety, appeal or customs bonds in
proceedings to which Borrower or a Subsidiary of Borrower is a
party in the ordinary course of its business.
"Permitted Right of Others" means a Right of Others consisting
of (a) an interest (other than a legal or equitable co-ownership
interest, an option or right to acquire a legal or equitable
co-ownership interest and any interest of a ground lessor under a
ground lease), that does not materially impair the value or use of
property for the purposes for which it is or may reasonably be
expected to be held, (b) an option or right to acquire a Lien that
would be a Permitted Encumbrance or (c) the reversionary interest of a
landlord under a lease of Property.
"Person" means an individual, trustee, corporation, general
partnership, limited partnership, joint stock company, trust, estate,
unincorporated organization, union, tribe, business association or
firm, joint venture, Governmental Agency, or other entity.
"Prior Loan Agreement" has the meaning set forth for that term
in the Recitals hereto.
"Projections" means the financial projections of Borrower
dated October 5, 1994.
"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 set forth opposite the name of that Bank on Schedule 1.1 to
the Override Agreement.
"Quarterly Payment Date" means December 31, 1994 and each
March 31, June 30, September 30 and December 31 thereafter through and
including the Maturity Date.
"Reference Rate" means the per annum rate of interest
publicly announced from time to time by Bank of America at San
Francisco, California, as its Reference Rate. The Reference Rate is
set by Bank of America based on various factors, including Bank of
America's costs and
-22-
28
desired return, general economic conditions and other factors, and is
used as a reference point for pricing loans. Bank of America may
price loans at, above or below the Reference Rate. Any change in the
Reference Rate shall take effect on the day specified in the public
announcement of such change.
"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.
"Regulatory Development" means (a) any change in the Laws, (b)
change in the application of any existing Laws or the interpretation
thereof by any Governmental Agency or central bank or comparable
authority (whether or not having the force of Law), or (c) compliance
by any Bank with any request or directive (whether or not having the
force of Law) of any Governmental Agency or central bank or comparable
authority.
"Request for Letter of Credit" means a written request for the
issuance of a Letter of Credit signed by a Responsible Official of
Borrower, substantially in the form of Exhibit C.
"Request for Loan" means a request for a Loan signed by a
Responsible Official of Borrower, substantially in the form of Exhibit
D.
"Request for Redesignation of Loans" means a written request
for redesignation of Loans signed by a Responsible Official of
Borrower, substantially in the form of Exhibit E.
"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, any Law or any judgment, award,
decree, writ or determination of, or any consent or similar agreement
with, 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.
"Reserve Percentage" means, for each LIBOR Loan, the total of
the maximum reserve percentages for determining the reserves to be
maintained by member banks of the Federal Reserve System for
Eurocurrency Liabilities, as defined in Regulation D. The Reserve
Percentage shall be expressed in decimal form and rounded upward, if
necessary, to the nearest 1/100th of one percent, and shall include
marginal, emergency, supplemental, special and
-23-
29
other reserve percentages. The Reserve Percentage shall be determined
solely by the Administrative Agent, which determination shall be
conclusive absent manifest error.
"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 a Person shall be
conclusively presumed to have been authorized by all necessary
corporate, partnership and/or other action on the part of that Person.
"Right of Others" means, with respect to any Property in which
a Person has an interest, (a) any legal or equitable claim or other
interest other than a Lien) in or with respect to that Property held
by any other Person, and (b) any option or right held by any other
Person to acquire any such claim or other interest including a Lien).
"Securities" means any capital stock, share, voting trust
certificate, bonds, debentures, notes or other evidences of
indebtedness, limited partnership interests, or any warrant, option or
other right to purchase or acquire any of the foregoing.
"Senior Officer" means the (a) chief executive officer, (b)
chief operating officer, (c) chief financial officer, or (d)
treasurer, in each case whatever the title nomenclature may be, of the
Person designated.
"Shareholders' Equity" means, as of any date of determination,
shareholders' equity as of that date determined in accordance with
Generally Accepted Accounting Principles; provided that there shall be
excluded from Shareholders' Equity any amount attributable to capital
stock that is, directly or indirectly, required to be redeemed or
repurchased by the issuer thereof prior to the date which is one year
after the Maturity Date or upon the occurrence of specified events or
at the election of the holder thereof.
"Significant Subsidiary" means, as of any date of
determination, any Subsidiary of Borrower (other than a
-24-
30
Joint Venture) with respect to which any of the following conditions
is met:
(a) the aggregate book value of all Investments
of Borrower and its Subsidiaries in such Subsidiary exceeds
five percent of the consolidated total assets (other than
assets of Financial Subsidiaries) of Borrower and its
Subsidiaries as of such date; or
(b) the proportionate share of Borrower and its
Subsidiaries in the total assets of such Subsidiary (after
intercompany eliminations) exceeds five percent of the
consolidated total assets (other than assets of Financial
Subsidiaries) of Borrower and its Subsidiaries as of such
date; or
(c) the equity of Borrower and its Subsidiaries
in the net income of such Subsidiary (before income taxes,
extraordinary items and cumulative effect of a change in
accounting principles) as of the end of the most recently
ended fiscal year or years of such Subsidiary exceeds the
greater of (i) an amount equal to five percent of the
consolidated net income of Borrower and its Subsidiaries
(computed as aforesaid) as of the end of the most recent
Fiscal Year ended prior to such date or (ii) $3,000,000.
"Subordinated Obligations" means, collectively, all
obligations of Borrower or any of its Subsidiaries that (a) do not
provide for any payment of principal, any sinking fund payment or any
mandatory redemption prior to the Maturity Date, (b) are expressly
subordinated to the Obligations by a written instrument containing
subordination and related provisions (including interest payment
blockage, standstill and related provisions) not less favorable to the
Banks in any respect whatsoever from those applicable to Borrower's
9-3/8% Senior Subordinated Notes due 2003 (the "Subordinated Notes")
(or such other subordination and related provisions as may be approved
in writing by the Majority Banks), (c) are subject to financial
covenants not more burdensome to Borrower in any respect than those
applicable to the Subordinated Notes, except such covenants as may be
approved in writing by the Majority Banks and (d) are subject to other
covenants (other than the covenant to pay interest) and events of
default which in the aggregate are not more burdensome to Borrower
than those applicable to the Subordinated Notes,except such covenants
or events of default as may be approved in writing by the Majority
Banks.
"Subsidiary" means, with respect to any Person, any
corporation, limited liability company, partnership or
-25-
31
joint venture whether now existing or hereafter organized or acquired:
(a) in the case of a corporation or limited liability company, of
which securities having a majority of the ordinary voting power for
the election of the board of directors (other than securities having
such power only by reason of the happening of a contingency) are at
the time owned by such Person and/or one or more Subsidiaries of such
Person or (b) in the case of a partnership, joint venture or other
business entity, in which such Person or a Subsidiary of such Person
is a general partner, or (c) in the case of a partnership, joint
venture or other business entity which would qualify as a Foreign
Subsidiary, in which such Person or a Subsidiary of such Person owns
an equity interest of more than 50%, provided thatthe Land Fund Joint
Venture shall not be a Subsidiary so long as each of the following
conditions remains satisfied: (1) all real Property purchased by the
Land Fund Joint Venture shall be located within the state of
California, (2) the aggregate amount of Borrower's Investment in the
Land Fund Joint Venture shall not exceed the lesser of $15,000,000 or
10% of the total capitalization of the Land Fund Joint Venture, (3)
the Land Fund Joint Venture shall not create, incur, assume or suffer
to exist any Indebtedness other than Non-Recourse Indebtedness, (4)
the aggregate outstanding principal amount of Non-Recourse
Indebtedness of the Land Fund Joint Venture (other than to Joint
Venturers as defined below) shall not exceed an amount equal to 50% of
its total capitalization, and (5) Borrower shall not be liable in any
capacity for any amount in excess of its Investment in the Land Fund
Joint Venture.
"Subsidiary Guaranty" means the guaranty of the Obligations
executed by each Guarantor Subsidiary of Borrower substantially in the
form ofExhibit F, either as originally executed or as the same may
from time to time be supplemented, modified, amended, renewed,
extended or supplanted.
"Swap Agreement" means one or more written agreements between
Borrower and one or more financial institutions providing for "swap",
"cap", "collar" or other interest rate protection with respect to any
Indebtedness.
"Tangible Net Worth" means, with respect to any Person and as
of any date of determination, the Shareholders' Equity of that Person
on that dateminus all Intangible Assets of that Person on that date.
"Termination Event" means (a) a "reportable event" as defined
in Section 4043 of ERISA (other than a "reportable event" that is not
subject to the provision for 30 day
-26-
32
notice to the PBGC), (b) the withdrawal of Borrower or any of its
ERISA Affiliates from a Pension Plan during any plan year in which it
was a "substantial employer" as defined in Section 4001(a)(2) of
ERISA, (c) the filing of a notice of intent to terminate a Pension
Plan or the treatment of an amendment to a Pension Plan as a
termination thereof pursuant to Section 4041 of ERISA,other than
pursuant to Section 4041(b) of ERISA, (d) the institution of
proceedings to terminate a Pension Plan by the PBGC or (e) any other
event or condition which might reasonably be expected to constitute
grounds under ERISA for the termination of, or the apportionment of a
trustee to administer, any Pension Plan.
"to the best knowledge of" means, when modifying a
representation, warranty or other statement of any Person, that such
representation, warranty or statement is a representation, warranty or
statement that (a) the Person making it has no actual knowledge of the
inaccuracy of the matters therein stated and (b) assuming the exercise
by the Person making it of reasonable due diligence under the
circumstances (in accordance with the standard of what a reasonable
Person would have done under similar circumstances), the Person making
it would have no actual knowledge of the inaccuracy of the matters
therein stated. Where the Person making the representation, warranty
or statement is not a natural Person, the aforesaid actual or
constructive knowledge shall be that of any Senior Officer of that
Person.
"Underwriting Bank" means any of Bank of America, Credit
Lyonnais Los Angeles Branch, The First National Bank of Chicago, NBD
Bank, N.A. and NationsBank of Texas, N.A.
1.2 Use of Defined Terms. Any defined term used in the plural
preceded by the definite article shall be taken to encompass all members of the
relevant class. Any defined term used in the singular preceded by "any" shall
be taken to indicate any number 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, consistently applied, except as
otherwise specifically prescribed herein. In the event that Generally Accepted
Accounting Principles change during the term of this Agreement such that the
financial covenants contained in Sections 6.4, 6.7, 6.8, 6.9, 6.10, 6.11, 6.13,
6.17, 6.18 and 6.19 would then be calculated in a different manner or with
different components or would render
-27-
33
the same not meaningful criteria for evaluating Borrower's financial condition,
(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 financial covenants contained in
such Sections during the 90 day period following 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 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 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.
1.6 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 reference. A
matter disclosed on any Schedule shall be deemed disclosed on all Schedules.
1.7 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.
ARTICLE 2
LOANS
2.1 Loans-General.
(a) Subject to the terms and conditions set forth in this
Agreement (including Section 8.2) and the Override Agreement, at any
time and from time to time from the Closing Date through the Banking
Day immediately preceding the Maturity Date, each Bank shall, pro rata
according to
-28-
34
that Bank's Pro Rata Share of the Commitment then in effect, make
Advances to Borrower under the Commitment in such amounts as Borrower
may request;provided that, after giving effect to such Advance, the
aggregate outstanding principal of the Loans evidenced by that Bank's
Noteplus that Bank's Pro Rata Share of the Letter of Credit Usage
shall not exceed that Bank's Pro Rata Share of the Commitment.
Subject to the limitations set forth herein, Borrower may borrow,
repay and reborrow under this Section 2.1 without premium or penalty.
(b) Subject to the next sentence and to Section 2.5(d),
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, and (iv) in the case of an LIBOR Loan, Interest
Period for such Loan. Unless the Administrative Agent, in its sole
and absolute discretion, has notified Borrower to the contrary, each
Loan shall be requested by telephone (promptly confirmed in writing)
or telecopier by a Responsible Official of Borrower, and Borrower
shall confirm such request by promptly mailing a Request for Loan
conforming to the preceding sentence to the Administrative Agent.
(c) Promptly following receipt of a Request for Loan, the
Administrative Agent shall notify each Bank by telephone, telecopier
or telex of the date and type of the Loan, the applicable Interest
Period in the case of an LIBOR Loan, 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, each Bank shall make its Pro-Rata Share of the
Loan in immediately available funds available to the Administrative
Agent at the Administrative Agent's Office. Upon fulfillment of the
applicable conditions set forth inArticle 8, all Advances shall be
credited in immediately available funds to the Designated Deposit
Account.
(d) The principal amount of each Loan shall be an
integral multiple of $1,000,000 and shall be in an amount not less
than (i) $1,000,000 if such Loan is an Alternate Base Rate Loan, and
(ii) $10,000,000 if such Loan is a LIBOR Loan.
(e) A Request for Loan shall be irrevocable upon the
Administrative Agent's first notification thereof. The obligation of
each Bank to make any Advance is several, and not joint or joint and
several, and is not conditioned upon the performance by any other Bank
of its obligation to make Advances. The failure by any Bank to
perform its
-29-
35
obligation to make any Advance will not increase the obligation of any
other Bank to make Advances.
(f) Borrower may redesignate an Alternate Base Rate Loan
as a LIBOR Loan, or a LIBOR Loan as an Alternate Base Rate Loan or a
LIBOR Loan with a new Interest Period, by delivering a Request for
Redesignation to the Administrative Agent, within the time periods and
pursuant to the conditions set forth in Section2.1(b), 2.2 or 2.3, as
applicable, and elsewhere in this Agreement (including Section 8.3).
If no Request for Redesignation (or telephonic or other request
referred to in the second sentence of Section 2.1(b), if applicable)
has been made prior to the last day of the Interest Period for an
outstanding LIBOR Loan within the requisite notice periods set forth
in Section2.3 in connection with a Loan which, if made, would not
increase the outstanding principal indebtedness evidenced by the
Notes, then Borrower shall be deemed to have requested an Alternate
Base Rate Loan in an amount equal to the amount necessary to cause the
outstanding principal Indebtedness evidenced by the Notes to remain
the same and, subject to Section 8.3, the Banks shall make the
Advances necessary to make such Loan notwithstanding Sections 2.1(b)
and 2.2.
2.2 Alternate Base Rate Loans. Each request by Borrower for an
Alternate Base 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 Administrative Agent, at the
Administrative Agent's Office, not later than 9:00 a.m., San Francisco time, on
the Banking Day on which the requested Alternate Base Rate Loan is to be made.
The Administrative Agent shall notify each Bank of a request for an Alternate
Base Rate Loan as soon as practicable after receipt of the same. All Loans
shall constitute Alternate Base Rate Loans unless properly designated as LIBOR
Loans pursuant to Section 2.3.
2.3 LIBOR Loans.
(a) Each request by Borrower for a LIBOR Loan shall be
made pursuant to a Request for Loan (or telephonic or other request
for loan referred to in the second sentence of Section2.1(b), if
applicable) received by the Administrative Agent, at the
Administrative Agent's Office, not later than 9:00 a.m., San Francisco
time, at least three (3) LIBOR Market Days before the first day of the
applicable Interest Period. The Administrative Agent shall notify
each Bank of a request for a LIBOR Loan as soon as practicable after
receipt of the same.
-30-
36
(b) At or about 10:00 a.m., San Francisco time, two (2)
LIBOR Market Days before the first day of the applicable Interest
Period, the Administrative Agent shall determine the applicable LIBOR
(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, telecopier or telex.
(c) No more than six (6) LIBOR Loans may be outstanding
at any particular time.
(d) Unless the Majority Banks otherwise consent, no LIBOR
Loan may be requested during the continuance of an Event of Default.
2.4 Notes. The Advances made by each Bank under the Commitment shall
be evidenced by that Bank's Note.
2.5 Letters of Credit.
(a) Subject to the terms and conditions of this
Agreement (including Section 8.4) and the Override Agreement, Borrower
may request from time to time during the period from the Closing Date
through the day prior to the Maturity Date that an Issuing Bank issue
Letters of Credit for the account of Borrower, and each Issuing Bank
agrees to issue for the account of Borrower one or more Letters of
Credit, provided that (i) Borrower shall not request that an Issuing
Bank issue any Letter of Credit if, after giving effect to such
issuance, the aggregate outstanding principal of the Loans evidenced
by the Notesplus the Letter of Credit Usage exceeds the Commitment,
(ii) Borrower shall not request that an Issuing Bank issue any Letter
of Credit if Borrower would not be in compliance with Section6.8,
(iii) in no event shall an Issuing Bank issue any Letter of Credit
having an expiration date after the Maturity Date, (iv) the Borrower
shall not request any Financial Letter of Credit or Performance Letter
of Credit if, after giving effect to such issuance, the Letter of
Credit Usage with respect to Financial Letters of Credit and
Performance Letters of Credit would exceed $50,000,000 or any limit
established by Law after the Closing Date on that Issuing Bank's
ability to issue the requested Letter of Credit at any time, and (v)
prior to the issuance of any Letter of Credit the Issuing Bank shall
request confirmation by telephone from the Administrative Agent that
such Letter of Credit may be issued. Notwithstanding the foregoing,
the Issuing Bank shall not be obligated to issue a Letter of Credit
if, on or prior to the Banking Day immediately preceding the issuance
thereof any Bank has notified the Issuing Bank in writing that the
conditions set forth in
-31-
37
Section 8.4 have not been satisfied with respect to the issuance of
such Letter of Credit.
(b) Whenever Borrower requests that an Issuing Bank issue
a Letter of Credit it shall deliver to such Issuing Bank (with a copy
to the Administrative Agent) (i) an executed application for such
Letter of Credit in the form customarily required by the Issuing Bank
and a Request for Letter of Credit by 10:00 a.m., San Francisco time,
at least three (3) Banking Days prior to the proposed date of
issuance,provided that the Issuing Bank shall use its best efforts to
issue the proposed Letter of Credit within two Banking Days after
receipt of such request, and (ii) the form of the Letter of Credit
requested, together with such other information or materials as the
Issuing Bank may reasonably request with respect to such Letter of
Credit. The Administrative Agent shall promptly thereafter notify
each of the Banks of the contents of such Request for Letter of Credit
and proposed form of Letter of Credit. Prior to the issuance of any
Letter of Credit, the Issuing Bank shall confirm by telephone with the
Administrative Agent that, giving effect to the issuance of such
Letter of Credit, the limitations set forth in Section2.5(a) have been
satisfied.
