11/2/98
Exhibit 10.12
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AMENDED AND RESTATED
CREDIT AGREEMENT
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Dated as of November 3, 1998
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BEAZER HOMES USA, INC.,
The Guarantors Parties Thereto,
The Banks Parties Thereto,
The First National Bank of Chicago
As Agent,
and
Comerica Bank
and
Guaranty Federal Bank, F.S.B.,
as Managing Agents
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ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS................... 1
Section 1.01. Defined Terms.............................................. 1
Section 1.02. Accounting Terms........................................... 19
ARTICLE II
AMOUNTS AND TERMS OF THE LOANS................... 20
Section 2.01. Revolving Credit........................................... 20
Section 2.02. Reduction of Commitment.................................... 21
Section 2.03. Notice and Manner of Borrowing............................. 22
Section 2.04. Non-Receipt of Funds by Agent.............................. 22
Section 2.05. Determination of Applicable Margins and
Applicable Commitment Rate................................ 23
Section 2.06. Conversions and Renewals................................... 25
Section 2.07. Interest................................................... 26
Section 2.08. Interest Rate Determination................................ 27
Section 2.09. Fees....................................................... 28
Section 2.10. Notes...................................................... 28
Section 2.11. Prepayments................................................ 29
Section 2.12. Method of Payment.......................................... 19
Section 2.13. Use of Proceeds............................................ 30
Section 2.14. Yield Protection........................................... 30
Section 2.15. Changes in Capital Adequacy Regulations.................... 31
Section 2.16. Availability of LIBOR Loans................................ 32
Section 2.17. Funding Indemnification.................................... 32
Section 2.18. Bank Statements; Survival of Indemnity..................... 32
Section 2.19. Extension of Termination Date ............................. 33
Section 2.20. Replacement of Certain Banks............................... 35
Section 2.21. Swing Line ................................................ 36
Section 2.22. Increase of Aggregate Commitments ......................... 37
Section 2.23. Amounts Payable Under Original Agreement .................. 40
ARTICLE III
CONDITIONS PRECEDENT........................ 41
Section 3.01. Conditions Precedent to the Initial
Loan...................................................... 41
Section 3.02. Conditions Precedent to All Loans.......................... 43
ARTICLE IV
REPRESENTATIONS AND WARRANTIES................... 44
Section 4.01. Incorporation, Formations Good Standing,
and Due Qualification..................................... 44
Section 4.02. Power and Authority........................................ 44
Section 4.03. Legally Enforceable Agreement.............................. 45
i
Section 4.04. Financial Statements.........................................
Section 4.05. Labor Disputes and Acts of God...............................
Section 4.06. Other Agreements...........................................
Section 4.07. Litigation.................................................
Section 4.08. No Defaults on Outstanding Judgments or
Orders..................................................... 46
Section 4.09. Ownership and Liens........................................ 47
Section 4.10. Subsidiaries and Ownership of Stock........................ 47
Section 4.11. ERISA...................................................... 47
Section 4.12. Operation of Business...................................... 48
Section 4.13. Taxes...................................................... 48
Section 4.14. Laws; Environment.......................................... 48
Section 4.15. Investment Company Act..................................... 49
Section 4.16. Public Utility Holding Company Act......................... 49
Section 4.17. Year 2000 ................................................. 49
ARTICLE V
AFFIRMATIVE COVENANTS....................... 49
Section 5.01. Maintenance of Existence................................... 49
Section 5.02. Maintenance of Records..................................... 50
Section 5.03. Maintenance of Properties.................................. 50
Section 5.04. Conduct of Business........................................ 50
Section 5.05. Maintenance of Insurance.................................... 50
Section 5.06. Compliance with Laws....................................... 50
Section 5.07. Right of Inspection........................................ 50
Section 5.08. Reporting Requirements..................................... 51
Section 5.09. Subsidiary Reporting Requirements.......................... 54
Section 5.10. Environment................................................ 55
Section 5.11. Use of Proceeds............................................ 55
Section 5.12. Ranking of Obligations..................................... 55
Section 5.13. Taxes...................................................... 56
Section 5.14. Wholly Owned Status........................................ 56
Section 5.15. New Subsidiaries........................................... 56
Section 5.16. Year 2000 ................................................. 56
ARTICLE VI
NEGATIVE COVENANTS.......................... 56
Section 6.01. Liens...................................................... 56
Section 6.02. Debt....................................................... 57
Section 6.03. Mergers, Etc................................................ 57
Section 6.04. Leases..................................................... 58
Section 6.05. Sale and Leaseback......................................... 58
Section 6.06. Sale of Assets............................................. 58
Section 6.07. Investments................................................ 58
Section 6.08. Guaranties, Etc............................................ 59
Section 6.09. Transactions With Affiliates............................... 60
Section 6.10. Land Inventory............................................. 60
Section 6.11. Total Inventory............................................ 60
Section 6.12. Senior Debt ............................................... 61
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Section 6.13. Amendment or Modification of Indenture..................... 61
Section 6.14. UHIC....................................................... 61
Section 6.15. Negative Pledges .......................................... 61
ARTICLE VII
FINANCIAL COVENANTS........................ 61
Section 7.01. Minimum Consolidated Tangible Net Worth.................... 61
Section 7.02. Leverage Ratio............................................. 62
Section 7.03. Permitted Senior Debt...................................... 62
Section 7.04. Fixed Charge Coverage Ratio................................ 62
Section 7.05. Land Inventory ............................................ 62
ARTICLE VIII
EVENTS OF DEFAULT......................... 62
Section 8.01. Events of Default.......................................... 62
Section 8.02. Set Off.................................................... 65
ARTICLE IX
GUARANTY.............................. 66
Section 9.01. Guaranty................................................... 66
Section 9.02. No Impairment of Guaranty.................................. 67
Section 9.03. Continuation and Reinstatements etc........................ 67
Section 9.04. Limitation on Guaranteed Amount............................ 68
ARTICLE X
AGENCY PROVISIONS.......................... 68
Section 10.01. Authorization and Action................................... 68
Section 10.02. Liability of Agent......................................... 69
Section 10.03. Rights of Agent as a Bank.................................. 69
Section 10.04. Independent Credit Decisions............................... 70
Section 10.05. Indemnification............................................ 70
Section 10.06. Successor Agent............................................ 71
Section 10.07. Sharing of Payments, Etc................................... 71
Section 10.08. Withholding Tax Matters.................................... 72
ARTICLE XI
MISCELLANEOUS............................ 73
Section 11.01. Amendments, Etc............................................ 73
Section 11.02. Notices, Etc............................................... 73
Section 11.03. No Waiver.................................................. 74
Section 11.04. Costs, Expenses, and Taxes................................. 74
Section 11.05. Integration................................................ 74
Section 11.06. Indemnity.................................................. 75
Section 11.07. Governing Law.............................................. 75
Section 11.08. Severability of Provisions................................. 75
Section 11.09. Counterparts............................................... 75
Section 11.10. Headings................................................... 75
Section 11.11. Submission to Jurisdiction................................. 75
Section 11.12. Jury Trial Waiver.......................................... 76
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Section 11.13. Government Regulation...................................... 76
Section 11.14. No Fiduciary Duty.......................................... 76
Section 11.15. Confidentiality............................................ 76
ARTICLE XII
BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS.......... 76
Section 12.01. Successors and Assigns..................................... 76
Section 12.02. Participations............................................. 77
Section 12.03. Assignments................................................ 78
Section 12.04. Dissemination of Information............................... 79
Section 12.05. Tax Treatment.............................................. 80
ARTICLE XIII
THE LETTER OF CREDIT FACILITY
Section 13.01. Facility Letters of Credit................................. 80
Section 13.02. Limitations................................................ 80
Section 13.03. Conditions................................................. 81
Section 13.04. Procedure for Issuance of Facility Letters
of Credit................................................. 82
Section 13.05. Duties of Issuing Bank..................................... 83
Section 13.06. Participation.............................................. 84
Section 13.07. Compensation for Facility Letters of
Credit.................................................... 86
Section 13.08. Issuing Bank Reporting Requirements........................ 86
Section 13.09. Indemnification; Nature of Issuing Banks'
Duties.................................................... 87
Section 13.10. Designation or Resignation of Issuing
Bank...................................................... 88
Section 13.11. Termination of Issuing Bank's Obligation................... 89
Section 13.12. Obligations of Issuing Bank and Other
Banks..................................................... 89
Section 13.13. Issuing Bank's Rights...................................... 89
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LIST OF EXHIBITS
Exhibit Description Reference
- ------- ----------- ---------
Exhibit A-1 Form of Note 2.10
Exhibit A-2 Form of Amended and Restated Note 2.10
Exhibit B Commitment and Acceptance 2.22
Exhibit C Summary of Opinion of Counsel for 3.01(5)
Borrower and Delaware Guarantors
Exhibit D Summary of Opinion of Illinois
Counsel for Borrower 3.01(5)
Exhibit E Summary of Opinion of Counsel for
Agent 3.01(6)
Exhibit F Summary of Opinion of Local Counsel for 3.01(10)
Beazer Homes Corp.
Exhibit G Form of Certificate for Borrowings 3.02
and Facility Letters of Credit
Exhibit H List of Subsidiaries of Borrower 4.10
Exhibit I Assignment Agreement 12.03(b)
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AMENDED AND RESTATED CREDIT AGREEMENT dated as of November 3,
1998 among BEAZER HOMES USA, INC., a Delaware corporation (the "Borrower"),
BEAZER MORTGAGE CORPORATION, a Delaware corporation, BEAZER HOMES CORP., a
Tennessee corporation, BEAZER HOMES SALES ARIZONA INC., a Delaware corporation,
BEAZER REALTY CORP., a Georgia corporation, BEAZER/SQUIRES REALTY, INC., a North
Carolina corporation, PANITZ HOMES REALTY, Inc., a Florida corporation, BEAZER
HOMES HOLDING CORP., a Delaware corporation, BEAZER HOMES TEXAS HOLDINGS, INC.,
a Delaware corporation, and BEAZER HOMES TEXAS, L.P., a Delaware limited
partnership (individually an "Original Guarantor" and collectively the "Original
Guarantors") and THE FIRST NATIONAL BANK OF CHICAGO, COMERICA BANK, GUARANTY
FEDERAL BANK, F.S.B., BANK UNITED, AMSOUTH BANK and SUNTRUST BANK (collectively,
the "Banks") and THE FIRST NATIONAL BANK OF CHICAGO as Agent (the "Agent") for
the Banks and as an Issuing Bank (as hereinafter defined).
WITNESSETH:
WHEREAS, the Borrower and certain of the Banks are party to
that certain Credit Agreement dated as of October 22, 1996, as amended by that
certain First Amendment to Credit Agreement dated as of July 29, 1997, as
further amended by that certain Second Amendment to Credit Agreement dated as of
December 10, 1997, and as further amended by that certain Third Amendment to
Credit Agreement dated as of March 16, 1998 (as so amended, the "Original
Agreement"); and
WHEREAS, the parties hereto now desire to amend and restate
the Original Agreement in its entirety to effect the changes in the Banks'
Commitments set forth herein and to effect certain other modifications of the
terms of the Original Agreement as hereinafter provided;
NOW THEREFORE, in consideration of the premises, the mutual
covenants contained herein and for other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the parties hereto
agree that, effective as of the Effective Date (as hereinafter defined), the
Original Agreement is hereby amended and restated in its entirety as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
Section 1.01. Defined Terms. As used in this Agreement, the
following terms have the following meanings (terms defined in the singular shall
have the same meaning when used in the plural and vice versa):
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"ABR Loan" means any Loan when and to the extent that the
interest rate therefor is determined by reference to the Alternate Base Rate.
"Acquisition" means any transaction, or any series of related
transactions, consummated on or after the date of this Agreement, by which the
Borrower or any of its Subsidiaries (i) acquires any going concern or all or
substantially all of the assets of any firm, corporation or division thereof,
whether through purchase of assets, merger or otherwise or (ii) directly or
indirectly acquires (in one transaction or as the most recent transaction in a
series of transactions) at least a majority (in number of votes) of the
securities of a corporation which have ordinary voting power for the election of
directors (other than securities having such power only by reason of the
happening of a contingency) or a majority (by percentage or voting power) of the
outstanding partnership interests of a partnership.
"Adjusted Land Value" means, as of any date, (i) the book
value of all Land, less (ii) the sum of (a) the book value of Finished Lots that
are subject to bona fide contracts of sale with Persons that are not Affiliates
and (b) the lesser of (1) the product of (x) the number of Housing Units with
respect to which the Borrower and its Subsidiaries (including any company or
other entity acquired in an Acquisition by the Borrower or a Subsidiary as of
such date) entered into bona fide contracts of sale with Persons that are not
Affiliates during the six-month period ending on such date multiplied by (y) the
average book value of all Finished Lots as of such date and (2) forty percent
(40%) of Consolidated Tangible Net Worth as of such date.
"Affiliate" means any Person (1) which directly or indirectly
controls, or is controlled by, or is under common control with, the Borrower or
a Subsidiary; (2) which directly or indirectly beneficially owns or holds five
percent (5%) or more of any class of voting stock of the Borrower or any
Subsidiary; or (3) five percent (5%) or more of the voting stock of which is
directly or indirectly beneficially owned or held by the Borrower or a
Subsidiary. The term "control" means the possession, directly or indirectly, of
the power to direct or cause the direction of the management and policies of a
Person, whether through the ownership of voting securities, by contract or
otherwise.
"Agent" means The First National Bank of Chicago.
"Aggregate Commitments" means the aggregate Commitments of all
the Banks, as reduced or increased from time to time pursuant to the terms of
this Agreement.
2
"Agreement" means this Amended and Restated Credit Agreement,
as amended, supplemented, or modified from time to time.
"Alternate Base Rate" means a fluctuating rate per annum equal
to the higher of (i) the corporate base rate of interest announced by the Agent
from time to time, changing when and as said rate changes, or (ii) the sum of
1/2 of 1% plus the Federal Funds Rate then in effect.
"Applicable ABR Margin" means, as at any date of
determination, the margin indicated in Section 2.05 as then applicable to ABR
Loans and Swing Line Loans (under Section 2.07(a)(i)).
"Applicable Commitment Rate" means, as at any date of
determination, the rate per annum indicated in Section 2.05 as then applicable
in the determination of the commitment fee (under Section 2.09).
"Applicable Letter of Credit Rate" means, as at any date of
determination, a rate per annum equal to (i) the Applicable LIBOR Margin, less
(ii) 0.125% per annum.
"Applicable LIBOR Margin" means, as at any date of
determination, the margin indicated in Section 2.05 as then applicable to LIBOR
Loans (under Section 2.07(a)(ii)).
"Applicable Margin(s)" means the Applicable ABR Margin and/or
the Applicable LIBOR Margin, as the case may be.
"Banks" means the Banks that are signatories to this
Agreement, and their respective successors and assigns.
"Borrowing" means a borrowing consisting of Loans of the same
type made, renewed or converted on the same day.
"Borrowing Base" means, with respect to an Inventory
Valuation Date for which it is to be determined, an amount equal to the sum
of the following unencumbered assets of the Borrower and the Guarantors: (i)
the lesser of (a) one hundred percent (100%) of the Unrestricted Cash and (b)
$10,000,000.00, (ii) one-hundred percent (100%) of the Receivables, (iii)
ninety percent (90%) of the book value of Housing Units Under Contract, (iv)
seventy-five percent (75%) of the book value of Speculative Housing Units,
(v) seventy percent (70%) of the book value of Finished Lots (subject to the
limitation set forth below), (vi) fifty percent (50%) of the book value of
Lots under Development (subject to the limitation set forth below), and (vii)
the lesser
3
of (a) twenty-five percent (25%) of the book value of Entitled Land and (b)
$30,000,000.00 (subject to the limitation set forth below). Notwithstanding
the foregoing, the Borrowing Base shall not include any amounts under clauses
(v), (vi) and (vii) above to the extent that the sum of such amounts exceeds
forty percent (40%) of the total Borrowing Base. The term "unencumbered"
means that such asset is not subject to any Lien (except for Liens permitted
under Sections 6.01(1), (2) or (6)).
"Borrowing Base Certificate" means a written certificate in a
form acceptable to the Majority Banks setting forth the amount of the Borrowing
Base with respect to the fiscal quarter, or (if applicable under Section 2.01(d)
or (e)) calendar month, most recently completed, certified as true and correct
by the Chief Financial Officer of the Borrower.
"Business Day" means (i) with respect to any Borrowing,
payment or rate selection of LIBOR Loans, a day (other than a Saturday or
Sunday) on which banks generally are open in Chicago and New York for the
conduct of substantially all of their commercial lending activities and on which
dealings in United States dollars are carried on in the London interbank market
and (ii) for all other purposes, a day (other than a Saturday or Sunday) on
which banks generally are open in Chicago for the conduct of substantially all
of their commercial lending activities.
"Capital Lease" means all leases which have been or should be
capitalized on the books of the lessee in accordance with GAAP.
"Change of Control" means any of the following: (i) the sale,
lease, conveyance or other disposition of all or substantially all of the assets
of the Borrower or (except for an Internal Reorganization) of a Significant
Guarantor or Significant Subsidiary, as an entirety or substantially as an
entirety to any Person or "group" (within the meaning of Section 13(d)(3) of the
Exchange Act) in one or a series of transactions; (ii) the acquisition of fifty
percent (50%) or more of the aggregate voting power of all classes of Common
Equity of the Borrower or (except for an Internal Reorganization) of a
Significant Guarantor or Significant Subsidiary in one transaction or a series
of related transactions; (iii) the liquidation or dissolution of the Borrower or
(except for an Internal Reorganization) of a Significant Guarantor or
Significant Subsidiary; (iv) any transaction or a series of related transactions
(as a result of a tender offer, merger, consolidation or otherwise but excluding
an Internal Reorganization) that results in, or that is in connection with,
4
(a) any Person, including, a "group" (within the meaning of Section 13(d)(3) of
the Exchange Act) acquiring "beneficial ownership" (as defined in Rule 13d-3
under the Exchange Act), directly or indirectly, of fifty percent (50%) or more
of the aggregate voting power of all classes of Common Equity of the Borrower, a
Significant Guarantor or a Significant Subsidiary, or of any Person that
possesses "beneficial ownership" (as defined in Rule 13d-3 under the Exchange
Act), directly or indirectly, of fifty percent (50%) or more of the aggregate
voting power of all classes of Common Equity of the Borrower, a Significant
Guarantor or a Significant Subsidiary, or (b) less than fifty percent (50%)
(measured by the aggregate voting power of all classes) of the Common Equity of
the Borrower being registered under Section 12(b) or 12(g) of the Exchange Act;
(v) a majority of the Board of Directors of the Borrower, a Significant
Guarantor or a Significant Subsidiary, not being comprised of persons who (a)
were members of the Board of Directors of such Borrower, Significant Guarantor
or Significant Subsidiary, as of the date of this Agreement ("Original
Directors"), or (b) were nominated for election or elected to the Board of
Directors of such Borrower, Significant Guarantor, or Significant Subsidiary,
with the affirmative vote of at least a majority of the directors who themselves
were Original Directors or who were similarly nominated for election or elected;
or (vi) with respect to any Significant Guarantor or Significant Subsidiary
which is not a corporation, any loss of the right or power to control the
activities, directly, or indirectly through one or more intermediaries, or both.
Nothing herein contained shall modify or otherwise affect the provisions of
Section 6.06.
"Code" means the Internal Revenue Code of 1986, as amended
from time to time, and the regulations and published interpretations thereof.
"Commitment" has the meaning assigned to such term in
Section 2.01.
"Common Equity" of any Person means any and all shares, rights
to purchase, warrants or options (whether or not currently exercisable),
participations, or other equivalents of or interests in (however designated) the
equity (which includes, but is not limited to, common stock, preferred stock and
partnership and joint venture interests) of such Person (excluding any debt
securities convertible into, or exchangeable for, such equity) to the extent
that the foregoing is entitled to (i) vote in the election of directors of such
Person or (ii) if such Person is not a corporation, vote or otherwise
participate in the selection of the governing body, partners, managers or other
persons that will control the management and policies of such Person.
5
"Commonly Controlled Entity" means an entity, whether or not
incorporated, which is under common control with the Borrower within the meaning
of Section 414(b) or 414(c) of the Code.
"Consolidated Debt" means the Debt of the Borrower and its
Subsidiaries determined on a consolidated basis (but shall not include Debt of
any Joint Venture or Debt of any Subsidiary which is not a Guarantor, except to
the extent that such Debt is guaranteed by the Borrower or a Guarantor).
"Consolidated Subordinated Debt" means, as of any date, all
Debt of the Borrower and the Guarantors (on a consolidated basis), the payment
of which is, either expressly by its terms or otherwise, subordinated to payment
of the Obligations to the satisfaction of the Majority Banks.
"Consolidated Tangible Assets" of the Borrower means, as of
any date, the total amount of assets of the Borrower and its Subsidiaries (less
applicable reserves) on a consolidated basis at the end of the fiscal quarter
immediately preceding such date (or on such date if such date is the last day of
the fiscal quarter), as determined in accordance with GAAP, less (i) Intangible
Assets and (ii) appropriate adjustments on account of minority interests of
other Persons holding equity Investments in Subsidiaries, in the case of each of
clauses (i) and (ii) above, as would be reflected on a consolidated balance
sheet of the Borrower and its Subsidiaries as of the end of the fiscal quarter
immediately preceding such date (or on such date if such date is the last day of
the fiscal quarter), prepared in accordance with GAAP.
"Consolidated Tangible Net Worth" of the Borrower means, at
any date, the consolidated stockholders' equity of the Borrower determined in
accordance with GAAP, less Intangible Assets, all determined as of such date.
"D&P" means Duff & Phelps Credit Rating Co.
"Debt" means, without duplication, with respect to any Person
(1) indebtedness or liability for borrowed money, including, without limitation,
subordinated indebtedness (other than trade accounts payable and accruals
incurred in the ordinary course of business); (2) obligations evidenced by
bonds, debentures, notes, or other similar instruments; (3) obligations for the
deferred purchase price of property (including, without limitation, seller
financing of any Inventory) or services, provided, however, that Debt shall not
include obligations with respect to options to purchase real property that have
not been exercised; (4) obligations as lessee under Capital Leases to the extent
that the same would, in accordance with GAAP, appear as liabilities in the
Borrower's consolidated balance sheet; (5) current liabilities in respect of
unfunded vested benefits under
6
Plans and incurred withdrawal liability under any Multiemployer Plan; (6)
reimbursement obligations under letters of credit (including contingent
obligations with respect to letters of credit not yet drawn upon); (7)
obligations under acceptance facilities; (8) all guaranties, endorsements (other
than for collection or deposit in the ordinary course of business), and other
contingent obligations to purchase, to provide funds for payment, to supply
funds to invest in any other Person or entity, or otherwise to assure a creditor
against loss, provided, however, that "Debt" shall not include guaranties of
performance obligations; (9) obligations secured by any Liens on any property of
such Person, whether or not the obligations have been assumed; and (10) net
liabilities under interest rate swap, exchange or cap agreements.
"Debt/Cap Ratio" means, as at any date of determination, the
quotient obtained by dividing (a) Consolidated Debt as at such date by (b) the
sum of Consolidated Debt and Consolidated Tangible Net Worth as at such date.
"Default" means any of the events specified in Section 8.01,
whether or not any requirement for the giving of notice, the lapse of time, or
both, or any other condition, has been satisfied.
"Dollars" and the sign "$" mean lawful money of the
United States of America.
"EBITDA" means, for any period, on a consolidated basis for
the Borrower and its Subsidiaries, the sum of the amounts for such period of (i)
Net Income (but excluding from such Net Income for the applicable period any
income derived from any Investment referred to in Section 6.07(9) to the extent
that such income exceeds the cash distributions thereof received by the Borrower
or its Subsidiaries in such period), plus (ii) charges against income for
foreign, federal, state and local taxes, plus (iii) Interest Expense, plus (iv)
depreciation, plus (v) amortization expense, including, without limitation,
amortization of goodwill and other intangible assets and amortization of
deferred compensation expense, plus (vi) extraordinary losses, minus (vii)
interest income, minus (viii) extraordinary gains (and any unusual gains arising
in or outside of the ordinary course of business not included in extraordinary
gains that have been included in the determination of Net Income).
"Effective Date" means the later of (a) the date on which this
Agreement has been fully executed and delivered by the Banks, the Agent, the
Issuing Bank or Banks and the Borrower and (b) the date on which the conditions
set forth in Section 3.01 have been satisfied.
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"Entitled Land" means all Lots that are neither Lots under
Development nor Finished Lots.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time, and the regulations and published
interpretations thereof.
"Eurocurrency Reserve Requirement" means, for any Interest
Period, the maximum aggregate reserve requirement (including all basic,
supplemental, marginal and other reserves) which is imposed under Regulation D
on "Eurocurrency liabilities" (as such term is used in Regulation D) but without
benefit or credit of proration, exemptions, or offsets that might otherwise be
available from time to time under Regulation D. Without limiting the effect of
the foregoing, the Eurocurrency Reserve Requirement shall reflect any other
reserves required to be maintained against (1) any category of liabilities that
includes deposits by reference to which the LIBOR Interest Rate for LIBOR Loans
is to be determined; or (2) any category of extension of credit or other assets
that include LIBOR Loans.
"Event of Default" means any of the events specified in
Section 8.01, provided that any requirement for the giving of notice, the lapse
of time, or both, or any other condition, has been satisfied.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended from time to time.
"Extension Request" has the meaning assigned to that
term in Section 2.19(a).
"Facility Letter of Credit" means (a) any Letter of Credit
issued as a "Facility Letter of Credit" by First Chicago as "Issuing Bank" under
the Original Agreement that is outstanding on the Effective Date and (b) any
Letter of Credit issued by an Issuing Bank for the account of the Borrower in
accordance with Article XIII.
"Facility Letter of Credit Fee" means a fee, payable with
respect to each Facility Letter of Credit issued by the Issuing Bank, in an
amount per annum equal to the product of (i) the Applicable Letter of Credit
Rate (determined as of the date on which the quarterly installment of such fee
is due) and (ii) the face amount of such Facility Letter of Credit, which fee
shall be calculated in the manner provided in Section 13.07.
"Facility Letter of Credit Obligations" means, at any date,
the sum of (i) the aggregate undrawn face amount of all outstanding Facility
Letters of Credit, and (ii) the aggregate amount paid by an Issuing Bank on any
Facility Letters of Credit
8
to the extent (if any) not reimbursed by the Borrower or by the
Banks under Section 13.04.
"FCCM" means First Chicago Capital Markets, Inc.
"Federal Funds Rate" means, for each day, a fluctuating
interest rate per annum equal to the weighted average of the rates on overnight
Federal Funds transactions with members of the Federal Reserve System arranged
by Federal Funds brokers, as published for such day (or, if such day is not a
Business Day, for the immediately preceding Business Day) by the Federal Reserve
Bank of New York, or, if such rate is not so published for any day which is a
Business Day, the average of the quotations at approximately 10:00 A.M. Chicago
time on such day on such transactions received by the Agent from three Federal
Funds brokers of recognized standing selected by the Agent in its sole
discretion.
"Finished Lots" means Lots in respect of which a building
permit, from the applicable local governmental authority, has been or could be
obtained; provided, however, that the term "Finished Lots" shall not include any
Land upon which the construction of a Housing Unit has commenced.
"First Chicago" means The First National Bank of
Chicago.
"Fitch" means Fitch Investors Services, L.P.
"GAAP" means generally accepted accounting principles in the
United States in effect from time to time (subject to the provisions of Section
1.02).
"Guarantor" means an Original Guarantor and any Person that,
pursuant to Section 5.15, guarantees the Obligations.
"Guaranty" means the guaranty of the Obligations by each
Guarantor under the provisions of Article IX contained herein or under a
guaranty of the Obligations delivered under Section 5.15.
"Housing Unit" means a single-family dwelling, including the
Land on which such dwelling is located, whether such dwelling is detached or
attached (including condominiums but excluding mobile homes), which dwelling is
either under construction or completed and is (or, upon completion of
construction thereof, will be) available for sale; the term "Housing Unit"
includes a Speculative Housing Unit.
"Housing Unit Closing" means a closing of the sale of a
Housing Unit by the Borrower or a Subsidiary (including any
9
company or other entity acquired in an Acquisition by the Borrower or a
Subsidiary) to a bona fide purchaser for value that is not an Affiliate.
"Housing Unit Under Contract" means a Housing Unit owned by
the Borrower or a Subsidiary as to which the Borrower or such Subsidiary has a
bona fide contract of sale, in a form customarily employed by the Borrower or
such Subsidiary and reasonably satisfactory to the Majority Banks, entered into
not more than 15 months prior to the date of determination with a Person who is
not an Affiliate, under which contract no defaults then exist and not less than
$1,000.00 toward the purchase price has been paid; provided, however, that in
the case of any Housing Unit the purchase of which is to be financed in whole or
in part by a loan insured by the Federal Housing Administration or guaranteed by
the Veterans Administration, the required minimum downpayment shall be the
amount (if any) required under the rules of the relevant agency.
"Incur" means to, directly or indirectly, create, incur,
assume, guarantee, extend the maturity of or otherwise become liable with
respect to any Debt; provided, however, that neither the accrual of interest
(whether such interest is payable in cash or kind) nor the accretion of original
issue discount shall be considered an Incurrence of Debt.
"Intangible Assets" means, at any time, the amount (to the
extent reflected in determining consolidated stockholders equity of the Borrower
and its Subsidiaries) of (i) Investments in any Subsidiaries that are not
Guarantors and (ii) all unamortized debt discount and expense, unamortized
deferred charges, good will, patents, trademarks, service marks, trade names,
copyrights and all other items which would be treated as intangibles on a
consolidated balance sheet of the Borrower and its Subsidiaries prepared in
accordance with GAAP.
"Interest Deficit" has the meaning assigned to that
term in Section 2.08(b) hereof.
"Interest Expense" means, for any period, the total interest
expense of the Borrower and its Subsidiaries, whether paid directly or amortized
through cost of sales (including the interest component of Capital Leases).
"Interest Period" means, with respect to any LIBOR Loan, the
period commencing on the date such Loan is made, converted or renewed, and
ending, as the Borrower may select pursuant to Section 2.03, on the numerically
corresponding day in the first, second, third or sixth calendar month
thereafter, except that each such Interest Period that commences on the last
Business Day of a calendar month (or on any day for which there
10
is no numerically corresponding day in the appropriate subsequent calendar
month) shall end on the last Business Day of the appropriate subsequent calendar
month; provided that all of the foregoing provisions relating to Interest
Periods are subject to the following:
(a) No Interest Period may extend beyond the
Termination Date; and
(b) If an Interest Period would end on a day that is not a
Business Day, such Interest Period shall be extended to the next
Business Day unless such Business Day would fall in the next calendar
month, in which event such Interest Period shall end on the immediately
preceding Business Day.
"Internal Reorganization" means any reorganization between or
among the Borrower and any Subsidiary or Subsidiaries or between or among any
Subsidiary and one or more other Subsidiaries or any combination thereof by way
of liquidations, mergers, consolidations, conveyances, assignments, sales,
transfers and other dispositions of all or substantially all of the assets of a
Subsidiary (whether in one transaction or in a series of transactions); provided
that (a) the Borrower shall preserve and maintain its status as a validly
existing corporation and (b) all assets, liabilities, obligations and guarantees
of any Subsidiary party to such reorganization will continue to be held by such
Subsidiary or be assumed by the Borrower or a Wholly-Owned Subsidiary of the
Borrower.
"Inventory" means all Housing Units, Lots, goods, merchandise
and other personal property wherever located to be used for or incorporated into
any Housing Unit.
"Inventory Valuation Date" means (a) the last day of the most
recent fiscal quarter of the Borrower with respect to which the Borrower is
required to have delivered a Borrowing Base Certificate pursuant to Section
5.08(6) hereof or (b) if the Borrower elects pursuant to Section 2.01(d) or is
required pursuant to Section 2.01(e) to deliver a Borrowing Base Certificate
with respect to a calendar month subsequent to such most recent fiscal quarter,
the last day of such subsequent calendar month.
"Investment" has the meaning provided therefor in Section
6.07. The amount of any Investment shall include (a) in the case of any loan or
advance, the outstanding amount of such loan or advance and (b) in the case of
any equity Investment, the amount of the "net equity investment" as determined
in accordance with GAAP; provided, however, that, solely for purposes of Section
6.07(12), the amount of the Investment in a Joint Venture
11
shall be the "net cash investment" therein, as determined in accordance with
GAAP, but not less than zero (0).
"Issuance Date" means the date on which a Facility Letter of
Credit is issued, amended or extended.
"Issuing Bank" means The First National Bank of Chicago and
any other Bank that may from time to time be designated as an Issuing Bank in
accordance with the provisions of Section 13.10.
"Joint Venture" means any Person (other than a Subsidiary) in
which the Borrower or a Subsidiary holds any stock, partnership interest, joint
venture interest, limited liability company interest or other equity interest.
"Land" means land owned by the Borrower or a Subsidiary, which
land is being developed or is held for future development or sale.
"Lending Office" means, with respect to any Bank, the Lending
Office of such Bank (or of an affiliate of such Bank) designated on the
signature pages hereof or such other office or branch of such Bank (or of an
affiliate of such Bank) as that Bank may from time to time specify to the
Borrower and the Agent as the office or branch at which its Loans (or Loans of a
type designated in such notice) are to be made and maintained.
"Letter of Credit" of a Person means a letter of credit or
similar instrument which is issued by a financial institution upon the
application of such Person or upon which such Person is an account party or for
which such Person is in any way liable.
"Level" means the level of a Pricing Factor, Applicable Margin
or Applicable Commitment Rate (as applicable) as designated in the Table set
forth in Section 2.05. The five Levels in such Table are identified as Levels I
through V, and Level I shall constitute the lowest Level and Level V shall
constitute the highest Level.
"LIBOR Interest Rate" means, for each LIBOR Loan for the
relevant Interest Period, the rate per annum (rounded upward, if necessary, to
the nearest one-sixteenth of 1%) determined by the Agent to be equal to the
quotient of (a) the London Interbank Offered Rate for such LIBOR Loan for such
Interest Period divided by (b) one minus the Eurocurrency Reserve Requirement
for such Interest Period.
"LIBOR Loan" means any Loan when and to the extent that the
interest rate therefor is determined by reference to the LIBOR Interest Rate.
12
"Lien" means any mortgage, deed of trust, pledge, security
interest, hypothecation, assignment, deposit arrangement, encumbrance, lien
(statutory or other), or preference, priority, or other security agreement or
preferential arrangement, charge, or encumbrance of any kind or nature
whatsoever (including, without limitation, any conditional sale or other title
retention agreement, any financing lease having substantially the same economic
effect as any of the foregoing, and the filing of any financing statement under
the Uniform Commercial Code or comparable law of any jurisdiction to evidence
any of the foregoing).
"Loan(s)" means a loan made by a Bank pursuant to this
Agreement, including (unless the context otherwise indicates) a Swing Line Loan.
Each such Loan (other than a Swing Line Loan) shall be an ABR Loan or a LIBOR
Loan.
"Loan Document(s)" means this Agreement, the Notes, the
Reimbursement Agreements, and any and all documents delivered hereunder or
pursuant hereto.
"London Interbank Offered Rate" means, with respect to a LIBOR
Loan for the relevant Interest Period, the rate determined by the Agent to be
the rate at which deposits in U.S. Dollars are offered by First Chicago to
first-class banks in the London interbank market at approximately 11:00 A.M.
(London time) two (2) Business Days prior to the first day of such Interest
Period, in the approximate amount of First Chicago's relevant LIBOR Loan and
having a maturity approximately equal to such Interest Period.
"Lots" means all Land owned by the Borrower and/or a
Subsidiary which is zoned by the municipality in which such real property is
located for residential building and use, and with respect to which the Borrower
or such Subsidiary has obtained all necessary approvals for its subdivision for
Housing Units; provided, however, that the term "Lots" shall not include any
Land upon which the construction of a Housing Unit has commenced.
"Lots under Development" means Lots with respect to which
construction of streets or other subdivision improvements has commenced but
which are not Finished Lots.
"Majority Banks" means at any time the Banks holding at least
sixty-six and two-thirds percent (66 2/3%) of the then aggregate unpaid
principal amount of the Notes held by the Banks (including in such amount any
participation held by such Bank as a result of its purchase thereof pursuant to
Section 10.07), or, if no such principal amount is then outstanding, Banks
having at least sixty-six and two-thirds percent (66 2/3%) of the Aggregate
Commitments.
13
"Merged Banks" has the meaning assigned to that term in
Section 12.03(c).
"Moody's" means Moody's Investors Service, Inc.
"Multiemployer Plan" means a plan described in Section
4001(a)(3) of ERISA in respect of which the Borrower, a Subsidiary or a Commonly
Controlled Entity is an "employer" as defined in Section 3(5) of ERISA.
"Net Income" means, for any period, the net earnings (or loss)
after taxes of the Borrower and its Subsidiaries on a consolidated basis for
such period.
"Note(s)" means the promissory notes described in
Section 2.10 hereof.
"Notice of Assignment" has the meaning assigned to that
term in Section 12.03(b) hereof.
"Obligations" means (a) the due and punctual payment of
principal of and interest on the Loans and the Notes, (b) the due and punctual
payment of the Facility Letter of Credit Obligations, and (c) the due and
punctual payment of fees, expenses, reimbursements, indemnifications and other
present and future monetary obligations of the Borrower to the Banks or to any
Bank, the Agent, the Issuing Bank or any indemnified party under the Loan
Documents.
"Original Agreement" has the meaning assigned to that
term in the recitals of this Agreement.
"Participant" has the meaning assigned to that term in
Section 12.02(a) hereof.
"PBGC" means the Pension Benefit Guaranty Corporation or any
entity succeeding to any or all of its functions under ERISA.
"Performance Letter of Credit" means any Letter of Credit of
the Borrower or a Guarantor that is issued for the benefit of a municipality,
other governmental authority, utility, water or sewer authority, or other
similar entity for the purpose of assuring such beneficiary of the Letter of
Credit of the proper and timely completion of construction work.
"Permitted Acquisition" means any Acquisition (other than by
means of a hostile takeover, hostile tender offer or other similar hostile
transaction) of a business or entity engaged primarily in the business of home
building; provided
14
that, immediately after giving effect to such Acquisition, no Default or Event
of Default has occurred and is continuing.
"Permitted Senior Debt" means the sum of all Debt of the
Borrower and its Subsidiaries on a consolidated basis, excluding (i) Secured
Debt, (ii) Performance Letters of Credit, (iii) performance bonds and (iv) Debt
of any Joint Venture.
"Person" means an individual, partnership, corporation,
business trust, joint stock company, trust, limited liability company,
unincorporated association, joint venture, governmental authority, or other
entity of whatever nature.
"Plan" means any pension plan which is covered by Title IV of
ERISA and in respect of which (a) the Borrower or a Subsidiary or a Commonly
Controlled Entity is an "employer" as defined in Section 3(5) of ERISA and (b)
the Borrower or a Subsidiary has any material liability; provided, however, that
the term "Plan" shall not include any Multiemployer Plan.
"Pricing Factor" means either the Debt/Cap Ratio or the
Senior Debt Rating.
"Principal Office" means, with respect to the Agent, the
Principal Office of the Agent designated as such on the signature pages hereof
or such other office of the Agent as the Agent may from time to time specify to
the Borrower and the Banks as its Principal Office.
"Prohibited Transaction" means any transaction set forth in
Section 406 of ERISA or Section 4975 of the Code that could subject the Borrower
or any Subsidiary to any material liability.
"Purchaser" has the meaning assigned to that term in
Section 12.03(a) hereof.
"Receivables" means the net proceeds payable to, but
not yet received by, the Borrower or a Subsidiary following a
Housing Unit Closing.
"Refinancing Debt" means Debt that refunds, refinances or
extends any applicable Debt ("Refinanced Debt") but only to the extent that (i)
the Refinancing Debt is subordinated to or pari passu with the Obligations to
the same extent as such Refinanced Debt, if at all, (ii) the Refinancing Debt is
scheduled to mature no earlier than the earlier of (A) the current maturity date
of such Refinanced Debt or (B) a date three (3) years after the Termination Date
(as determined at the time such Refinancing Debt is Incurred), (iii) such
Refinancing Debt is in an aggregate amount that is equal to or less than the sum
15
of (A) the aggregate amount then outstanding under the Refinanced Debt, plus (B)
accrued and unpaid interest on such Refinanced Debt, plus (C) reasonable fees
and expenses incurred in obtaining such Refinancing Debt, it being understood
that this clause (iii) shall not preclude the Refinancing Debt from being a part
of a Debt financing that includes other or additional Debt otherwise permitted
herein, (iv) such Refinancing Debt is Incurred by the same Person that initially
Incurred such Refinanced Debt or by another Person of which the Person that
initially Incurred such Refinanced Debt is a Subsidiary, and (v) such
Refinancing Debt is Incurred within 60 days after such Refinanced Debt is so
refunded, refinanced or extended.
"Regulation D" means Regulation D of the Board of Governors of
the Federal Reserve System as from time to time in effect and any successor
thereto or other regulation or official interpretation of said Board of
Governors relating to reserve requirements applicable to member banks of the
Federal Reserve System.
"Regulation U" means Regulation U of the Board of Governors of
the Federal Reserve System as from time to time in effect and any successor or
other regulation or official interpretation of said Board of Governors relating
to the extension of credit by banks for the purpose of purchasing or carrying
margin stocks applicable to member banks of the Federal Reserve System.
"Regulation X" means Regulation X of the Board of Governors of
the Federal Reserve System as from time to time in effect and any successor or
other regulation or official interpretation of said Board of Governors relating
to the extension of credit by foreign lenders for the purpose of purchasing or
carrying margin stock (as defined therein).
"Reimbursement Agreement" means, with respect to a Facility
Letter of Credit, such form of application therefor and form of reimbursement
agreement therefor (whether in a single or several documents, taken together) as
the applicable Issuing Bank may employ in the ordinary course of business for
its own account, with the modifications thereto as may be agreed upon by such
Issuing Bank and the Borrower and as are not materially adverse (in the
reasonable judgment of such Issuing Bank and the Agent) to the interests of the
Banks; provided, however, in the event of any conflict between the terms of any
Reimbursement Agreement and this Agreement, the terms of this Agreement shall
control.
"Rejecting Bank" has the meaning assigned to such term
in Section 2.19(b).
16
"Replacement Bank" has the meaning assigned to such
term in Section 2.20.
"Reportable Event" means any of the events set forth in
Section 4043 of ERISA with respect to a Plan (excluding any such event with
respect to which the PBGC has waived the 30-day notice requirement).
"S&P" means Standard & Poor's Rating Services.
"Secured Debt" means all Debt of the Borrower or any of its
Subsidiaries (excluding Debt owing to the Borrower or any of its Subsidiaries)
that is secured by a Lien on assets of the Borrower or any of its Subsidiaries.
"Senior Debt" means the Senior Notes or, if the Senior Notes
are refinanced, the Refinancing Debt with respect thereto.
"Senior Debt Rating" means the second highest rating among the
publicly announced ratings of Moody's, S&P, D&P and/or Fitch of the Borrower's
unsecured long-term debt (including the Senior Debt and the Obligations),
provided, however, (i) at any time at which neither of the two highest ratings
is by Moody's or S&P, the Senior Debt Rating shall be (x) the rating assigned by
either Moody's or S&P at any time at which only one of Moody's or S&P shall
publicly announce a rating of the Borrower's unsecured long-term debt, or (y)
the higher of the two ratings by Moody's and S&P at any time at which both shall
publicly announce a rating of the Borrower's unsecured long-term debt, and (ii)
at any time at which (A) none of Moody's, S&P, D&P or Fitch publicly announces
ratings of the Borrower's unsecured long-term debt, or (B) neither Moody's nor
S&P publicly announces ratings of the Borrower's unsecured long-term debt, no
Senior Debt Rating shall be deemed to exist. The Senior Debt Rating shall change
if and when such rating(s) change, and such change in the Senior Debt Rating
shall have the effect provided for in Section 2.05 and elsewhere in this
Agreement.
"Senior Indentures" means either of the Indentures identified
in the definition of the term "Senior Notes" and any other Indenture hereafter
entered into by the Borrower pursuant to which the Borrower Incurs any
Refinancing Debt with respect to any of the Senior Notes.
"Senior Notes" means (i) the 9% Senior Notes due 2004 of the
Borrower issued in the original principal amount of $115,000,000 pursuant to the
Indenture dated March 2, 1994 and (ii) the 8 7/8 percent Senior Notes due 2008
of the Borrower issued in the original principal amount of $100,000,000 pursuant
to the Indenture dated March 25, 1998.
17
"Significant Guarantor" means, at any date of determination
thereof, any Guarantor that (together with its Subsidiaries) accounts for five
percent (5%) or more of the Consolidated Tangible Assets as of the last day of
the most recent fiscal quarter then ended and of the net revenues for the
twelve-month period ending on the last day of the most recent fiscal quarter
then ended, in each case of the Borrower and its Subsidiaries taken as a whole.
Such percentage shall be determined on the basis of financial reports that shall
be available not later than 25 days (or, in the case of the last fiscal quarter
of the fiscal year, 35 days) following the end of such fiscal quarter.
"Significant Subsidiary" means, at any date of determination
thereof, any Subsidiary that (together with its Subsidiaries) accounts for five
percent (5%) or more of the Consolidated Tangible Assets as of the last day of
the most recent fiscal quarter then ended and of the net revenues for the
twelve-month period ending on the last day of the most recent fiscal quarter
then ended, in each case of the Borrower and its Subsidiaries taken as a whole.
Such percentage shall be determined on the basis of financial reports that shall
be available not later than 25 days (or, in the case of the last fiscal quarter
of the fiscal year, 35 days) following the end of such fiscal quarter.
"Speculative Housing Unit" means any Housing Unit owned by the
Borrower or a Subsidiary that is not a Housing Unit Under Contract.
"Subsidiary" means, as to the Borrower or a Guarantor, in the
case of a corporation, a corporation of which shares of stock having ordinary
voting power (other than stock having such power only by reason of the happening
of a contingency) to elect a majority of the board of directors or other
managers of such corporation are at the time owned, or the management of which
is otherwise controlled, directly, or indirectly through one or more
intermediaries, or both, by the Borrower or such Guarantor, as the case may be,
or in the case of an entity which is not a corporation, the activities of which
are controlled directly, or indirectly through one or more intermediaries, or
both, by the Borrower or such Guarantor, as the case may be.
"Swing Line Bank" means First Chicago or any Purchaser
to which First Chicago assigns the Swing Line Commitment in
accordance with Section 12.03 hereof.
"Swing Line Commitment" means the commitment of the Swing Line
Bank to make Swing Line Loans pursuant to Section 2.21(a) hereof. The Swing Line
Commitment is in the amount of $10,000,000.
18
"Swing Line Loan" has the meaning assigned to such term
in Section 2.21(a).
"Termination Date" means November 2, 2002.
"Transferee" has the meaning assigned to that term in
Section 12.04.
"UHIC" means United Homes Insurance Corporation, a
Vermont corporation and Wholly Owned Subsidiary of the Borrower.
"Unrestricted Cash" of a Person means the cash of such Person
that would not be identified as "restricted" on a balance sheet of such Person
prepared in accordance with GAAP.
"Wholly Owned Subsidiary" of any Person means (i) a
Subsidiary, of which one hundred percent (100%) of the outstanding Common Equity
(except for directors' qualifying shares or certain minority interests owned by
other Persons solely due to local law requirements that there be more than one
stockholder, but which interest is not in excess of what is required for such
purpose) is owned directly by such Person or through one or more other Wholly
Owned Subsidiaries of such Person, or (ii) any entity other than a corporation
in which such Person, directly or indirectly, owns all of the outstanding Common
Equity of such entity.
"Year 2000 Issues" means anticipated costs, problems and
uncertainties associated with the inability of the Borrower's or its
Subsidiaries' computer applications to effectively handle data (including dates)
on and after January 1, 2000, as such inability affects the business,
operations, or financial condition of the Borrower or its Subsidiaries.
Section 1.02. Accounting Terms. (a) All accounting terms not
specifically defined herein shall be construed in accordance with GAAP
consistent with those applied in the preparation of the financial statements
referred to in Section 4.04, and all financial data submitted pursuant to this
Agreement shall be prepared in accordance with such principles.
(b) Notwithstanding anything to the contrary contained in this
Agreement, in determining the Borrower's compliance with the provisions of
Article VII hereof, GAAP shall not include modifications of generally accepted
accounting principles that become effective after the date hereof.
ARTICLE II
AMOUNTS AND TERMS OF THE LOANS
19
Section 2.01. Revolving Credit. (a) Each Bank severally
agrees, on the terms and conditions hereinafter set forth, to make Loans (other
than Swing Line Loans) to the Borrower from time to time during the period from
the date of this Agreement up to but not including the Termination Date, and to
purchase undivided interests and participations in Facility Letters of Credit in
accordance with Section 13.06, in an aggregate principal amount of Loans and of
such Bank's ratable share of Facility Letter of Credit Obligations not to exceed
at any time outstanding the amount set opposite such Bank's name on the
signature pages of this Agreement (such Bank's obligations to make Loans (other
than Swing Line Loans) and to purchase undivided interests and participations in
Facility Letters of Credit in accordance with Section 13.06 in such amounts, as
reduced, increased or otherwise modified from time to time pursuant to the terms
of this Agreement, being herein referred to as such Bank's "Commitment"),
subject to the limitations set forth in Section 2.01(b) and Section 13.02.
(b) The aggregate amount of Permitted Senior Debt at any one
time outstanding may not exceed the Borrowing Base as of the most recent
Inventory Valuation Date, and no Loan (including a Swing Line Loan) shall be
made that would have the effect of increasing the then outstanding amount of the
Permitted Senior Debt to an amount exceeding such Borrowing Base, provided that
a Loan shall not be deemed to have increased the amount of the Permitted Senior
Debt to the extent that the proceeds of such Loan are immediately used to repay
a Swing Line Loan theretofore included in the Permitted Senior Debt. No Loans
shall be made at any time that any Swing Line Loan is outstanding, except for
Loans that are used, on the day on which made, to repay in full the outstanding
principal balance of the Swing Line Loans.
(c) Each Borrowing which shall not utilize the Commitment in
full shall be in an amount not less than One Million Dollars ($1,000,000) for a
Borrowing consisting of LIBOR Loans and Five Hundred Thousand Dollars ($500,000)
in the case of a Borrowing consisting of ABR Loans and, in either case, if in
excess of the specified amount, in integral multiples of One Hundred Thousand
Dollars ($100,000). Each Borrowing shall consist of a Loan made by each Bank in
the proportion which that Bank's Commitment bears to the Aggregate Commitments.
Within the limits of the Aggregate Commitments, the Borrower may borrow, repay
pursuant to Section 2.11, and reborrow under this Section 2.01. On such terms
and conditions, the Loans may be outstanding as ABR Loans or LIBOR Loans. Each
type of Loan shall be made and maintained at such Bank's Lending Office for such
type of Loan. The failure of any Bank to make any requested Loan to be made by
it on the date specified for such Loan shall not relieve any other Bank of its
obligation (if any) to make such Loan on such date, but no Bank shall be
responsible for the failure of any
20
other Bank to make such Loans to be made by such other Bank. The provisions of
this Section 2.01(c) shall not apply to Swing Line Loans.
(d) The Borrower may elect to deliver to the Agent a Borrowing
Base Certificate setting forth the Borrowing Base as of the last day of a
calendar month subsequent to the most recent fiscal quarter with respect to
which a Borrowing Base Certificate was required to be delivered under Section
5.08(6) of the Agreement.
(e) The Agent or the Majority Lenders may, upon notice to the
Borrower from the Agent, require the Borrower to deliver a Borrowing Base
Certificate determined as of the last day of a calendar month (as designated in
such notice) subsequent to the fiscal quarter with respect to which a Borrowing
Base Certificate was required to be delivered under Section 5.08(6) of the
Agreement, provided that the Borrowing Base Certificate under this Section
2.01(e) shall only be required to be delivered on the later to occur of (i) the
tenth (10th) day following the Agent's notice to the Borrower under this Section
2.01(e) or (ii) the twenty-fifth (25th) day after the last day of the applicable
calendar month (as designated in such notice).
(f) The Borrower may elect to include in a Borrowing Base
Certificate delivered in anticipation of a Permitted Acquisition all assets that
would have been included in the Borrowing Base had the Permitted Acquisition
been consummated as of the last day of the most recent fiscal quarter or (if
applicable under Section 2.01(d) or (e)) calendar month, provided, however, that
such Borrowing Base Certificate shall expressly state that it is delivered in
anticipation of, and shall only be effective hereunder for purposes of
Borrowings made on or after, the consummation of such Permitted Acquisition (it
being understood that, until the consummation of such Permitted Acquisition, the
previously delivered Borrowing Base Certificate shall remain in effect).
Section 2.02. Reduction of Aggregate Commitments. The Borrower
shall have the right, upon at least three (3) Business Days' prior notice to the
Agent, to terminate in whole or reduce in part the unused portion of the
Aggregate Commitments, provided that each partial reduction shall be in the
amount of at least Five Million Dollars ($5,000,000), and provided further that
no reduction shall be permitted if, after giving effect thereto, and to any
prepayment made therewith, the sum of (i) the outstanding and unpaid principal
amount of the Loans and (ii) the Facility Letter of Credit Obligations shall
exceed the Aggregate Commitments. Each reduction in part of the unused portion
of each Bank's Commitment shall be made in the proportion that such Bank's
Commitment bears to the total amount of the Aggregate
21
Commitments. Any Commitment, once reduced or terminated, may not be reinstated.