(c) Each Issuing Bank shall notify the Administrative
Agent and Borrower of each issuance or amendment of any Letter of
Credit issued by it on the Banking Day upon which such issuance or
amendment occurs. Such notice shall indicate whether such Letter of
Credit is, in the reasonable determination of the Issuing Bank (which
determination shall be conclusive absent manifest error), a Financial
Letter of Credit or a Performance Letter of Credit. Upon the issuance
of a Letter of Credit, each Bank other than the respective Issuing
Bank and any Bank that has notified the Issuing Bank pursuant to the
last sentence of Section2.5(a) with respect to such Letter of Credit)
shall be deemed to have purchased a pro rata participation from the
Issuing Bank in an amount equal to that Bank's Pro Rata Share, of the
face amount of such Letter of Credit. Without limiting the scope and
nature of each such Bank's participation in any Letter of Credit, to
the extent that the Issuing Bank has not been reimbursed for any
payment required to be made by the Issuing Bank under any Letter of
Credit by the Banks through the making of an Alternative Base Rate
Loan in accordance with Section 2.5(d) or by the Borrower in
accordance with Section 2.5(e), each such Bank shall, according to its
Pro Rata Share, immediately reimburse the Issuing Bank upon demand for
the amount of such payment. If any Bank fails to reimburse the
Issuing Bank in the manner required by this Section on the same day
upon which the related
-32-
38
payment has been made by the Issuing Bank, that Bank shall also pay
interest to the Issuing Bank on the amount of such reimbursement
obligations at the Federal Funds Rate for the first two days after
payment has been made by the Issuing Bank and at a rate equal to the
sum of the Federal Funds Rate plus 2% from and after the third day
after the date such payment was made (which interest shall not be for
the account of or otherwise reimbursable by Borrower). The obligation
of each such Bank to so reimburse the Issuing Bank shall be absolute
and unconditional and shall not be affected by (i) the occurrence of
an Event of Default or a Default, (ii) any set-off, counterclaim,
defense or other right that such Bank or Borrower may have against the
Issuing Bank, Borrower or any other Person, (iii) any adverse change
in the condition (financial or otherwise) of Borrower or (iv) any
other occurrence or event. Any such reimbursement shall not relieve
or otherwise impair the obligation of Borrower to reimburse the
Issuing Bank under any Letter of Credit together with interest as
hereinafter provided.
(d) The Issuing Bank shall provide notice to Borrower and
the Administrative Agent of the amount of each demand for a draw under
any Letter of Credit and, where practicable, such notice may be
provided on the Banking Day immediately preceding the Banking Day of
an expected payment. If all of the limitations and requirements set
forth in this Agreement with respect to the making of an Alternate
Base Rate Loan except the requirement that a Request for Loan be made
as and when specified herein) have been satisfied then the Banks shall
be obligated to make an Alternate Base Rate Loan to Borrower (without
notice to or the consent of the Borrower) in an aggregate amount equal
to the amount paid by the Issuing Bank on the related Letter of
Credit. The Administrative Agent shall thereupon promptly provide
notice of such payment under the Letter of Credit to the Banks, and
within one Banking Day after such notice from the Administrative
Agent, each Bank shall make its Pro Rata Share of the Alternate Base
Rate Loan made by the Issuing Bank (plus interest at the Federal Funds
Rate for the first two days after the date payment has been made by
the Issuing Bank and at a rate equal to thesum of the Federal Funds
Rate plus 2% from and after the third day after the date such payment
has been made by he Issuing Bank, which interest shall not be for the
account of or otherwise reimbursable by Borrower) available to the
Administrative Agent for the account of the Issuing Bank in
immediately available funds, and such funds shall collectively
constitute the aforementioned Alternate Base Rate Loan, the proceeds
of which shall be paid to the
-33-
39
Issuing Bank to reimburse it for the payment made by it under the
Letter of Credit.
(e) In the event that not all of the limitations
and requirements set forth in this Agreement with respect to the
making of an Alternative Base Rate Loan other than the requirement
that a Request for Loan be made as and when specified herein) have
been satisfied, then Borrower agrees to pay to the Issuing Bank an
amount equal to the amount of the applicable demand for a draw under a
Letter of Credit (i) on the same Banking Day any payment is made, if
the Issuing Bank notifies Borrower of such payment prior to 12:00
p.m., San Francisco time, on the Banking Day immediately preceding the
Banking Day upon which such payment is to be made or (ii) on the
Banking Day immediately following the Banking Day of the payment, if
later notice is given. The principal amount of any such payment made
by Borrower to the Issuing Bank shall be used to reimburse the Issuing
Bank for the payment made by it under the Letter of Credit. In the
event that Borrower does not make such payment when due, Borrower
shall also pay interest to the Administrative Agent for the account of
the Banks on such amount from the date of any payment to, but not
including, the date of payment by Borrower at the rate provided for in
Section 3.7; provided that not less than one day's interest shall be
due. Each Bank that has reimbursed the Issuing Bank pursuant to this
Section 2.5(e) in accordance with 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 this Section
2.5(e).
(f) Borrower agrees to pay to the Administrative Agent
(which shall promptly pay the same to the Banks or the respective
Issuing Bank, as the case may be), (i) for the account of the Banks
other than a Bank that has notified the Issuing Bank pursuant to the
last sentence of Section2.5(a) with respect to such Letter of Credit)
with respect to each Letter of Credit (whether a Financial Letter of
Credit or a Performance Letter of Credit), a per annum letter of
credit fee in an amount equal to the Applicable Letter of Credit
Feetimes the face amount of such Letter of Credit (including increases
in the undrawn face amount thereof) for the term of such
-34-
40
Letter of Credit, and (ii) for the account of the applicable Issuing
Bank with respect to each Letter of Credit (whether a Financial Letter
of Credit or a Performance Letter of Credit), an issuance fee in an
amount equal to the greater of $500 or one eighth percent (1/8%) per
annum times the face amount of such Letter of Credit (including
increases in the undrawn face amount thereof) for the term of such
Letter of Credit, together with such Issuing Bank's standard charges
and out-of-pocket costs in connection with such issuance. The letter
of credit fees for each Letter of Credit are payable in advance for
each six month period (or portion thereof) during the term of the
applicable Letter of Credit, on the issuance date and on each six
month anniversary thereof during the term the applicable Letter of
Credit is outstanding. In the event a Letter of Credit is cancelled
or terminated prior to its original expiration date, the fee provided
for in clause (i) above shall be refundable by the Banks on a pro rata
basis over the period such Letter of Credit will no longer be
outstanding, and one-half of the issuance fee referred to in clause
(ii) shall be refundable by the Issuing Bank over the period such
Letter of Credit will no longer be outstanding (and the balance will
be non-refundable).
(g) The obligation of Borrower to reimburse each Issuing
Bank for drawings or payments made under each Letter of Credit shall
be unconditional and irrevocable. Without limiting the foregoing,
such obligation of Borrower shall not be affected by any of the
following circumstances:
(A) any lack of validity or enforceability of the
Letter of Credit, this Agreement, or any letter of credit application
or other agreement or instrument relating thereto;
(B) compliance by the Issuing Bank with any
amendment or waiver of or any consent to departure from the Letter of
Credit, this Agreement or any letter of credit application or other
agreement or instrument relating thereto previously approved by
Borrower pursuant to Section2.5(b);
(C) the existence of any claim, setoff, defense,
or other rights which Borrower may have at any time against any Bank,
any beneficiary of the Letter of Credit (or any Persons for whom any
such beneficiary may be acting) or any other Person, whether in
connection with the Letter of Credit, this Agreement, or any letter of
credit application or other agreement or instrument relating thereto,
or any unrelated transactions;
(D) any demand, statement, or any other document
presented under a 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
docu-
-35-
41
ment appeared to comply with the terms of the Letter of Credit;
(E) the solvency or financial responsibility of
any party issuing any documents in connection with a Letter of Credit;
(F) any failure or delay in notice of shipments
or arrival of any property;
(G) 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;
(H) any error, neglect or default of any
correspondent of any Bank in connection with a Letter of Credit;
(I) any consequence arising from acts of God,
war, insurrection, disturbances, labor disputes, emergency conditions
or other causes beyond the control of the Banks;
(J) 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 so
long as the Issuing Bank in good faith determines that the draft or
document appears to comply with the terms of the Letter of Credit; and
(K) where the Issuing Bank has acted in good
faith and without gross negligence and observed general banking usage,
any other circumstance whatsoever. IN DETERMINING WHETHER TO PAY
UNDER ANY LETTER OF CREDIT, THE ISSUING BANK SHALL BE RESPONSIBLE ONLY
TO DETERMINE THAT THE DOCUMENTS AND CERTIFICATES REQUIRED TO BE
DELIVERED UNDER THAT LETTER OF CREDIT HAVE BEEN DELIVERED AND THAT
THEY COMPLY ON THEIR FACE WITH THE REQUIREMENTS OF THAT LETTER OF
CREDIT AND THE ISSUING BANK SHALL OBTAIN THE CONSENT OF THE BORROWER
PRIOR TO MAKING ANY PAYMENT WITH RESPECT TO ANY DOCUMENT OR
CERTIFICATE WHICH DOES NOT SO COMPLY ON ITS FACE.
(h) Each Issuing Bank shall be entitled to the
protections accorded to the Administrative Agent pursuant to Article 10,
mutatis mutandis.
2.6 Reduction of Commitment. Borrower shall have the right, at any
time and from time to time, without penalty or charge, voluntarily to reduce or
terminate all or a portion of any of the unused Commitment, on the terms and
conditions set
-36-
42
forth in Section 2.4 of the Override Agreement. Borrower shall pay to the
Administrative Agent on the date of such termination all commitment fees which
have accrued to such date in respect of the terminated portion of the
Commitment.
2.7 Administrative Agent's Right to Assume Funds Available. Unless
the Administrative Agent shall have been notified by any Bank at least two
hours prior to the funding by the Administrative Agent of any Loan that such
Bank does not intend to make available to the Administrative Agent such Bank's
Pro Rata Share of such Loan, the Administrative Agent may assume that such Bank
has made such amount available to the Administrative Agent on the date of the
Loan and the Administrative Agent may, in reliance upon such assumption, make
available to Borrower a corresponding amount. If such corresponding amount is
not in fact made available to the Administrative Agent by such Bank, the
Administrative Agent shall be entitled to recover such corresponding amount on
demand from such Bank, which demand shall be made in a reasonably prompt
manner. If such Bank does not pay such corresponding amount forthwith upon the
Administrative Agent's demand therefor, the Administrative Agent promptly shall
notify Borrower and Borrower shall pay such corresponding amount to the
Administrative Agent. The Administrative Agent shall also 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
Administrative Agent to Borrower to the date such corresponding amount is
recovered by the Administrative Agent, at a rate per annum equal to the Federal
Funds Rate as notified by the Administrative Agent to such Bank or the
Borrower, as the case may be. Nothing herein shall be deemed to relieve any
Bank from its obligation to fulfill its Pro Rata Share of the Commitment
hereunder or to prejudice any rights which the Administrative Agent or Borrower
may have against any Bank as a result of any default by such Bank hereunder.
ARTICLE 3
PAYMENTS; FEES
3.1 Principal and Interest
(a) Interest shall be payable on the outstanding daily
unpaid principal amount of each Loan from the date thereof until
payment in full and shall accrue and be payable at the rates set forth
herein, to the extent permitted by applicable Laws, before and after
default, before and after maturity, before and after any 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.
-37-
43
(b) Interest accrued on each Alternate Base Rate Loan
shall be due and payable on the last day of each calendar month.
Except as otherwise provided in Section 3.7, the unpaid principal
amount of any Alternate Base Rate Loan shall bear interest at a
fluctuating rate per annum equal to the Alternate Base Rate. Each
change in the interest rate hereunder shall take effect simultaneously
with the corresponding change in the Alternate Base Rate. Each change
in the Alternate Base Rate shall be effective as of the Banking Day on
which change in the Alternate Base Rate is announced, unless otherwise
specified in such announcement, in which case the change shall be
effective as so specified.
(c) Interest accrued on each LIBOR Loan which has an
Interest Period of three months or less shall be due and payable on
the last day of the related Interest Period. Interest accrued on each
other LIBOR Loan shall be due and payable on the date which is three
months after the date such LIBOR Loan was made, every three months
thereafter and on last day of the related Interest Period. Except as
otherwise provided in Section 3.7, the unpaid principal amount of any
LIBOR Loan shall bear interest at a rate per annum equal to LIBOR for
that LIBOR Loanplus the Applicable LIBOR Spread in effect from time to
time.
(d) If not sooner paid, the principal Indebtedness
evidenced by the Notes shall be payable as follows:
(i) the principal amount of each Alternate Base
Rate Loan shall be due and payable on the Maturity date;
(ii) subject to Section 2.1(f), the principal
amount of each LIBOR Loan shall be payable on the last day of
the Interest Period for such LIBOR Loan;
(iii) the principal Indebtedness evidenced by the
Notes shall be immediately payable in Cash, to the extent that
such Indebtedness exceeds at any time the Commitment as then
in effect; and
(iv) the principal indebtedness evidenced by the
Notes shall be immediately payable in Cash on the Maturity
Date.
(e) The Notes may, at any time and from time to time,
voluntarily be prepaid at the election of Borrower in whole or in part
without premium or penalty;provided that: (i) any partial prepayment
shall be in integral multiples of $1,000,000, (ii) any partial
prepayment shall be in an amount not less than $1,000,000 on a
Alternate
-38-
44
Base Rate Loan, and not less than $5,000,000 on a LIBOR Loan, (iii)
the Administrative Agent must have received written notice (or
telecopied notice confirmed promptly in writing) of any prepayment at
least three Banking Days before the date of prepayment in the case of
a LIBOR Loan and by 10:00 a.m., San Francisco time, on the date of
prepayment in the case of an Alternate Base Rate Loan, (iv) each
prepayment of principal, except for partial prepayments on Alternate
Base Rate Loans, shall be accompanied by prepayment of interest
accrued to the date of payment on the amount of principal paid, and
(v) in the case of any prepayment of any LIBOR Loan, Borrower shall
promptly upon demand reimburse each Bank for any loss or cost directly
or indirectly resulting from the prepayment, determined as set forth
in Section 3.6.
(f) (i) If a Change in Control (as defined below) shall
have occurred, at the option of the Majority Banks, Borrower shall
repay in Cash the entire principal Indebtedness evidenced by the
Notes, together with Interest thereon and all other amounts due in
connection with the Notes and this Agreement, and deliver to the
Administrative Agent an amount equal to the Letter of Credit Usage
then outstanding, to be held as cash collateral as provided in Section
9.2(c) (the "Change in Control Repayment"), on the date that is 27
Banking Days after the occurrence of the Change of Control (the
"Change of Control Payment Date"), subject to receipt by Borrower of
Change in Control Payment Notice as set forth in Section 3.1(f)(iii).
On the Change in Control Payment Date, the Commitment shall
automatically terminate.
A "Change in Control" shall be deemed to have occurred at such
time as any of the following events shall occur:
(A) There shall be consummated any consolidation
or merger of Borrower in which Borrower is not the continuing
or surviving corporation or pursuant to which the Voting Stock
(as defined below) would be converted into Cash, securities or
other property, other than a merger of Borrower in which the
holders of Voting Stock immediately prior to the merger have
the same or greater proportionate ownership, directly or
indirectly, of the Voting Stock of the surviving corporation
immediately after such merger as they had of the Voting Stock
immediately prior to such merger; or
(B) There is a report filed by any person,
including its Affiliates and Associates, on Schedule 13D or
14D-1 (or any successor schedule,
-39-
45
form or report) pursuant to the Securities Exchange Act of
1934 (the "Exchange Act"), disclosing that such person (for
the purposes of this Section 3.1(f) only, the term "person" is
used as defined in Section 13(d)(3) or Section 14(d)(2) of the
Exchange Act or any successor provision to either of the
foregoing) has become the beneficial owner (as the term
"beneficial owner" is defined under Rule 13d-3 or any
successor rule or regulation promulgated under the Exchange
Act) of 50% or more of the voting power of Borrower's Voting
Stock then outstanding; provided, however, that a person shall
not be deemed beneficial owner of, or to own beneficially (1)
any Securities tendered pursuant to a tender or exchange offer
made by or on behalf of such person or any of such person's
Affiliates or Associates (as defined below) until such
tendered Securities are accepted for purchase or exchange
thereunder, or (2) any Securities if such beneficial ownership
(a) arises solely as a result of a revocable proxy delivered
in response to a proxy or consent solicitation made pursuant
to, and in accordance with, the applicable rules and
regulations under the Exchange Act, and (b) is not also then
reportable on Schedule 13D (or any successor schedule) under
the Exchange Act; or
(C) A "Change in Control" (or analogous term) as
defined in an indenture or agreement governing any
Subordinated Obligation occurs.
Notwithstanding the foregoing provisions of this
Section3.1(f), a Change in Control shall not be deemed to have
occurred if at any time Borrower, any Subsidiary of Borrower,
any employee stock ownership plan or any other employee
benefit plan, including any Pension Plan of Borrower or any
Subsidiary of Borrower, or any person holding Voting Stock for
or pursuant to the terms of such employee benefit plan, files
or becomes obligated to file a report under or in response to
Schedule 13D or Schedule 14D-1 (or any successor schedule,
form or report) under the Exchange Act disclosing beneficial
ownership by it of shares of Voting Stock, whether in excess
of 50% or otherwise.
"Voting Stock" means, with respect to any Person, the
capital stock of such Person having general voting power under
ordinary circumstances to elect at least a majority of the
board of directors, managers or trustees of such Person
(irrespective of whether or not at the time capital stock of
any other
-40-
46
class or classes shall have or might have voting power by
reason of the happening of any contingency).
"Associate" shall have the meaning ascribed to such
term in Rule 12b-2 of the General Rules and Regulations under
the Exchange Act, as in effect on the date hereof.
(ii) Within 15 Banking Days after the occurrence
of a Change in Control, Borrower shall provide written notice
of the Change in Control to the Administrative Agent and each
Bank. The notice shall state:
(a) the events causing a Change in
Control and the date of such Change in Control;
(b) the date by which the Change in
Control Payment Notice (as defined in Section
3.1(f)(iii)) must be given; and
(c) the Change in Control Payment Date.
(iii) At the direction of the Majority Banks, the
Administrative Agent shall, on behalf of the Banks, exercise
the rights specified in Section 3.1(f)(i) by delivery of a
written notice (a "Change in Control Payment Notice") to
Borrower at any time prior to or on the Change in Control
Payment Date, stating that the Notes shall be prepaid and cash
collateral shall be provided for the Letter of Credit Usage on
the Change in Control Payment Date. On the Change in Control
Payment Date, Borrower shall make the Change in Control
Repayment to the Administrative Agent for the benefit of the
Banks, and the Commitment shall terminate.