Section 2.03. Notice and Manner of Borrowing. The Borrower
shall give the Agent notice of any Loans under this Agreement, on the Business
Day of each ABR Loan, and at least three (3) Business Days before each LIBOR
Loan, specifying: (1) the date of such Loan; (2) the amount of such Loan; (3)
the type of Loan (whether an ABR Loan or a LIBOR Loan); and (4) in the case of a
LIBOR Loan, the duration of the Interest Period applicable thereto. All notices
given by the Borrower under this Section 2.03 shall be irrevocable and shall be
given not later than 10:00 A.M. Chicago time on the day specified above for such
notice. The Agent shall notify each Bank of each such notice (including any
notice provided for in Section 2.20(d)) not later than 11:00 A.M. Chicago time
on the date it receives such notice from the Borrower if such notice is received
by the Agent at or before 10:00 A.M. Chicago time. In the event such notice from
the Borrower is received after 10:00 A.M. Chicago time, it shall be treated as
if received on the next succeeding Business Day, and the Agent shall notify each
Bank of such notice as soon as practicable but not later than 11:00 A.M. Chicago
time on the next succeeding Business Day. Not later than 1:00 P.M. Chicago time
on the date of such Loans, each Bank will make available to the Agent in
immediately available funds, such Bank's pro rata share of such Loans. After the
Agent's receipt of such funds, on the date of such Loans and upon fulfillment of
the applicable conditions set forth in Article III, the Agent will make such
Loans available to the Borrower in immediately available funds by crediting the
amount thereof to the Borrower's account with the Agent. The provisions of this
Section 2.03 shall not apply to Swing Line Loans.
Section 2.04. Non-Receipt of Funds by Agent. (a) Unless the
Agent shall have received notice from a Bank prior to the date (in the case of a
LIBOR Loan), or by 12:00 noon Chicago time on the date (in the case of an ABR
Loan), on which such Bank is to provide funds to the Agent for a Loan to be made
by such Bank that such Bank will not make available to the Agent such funds, the
Agent may assume that such Bank has made such funds available to the Agent on
the date of such Loan in accordance with Section 2.03 and the Agent in its sole
discretion may, but shall not be obligated to, in reliance upon such assumption,
make available to the Borrower on such date a corresponding amount. If and to
the extent such Bank shall not have given the notice provided for above and
shall not have made such funds available to the Agent, such Bank agrees to repay
to the Agent forthwith on demand such corresponding amount together with
interest thereon, for each day from the date such amount is made available to
the Borrower until the date such amount is repaid to the Agent, at the Federal
Funds Rate for three Business Days and thereafter at
22
the Alternate Base Rate. If such Bank shall repay to the Agent such
corresponding amount, such amount so repaid shall constitute such Bank's Loan
for purposes of this Agreement. If such Bank does not pay such corresponding
amount forthwith upon Agent's demand therefor, the Agent shall promptly notify
the Borrower, and the Borrower shall immediately pay such corresponding amount
to the Agent with interest thereon, for each day from the date such amount is
made available to the Borrower until the date such amount is repaid to the
Agent, at the rate of interest applicable at the time to such proposed Loan.
Nothing set forth in this Section shall affect the rights of the Borrower with
respect to any Bank that defaults in the performance of its obligation to make a
Loan hereunder.
(b) Unless the Agent shall have received notice from the
Borrower prior to the date on which any payment is due to the Banks hereunder
that the Borrower will not make such payment in full, the Agent may assume that
the Borrower has made such payment in full to the Agent on such date and the
Agent in its sole discretion may, but shall not be obligated to, in reliance
upon such assumption, cause to be distributed to each Bank on such due date an
amount equal to the amount then due such Bank. If and to the extent the Borrower
shall not have so made such payment in full to the Agent, each Bank shall repay
to the Agent forthwith on demand such amount distributed to such Bank together
with interest thereon, for each day from the date such amount is distributed to
such Bank until the date such Bank repays such amount to the Agent, at the
Federal Funds Rate for three Business Days and thereafter at the Alternate Base
Rate.
(c) The provisions of this Section 2.04 shall not apply to
Swing Line Loans.
Section 2.05. Determination of Applicable Margins and
Applicable Commitment Rate. (a) The Applicable Margins and the Applicable
Commitment Rate shall be determined by reference to the Senior Debt Rating and
the Debt/Cap Ratio in accordance with the following table and the provisions of
this Section 2.05:
Senior Applicable Applicable
Debt Debt/Cap LIBOR Applicable Commitment
Level Rating Ratio Margin ABR Margin Rate
BBB- less .80% -0- 0.20%
V /Baa3 than 30%
23
IV BB+/Ba1 equal to 1.00% -0- 0.225%
or more
than 30%
and less
than 35%
III BB/Ba2 equal to 1.15% -0- 0.25%
or more
than 35%
and less
than 40%
II BB-/Ba3 equal to 1.35% 0.10% 0.30%
B+/B1 or more
than 40%
and less
than 55%
I B/B2 & 55% or 1.55% 0.30% 0.35%
Below more
The Applicable Margins and Applicable Commitment Rate shall be
determined on the basis of the Levels of the Pricing Factors in accordance with
the following provisions:
(i) At any time at which the Pricing Factors are at the same
Level, the Applicable Margins and Applicable Commitment Rate shall be
at that Level;
(ii) At any time at which the Pricing Factors are at different
Levels, the Applicable Margins and the Applicable Commitment Rate shall
be at the Level that corresponds to (A) the Level of the higher of the
two Pricing Factors (i.e. the lower pricing) whenever the Pricing
Factors differ by one Level and (B) the Level that is one Level lower
than the higher of the two Pricing Factors whenever the Pricing Factors
differ by more than one Level;
(iii) At any time at which there is or is deemed to be no Senior
Debt Rating, the Applicable Margins and the Applicable Commitment Rate
shall be at the Level that is one Level lower than the Level of the
Debt/Cap Ratio; and
(iv) At any time at which (A) neither D&P nor Fitch publicly
announces a rating of the Borrower's unsecured long-term debt, and (B)
Moody's or S&P (but not both) publicly announces a rating of the
Borrower's unsecured long-term debt, the Applicable Margin and
Applicable
24
Commitment Rate shall be determined in accordance with subsections (i)
and (ii) above (as applicable), except that (A) the Applicable LIBOR
Margin set forth in the Table above shall be increased by 0.075% and
(B) the Applicable Commitment Rate set forth in the Table shall be
increased by 0.025%.
(b) The Applicable Margin and the Applicable Commitment Rate shall be
adjusted, from time to time, effective (as applicable) on the first Business Day
after any change in the Senior Debt Ratings that results in any change in the
Applicable Margins or Applicable Commitment Rate or the fifth (5th) Business Day
after the Agent's receipt of the Borrower's quarterly or annual financial
statements evidencing a change in the Debt/Cap Ratio that results in any change
in the Applicable Margins or Applicable Commitment Rates, provided, however,
that any change in the Applicable LIBOR Margin shall only apply to LIBOR Loans
for Interest Periods commencing after such change in the Applicable LIBOR Margin
is effective.
Section 2.06. Conversions and Renewals. The Borrower may elect
from time to time to convert all or a part of one type of Loan into another type
of Loan or to renew all or part of a Loan by giving the Agent notice at least
one (1) Business Day before conversion into an ABR Loan, and at least three (3)
Business Days before the conversion into or renewal of a LIBOR Loan, specifying:
(1) the renewal or conversion date; (2) the amount of the Loan to be converted
or renewed; (3) in the case of conversions, the type of Loan to be converted
into; and (4) in the case of renewals of or a conversion into a LIBOR Loan, the
duration of the Interest Period applicable thereto; provided that (a) the
minimum principal amount of each Loan of each Bank outstanding after a renewal
or conversion shall be One Million Dollars ($1,000,000) in the case of a LIBOR
Loan, and Two Hundred Fifty Thousand Dollars ($250,000) in the case of an ABR
Loan; and (b) LIBOR Loans may be converted on a Business Day that is not the
last day of the Interest Period for such Loan only if the Borrower pays on the
date of conversion all amounts due pursuant to Section 2.17 hereof; and (c) the
Borrower may not renew a LIBOR Loan or convert an ABR Loan into a LIBOR Loan at
any time that a Default has occurred that is continuing. Each such notice shall
be accompanied by a Borrowing Base Certificate dated as at the date of such
notice. All conversions and renewals shall be made in the proportion that each
Bank's Loan bears to the total amount of all the Banks' Loans. All notices given
by the Borrower under this Section 2.06 shall be irrevocable and shall be given
not later than 10:00 A.M. Chicago time on the day which is not less than the
number of Business Days specified above for such notice. The Agent shall notify
each Bank of each such notice not later than 11:00 A.M. Chicago time on the date
it receives such notice from the Borrower if such notice is received by the
Agent at or before 10:00 A.M. Chicago time. In the event
25
such notice from the Borrower is received after 10:00 A.M. Chicago time, it
shall be treated as if received on the next succeeding Business Day, and the
Agent shall notify each Bank of such notice as soon as practicable but not later
than 11:00 A.M. Chicago time on the next succeeding Business Day.
Notwithstanding the foregoing, if the Borrower shall fail to give the Agent the
notice as specified above for the renewal or conversion of a LIBOR Loan prior to
the end of the Interest Period with respect thereto, such LIBOR Loan shall
automatically be converted into an ABR Loan on the last day of the Interest
Period for such Loan. The provisions of this Section 2.06 shall not apply to
Swing Line Loans.
Section 2.07. Interest. (a) The Borrower shall pay
interest to the Agent for the account of each Bank on the
outstanding and unpaid principal amount of the Loans at the
following rates:
(i) If an ABR Loan or Swing Line Loan, then at a rate
per annum equal to the sum of (A) the Applicable ABR Margin in
effect from time to time as interest accrues and (B) the
Alternate Base Rate in effect from time to time as interest
accrues; and
(ii) if a LIBOR Loan, then at a rate per annum for the
Interest Period applicable to such LIBOR Loan equal to the sum
of (A) the Applicable LIBOR Margin in effect on the first day
of such Interest Period and (B) the LIBOR Interest Rate
determined for such Interest Period.
(b) Any change in the interest rate based on the Alternate
Base Rate resulting from a change in the Alternate Base Rate shall be effective
as of the opening of business on the day on which such change in the Alternate
Base Rate becomes effective. Interest on each LIBOR Loan shall be calculated on
the basis of a year of 360 days for the actual number of days elapsed. Interest
on each ABR Loan and Swing Line Loan shall be calculated on the basis of a year
of 365 days for the actual number of days elapsed.
(c) Interest on the Loans shall be paid (in an amount set
forth in a statement delivered by the Agent to the Borrower, provided, however,
that the failure of the Agent to deliver such statement shall not limit or
otherwise affect the obligations of the Borrower hereunder) in immediately
available funds to the Agent at its Principal Office for the account of the
applicable Lending Office of each Bank as follows:
(1) For each ABR Loan and Swing Line Loan on the first day of each
calendar month commencing on the first such date after such
Loan;
26
(2) For each LIBOR Loan, on the last day of the Interest Period
with respect thereto, except that, if such Interest Period is
longer than three months, interest shall also be paid on the
last day of the third month of such Interest Period; and
(3) If not sooner paid, then on the Termination Date or such
earlier date as the Loans may be due or declared due
hereunder.
(d) Any principal amount of any Loan not paid when due (at
maturity, by acceleration, or otherwise) shall bear interest thereafter until
paid in full, payable on demand, at a rate per annum equal to the Alternate Base
Rate or the applicable LIBOR Interest Rate, as the case may be, for such Loan in
effect from time to time as interest accrues, plus the Applicable Margin in
effect from time to time as interest accrues, plus two percent (2%) per annum.
Section 2.08. Interest Rate Determination. (a) The Agent shall
determine each London Interbank Offered Rate, as applicable. The Agent shall
give prompt notice to the Borrower and the Banks of the applicable interest rate
determined by the Agent pursuant to the terms of this Agreement.
(b) If the provisions of this Agreement or any Note would at
any time require payment by the Borrower to a Bank of any amount of interest in
excess of the maximum amount then permitted by the law applicable to any Loan,
the interest payments to such Bank shall be reduced to the extent necessary so
that such Bank shall not receive interest in excess of such maximum amount. If,
as a result of the foregoing a Bank shall receive interest payments hereunder or
under a Note in an amount less than the amount otherwise provided hereunder,
such deficit (hereinafter called "Interest Deficit") will cumulate and will be
carried forward (without interest) until the termination of this Agreement.
Interest otherwise payable to a Bank hereunder and under a Note for any
subsequent period shall be increased by the maximum amount of the Interest
Deficit that may be so added without causing such Bank to receive interest in
excess of the maximum amount then permitted by the law applicable to the Loans.
The amount of the Interest Deficit relating to the Loans shall be treated as a
prepayment premium (to the extent permitted by law) and paid in full at the time
of any optional prepayment by the Borrower to the Banks of all the Loans at that
time outstanding pursuant to Section 2.11 hereof. The amount of the Interest
Deficit relating to the Loans at the time of any complete payment of the Loans
at that time outstanding (other than an optional prepayment thereof pursuant to
Section 2.11 hereof) shall be canceled and not paid.
27
Section 2.09. Fees. (a) The Borrower shall pay to the Agent
upon the execution of this Agreement, for the account of each Bank, a one time,
nonrefundable fee equal to the percentage of such Bank's Commitment provided for
in the allocation letter delivered on or before the date hereof by First Chicago
and FCCM to the Banks and the Borrower. The Agent shall deliver to each Bank its
applicable fee promptly upon the Agent's receipt thereof.
(b) The Borrower agrees to pay to the Agent for the account of
each Bank (subject to adjustment in the case of the Swing Line Bank as
hereinafter provided) a commitment fee on the average daily unused portion of
such Bank's Commitment (in an amount set forth in a statement delivered by the
Agent to the Borrower, provided, however, that the failure of the Agent to
deliver such statement shall not limit or otherwise affect the obligations of
the Borrower hereunder) from the date of this Agreement until the Termination
Date at the Applicable Commitment Rate, payable in arrears on the first day of
each January, April, July and October during the term of such Bank's Commitment,
commencing January 1, 1999, and ending on the Termination Date. The commitment
fees shall be calculated on the basis of a year of 365 days for the actual
number of days elapsed. Upon receipt of any commitment fees, the Agent will
promptly thereafter cause to be distributed such payments to the Banks in the
proportion that each Bank's unused Commitment bears to the unused Aggregate
Commitments (subject to adjustment in the case of the Swing Line Bank as
hereinafter provided). For purposes of determining the commitment fee payable to
the Swing Line Bank, the unused portion of such Bank's Commitment shall be
reduced dollar-for-dollar by the amount of any Swing Line Loans then
outstanding.
(c) The Borrower shall pay to the Agent and FCCM such
additional fees as are specified in a fee letter from the Agent and FCCM to the
Borrower dated October 30, 1998, accepted by the Borrower on November 2, 1998.
Section 2.10. Notes. All Loans made by each Bank under this
Agreement shall be evidenced by, and repaid with interest in accordance with, a
single promissory note of the Borrower in substantially the form of Exhibit A-1
hereto in the case of each Bank that is not a party to the Original Agreement
and in substantially the form of Exhibit A-2 hereto in the case of each Bank
that is a party to the Original Agreement, and in each case duly completed,
dated the date of this Agreement, and payable to such Bank for the account of
its applicable Lending Office, such Note to represent the obligation of the
Borrower to repay the Loans. Each Bank is hereby authorized by the Borrower to
endorse on the schedule attached to the Note held by it the amount and type of
each Loan and each renewal, conversion, and
28
payment of principal amount received by such Bank for the account of its
applicable Lending Office on account of its Loans, which endorsement shall, in
the absence of manifest error, be conclusive as to the outstanding balance of
the Loans made by such Bank; provided, however, that the failure to make such
notation with respect to any Loan or renewal, conversion, or payment shall not
limit or otherwise affect the obligations of the Borrower under this Agreement
or the Note held by such Bank. All Loans shall be repaid on the Termination
Date.
Section 2.11. Prepayments. (a) The Borrower may, upon notice
to the Agent not later than 11:00 A.M. (Chicago time) on the date of prepayment
in the case of ABR Loans and at least three (3) Business Days' prior notice to
the Agent in the case of LIBOR Loans, prepay (including, without limitation, all
amounts payable pursuant to the terms of Section 2.17 hereof) the Notes in whole
or in part with accrued interest to the date of such prepayment on the amount
prepaid, provided that (1) each partial payment shall be in a principal amount
of not less than One Million Dollars ($1,000,000) in the case of a LIBOR Loan
and Two Hundred Fifty Thousand Dollars ($250,000) in the case of an ABR Loan;
and (2) LIBOR Loans may be prepaid only on the last day of the Interest Period
for such Loans; provided, however, that such prepayment of LIBOR Loans may be
made on any other Business Day if the Borrower pays at the time of such
prepayment all amounts due pursuant to Section 2.17 hereof. Upon receipt of any
such prepayments, the Agent will promptly thereafter cause to be distributed
such prepayment to each Bank for the account of its applicable Lending Office
pro rata to each Bank in the proportion that its Commitment bears to the
Aggregate Commitments, except that prepayments of Swing Line Loans shall be made
solely to the Swing Line Bank.
(b) The Borrower shall immediately upon a Change in Control
prepay the Notes in full and all accrued interest to the date of such
prepayment, and in the case of LIBOR Loans all amounts due pursuant to Section
2.17 hereof.
Section 2.12. Method of Payment. The Borrower shall make each
payment under this Agreement and under the Notes not later than 11:00 A.M.
Chicago time on the date when due in lawful money of the United States to the
Agent for the account of the applicable Lending Office of each Bank (or, in the
case of Swing Line Loans, for the account of the Swing Line Bank) in immediately
available funds. The Agent will promptly thereafter cause to be distributed (1)
such payments of principal and interest with respect to Loans (other than Swing
Line Loans) in like funds to each Bank for the account of its applicable Lending
Office pro rata to each Bank in the proportion that its Commitment bears to the
Aggregate Commitments, (2) such payments of principal and interest with respect
to Swing Line Loans solely
29
to the Swing Line Bank and (3) other fees payable to any Bank to be applied in
accordance with the terms of this Agreement. If any such payment is not received
by a Bank on the Business Day on which the Agent received such payment (or the
following Business Day if the Agent's receipt thereof occurs after 2:00 P.M.
(Chicago time)), such Bank shall be entitled to receive from the Agent interest
on such payment at the Federal Funds Rate for three Business Days and thereafter
at the Alternate Base Rate (which interest payment shall not be an obligation
for the Borrower's account, including under Section 11.04 or Section 11.06). The
Borrower hereby authorizes each Bank, if and to the extent payment is not made
when due under this Agreement or under the Notes, to charge from time to time
against any account of the Borrower with such Bank any amount as due. Whenever
any payment to be made under this Agreement or under the Notes shall be stated
to be due on a day other than a Business Day, such payment shall be made on the
next succeeding Business Day, and such extension of time shall be included in
the computation of the payment of interest and the commitment fee, as the case
may be, except, in the case of a LIBOR Loan, if the result of such extension
would be to extend such payment into another calendar month, such payment shall
be made on the immediately preceding Business Day.
Section 2.13. Use of Proceeds. The proceeds of the Loans
hereunder shall be used by the Borrower for working capital and general
corporate purposes of the Borrower and the Guarantors to the extent permitted in
this Agreement and to repay Swing Line Loans. The Borrower will not, directly or
indirectly, use any part of such proceeds for the purpose of repaying the Senior
Notes or for purchasing or carrying any margin stock within the meaning of
Regulation U of the Board of Governors of the Federal Reserve System or to
extend credit to any Person for the purpose of purchasing or carrying any such
margin stock, or for any purpose which violates, or is inconsistent with,
Regulation X of such Board of Governors.
Section 2.14. Yield Protection. If any law or any
governmental or quasi-governmental rule, regulation, policy,
guideline or directive (whether or not having the force of law),
or any interpretation thereof, or the compliance of any Bank
therewith,
(i) subjects any Bank or any applicable Lending Office
to any tax, duty, charge or withholding on or from
payments due from the Borrower (excluding federal
taxation of the overall net income of any Bank or
applicable Lending Office), or changes the basis of
taxation of payments to any Bank in respect of its
Loans or other amounts due it hereunder, or
30
(ii) imposes or increases or deems applicable any
reserve, assessment, insurance charge, special
deposit or similar requirement against assets of,
deposits with or for the account of, or credit
extended by, any Bank or any applicable Lending
Office (other than reserves and assessments taken
into account in determining the interest rate
applicable to LIBOR Loans), or
(iii) imposes any other condition the result of which is
to increase the cost to any Bank or any applicable
Lending Office of making, funding or maintaining
loans or reduces any amount receivable by any Bank
or any applicable Lending Office in connection
with loans, or requires any Bank or any applicable
Lending Office to make any payment calculated by
reference to the amount of loans held or interest
received by it, by an amount deemed material by
such Bank,
then, within fifteen (15) days of demand by such Bank, the Borrower shall pay
such Bank that portion of such increased expense incurred or reduction in an
amount received which such Bank reasonably determines is attributable to making,
funding and maintaining its Loans and its Commitment.
Section 2.15. Changes in Capital Adequacy Regulations. If a
Bank determines the amount of capital required or expected to be maintained by
such Bank, any Lending Office of such Bank or any corporation controlling such
Bank is increased as a result of a Change, then, within 10 days of demand by
such Bank, the Borrower shall pay such Bank the amount necessary to compensate
for any shortfall in the rate of return on the portion of such increased capital
which such Bank determines is attributable to this Agreement, its Loans or its
obligation to make Loans hereunder (after taking into account such Bank's
policies as to capital adequacy); provided, however, that a Bank shall impose
such cost upon the Borrower only if such Bank is generally imposing such cost on
its other borrowers having similar credit arrangements. "Change" means (i) any
change after the date of this Agreement in the Risk-Based Capital Guidelines or
(ii) any adoption of or change in any other law, governmental or
quasi-governmental rule, regulation, policy, guideline, interpretation, or
directive (whether or not having the force of law) after the date of this
Agreement which affects the amount of capital required or expected to be
maintained by any Bank or any Lending Office or any corporation controlling any
Bank. "Risk-Based Capital Guidelines" means (i) the risk-based capital
guidelines in effect in the United States on the date of this Agreement,
including transition rules, and (ii) the corresponding capital regulations
promulgated by regulatory authorities outside the
31
United States implementing the July 1988 report of the Basle Committee on
Banking Regulation and Supervisory Practices Entitled "International Convergence
of Capital Measurements and Capital Standards," including transition rules, and
any amendments to such regulations adopted prior to the date of this Agreement.
Section 2.16. Availability of LIBOR Loans. If any Bank
determines that maintenance of its LIBOR Loans at the Lending Office selected by
the Bank would violate any applicable law, rule, regulation, or directive,
whether or not having the force of law (and it is not reasonably possible for
the Bank to designate an alternate Lending Office without being adversely
affected thereby), or if the Majority Banks determine that (i) deposits of a
type and maturity appropriate to match fund LIBOR Loans are not available or
(ii) the interest rate applicable to LIBOR Loans does not accurately reflect the
cost of making or maintaining such LIBOR Loans, then the Agent shall suspend the
availability of LIBOR Loans and require any LIBOR Loans to be repaid.
Section 2.17. Funding Indemnification. If any payment of a
LIBOR Loan occurs on a date which is not the last day of the applicable Interest
Period, whether because of acceleration, prepayment or otherwise, or a LIBOR
Loan is not made on the date specified by the Borrower for any reason other than
default by the Banks, the Borrower will indemnify each Bank for any loss or cost
incurred by it resulting therefrom, including, without limitation, any loss or
cost in liquidating or employing deposits required to fund or maintain the LIBOR
Loan.
Section 2.18. Bank Statements; Survival of Indemnity. To the
extent reasonably possible, each Bank shall designate an alternate Lending
Office with respect to its LIBOR Loans to reduce any liability of the Borrower
to such Bank under Sections 2.14 and 2.15 or to avoid the unavailability of
LIBOR Loans. Each Bank shall deliver a written statement of such Bank as to the
amount due, if any, under Sections 2.14, 2.15 or 2.17. Such written statement
shall set forth in reasonable detail the calculations upon which such Bank
determined such amount and shall be final, conclusive and binding on the
Borrower in the absence of manifest error. Determination of amounts payable
under such Sections in connection with a LIBOR Loan shall be calculated as
though each Bank funded its LIBOR Loan through the purchase of a deposit of the
type and maturity corresponding to the deposit used as a reference in
determining the LIBOR Rate applicable to such Loan, whether in fact that is the
case or not. Unless otherwise provided herein, the amount specified in the
written statement shall be payable on demand after receipt by the Borrower of
the written statement. The obligations of the
32
Borrower under Sections 2.14, 2.15 and 2.17 shall survive payment of the
Obligations and termination of this Agreement.
Section 2.19. Extension of Termination Date. (a) The
Borrower may request an extension of the Termination Date to
February 28, 2004 (in the case of the first such extension) or to
the first anniversary of the then scheduled Termination Date (in
the case of each subsequent extension) by submitting a request
for an extension to the Agent (i) in the case of the first such
extension, on or after January 1, 2000 and on or before February
28, 2000, and (ii) in the case of each subsequent extension, not
more than 38 months nor less than 36 months prior to the then
scheduled Termination Date; provided that, in the case of each
such request, the Borrower shall have theretofore furnished to
the Agent the annual financial statements for the immediately
preceding fiscal year provided for in Section 5.08(2). At the
time of or prior to the delivery of such request, the Borrower
shall propose to the Agent the amount of the fees that the
Borrower would agree to pay with respect to such extension if
approved by the Banks. Promptly upon (but not later than five
Business Days after) the Agent's receipt and approval of the
extension request and fee proposal (as so approved, the
"Extension Request"), the Agent shall deliver to each Bank a copy
of, and shall request each Bank to approve, the Extension
Request. Each Bank approving the Extension Request shall deliver
its written approval no later than 30 days after such Bank's
receipt of the Extension Request. If the approval of each of the
Banks is received by the Agent within 30 days of the receipt by
them of the Extension Request (or as otherwise provided in
Section 2.19(b)), the Agent shall promptly so notify the Borrower
and each Bank in writing, and the Termination Date shall be
extended to February 28, 2004 (in the case of the first such
extension) or to the first anniversary of the then scheduled
Termination Date (in the case of each subsequent extension), and
in such event the Borrower may thereafter request, each time the
Termination Date is so extended, a further extension of the then
scheduled Termination Date in accordance with this Section 2.19.