3.2 Commitment Fees. From the Closing Date to the Maturity Date,
Borrower shall pay to the Administrative Agent, for the account of each Bank
pro rata according to that Bank's Pro Rata Share of the Commitment, a
commitment fee equal to the Applicable Commitment Fee Rate per annum in effect
from time to time times the average daily amount by which the Commitment
exceeds the aggregate outstanding principal of the Loans evidenced by the Notes
plus the Letter of Credit Usage. The commitment fee shall accrue daily and be
payable in arrears with respect to each calendar quarter on the Quarterly
Payment Date falling at the end of such calendar quarter, commencing December
31, 1994. The Administrative Agent shall calculate the commitment fee and the
amount thereof allocable to each Bank according to that Bank's Pro Rata Share
of the Commitment and shall notify Borrower in writing of such amounts.
-41-
47
3.3 Facility/Extension Fee. [Intentionally omitted]
3.4 Agency Fees. Borrower shall pay to the Administrative Agent and
the Managing Agents, respectively, for the account solely of each respective
Agent, such agency fees as are referred to in the Override Agreement.
3.5 Capital Adequacy.
(a) If any Bank (an "Affected Bank") determines that
compliance with any Law or regulation or with any guideline or request
from any central bank or other Governmental Agency (whether or not
having the force of Law) enacted or issued after the Closing Date
relating to the capital adequacy of banks or corporations in control
of banks has or would have the effect of reducing the rate of return
on the capital of such Affected Bank or any corporation controlling
such Affected Bank as a consequence of, or with reference to, such
Affected Bank's Pro Rata Share of the Commitment below the rate which
the Bank or such other corporation could have achieved but for such
compliance (taking into account the policies of such Bank or
corporation with regard to capital adequacy), then Borrower shall from
time to time, upon demand by such Affected Bank in accordance with
this Section3.5 (with a copy of such demand to the Administrative
Agent), within 15 days after demand pay to such Affected Bank
additional amounts sufficient to compensate such Affected Bank or
other corporation for such reduction.
(b) An Affected Bank may not seek compensation under
Section 3.5(a) unless the demand for such compensation is delivered to
Borrower within six months following the date of enactment or issuance
of the Law, regulation, guideline or request giving rise to such
demand for compensation.
(c) A certificate as to any amounts for which an Affected
Bank is seeking compensation under Section 3.5(a), submitted to
Borrower and the Administrative Agent by such Affected Bank, shall be
conclusive and binding for all purposes, absent manifest error. Each
Affected Bank shall calculate such amounts in a manner which is
consistent with the manner in which it makes calculations for
comparable claims with respect to similarly situated borrowers from
such Affected Bank, will not allocate to Borrower a proportionately
greater amount of such compensation than it allocates to each of its
other commitments to lend or other loans with respect to which it is
entitled to demand comparable compensation, and will not include
amounts already factored into the rates of interest or fees already
provided for herein. Each Bank agrees promptly to notify Borrower and
the
-42-
48
Administrative Agent of any circumstances that would cause Borrower to
pay additional amounts pursuant to this Section, provided that the
failure to give such notice shall not affect Borrower's obligation to
pay such additional amounts hereunder.
(d) Without limiting its obligation to reimburse an
Affected Bank for compensation theretofore claimed by an Affected Bank
pursuant to Section 3.5(a), Borrower may, within 60 days following any
demand by an Affected Bank, request that one or more Persons that
constitute "Eligible Assignees" under the Override Agreement and that
are acceptable to Borrower and approved by the Managing Agents (which
approval shall not be unreasonably withheld) purchase all (but not
part) of the Affected Bank's then outstanding Advances, its Note and
its participation interest in outstanding Letters of Credit, and
assume its Pro Rata Share of the Commitment and its obligations
hereunder. Borrower shall have the same right as to any Bank which
has claimed compensation for a capital adequacy charge pursuant to
Section 4.4 of the Mortgage Warehousing Agreement, and such a Bank
shall be an "Affected Bank" for purposes of this Section 3.5(d). If
one or more such Banks or banks so agree in writing (each, an
"Assuming Bank" and collectively, the "Assuming Banks"), the Affected
Bank shall assign its Pro Rata Share of the Commitment, together with
the Indebtedness then evidenced by its Note and its participation
interest in outstanding Letters of Credit, to the Assuming Bank or
Assuming Banks in accordance with Section5.1 of the Override
Agreement. On the date of any such assignment, the Affected Bank
which is being so replaced shall cease to be a "Bank" for all purposes
of this Agreement and shall receive (x) from the Assuming Bank or
Assuming Banks the principal amount of its Advances then outstanding
and (y) from Borrower all interest and fees accrued and then unpaid
with respect to such Advances, together with any other amounts then
payable to such Bank by Borrower. In the event the Affected Bank is
also an Issuing Bank, then the Assuming Bank shall also become an
Issuing Bank for all purposes of this Agreement and shall either (at
the Affected Bank's election, subject to the approval of Borrower, the
Administrative Agent and the Assuming Bank (which approvals shall not
be unreasonably withheld) and the approval of the applicable Letter of
Credit beneficiary) (i) issue new Letters to Credit to replace the
outstanding Letters of Credit issued by the Affected Bank, or (ii)
issue new Letters of Credit in support of the outstanding Letters of
Credit issued by the Affected Bank, whereupon such outstanding letters
shall no longer be considered "Letters of Credit" under this
Agreement, and such new Letters of Credit shall be considered Letters
of Credit
-43-
49
for all purposes of this Agreement (including the participation
therein by the other Banks pursuant to Section 2.5). The Affected
Bank shall be obligated to reimburse to Borrower a portion of the
issuance fees referred to in Section 2.5(f)(iii) based on the period
during which each new Letter of Credit issued by the Assuming Bank
will be outstanding in replacement or support of a Letter of Credit
issued by the Affected Bank. Notwithstanding the foregoing, Borrower
may not cause the replacement of an Affected Bank under this Section
3.5 unless the Affected Bank is also concurrently replaced as a Bank
under Section 14.4 of the Mortgage Warehousing Agreement.
3.6 LIBOR Fees and Costs.
(a) If the occurrence of any Regulatory
Development after the Closing Date:
(1) shall subject any Bank or its LIBOR
Lending Office to any tax, duty or other charge or cost with
respect to any LIBOR Advance or its obligation to make LIBOR
Advances, or shall change the basis of taxation of payments to
any Bank of the principal of or interest on any LIBOR Advance
or any other amounts due under this Agreement in respect of
any LIBOR Advance or its obligation to make LIBOR Advances
(except for changes in any tax on the overall net income,
gross income or gross receipts of such Bank or its LIBOR
Lending Office);
(2) shall impose, modify or deem
applicable any reserve (including, without limitation, any
reserve imposed by the Board of Governors of the Federal
Reserve System), special deposit or similar requirements
(excluding any such requirement included in any applicable
Reserve Percentage) against assets of, deposits with or for
the account of, or credit extended by, any Bank or its LIBOR
Lending Office; or
(3) shall impose on any Bank or its
LIBOR Lending Office or the LIBOR Market any other condition
affecting any LIBOR Advance or its obligation to make LIBOR
Advances, 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 LIBOR Lending Office of making
or maintaining any LIBOR Advance or in respect of any LIBOR Advance or
its obligation to make LIBOR Advances or reduces the amount of any sum
received or receivable by such Bank or its LIBOR Lending
-44-
50
Office with respect to any LIBOR Advance or its obligation to make
LIBOR Advances (assuming such Bank's LIBOR Lending Office had funded
100% of its LIBOR Advance in the LIBOR Market), then, within 15 days
after demand by such Bank (with a copy to the Administrative 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 LIBOR Lending Office had funded 100%
of its LIBOR Advance in the LIBOR Market); provided that Borrower
shall not be liable to any Bank for any such increased cost or
reduction pursuant to this Section 3.6 in respect of any period which
is more than six months prior to such Bank's demand for such
compensation. 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 which will entitle such
Bank to compensation pursuant to this Section, and agrees to designate
a different LIBOR 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 disadvantageous to such Bank.
If any Bank claims compensation under this Section, Borrower may at
any time, upon at least four (4) LIBOR Market Days' prior notice to
the Administrative Agent and such Bank and upon payment in full of the
amounts provided for in this Section through the date of such
paymentplus any prepayment fee required by Section 3.6(d), pay in full
the affected LIBOR Advances of such Bank or request that such LIBOR
Advances be converted to Alternate Base Rate Advances.
(b) If after the Closing Date the occurrence of
any Regulatory Development shall, in the opinion of any Bank, make it
unlawful or impossible for such Bank or its LIBOR Lending Office to
make, maintain or fund its portion of any LIBOR Loan, or to take
deposits of, dollars in the LIBOR Market, or to determine or charge
interest rates based upon the LIBOR, and such Bank shall so notify the
Administrative Agent, then such Bank's obligation to make LIBOR
Advances shall be suspended for the duration of such illegality or
impossibility and the Administrative Agent forthwith shall give notice
thereof to the other Banks and Borrower. Before giving any notice to
the Administrative Agent pursuant to this Section, such Bank shall
designate a different Lending Office if such designation will avoid
the need for giving such notice and will not, in the judgment of such
Bank, be otherwise disadvantageous to such Bank. Upon receipt of such
notice, the outstanding principal amount of such Bank's LIBOR
Advances, together
-45-
51
with accrued interest thereon, automatically shall be converted to
Alternate Base Rate Advances with Interest Periods corresponding to
the LIBOR Loans of which such LIBOR Advances were a part on either (1)
the last day of the Interest Period(s) applicable to such LIBOR
Advances if such Bank may lawfully continue to maintain and fund such
LIBOR Advances to such day(s) or (2) immediately if such Bank may not
lawfully continue to fund and maintain such LIBOR Advances to such
day(s), provided that in such event the conversion shall not be
subject to payment of a prepayment fee under Section3.6(d). In the
event that any Bank is unable, for the reasons set forth above, to
make, maintain or fund its portion of any LIBOR Loan, such Bank shall
fund such amount as an Alternate Base Rate Advance for the same period
of time, and such amount shall be treated in all respects as an
Alternate Base Rate Advance.
(c) If, with respect to any proposed LIBOR Loan:
(1) the Administrative Agent reasonably
determines that, by reason of circumstances affecting the
LIBOR Market generally that are beyond the reasonable control
of the Banks, deposits in dollars (in the applicable amounts)
are not being offered to each of the Banks in the LIBOR Market
for the applicable Interest Period; or
(2) the Majority Banks advise the
Administrative Agent that the LIBOR as determined by the
Administrative Agent will not adequately and fairly reflect
the cost to such Banks of making the applicable LIBOR
Advances;
then the Administrative Agent forthwith shall give notice thereof to
Borrower and the Banks, whereupon until the Administrative Agent
notifies Borrower that the circumstances giving rise to such
suspension no longer exist, the obligation of the Banks to make any
future LIBOR Advances shall be suspended. If at the time of such
notice there is then pending a Request for Loan that specifies a LIBOR
Loan, such Request for Loan shall be deemed to specify an Alternate
Base Rate Loan.
(d) Upon payment or prepayment of any LIBOR
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
Interest Period (whether voluntarily, involuntarily, by reason of
acceleration, or otherwise), or upon the failure of Borrower to borrow
on the date or in the amount specified for a LIBOR Loan in any Request
-46-
52
for Loan, Borrower shall pay to each Bank an amount equal to the sum
of
(1) $250; plus
(2) the amount, if any, by which (x) the additional interest
that would have accrued (without any Applicable LIBOR Spread) on the
principal amount prepaid on account of the LIBOR Advance had it
remained outstanding until the last day of the applicable Interest
Period, exceeds (y) the interest that Bank could recover by placing
funds in the amount of the prepayment on deposit in the LIBOR Market
selected by that Bank for a period beginning on the date of the
prepayment and ending on the last day of the applicable Interest
Period, or for a comparable period for which an appropriate rate quote
may be obtained; plus
(3) an amount equal to all costs and expenses which that
Bank incurred or reasonably expects to incur in liquidating and
reinvesting the prepayment.
Each Bank's determination of the amount of any prepayment fee or
failure to borrow fee payable under this Section 3.6(d) shall be
conclusive in the absence of manifest error.
(e) Any statement or certificate given by a Bank
under this Section 3.6 shall satisfy the requirements set forth in
Section 3.5(c) with respect to requests for reimbursement under Section
3.5(a)
3.7 Late Payments/Default Interest. If any installment of principal
or interest under the Notes or any other amount payable under any Loan Document
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 Alternate Base
Rate plus 2%, to the extent permitted by applicable Law, until paid in full
(whether before or after judgment). Upon and during the continuance of any
Event of Default, the Indebtedness evidenced by the Notes shall, at the
election of the Majority Banks and upon notice to Borrower (and in lieu of
interest provided for in the preceding sentence), bear interest at a
fluctuating interest rate per annum at all times equal to the sum of the
Alternate Base Rate plus 2%, to the extent permitted by applicable Law, until
no Event of Default exists (whether before or after judgment). Notwithstanding
the preceding sentence, after the occurrence of any Event of Default under
Section 6.7, 6.11 or 6.18, the Indebtedness evidenced by the Notes may not bear
interest at the increased rate provided for in the preceding sentence until
such Event of Default has continued for at least 15 days, in the case of
Section 6.7, or 30 days, in the case of Section 6.11 or 6.18.
-47-
53
3.8 Computation of Interest and Fees. All computations of interest
and fees hereunder shall be calculated on the basis of a year of 360 days and
paid for the actual number of days elapsed (including the first day and
excluding the last day), which results in greater interest than if a year of
365 days were used. Any Loan that is repaid on the same day on which it is
made shall bear interest for one day.
3.9 Holidays. If any principal payment to be made by Borrower on an
Alternate Base Rate Loan shall come due on a day other than a Banking Day,
payment shall be made on the next succeeding Banking Day and the extension of
time shall be reflected in computing interest. If any principal payment to be
made by Borrower on a LIBOR Loan shall come due on a day other than a LIBOR
Market Day, payment shall be made on the next preceding or succeeding LIBOR
Market Day as determined by the Administrative Agent in accordance with the
then current banking practice in the LIBOR Market and the adjustment shall be
reflected in computing interest.
3.10 Payment Free of Taxes.
(a) Any payments made by any Party under the Loan
Documents shall be made free and clear of, and without reduction by
reason of, any tax, assessment or other charge imposed by any
Governmental Agency, central bank or comparable authority (other than
taxes on income or gross receipts generally applicable to banks). To
the extent that Borrower is obligated by applicable Laws to make any
deduction or withholding on account of taxes, assessments or other
charges imposed by any Governmental Agency from any amount payable to
any Bank under this Agreement, Borrower shall (a) make such deduction
or withholding and pay the same to the relevant Governmental Agency
and (b) pay such additional amount to that Bank as is necessary to
result in that Bank's receiving a net after-tax (or after-assessment
or after-charge) 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, assessments
or other charges, that Bank shall refund such excess to Borrower.
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 Administrative Agent, within twenty
days after the Closing Date (or such later date on which such Bank
becomes a "Bank" hereunder), a certificate signed by a Responsible
Official of that Bank to the effect that such Bank is entitled to
receive payments of interest and other amounts payable under this
Agreement without deduction or withholding on account of United
-48-
54
States of America federal income taxes, which certificate shall be
accompanied by two copies of Internal Revenue Service Form 1001 or
Form 4224, as applicable, also executed by a Responsible Official of
that Bank. Each such Bank agrees (i) promptly to notify the
Administrative Agent and Borrower if any fact set forth in such
certificate ceases to be true and correct and (ii) to take such steps
as may be reasonably necessary to avoid any requirement of applicable
Laws that Borrower make any deduction or withholding for taxes from
amounts payable to that Bank under this Agreement.
(b) Without limiting its obligation to pay any additional
amount to a Bank pursuant to Section 3.10(a), Borrower, may within 60
days following any such payment by that Bank, treat that Bank as an
"Affected Bank" under Section3.5(d), and exercise the remedies set
forth in such Section 3.5(d).
3.11 Funding Sources. Nothing in this Agreement shall be deemed to
obligate any Bank to obtain the funds for its share of any Loan in any
particular place or manner or to constitute a representation by any Bank that
it has obtained or will obtain the funds for its share of any Loan in any
particular place or manner.
3.12 Failure to Charge or Making of Payment Not Subsequent Waiver.
Any decision by any Bank not to require payment of any fee or costs, or to
reduce the amount of the payment required for any fee or costs, or to calculate
any fee or any cost in any particular manner, shall not limit or be deemed a
waiver of any Bank's right to require full payment of any fee or costs, or to
calculate any fee or any costs in any other manner. Any decision by Borrower
to pay any fee or costs shall not limit or be deemed a waiver of any right of
Borrower to protest or dispute the payment amount of such fee or costs.
3.13 Pro Rata Treatment. Except as otherwise provided herein, each
payment on account of the Obligations shall be made pro rata according to each
Bank's Pro Rata Share.
3.14 Time and Place of Payments; Evidence of Payments. The amount of
each payment hereunder, under the Notes or under any Loan Document shall be
made to the Administrative Agent at the Administrative Agent's Office, for the
account of each of the Banks or the Administrative Agent, as the case may be,
in lawful money of the United States of America and in immediately available
funds on the day of payment (which must be a Banking Day). All payments of
principal received after 10:00 a.m., San Francisco time, on any Banking Day,
shall be deemed received on the next succeeding Banking Day for purposes of
calculating interest thereon. The amount of all payments received by the
-49-
55
Administrative Agent for the account of a Bank shall be promptly paid by the
Administrative Agent to that Bank in immediately available funds. Each Bank
shall keep a record of Advances made by it and payments of principal with
respect to each Note, and such record shall be presumptive evidence of the
principal amount owing under such Note; provided that failure to keep such
record shall in no way affect the Obligations of Borrower hereunder.
3.15 Administrative Agent's Right to Assume Payments Will be Made.
Unless the Administrative 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 Administrative Agent may,
in its discretion, assume that Borrower has remitted such payment when so due
and the Administrative 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 Pro Rata Share of such assumed payment. If Borrower has not in
fact remitted such payment to the Administrative Agent, each Bank shall
forthwith on demand repay to the Administrative 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 Administrative Agent to such Bank to but excluding the date such amount
is repaid to the Administrative Agent at a rate per annum equal to the actual
cost to the Administrative Agent of funding such amount as notified by the
Administrative Agent to such Bank. In furtherance of the foregoing, Borrower
hereby authorizes the Administrative Agent, through Bank of America, to
automatically debit the Designated Deposit Account (or, upon notice to
Borrower, any other deposit account maintained by Borrower with Bank of
America) for payments as and when due hereunder.