If any of the Banks does not deliver to the Agent such Bank's
written approval to any Extension Request within such 30-day
period, the Termination Date shall not be extended, except as
otherwise provided in Section 2.19(b).
(b) If (i) any Bank (but not more than one Bank) ("Rejecting
Bank") shall not approve an Extension Request, (ii) all rights and obligations
(from and after the date of the assignment described below) of such Rejecting
Bank under this Agreement and under the other Loan Documents (including, without
limitation, its Commitment and all Loans owing to it) shall have been assigned,
within 90 days following the Bank's receipt of such Extension Request, in
accordance with Section 2.20, to one or more Replacement Banks who shall have
approved in writing such
33
Extension Request at the time of such assignment, or, to the extent not so
assigned, such Rejecting Bank's Commitment shall have been terminated as
provided in Section 2.19(c), and (iii) no other Bank shall have given written
notice to the Agent of such Bank's withdrawal of its approval of the Extension
Request, the Agent shall promptly so notify the Borrower and each Bank, and the
Termination Date shall be extended to February 28, 2004 (in the case of the
first such extension) or to the first anniversary of the then scheduled
Termination Date (in the case of each subsequent extension), and in such event
the Borrower may thereafter request, each time the Termination Date is so
extended, a further extension as provided in Section 2.19(a).
(c) Within ninety (90) days following the Banks' receipt of an
Extension Request, the Borrower may, upon notice to the Agent and the Rejecting
Bank, and subject to the provisions of the last sentence of this Section
2.19(c), terminate the Commitment of such Rejecting Bank (or such portion of the
Commitment as is not assigned to a Replacement Bank in accordance with Section
2.20), which termination shall occur as of a date set forth in such Borrower's
notice but in no event more than thirty (30) days following such notice (subject
to the provisions of Section 2.20(b)). Upon the effective date of such
termination, the Borrower shall pay to the Rejecting Bank all amounts due and
owing to it hereunder or under any other Loan Document, including, without
limitation, the aggregate outstanding principal amount of the Loans owed to such
Rejecting Bank, together with accrued interest thereon through the date of such
termination, amounts payable under Sections 2.14 and 2.15 with respect to such
Rejecting Bank and the fees payable to such Rejecting Bank under Section
2.09(b). Upon request by the Borrower or the Agent, the Rejecting Bank will
deliver to the Borrower and the Agent a letter setting forth the amounts payable
to the Rejecting Bank as set forth above. Upon the termination of such Rejecting
Bank's Commitment and payment of the amounts provided for in the immediately
preceding sentence, the Borrower shall have no further obligations to such
Rejecting Bank under this Agreement and such Rejecting Bank shall cease to be a
party hereto, provided, however, that such Rejecting Bank shall continue to be
entitled to the benefits of Sections 2.14, 2.15, 2.17, 11.04 and 11.06, as well
as to any fees accrued for its account hereunder not yet paid, and shall
continue to be obligated under Section 10.05 with respect to obligations and
liabilities accruing prior to the termination of such Rejecting Bank's
Commitment. If, as a result of the termination of the Rejecting Bank's
Commitment, any payment of a LIBOR Loan occurs on a day which is not the last
day of the applicable Interest Period, the Borrower shall pay to the Agent for
the benefit of the Banks any loss or cost incurred by the Banks resulting
therefrom in accordance with Section 2.17. Upon the effective date of the
termination of the Rejecting Bank's Commitment, the
34
Aggregate Commitments shall be reduced by the amount of the terminated
Commitment of the Rejecting Bank, and each other Bank shall be deemed to have
irrevocably and unconditionally purchased and received (subject to the
provisions of the last sentence of this Section 2.19(c), without recourse or
warranty, from the Rejecting Bank, an undivided interest and participation in
any Facility Letter of Credit then outstanding, ratably, such that each Bank
(excluding the Rejecting Bank but including any Replacement Bank that acquires
an interest hereunder from such Rejecting Bank) holds a participation interest
in each Facility Letter of Credit in proportion to the ratio that such Bank's
Commitment (upon the effective date of such termination of the Rejecting Bank's
Commitment) bears to the Aggregate Commitments (as reduced by the termination of
such Rejecting Bank's Commitment or a part thereof). Notwithstanding the
foregoing, if, upon the termination of the Commitment of such Rejecting Bank,
the sum of the outstanding principal balance of the Loans and the Facility
Letter of Credit Obligations would exceed the Aggregate Commitments (as
reduced), the Borrower may not terminate such Rejecting Bank's Commitment unless
the Borrower, on or prior to the effective date of such termination, prepays, in
accordance with the provisions of this Agreement, outstanding Loans or causes to
be canceled, released and returned to the applicable Issuing Bank outstanding
Facility Letters of Credit in sufficient amounts such that, on the effective
date of such termination, the sum of the outstanding principal balance of the
Loans and the Facility Letter of Credit Obligations does not exceed the
Aggregate Commitments (as reduced).
(d) Within ten days of the Agent's notice to the Borrower that
all of the Banks have approved an Extension Request (whether pursuant to Section
2.19(a) or 2.19(b)), the Borrower shall pay to the Agent for the account of each
Bank the applicable extension fees specified in the Extension Request.
Section 2.20. Replacement of Certain Banks. (a) In the event
a Bank ("Affected Bank"): (i) shall have requested compensation from the
Borrower under Sections 2.14 or 2.15 to recover additional costs incurred by
such Bank that are not being incurred generally by the other Banks, (ii) shall
have delivered a notice pursuant to Section 2.16 claiming that such Bank is
unable to extend LIBOR Loans to the Borrower for reasons not generally
applicable to the other Banks, (iii) shall have invoked Section 11.13 or (iv) is
a Rejecting Bank pursuant to Section 2.19, then, in any such case, the Borrower
or the Agent may make written demand on such Affected Bank (with a copy to the
Agent in the case of a demand by the Borrower and a copy to the Borrower in the
case of a demand by the Agent) for the Affected Bank to assign, and, if a
Replacement Bank (as hereinafter defined) notifies the Affected Bank of its
willingness to purchase the Affected Bank's interest and the Agent and the
Borrower consent
35
thereto in writing, then such Affected Bank shall assign pursuant to one or more
duly executed assignment and acceptance agreements in substantially and in all
material respects in the form and substance of Exhibit I five (5) Business Days
after the date of such demand, to one or more financial institutions that comply
with the provisions of Section 12.03(a) that the Borrower or the Agent, as the
case may be, shall have engaged for such purpose ("Replacement Bank"), all (or,
to the extent permitted under Section 2.20(b), a part) of such Affected Bank's
rights and obligations (from and after the date of such assignment) under this
Agreement and the other Loan Documents (including, without limitation, its
Commitment and all Loans owing to it) in accordance with Section 12.03. The
Agent agrees, upon the occurrence of such events with respect to an Affected
Bank and upon the written request of the Borrower, to use its reasonable efforts
to obtain the commitments from one or more financial institutions to act as a
Replacement Bank. As a condition to any such assignment, the Affected Bank shall
have concurrently received, in cash, all amounts due and owing to the Affected
Bank hereunder or under any other Loan Document, including, without limitation,
the aggregate outstanding principal amount of the Loans owed to such Bank,
together with accrued interest thereon through the date of such assignment,
amounts payable under Sections 2.14 and 2.15 with respect to such Affected Bank
and the fees payable to such Affected Bank under Section 2.09(b); provided that
upon such Affected Bank's replacement, such Affected Bank shall cease to be a
party hereto but shall continue to be entitled to the benefits of Sections 2.14,
2.15, 2.17, 11.04 and 11.06, as well as to any fees accrued for its account
hereunder and not yet paid, and shall continue to be obligated under Section
10.05 with respect to obligations and liabilities accruing prior to the
replacement of such Affected Bank.
(b) In the event that the Affected Bank is a Rejecting Bank,
the Borrower may elect to have a part of the Rejecting Bank's rights and
obligations under this Agreement and the other Loan Documents assigned pursuant
to this Section 2.20, provided that the Borrower also elects, pursuant to
Section 2.19(c), to terminate the entire amount of the Rejecting Bank's
Commitment not so assigned, which termination shall be effective on the date on
which such assignment of the Rejecting Bank's rights and obligations is
consummated under this Section 2.20.
Section 2.21. Swing Line. (a) The Swing Line Bank agrees, on
the terms and conditions hereinafter set forth, to make loans ("Swing Line
Loans") to the Borrower from time to time during the period from the date of
this Agreement, up to but not including the Termination Date, in an aggregate
principal amount not to exceed at any time outstanding the lesser of (i) the
Swing Line Commitment or (ii) the amount by which the Swing Line Bank's
Commitment under Section 2.01 exceeds the outstanding principal amount of the
Loans made by the Swing Line Bank pursuant to Section 2.01, subject to the
limitations set forth in Section 2.01(b).
36
(b) Each Swing Line Loan which shall not utilize the Swing
Line Commitment in full shall be in an amount not less than One Million Dollars
($1,000,000) and, if in excess thereof, in integral multiples of One Million
Dollars ($1,000,000). Within the limits of the Swing Line Commitment, the
Borrower may borrow, repay and reborrow under this Section 2.21.
(c) The Borrower shall give the Swing Line Bank notice of any
request for a Swing Line Loan not later than 2:00 p.m. Chicago time on the
Business Day of such Swing Line Loan, specifying the amount of such requested
Swing Line Loan. Each such notice shall be accompanied by a Borrowing Base
Certificate dated as of the date of such notice (and by the notice provided for
in Section 2.21(d)). All notices given by the Borrower under this Section
2.21(c) shall be irrevocable. Upon fulfillment of the applicable conditions set
forth in Article III, the Swing Line Bank will make the Swing Line Loan
available to the Borrower in immediately available funds by crediting the amount
thereof to the Borrower's account with the Swing Line Bank.
(d) On the first Business Day following the making of a Swing
Line Loan, such Swing Line Loan shall be paid in full from the proceeds of a
Loan made pursuant to Section 2.01. Each notice given by the Borrower under
Section 2.21(c) shall include, or, if it does not include, shall be deemed to
include an irrevocable notice under Section 2.03 requesting the Banks to make an
ABR Loan on the next succeeding Business Day in the full amount of such Swing
Line Loan.
Section 2.22. Increase of Aggregate Commitments.(a) The
Borrower may, at any time and from time to time, request, by notice to the
Agent, the Agent's approval of an increase of the Aggregate Commitments within
the limitations hereafter described, which request shall set forth the amount of
such requested increase. Within twenty (20) days of such request, the Agent
shall advise the Borrower of its approval or disapproval of such request;
failure to so advise the Borrower shall constitute disapproval. Upon approval of
the Agent, the Aggregate Commitments may be so increased either by having
additional financial institutions approved by the Borrower and the Agent
("Additional Banks") become Banks hereunder and/or by having any one or more of
the then existing Banks hereunder (at their respective election in their sole
discretion) that have been approved by the Borrower and the Agent, increase the
amount of their Commitments (any such Bank that elects to increase its
Commitment and any Additional Bank being hereinafter referred to as a "New
Bank"), provided that (i) the Commitment of any Additional Bank shall not be
less than Ten Million Dollars ($10,000,000) and the sum of the Commitments of
the Additional Banks and the increases in the Commitments of the other New Banks
shall be in an aggregate amount of not less than Five Million
37
Dollars ($5,000,000) (and, if in excess thereof, in integral multiples of One
Million Dollars ($1,000,000)); (ii) the Aggregate Commitments shall not exceed
Two Hundred Fifty Million Dollars ($250,000,000); (iii) the Borrower and each
New Bank shall have executed and delivered a commitment and acceptance (the
"Commitment and Acceptance") substantially in the form of Exhibit B hereto, and
the Agent shall have accepted and executed the same; (iv) the Borrower shall
have executed and delivered to the Agent a Note or Notes payable to the order of
each New Bank, each such Note to be in the amount of such New Bank's Commitment
(and, if such New Bank is not an Additional Bank, such Note shall replace the
Note theretofore held by such New Bank); (v) the Borrower shall have delivered
to the Agent opinions of counsel (substantially similar to the forms of opinions
attached hereto as Exhibits C and D, modified to apply to the increase in the
Aggregate Commitments and each Note and Commitment and Acceptance executed and
delivered in connection therewith); (vi) the Guarantors shall have consented in
writing to the new Commitments or increases in Commitments (as applicable) and
shall have agreed that their Guaranties continue in full force and effect; (vii)
the Borrower and each New Bank shall otherwise have executed and delivered such
other instruments and documents as the Agent shall have reasonably requested in
connection with such new Commitment or increase in Commitment (as applicable);
and (viii) if the Aggregate Commitments shall at any time have been reduced
(other than pursuant to Section 2.19(c)), any subsequent increase of the
Aggregate Commitments shall be subject to the provisions of Section 2.22(b). The
form and substance of the documents required under clauses (iii) through (vii)
above shall be reasonably acceptable to the Agent. Upon the admission of any
Additional Bank or the increase in the Commitment of any other New Bank
hereunder, the Agent shall provide written notice thereof to all of the Banks
and shall furnish to all of the Banks copies of the documents required under
clauses (iii), (v), (vi) and (vii) above. Except for (1) the notice by the
Borrower to the Agent provided for in the first sentence of this Section
2.22(a), (2) the notice by the Agent to the Banks provided for in the
immediately preceding sentence of this Section 2.22(a) and (3) the Facility
Increase Notice (which is required to be given under the provisions of Section
2.22(b) only if the Aggregate Commitments have been reduced (other than pursuant
to Section 2.19(c)) prior to the Borrower's notice to the Agent requesting an
increase in the Aggregate Commitments), neither the Borrower nor the Agent shall
be required to give to any Bank any notice of the Borrower's request for an
increase of the Aggregate Commitments under this Section 2.22(a).
(b) Notwithstanding the provisions of Section 2.22(a), in the
event that the Aggregate Commitments shall at any time have been reduced (other
than pursuant to Section 2.19(c)), the Aggregate Commitments shall not
thereafter be increased unless and until each of the then existing Banks shall
have been given
38
the right (at its election) to increase its Commitment by an amount equal to the
lesser of (i) such Bank's ratable portion (based upon the ratio (determined as
of the date of the Borrower's request for the Agent's approval of such increase)
of its then existing Commitment to the then existing Aggregate Commitments) of
the aggregate amount of all prior decreases (net of prior increases) in the
Aggregate Commitments (other than pursuant to Section 2.19(c)) or (ii) such
Bank's ratable portion (based upon the ratio (determined as of the date of the
Borrower's request for the Agent's approval of such increase) of its then
existing Commitment to the then existing Aggregate Commitments) of the proposed
increase in the Aggregate Commitments. If, at any time after the Aggregate
Commitments have been reduced (other than pursuant to Section 2.19(c)), the
Agent shall approve the Borrower's request for an increase in the Aggregate
Commitments, the Agent shall promptly, but no later than ten (10) days after its
receipt of the Borrower's request, deliver to the then existing Banks hereunder
a notice (the "Facility Increase Notice") setting forth the amount of the
increase so requested by the Borrower, and the Banks' rights hereunder to
increase their Commitments shall be exercisable within, but not later than,
thirty (30) days following the date of delivery of the Facility Increase Notice.
If a Bank elects to exercise such right by notice given to the Agent within such
30- day period, then such Bank shall (in accordance with and subject to the
provisions of Section 2.22(a)) increase its Commitment by an amount determined
in accordance with the first sentence of this Section 2.22(b). If such Bank does
not so elect by notice given to the Agent within such 30-day period, the
Borrower and the Agent may proceed with the increase of the Aggregate
Commitments as set forth in the Facility Increase Notice, subject to and in
accordance with Section 2.22(a). Nothing contained herein shall preclude any
Bank, at its election and with the approval of the Borrower and the Agent as
provided in and otherwise in accordance with Section 2.22(a), from increasing
its Commitment to an amount in excess of the amount provided for in this Section
2.22(b).
(c) Upon the effective date of any increase in the Aggregate
Commitments pursuant to the provisions hereof, which effective date shall be
mutually agreed upon by the Borrower, each New Bank and the Agent, each New Bank
shall make a payment to the Agent in an amount sufficient, upon the application
of such payments by all New Banks to the reduction of the outstanding Loans held
by the Banks, to cause the principal amount outstanding under the Loans made by
each Bank (including any New Bank) to be in the proportion to the ratio that
such Bank's Commitment (upon the effective date of such increase) bears to the
Aggregate Commitments as so increased. The Borrower hereby irrevocably
authorizes each New Bank to fund to the Agent the payment required to be made
pursuant to the immediately
39
preceding sentence for application to the reduction of the outstanding Loans
held by the other Banks, and each such payment shall constitute a Loan
hereunder, it being understood that the outstanding amounts of the Loans held by
the other Banks shall be reduced by such amounts in accordance with this Section
2.22(c). If, as a result of the repayment of the Loans provided for in this
Section 2.22(c), any payment of a Borrowing consisting of LIBOR Loans occurs on
a day which is not the last day of the applicable Interest Period, the Borrower
will pay to the Agent for the benefit of any of the Banks holding a LIBOR Loan
any loss or cost incurred by such Bank resulting therefrom in accordance with
Section 2.17. Upon the effective date of such increase in the Aggregate
Commitments, all Loans outstanding hereunder (including any Loans made by the
New Banks on such date) shall be ABR Loans, subject to the Borrower's right to
convert the same to LIBOR Loans on or after such date in accordance with the
provisions of Section 2.06.
(d) Upon the effective date of any increase in the Aggregate
Commitments and the making of the Loans by the New Banks in accordance with the
provisions of Section 2.22(c), each New Bank shall also be deemed to have
irrevocably and unconditionally purchased and received, without recourse or
warranty, from the Banks party to this Agreement immediately prior to the
effective date of such increase, an undivided interest and participation in any
Facility Letter of Credit then outstanding, ratably, such that each Bank
(including each New Bank) holds a participation interest in each such Facility
Letter of Credit in proportion to the ratio that such Bank's Commitment (upon
the effective date of such increase in the Aggregate Commitments) bears to the
Aggregate Commitments as so increased.
(e) Nothing contained herein shall constitute, or otherwise be
deemed to be, a commitment or agreement on the part of any Bank to increase its
Commitment hereunder at any time or (except as provided in Section 2.22(b)) a
commitment or agreement on the part of the Borrower or the Agent to give or
grant any Bank the right to increase its Commitment hereunder at any time.
Section 2.23 Amounts Payable Under Original Agreement. (a) On
the Effective Date, each Bank ("Funding Bank") that is not party to the Original
Agreement or whose Commitment hereunder exceeds (on a pro rata basis) its
maximum "Commitment" under the Original Agreement shall make a payment to the
Agent in an amount sufficient, upon the application of such payments by all such
Funding Banks to the reduction of the outstanding Advances held by the Banks
that are not Funding Banks, to cause the principal amount outstanding under the
Loans by all Banks hereunder as at the Effective Date to be in proportion to the
ratio that such Bank's Commitment (upon the Effective Date) bears to the
Aggregate Commitments. The Borrower hereby irrevocably
40
authorizes each Funding Bank to fund to the Agent the payment required to be
made pursuant to the immediately preceding sentence for application to the
payment in full of the Loans held by "Banks" that are party to the Original
Agreement but not party to this Agreement and to reduction of the outstanding
Loans held by the Banks that are not Funding Banks, and each such payment shall
constitute a Loan hereunder, provided that such Loans shall not increase the
aggregate amount of all Loans outstanding hereunder on the Effective Date to an
amount exceeding the aggregate amount outstanding under the Original Agreement
immediately prior thereto. If, as a result of the repayment of the Loans
provided for in this Section 2.23(a), any payment of a Borrowing consisting of
LIBOR Loans occurs on a day which is not the last day of the applicable Interest
Period under the Original Agreement, the Borrower will pay to the Agent for the
benefit of the Banks that were party to the Original Agreement any loss or cost
incurred by such Bank resulting therefrom in accordance with Section 2.17 of the
Original Agreement. Upon the Effective Date, all Loans outstanding hereunder
(including any Loans made by the Banks on such date) shall be ABR Loans, subject
to the Borrower's right to convert the same to LIBOR Loans on or after such date
in accordance with the provisions of Section 2.06.
(b) Borrower hereby agrees to pay to the Agent, for the
benefit of the Banks that were party to the Original Agreement, the amount of
all interest (if any) that has accrued but not been paid under the Original
Agreement through the Effective Date, all commitment fees that have accrued but
not been paid under the Original Agreement through the Effective Date and all
"Facility Letter of Credit Fees" that have accrued but not been paid under the
Original Agreement through the Effective Date, all of which amounts shall be
paid by the Borrower on the date or dates on which such amounts would have been
due and payable under the terms of the Original Agreement.
ARTICLE III
CONDITIONS PRECEDENT
Section 3.01. Conditions Precedent to Effective Date.
The Effective Date of this Agreement shall not occur, and the Banks and the
Issuing Bank or Issuing Banks shall not be required to perform any of their
obligations hereunder, unless and until the Borrower has paid to the Agent the
applicable fees referred to in Sections 2.09(a) and (c) and the Agent shall have
received each of the following, in form and substance satisfactory to the Agent
and its counsel and (except for the Notes) in sufficient copies for each Bank:
41
(1) Notes. A Note payable to each Bank duly executed
by the Borrower;
(2) Evidence of all corporate action by the Borrower.
Certified copies of all corporate action taken by the Borrower, including
resolutions of its Board of Directors, authorizing the execution, delivery and
performance of the Loan Documents to which it is a party and each other document
to be delivered pursuant to this Agreement;
(3) Incumbency and signature certificate of Borrower. A
certificate of the Secretary or Assistant Secretary of the Borrower certifying
the names and true signatures of the officers of the Borrower authorized to sign
the Loan Documents to which it is a party and the other documents to be
delivered by the Borrower under this Agreement;
(4) Articles of Incorporation of Borrower. Copies of the
articles of incorporation of the Borrower, together with all amendments, and a
certificate of good standing, all certified by the appropriate governmental
officer in its jurisdiction of incorporation;
(5) Opinions of counsel for Borrower. A favorable opinion of
Paul, Hastings, Janofsky & Walker LLP, counsel for the Borrower and for the
Guarantors that are Delaware Persons, in substantially the form of Exhibit C and
as to such other matters as the Agent may reasonably request and of Katten
Muchin & Zavis, Illinois counsel for the Borrower, in substantially the form of
Exhibit D and as to such other matters as the Agent may reasonably request;
(6) Opinion of counsel for Agent. A favorable opinion of
Sidley & Austin, counsel for the Agent, in substantially the form of Exhibit E
hereto;
(7) Evidence of all corporate or partnership action by
Guarantors. With respect to each corporate Guarantor, certified (as of the date
of this Agreement) copies of all corporate action taken by such Guarantor,
including resolutions of its Board of Directors, authorizing the execution,
delivery, and performance of the applicable Guaranty, and with respect to each
limited partnership Guarantor, partnership action taken by such Guarantor,
including any and all necessary partnership consents authorizing the execution,
delivery, and performance of the applicable Guaranty;
(8) Articles of Incorporation of Guarantors. Copies of the
articles of incorporation of each corporate Guarantor, together with all
amendments, and a certificate of good standing,
42
all certified by the appropriate governmental officer in its jurisdiction of
incorporation; provided, however, that, if a certificate of good standing is not
currently available, the Guarantor shall deliver other reasonably satisfactory
evidence of its good standing and, within thirty (30) days, shall deliver a
certificate of good standing;
(9) Incumbency and signature certificate of Guarantors. A
certificate (dated as of the date of this Agreement) of the Secretary or
Assistant Secretary of each corporate Guarantor or the general partner of each
partnership Guarantor certifying the names and true signatures of the officers
of each such corporate Guarantor and the representative of each partnership
Guarantor authorized to sign the Guaranty;
(10) Opinion of counsel for Certain Guarantors. With respect
to Beazer Homes Corp., a favorable opinion of Tennessee counsel in substantially
the form of Exhibit F hereto, and as to such other matters as the Agent may
reasonably request;
(11) Partnership agreement. A true and complete copy of the
limited partnership agreement of each limited partnership Guarantor, including
without limitation, any and all amendments and modifications thereto, and any
and all filed partnership certificates; and
(12) Other Documents. Such other and further
documents as any Bank or its counsel may have reasonably
requested.
Upon the Effective Date, the Original Agreement shall be
amended and restated in its entirety by this Agreement, which shall supersede
the Original Agreement.
Section 3.02. Conditions Precedent to All Loans. The
obligation of each Bank to make each Loan (including the Loans referred to in
Section 2.23 and, in the case of the Swing Line Bank, any Swing Line Loan) shall
be subject to the further conditions precedent that (except as hereinafter
provided) on the date of such Loan:
(1) The following statements shall be true and the Agent shall
have received a certificate, substantially in the form of the
certificate attached hereto as Exhibit G, signed by a duly
authorized officer of the Borrower dated the date of such
Loan, stating that:
(a) The representations and warranties contained in
Article IV of this Agreement, are correct on and
as of the date of such Loan as though made on and
as of such date except to the extent that any such
representation or warranty is stated to relate
solely to an earlier date, in which case such
43
representation or warranty is correct as of such
earlier date;
(b) No Default or Event of Default has occurred and is
continuing, or would result from such Loan; and
(c) Upon the making of the requested Loans, the aggregate
outstanding amount of Permitted Senior Debt shall not
exceed the Borrowing Base as of the most recent
Inventory Valuation Date; and
(2) The Agent shall have received such other approvals, opinions,
or documents as any Bank through the Agent may reasonably
request; and
(3) Such other and further documents as any Bank or its counsel
may have reasonably requested. All matters incident to the
making of such Loan shall be reasonably satisfactory to the
Banks and their counsel.
Notwithstanding the foregoing, in the case of a Loan (provided
for in Section 2.21(d)) made to repay a Swing Line Loan, the satisfaction of the
foregoing conditions with respect to such Swing Line Loan shall constitute
satisfaction of such conditions with respect to the Loan made on the next
succeeding Business Day to repay such Swing Line Loan.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
The Borrower and each of the Guarantors, jointly and
severally, represent and warrant that:
Section 4.01. Incorporation, Formation, Good Standing, and Due
Qualification. The Borrower, each Subsidiary, and each of the Guarantors is (in
the case of a corporation) a corporation duly incorporated or (in the case of a
limited partnership) a limited partnership duly formed, validly existing, and in
good standing under the laws of the jurisdiction of its incorporation or
formation; has the power and authority to own its assets and to transact the
business in which it is now engaged or proposed to be engaged in; and is duly
qualified and in good standing under the laws of each other jurisdiction in
which such qualification is required.
Section 4.02. Power and Authority. The execution,
delivery and performance by the Borrower and the Guarantors of the Loan
Documents to which each is a party have been duly authorized by all necessary
corporate or partnership action, as the case may be, and do not and will not (1)
require any consent or approval of the stockholders of such corporation, or
partners of such partnership; (2) contravene such corporation's charter or
bylaws, or such partnership's partnership agreement; (3) violate,
44
in any material respect, any provision of any law, rule, regulation (including,
without limitation, Regulations U and X of the Board of Governors of the Federal
Reserve System), order, writ, judgment, injunction, decree, determination, or
award presently in effect having applicability to such corporation or
partnership; (4) result in a breach of or constitute a default under any
indenture or loan or credit agreement or any other material agreement, lease, or
instrument to which such corporation or partnership is a party or by which it or
its properties may be bound or affected; (5) result in, or require, the creation
or imposition of any Lien, upon or with respect to any of the properties now
owned or hereafter acquired by such corporation or partnership; and (6) cause
such corporation or partnership to be in default, in any material respect, under
any such law, rule, regulation, order, writ, judgment, injunction, decree,
determination, or award or any such indenture, agreement, lease or instrument.
Section 4.03. Legally Enforceable Agreement. This Agreement
is, and each of the other Loan Documents when delivered under this Agreement
will be legal, valid, and binding obligations of the Borrower or each Guarantor,
as the case may be, enforceable against the Borrower or each Guarantor, as the
case may be, in accordance with their respective terms, except to the extent
that such enforcement may be limited by applicable bankruptcy, insolvency, and
other similar laws affecting creditors' rights generally.
Section 4.04. Financial Statements. The consolidated balance
sheet of the Borrower and its Subsidiaries as at June 30, 1998, and the
consolidated statements of operations, cash flow and changes to stockholders'
equity of the Borrower and its Subsidiaries for the period of three fiscal
quarters ended June 30, 1998, are complete and correct and fairly present as at
such date the financial condition of the Borrower and its Subsidiaries and the
results of their operations for the periods covered by such statements, all in
accordance with GAAP consistently applied (subject to year-end adjustments), and
since June 30, 1998, there has been no material adverse change in the condition
(financial or otherwise), business, or operations of the entities for which
combined financial statements have been furnished to the Banks. There are no
liabilities of the Borrower or any Subsidiary, fixed or contingent, which are
material but are not reflected in the financial statements or in the notes
thereto, other than liabilities arising in the ordinary course of business since
June 30, 1998. No information, exhibit, or report furnished by the Borrower to
any Bank in connection with the negotiation of this Agreement taken together,
contained any material misstatement of fact or omitted to state a material fact
or any fact necessary to make the statements contained therein not materially
misleading.
45
Section 4.05. Labor Disputes and Acts of God. Neither the
business nor the properties of the Borrower or any Subsidiary or any Guarantor
are affected by any fire, explosion, accident, strike, lockout, or other labor
dispute, drought, storm, hail, earthquake, embargo, act of God or of the public
enemy, or other casualty (whether or not covered by insurance), materially and
adversely affecting such business or properties or the operation of the Borrower
or such Subsidiary or such Guarantor.
Section 4.06. Other Agreements. Neither the Borrower nor any
Significant Subsidiary nor any Significant Guarantor is a party to any
indenture, loan, or credit agreement, or to any lease or other agreement or
instrument or subject to any charter, corporate or other restriction which could
have a material adverse effect on the business, properties, assets, operations,
or conditions, financial or otherwise, of the Borrower or any Significant
Subsidiary or any Significant Guarantor, or the ability of the Borrower or any
Significant Guarantor to carry out its obligations under the Loan Documents to
which it is a party. Neither the Borrower nor any Significant Subsidiary nor any
Significant Guarantor is in default in any material respect in the performance,
observance, or fulfillment of any of the obligations, covenants, or conditions
contained in any agreement or instrument material to its business to which it is
a party.
Section 4.07. Litigation. There is no pending or, to the
knowledge of the Borrower or any Guarantor, threatened action or proceeding
against or affecting the Borrower or any Significant Subsidiary or any
Significant Guarantor before any court, governmental agency, or arbitrator,
which may, in any one case or in the aggregate, materially adversely affect the
financial condition, operations, properties, or business of the Borrower or any
Significant Subsidiary or any Significant Guarantor or the ability of the
Borrower or any Significant Guarantor to perform its obligation under the Loan
Documents to which it is a party.
Section 4.08. No Defaults on Outstanding Judgments or Orders.
The Borrower, each Significant Subsidiary and each Significant Guarantor have
satisfied all judgments, and neither the Borrower nor any Significant Subsidiary
nor any Significant Guarantor is in default with respect to any judgment, writ,
injunction, decree, rule, or regulation of any court, arbitrator, or federal,
state, municipal, or other governmental authority, commission, board, bureau,
agency, or instrumentality, domestic or foreign.
Section 4.09. Ownership and Liens. The Borrower and each
Subsidiary and each Guarantor have title to, or valid leasehold interests in,
all of their respective properties and assets, real and personal, including the
properties and assets
46
and leasehold interests reflected in the financial statements referred to in
Section 4.04 (other than any properties or assets disposed of in the ordinary
course of business), and none of the properties and assets owned by the Borrower
or any Subsidiary or any Guarantor and none of their leasehold interests is
subject to any Lien, except such as may be permitted pursuant to Section 6.01 of
this Agreement.
Section 4.10. Subsidiaries and Ownership of Stock. Set forth
in Exhibit H hereto is a complete and accurate list of the Subsidiaries of the
Borrower, showing the jurisdiction of incorporation or formation of each and
showing the percentage of the Borrower's ownership of the outstanding stock or
partnership interest of each Subsidiary. All of the outstanding capital stock of
each such corporate Subsidiary has been validly issued, is fully paid and
nonassessable, and is owned by the Borrower free and clear of all Liens. The
limited partnership agreement of each such limited partnership Subsidiary is in
full force and effect and has not been amended or modified. Each of the
Guarantors is a Wholly Owned Subsidiary of the Borrower.
Section 4.11. ERISA. The Borrower and each Subsidiary and each
Guarantor are in compliance in all material respects with all applicable
provisions of ERISA. Neither a Reportable Event nor a Prohibited Transaction has
occurred and is continuing with respect to any Plan; no notice of intent to
terminate a Plan has been filed, nor has any Plan been terminated; no
circumstances exist which constitute grounds entitling the PBGC to institute
proceedings to terminate, or appoint a trustee to administer, a Plan, nor has
the PBGC instituted any such proceedings; neither the Borrower nor any Commonly
Controlled Entity has completely or partially withdrawn from a Multiemployer
Plan under circumstances that could subject the Borrower or any Subsidiary to
material withdrawal liability; the Borrower and each Commonly Controlled Entity
have met their minimum funding requirements under ERISA with respect to all of
their Plans and the present value of all vested benefits under each Plan does
not materially exceed the fair market value of all Plan assets allocable to such
benefits, as determined on the most recent valuation date of the Plan and in
accordance with the provisions of ERISA; and neither the Borrower nor any
Commonly Controlled Entity has incurred any material liability to the PBGC under
ERISA.
Section 4.12. Operation of Business. The Borrower, each
Subsidiary and each Guarantor possess all licenses, permits, franchises,
patents, copyrights, trademarks, and trade names, or rights thereto, to conduct
their respective businesses substantially as now conducted and as presently
proposed to be conducted and the Borrower and each of its Subsidiaries and each
47
Guarantor are not in violation of any valid rights of others with respect to any
of the foregoing.
Section 4.13. Taxes. All income tax liabilities or income tax
obligations of the Borrower, each Subsidiary and each Guarantor have been paid
or have been accrued by or reserved for by the Borrower. The Borrower
constitutes the parent of an affiliated group of corporations for purposes of
filing a consolidated United States federal income tax return.
Section 4.14. Laws; Environment. The Borrower, each Subsidiary
and each Guarantor have duly complied, and their businesses, operations, assets,
equipment, property, leaseholds, or other facilities are in compliance, in all
material respects, with the provisions of all federal, state, and local
statutes, laws, codes, and ordinances and all rules and regulations promulgated
thereunder (including without limitation those relating to the environment,
health and safety). The Borrower, each Subsidiary and each Guarantor have been
issued and will maintain all required federal, state, and local permits,
licenses, certificates, and approvals relating to (1) air emissions; (2)
discharges to surface water or groundwater; (3) noise emissions; (4) solid or
liquid waste disposal; (5) the use, generation, storage, transportation, or
disposal of toxic or hazardous substances or hazardous wastes (intended hereby
and hereafter to include any and all such materials listed in any federal,
state, or local law, code, or ordinance and all rules and regulations
promulgated thereunder as hazardous); or (6) other environmental, health or
safety matters. Neither the Borrower nor any Subsidiary nor any Guarantor has
received notice of, or has actual knowledge of any violations of any federal,
state, or local environmental, health, or safety laws, codes or ordinances or
any rules or regulations promulgated thereunder with respect to its businesses,
operations, assets, equipment, property, leaseholds, or other facilities. Except
in accordance with a valid governmental permit, license, certificate or
approval, there has been no material emission, spill, release, or discharge into
or upon (1) the air; (2) soils, or any improvements located thereon; (3) surface
water or groundwater; or (4) the sewer, septic system or waste treatment,
storage or disposal system servicing the premises, of any toxic or hazardous
substances or hazardous wastes at or from the premises; and accordingly the
premises of the Borrower, each Subsidiary and each Guarantor have not been
adversely affected, in any material respect, by any toxic or hazardous
substances or wastes. There has been no complaint, order, directive, claim,
citation, or notice by any governmental authority or any person or entity with
respect to violations of law or damages by reason of Borrower's or any
Subsidiary's (1) air emissions; (2) spills, releases, or discharges to soils or
improvements located thereon, surface water, groundwater or the sewer, septic
system or waste
48
treatment, storage or disposal systems servicing the premises; (3) noise
emissions; (4) solid or liquid waste disposal; (5) use, generation, storage,
transportation, or disposal of toxic or hazardous substances or hazardous waste;
or (6) other environmental, health or safety matters affecting the Borrower, any
Subsidiary or any Guarantor or its business, operations, assets, equipment,
property, leaseholds, or other facilities. Neither the Borrower nor any
Subsidiary nor any Guarantor has any material indebtedness, obligation, or
liability, absolute or contingent, matured or not matured, with respect to the
storage, treatment, cleanup, or disposal of any solid wastes, hazardous wastes,
or other toxic or hazardous substances (including without limitation any such
indebtedness, obligation, or liability with respect to any current regulation,
law, or statute regarding such storage, treatment, cleanup, or disposal).
Section 4.15. Investment Company Act. Neither the Borrower nor
any Subsidiary thereof is an "investment company" or a company "controlled" by
an "investment company," within the meaning of the Investment Company Act of
1940, as amended.
Section 4.16. Public Utility Holding Company Act. Neither the
Borrower nor any Subsidiary is a "holding company" or a "subsidiary company" of
a "holding company," or an "affiliate" of a "holding company" or of a
"subsidiary company" of a "holding company," within the meaning of the Public
Utility Holding Company Act of 1935, as amended.
Section 4.17. Year 2000. As of the date hereof, the Borrower
has made a full and complete assessment of the Year 2000 Issues and has a
realistic and achievable program for remediating the Year 2000 Issues on a
timely basis. Based on such assessment and program, the Borrower does not
reasonably anticipate that the Year 2000 Issues will have a material adverse
effect on its operations, business or financial condition.
ARTICLE V
AFFIRMATIVE COVENANTS
So long as any Note shall remain unpaid or any Bank shall have
any Commitment under this Agreement, the Borrower and each Guarantor will:
Section 5.01. Maintenance of Existence. Preserve and maintain,
and cause each Subsidiary to preserve and maintain (except for a Subsidiary that
ceases to maintain its existence solely as a result of an Internal
Reorganization), its corporate or limited partnership existence and good
standing in the
49
jurisdiction of its incorporation or formation and qualify and remain qualified
to transact business in each jurisdiction in which such qualification is
required.
Section 5.02. Maintenance of Records. Keep and cause each
Subsidiary to keep, adequate records and books of account, in which complete
entries will be made in accordance with GAAP consistently applied, reflecting
all financial transactions of the Borrower and its Subsidiaries.
Section 5.03. Maintenance of Properties. Maintain, keep, and
preserve, and cause each Subsidiary to maintain, keep, and preserve, all of its
properties (tangible and intangible) necessary or useful in the proper conduct
of its business in good working order and condition, ordinary wear and tear
excepted.
Section 5.04. Conduct of Business. Continue, and cause each
Subsidiary to continue (except in the case of a Subsidiary that ceases to engage
in business solely as a result of an Internal Reorganization), to engage in a
business of the same general type and in the same manner as conducted by it on
the date of this Agreement.
Section 5.05. Maintenance of Insurance. Maintain, and cause
each Subsidiary to maintain, insurance with financially sound reputable
insurance companies or associations (or, in the case of insurance for
construction warranties and builder default protection for buyers of Housing
Units from the Borrower or any of its Subsidiaries, UHIC) in such amounts and
covering such risks as are usually carried by companies engaged in the same or a
similar business and similarly situated, which insurance may provide for
reasonable deductibility from coverage thereof.
Section 5.06. Compliance with Laws. Comply, and cause each
Subsidiary to comply, in all material respects with all applicable laws, rules,
regulations, and orders, such compliance to include, without limitation, paying
before the same become delinquent all taxes, assessments and governmental
charges imposed upon it or upon its property, other than any such taxes,
assessments and charges being contested by the Borrower in good faith which will
not have a material adverse effect on the financial condition of the Borrower.
Section 5.07. Right of Inspection. At any reasonable
time and from time to time, permit any Bank or any agent or
representative thereof to examine and make copies of and abstracts from the
records and books of account of, and visit the properties of, the Borrower and
any Subsidiary, and to discuss the affairs, finances, and accounts of the
Borrower and any Subsidiary with any of their respective officers and directors
and the Borrower's independent accountants.
50
Section 5.08. Reporting Requirements. Furnish to the
Agent for delivery to each of the Banks:
(1) Quarterly financial statements. As soon as available and
in any event within sixty (60) days after the end of each of the first three
quarters of each fiscal year of the Borrower, an unaudited condensed
consolidated balance sheet of the Borrower and its Subsidiaries as of the end of
such quarter, unaudited condensed consolidated statements of operations and cash
flow of the Borrower and its Subsidiaries for the period commencing at the end
of the previous fiscal year and ending with the end of such quarter, and
unaudited condensed consolidated statements of changes in stockholders' equity
of the Borrower and its Subsidiaries for the portion of the fiscal year ended
with the last day of such quarter, all in reasonable detail and stating in
comparative form the respective figures for the corresponding date and period in
the previous fiscal year and all prepared in accordance with GAAP consistently
applied and certified by the chief financial officer of the Borrower (subject to
year-end adjustments); statements in the form of the Borrower's quarterly 10-Q
report to the Securities and Exchange Commission that are consistent with the
foregoing requirements shall satisfy such requirements;
(2) Annual financial statements. As soon as available and in
any event within one hundred (100) days after the end of each fiscal year of the
Borrower, a consolidated balance sheet of the Borrower and its Subsidiaries as
of the end of such fiscal year, consolidated statements of operations and cash
flow of the Borrower and its Subsidiaries for such fiscal year, and consolidated
statements of changes in stockholders' equity of the Borrower and its
Subsidiaries for such fiscal year, all in reasonable detail and stating in
comparative form the respective figures for the corresponding date and period in
the prior fiscal year and all prepared in accordance with GAAP consistently
applied and accompanied by an opinion thereon acceptable to the Agent by Ernst &
Young or other independent accountants selected by the Borrower and acceptable
to the Agent; statements in the form of the Borrower's annual 10-K report to the
Securities and Exchange Commission that are consistent with the foregoing
requirements shall satisfy such requirements;
(3) Financial projections. On August 15, 1999 and each
anniversary thereof, two-year financial projections (including a consolidated
income statement, balance sheet and statement of cash flows for the Borrower and
its Subsidiaries) broken down by quarters, and as soon as available (but not
later than June 15 of each year), a mid-year update of the financial projections
for the current year;
51
(4) Variance analysis. (a) Within sixty (60) days of the end
of each of the first three fiscal quarters of each fiscal year of the Borrower,
a quarterly variance analysis comparing actual quarterly results versus the most
recently projected quarterly results for the fiscal quarter most recently ended
(including consolidated income statements of the Borrower and its Subsidiaries,
an analysis of revenues, closings and operating profits of the Borrower and each
Subsidiary on a state by state basis, and such other items as are requested by
any of the Banks), together with a written explanation of material variances.
(b) Within one hundred (100) days after the end
of each fiscal year of the Borrower, a quarterly variance analysis comparing
actual quarterly results versus the most recently projected quarterly results
for the fiscal year most recently ended (including consolidated income
statements of the Borrower and its Subsidiaries accompanied by an opinion
thereon acceptable to the Agent by Ernst & Young or other independent
accountants selected by the Borrower and acceptable to the Agent, an analysis of
revenues, closings and operating profits of the Borrower and each Subsidiary on
a state by state basis, and such other items as are requested by any of the
Banks), together with a written explanation of material variances.
(5) Management letters. Promptly upon receipt thereof, copies
of any reports submitted to the Borrower or any Subsidiary by independent
certified public accountants in connection with examination of the financial
statements of the Borrower or any Subsidiary made by such accountants.
(6) Borrowing Base Certificate. Within thirty-five (35) days
after the end of each fiscal quarter, a Borrowing Base Certificate, with respect
to the Inventory Valuation Date occurring on the last day of such fiscal
quarter.
(7) Compliance certificate. Within sixty (60) days after the
end of each of the first three quarters, and within one hundred (100) days after
the end of each fourth quarter, of each fiscal year of the Borrower, a
certificate of the President or chief financial officer of the Borrower
certifying (a) the Borrower's compliance with all financial covenants including,
without limitation, those set forth in Sections 6.10 and 6.11 and Article VII
hereof, which certificate shall set forth in reasonable detail the computation
thereof and (b) certifying that to the best of his knowledge no Default or Event
of Default has occurred and is continuing, or if a Default or Event of Default
has occurred and is continuing, a statement as to the nature
52
thereof and the action which is proposed to be taken with respect thereto;
(8) Production Monitor Summary. Within thirty (30) days after
the end of each fiscal quarter, a certificate of the President or Chief
Operating Officer of the Borrower certifying the Inventory as at such date which
lists by state of location each item of Inventory, in the following categories:
(a) prefoundation, (b) foundation, (c) framed, (d) being finished, and (e) model
homes; such summary shall include a delineation of sold or unsold items in each
category;
(9) Land Bank Inventory. Within sixty (60) days after the end
of each calendar quarter, a certificate of the President or Chief Operating
Officer of the Borrower certifying the Land as at such date, which lists by
state of location all Land, delineating Finished Lots, Lots under Development,
Entitled Land and estimated undeveloped Lots.
(10) Accountant's report. Simultaneously with the delivery of
the annual financial statements referred to in Section 5.08(2), a certificate of
the independent public accountants who audited such statements to the effect
that, in making the examination necessary for the audit of such statements, they
have obtained no knowledge of any condition or event which constitutes a Default
or Event of Default, or if such accountants shall have obtained knowledge of any
such condition or event, specifying in such certificate each such condition or
event of which they have knowledge and the nature and status thereof;
(11) Notice of litigation. Promptly after the commencement
thereof, notice of all actions, suits, and proceedings before any court or
governmental department, commission, board, bureau, agency, or instrumentality,
domestic or foreign, affecting the Borrower or any Subsidiary which, if
determined adversely to the Borrower or such Subsidiary, would reasonably be
expected to result in a judgment against the Borrower or such Subsidiary in
excess of $1,000,000 or would reasonably be expected to have a material adverse
effect on the financial condition, properties, or operations of the Borrower or
such Subsidiary;
(12) Notice of Defaults and Events of Default. As soon as
possible and in any event within ten (10) days after the occurrence of each
Default or Event of Default, a written notice setting forth the details of such
Default or Event of Default and the action which is proposed to be taken by the
Borrower with respect thereto;
53
(13) ERISA reports. As soon as possible, and in any event
within thirty (30) days after the Borrower knows or has reason to know that any
circumstances exist that constitute grounds entitling the PBGC to institute
proceedings to terminate a Plan subject to ERISA with respect to the Borrower or
any Commonly Controlled Entity, and promptly but in any event within two (2)
Business Days of receipt by the Borrower or any Commonly Controlled Entity of
notice that the PBGC intends to terminate a Plan or appoint a trustee to
administer the same, and promptly but in any event within five (5) Business Days
of the receipt of notice concerning the imposition of withdrawal liability in
excess of $50,000 with respect to the Borrower or any Commonly Controlled
Entity, the Borrower will deliver to each Bank a certificate of the chief
financial officer of the Borrower setting forth all relevant details and the
action which the Borrower proposes to take with respect thereto;
(14) Reports to other creditors. Promptly after the furnishing
thereof, copies of any statement, report, document, notice, certificate, and
correspondence furnished to any other party pursuant to the terms of any
indenture, loan, credit, or similar agreement and not otherwise required to be
furnished to the Bank pursuant to any other clause of this Section 5.08;
(15) Proxy statements, etc. Promptly after the sending or
filing thereof, copies of all proxy statements, financial statements, and
reports which the Borrower or any Subsidiary sends to its stockholders, and
copies of all regular, periodic, and special reports, and all registration
statements which the Borrower or any Subsidiary files with the Securities and
Exchange Commission or any governmental authority which may be substituted
therefor, or with any national securities exchange; and
(16) General information. Such other information respecting
the condition or operations, financial or otherwise, of the Borrower or any
Subsidiary as any Bank may from time to time reasonably request.
Section 5.09. Subsidiary Reporting Requirements. In the event
any of the following statements are prepared with respect to any Subsidiary,
then upon written request from any Bank, furnish to the Agent for delivery to
each of the Banks the following with respect to any Subsidiary:
(1) Quarterly financial statements. An unaudited balance sheet
of such Subsidiary as of the end of most recently completed fiscal quarter,
statements of operations and cash flow of such Subsidiary for the period
commencing at the end of the previous fiscal year and ending with the end of
such quarter, and statements of changes in stockholders' equity of such
Subsidiary
54
for the portion of the fiscal year ended with the last day of such quarter, all
in reasonable detail and stating in comparative form the respective figures for
the corresponding date and period in the previous fiscal year and all prepared
in accordance with GAAP consistently applied and certified by the chief
financial officer of such Subsidiary (subject to year-end adjustments);
(2) Annual financial statements. A balance sheet of such
Subsidiary as of the end of such fiscal year, statements of operations and cash
flow of such Subsidiary for such fiscal year, and statements of changes in
stockholders' equity of such Subsidiary for such fiscal year, all in reasonable
detail and stating in comparative form the respective figures for the
corresponding date and period in the prior fiscal year and all prepared in
accordance with GAAP consistently applied and as to the consolidated statements
accompanied by an opinion thereon acceptable to the Agent by Ernst & Young or
other independent accountants selected by the Borrower and acceptable to the
Agent.
Section 5.10. Environment. Be and remain, and cause each
Subsidiary to be and remain, in compliance with the provisions of all federal,
state, and local environmental, health, and safety laws, codes and ordinances,
and all rules and regulations issued thereunder; notify the Agent promptly of
any notice of a hazardous discharge or environmental complaint received from any
governmental agency or any other party (and the Agent shall notify the Banks
promptly following its receipt of any such notice from the Borrower); notify the
Agent promptly of any hazardous discharge from or affecting its premises (and
the Agent shall notify the Banks promptly following its receipt of any such
notice from the Borrower); promptly contain and remove the same, in compliance
with all applicable laws; promptly pay any fine or penalty assessed in
connection therewith; permit any Bank to inspect the premises, to conduct tests
thereon, and to inspect all books, correspondence, and records pertaining
thereto; and at such Bank's request, and at the Borrower's expense, provide a
report of a qualified environmental engineer, satisfactory in scope, form, and
content to the Majority Banks, and such other and further assurances reasonably
satisfactory to the Majority Banks that the condition has been corrected.
Section 5.11. Use of Proceeds. Use the proceeds of
the Loans solely as provided in Section 2.13 hereof.
Section 5.12. Ranking of Obligations. Ensure that at all times
its Obligations under the Loan Documents shall be and constitute unconditional
general obligations of the Borrower ranking at least pari passu with all its
other unsecured Debt.
Section 5.13. Taxes. Pay and cause each Subsidiary to pay when
due all taxes, assessments and governmental charges and levies upon it or its
income, profits or property, except those
55
which are being contested in good faith by appropriate proceedings and with
respect to which adequate reserves have been set aside.
Section 5.14. Wholly Owned Status. Ensure that at all
times each of the Guarantors is a Wholly Owned Subsidiary of the
Borrower.
Section 5.15. New Subsidiaries. Within thirty (30) days after
the date on which any Person shall become a Subsidiary, cause such Subsidiary to
execute and deliver to the Agent, for the benefit of the Banks, a guaranty of
the Obligations in the form of Article IX and an opinion of counsel, certified
copies of resolutions, articles of incorporation, incumbency certificates and
other documents with respect to such Subsidiary and its guaranty substantially
similar to the documents delivered pursuant to Section 3.01 with respect to the
Original Guarantors and Guaranty, all of which shall be reasonably satisfactory
to the Majority Banks in form and substance. UHIC shall not be required to
deliver a Guaranty.
Section 5.16. Year 2000. The Borrower will take all actions
reasonably necessary to assure that the Year 2000 Issues will not have a
material adverse effect on the business, operations or financial condition of
the Borrower and, upon the Agent's request, will provide the Agent a description
of its program to address the Year 2000 Issues, including updates and progress
reports. The Borrower will promptly advise the Agent of any reasonably
anticipated material adverse effect as a result of the Year 2000 Issues.
ARTICLE VI
NEGATIVE COVENANTS
So long as any Note shall remain unpaid or any Bank shall have
any Commitment under this Agreement, the Borrower and each Guarantor will not:
Section 6.01. Liens. Create, incur, assume, or suffer to
exist, or permit any Subsidiary to create, incur, assume, or suffer to exist,
any Lien, upon or with respect to any of its properties, now owned or hereafter
acquired, except the following:
(1) Liens for taxes or assessments or other government
charges or levies if not yet due and payable or, if due and payable, if they are
being contested in good faith by appropriate proceedings and for which
appropriate reserves are maintained;
56
(2) Liens imposed by law, such as mechanics', materialmen's,
landlords', warehousemen's, and carriers' Liens, and other similar Liens,
securing obligations incurred in the ordinary course of business which are not
past due for more than ninety (90) days or which are being contested in good
faith by appropriate proceedings and for which appropriate reserves have been
established;
(3) Liens under workers' compensation, unemployment insurance,
Social Security, or similar legislation;
(4) Liens, deposits, or pledges to secure the performance of
bids, tenders, contracts (other than contracts for the payment of money),
Capital Leases (permitted under the terms of this Agreement), public or
statutory obligations, surety, stay, appeal, indemnity, performance, or other
similar bonds, or other similar obligations arising in the ordinary course of
business;
(5) Judgment and other similar Liens arising in connection
with any court proceeding, provided the execution or other enforcement of such
Liens is effectively stayed and the claims secured thereby are being actively
contested in good faith and by appropriate proceedings;
(6) Easements, rights-of-way, restrictions, and other similar
encumbrances which, in the aggregate, do not materially interfere with the
occupation, use, and enjoyment by the Borrower or any Subsidiary of the property
or assets encumbered thereby in the normal course of its business or materially
impair the value of the property subject thereto;
(7) Liens securing Secured Debt permitted under Section
6.02.