3.16 Survivability. All of Borrower's obligations under this Article
3 shall survive for six months following the date on which all Loans hereunder
were fully paid.
3.17 Bank Calculation Certificate. Any request for compensation
pursuant to Section 3.5 or 3.6 shall be accompanied by a statement of an
officer of the Bank requesting such compensation and describing the methodology
used by such Bank in calculating the amount of such compensation, which
methodology (i) may consist of any reasonable averaging and attribution methods
and (ii) in the case of Section 3.5 hereof shall be consistent with the
methodology used by such Bank in making similar calculations in respect of
loans or commitments to other borrowers.
-50-
56
ARTICLE 4
REPRESENTATIONS AND WARRANTIES
Borrower represents and warrants to the Banks that:
4.1 Existence and Qualification; Power; Compliance with Law.
Borrower is a corporation duly organized, validly existing and in good standing
under the Laws of Delaware, and its certificate of incorporation does not
provide for the termination of its existence. Borrower is duly qualified or
registered to transact business as a foreign corporation in the State of
California, and in each other jurisdiction in which the conduct of its business
or the ownership of its properties makes such qualification or registration
necessary, except where the failure so to qualify or register 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, deliver and perform all of its obligations under the Loan
Documents. All outstanding shares of capital stock of Borrower are duly
authorized, validly issued, fully paid, non-assessable, and were issued in
compliance with all applicable state and federal securities Laws, except where
the failure to so comply would not constitute a Material Adverse Effect.
Borrower is in substantial compliance with all Laws and other legal
requirements applicable to its business, has obtained all authorizations,
consents, approvals, orders, licenses and permits (collectively,
"Authorizations") 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 obtain Authorizations, comply, file, register,
qualify or obtain exemptions does not constitute a Material Adverse Effect.
4.2 Authority; Compliance with Other Instruments and Government
Regulations. The execution, delivery, and performance by Borrower, and by each
Guarantor Subsidiary of Borrower, of the Loan Documents to which it is a Party,
and by the Mortgage Company of the Override Agreement, have been duly
authorized by all necessary corporate action, and do not:
(a) require any consent or approval not heretofore
obtained of any stockholder, partner, security holder, or creditor of
such Party;
(b) violate or conflict with any provision of such
Party's charter, certificate or articles of incorporation or bylaws;
(c) result in or require the creation or imposition of
any Lien or Right of Others upon or with respect to any
-51-
57
Property now owned or leased or hereafter acquired by such Party;
(d) constitute a "transfer of an interest" or an
"obligation incurred" that is avoidable by a trustee under Section 548
of the Bankruptcy Code of 1978, as amended, or constitute a
"fraudulent transfer" or "fraudulent obligation" within the meaning of
the Uniform Fraudulent Transfer Act as enacted in any jurisdiction or
any analogous Law;
(e) violate any Requirement of Law applicable to such
Party; or
(f) 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 or any of its Property is bound or
affected;
and neither Borrower nor any Subsidiary of Borrower 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(f) in any respect
that would constitute a Material Adverse Effect.
4.3 No Governmental Approvals Required. Except such as have
heretofore been obtained, no authorization, consent, approval, order, license
or permit from, or filing, registration, or qualification with, or exemption
from any of the foregoing from, any Governmental Agency is or will be required
to authorize or permit the execution, delivery and performance by Borrower or
any Significant Subsidiary of Borrower of the Loan Documents to which it is a
Party.
4.4 Subsidiaries.
(a) Schedule 4.4 correctly sets forth the names, the form
of legal entity and jurisdictions of organization of all Subsidiaries
of Borrower as of the Closing Date and identifies each such Subsidiary
that is a Consolidated Subsidiary, a Significant Subsidiary, a
Guarantor Subsidiary, a Foreign Subsidiary and a Financial Subsidiary.
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 indicated thereon are owned of
record and beneficially by Borrower, and all such shares or equity
interests so owned were issued in compliance with all state and
federal securities Laws and are duly authorized, validly issued, fully
paid and non-assessable (other than with respect to required capital
contributions to any
-52-
58
joint venture in accordance with customary terms and provisions of the
related joint venture agreement), except where the failure to so
comply would not constitute a Material Adverse Effect, and are free
and clear of all Liens and Rights of Others, except for Permitted
Encumbrances and Permitted Rights of Others.
(b) Each Significant Subsidiary is as of the date of this
Agreement, and will be as of the Closing Date, a legal entity of the
form described for that Subsidiary in Schedule 4.4, and is duly
organized, 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, to own and lease its Properties
and to execute, deliver and perform the Loan Documents to which it is
a Party.
(c) Each Significant Subsidiary is in substantial
compliance with all Laws and other requirements applicable to its
business and has obtained all Authorizations from, and each such
Significant 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 so to obtain
Authorizations, comply, file, register, qualify or obtain exemptions
does not constitute a Material Adverse Effect.
4.5 Financial Statements. Borrower has furnished to each Bank the
following financial statements:
(a) the audited consolidated financial statements of
Borrower and its Consolidated Subsidiaries as at November 30, 1993 and
for the Fiscal Year then ended;
(b) the unaudited consolidating financial statements of
Borrower and its Consolidated Subsidiaries as at August 31, 1994 for
the Fiscal Quarter then ended and for the portion of the Fiscal Year
ended with such Fiscal Quarter; and
(c) the unaudited combined financial statements of the
Financial Subsidiaries as at August 31, 1994 for the Fiscal Quarter
then ended and for the portion of the Fiscal Year ended with such
Fiscal Quarter.
-53-
59
The audited financial statements described in clause (a) are in accordance with
the books and records of Borrower and its Consolidated Subsidiaries, were
prepared in accordance with Generally Accepted Accounting Principles and fairly
present in accordance with Generally Accepted Accounting Principles
consistently applied the consolidated financial condition and results of
operations of Borrower and its Consolidated Subsidiaries as at the date and
for the period covered thereby. The unaudited financial statements described
in clause (b), are in accordance with the books and records of Borrower and its
Consolidated Subsidiaries, were prepared in accordance with Generally Accepted
Accounting Principles and fairly present in accordance with Generally Accepted
Accounting Principles consistently applied the consolidating financial
condition and results of operation of Borrower and its Consolidated
Subsidiaries as at the date and for the period covered thereby. The unaudited
financial statements described in clause (c) are in accordance with the books
and records of the respective Subsidiaries of Borrower named, were prepared in
accordance with Generally Accepted Accounting Principles and fairly present in
accordance with Generally Accepted Accounting Principles consistently applied
the financial condition and results of operation of such Subsidiaries of
Borrower as at the date and for the period covered thereby.
4.6 No Other Liabilities; No Material Adverse Effect. Borrower and
its Consolidated Subsidiaries do not have any material liability or material
contingent liability not reflected or disclosed in the financial statements or
in the notes to the financial statements described in Section 4.5, other than
liabilities and contingent liabilities arising in the ordinary course of
business subsequent to November 30, 1993 or August 31, 1994, as applicable.
Since November 30, 1993, no event or circumstance has occurred that
constitutes a Material Adverse Effect with respect to Borrower and its
Subsidiaries.
4.7 Title to Assets. Borrower and its Consolidated Subsidiaries have
good and valid title to all of the assets reflected in the financial statements
described in Section 4.5 owned by them or any of them (other than assets
disposed of in the ordinary course of business) and all other assets owned on
the date of this Agreement, free and clear of all Liens and Rights of Others
other than (a) those reflected or disclosed in the notes to the financial
statements described in Section 4.5, (b) immaterial Liens or Rights of Others
not required under Generally Accepted Accounting Principles to be so reflected
or disclosed, (c) Liens permitted pursuant to Section 6.7, (d) Permitted Rights
of Others, and (e) such existing Liens or Rights of Others as are described on
Schedule 4.7 hereto.
-54-
60
4.8 Intangible Assets. Borrower and its Subsidiaries own, or possess
the unrestricted right to use, all trademarks, trade names, copyrights,
patents, patent rights, licenses and other intangible assets that are necessary
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 would constitute a Material Adverse
Effect.
4.9 Existing Indebtedness and Contingent Guaranty Obligations.
Except as set forth in Schedule 4.9, neither Borrower nor any of its
Subsidiaries has (a) any Indebtedness owed to any Person in an amount in excess
of $5,000,000 or (b) outstanding any Contingent Guaranty Obligation with
respect to obligations of another Person in excess of $5,000,000.
4.10 Governmental Regulation. Neither Borrower nor any of its
Subsidiaries is subject to regulation under the Public Utility Holding Company
Act of 1935, the Federal Power Act, the Interstate Commerce Act or the
Investment Company Act of 1940.
4.11 Litigation. There are no actions, suits, or proceedings pending
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 which would constitute a Material Adverse Effect.
4.12 Binding Obligations. Each of the Loan Documents to which
Borrower or any Guarantor Subsidiary of Borrower is a Party will, when executed
and delivered by Borrower or the Guarantor Subsidiary, as the case may be,
constitute the legal, valid and binding obligation of Borrower or the Guarantor
Subsidiary, as the case may be, enforceable against Borrower or the Guarantor
Subsidiary, as the case may be, in accordance with its terms, except as
enforcement may be limited by Debtor Relief Laws or by equitable principles
relating to the granting of specific performance and other equitable remedies
as a matter of judicial discretion.
4.13 No Default. No event has occurred and is continuing that is a
Default or an Event of Default.
4.14 Pension Plans. As of the Closing Date, all contributions
required to be made under any Pension Plan maintained by Borrower or any of its
ERISA Affiliates (or to which Borrower or any ERISA Affiliate contributes or is
required to contribute) have been made or have been reflected as a liability on
the pro-forma consolidated balance sheet described in Section 4.5(d). There is
no "accumulated funding deficiency" within the meaning of Section 302 of ERISA
or any
-55-
61
liability to the PBGC (other than for premiums) with respect to any such
Pension Plan other than a Multiemployer Plan.
4.15 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 which have become due pursuant to said returns or
pursuant to any assessment received by Borrower or any Subsidiary, except (a)
such taxes, if any, as are being contested in good faith by appropriate
proceedings (and with respect to which Borrower or its Subsidiary has
established adequate reserves for the payment of the same), and (b) such taxes
the failure of which to pay will not constitute a Material Adverse Effect.
4.16 Regulation U. Neither Borrower nor any of its Subsidiaries is
engaged principally, or as one of its important activities, in the business of
extending credit for the purpose of "purchasing" or "carrying" any "margin
stock" within the meanings of Regulation U of the Board of Governors of the
Federal Reserve System, and no Loan hereunder will be used to purchase or carry
any such margin stock in violation of Regulation U.
4.17 Environmental Matters. To the best knowledge of Borrower,
Borrower and its Subsidiaries are in substantial compliance with all applicable
Laws relating to environmental protection where the failure to comply would
constitute a Material Adverse Effect. To Borrower's best knowledge, neither
Borrower nor any of its Subsidiaries has received any notice from any
Governmental Agency respecting the alleged violation by Borrower or any
Subsidiary of such Laws which would constitute a Material Adverse Effect and
which has not been or is not being corrected.
4.18 Disclosure. The information provided by Borrower to the Banks in
connection with this Agreement or any Loan, taken as a whole, has not contained
any untrue statement of a material fact and has not omitted a material fact
necessary to make the statements contained therein not misleading under the
totality of the circumstances existing at the date such information was
provided and in the context in which it was provided.
4.19 Projections. As of the Closing Date, the assumptions upon which
the Projections are based are reasonable and consistent with each other
assumption and with all facts known to Borrower and the Projections are
reasonably based on those assumptions. Nothing in this Section 4.19 shall be
construed as a representation or warranty as of any date other than the Closing
Date or that the Projections will in fact be achieved by Borrower.
-56-
62
ARTICLE 5
AFFIRMATIVE COVENANTS
(OTHER THAN INFORMATION AND
REPORTING REQUIREMENTS)
As long as any Loan remains unpaid, or any other Obligation remains
unpaid, or any portion of the Commitment remains outstanding, Borrower shall,
and shall cause each of its Subsidiaries to, unless the Administrative Agent
(with the approval of the Majority Banks) otherwise consents in writing:
5.1 Payment of Taxes and Other Potential Liens. Pay and discharge
promptly, all taxes, assessments, and governmental charges or levies imposed
upon Borrower or any of its Subsidiaries, upon their respective Property or any
part thereof, upon their respective income or profits or any part thereof,
except any tax, assessment, charge, or levy that is not yet past due, or is
being contested in good faith by appropriate proceedings, as long as Borrower
or its Subsidiary has established and maintains adequate reserves for the
payment of the same and by reason of such nonpayment no material Property of
Borrower or its Subsidiaries is subject to a risk of loss or forfeiture.
5.2 Preservation of Existence. Preserve and maintain their
respective existence, licenses, rights, franchises, and privileges in the
jurisdiction of their formation and all authorizations, consents, approvals,
orders, licenses, permits, or exemptions from, or registrations with, any
Governmental Agency that are necessary for the transaction of their respective
business, 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;
provided that (a) the failure to preserve and maintain any particular right,
franchise, privilege, authorization, consent, approval, order, license, permit,
exemption, or registration, or to qualify or remain qualified in any
jurisdiction, that does not constitute a Material Adverse Effect will not
constitute a violation of this covenant, and (b) nothing in this Section 5.2
shall prevent any consolidation or merger or disposition of assets permitted by
Sections 6.2 or 6.3 or shall prevent the termination of the business or
existence (corporate or otherwise) of any Subsidiary of Borrower which in the
reasonable judgment of the management of Borrower is no longer necessary or
desirable.
5.3 Maintenance of Properties. Maintain, preserve and protect all of
their respective Properties in good order and condition, subject to wear and
tear in the ordinary course of business and damage caused by the natural
elements, and not permit any waste of their respective Properties, except that
-57-
63
the failure to so maintain, preserve or protect any particular Property, or the
permitting of waste on any particular Property, where such failure or waste
with respect to all Properties of Borrower and its Subsidiaries, in the
aggregate, would not constitute a Material Adverse Effect will not constitute a
violation of this covenant.
5.4 Maintenance of Insurance. Maintain insurance with responsible
insurance companies in such amounts (subject to customary deductibles and
retentions) and against such risks as is usually carried by responsible
companies of similar size 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 with all Requirements of Laws
noncompliance with which would constitute 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 procedures, so
long as such contest (or a bond or surety posted in connection therewith)
operates as a stay of enforcement of any penalty that would otherwise apply as
a result of such failure to comply.
5.6 Inspection Rights. At any time during regular business hours and
as often as requested, permit any Bank or any employee, agent or representative
thereof at the expense of such Bank 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 or employees; provided that none of the foregoing unreasonably
interferes with the normal business operations of Borrower or any of its
Subsidiaries.
5.7 Keeping of Records and Books of Account. Keep adequate records
and books of account fairly reflecting all financial transactions in conformity
with Generally Accepted Accounting Principles applied on a consistent basis
(except for changes concurred with by Borrower's independent certified public
accountants) and all applicable requirements of any Governmental Agency having
jurisdiction over Borrower or any of its Subsidiaries.
5.8 Use of Proceeds. Use the proceeds of all Loans solely for
working capital and other general corporate purposes of Borrower and its
Subsidiaries.
5.9 Subsidiary Guaranty. Cause each of its Guarantor Subsidiaries
hereafter formed, acquired or qualifying as a Guarantor Subsidiary, to execute
and deliver a joinder of the
-58-
64
Subsidiary Guaranty promptly following such formation, acquisition or
qualification.
ARTICLE 6
NEGATIVE COVENANTS
As long as any Loan remains unpaid, or any other Obligation
remains unpaid, or any portion of the Commitment remains outstanding, Borrower
shall not, and shall not permit any of its Subsidiaries to, unless the
Administrative Agent (with the approval of the Majority Banks) otherwise
consents in writing:
6.1 Payment or Prepayment of Subordinated Obligations. Make an
optional or unscheduled payment or prepayment of any principal (including an
optional or unscheduled sinking fund payment), interest or any other amount
with respect to any Subordinated Obligation, or make a purchase or redemption
of any Subordinated Obligation, or make any payment with respect to any
Subordinated Obligation in violation of the subordination provisions in the
instruments governing such Subordinated Obligation; provided that: (a)
Borrower may prepay and refinance Subordinated Obligations of Borrower if
through the issuance of new Subordinated Obligations (i) such new Subordinated
Obligations satisfy all of the criteria set forth in the definition of
"Subordinated Obligations," and (ii) the incurrence of such new Subordinated
Obligations is permitted under Section 6.8 hereof; (b) Borrower may purchase or
redeem any Subordinated Obligation solely in exchange for shares of capital
stock of Borrower which are not subject to mandatory redemption provisions; and
(c) Borrower may purchase or redeem any Subordinated Obligation to the extent
obligated to do so upon the occurrence of a "Change in Control", as defined in
the indenture governing such Subordinated Obligation, if (i) Borrower has
provided to the Administrative Agent pro-forma calculations showing that,
giving effect to such repurchase (both as to source and application of funds),
Borrower would be in compliance with the covenants set forth herein on a
pro-forma basis as of the end of the Fiscal Quarter then most recently ended,
and (ii) there has not then occurred and is not then continuing any Default or
Event of Default, provided that the requirements of clauses (i) and (ii) above
need not be satisfied if concurrently with such repurchase Borrower prepays the
Obligations in accordance with Section 3.1(f) and terminates the Commitment
pursuant to Section 2.6.
6.2 Dispositions. Make any Disposition, except (a) a Disposition to
Borrower or to a wholly-owned Subsidiary of Borrower and (b) a Disposition of a
Foreign Subsidiary that does not hold a majority of its assets in the Republic
of France.
-59-
65
6.3 Mergers and Sale of Assets. Merge or consolidate with or into
any Person, or sell all or substantially all of its assets to any Person,
except;
(a) a merger of Borrower into a wholly-owned Subsidiary
of Borrower that has nominal assets and liabilities, the primary
purpose of which is to effect the reincorporation of Borrower in
another state;
(b) mergers or consolidations of a Subsidiary of Borrower
into Borrower (with Borrower as the surviving corporation) or into any
other wholly-owned Subsidiary of Borrower;
(c) liquidations of any Subsidiary of Borrower into
Borrower or into a wholly-owned Subsidiary of Borrower;
(d) a merger of Borrower or one of its Subsidiaries with
another Person if (i) Borrower or such Subsidiary is the corporation
surviving such merger, (ii) immediately after giving effect to such
merger, no Default or Event of Default shall have occurred and be
continuing, and (iii) immediately after giving effect to such merger,
there shall have occurred no material diminution in Domestic Adjusted
Tangible Net Worth, nor any material deterioration in the ratio of
Indebtedness to Domestic Adjusted Tangible Net Worth, in each case
from that existing immediately prior to the merger; or
(e) Dispositions permitted under Section 6.2.
6.4 Investments and Acquisitions. Make any Acquisition, or enter
into an agreement to make any Acquisition, or make or suffer to exist any
Investment, other than:
(a) Investments consisting of Cash or Cash Equivalents;
(b) advances to employees of Borrower or its Subsidiaries
for travel, housing expenses, stock option plans, or otherwise in
connection with their employment or the business of Borrower or any of
its Subsidiaries;
(c) Investments of Borrower in any of its wholly-owned
Subsidiaries and Investments of any Subsidiary of Borrower in Borrower
or any of Borrower's wholly-owned Subsidiaries;
(d) Acquisitions of or Investments in Persons engaged in
the residential housing construction business and/or the residential
land development business in the United States of America, Canada,
Mexico and Europe,
-60-
66
provided that (i) to the extent that any such Acquisition or
Investment is made by a Foreign Subsidiary, after giving effect
thereto Borrower shall be in compliance with Section 6.19, (ii) after
giving effect to such Acquisition or Investment on a proforma basis,
no Default or Event of Default then exists or would result therefrom
and (iii) nothing in this clause (d) shall limit Investments permitted
by clause (c) above;
(e) Acquisitions or Investments in Persons engaged in the
commercial construction business in the United States of America or
Europe; provided that (i) to the extent that any such Acquisition or
Investment is made by a Foreign Subsidiary, after giving effect
thereto Borrower shall be in compliance with Section 6.19, (ii) the
aggregate cost of such Acquisitions of or Investments in such Persons
engaged in the commercial construction business in countries in Europe
other than France), shall not exceed at any time $25,000,000, (iii)
the aggregate cost of such Acquisitions of and Investments in such
Persons engaged in the commercial construction business within the
United States of America, when added to the aggregate cost of
investments in such inventory within the United States of America made
after the Closing Date, shall not exceed $15,000,000 in the aggregate
and (iv) nothing in this clause e) shall limit Investments permitted
by clause (c) above;
(f) Investments by KBMHG in a Person owning one or more
multi-unit affordable housing projects, provided that such Investment
is made as a limited partner, or otherwise on a basis that will not
result in liability or contingent liability to Borrower or any of its
Subsidiaries for the obligations of such Person;
(g) Investments by the Mortgage Company that are
permitted under the Mortgage Warehousing Agreement;
(h) Investments in existence on the Closing Date
disclosed on Schedule 6.4;
(i) Acquisitions of or Investments in Persons engaged
primarily in businesses in addition to those permitted by Sections
6.4(d) through (f), provided that the aggregate cost of all such
Acquisitions and Investments made after the Closing Date does not
exceed at $5,000,000 in the aggregate.
6.5 ERISA Compliance. Permit any Pension Plan maintained by Borrower
or any of its ERISA Affiliates (or to which Borrower or any ERISA Affiliate
contributes or is required to contribute), other than a Multiemployer Plan, to
incur any
-61-
67
material "accumulated funding deficiency," as such term is defined in Section
302 of ERISA, unless waived, or permit any Pension Plan maintained by any of
them to suffer a Termination Event or incur withdrawal liability under any
Multiemployer Plan if any of such events would result in a liability of
Borrower or any ERISA affiliate exceeding in the aggregate $5,000,000.
6.6 Change in Business. Engage in any business other than the
businesses as now conducted by Borrower or any of its Subsidiaries.
6.7 Liens and Negative Pledges. Create, incur, assume, or suffer to
exist, or cause or permit any Joint Venture to 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, or enter or
suffer to exist any Contractual Obligation wherein Borrower, any of its
Subsidiaries or any Joint Venture agrees not to grant any Lien on any of their
Properties, except:
(a) Liens and Contractual Obligations existing on the
date hereof and described in Schedule 4.7, provided that the
obligations secured by such Liens are not increased and that no such
Lien extends to any Property of Borrower or any Subsidiary other than
the Property subject to such Lien on the Closing Date;
(b) Liens on Property of any Financial Subsidiary or
Foreign Subsidiary securing Indebtedness of that Financial Subsidiary
or Foreign Subsidiary;
(c) Liens on real Property securing Non-Recourse
Indebtedness; provided that any such Non-Recourse Indebtedness
complies with the terms of Section6.9 ;
(d) Liens consisting of a Capital Lease covering personal
Property;
(e) Permitted Encumbrances;
(f) attachment, judgment and other similar Liens arising
in connection with court proceedings; provided that the execution or
enforcement of such Lien is effectively stayed and the claims secured
thereby do not in the aggregate exceed $5,000,000 and are being
contested in good faith by appropriate proceedings timely commenced
and diligently prosecuted;
(g) Liens existing on any asset of any corporation at the
time such corporation becomes a Subsidiary and not created in
contemplation of such event;
-62-
68
(h) Liens on any asset of any corporation existing at the
time such corporation is merged or consolidated with or into Borrower
or any of its Subsidiaries and not created in contemplation of such
event;
(i) Liens existing on any asset prior to the acquisition
thereof by Borrower or any of its Subsidiaries and not created in
contemplation of such acquisition;
(j) Liens arising out of the refinancing, extension,
renewal or refunding of any Indebtedness secured by any Lien permitted
by any of the foregoing clauses of this Section, provided that such
Indebtedness is not increased and is not secured by additional assets;
(k) Liens arising in the ordinary course of business
which (i) do not secure Indebtedness, (ii) do not secure any
obligation in an amount exceeding $200,000 individually, or $500,000
in the aggregate, and (iii) do not in the aggregate materially detract
from the value of the assets covered by such Liens or materially
impair the use thereof in the operation of Borrower's business;
(l) Liens not otherwise permitted by the foregoing
clauses of this Section which secure Indebtedness not exceeding
$500,000 in the aggregate;
(m) Liens securing Indebtedness permitted by Section
6.10(e) incurred in connection with the acquisition of Property;
(n) Liens referred to in the last sentence of the
definition of "Bond Facility" encumbering (i) real property owned by
Borrower or one of its Subsidiaries on September 1, 1994 or (ii) other
real property of Borrower or one of its Subsidiaries provided that the
aggregate obligations secured by such Liens does not exceed
$10,000,000;
(o) a Contractual Obligation wherein Borrower or any of
its Subsidiaries agrees not to a grant any Lien on any of their
Properties, if such Contractual Obligation does not, by its terms,
prohibit the grant of a Lien in favor of the Administrative Agent and
the Banks with respect to the Obligations (and Borrower shall, as soon
as reasonably possible, provide to the Banks a copy of such
Contractual Obligation);
(p) Liens on property of a Joint Venture referred to in
Section 6.10(h) securing Indebtedness permitted by such Section;
-63-
69
provided, however, in no event may Borrower or any of its Subsidiaries create,
incur, assume or suffer to exist any Lien of any nature upon or with respect to
any of their Investments in any Joint Venture, or enter or suffer to exist any
Contractual Obligation wherein Borrower or any of its Subsidiaries agrees not
to grant any Lien on any of their Investments in any Joint Venture, except in
connection with customary joint venture agreements entered into in the ordinary
course of business that restrict a joint venture partner from granting a Lien
on or Contractual Obligation with respect to its ability to convey its interest
in a Joint Venture and except that any such Joint Venture may, to secure
Indebtedness permitted under this Agreement, grant a Lien on its Property which
includes a provision that such Indebtedness will be accelerated and due in its
entirety upon the sale or other transfer of such Property.
6.8 Indebtedness and Contingent Guaranty Obligations. Create, incur,
assume or suffer to exist, directly or indirectly, any Indebtedness or
Contingent Guaranty Obligation, unless after giving effect to such creation,
incurrence, assumption or sufferance:
(a) the Domestic Interest Coverage Ratio as of the last
day of the most recent Fiscal Quarter is at least 1.50 to 1.00; or
(b) Domestic Indebtedness as of the last day of the most
recent Fiscal Quarter is less than the sum of (i) an amount equal to
2.60 times the lesser of $240,000,000 or the amount of the Domestic
Adjusted Tangible Net Worth as of the last day of such Fiscal
Quarter, plus (ii) 2.00 times the amount, if any, by which Domestic
Adjusted Tangible Net Worth as of the last day of such Fiscal Quarter
exceeded $240,000,000. As used herein, the multiplication factor for
the Domestic Indebtedness requirement set forth in each of clauses
(b)(i) and (b)(ii) above is referred to in this Section 6.8 as a
"Multiplier."
The foregoing covenant is subject to the following provisos:
(A) For the first Fiscal Quarter, if any, for which
the Domestic Interest Coverage Ratio does not satisfy the
minimum requirements set forth in clause (a) above, each
Multiplier shall be decreased for such Fiscal Quarter by ten
one-hundredths (0.10). As used herein, the amount of any such
change in the Multiplier (whether such change is an increase
or a decrease) is referred to in this Section 6.8 as a
"Delta";
-64-
70
(B) For each Fiscal Quarter for which the Domestic
Interest Coverage Ratio does not satisfy the minimum
requirement set forth in clause (a) above and which
immediately follows a Fiscal Quarter in which such minimum
requirement had not been satisfied, each Multiplier shall be
decreased for such Fiscal Quarter by a Delta equal to the sum
of (x) the Delta applicable to the most recent Fiscal Quarter
for which the Multiplier was changed plus (y) five
one-hundredths (0.05);
(C) For each Fiscal Quarter (other than the Fiscal
Quarter referred to in clause (A) above) for which the
Domestic Interest Coverage Ratio does not satisfy the minimum
requirement set forth in clause (a) above and which
immediately follows a Fiscal Quarter in which such minimum
requirement had been satisfied, each Multiplier shall be
decreased for such Fiscal Quarter by a Delta equal to the
Delta applicable to the most recent Fiscal Quarter for which
the Multiplier was changed;
(D) For each Fiscal Quarter for which the Domestic
Interest Coverage Ratio satisfies the minimum requirement set
forth in clause (a) above and which immediately follows a
Fiscal Quarter in which such minimum requirement had not been
satisfied, each Multiplier shall be increased for such Fiscal
Quarter by a Delta equal to the Delta applicable to the most
recent Fiscal Quarter for which the Multiplier was changed;
(E) For each Fiscal Quarter for which the
Domestic Interest Coverage Ratio satisfies the minimum
requirement set forth in clause (a) above and which follows a
Fiscal Quarter in which such minimum requirement had been
satisfied, each Multiplier shall be increased for such Fiscal
Quarter by a Delta equal to the sum of (x) the Delta
applicable to the most recent Fiscal Quarter for which such
Multiplier was changed minus (y) five one-hundredths (0.05);
(F) In no event shall the Multiplier for any Fiscal
Quarter be increased above 2.60 (in the case of clause (b)(i)
above), and 2.00 (in the case of clause (b)(ii) above); and
(G) examples of (but not limitations on) the
application of the provisions of this Section 6.8 are set forth
in Schedule 6.8.
-65-
71
6.9 Non-Recourse Indebtedness. Create, incur, assume or suffer to
exist, directly or indirectly, any Non-Recourse Indebtedness of Borrower, its
Domestic Subsidiaries and Joint Ventures except Non-Recourse Indebtedness that
(a) is incurred only in the connection with the purchase and improvement of
Property, (b) constitutes Indebtedness owed to the seller of such Property for
the purchase or improvement thereof, (c) as of the date of the incurrence,
represents not less than 50% of the purchase price for such property and (d)
when aggregated with (x) the amount of all other Non-Recourse Indebtedness of
Borrower and its Domestic Subsidiaries plus (y) an amount equal to the
aggregate with respect to each Joint Venture of the amount of all Non-Recourse
Indebtedness of such Joint Venture times the percentage ownership interest of
Borrower and its Subsidiaries in such Joint Venture, does not exceed
$100,000,000.
6.10 Subsidiary Indebtedness and Contingent Guaranty Obligations.
Permit any Domestic Subsidiary to create, incur, assume or suffer to exist any
Indebtedness, or any Contingent Guaranty Obligation except:
(a) the Subsidiary Guaranty;
(b) Indebtedness of a Financial Subsidiary;
(c) Indebtedness owed to Borrower or to a wholly-owned
Subsidiary of Borrower;
(d) Contingent Guaranty Obligations of Indebtedness owed
to Borrower or to a wholly-owned Subsidiary of Borrower;
(e) Indebtedness other than Non-Recourse Indebtedness,
provided that the aggregate principal amount outstanding at any time
does not exceed $5,000,000;
(f) Indebtedness (including Indebtedness referred to in
subsections (e) above and (h) below) the aggregate outstanding
principal amount of which, when added to Indebtedness referred to in
Section 6.9, does not exceed $100,000,000 at any time;
(g) Indebtedness and Contingent Guaranty Obligations
under any Bond Facility; and
(h) Indebtedness incurred by an "Unimproved Land Joint
Venture" (as defined in the following sentence), provided that the
aggregate principal amount of all such Indebtedness outstanding at any
time does not exceed $35,000,000. As used herein, "Unimproved Land
Joint Venture" means a Joint Venture formed by a Subsidiary
-66-
72
which does not qualify as a Significant Subsidiary, and to which such
Subsidiary has contributed Domestic Unimproved Land.
6.11 Money Market Indebtedness. Create, incur or suffer to exist any
short term Indebtedness under domestic money market credit lines available to
Borrower and/or its Subsidiaries, if at any time (a) the sum of the aggregate
outstanding principal amount of the Loans evidenced by the Notes plus the
Letter of Credit Usage plus the aggregate principal amount of short term
Indebtedness of Borrower and its Subsidiaries under domestic money market lines
then outstanding would exceed the Commitment or (b) the aggregate principal
amount of short term Indebtedness of Borrower and its Subsidiaries under
domestic money market credit lines then outstanding plus the aggregate
principal amount of Indebtedness of Borrower and its Subsidiaries under
revolving lines of credit provided by any Bank would exceed that Bank's
Pro-Rata Share of the Commitment (unless the applicable Bank otherwise elects).
For purposes of this Section 6.11, "short term Indebtedness under domestic
money market credit lines" shall be deemed to be Indebtedness that matures
within one year of the date it is incurred.
6.12 Transactions with Affiliates. Enter into any transaction of any
kind with any Affiliate of Borrower other than (a) a transaction that results
in Subordinated Obligations, or (b) a transaction between or among Borrower and
its wholly-owned Subsidiaries, or (c) a transaction that has been approved by a
resolution adopted by the board of directors of Borrower with the favorable
vote of a majority of the directors who have no financial or other interest in
the transaction or by the vote of a majority of the outstanding shares of
capital stock of Borrower, or (d) an arm's length transaction entered into on
terms and under conditions not less favorable to Borrower or any of its
Subsidiaries than could be obtained from a Person that is not an Affiliate of
Borrower.
6.13 Minimum Consolidated Tangible Net Worth. Permit Consolidated
Tangible Net Worth to be, at the end of each Fiscal Quarter, less than an
amount equal to (a) $325,000,000, plus (b) an amount equal to 60% of the
consolidated net income of Borrower and its Subsidiaries for the fiscal period
commencing on December 1, 1994 and then ending, plus (c) an amount equal to 60%
of the net proceeds received by Borrower from the issuance of capital stock
since the Closing Date and minus (d) to the extent of any net proceeds received
by Borrower from the issuance of capital stock since the Closing Date, an
amount equal to the cost to Borrower of the repurchase of any capital stock
since the Closing Date.
-67-
73
6.14 Distributions. Make any Distribution if an Event of Default then
exists or if an Event of Default or Default would result therefrom.
6.15 Amendments. Amend, waive or terminate any provision in any
instrument or agreement governing Subordinated Obligations unless such
amendment, waiver or termination would not be materially adverse to the
interests of the Banks under this Agreement.
6.16 Hostile Tender Offers. Make any offer to the shareholders of a
publicly held corporation or business entity to purchase or acquire, or
consummate such a purchase or acquisition of, more than 5% of the shares of
capital stock or analogous ownership interests in such a corporation or
business entity if the board of directors or analogous body of such corporation
or business entity has notified Borrower that it opposes such offer or
purchase, except for consideration which consists solely of shares of capital
stock or other equity securities of Borrower or any of its Subsidiaries.
6.17 Inventory.
(a) Permit the book value of Domestic Unimproved Land to
exceed an amount equal to 100% of Domestic Adjusted Tangible Net Worth
as of the end of any two (2) consecutive Fiscal Quarters.
(b) Permit the book value of Domestic Unimproved Unmapped
Land to exceed an amount equal to 50% of Domestic Adjusted Tangible
Net Worth as of the end of any two (2) consecutive Fiscal Quarters.
(c) Purchase or acquire (i) any additional Domestic
Unimproved Land or Domestic Unimproved Unmapped Land if Borrower fails
to comply with the ratio set forth in clause a) above (even for a
single Fiscal Quarter) or (ii) any additional Domestic Unimproved
Unmapped Land if Borrower fails to comply with the ratio set forth in
clause (b) above (even for a single Fiscal Quarter), until in either
case Borrower is in compliance with such ratio for at least one Fiscal
Quarter.
6.18 Domestic Standing Inventory. As of any date in any Fiscal
Quarter, permit Domestic Standing Inventory to exceed an amount equal to 15% of
Net Orders received during that Fiscal Quarter and the three immediately
preceding Fiscal Quarters.
-68-
74
6.19 Investments in Certain Subsidiaries. Make any Investment:
(a) in any Foreign Subsidiary after the Closing Date if,
after giving effect thereto, the aggregate amount of all such
Investments made after the Closing Date exceeds the sum of (i)
$30,000,000 plus (ii) the aggregate amount of Distributions declared
and paid by all Foreign Subsidiaries to Borrower after the Closing
Date plus (iii) the aggregate amount of capital of Foreign
Subsidiaries returned to Borrower after the Closing Date.