Section 6.02. Secured Debt. Create, incur, assume or suffer to
exist, or permit any Subsidiary to create, incur, assume or suffer to exist, any
Secured Debt, except for Secured Debt in an aggregate amount outstanding at any
one time not exceeding $50,000,000.
Section 6.03. Mergers, Etc. Wind up, liquidate or dissolve
itself, reorganize, merge or consolidate with or into, or convey, sell, assign,
transfer, lease, or otherwise dispose of (whether in one transaction or in a
series of transactions) all or substantially all of its assets (whether now
owned or hereafter acquired) to any Person, or acquire all or sub stantially all
the assets or the business of any Person, or permit any Subsidiary to do so,
except (1) for any Permitted Acquisition, (2) that any Subsidiary (other than
UHIC) may merge
57
into or transfer assets to the Borrower as a result of an Internal
Reorganization or otherwise and (3) that any Subsidiary (other than UHIC) may
merge into or consolidate with or transfer assets to any other Subsidiary (other
than UHIC) as a result of an Internal Reorganization or otherwise.
Section 6.04. Leases. Create, incur, assume, or suffer to
exist, or permit any Subsidiary to create, incur, assume, or suffer to exist,
any obligation as lessee for the rental or hire of any real or personal
property, except (1) Capital Leases not otherwise prohibited by the terms of
this Agreement; (2) leases existing on the date of this Agreement and any
extension or renewals thereof; (3) leases between the Borrower and any
Subsidiary or between any Subsidiaries; (4) operating leases entered into in the
ordinary course of business; and (5) any lease of property having a value of
$500,000 or less.
Section 6.05. Sale and Leaseback. Sell, transfer or otherwise
dispose of, or permit any Subsidiary to sell, transfer, or otherwise dispose of,
any real or personal property to any Person and thereafter directly or
indirectly lease back the same or similar property, except for the sale and
leaseback of model homes.
Section 6.06. Sale of Assets. Sell, lease, assign, transfer,
or otherwise dispose of, or permit any Subsidiary to sell, lease, assign,
transfer, or otherwise dispose of, any of its now owned or hereafter acquired
assets (including, without limitation, shares of stock and indebtedness of
subsidiaries, receivables, and leasehold interests), except: (1) Inventory
disposed of in the ordinary course of business; (2) the sale or other
disposition of assets no longer used or useful in the conduct of its business;
(3) the sale and leaseback of model homes, or (4) that any Subsidiary (other
than UHIC) may sell, lease, assign, or otherwise transfer its assets to the
Borrower or any Wholly Owned Subsidiary (other than UHIC) in connection with an
Internal Reorganization or otherwise.
Section 6.07. Investments. Make, or permit any Subsidiary to
make, any loan or advance to any Person, or purchase or otherwise acquire, or
permit any Subsidiary to purchase or otherwise acquire, any capital stock,
assets (other than assets acquired in the ordinary course of business),
obligation, or other securities of, make any capital contribution to, or
otherwise invest in or acquire any interest in any Person including, without
limitation, any hostile takeover, hostile tender offer or similar hostile
transaction (collectively, "Investments"), except: (1) a direct obligation of
the United States or any agency thereof with maturities of one year or less from
the date of acquisition; (2) commercial paper rated at least "A-1" by Standard &
Poor's Corporation or "P-1" by Moody's
58
Investors Service, Inc.; (3) certificates of deposit with maturities of one year
or less from the date of acquisition issued by any commercial bank or federal
savings bank having capital and surplus in excess of $250,000,000; (4) a direct
obligation of any state or municipality within the United States with maturities
of one year or less from the date of acquisition and which, at the time of such
acquisition, is accorded one of the two highest debt ratings for obligations of
such type by Standard & Poor's or Moody's; (5) mutual funds investing in assets
of the type described in items (1), (2), (3) or (4) above which in any case
would be classified as a current asset in accordance with GAAP which are managed
by a fund manager of recognized standing in the United States and having capital
and surplus of at least $100,000,000 or having at least $250,000,000 under
management; (6) stock, obligation, or securities received in settlement of debts
(created in the ordinary course of business) owing to the Borrower or any
Subsidiary provided such issuance is approved by the board of directors of the
issuer thereof; (7) a loan or advance from the Borrower to a Subsidiary, or from
a Subsidiary to a Subsidiary, or from a Subsidiary to the Borrower (subject,
however, to the limitations set forth in Section 6.14 in the case of Investments
in UHIC); (8) any Permitted Acquisition for which the total consideration
payable for such Permitted Acquisition does not exceed, or have a value
exceeding, $50,000,000; (9) the Acquisition of Trafalgar House Properties Inc.;
(10) an Investment in a Wholly Owned Subsidiary, which Investment is, or
constitutes a part of, an Internal Reorganization (subject, however, to the
limitations set forth in Section 6.14 in the case of Investments in UHIC); (11)
Investments in UHIC to the extent permitted in Section 6.14; (12) any Investment
in a Joint Venture, provided that the amount of all such Investments by the
Borrower and its Subsidiaries in all Joint Ventures does not exceed $15,000,000
in the aggregate; or (13) any Investment of $500,000 or less.
Section 6.08. Guaranties, Etc. Assume, guarantee, endorse, or
otherwise be or become directly or contingently responsible or liable, or permit
any Subsidiary to assume, guarantee, endorse, or otherwise be or become directly
or contingently responsible or liable (including, but not limited to, an
agreement to purchase any obligation, stock, assets, goods, or services, or to
supply or advance any funds, assets, goods, or services, or an agreement to
maintain or cause such Person to maintain a minimum working capital or net worth
or otherwise to assure the creditors of any Person against loss), for
obligations of any Person, except: (1) guaranties by endorsement of negotiable
instruments for deposit or collection or similar transactions in the ordinary
course of business; (2) guaranties of performance obligations in the ordinary
course of business; (3) guaranties of any obligation of $500,000 or less,
provided, however, that neither the Borrower nor any Subsidiary
59
shall guarantee an obligation of UHIC; and (4) that the Borrower or any
Subsidiary or any Guarantor may, whether as a result of an Internal
Reorganization or otherwise, guarantee the Debt of any other Subsidiary (other
than UHIC) or Guarantor or the Borrower permitted under this Agreement.
Section 6.09. Transactions With Affiliates. Enter into any
transaction, including, without limitation, the purchase, sale, or exchange of
property or the rendering of any service, with any Affiliate, or permit any
Subsidiary to enter into any transaction, including, without limitation, the
purchase, sale, or exchange of property or the rendering of any service, with
any Affiliate, except in the ordinary course of and pursuant to the reasonable
requirements of the Borrower's or such Guarantor's or any Subsidiary's business
and upon fair and reasonable terms no less favorable to the Borrower or such
Guarantor or any Subsidiary than would obtain in a comparable arm's-length
transaction with a Person not an Affiliate (which exception shall include the
payment of insurance premiums to UHIC for the purchase of construction
warranties and builder default protection for buyers of Housing Units from the
Borrower or any of its Subsidiaries); provided, however, that the following
transactions shall not be prohibited by this Section 6.09: (i) any transaction
pursuant to the Tax Sharing Agreement dated as of March 2, 1994, between the
Borrower and Hanson America Inc., the Services Agreement dated as of March 2,
1994, between the Borrower and Hanson America Inc., the agreement with Beazer
Homes, Ltd. regarding use of name, the Pension and Employee Benefits Agreement
dated as of March 2, 1994, among Beazer Homes, Inc., the Borrower and Hanson
America Inc., the Cross Indemnification Agreement dated as of March 2, 1994,
between the Borrower and Hanson America Inc., and the Registration Rights
Agreement dated as of March 2, 1994, between the Borrower and Beazer America,
Inc; (ii) transactions involving the purchase, sale or exchange of property
having a value of $500,000 or less; and (iii) transactions otherwise permitted
by this Agreement.
Section 6.10. Land Inventory. Permit the ratio, determined as
at the end of any fiscal quarter, of (i) the sum of the number of Finished Lots
and the reasonably estimated number of Finished Lots that will be developed on
other Land, all determined as at the end of such fiscal quarter, to (ii) the
number of Housing Unit Closings for the period of four (4) full fiscal quarters
ending with such fiscal quarter, to exceed 2.5 to 1.0.
Section 6.11. Housing Inventory. Permit the number of
Speculative Housing Units, as at the end of any fiscal quarter, to exceed the
greater of (a) the number of Housing Unit Closings occurring during the period
of twelve (12) months ending on the last day of such fiscal quarter, multiplied
by thirty percent
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(30%) or (b) the number of Housing Unit Closings occurring during the period of
six (6) months ending on the last day of such fiscal quarter, multiplied by
seventy percent (70%).
Section 6.12. Senior Debt. Repay in whole or in part
the principal of the Senior Debt, except for refinancings thereof
from the proceeds of Refinancing Debt with respect thereto.
Section 6.13. Amendment or Modification of Senior Indentures.
Amend or modify, or permit any amendment or modification of, either of the
Senior Indentures (other than those provided for in clauses (i), (ii), (iii),
(v) or (vi) of Section 10.01(a) of such Senior Indentures).
Section 6.14. UHIC. Permit any of the following: (i) the
assets of UHIC to exceed $10,000,000 at any time; (ii) the aggregate amount of
all Investments in UHIC by the Borrower and its Subsidiaries to exceed
$10,000,000; or (iii) UHIC to engage in any business other than the issuance of
construction warranties and builder default protection for buyers of Housing
Units from the Borrower or any of its Subsidiaries.
Section 6.15. Negative Pledges. Directly or indirectly enter
into any agreement (other than this Agreement and the Senior Indentures) with
any Person that prohibits or restricts or limits the ability of the Borrower or
any Guarantor to create, incur, pledge or suffer to exist any Lien upon any
assets of the Borrower or any Guarantor (except that agreements creating or
securing Secured Debt permitted under Section 6.02 may prohibit, restrict or
limit other Liens on those assets encumbered by the Liens securing such Secured
Debt).
ARTICLE VII
FINANCIAL COVENANTS
So long as any Note shall remain unpaid or any Bank shall have
any Commitment under this Agreement:
Section 7.01. Minimum Consolidated Tangible Net Worth. The
Borrower will maintain at all times a Consolidated Tangible Net Worth of not
less than the sum of (i) $162,400,000 (subject to adjustment of such amount as
hereinafter provided), (ii) an amount equal to fifty percent (50%) of the
cumulative Net Income of the Borrower earned after June 30, 1998 (excluding any
quarter in which there is a loss), and (iii) one hundred percent (100%) of the
net proceeds received after June 30, 1998 by the Borrower or any Subsidiary from
the sale or issuance of any of its Common Equity. If the Borrower elects to
convert to common stock some or all of the $50,000,000 of its preferred stock
outstanding as of
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the date of this Agreement (and provided its common stock price on the day that
the conversion notice is given is greater than $21.00 per share), the amount set
forth in clause (i) above shall be reduced (but not below $130,000,000) to the
extent that Consolidated Tangible Net Worth is reduced as a result of the
election by the preferred shareholders to convert their preferred stock to cash
rather than to common stock.
Section 7.02. Leverage Ratio. The Borrower will not at any
time permit the ratio of Consolidated Debt to Consolidated Tangible Net Worth to
exceed 2.0 to 1.0. For purposes of this Section 7.02, Consolidated Tangible Net
Worth shall exclude the Borrower's and Guarantors' Investments in Joint Ventures
and in Subsidiaries that are not Guarantors.
Section 7.03. Permitted Senior Debt. The Borrower
will not permit the outstanding amount of the Permitted Senior
Debt to exceed the Borrowing Base.
Section 7.04. Fixed Charge Coverage Ratio. The Borrower shall
maintain a ratio of (i) EBITDA to (ii) the sum (for the Borrower and its
Subsidiaries on a consolidated basis) of (A) interest incurred, whether
capitalized or expensed directly, plus (B) required principal payments (other
than balloon payments on long-term Debt), (C) scheduled principal payments on
Capital Lease obligations (other than balloon payments on long-term Capital
Leases) and (D) dividends paid with respect to any one or more classes of
preferred stock of the Borrower, of at least 1.5 to 1.0, which ratio shall be
determined as of the last day of each fiscal quarter for the four-quarter period
ending on such day.
Section 7.05. Land Inventory. The Borrower shall not permit
the ratio of (i) Adjusted Land Value to (ii) the sum of (a) Consolidated
Tangible Net Worth plus (b) fifty percent (50%) of Consolidated Subordinated
Debt to exceed 1.0 to 1.0.
ARTICLE VIII
EVENTS OF DEFAULT
Section 8.01. Events of Default. If any of the
following events shall occur:
(1) The Borrower shall fail to pay (a) the principal of any
Note, or any amount of a commitment or other fee, as and when due and payable or
(b) interest on any Note or any amount of any commitment fee or other fee within
five (5) Business Days after the same is due and payable;
62
(2) Any representation or warranty made or deemed made by the
Borrower or by any Guarantor in any Loan Document or which is contained in any
certificate, document, opinion, or financial or other statement furnished at any
time under or in connection with this Agreement shall prove to have been
incorrect, incomplete, or misleading in any material respect on or as of the
date made or deemed made;
(3) The Borrower or any Guarantor shall fail to perform or
observe any term, covenant, or agreement contained in Articles V, VI or VII
hereof, and such failure shall continue for a period of thirty (30) consecutive
days;
(4) The Borrower or any Significant Subsidiary or any
Significant Guarantor shall (a) fail to pay (within the applicable cure period,
if any) any amount in respect of indebtedness for borrowed money equal to or in
excess of $5,000,000 in the aggregate (other than the Notes) of the Borrower or
such Significant Subsidiary or such Significant Guarantor, as the case may be,
or any interest or premium thereon, when due (whether by scheduled maturity,
required prepayment, acceleration, demand, or otherwise); or (b) fail to perform
or observe any term, covenant, or condition on its part to be performed or
observed (within the applicable cure period, if any) under any agreement or
instrument relating to any such indebtedness, when required to be performed or
observed, if the effect of such failure to perform or observe is to accelerate,
or permit the acceleration of after the giving of notice or passage of time, or
both, the maturity of such indebtedness, whether or not such failure to perform
or observe shall be waived by the holder of such indebtedness, or any such
indebtedness shall be declared to be due and payable, or required to be prepaid
(other than by a regularly scheduled required prepayment), prior to the stated
maturity thereof;
(5) The Borrower or any Significant Subsidiary or any
Significant Guarantor (a) shall generally not pay, or shall be unable to pay, or
shall admit in writing its inability to pay its debts as such debts become due;
or (b) shall make an assignment for the benefit of creditors, or petition or
apply to any tribunal for the appointment of a custodian, receiver, or trustee
for it or a substantial part of its assets; or (c) shall commence any proceeding
under any bankruptcy, reorganization, arrangement, readjustment of debt,
dissolution, or liquidation law or statute of any jurisdiction, whether now or
hereafter in effect; or (d) shall have had any such petition or application
filed or any such proceeding commenced against it in which an order for relief
is entered or an adjudication or appointment is made and which remains
undismissed for a period of forty (40) days or more; or (e) shall take any
corporate action indicating its consent to, approval of, or acquiescence in any
such petition, application,
63
proceeding, or order for relief or the appointment of a custodian, receiver, or
trustee for all or any substantial part of its properties; or (f) shall suffer
any such custodianship, receivership, or trusteeship to continue undischarged
for a period of forty (40) days or more;
(6) One or more judgments, decrees, or orders for the payment
of money in excess of $10,000,000 in the aggregate shall be rendered against the
Borrower and/or any Subsidiary and/or any Guarantor, and such judgments,
decrees, or orders shall continue unsatisfied and in effect for a period of
twenty (20) consecutive days without being vacated, discharged, satisfied, or
stayed or bonded pending appeal;
(7) Any Guaranty hereunder shall at any time after its
execution and delivery and for any reason cease to be in full force and effect
or shall be declared null and void, or the validity or enforceability thereof
shall be contested by the Guarantor or the Guarantor shall deny it has any
further liability or obligation under, or shall fail to perform its obligations
under, the Guaranty (except to the extent that the foregoing occurs solely by
reason of the liquidation or dissolution of a Guarantor as a result of an
Internal Reorganization);
(8) Any Change of Control of the Borrower or any
Subsidiary or any Guarantor shall occur;
(9) Any of the following events shall occur or exist with
respect to the Borrower, any Subsidiary or any Commonly Controlled Entity under
ERISA: any Reportable Event shall occur; complete or partial withdrawal from any
Multiemployer Plan shall take place; any Prohibited Transaction shall occur; a
notice of intent to terminate a Plan shall be filed, or a Plan shall be
terminated; or circumstances shall exist which constitute grounds entitling the
PBGC to institute proceedings to terminate a Plan, or the PBGC shall institute
such proceedings; and in each case above, such event or condition, together with
all other events or conditions described in this Section 8.01(9), if any, could
subject the Borrower or any Significant Guarantor or Significant Subsidiary to
any tax, penalty, or other liability which in the aggregate may exceed $500,000;
or
(10) If any federal, state, or local agency asserts a material
claim against the Borrower or any Significant Guarantor or Significant
Subsidiary and/or its assets, equipment, property, leaseholds, or other
facilities for damages or cleanup costs relating to a hazardous discharge or an
environmental complaint; provided, however, that such claim shall not constitute
a default if, within fifteen (15) days of the occurrence giving rise to the
claim, (a) the Borrower can prove to the reasonable satisfaction
64
of the Majority Banks that the Borrower has commenced and is diligently pursuing
either: (i) a cure or correction of the event which constitutes the basis for
the claim, and continues diligently to pursue such cure or correction or (ii)
proceedings for an injunction, a restraining order or other appropriate emergent
relief preventing such agency or agencies from asserting such claim, which
relief is granted within thirty (30) days of the occurrence giving rise to the
claim and the injunction, order, or emergent relief is not thereafter resolved
or reversed on appeal or (iii) the defense against the claim through action in a
court or agency exercising jurisdiction over the claim; and (b) in any of the
foregoing events, the Borrower has posted a bond, letter of credit, or other
security satisfactory in form, substance, and amount to the Majority Banks and
the agency or entity asserting the claim to secure the correction of the event
which constitutes the basis for the claim in accordance with applicable laws;
then, and in any such event, the Agent shall at the request of, or may, with the
consent of, the Majority Banks, by notice to the Borrower, (1) declare the
Banks' obligation to make Loans (including, in the case of the Swing Line Bank,
Swing Line Loans) to be terminated, whereupon the same shall forthwith
terminate; and (2) declare the outstanding Notes, all interest thereon, and all
other amounts payable under this Agreement to be forthwith due and payable,
whereupon the Notes, all such interest, and all such amounts shall become and be
forthwith due and payable, without presentment, demand, protest, or further
notice of any kind, all of which are hereby expressly waived by the Borrower;
provided, however, in the case of an event described in Section 8.01(5) hereof
the obligations of the Banks to make Loans (including, in the case of the Swing
Line Bank, Swing Line Loans) hereunder shall automatically terminate and the
Obligations shall immediately become due and payable without any election or
action on the part of the Agent or any Bank.
Section 8.02. Set Off. Upon the occurrence and during the
continuance of any Event of Default, each Bank is hereby authorized at any time
and from time to time, without notice to the Borrower (any such notice being
expressly waived by the Borrower), to set off and apply any and all deposits
(general or special, time or demand, provisional or final) at any time held and
other indebtedness at any time owing by such Bank to or for the credit or the
account of the Borrower against any and all of the obligations of the Borrower
now or hereafter existing under this Agreement or the Bank's Note or any other
Loan Document, irrespective of whether or not the Agent or such Bank shall have
made any demand under this Agreement or such Bank's Note or such other Loan
Document and although such obligations may be unmatured. Each Bank agrees
promptly to notify the Borrower (with a copy to the Agent) after any such
set-off and
65
application, provided that the failure to give such notice shall not affect the
validity of such set-off and application. The rights of each Bank under this
Section 8.02 are in addition to other rights and remedies (including, without
limitation, other rights of set-off) which each Bank may have.
ARTICLE IX
GUARANTY
Section 9.01. Guaranty. (a) Each of the Guarantors
unconditionally and irrevocably guarantees the due and punctual payment and
performance of the Obligations. Each of the Guarantors further agrees that the
Obligations may be extended or renewed, in whole or in part, without notice or
further assent from it, and it will remain bound upon this Guaranty
notwithstanding any extension or renewal of any Obligation.
(b) Each of the Guarantors waives presentation to, demand for
payment from and protest to the Borrower or any other Guarantor of any of the
Obligations, and also waives notice of protest for nonpayment. The Obligations
of the Guarantors hereunder shall not be affected by (i) the failure of the
Agent or any Bank to assert any claim or demand or to enforce any right or
remedy against the Borrower or any other Guarantor under the provisions of this
Agreement or any other agreement or otherwise; (ii) any extension or renewal of
any provision hereof or thereof; (iii) any rescission, waiver, compromise,
acceleration, amendment or modification of any of the terms or provisions of any
Loan Document or any other agreement; (iv) the release, exchange, waiver or
foreclosure of any security held by the Agent or any Bank for the Obligations or
any of them; (v) the failure of the Agent or any Bank to exercise any right or
remedy against any other guarantor of the Obligations; or (vi) the release or
substitution of any Guarantor.
(c) Each of the Guarantors further agrees that this Guaranty
constitutes a guaranty of performance and of payment when due and not just of
collection, and waives any right to require that any resort be had by the Agent
or any Bank to any security held for payment of the Obligations or to any
balance of any deposit, account or credit on the books of a Bank in favor of the
Borrower or any other Guarantor, or to any other Person.
(d) Each of the Guarantors hereby expressly assumes all
responsibilities to remain informed of the financial condition of the Borrower
and each other Guarantor and any circumstances affecting the ability of the
Borrower to perform under this Agreement. Each Guarantor acknowledges that it
will receive direct and indirect benefits from the Loans contemplated
66
by this Agreement and that the Banks required as a condition to entering into
this Agreement, and in order to secure the prompt and complete payment,
observance and performance of the Obligations, that each Guarantor shall make
this Guaranty.
(e) Each of the Guarantors' guaranty shall not be affected by
the genuineness, validity, regularity or enforceability of the Obligations, the
Notes or any other instrument evidencing any Obligations, or by the existence,
validity, enforceability, perfection, or extent of any collateral therefor or by
any other circumstance relating to the Obligations which might otherwise
constitute a defense to this Guaranty. The Agent makes no representation or
warranty in respect of any such circumstances and has no duty or responsibility
whatsoever to the Guarantors in respect of the management and maintenance of the
Obligations or any such collateral.
Section 9.02. No Impairment of Guaranty. The Obligations of
the Guarantors hereunder shall not be subject to any reduction, limitation,
impairment or termination for any reason, including, without limitation, any
claim of waiver, release, surrender, alteration or compromise, and shall not be
subject to any defense or set-off, counterclaim, recoupment or termination
whatsoever by reason of the invalidity, illegality or unenforceability of the
Obligations or otherwise. Without limiting the generality of the foregoing, the
Obligations of the Guarantors hereunder shall not be discharged or impaired or
otherwise affected by the failure of the Agent or any Bank to assert any claim
or demand or to enforce any remedy under this Agreement or any other agreement,
by any waiver or modification of any provision thereof, by any default, failure
or delay, willful or otherwise, in the performance of the Obligations, or by any
other act or thing or omission or delay to do any other act or thing which may
or might in any manner or to any extent vary the risk of the Guarantors or would
otherwise operate as a discharge of the Guarantors as a matter of law, unless
and until the Obligations are paid in full and the Commitments have been
terminated.
Section 9.03. Continuation and Reinstatements etc. (a) Each of
the Guarantors further agrees that its guaranty hereunder shall continue to be
effective or be reinstated, as the case may be, if at any time payment, or any
part thereof, of principal or of interest on any Obligation is rescinded or must
otherwise be restored by the Agent or any Bank upon the bankruptcy or
reorganization of the Borrower or a Guarantor, or otherwise. In furtherance of
the provisions of this Article IX, and not in limitation of any other right
which the Agent or any Bank may have at law or in equity against the Borrower or
the Guarantors by virtue hereof, upon failure of the Borrower to pay any
Obligation when and as the same shall become due, whether at
67
maturity, by acceleration, after notice or otherwise, each of the Guarantors
hereby promises to and will, upon receipt of written demand by the Agent on
behalf of the Banks, forthwith pay or cause to be paid to the Agent on behalf of
the Banks in cash an amount equal to the unpaid amount of all the Obligations,
and thereupon the Banks shall assign such Obligation, together with all security
interests, if any, then held by the Agent in respect of such Obligation, to the
Guarantor or Guarantors making such payment.
(b) Upon payment by any Guarantor of any sums to the Agent on
behalf of the Banks hereunder, all rights of such Guarantor against the
Borrower, arising as a result thereof by way of right of subrogation or
otherwise, shall in all respects be subordinate and junior in right of payment
to the prior final and indefeasible payment in full of all the Obligations to
the Agent on behalf of the Banks. If any amount shall be paid to such Guarantor
for the account of the Borrower, such amount shall be held in trust for the
benefit of the Banks and shall forthwith be paid to the Agent on behalf of the
Banks to be credited and applied to the Obligations, whether matured or
unmatured.
Section 9.04. Limitation on Guaranteed Amount. Notwithstanding
any other provision of this Article IX, the amount guaranteed by any Guarantor
hereunder shall be limited to the extent, if any, required so that its
obligations under this Article IX shall not be subject to avoidance under
Section 548 of the Bankruptcy Code or to being set aside or annulled under any
applicable state law relating to fraud on creditors. In determining the
limitations, if any, on the amount of such Guarantor's obligations hereunder
pursuant to the preceding sentence, any rights of subrogation or contribution
which such Guarantor may have under this Article IX or applicable law shall be
taken into account.
ARTICLE X
AGENCY PROVISIONS
Section 10.01. Authorization and Action. Each Bank hereby
irrevocably appoints and authorizes the Agent to take such action as agent on
its behalf and to exercise such powers under this Agreement as are delegated to
the Agent by the terms hereof, together with such powers as are reasonably
incidental thereto. The duties of the Agent shall be mechanical and
administrative in nature and the Agent shall not by reason of this Agreement be
a trustee or fiduciary for any Bank. The Agent shall have no duties or
responsibilities except those expressly set forth herein. As to any matters not
expressly provided for by this Agreement (including, without limitation,
enforcement or
68
collection of the Notes), the Agent shall not be required to act or to refrain
from acting except upon the instructions of the Majority Banks or, to the extent
required under Section 11.01, all Banks (and shall be fully protected in so
acting or so refraining from acting), and such instructions shall be binding
upon all Banks and all holders of Notes; provided, however, that the Agent shall
not be required to take any action which exposes the Agent to personal liability
or which is contrary to this Agreement or applicable law. The Agent shall
administer the Loan in the same manner that it would administer a comparable
loan held 100% for its own account.
Section 10.02. Liability of Agent. Neither the Agent nor any
of its directors, officers, agents, or employees shall be liable for any action
taken or omitted to be taken by it or them under or in connection with this
Agreement in the absence of its or their own gross negligence or willful
misconduct. Without limiting the generality of the foregoing, the Agent (1) may
treat the payee of any Note as the holder thereof until the Agent receives
written notice of the assignment or transfer thereof signed by such payee and in
form satisfactory to the Agent; (2) may consult with legal counsel (including
counsel for the Borrower), independent public accountants and other experts
selected by it and shall not be liable for any action taken or omitted to be
taken in good faith by it in accordance with the advice of such counsel,
accountants, or experts; (3) makes no warranty or representation to any Bank and
shall not be responsible to any Bank for any statements, warranties, or
representations made in or in connection with this Agreement; (4) shall not have
any duty to ascertain or to inquire as to the performance or observance of any
terms, covenants, or conditions of this Agreement on the part of the Borrower,
or to inspect the property (including the books and records) of the Borrower;
(5) shall not be responsible to any Bank for the due execution, legality,
validity, enforceability, genuineness, perfection, sufficiency or value of this
Agreement or any other instrument or document furnished pursuant hereto; and (6)
shall incur no liability under or in respect of this Agreement by acting upon
any notice, consent, certificate or other instrument or writing (which may be
sent by telegram, telefax, or facsimile transmission) reasonably believed by it
to be genuine and signed or sent by the proper party or parties.
Section 10.03. Rights of Agent as a Bank. With respect to its
Commitment, the Loans made by it and the Note issued to it, the Agent shall have
the same rights and powers under this Agreement as any other Bank and may
exercise the same as though it were not the Agent; and the term "Bank" or
"Banks" shall, unless otherwise expressly indicated, include the Agent in its
individual capacity. The Agent, each Bank and each of their respective
Affiliates may accept deposits from, lend money to,
69
act as trustee under indentures of, and generally engage in any kind of business
with, the Borrower, any of its Subsidiaries and any Person who may do business
with or own securities of the Borrower or any Subsidiary, all as if the Agent
were not the Agent and without any duty to account therefor to the other Banks.
Section 10.04. Independent Credit Decisions. Each Bank
acknowledges that it has, independently and without reliance upon the Agent or
any other Bank and based on such documents and information as it has deemed
appropriate, made its own credit analysis and decision to enter into this
Agreement. Each Bank also acknowledges that it will, independently and without
reliance upon the Agent or any other Bank and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under this Agreement. The Agent
shall promptly provide the Banks with copies of all notices of default and other
formal notices sent or received in accordance with Section 11.02 of this
Agreement, any written notice relating to changes in the Borrower's debt ratings
that affect the Senior Debt Rating received from the Borrower or a ratings
agency and any other documents or notices received by the Agent with respect to
the Agreement and requested in writing by any Bank. Except for notices, reports
and other documents and information expressly required to be furnished to the
Banks by the Agent hereunder, the Agent shall have no duty or responsibility to
provide any Bank with any credit or other information concerning the affairs,
financial condition or business of the Borrower or any of its Subsidiaries (or
any of their Affiliates) which may come into possession of the Agent or any of
its Affiliates.
Section 10.05. Indemnification. The Banks severally agree to
indemnify the Agent in its capacity as Agent and not as a Bank (to the extent
not reimbursed by the Borrower), ratably according to the respective amounts of
their Commitments, from and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind or nature whatsoever which may be imposed on, incurred
by, or asserted against the Agent in any way relating to or arising out of this
Agreement or any action taken or omitted by the Agent under this Agreement,
provided that no Bank shall be liable for any portion of any of the foregoing
(i) resulting from the Agent's gross negligence or willful misconduct, (ii) on
account of a strictly internal or regulatory matter relating to the Agent (such
as relating to legal lending limit violation by the Agent), or (iii) in
connection with a breach of an express agreement made by the Agent to a Bank
under this Agreement. Without limitation of the foregoing, each Bank severally
agrees to reimburse the Agent (to the extent not reimbursed by the Borrower)
promptly upon demand for its ratable
70
share of any reasonable out-of-pocket expenses (including counsel fees) incurred
by the Agent in connection with the preparation, administration, or enforcement
of, or legal advice in respect of rights or responsibilities under, this
Agreement; provided, however, that no Bank shall be required to reimburse the
Agent for any such expenses incurred (i) resulting from the Agent's gross
negligence or willful misconduct, (ii) on account of a strictly internal or
regulatory matter relating to the Agent (such as relating to legal lending limit
violation by the Agent), or (iii) in connection with a breach of an express
agreement made by the Agent to a Bank under this Agreement.
Section 10.06. Successor Agent. (a) The Agent may resign at
any time by giving at least sixty (60) days' prior written notice thereof to the
Banks and the Borrower and may be removed at any time with or without cause by
the Majority Banks. Upon any such resignation or removal, the Majority Banks
shall have the right to appoint a successor Agent, subject to Section 10.06(b).
If no successor Agent shall have been so appointed by the Majority Banks, and
shall have accepted such appointment, within thirty (30) days after the retiring
Agent's giving of notice of resignation or the Majority Banks' removal of the
retiring Agent, then the retiring Agent may, on behalf of the Banks, appoint a
successor Agent, which shall be a commercial bank or federal savings bank
organized under the laws of the United States of America or of any State
thereof, subject to Section 10.06(b). Upon the acceptance of any appointment as
Agent hereunder by a successor Agent, such successor Agent shall thereupon
succeed to and become vested with all the rights, powers, privileges and duties
of the retiring Agent, and the retiring Agent shall be discharged from its
duties and obligations under this Agreement. After any retiring Agent's
resignation or removal hereunder as Agent, the provisions of this Article X
shall inure to its benefit as to any actions taken or omitted to be taken by it
while it was Agent under this Agreement.
(b) The appointment of any successor Agent that is not a Bank
shall be subject to the prior written approval of the Borrower, which approval
shall not be unreasonably withheld.
Section 10.07. Sharing of Payments, Etc. If any Bank shall
obtain any payments (whether voluntary, involuntary, through the exercise of any
right of set-off, or otherwise) on account of the Note held by it in excess of
its ratable share of payments on account of the Notes obtained by all the Banks,
such Bank shall purchase from the other Banks such participations in the Notes
held by them as shall be necessary to cause such purchasing Bank to share the
excess payment ratably with each of the other Banks, provided, however, that if
all or any portion of such excess payment is thereafter recovered from such
purchasing
71
Bank, such purchase from each Bank shall be rescinded and each Bank shall repay
to the purchasing Bank the purchase price to the extent of such recovery
together with an amount equal to such Bank's ratable share (according to the
proportion of (1) the amount of such Bank's required repayment to (2) the total
amount so recovered from the purchasing Bank) of any interest or other amount
paid or payable by the purchasing Bank in respect of the total amount so
recovered. The Borrower agrees that any Bank so purchasing a participation from
another Bank pursuant to this Section 10.07 may, to the fullest extent permitted
by law, exercise all its rights of payment (including the right of set-off) with
respect to such participation as fully as if such Bank were the direct creditor
of the Borrower in the amount of such participation.
Section 10.08. Withholding Tax Matters. Each Bank which is a
Non-United States Person agrees to execute and deliver to the Agent for delivery
to the Borrower, before the first scheduled payment date in each year, either
(i) three United States Internal Revenue Service Forms 1001 or (ii) three United
States Internal Revenue Service Forms 4224 together with three United States
Internal Revenue Service Forms W-9, or any successor forms, as appropriate,
properly completed and claiming complete or partial, as the case may be,
exemption from withholding and deduction of United States federal taxes. Each
Bank which is a Non-United States Person represents and warrants to the Borrower
and to the Agent that, at the date of this Agreement, (i) its Lending Offices
are entitled to receive payments of principal, interest, and fees hereunder
without deduction or withholding for or on account of any taxes imposed by the
United States or any political subdivision thereof and (ii) it is permitted to
take the actions described in the preceding sentence under the laws and any
applicable double taxation treaties of the jurisdictions specified in the
preceding sentence. Each Bank which is a Non-United States Person further agrees
that, to the extent any form claiming complete or partial exemption from
withholding and deduction of United States federal taxes delivered under this
Section 10.08 is found to be incomplete or incorrect in any material respect,
such Bank shall execute and deliver to the Agent a complete and correct
replacement form.
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ARTICLE XI
MISCELLANEOUS
Section 11.01. Amendments, Etc. No amendment, modification,
termination, or waiver of any provision of any Loan Document to which the
Borrower is a party, nor consent to any departure by the Borrower from any Loan
Document to which it is a party, shall in any event be effective unless the same
shall be in writing and signed by the Majority Banks and the Borrower, and then
such waiver or consent shall be effective only in the specific instance and for
the specific purpose for which given; provided, however, that no amendment,
waiver or consent shall, unless in writing and signed by all the Banks and the
Borrower, do any of the following: (1) increase the Commitments of the Banks
(except as provided in Section 2.22) or the Swing Loan Commitment of the Swing
Line Bank or subject the Banks to any additional obligations; (2) reduce the
principal of, or interest on, the Notes or any fees (other than the Agent's
fees) hereunder; (3) postpone any date fixed for any payment of principal of, or
interest on, the Notes or any fees (other than the Agent's fees) hereunder; (4)
change the percentage of the Commitments or of the aggregate unpaid principal
amount of the Notes or the number of Banks which shall be required for the Banks
or any of them to take action hereunder (including, without limitation, any
change in the number of Banks required to extend the Termination Date under the
provisions of Section 2.19); (5) release any Significant Guarantor; or (6)
amend, modify or waive any provision of Article X or this Section 11.01; and,
provided further, that no amendment, waiver, or consent shall, unless in writing
and signed by the Agent or the Swing Line Bank (as applicable) in addition to
the Banks required above to take such action, affect the rights or duties of the
Agent or the Swing Line Bank (as applicable) under any of the Loan Documents;
and, provided, further, that no amendment, waiver or consent shall, unless in
writing and signed by the Issuing Bank in addition to the Banks required above
to take such action, affect the rights or duties of the Issuing Bank under any
of the Loan Documents.
Section 11.02. Notices, Etc. All notices and other
communications provided for under this Agreement and under the other Loan
Documents to which the Borrower is a party shall be in writing (including
telegraphic, telex, and facsimile transmis sions) and mailed or transmitted or
hand delivered, if to the Borrower, a Guarantor, a Bank or the Agent at its
respective address set forth on the signature pages hereof; or, as to each
party, at such other address as shall be designated by such party in a written
notice to all other parties complying as to delivery with the terms of this
Section 11.02. Except as is otherwise provided in this Agreement, all such
notices and communications shall be effective when deposited in the mails or
delivered to
73
the telegraph company, or transmitted, answerback received, or hand delivered,
respectively, addressed as aforesaid, except that notices to the Agent pursuant
to the provisions of Article II shall not be effective until received by the
Agent or, in the case of Section 2.21, the Swing Line Bank.
Section 11.03. No Waiver. No failure or delay on the part of
any Bank or the Agent or the Issuing Bank in exercising any right, power, or
remedy hereunder shall operate as a waiver thereof; nor shall any single or
partial exercise of any such right, power, or remedy preclude any other or
further exercise thereof or the exercise of any other right, power, or remedy
hereunder. The making of a Loan or issuance, amendment or extension of a
Facility Letter of Credit notwithstanding the existence of a Default or Event of
Default shall not constitute any waiver or acquiescence of such Default or Event
of Default, and the making of any Loan or issuance, amendment or extension of a
Facility Letter of Credit notwithstanding any failure or inability to satisfy
the conditions precedent to such Loan or issuance, amendment or extension of a
Facility Letter of Credit shall not constitute any waiver or acquiescence with
respect to such conditions precedent with respect to any subsequent Loans or
subsequent issuance, amendment or extension of a Facility Letter of Credit. The
rights and remedies provided herein are cumulative, and are not exclusive of any
other rights, powers, privileges, or remedies, now or hereafter existing, at
law, in equity or otherwise.
Section 11.04. Costs, Expenses, and Taxes. The Borrower agrees
to reimburse the Agent for any reasonable costs, internal charges and
out-of-pocket expenses (including reasonable fees and time charges of attorneys
for the Agent, which attorneys may be employees of the Agent) paid or incurred
by the Agent in connection with the preparation, negotiation, execution,
delivery, review, amendment, modification and administration of the Loan
Documents and the collection of the Loans and enforcement of the Loan Documents.
In addition, the Borrower shall pay any and all stamp and other taxes and fees
payable or determined to be payable in connection with the execution, delivery,
filing, and recording of any of the Loan Documents and the other documents to be
delivered under any such Loan Documents, and agrees to hold the Agent and each
of the Banks harmless from and against any and all liabilities with respect to
or resulting from any delay in paying or failing to pay such taxes and fees.
This provision shall survive termination of this Agreement.
Section 11.05. Integration. This Agreement (including the
Borrower's obligation to pay the fees of the Agent and FCCM as provided in
Section 2.09(c) and the letter referred to therein) and the Loan Documents
contain the entire agreement
74
between the parties relating to the subject matter hereof and supersede all oral
statements and prior writings with respect thereto.
Section 11.06. Indemnity. The Borrower hereby agrees to
defend, indemnify, and hold each Bank harmless from and against all claims,
damages, judgments, penalties, costs, and expenses (including attorney fees and
court costs now or hereafter arising from the aforesaid enforcement of this
clause) arising directly or indirectly from the activities of the Borrower and
its Subsidiaries, its predecessors in interest, or third parties with whom it
has a contractual relationship, or arising directly or indirectly from the
violation of any environmental protection, health, or safety law, whether such
claims are asserted by any governmental agency or any other person. This
indemnity shall survive termination of this Agreement.
Section 11.07. Governing Law. This Agreement and the Notes
shall be governed by, and construed in accordance with, the laws of the State of
Illinois (without regard to principles of conflict of law) but giving effect to
federal laws applicable to national banks.
Section 11.08. Severability of Provisions. Any provision of
any Loan Document which is prohibited or unenforce able in any jurisdiction
shall, as to such jurisdiction, be ineffective to the extent of such prohibition
or unenforceability without invalidating the remaining provisions of such Loan
Document or affecting the validity or enforceability of such provision in any
other jurisdiction.
Section 11.09. Counterparts. This Agreement may be executed in
any number of counterparts and by the different parties to this Agreement in
separate counterparts, each of which when so executed shall be deemed to be an
original and all of which taken together shall constitute one and the same
Agreement.
Section 11.10. Headings. Article and Section headings in the
Loan Documents are included in such Loan Documents for the convenience of
reference only and shall not constitute a part of the applicable Loan Documents
for any other purpose.
Section 11.11. Submission to Jurisdiction. The Borrower, each
Subsidiary, and each Guarantor hereby submits to the nonexclusive jurisdiction
of the United States District Court for the Northern District of Illinois and of
any Illinois State court sitting in The City of Chicago for purposes of all
legal proceedings which may arise hereunder or under the Notes. The Borrower,
each Subsidiary, and each Guarantor irrevocably waives to the fullest extent
permitted by law, any objection which it
75
may have or hereafter have to the laying of the venue of any such proceeding
brought in such a court, and any claim that any such proceeding brought in such
a court has been brought in an inconvenient forum. The Borrower, each
Subsidiary, and each Guarantor hereby consents to process being served in any
such proceeding by the mailing of a copy thereof by registered or certified
mail, postage prepaid, to its address specified in Section 11.02 hereof or in
any other manner permitted by law.
Section 11.12. Jury Trial Waiver. THE BORROWER, EACH
SUBSIDIARY, EACH GUARANTOR, THE AGENT, AND EACH BANK HEREBY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY LAW, TRIAL BY JURY IN ANY ACTION, PROCEEDING, CLAIM
OR COUNTERCLAIM, WHETHER IN CONTRACT OR TORT, AT LAW OR IN EQUITY, ARISING OUT
OF OR IN ANY WAY RELATED TO THIS AGREEMENT OR THE LOAN DOCUMENTS. NO OFFICER OF
ANY BANK OR OF THE AGENT HAS AUTHORITY TO WAIVE, CONDITION, OR MODIFY THIS
PROVISION.
Section 11.13. Governmental Regulation. Anything contained in
this Agreement to the contrary notwithstanding, no Bank shall be obligated to
extend credit to the Borrower in violation of any limitation or prohibition
provided by any applicable statute or regulation.
Section 11.14. No Fiduciary Duty. The relationship between the
Borrower and the Banks and the Agent shall be solely that of borrower and
lender. Neither the Agent nor any Bank shall have any fiduciary responsibilities
to the Borrower. Neither the Agent nor any Bank undertakes any responsibility to
the Borrower to review or inform the Borrower of any matter in connection with
any phase of the Borrower's business or operations.
Section 11.15. Confidentiality. Each Bank agrees to hold any
confidential information which it may receive from the Borrower pursuant to this
Agreement in confidence, except for disclosure (i) to other Banks and their
respective affiliates, (ii) to legal counsel, accountants, and other
professional advisors to that Bank or to a Transferee, (iii) to regulatory
officials, (iv) to any Person as requested pursuant to or as required by law,
regulation, or legal process, (v) to any Person in connection with any legal
proceeding to which that Bank is a party, and (vi) permitted by Section 12.04.
ARTICLE XII
BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS
Section 12.01. Successors and Assigns. The terms and
provisions of the Loan Documents shall be binding upon and inure to the benefit
of the Borrower and the Agent and the Banks and
76
their respective successors and assigns, except that (i) the Borrower shall not
have the right to assign its rights or obligations under the Loan Documents
without the consent of all Banks and (ii) any assignment by any Bank must be
made in compliance with Section 12.03. Notwithstanding clause (ii) of this
Section, any Bank may at any time, without the consent of the Borrower or the
Agent, pledge all or any portion of its rights under this Agreement and its
Notes to a Federal Reserve Bank as security for an obligation of such pledgor or
of an affiliated entity to such Federal Reserve Bank; provided, however, that no
such pledge shall release the pledgor Bank from its obligations hereunder. The
Agent may treat the payee of any Note as the owner thereof for all purposes
hereof unless and until such payee complies with Section 12.03 in the case of an
assignment thereof. Any assignee or transferee of a Note agrees by acceptance
thereof to be bound by all the terms and provisions of the Loan Documents. Any
request, authority or consent of any Person, who at the time of making such
request or giving such authority or consent is the holder of any Note, shall be
conclusive and binding on any subsequent holder, transferee or assignee of such
Note or of any Note or Notes issued in exchange thereof.
Section 12.02. Participations. (a) Permitted Participants;
Effect. Any Bank may, in the ordinary course of its business and in accordance
with applicable law, at any time sell to one or more banks or other entities
("Participants") participating interests in any Loan owing to such Bank, any
Note held by such Bank, any Commitment of such Bank (which may include, in the
case of the Swing Line Bank, the Swing Line Commitment) or any other interest of
such Bank under the Loan Documents in an amount not less than Five Million
Dollars ($5,000,000). In the event of any such sale by a Bank of participating
interests to a Participant, such Bank's obligations under the Loan Documents
shall remain unchanged, such Bank shall remain solely responsible to the other
parties hereto for the performance of such obligations, such Bank shall remain
the holder of any such Note for all purposes under the Loan Documents, all
amounts payable by the Borrower under this Agreement shall be determined as if
such Bank had not sold participating interests, and the Borrower and the Agent
shall continue to deal solely and directly with such Bank in connection with
such Bank's rights and obligations under the Loan Documents.
(b) Voting rights. Each Bank shall with respect to its
Participants, if any, retain the sole right to approve, without the consent of
any Participant, any amendment, modification or waiver of any provision of the
Loan Documents other than any amendment, modification or waiver with respect to
any Loan or Commitment (or Swing Line Commitment, if applicable) in which such
Participant has an interest which forgives
77
principal, interest or fees (other than Agent's fees) or reduces the interest
rate or fees (other than Agent's fees) payable with respect to any such Loan or
Commitment (or Swing Line Commitment, if applicable), postpones any date fixed
for any regularly scheduled payment of principal of, or interest or fees (other
than Agent's fees) on, any such Loan or Commitment (or Swing Line Commitment, if
applicable) or releases any Significant Guarantor.
(c) Benefit of set-off. The Borrower agrees that each
Participant shall be deemed to have the rights of set-off provided in Sections
2.12 and 8.02 in respect of its participating interest in amounts owing under
the Loan Documents to the same extent as if the amount of its participating
interest were owing directly to it as a Bank under the Loan Documents, provided
that each Bank shall retain the right of set-off provided in Sections 2.12 and
8.02 with respect to the amount of participating interests sold to each
Participant. The Banks agree to share with each Participant, and each
Participant, by exercising the right of set-off provided in Section 2.12 or
8.02, agrees to share with each Bank, any amount received pursuant to the
exercise of its right of set-off, such amounts to be shared in accordance with
Section 10.07 as if each Participant were a Bank.
Section 12.03. Assignments. (a) Permitted assign ments. Any
Bank may, in the ordinary course of its business and in accordance with
applicable law, at any time assign to one or more banks or other entities
("Purchasers") all, or any part (but in an amount not less than Five Million
Dollars ($5,000,000) of its Commitment and Loans, which may include, in the case
of a Purchaser of an interest from the Swing Line Bank, the Swing Line
Commitment and Swing Line Loans), of its rights and obligations under the Loan
Documents, provided, however, that, based upon facts and circumstances existing
at the time of any such assignment, such assignment does not result in an event
described in Sections 2.14, 2.15, or 2.16 hereof. Such assignment shall be
substantially in the form of Exhibit I hereto or in such other form as may be
agreed to by the parties thereto. The consent of the Borrower and the Agent
shall be required prior to an assignment becoming effective with respect to a
Purchaser which is not a Bank or an Affiliate thereof; provided, however, that
if an Event of Default has occurred and is continuing, the consent of the
Borrower shall not be required. Such consent shall not be unreasonably withheld.
(b) Effect; Effective date. Upon (i) delivery to the Agent of
a notice of assignment, substantially in the form attached as Exhibit 1 to
Exhibit I hereto (a "Notice of Assignment"), together with any consents required
by Section 12.03; and (ii) payment (by either the assignor or the assignee) of a
$4,000.00 fee (or, in the case of an assignment to the
78
assignor's Affiliate or by reason of the provisions of Section 2.19, a $2,000
fee) to the Agent for processing such assignment, such assignment shall become
effective on the effective date specified in such Notice of Assignment. The
Notice of Assignment shall contain a representation by the Purchaser to the
effect that none of the consideration used to make the purchase of the
Commitment and Loans under the applicable assignment agreement are "plan assets"
as defined under ERISA and that the rights and interests of the Purchaser in and
under the Loan Documents will not be "plan assets" under ERISA. On and after the
effective date of such assignment, such Purchaser shall for all purposes be a
Bank party to this Agreement and shall have all the rights and obligations of a
Bank under the Loan Documents, to the same extent as if it were an original
party hereto, and no further consent or action by the Borrower, the Banks or the
Agent shall be required to release the transferor Bank with respect to the
percentage of the Aggregate Commitments and Loans (and, if applicable, Swing
Line Commitments and Swing Line Loans) assigned to such Purchaser. Upon the
consummation of any assignment to a Purchaser pursuant to this Section 12.03(b),
the transferor Bank, the Agent and the Borrower shall make appropriate
arrangements so that replacement Notes are issued to such transferor Bank and
new Notes or, as appropriate, replacement Notes, are issued to such Purchaser,
in each case in principal amounts reflecting their Commitment, as adjusted
pursuant to such assignment.
(c) Bank Acquisitions and Mergers. If, as a result of
acquisitions or mergers by Banks (or by entities of which a Bank or Banks are
subsidiaries), a Bank or two or more Banks that are, directly or indirectly,
subsidiaries of a common parent (collectively, "Merged Banks") hold a Commitment
or Commitments in an aggregate amount exceeding the amount of the Commitment
held by the Bank that is the Agent hereunder, the Bank that is the Agent may, at
its election, but without any obligation to do so, acquire from such Merged
Banks a portion of their Commitments and rights and obligations hereunder in an
amount necessary to reduce the aggregate amount of the Commitments of the Merged
Banks, and to increase the Commitment of the Bank that is Agent, to equal
amounts. Such election shall be exercisable by notice from the Agent to the
Merged Banks and shall be effected, on a date designated in such notice, by
Assignment substantially in the form of Exhibit I hereto or such other form as
may be agreed to by the parties. On the date of delivery of such Assignment the
assignor shall pay to the assignee an amount equal to the principal balance of
the Loans outstanding with respect to the interest so assigned.
Section 12.04. Dissemination of Information. The Borrower
authorizes each Bank to disclose to any Participant or Purchaser or any other
Person acquiring an interest in the Loan Documents by operation of law (each a
"Transferee") and any
79
prospective Transferee any and all information in such Bank's possession
concerning the creditworthiness of the Borrower, each Subsidiary, or each
Guarantor, provided that such Transferee or prospective Transferee agrees to be
subject to Section 11.15 to the same effect as if it were a Bank.
Section 12.05. Tax Treatment. If any interest in any Loan
Document is transferred to any Transferee which is organized under the laws of
any jurisdiction other than the United States or any State thereof, the
transferor Bank shall cause such Transferee, concurrently with the effectiveness
of such transfer to comply with the provisions of Section 10.08.
ARTICLE XIII
THE LETTER OF CREDIT FACILITY
Section 13.01. Facility Letters of Credit. (a) Each Issuing
Bank agrees, on the terms and conditions set forth in this Agreement, to issue
from time to time for the account of the Borrower, through such offices or
branches as it and the Borrower may jointly agree, one or more Facility Letters
of Credit in accordance with this Article XIII, during the period commencing on
the Effective Date and ending on the sixtieth (60th) day prior to the
Termination Date.
(b) The Borrower shall not request, and no Issuing Bank shall
issue, a Facility Letter of Credit for any purpose other than for purposes for
which Loan proceeds may by used.