(b) in any Financial Subsidiary after the Closing Date
if, after giving effect thereto, the aggregate amount of all such
Investments made after the Closing Date exceeds the sum of (i)
$40,000,000 plus (ii) the aggregate amount of Distributions declared
and paid by all Financial Subsidiaries to Borrower after the Closing
Date plus (iii) the aggregate amount of capital of Financial
Subsidiaries returned to Borrower after the Closing Date. In
calculating compliance with this Section 6.19(b), the amount of
Borrower's Contingent Guaranty Obligations under the Mortgage
Warehousing Guaranty shall be excluded from Investments;
(c) in the Land Fund Joint Venture in excess of
$6,000,000 plus the amount of Distributions to Borrower or any of its
Subsidiaries paid by the Land Fund Joint Venture since the Closing
Date; and
(d) in KBMHG after the Closing Date if, giving effect
thereto, the aggregate amount of all such Investments made after the
Closing Date exceeds the sum of (i) $22,500,000 plus (ii) the
aggregate amount of Distributions declared and paid by KBMHG to
Borrower after the Closing Date plus (iii) the aggregate amount of
capital of KBMHG returned to Borrower after the Closing Date.
6.20 Land Fund Joint Venture. Make or permit to be made any material
amendment to the organization documents with respect to the Land Fund Joint
Venture without the prior written consent of the Majority Banks.
ARTICLE 7
INFORMATION AND REPORTING REQUIREMENTS
7.1 Financial and Business Information of Borrower and Its
Subsidiaries. As long as any Loan remains unpaid or any other Obligation
remains unpaid, or any portion of the Commitment remains outstanding, Borrower
shall, unless the
-69-
75
Administrative Agent (with the approval of the Majority Banks) otherwise
consents in writing, deliver to each of the Banks (except as otherwise provided
below) at its own expense:
(a) As soon as reasonably possible, and in any event
within 60 days after the close of each Fiscal Quarter of Borrower
(other than the fourth Fiscal Quarter), (i) the consolidated and
consolidating balance sheet of Borrower and its Consolidated
Subsidiaries as of the end of such Fiscal Quarter, setting forth in
comparative form the corresponding figures for the corresponding
Fiscal Quarter of the preceding Fiscal Year, if available, and (ii)
the consolidated and consolidating statements of profit and loss and
the consolidated statements of cash flows of Borrower and its
Consolidated Subsidiaries for such Fiscal Quarter and for the portion
of the Fiscal Year ended with such Fiscal Quarter, setting forth in
comparative form the corresponding periods of the preceding Fiscal
Year. Such consolidated and consolidating balance sheets and
statements shall be prepared in reasonable detail in accordance with
Generally Accepted Accounting Principles (other than those which
require footnote disclosure of certain matters) consistently applied,
and shall be certified by the principal financial officer of Borrower,
subject to normal year-end accruals and audit adjustments;
(b) As soon as reasonably possible, and in any event
within 90 days after the close of each Fiscal Year of Borrower, (i)
the consolidated and consolidating balance sheets of Borrower and its
Consolidated Subsidiaries as at the end of such Fiscal Year, setting
forth in comparative form the corresponding figures at the end of the
preceding Fiscal Year and (ii) the consolidated and consolidating
statements of profit and loss and the consolidated statements of cash
flows of Borrower and its Consolidated Subsidiaries for such Fiscal
Year, setting forth in comparative form the corresponding figures for
the previous Fiscal Year. Such consolidated and consolidating balance
sheet and statements shall be prepared in reasonable detail in
accordance with Generally Accepted Accounting Principles consistently
applied. Such consolidated balance sheet and statements shall be
accompanied by a report and opinion of Ernst & Young or other
independent certified public accountants of recognized standing
selected by Borrower (to which the Majority Banks have not reasonably
objected), which report and opinion shall state that the examination
of such consolidated financial statements by such accountants was made
in accordance with generally accepted auditing standards and that such
consolidated financial statements fairly present the financial
condition, results of operations and of cash flows of Borrower and its
Subsidiaries
-70-
76
subject to no exceptions as to scope of audit and subject to no other
exceptions or qualifications (other than changes in accounting
principles in which the auditors concur) not approved by the Majority
Banks in their reasonable discretion. Such accountants' report and
opinion shall be accompanied by a certificate stating that, in
conducting the audit examination of books and records necessary for
the certification of such financial statements, such accountants have
obtained no knowledge of any Default or Event of Default hereunder or,
if in the opinion of such accountants, any such Default or Event of
Default shall exist, stating the nature and status of such event, and
setting forth the applicable calculations under Sections 6.4(e) and
(i), 6.8, 6.9, 6.10(e) and (f), 6.13, 6.17 (a) and (b), 6.18 (without
requiring any physical count of inventory) and 6.19, as of the date of
the balance sheet. Such consolidating balance sheet and statements
shall be certified by the principal financial officer of Borrower;
(c) Promptly after the receipt thereof by Borrower,
copies of any audit or management reports submitted to it by
independent accountants in connection with any audit or interim audit
submitted to the board of directors of Borrower or any of its
Subsidiaries;
(d) Promptly after the same are available, copies of each
annual report, proxy or financial statement or other report or
communication sent to its stockholders, and copies of all annual,
regular, periodic and special reports and registration statements
which Borrower may file or be required to file with the Commission or
any similar or corresponding Governmental Agency or with any
securities exchange;
(e) Promptly upon a Senior Officer of Borrower becoming
aware, and in any event within ten Banking Days after becoming aware,
of the occurrence of any (i) "reportable event" (as such term is
defined in Section 4043 of ERISA) other than any such event as to
which the PBGC has by regulation waived the requirement of 30 days'
notice 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, other than a Multiemployer Plan, or any trust
created thereunder, a written notice specifying the nature thereof,
what action Borrower and 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;
-71-
77
(f) Promptly upon a Senior Officer of Borrower becoming
aware, and in any event within five Banking Days after becoming aware,
of the existence of a Default or an Event of Default, a written notice
specifying the nature and period of existence thereof and what action
Borrower is taking or proposes to take with respect thereto;
(g) Promptly upon a Senior Officer of Borrower becoming
aware, and in any event within five Banking Days after becoming aware,
that the holder of any evidence of Indebtedness for borrowed money or
Security of Borrower or any of its Subsidiaries has given notice or
taken any other action with respect to a default or event of default,
a written notice specifying the notice given or action taken by such
holder and the nature of such default or event of default and what
action Borrower or its Subsidiary is taking or proposes to take with
respect thereto;
(h) Promptly upon a Senior Officer of Borrower becoming
aware, and in any event within five Banking Days after becoming aware,
of the existence of any pending or threatened litigation or any
investigation by any Governmental Agency that would constitute a
Material Adverse Effect (provided, that no failure of a Senior Officer
to provide notice of any such event shall be the sole basis for any
Default or Event of Default hereunder);
(i) As soon as reasonably possible, and in any event
within 60 days after the close of each Fiscal Quarter (except 90 days
after the close of the Fiscal Year) of the Land Fund Joint Venture and
each other Joint Venture, a report certified by a Senior Officer of
Borrower setting forth (i) a complete list of all real Property held
by the Land Fund Joint Venture and each other Joint Venture as of the
end of such fiscal quarter, (ii) the aggregate outstanding principal
amount of Non-Recourse Indebtedness of the Land Fund Joint Venture and
each other Joint Venture as of the end of such fiscal quarter and
(iii) the aggregate amount of Borrower's Investment in the Land Fund
Joint Venture and each other Joint Venture as of the end of such
fiscal quarter;
(j) As soon as possible, and in any event within 60 days
after the close of each Fiscal Quarter of Borrower (except 90 days
after the close of the Fiscal Year of Borrower), (i) a sales report by
geographical region, certified by a Senior Officer of Borrower,
setting forth the number of homes or other units sold and delivered
during such period and in backlog at the end of such period, (ii) an
inventory report for such Fiscal Quarter summarizing such inventory by
type and geographical region
-72-
78
and otherwise in form and substance satisfactory to the Majority
Banks, (iii) a quarterly report in form and substance satisfactory to
the Majority Banks detailing intercompany borrowings and repayments
between Borrower and its Domestic Subsidiaries during such Fiscal
Quarter, and (iv) a report of any change, as of the last day of such
Fiscal Quarter, in the listing of Financial Subsidiaries and Foreign
Subsidiaries set forth in Schedule 4.4 (as the same may have been
revised by previous reports under this clause (j)(iv));
(k) As soon as reasonably possible, and in any event
prior to the date that is sixty (60) days after the commencement of
each Fiscal Year, deliver to the Administrative Agent the business
plan of Borrower and its Subsidiaries for that Fiscal Year, together
with projections (in substantially the same format as the Projections)
covering the next two (2) Fiscal Years;
(l) Promptly following obtaining knowledge thereof by a
Senior Officer of Borrower, written notice of any change in the Credit
Rating Level; and
(m) Such other data and information as from time to time
may be reasonably requested by any of the Banks.
7.2 Compliance Certificate. Not later than 60 days after the close
of each Fiscal Quarter and 90 days after the close of each Fiscal Year, a
Compliance Certificate dated as of the last day of the Fiscal Quarter or Fiscal
Year, as the case may be, (a) setting forth computations showing, in detail
reasonably satisfactory to the Administrative Agent, whether Borrower and its
Subsidiaries were in compliance with their obligations to the Banks pursuant to
Sections 6.4(e) and (i), 6.8, 6.9, 6.10(e) and (f), 6.13, 6.17(a) and (b), 6.18
and 6.19; (b) either (i) stating that to the best knowledge of the certifying
officer as of the date of such certificate there is no Default or Event of
Default, or (ii) if there is a Default or Event of Default as of the date of
such certificate, specifying all such Defaults or Events of Default and their
nature and status and (c) stating, to the best knowledge of the certifying
officer, whether any event or circumstance constituting a Material Adverse
Effect (other than a Material Adverse Effect which is not particular to the
Borrower and which is generally known) has occurred since the date of the most
recent Compliance Certificate delivered under this Section and, if so,
describing such Material Adverse Effect in reasonable detail. No failure of
the certifying officer to describe the existence of an event or circumstance
constituting a Material Adverse Effect shall be the sole basis for any Default
or Event of Default hereunder.
-73-
79
ARTICLE 8
CONDITIONS
8.1 Initial Advances. The effectiveness of this Agreement, and
obligations of the Banks to make the initial Advances and of the Issuing Bank
to issue the initial Letter of Credit are subject to the following conditions,
each of which shall be satisfied prior to or concurrently with the making of
the initial Advances:
(a) The Administrative Agent shall have received all of
the following, each dated as of the Closing Date (unless otherwise
specified or unless the Administrative Agent otherwise agrees) and all
in form and substance satisfactory to the Administrative Agent and
legal counsel for the Administrative Agent:
(1) executed counterparts of this
Agreement, sufficient in number for distribution to the Banks
and Borrower;
(2) the Notes executed by Borrower in
favor of each Bank, each in a principal amount equal to that
Bank's Pro Rata Share of the Commitment;
(3) the Subsidiary Guaranty executed by
each Subsidiary which is a Guarantor Subsidiary as of the
Closing Date;
(4) with respect to Borrower and each
Subsidiary which is a Guarantor Subsidiary as of the Closing
Date, such documentation as the Administrative Agent may
reasonably require to establish the due organization, valid
existence and good standing of Borrower and each such
Subsidiary, its qualification to engage in business in each
jurisdiction in which it is required to be so qualified, its
authority to execute, deliver and perform any Loan Documents
to which it is a Party, and the identity, authority and
capacity of each Responsible Official thereof authorized to
act on its behalf, including, without limitation, 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, and the like;
(5) the Opinions of Counsel;
(6) an Officer's Certificate of Borrower
affirming, to the best knowledge of the certifying
-74-
80
Senior Officer, that the conditions set forth in Sections
8.1(c) and 8.1(d) have been satisfied;
(7) a Notice of Allocation (as such term
is defined in the Override Agreement); and
(8) such other assurances, certificates,
documents, consents or opinions relevant hereto as the
Administrative Agent may reasonably require.
(b) The Administrative Agent shall have received
satisfactory evidence that the Override Agreement and the KBMC
Amendment referred to therein shall become effective concurrently with
the effectiveness of this Agreement.
(c) The representations and warranties of Borrower
contained in Article 4 shall be true and correct in all material
respects on and as of the Closing Date.
(d) Borrower and its Subsidiaries and any other Parties
shall be in compliance with all the terms and provisions of the Loan
Documents.
(e) The Banks shall have received the written legal
opinion of Messrs. Sheppard, Mullin, Richter & Hampton, legal counsel
to the Administrative Agent, to the effect that the Opinions of
Counsel are acceptable and such other matters relating to the Loan
Documents as the Administrative Agent may request.
8.2 Any Increasing Advance. The obligations of the Banks to make any
Advance which would increase the aggregate principal Indebtedness evidenced by
the Notes, are subject to the following conditions precedent:
(a) the Administrative Agent shall have received a
Request for Loan;
(b) the representations and warranties contained in
Article 4 (other than the representations and warranties contained in
Sections 4.4(a), 4.5, 4.6, 4.7, 4.9, 4.14, and 4.19) shall be true and
correct in all material respects on and as of the date of the Loan as
though made on and as of that date and no event or circumstance that
constitutes a Material Adverse Effect shall have occurred since the
Closing Date;
(c) no Material KBMC Default or Material KBMC Event of
Default then exists under the Mortgage Warehousing Agreement; provided
that this condition precedent shall not apply in respect of a Curable
KBMC Default so long as
-75-
81
the proceeds of any Loan made in reliance on this proviso are actually
used to cure such Curable KBMC Default; and
(d) the Administrative Agent shall have received such
other information relating to any matters which are the subject of
Section 8.2(b) or the compliance by Borrower with this Agreement as
may reasonably be requested by the Administrative Agent on behalf of a
Bank.
8.3 Any Advance. The obligations of the Banks to make any Advance
are subject to the conditions precedent that the representations and warranties
contained in Sections 4.12 and 4.18 shall be true and correct in all material
respects on and as of the date of the Advance as though made on and as of that
date, and that there has not occurred an Event of Default that is then
continuing.
8.4 Any Letter of Credit. The obligation of any Issuing Bank to
issue any Letter of Credit, and the obligation of the other Banks to
participate therein, are subject to the conditions precedent that (a) the
conditions set forth in Section 8.2 have been satisfied and (b) Borrower shall
have certified that, giving effect to the issuance of the requested Letter of
Credit, the Letter of Credit Usage shall not exceed any limitations set forth
in this Agreement.
ARTICLE 9
EVENTS OF DEFAULT AND REMEDIES UPON EVENTS OF DEFAULT
9.1 Events of Default. There will be a default hereunder if any one
or more of the following events ("Events of Default") occurs and is continuing,
whatever the reason therefor:
(a) failure to pay any installment of principal on any of
the Notes on the date, or any payment in respect of a Letter of Credit
pursuant to Section 2.5(e), when due; or
(b) failure to pay any installment of interest on any of
the Notes, or to pay any fee or other amounts due the Administrative
Agent or any Bank hereunder, within five Banking Days after the date
when due; or
(c) any failure to comply with Sections 5.8, 5.9, 6.1,
6.2, 6.3, 6.4, 6.7, 6.8, 6.9, 6.10, 6.13, 6.17, 6.18, 6.19 or 7.1(f);
or
(d) any failure to comply with Section 6.11 which shall
remain unremedied for a period of three Banking Days
-76-
82
after notice by the Administrative Agent of such Default; or
(e) Borrower or any other Party fails to perform or
observe any other term, covenant, or agreement contained in any Loan
Document on its part to be performed or observed within thirty (30)
calendar days after notice by the Administrative Agent of such
Default; or
(f) any representation or warranty in any Loan Document
or in any certificate, agreement, instrument, or other document made
or delivered, on or after the Closing Date, pursuant to or in
connection with any Loan Document proves to have been incorrect when
made in any respect material to the ability of the Borrower to duly
and punctually perform all of the Obligations; or
(g) Any failure to pay any principal when due (including
upon acceleration thereof) under the Mortgage Warehousing Agreement;
or
(h) Borrower or any of its Significant Subsidiaries (i)
fails to pay the principal, or any principal installment, of any
present or future Indebtedness other than Non-Recourse Indebtedness,
and in the case of the Mortgage Company, arising under the Mortgage
Warehousing Agreement), or any guaranty of present or future
Indebtedness other than Non-Recourse Indebtedness) 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 in excess of $10,000,000 individually or $25,000,000 in
the aggregate or (ii) fails to perform or observe any other material
term, covenant, or agreement on its part to be performed or observed,
or suffers to exist any condition, in connection with any present or
future Indebtedness (other than Non-Recourse Indebtedness, and in the
case of the Mortgage Company, arising under the Mortgage Warehousing
Agreement) or any guaranty of present or future Indebtedness other
than Non-Recourse Indebtedness), in excess of $10,000,000 individually
or $25,000,000 in the aggregate, if as a result of such failure or
such condition any holder or holders thereof (or an agent or trustee
on its or their behalf) has the right to declare it due before the
date on which it otherwise would become due; or
(i) any Loan Document, at any time after its execution
and delivery and for any reason other than the agreement of all 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
-77-
83
which is, in the reasonable opinion of the Majority Banks, materially
adverse to the interest of the Banks;
(j) a final judgment (or judgments) against Borrower or
any of its Significant Subsidiaries is entered for the payment of
money in excess of $10,000,000 individually or $25,000,000 in the
aggregate, and remains unsatisfied without procurement of a stay of
execution within thirty (30) calendar days after the issuance of any
writ of execution or similar legal process or the date of entry of
judgment, whichever is earlier, or in any event at least five (5)
calendar days prior to the sale of any assets pursuant to such legal
process; or
(k) Borrower or any Significant Subsidiary of Borrower
institutes or consents to any proceeding under a Debtor Relief Law
relating to it or to all or any part of its Property, or fails
generally to pay its debts as they mature, or makes a general
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 any 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
(l) the occurrence of a Termination Event with respect to
any Pension Plan if the aggregate liability of Borrower and its ERISA
Affiliates under ERISA as a result thereof exceeds $10,000,000; or the
complete or partial withdrawal by Borrower or any of its ERISA
Affiliates from any Multiemployer Plan if the aggregate liability of
Borrower and its ERISA Affiliates as a result thereof exceeds
$10,000,000; or
(m) any determination is made by a court of competent
jurisdiction that payment of principal or interest or both is due to
the holder of any Subordinated Obligations which would not be
permitted by Section 6.1 or that any Subordinated Obligation is not
subordinated in accordance with its terms to the Obligations.
9.2 Remedies Upon Event of Default. Without limiting any other
rights or remedies of the Administrative Agent or the
-78-
84
Banks provided for elsewhere in this Agreement or the Loan Documents, or by
applicable Law or in equity, or otherwise:
(a) Upon the occurrence of any Event of Default, and so
long as any such Event of Default shall be continuing (other than an
Event of Default described in Section 9.1(k) with respect to Borrower
or a Guarantor Subsidiary):
(i) all commitments to make Advances or issue
Letters of Credit, and all other obligations of the
Administrative Agent, the Issuing Bank or the Banks shall be
suspended without notice to or demand upon Borrower, which are
expressly waived by Borrower, except that the Majority Banks
may waive the Event of Default or, without waiving, determine,
upon terms and conditions satisfactory to the Majority Banks,
to reinstate the Commitment and make further Advances or issue
Letters of Credit, which waiver or determination shall apply
equally to, and shall be binding upon, all the Banks;
(ii) the Majority Banks may request the
Administrative Agent to, and the Administrative Agent
thereupon shall, declare the unpaid principal of all
Obligations due to Banks hereunder and under the Notes, an
amount equal to the Letter of Credit Usage, 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; provided that the Administrative
Agent shall notify Borrower (by telecopy and, if practicable,
by telephone) substantially concurrently with any such
acceleration (but the failure of Borrower to receive such
notice shall not affect such acceleration).
(b) Upon the occurrence of any Event of Default described
in Section 9.1(k) with respect to Borrower or a Guarantor Subsidiary:
(i) all commitments to make Advances or issue
Letters of Credit, and all other obligations of the
Administrative Agent, the Issuing Bank(s) or the Banks under
the Loan Documents shall terminate without notice to or demand
upon Borrower, which are expressly waived by Borrower, except
that all the Banks may waive the Event of Default or, without
waiving, determine, upon terms and conditions
-79-
85
satisfactory to all the Banks, to reinstate the Commitment and
make further Advances;
(ii) the unpaid principal of all Obligations due
to the Banks hereunder and under the Notes, an amount equal to
the Letter of Credit Usage and all interest accrued and unpaid
on such Obligations, 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) So long as any Letter of Credit shall remain
outstanding, any amounts received by the Administrative Agent in
respect of the Letter of Credit Usage pursuant to Section9.2.(a)(ii)
or 9.2(b)(ii) may be held as cash collateral for the obligation of
Borrower to reimburse the Issuing Bank in event of any drawing under
any Letter of Credit (and Borrower hereby grants to the Administrative
Agent a security interest in such cash collateral). In the event any
Letter of Credit in respect of which Borrower has deposited cash
collateral with the Administrative Agent is cancelled or expires, the
cash collateral shall be appliedfirst to the reimbursement of the
Issuing Bank (or all of the Banks, as the case may be) for any
drawings thereunder, andsecond to the payment of any outstanding
Obligations of Borrower hereunder or under any other Loan Document.
(d) Upon the occurrence of an Event of Default, the Banks
and the Administrative Agent, or any of them, may proceed to protect,
exercise, and enforce their rights and remedies under the Loan
Documents against Borrower or any other Party and such other rights
and remedies as are provided by Law or equity, without notice to or
demand upon Borrower (which are expressly waived by Borrower) except
to the extent required by applicable Laws. The order and manner in
which the rights and remedies of the Banks under the Loan Documents
and otherwise are exercised shall be determined by the Majority Banks.
(e) All payments received by the Administrative Agent and
the Banks, or any of them, after the acceleration of the maturity of
the Loans shall be applied first to the costs and expenses (including
attorneys' fees and disbursements) of the Administrative Agent, acting
as Administrative Agent, and of the Banks and thereafter paid pro rata
to the Banks in the same proportion that the aggregate of the unpaid
principal amount owing on the Obligations of Borrower to each Bank,
plus accrued and unpaid interest thereon, bears to the aggregate of
the
-80-
86
unpaid principal amount owing on all the Obligations, plus accrued and
unpaid interest thereon. Regardless of how each Bank may treat the
payments for the purpose of its own accounting, for the purpose of
computing Borrower's Obligations, the payments shall be applied first,
to the costs and expenses of the Administrative Agent, acting as
Administrative Agent, and the Banks as set forth above, second, to the
payment of accrued and unpaid fees hereunder and interest on all
Obligations to the Banks, to and including the date of such
application (ratably according to the accrued and unpaid interest on
the Loans), third, to the ratable payment of the unpaid principal of
all Obligations to the Banks, and fourth, to the payment of all other
amounts then owing to the Administrative Agent or the Banks under the
Loan Documents. No application of the 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 under
applicable Law unless all amounts then due (whether by acceleration or
otherwise) have been paid in full.
ARTICLE 10
THE ADMINISTRATIVE AGENT
10.1 Appointment and Authorization. Subject to Section 10.7, each
Bank hereby irrevocably appoints and authorizes the Administrative Agent to
take such action as agent on its behalf and to exercise such powers under the
Loan Documents as are delegated to the Administrative Agent by the terms
thereof or are reasonably incidental, as determined by the Administrative
Agent, thereto. This appointment and authorization does not constitute
appointment of the Administrative Agent as trustee for any Bank and, except as
specifically set forth herein to the contrary, the Administrative Agent shall
take such action and exercise such powers only in an administrative and
ministerial capacity.
10.2 Administrative Agent and Affiliates. Bank of America (and each
successor Administrative Agent) has the same rights and powers under the Loan
Documents as any other Bank and may exercise the same as though it were not the
Administrative Agent; and the term "Bank" or "Banks" includes Bank of America
in its individual capacity. Bank of America (and each successor Administrative
Agent) and its respective Affiliates may accept deposits from, lend money to,
and generally engage in any kind of banking, trust or other business with
Borrower and any Affiliate of Borrower, as if it were not the Administrative
Agent and without any duty to account therefor to the Banks. Bank of America
(and each
-81-
87
successor Administrative Agent) need not account to any other Bank for any
monies received by it for reimbursement of its costs and expenses as
Administrative Agent hereunder, or for any monies received by it in its
capacity as a Bank hereunder, except as otherwise provided herein.
10.3 Banks' Credit Decisions. Each Bank agrees that it has,
independently and without reliance upon the Administrative Agent, any other
Bank, or the directors, officers, agents, or employees of the Administrative
Agent or of any other Bank, and instead in reliance upon information supplied
to it by or on behalf of Borrower and its Subsidiaries 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 Administrative Agent, any
other Bank, or the directors, officers, agents, or employees of the
Administrative 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.
10.4 Action by Administrative Agent.
(a) The Administrative Agent may assume that no Default
or Event of Default has occurred and is continuing, unless the Administrative
Agent has actual knowledge of the Default or Event of Default, has received
notice from Borrower stating the nature of the Default or Event of Default, or
has received notice from a Bank stating the nature of the Default or Event of
Default and that Bank considers the Default or Event of Default to have
occurred and to be continuing.
(b) The Administrative Agent has only those obligations
under the Loan Documents that are expressly set forth therein. Without
limitation on the foregoing, the Administrative Agent shall have no duty to
inspect any property of Borrower or any of its Subsidiaries, although the
Administrative Agent may in its discretion periodically inspect any property
from time to time.
(c) Except for any obligation expressly set forth in the
Loan Documents and as long as the Administrative Agent may assume that no Event
of Default has occurred and is continuing, the Administrative Agent may, but
shall not be required to, exercise its discretion to act or not act, except
that the Administrative Agent shall be required to act or not act upon the
instructions of the Majority Banks (or of all the Banks, to the extent required
by Section 11.2) and those instructions shall be binding upon the
Administrative Agent and all the Banks, provided that the Administrative Agent
shall not be required to act or not act if to do so would, in the reasonable
judgment of the Administrative Agent, expose the Administrative
-82-
88
Agent to significant liability or would be contrary to any Loan Document or to
applicable law.
(d) If the Administrative Agent has received a notice
specified in clause (a), the Administrative Agent shall give notice thereof to
the Banks and shall act or not act upon the instructions of the Majority Banks
(or of all the Banks, to the extent required by Section 11.2), provided that
the Administrative 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 Administrative Agent, in substantial risk of
liability to the Administrative Agent, and except that if the Majority Banks
(or all the Banks, if required under Section 11.2) fail, for three (3) Banking
Days after the receipt of notice from the Administrative Agent, to instruct the
Administrative Agent, then the Administrative Agent, in its sole discretion,
may act or not act as it deems advisable for the protection of the interests of
the Banks.
(e) The Administrative 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), notwithstanding any other provision
hereof.
10.5 Liability of Administrative Agent. Neither the Administrative
Agent nor any of its respective directors, officers, agents, or employees 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 Administrative Agent and
its respective directors, officers, agents, and employees:
(a) may treat the payee of any Note as the holder thereof
until the Administrative Agent receives notice of the assignment or transfer
thereof in form satisfactory to the Administrative Agent, signed by the payee
and may treat each Bank as the owner of that Bank's interest in the obligations
due to Banks for all purposes of this Agreement until the Administrative Agent
receives notice of the assignment or transfer thereof, in form satisfactory to
the Administrative Agent, signed by that Bank;
(b) may consult with legal counsel, in-house legal
counsel, independent public accountants, in-house accountants and other
professionals, or other experts selected by it, or with legal counsel,
independent public accountants, or other experts for Borrower, and shall not be
liable for any action taken or not taken by it or them in good faith in
accordance with the advice of such legal counsel, independent public
accountants, or experts;
-83-
89
(c) will 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)
in connection with any of the Loan Documents;
(d) except to the extent expressly set forth in the Loan
Documents, will have no duty to ascertain or inquire as to the performance or
observance by Borrower or any other Person of any of the terms, conditions, or
covenants of any of the Loan Documents or to inspect the property, books, or
records of Borrower or any of its Subsidiaries or other Person;
(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;
(f) will not incur any liability by acting or not acting
in reliance upon any Loan Document, notice, consent, certificate, statement, or
other instrument or writing believed by it or them to be genuine and signed or
sent by the proper party or parties; and
(g) will not incur any liability for any arithmetical
error in computing any amount payable to or receivable from any Bank hereunder,
including without limitation payment of principal and interest on the Notes,
payment of commitment fees, Loans, and other amounts; provided that promptly
upon discovery of such an error in computation, the Administrative Agent, the
Banks, and (to the extent applicable) Borrower 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.
10.6 Indemnification. Each Bank shall, ratably in accordance with the
respective principal amount of its Commitment, indemnify and hold the
Administrative Agent and its directors, officers, agents, and employees
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, attorney's fees and
disbursements) 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 by Borrower to pay the obligations due
to Banks hereunder or under the Notes) or any action taken or not taken by it
as Administrative Agent thereunder, except for the Administrative Agent's gross
negligence or willful misconduct. Without limitation on the
-84-
90
foregoing, each Bank shall reimburse the Administrative Agent upon demand for
that Bank's ratable share of any cost or expense incurred by the Administrative
Agent in connection with the negotiation, preparation, execution, delivery,
administration, amendment, waiver, refinancing, restructuring, reorganization
(including a bankruptcy reorganization), or enforcement of the Loan Documents,
to the extent that Borrower is required by Section 11.3 to pay that cost or
expense but fails to do so upon demand. Any such reimbursement shall not
relieve Borrower of its obligations under Section 11.3.
10.7 Successor Administrative Agent. The Administrative Agent may
resign as such at any time by written notice to Borrower and the Banks, to be
effective upon a successor's acceptance of appointment as Administrative Agent.
The Majority Banks may at any time remove the Administrative Agent by written
notice to that effect to be effective on such date as the Majority Banks
designate. In either event, the Majority Banks shall appoint a successor
Administrative Agent or Agents, who must be from among the Banks; provided,
that the Administrative Agent shall be entitled to appoint a successor
Administrative Agent from among the Banks, subject to acceptance of appointment
by that successor Administrative Agent, if the Majority Banks have not
appointed a successor Administrative Agent within thirty (30) days after the
date the Administrative Agent gave notice of resignation or was removed. Upon
a successor's acceptance of appointment as Administrative Agent, the successor
will thereupon succeed to and become vested with all the rights, powers,
privileges, and duties of the Administrative Agent under the Loan Documents,
and the resigning or removed Administrative Agent will thereupon be discharged
from its duties and obligations thereafter arising under the Loan Documents.
After any retiring Administrative Agent's resignation or removal hereunder as
Administrative Agent, the provisions of this Article 10 and Sections 11.3 and
11.10 shall inure to its benefit as to any action taken or omitted to be taken
by it while it was Administrative Agent under this Agreement.
10.8 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 Administrative Agent of its obligations to the
Banks under any provision of this Agreement, and Borrower shall have no
liability to the Administrative Agent or any of the Banks in respect of any
failure by the Administrative Agent or any Bank to perform any of its
obligations to the Administrative 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
Administrative Agent for the account of
-85-
91
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
Administrative Agent in the manner provided by this Agreement.
ARTICLE 11
MISCELLANEOUS
11.1 Cumulative Remedies; No Waiver. The rights, powers, and remedies
of the Administrative Agent or any Bank provided herein or in any Note or other
Loan Document are cumulative and not exclusive of any right, power, or remedy
provided by law or equity. No failure or delay on the part of the
Administrative Agent or any Bank in exercising any right, power, or remedy may
be, or may be deemed to be, a waiver thereof; nor may any single or partial
exercise of any right, power, or remedy preclude any other or further exercise
of any other right, power, or remedy. The terms and conditions of Sections
8.1, 8.2, 8.3 and 8.4 hereof are inserted for the sole benefit of the Banks and
the Administrative Agent may (with the approval of the Majority Banks) waive
them in whole or in part with or without terms or conditions in respect of any
Loan, without prejudicing the Banks' rights to assert them in whole or in part
in respect of any other Loans.
11.2 Amendments; Consents. No amendment, modification, supplement,
termination, or waiver of any provision of this Agreement or any other Loan
Document, 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
Administrative Agent with the approval of the Majority Banks and 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 (or in the case of Section
11.2(d), Banks holding at least 66 2/3% of the Commitment), no amendment,
modification, supplement, termination, waiver, or consent may be effective:
(a) to amend or modify the principal of, or the amount of
principal or principal prepayments, payable on any Obligation or the
amount of the Commitment or to decrease the rate of any interest or
fee payable to any Bank;
(b) to postpone any date fixed for any payment of
principal of, prepayment of principal of, or any installment of
interest on, any Obligation or any installment of any fee or to extend
the term of the Commitment;
-86-
92
(c) to amend or modify the provisions of the definitions
in Section 1.1 of "Majority Banks" or of Sections 11.2, 11.9, 11.10,
or 11.11;
(d) release any Guarantor Subsidiary from liability under
any Subsidiary Guaranty; or
(e) to amend or modify any provision of this Agreement or
the Loan Documents 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 Agents.
11.3 Costs, Expenses and Taxes. Borrower shall pay within fifteen
(15) days after demand the reasonable actual out-of-pocket costs and expenses
of the Managing Agents and the Administrative Agent in connection with (a) the
negotiation, preparation, execution, delivery, arrangement, syndication and
closing of the Loan Documents, provided that such costs and expenses do not
exceed the amounts set forth in a letter agreement between Borrower and the
Managing Agents, (b) administration of the Loan Documents, provided that such
costs and expenses do not exceed the amounts set forth in a letter agreement
between Borrower and the Administrative Agent and (c) amendment, waiver or
modification of the Loan Documents. Borrower shall pay within fifteen (15)
days after demand the reasonable out-of-pocket costs and expenses of the
Administrative Agent and each of the Banks in connection with the enforcement
of any Loan Documents, including in connection with any refinancing,
restructuring, reorganization (including a bankruptcy reorganization, if such
payment is approved by the bankruptcy court or any similar proceeding). The
costs and expenses referred to in the first sentence above (in the case of the
Managing Agents and Administrative Agent only) and the second sentence above
(in the case of the Administrative Agent and the Banks) 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 retained by the Managing Agents and Administrative Agent
or any of the Banks (including the allocated costs of in-house counsel), as the
case may be, or independent public accountants and other outside experts
retained by the Managing Agents and Administrative Agent (provided that
Borrower shall not be liable under this Section 11.3 for fees and expenses of
more than one firm of independent public accountants, or more than one expert
with respect to a specific subject matter, at any one time). Nothing herein
shall obligate Borrower to pay any costs and expenses in connection with an
assignment of or participation in a Bank's Pro-Rata Share of the Commitment.
Borrower shall
-87-
93
pay any and all documentary and transfer taxes, assessments or charges made by
any Governmental Agency and all costs, expenses, fees, and charges payable or
determined to be payable in connection with the execution, delivery, filing or
recording of this Agreement, any other Loan Document, or any other instrument
or writing to be delivered hereunder or thereunder, and shall reimburse, hold
harmless, and indemnify the Administrative Agent and each Bank 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 Borrower to perform any of its Obligations. Any amount payable
to the Administrative Agent or any Bank under this Section shall bear interest
from the date of receipt of demand for payment at the rate then in effect for
Alternate Base Rate Loans.
11.4 Nature of Banks' Obligations. Nothing contained in this
Agreement or any other Loan Document and no action taken by the Administrative
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. Each Bank's obligation
to make any Advance pursuant hereto is several and not joint or joint and
several, and is not conditioned upon the performance by any other Bank of its
obligation to make Advances. A default by any Bank will not increase the
Commitment of 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.
11.5 Representations and Warranties. All representations and
warranties of Borrower and any other Party contained herein or in any other
Loan Document (including, for this purpose, all representations and warranties
contained in any certificate or other writing required to be delivered by or on
behalf of Borrower or such Party pursuant to any Loan Document) will survive
the making of the loans hereunder and the execution and delivery of the Notes,
and, in the absence of actual knowledge by the Administrative Agent or a Bank
of the untruth of any representation or warranty, have been or will be relied
upon by the Administrative Agent and that Bank, notwithstanding any
investigation made by the Administrative Agent or that Bank or on their behalf.
11.6 Notices. Except as otherwise provided in any Loan Document, all
notices, requests, demands, directions, and other communications provided for
hereunder and under any other Loan Document must be in writing and must be
mailed (provided that communications related to any Default or Event of Default
or proposed action under Section 11.2 shall not be sent solely by
-88-
94
mail), telegraphed, delivered, or sent by telex, telecopier or cable to the
appropriate party at the address set forth on the signature pages of this
Agreement or, as to any Party, at any other address as may be designated by it
in the applicable Loan Document or in a written notice sent to the
Administrative Agent and Borrower in accordance with this Section. Except as
otherwise provided in any Loan Document if any notice, request, demand,
direction, or other communication is given by mail it will be effective on the
earlier of actual receipt or the third Banking Day after deposited in the
United States mails 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; if given by telex, when confirmed
by answerback; or if given by personal delivery, when delivered.
11.7 Execution in Counterparts. This Agreement and any other Loan
Document to which Borrower is a Party 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, taken together will be deemed to be but one and the same instrument.
Such counterparts may be sent by telecopy, with the original counterparts to
follow by mail or courier. The execution of this Agreement or any other Loan
Document by any party hereto or thereto will not become effective until
executed counterparts hereof or thereof (or other evidence of execution
satisfactory to the Administrative Agent and Borrower) have been delivered to
the Administrative Agent and Borrower.
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 Agents, each of the Banks, and their respective
successors and assigns, except thatexcept as permitted in Section 6.3,
Borrower may not assign its rights hereunder or thereunder or any
interest herein or therein without the prior written consent of all
the Banks.
(b) From time to time subsequent to the Closing Date,
each Bank may assign or grant a participation in a portion of its Pro
Rata Share of the Commitment, its Advances and its participation in
Letters of Credit, subject to all of the terms and conditions set
forth in Sections 5.1 and 5.2 of the Override Agreement.
11.9 Sharing of Setoffs. Each Bank severally agrees that if it,
through the exercise of the right of setoff, banker's
-89-
95
lien, or counterclaim against Borrower or otherwise, receives payment of the
Obligations due it hereunder and under the Notes that is ratably more than any
other Bank, through any means, receives in payment of the Obligations held by
that Bank, then: (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 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. Borrower
expressly consents to the foregoing arrangements and agrees that, to the extent
permitted by Law, any Bank holding a participation in an Obligation so
purchased may exercise any and all rights of setoff, banker's lien or
counterclaim with respect to the participation as fully as if the Bank were the
original owner of the Obligation purchased.
11.10 Indemnity by Borrower. Borrower agrees to indemnify, save, and
hold harmless the Agents and each Bank and their directors, officers, agents,
attorneys, and employees (collectively, the "indemnitees") from and against:
(i) any and all claims, demands, actions or causes of action that are asserted
against any indemnitee (other than by Borrower or by any other indemnitee) if
the claim, demand, action or cause of action arises out of or relates to the
Commitment, the use of proceeds of any Loans, any transaction contemplated
pursuant to this Agreement, or any relationship or alleged relationship of any
indemnitee to Borrower related to this Agreement; (ii) any administrative or
investigative proceeding by any Governmental
-90-
96
Agency arising out of or related to a claim, demand, action or cause of action
described in clause (i) above; and (iii) any and all liabilities, losses,
costs, or expenses (including reasonable attorneys' fees and disbursements
(including the allocated cost of in-house counsel)) that any indemnitee suffers
or incurs as a result of any of the foregoing; provided, that Borrower shall
have no obligation under this Section to any indemnitee with respect to any of
the foregoing arising out of the gross negligence or willful misconduct of that
indemnitee or the breach by the indemnitee of this Agreement or from the
transfer or disposition of any Note by any Bank. 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. If
requested by Borrower in writing and so long as no Default or Event of Default
shall have occurred and be continuing, such indemnitee shall in good faith
contest the validity, applicability and amount of such claim, demand, action or
cause of action, shall permit Borrower to participate in such contest and shall
cooperate with Borrower to the extent their interests are aligned. 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 not so settle or compromise without Borrower's written approval thereof,
which approval may be withheld in Borrower's sole discretion. Any voluntary
settlement by an indemnitee of such a claim or proceeding without Borrower's
written approval shall relieve Borrower of its obligation to indemnify that
indemnitee with respect to such claim or proceeding. In any legal action
involving more than one indemnitee, all indemnitees shall be represented by a
single legal counsel unless such legal counsel determines that a defense or
counterclaim is available to an indemnitee that is not available to all
indemnitees and that to assert such a defense or counterclaim would create a
conflict of interest, or a potential conflict of interest, in which case such
indemnitee shall be entitled to separate legal counsel. Any obligation or
liability of Borrower to any indemnitee under this Section shall survive the
expiration or termination of this Agreement and the repayment of all Loans and
all other Obligations owed to the Banks.
11.11 Nonliability of Banks. The relationship between Borrower and
the Banks is, and shall at all times remain, solely that of borrower and
lenders, and the Banks and the Agents neither undertake nor assume any
responsibility or duty
-91-
97
to Borrower to review, inspect, supervise, pass judgment upon, or inform
Borrower of any matter in connection with any phase of Borrower's business,
operations, or condition, financial or otherwise. Borrower shall rely entirely
upon its own judgment with respect to such matters, and any review, inspection,
supervision, exercise of judgment, or information supplied to Borrower by any
Bank or the Agents in connection with any such matter is for the protection of
the Banks and the Agents, and neither Borrower nor any third party is entitled
to rely thereon.
11.12 Confidentiality. Each Bank agrees to use any confidential
information that it may receive, directly or indirectly, from Borrower pursuant
to this Agreement only for the purposes of this Agreement and to hold such
confidential information in confidence, except for disclosure: (a) To
Affiliates of the Bank; (b) To other Banks; (c) To legal counsel, accountants
and other professional advisors to that Bank; (d) To regulatory officials
having jurisdiction over that Bank; (e) As required by Law or legal process
(provided that the Bank shall, to the extent possible give sufficient notice to
Borrower of such legal process to enable Borrower to oppose such legal process,
and in any event, give written notice to Borrower of such legal process as soon
as practicable) or in connection with any legal proceeding to which that Bank
and Borrower are adverse parties; and (f) 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 its Note, provided that such disclosure is made
subject to an appropriate confidentiality agreement by such institution on
terms substantially similar to this Section. For purposes of the foregoing,
"confidential information" shall mean any information respecting Borrower or
its Subsidiaries reasonably considered by Borrower 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, the Agents or any
Bank, and (iii) information previously disclosed by Borrower to any Person not
associated with Borrower without any reasonable expectation of confidentiality.
Nothing in this Section shall be construed to create or give rise to any
fiduciary duty on the part of the Agents or the Banks to Borrower.
11.13 No Third Parties Benefited. This Agreement is made for the
purpose of defining and setting forth certain obligations, rights and duties of
Borrower, the Agents and the Banks in connection with the Commitment, and is
made for the sole benefit of Borrower, the Agents and the Banks, and the
Agents' and the Banks' successors and assigns. Except as provided in
-92-
98
Sections 11.8 and 11.10, no other Person shall have any rights of any nature
hereunder or by reason hereof.
11.14 Other Dealings. Any Bank may, without liability to account to
the other Banks, accept deposits from, lend money or provide credit facilities
to and generally engage in any kind of banking or other business with Borrower
and its Subsidiaries.
11.15 Right of Setoff - Deposit Accounts. Upon the occurrence of an
Event of Default and the acceleration of maturity of the principal indebtedness
under the Notes pursuant to Section 9.2, Borrower hereby specifically
authorizes each Bank in which Borrower maintains a deposit account (whether a
general or special deposit account, other than trust accounts) or a certificate
of deposit to setoff any Obligations owed to the Banks against such deposit
account or certificate of deposit without prior notice to Borrower (which
notice is hereby waived) whether or not such deposit account or certificate of
deposit has then matured. Nothing in this Section shall limit or restrict the
exercise by a Bank of any right to setoff or banker's lien under applicable
Law, subject to the approval of the Majority Banks.
11.16 Further Assurances. Borrower shall, at its expense and without
expense to the Banks or the Agents, do, execute, and deliver such further acts
and documents as any Bank or the Agents from time to time reasonably requires
for the assuring and confirming unto the Banks or the Agents 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;
provided that this Section 11.16 is not intended to create any affirmative
obligation on the part of Borrower to provide collateral security, additional
guarantors or other credit enhancement with respect to the Obligations.
11.17 Integration. This Agreement, together with the other Loan
Documents and the Mortgage Warehousing Agreement, 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 except as
expressly provided herein to the contrary; provided that the foregoing is
subject to Section 4.18 hereof. The Loan Documents were drafted with the joint
participation of Borrower and the Banks and shall be construed neither against
nor in favor of either, but rather in accordance with the fair meaning thereof.
11.18 Governing Law. The Loan Documents shall be governed by, and
construed and enforced in accordance with, the Laws of California.
-93-
99
11.19 Severability of Provisions. Any provision in any Loan Document
that is held to be inoperative, unenforceable, or invalid in any jurisdiction
shall, as to that jurisdiction, be inoperative, unenforceable, or invalid
without affecting the remaining provisions in that jurisdiction or the
operation, enforceability, or validity of that provision in any other
jurisdiction, and to this end the provisions of all Loan Documents are declared
to be severable.
11.20 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.
11.21 Conflict in Loan Documents. To the extent there is any actual
irreconcilable conflict between the provisions of this Agreement and any other
Loan Document (other than the Override Agreement), the provisions of this
Agreement shall prevail. To the extent there is any actual irreconcilable
conflict between the provisions of this Agreement and the Override Agreement,
the provisions of the Override Agreement shall prevail.
11.22 Waiver Of Jury Trial. EACH OF THE PARTIES HERETO HEREBY
EXPRESSLY WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO
ENFORCE OR DEFEND ANY RIGHTS UNDER THIS AGREEMENT, THE NOTES, ANY OTHER LOAN
DOCUMENT OR UNDER ANY AMENDMENT, INSTRUMENT OR DOCUMENT DELIVERED OR WHICH MAY
IN THE FUTURE BE DELIVERED IN CONNECTION HEREWITH OR ARISING FROM ANY BANKING
OR OTHER RELATIONSHIP EXISTING IN CONNECTION WITH THIS AGREEMENT, THE NOTES OR
ANY OTHER LOAN DOCUMENT AND AGREES THAT ANY SUCH ACTION OR PROCEEDING SHALL BE
TRIED BEFORE A COURT AND NOT BEFORE A JURY. ANY PARTY TO THIS AGREEMENT MAY
FILE AN ORIGINAL COUNTERPART OR COPY OF THIS SECTION WITH ANY COURT AS WRITTEN
EVIDENCE OF THE CONSENT OF THE SIGNATORIES HERETO TO THE WAIVER OF THEIR RIGHT
TO TRIAL BY JURY.
11.23 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 ANY AGENT OR ANY BANK THAT DOES NOT COMPLY WITH
SECTION 11.2 TO EFFECT AN AMENDMENT, MODIFICATION, WAIVER OR SUPPLEMENT TO THE
AGREEMENT OR THE OTHER LOAN DOCUMENTS.
11.24 Hazardous Materials Indemnity. Without limiting any other
indemnity provided for in the Loan Documents, Borrower agrees to indemnify the
Agents and each Bank and their directors, officers, agents, attorneys, and
employees
-94-
100
(collectively, the "indemnities") from any claim, liability, loss, cost or
expense (including reasonable attorneys' fees (including the allocated cost of
in-house counsel)) directly or indirectly arising out of the use, generation,
manufacture, production, storage, release, threatened release, discharge,
disposal or presence of any Hazardous Materials if such Hazardous Materials are
on, under, about or relate to Borrower's Property or operations, so long as
such claim, liability, loss, cost or expense arises out of or relates to the
Commitment, the use of proceeds of any Loans, any transaction contemplated
pursuant to this Agreement, or any relationship or alleged relationship of any
indemnitee to Borrower related to this Agreement.
-95-
101
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the date first above written.
KAUFMAN AND BROAD HOME CORPORATION
By /s/ Michael F. Henn
-----------------------------------
Michael F. Henn
Senior Vice President
and Chief Financial Officer
By /s/ Marc I. Chasman
-----------------------------------
Marc I. Chasman
Vice President
10877 Wilshire Boulevard
Los Angeles, California 90024
Attn.: Marc I. Chasman
Vice President
Phone: (310) 443-8005
Fax: (310) 443-8098
-96-
102
BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION, as Administrative Agent
and Managing Agent
By /s/ Peggy A. Fujimoto
- --------------------------------------
Peggy A. Fujimoto
Vice President
Agency Management Services #5596
1455 Market Street
San Francisco, California 94103
Attn.: Peggy A. Fujimoto
Vice President
Phone: (415) 622-4835
Fax: (415) 622-4894
BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION, as a Bank
By /s/ Craig A. Moyer
- --------------------------------------
Craig A. Moyer
Vice President
Domestic Lending Office
Bank of America NT&SA
yCRESG - National Accounts #1357
555 South Flower Street
Los Angeles, California 90071
Attn.: Craig A. Moyer
Vice President
Phone: (213) 228-5238
Fax: (213) 228-5389
LIBOR Lending Office
Bank of America NT&SA
CRESG National Accounts #1357
555 South Flower Street
Los Angeles, California 90071
Attn.: Marilyn Harvey or
Mary Gamboa
Phone: (213) 228-4013 (Harvey)
(213) 228-4582 (Gamboa)
Fax: (213) 228-5389
-97-
103
THE FIRST NATIONAL BANK OF CHICAGO,
as a Managing Agent, Documentation Agent and as a Bank
By /s/ Mark D. Zeisloft
----------------------------------
Mark D. Zeisloft
Vice President
Domestic and LIBOR Lending Office
The First National Bank of Chicago
One First National Plaza, Suite 0318
Chicago, Illinois 60670
Attn.: Michael Dowling
Assistant Vice President
Phone: (312) 732-2517
Fax: (312) 732-1582
-98-
104
CREDIT LYONNAIS LOS ANGELES BRANCH,
as a Co-Agent and as a Bank
By /s/ Thierry F. Vincent
-----------------------------------
Thierry F. Vincent
Vice President
CREDIT LYONNAIS CAYMAN ISLAND BRANCH,
as a Bank
By /s/ Thierry F. Vincent
-----------------------------------
Thierry F. Vincent
Authorized Signatory
Domestic Lending Office
Credit Lyonnais Los Angeles Branch
515 South Flower Street
Los Angeles, California 90071
Attn.: David L. Miller
Vice President
Phone: (213) 627-3200
Fax: (213) 623-3437
LIBOR Lending Office
Credit Lyonnais Cayman Island Branch
c/o Credit Lyonnais
515 South Flower Street
Los Angeles, California 90071
Attn.: David L. Miller
Vice President
Phone: (213) 627-3200
Fax: (213) 623-3437
-99-
105
NBD BANK, N.A., as a Co-Agent and as a Bank
By /s/ Andrew Heinecke
-------------------------------------
Andrew Heinecke
First Vice President
Domestic and LIBOR Lending Office
NBD Bank, N.A.
Financial Services Division 3rd Floor
611 Woodward Avenue
Detroit, Michigan 48226
Attn.: Richard J. Johnsen
Vice President
Phone: (313) 225-3181
Fax: (313) 225-3074
NATIONSBANK OF TEXAS, N.A., as a Co-Agent and as a Bank
By /s/ Michele Shafroth
-------------------------------------
Michele Shafroth
Senior Vice President
Domestic and LIBOR Lending Office
NationsBank of Texas, N.A.
901 Main Street
TX1-492-14-06
Dallas, Texas 75202
Attn.: Kay Hibbs
Administrative Officer
Phone: (214) 508-3089
Fax: (214) 508-0944
-100-
106
THE INDUSTRIAL BANK OF JAPAN, LIMITED, Los Angeles Agency, as a Bank
By /s/ Toshinari Iyoda
----------------------------------
Toshinari Iyoda
Senior Vice President
Domestic and LIBOR Lending Office
The Industrial Bank of Japan, Ltd.,
Los Angeles Agency
350 South Grand Avenue, Suite 1500
Los Angeles, California 90071
Attn.: Lori Roth Schnadig
Assistant Vice President
Phone: (213) 893-6444
Fax: (213) 488-9840
SOCIETE GENERALE, as a Bank
By /s/ Maureen Kelly
----------------------------------
Maureen Kelly
Vice President
Domestic and LIBOR Lending Office
Societe Generale
2029 Century Park East, Suite 2900
Los Angeles, California 90067
Attn.: Maureen Kelly
Vice President
Phone: (310) 788-7110
Fax: (310) 551-1537
-101-
107
TRUST COMPANY BANK, as a Bank
By /s/ Frank O. Bennett
----------------------------------
Frank O. Bennett
Vice President
Domestic and LIBOR Lending Office
Trust Company Bank
25 Park Place
24th Floor, Mail Code 124
Atlanta, Georgia 30303
Attn.: Ginny Dulaney
Corporate Banking Assistant
Phone: (404) 588-8481
Fax: (404) 827-6270
-102-
108
BANK ONE ARIZONA, NA, as a Bank
By /s/ Rhonda R. Williams
-----------------------------------
Rhonda R. Williams
Assistant Vice President
Domestic and LIBOR Lending Office
Bank One Arizona, NA
241 North Central, 20th Floor
Phoenix, Arizona 85004
Attn.: Rhonda R. Williams
Assistant Vice President
Phone: (602) 221-1783
Fax: (602) 221-1372
THE FIRST NATIONAL BANK OF BOSTON, as a Bank
By /s/ Paul F. DiVito
-----------------------------------
Paul F. DiVito
Vice President
Domestic and LIBOR Lending Office
Bank of Boston
400 Perimiter Center Terrace
Suite 745
Atlanta, Georgia 30346
Attn.: Cheryl Geoffrion
Administrative Assistant
Phone: (404) 390-6577
(404) 390-6581
Fax: (404) 391-9811
-103-
109
BANQUE INDOSUEZ, as a Bank
By /s/ Jerome S. Sanzo
-----------------------------------
Jerome S. Sanzo
First Vice President
By /s/ Sandra Galeos Piserchia
-----------------------------------
Sandra Galeos Piserchia
Vice President
Domestic Lending Office
Banque Indosuez
1211 Avenue of the Americas
New York, New York 10036-8701
Attn.: Sandra Galeos Piserchia
Vice President
Phone: (212) 278-2754
Fax: (212) 278-2759
LIBOR Lending Office
Banque Indosuez Grand Cayman Island Branch
c/o 1211 Avenue of the Americas
New York, New York 10036-8701
Attn.: Sandra Galeos Piserchia
Vice President
Phone: (212) 278-2754
Fax: (212) 278-2759
CHEMICAL BANK, as a Bank
By /s/ Peter C. Haley
-----------------------------------
Peter C. Haley
Managing Director
Domestic and LIBOR Lending Office
Chemical Bank
380 Madison Avenue, 10th Floor
New York, New York 10017
Attn.: Louise Ng
Loan Administrator
Phone: (212) 622-3340
Fax: (212) 622-3397
-104-
110
THE FUJI BANK, LIMITED, Los Angeles Agency, as a Bank
By /s/ Yasuji Ikawa
-----------------------------------
Yasuji Ikawa
Joint General Manager
Domestic and LIBOR Lending Office
The Fuji Bank, Limited, Los Angeles
333 South Grand Avenue, 25th Floor
Los Angeles, California 90071
Attn.: Ching L. Lim
Assistant Vice President
Phone: (213) 251-4179
Fax: (213) 253-4198
-105-