Section 13.02. Limitations. An Issuing Bank shall not
issue, amend or extend, at any time, any Facility Letter of
Credit:
(i) if the aggregate maximum amount then available for drawing
under Letters of Credit issued by such Issuing Bank, after giving
effect to the Facility Letter of Credit or amendment or extension
thereof requested hereunder, shall exceed any limit imposed by law or
regulation upon such Issuing Bank;
(ii) if, after giving effect to the issuance, amendment or
extension of the Facility Letter of Credit requested hereunder, the
aggregate principal amount of the Facility Letter of Credit Obligations
would exceed
$30,000,000;
(iii) if, after giving effect to the issuance, amendment or
extension of the Facility Letter of Credit requested hereunder,
Permitted Senior Debt would exceed the
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Borrowing Base as of the most recent Inventory Valuation
Date;
(iv) if, after giving effect to the issuance, amendment or
extension of the Facility Letter of Credit requested hereunder, the sum
of (A) the outstanding and unpaid principal amount of the Loans and (B)
the Facility Letter of Credit Obligations would exceed the Aggregate
Commitments;
(v) if such Issuing Bank receives written notice from
the Agent at or before 11:00 A.M. (Chicago time) on the proposed
Issuance Date of such Facility Letter of Credit that one or more of the
conditions precedent contained in Section 13.03 would not on such
Issuance Date be satisfied, unless such conditions are thereafter
satisfied or waived and written notice of such satisfaction is given to
such Issuing Bank by the Agent;
(vi) that has an expiration date (taking into account any
automatic renewal provisions thereof) later than thirty (30) days prior
to the scheduled Termination Date; or
(vii) that is in a currency other than U.S. Dollars.
Section 13.03. Conditions. The issuance, amendment or
extension of any Facility Letter of Credit is subject to the
satisfaction in full of the following conditions on the Issuance
Date:
(i) the Borrower shall have delivered to the Issuing Bank at
such times and in such manner as the Issuing Bank may reasonably
prescribe a Reimbursement Agreement and such other documents and
materials as may be reasonably required pursuant to the terms thereof,
and the proposed Facility Letter of Credit shall be reasonably
satisfactory to such Issuing Bank in form and content;
(ii) as of the Issuance Date no order, judgment or decree of any
court, arbitrator or governmental authority shall enjoin or restrain
such Issuing Bank from issuing the Facility Letter of Credit and no
law, rule or regulation applicable to the Issuing Bank and no directive
from any governmental authority with jurisdiction over the Issuing Bank
shall prohibit such Issuing Bank from issuing Letters of Credit
generally or from issuing that Facility Letter or Credit;
(iii) The following statements shall be true, and the Agent and such
Issuing Bank shall have received a certificate, substantially in the
form of the certificate attached hereto as Exhibit G, signed by a duly
authorized
81
officer of the Borrower dated the Issuance Date stating
that:
(a) The representations and warranties contained in
Article IV of this Agreement are correct on and as
of such Issuance Date as though made on and as of
such Issuance Date except to the extent that any
such representation or warranty is stated to
relate solely to an earlier date, in which case
such representation or warranty is correct as of
such earlier date;
(b) No Default or Event of Default has occurred and is
continuing or would result from the issuance,
amendment or extension of such Facility Letter of
Credit; and
(c) Upon the issuance, amendment or extension of the
requested Facility Letter of Credit on such Issuance
Date, the aggregate outstanding amount of Permitted
Senior Debt shall not exceed the Borrowing Base as of
the most recent Inventory Valuation Date; and
(iv) The Issuing Bank and the Agent shall have received such other
approvals, opinions, or documents as either may reasonably request.
Section 13.04. Procedure for Issuance of Facility Letters of
Credit. (a) The Borrower shall give the applicable Issuing Bank and the Agent
not less than two (2) Business Days' prior written notice of any requested
issuance of a Facility Letter of Credit under this Agreement (except that, in
lieu of such written notice, the Borrower may give the Issuing Bank and the
Agent telephonic notice of such request if confirmed in writing by delivery to
such Issuing Bank and the Agent (i) immediately (A) of a telecopy of the written
notice required hereunder which has been signed by an authorized officer of the
Borrower or (B) of a telex containing all information required to be contained
in such written notice and (ii) promptly (but in no event later than the
requested Issuance Date) of the written notice required hereunder containing the
original signature of an authorized officer of the Borrower). Such notice shall
specify (i) the stated amount of the Facility Letter of Credit requested, which
amount shall be in compliance with the requirements of Section 13.02, (ii) the
requested Issuance Date, which shall be a Business Day, (iii) the date on which
such requested Facility Letter of Credit is to expire, which date shall be in
compliance with the requirements of Section 13.02(vi), (iv) the purpose for
which such Facility Letter of Credit is to be issued, which purpose shall be in
compliance with the requirements of Section 13.01(b), and (v) the Person for
whose benefit the requested Facility Letter of Credit is to be issued. At the
time such request is made, the Borrower shall also provide the Agent with a
82
copy of the form of the Facility Letter of Credit it is requesting be issued.
Such notice, to be effective, must be received by the Issuing Bank and the Agent
not later than 2:00 p.m. (Chicago time) on the last Business Day on which notice
can be given under this Section 13.04(a).
(b) Promptly following receipt of a request for issuance of a
Facility Letter of Credit in accordance with Section 13.04(a), such Issuing Bank
shall approve or disapprove, in its reasonable discretion, the issuance of such
requested Facility Letter of Credit, but the issuance of such approved Facility
Letter of Credit shall continue to be subject to the provisions of this Article
XIII.
(c) Subject to the terms and conditions of this Article XIII
(including, without limitation, Sections 13.02 and 13.03), the applicable
Issuing Bank shall, on the Issuance Date, issue the requested Facility Letter of
Credit in accordance with such Issuing Bank's usual and customary business
practices unless such Issuing Bank has actually received written or telephonic
notice from the Borrower specifically revoking the request to issue such
Facility Letter of Credit. The Issuing Bank shall give the Agent written notice,
or telephonic notice confirmed promptly thereafter in writing, of the issuance
of a Facility Letter of Credit, and the Agent shall promptly thereafter so
notify all Banks.
(d) No Issuing Bank shall extend or amend any Facility Letter
of Credit unless the requirements of this Section 13.04 are met as though a new
Facility Letter of Credit were being requested and issued.
(e) Any Bank may, but shall not be obligated to, issue to the
Borrower or any of its Subsidiaries Letters of Credit (that are not Facility
Letters of Credit) for its own account, and at its own risk. None of the
provisions of this Article XIII shall apply to any Letter of Credit that is not
a Facility Letter of Credit.
Section 13.05. Duties of Issuing Bank. Any action taken or
omitted to be taken by an Issuing Bank under or in connection with any Facility
Letter of Credit, if taken or omitted in the absence of willful misconduct or
gross negligence, shall not put such Issuing Bank under any resulting liability
to any Bank or, assuming that such Issuing Bank has complied in all material
respects with the procedures specified in Section 13.04, relieve any Bank of its
obligations hereunder to such Issuing Bank. In determining whether to pay under
any Facility Letter of Credit, such Issuing Bank shall have no obligation to the
Banks other than to confirm that any documents required to be delivered under
such Facility Letter of Credit appear to have been
83
delivered in compliance and that they appear to comply on their face with the
requirements of such Facility Letter of Credit.
Section 13.06. Participation. (a) Immediately upon the
Effective Date (in the case of the Facility Letters of Credit outstanding on the
Effective Date) and immediately upon issuance after the Effective Date by an
Issuing Bank of any Facility Letter of Credit in accordance with Section 13.04,
each Bank shall be deemed to have irrevocably and unconditionally purchased and
received from such Issuing Bank, without recourse or warranty, an undivided
interest and participation ratably (in the proportion of such Bank's Commitment
to the Aggregate Commitments) in such Facility Letter of Credit (including,
without limitation, all obligations of the Borrower with respect thereto other
than amounts owing to such Issuing Bank under Section 2.15).
(b) In the event that an Issuing Bank makes any payment under
any Facility Letter of Credit and the Borrower shall not have repaid such amount
to such Issuing Bank on or before the date of such payment by such Issuing Bank,
such Issuing Bank shall promptly so notify the Agent, which shall promptly so
notify each Bank. Upon receipt of such notice, each Bank shall promptly and
unconditionally pay to the Agent for the account of such Issuing Bank the amount
of such Bank's ratable share (in the proportion of such Bank's Commitment to the
Aggregate Commitments) of such payment in same day funds, and the Agent shall
promptly pay such amount, and any other amounts received by the Agent for such
Issuing Bank's account pursuant to this Section 13.06(b), to such Issuing Bank.
If the Agent so notifies such Bank prior to 11:00 A.M. (Chicago time) on any
Business Day, such Bank shall make available to the Agent for the account of
such Issuing Bank such Bank's ratable share of the amount of such payment on
such Business Day in same day funds. If and to the extent such Bank shall not
have so made its ratable share of the amount of such payment available to the
Agent for the account of the Issuing Bank, such Bank agrees to pay to the Agent
for the account of the Issuing Bank forthwith on demand such amount, together
with interest thereon, for each day from the date such payment was first due
until the date such amount is paid to the Agent for the account of the Issuing
Bank, at the Federal Funds Rate. The failure of any Bank to make available to
the Agent for the account of an Issuing Bank such Bank's ratable share of any
such payment shall not relieve any other Bank of its obligation hereunder to
make available to the Agent for the account of such Issuing Bank its ratable
share of any payment on the date such payment is to be made.
(c) The payments made by the Banks to an Issuing Bank in
reimbursement of amounts paid by it under a Facility Letter of Credit shall
constitute, and the Borrower hereby expressly
84
acknowledges and agrees that such payments shall constitute, Loans hereunder
(notwithstanding that the amounts thereof may not comply with the provisions of
Section 2.01(c)). Such Loans shall be ABR Loans, subject to the Borrower's
rights under Article II hereof.
(d) Upon the request of the Agent or any Bank, each Issuing
Bank shall furnish to the requesting Agent or Bank copies of any Facility Letter
of Credit or Reimbursement Agreement to which such Issuing Bank is party.
(e) The obligations of the Banks to make payments to the Agent
for the account of an Issuing Bank with respect to a Facility Letter of Credit
shall be irrevocable, not subject to any qualification or exception whatsoever
and shall be made in accordance with, but not subject to, the terms and
conditions of this Agreement under all circumstances, including, without
limitation, the following:
(i) any lack of validity or enforceability of this
Agreement or any of the other Loan Documents;
(ii) the existence of any claim, setoff, defense or other right
which the Borrower may have at any time against a beneficiary named in
a Facility Letter of Credit or any transferee of any Facility Letter of
Credit (or any Person for whom any such transferee may be acting), the
Issuing Bank, the Agent, any Bank, or any other Person, whether in
connection with this Agreement, any Facility Letter of Credit, the
transactions contemplated herein or any unrelated transactions
(including any underlying transactions between the Borrower or any
Subsidiary and the beneficiary named in any Facility Letter of Credit);
(iii) any draft, certificate or any other document presented
under the Facility Letter of Credit proving to be forged, fraudulent,
invalid or insufficient in any respect of any statement therein being
untrue or inaccurate in any respect;
(iv) the surrender or impairment of any security for the
performance or observance of any of the terms of any of the Loan
Documents;
(v) any failure by the Agent or an Issuing Bank to make any
reports required pursuant to Section 13.08; or
(vi) the occurrence of any Default or Event of Default.
85
(f) For purposes of determining the unused portion of the
Aggregate Commitments and the unused portion of a Bank's Commitment under
Sections 2.02 and 2.09(b), the Aggregate Commitments shall be deemed used to the
extent of the aggregate undrawn face amount of the outstanding Facility Letters
of Credit and the Bank's Commitment shall be deemed used to the extent of such
Bank's ratable share (in the proportion of such Bank's Commitment to the
Aggregate Commitments) of the aggregate undrawn face amount of the outstanding
Facility Letters of Credit.
Section 13.07. Compensation for Facility Letters of Credit.
(a) The Borrower agrees to pay to the Agent, in the case of the issuance of each
Facility Letter of Credit, the Facility Letter of Credit Fee therefor, payable
in quarterly installments in advance on the Issuance Date (which installment
shall be a pro rata portion of the annual Facility Letter of Credit Fee for the
period commencing on the Issuance Date and ending on the last day of the
calendar quarter in which the Issuance Date occurs) and on the first day of each
calendar quarter after the Issuance Date (which installment shall be a pro rata
portion of the annual Facility Letter of Credit Fee for the quarter in which
such payment is due). Facility Letter of Credit Fees shall be calculated, on a
pro rata basis for the period to which such payment applies, for actual days
that will elapse during such period, on the basis of a 360-day year. The Agent
shall promptly remit such Facility Letter of Credit Fees, when paid, to the
Banks ratably.
(b) The Borrower shall also pay to the applicable Issuing
Bank, solely for its own account, a fee with respect to each Facility Letter of
Credit issued by such Issuing Bank in an amount per annum equal to the product
of (i) 0.125% per annum and (ii) the face amount of such Facility Letter of
Credit, which fee shall be payable in advance on or before the issuance of such
Facility Letter of Credit. An Issuing Bank shall also have the right to receive,
solely for its own account, its out-of-pocket costs of issuing and servicing
Facility Letters of Credit, as the Borrower may agree in writing.
Section 13.08. Issuing Bank Reporting Requirements. Each
Issuing Bank shall, no later than the tenth day following the last day of each
month, provide to the Agent a schedule of the Facility Letters of Credit issued
by it showing the Issuance Date, account party, original face amount, amount (if
any) paid thereunder, expiration date and the reference number of each Facility
Letter of Credit outstanding at any time during such month and the aggregate
amount (if any) payable by the Borrower to such Issuing Bank during the month
pursuant to Section 2.15. Copies of such reports shall be provided promptly to
each Bank by the Agent.
86
Section 13.09. Indemnification; Nature of Issuing Bank's
Duties. (a) In addition to amounts payable as elsewhere provided in this Article
XIII, the Borrower hereby agrees to protect, indemnify, pay and save the Agent,
each Issuing Bank and each Bank harmless from and against any and all claims,
demands, liabilities, damages, losses, costs, charges and expenses (including
reasonable attorneys' fees) arising from the claims of third parties against the
Agent, any Issuing Bank or any Bank as a consequence, direct or indirect, of (i)
the issuance of any Facility Letter of Credit other than, in the case of an
Issuing Bank, as a result of its willful misconduct or gross negligence, or (ii)
the failure of an Issuing Bank to honor a drawing under a Facility Letter of
Credit as a result of any act or omission, whether rightful or wrongful, of any
government, court or other governmental agency or authority.
(b) As among the Borrower, the Banks, the Agent and each
Issuing Bank, the Borrower assumes all risks of the acts and omissions of, or
misuse of Facility Letters of Credit by, the respective beneficiaries of such
Facility Letters of Credit. In furtherance and not in limitation of the
foregoing, neither an Issuing Bank nor the Agent nor any Bank shall be
responsible: (i) for the form, validity, sufficiency, accuracy, genuineness or
legal effect of any document submitted by any party in connection with the
application for and issuance of the Facility Letters of Credit, even if it
should in fact prove to be in any or all respects invalid, insufficient,
inaccurate, fraudulent or forged; (ii) for the validity or sufficiency of any
instrument transferring or assigning or purporting to transfer or assign a
Facility Letter of Credit or the rights or benefits thereunder or proceeds
thereof, in whole or in part, which may prove to be invalid or ineffective for
any reason; (iii) for failure of the beneficiary of a Facility Letter of Credit
to comply fully with conditions required in order to draw upon such Facility
Letter of Credit; (iv) for errors, omissions, interruptions or delays in
transmission or delivery of any messages, by mail, cable, telegraph, telex,
facsimile transmission or otherwise; (v) for errors in interpretation of
technical terms; (vi) for any loss or delay in the transmission or otherwise of
any document required in order to make a drawing under any Facility Letter of
Credit or of the proceeds thereof; (vii) for the misapplication by the
beneficiary of a Facility Letter of Credit of the proceeds of any drawing under
such Facility Letter of Credit; or (viii) for any consequences arising from
causes beyond the control of the Agent, such Issuing Bank and the Banks
including, without limitation, any act or omission, whether rightful or
wrongful, of any government, court or other governmental agency or authority.
None of the above shall affect, impair, or prevent the vesting of any of such
Issuing Bank's rights or powers under this Section 13.09.
87
(c) In furtherance and extension and not in limitation of the
specific provisions hereinabove set forth, any action taken or omitted by an
Issuing Bank under or in connection with the Facility Letters of Credit or any
related certificates, if taken or omitted in good faith, shall not put such
Issuing Bank, the Agent or any Bank under any resulting liability to the
Borrower or relieve the Borrower of any of its obligations hereunder to any such
Person, but the foregoing shall not relieve such Issuing Bank of its obligation
to confirm that any documents required to be delivered under a Facility Letter
of Credit appear to have been delivered in compliance and that they appear to
comply on their face with the requirements of such Facility Letter of Credit.
(d) Notwithstanding anything to the contrary contained in this
Section 13.09, the Borrower shall have no obligation to indemnify an Issuing
Bank under this Section 13.09 in respect of any liability incurred by an Issuing
Bank arising primarily out of the willful misconduct or gross negligence of such
Issuing Bank, as determined by a court of competent jurisdiction, or out of the
wrongful dishonor by such Issuing Bank of a proper demand for payment made under
the Facility Letters of Credit issued by such Issuing Bank, unless such dishonor
was made at the request of the Borrower.
Section 13.10. Designation or Resignation of Issuing Bank. (a)
Upon request by the Borrower and approval by the Agent, a Bank may at any time
agree to be designated as an Issuing Bank hereunder, which designation shall be
set forth in a written instrument or instruments delivered by the Borrower, the
Agent and such Bank. The Agent shall promptly deliver to the other Banks a copy
of such instrument or instruments. From and after such designation and unless
and until such Bank resigns as an Issuing Bank in accordance with Section
13.10(b), such Bank shall have all of the rights and obligations of an Issuing
Bank hereunder.
(b) An Issuing Bank shall continue to be the Issuing Bank
unless and until (i) it shall have given the Borrower and the Agent notice that
it has elected to resign as Issuing Bank and (ii) unless there is, at the time
of such notice, at least one other Issuing Bank, another Bank shall have agreed
to be the replacement Issuing Bank and shall have been approved in writing by
the Agent and the Borrower. A resigning Issuing Bank shall continue to have the
rights and obligations of the Issuing Bank hereunder solely with respect to
Facility Letters of Credit theretofore issued by it notwithstanding the
designation of a replacement Issuing Bank hereunder, but upon its notice of
resignation (or, if at the time of such notice, there is not at least one other
Issuing Bank, then upon such designation of a replacement Issuing Bank), the
resigning Issuing Bank shall not
88
thereafter issue any Facility Letters of Credit (unless it shall again
thereafter be designated as an Issuing Bank in accordance with the provisions of
this Section 13.10). The assignment of, or grant of a participation interest in,
all or any part of its Commitment or Loans by a Bank that is also the Issuing
Bank shall not constitute an assignment or transfer of any of its rights or
obligations as an Issuing Bank.
Section 13.11. Termination of Issuing Bank's Obligation. In
the event that the Banks' obligations to make Loans terminate or are terminated
as provided in Section 8.01, each Issuing Bank's obligation to issue Facility
Letters of Credit shall also terminate.
Section 13.12. Obligations of Issuing Bank and Other Banks.
Except to the extent that a Bank shall have agreed to be designated as an
Issuing Bank, no Bank shall have any obligation to accept or approve any request
for, or to issue, amend or extend, any Letter of Credit, and the obligations of
an Issuing Bank to issue, amend or extend any Facility Letter of Credit are
expressly limited by and subject to the provisions of this Article XIII.
Section 13.13. Issuing Bank's Rights. All of the
representations, warranties, covenants and agreements of the Borrower to the
Banks under this Agreement and of the Borrower under any other Loan Document
shall inure to the benefit of each Issuing Bank (unless the context otherwise
indicates). Without limitation of the foregoing, (a) the provisions of Section
2.15 (relating to capital adequacy) shall apply with respect to each Issuing
Bank and its issuance of, or obligation to issue, Facility Letters of Credit;
(b) the provisions of Section 2.18 (relating to statements of amounts payable
and the survival of obligations) shall apply to each Issuing Bank; and (c) the
provisions of Section 11.04 (relating to the Borrower's payment of costs,
expenses, taxes, fees and other amounts) shall apply to such costs, expenses,
taxes, fees and other amounts relating to the Facility Letters of Credit.
89
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their respective officers thereunto duly authorized,
as of the date first written.
BEAZER HOMES USA, INC.
By:
--------------------------------
Name:
-----------------------------
Title:
-----------------------------
Address for Notices
5775 Peachtree Dunwoody Road
Suite C-550
Atlanta, Georgia 30342
Attention: President
Tel: (404) 250-3420
Fax: (404) 250-3428
BEAZER MORTGAGE CORPORATION
By:
--------------------------------
Name:
-----------------------------
Title:
-----------------------------
BEAZER HOMES CORP.
By:
--------------------------------
Name:
-----------------------------
Title:
-----------------------------
BEAZER HOMES SALES ARIZONA INC.
By:
--------------------------------
Name:
-----------------------------
Title:
-----------------------------
BEAZER REALTY CORP.
By:
--------------------------------
Name:
-----------------------------
Title:
-----------------------------
BEAZER/SQUIRES REALTY, INC.
90
By:
--------------------------------
Name:
-----------------------------
Title:
-----------------------------
PANITZ HOMES REALTY INC.
By:
--------------------------------
Name:
-----------------------------
Title:
-----------------------------
BEAZER HOMES HOLDINGS CORP.
By:
--------------------------------
Name:
-----------------------------
Title:
-----------------------------
BEAZER HOMES TEXAS HOLDINGS, INC.
By:
--------------------------------
Name:
-----------------------------
Title:
-----------------------------
BEAZER HOMES TEXAS, L.P.
By: BEAZER HOMES TEXAS HOLDINGS,
INC., its general partner
By:
--------------------------------
Name:
-----------------------------
Title:
-----------------------------
91
Address for Notices to all
Guarantors
c/o Beazer Homes USA, Inc.
5775 Peachtree Dunwoody Road
Suite C-550
Atlanta, Georgia 30342
Attention: President
Tel: (404) 250-3420
Fax: (404) 250-3428
92
THE FIRST NATIONAL BANK OF CHICAGO
Commitment:
$40,000,000.00
By:
--------------------------------
Gregory Gilbert
Vice President
Addresses for Notices
The First National Bank of Chicago
One First National Plaza
Mail Suite 0151
Chicago, Illinois 60670
Attn: Mr. Gregory Gilbert
Telephone: (312) 732-5067
Telecopy: (312) 732-1117
Lending Office for Loans
The First National Bank of Chicago
One First National Plaza
Mail Suite 0318
Chicago, Illinois 60670
Attention: Mr. Michael Dowling
Telephone: (312) 732-2517
Telecopy: (312) 732-1582
93
GUARANTY FEDERAL BANK, F.S.B.
Commitment:
By:
--------------------------------
$40,000,000.00 Name:
-----------------------------
Title:
-----------------------------
Address for Notices
Guaranty Federal Bank, F.S.B.
8333 Douglas Avenue
Dallas, TX 75225
Attn: Mr. Randy Reid
Telephone: (214)360-2735
Telecopy: (214)360-1661
Lending Office for Loans
Guaranty Federal Bank, F.S.B.
8333 Douglas Avenue
Dallas, TX 75225
Attn: Ms. Martha Fleming
Telephone: (214) 360-8905
Telecopy: (214) 360-4854
94
BANK UNITED
Commitment: By:
--------------------------------
Name:
-----------------------------
$35,000,000.00 Title:
-----------------------------
Address for Notices
Bank United
3200 Southwest Freeway
Suite 2001
Houston, TX 77027
Attn: Mr. Max R. Epperson
Telephone: (713) 543-7802
Telecopy: (713) 543-6986
Lending Office for Loans
Bank United
5963 La Place Court
Suite 202
Carlsbad, CA 92008
Attn: Mr. Tom Griffin
Telephone: (760) 804-8595
Telecopy: (760) 804-8590
95
COMERICA BANK
Commitment: By:
--------------------------------
David J. Campbell
$40,000,000.00 Vice President
Address for Notices
Comerica Bank
500 Woodward Avenue, MC: 3256
Detroit, MI 48226
Attn: Mr. David J. Campbell
Telephone: (313)222-9306
Telecopy: (313)222-9295
Lending Office for Loans
Comerica Bank
500 Woodward Avenue, MC: 3256
Detroit, MI 48226
Attn: Ms. Betsy Branson
Telephone: (313) 222-5878
Telecopy: (313) 222-3697
96
AMSOUTH BANK
Commitment: By:
--------------------------------
Name:
-----------------------------
$25,000,000.00 Title:
-----------------------------
By:
--------------------------------
Name:
-----------------------------
Title
-----------------------------
Address for Notices
AmSouth Bank
AmSouth/Sonat Tower
CRE-9th Floor
1900 5th Avenue North
Birmingham, AL 35203
Attn: Mr. Ronny Hudspeth
Telephone: (205) 307-4427
Telecopy: (205) 326-4075
Lending Office for Loans
AmSouth Bank
AmSouth/Sonat Tower
CRE-9th Floor
1900 5th Avenue North
Birmingham, AL 35203
Attn: Ms. Wanda Pate
Telephone: (205) 326-4615
Telecopy: (205) 326-4075
97
SUNTRUST BANK, ATLANTA
Commitment: By:
--------------------------------
Name:
-----------------------------
$20,000,000.00 Title:
-----------------------------
By:
--------------------------------
Name:
-----------------------------
Title
-----------------------------
Address for Notices
SunTrust Bank, Atlanta
25 Park Place, Mail Code 120
P.O. Box 4418
Atlanta, GA 30303
Attn: Mr. David Edge
Telephone: (404) 827-6735
Telecopy: (404) 827-6270
Address for Loans
SunTrust Bank, Atlanta
25 Park Place
P.O. Box 4418
Atlanta, GA 30303
Attn: Mr. Tra Bradley
Telephone: (404) 658-4624
Telecopy: (404) 575-2730
98
Exhibit A-1
NOTE
$
---------------------- -------------, ----
FOR VALUE RECEIVED, the undersigned, BEAZER HOMES USA, INC., a
Delaware corporation (the "Borrower") HEREBY PROMISES TO PAY to the order of
_______________________ (the "Bank") to THE FIRST NATIONAL BANK OF CHICAGO, as
Agent, at the Agent's Office located at One First National Plaza, Chicago, IL,
for the account of the applicable Lending Office of the Bank, in lawful money of
the United States and in immediately available funds, the principal amount of
_________________ Dollars ($_______) or the aggregate unpaid principal amount of
all Loans made to the Borrower by the Bank pursuant to the Credit Agreement and
outstanding on the Termination Date, whichever is less, and to pay interest from
the date of this Note, in like money, at said office for the account of the
applicable Lending Office, at the time and at a rate per annum as provided in
the Credit Agreement. The Bank is hereby authorized by the Borrower to endorse
on the schedule attached to the Note held by it the amount and type of each Loan
and each renewal, conversion, and payment of principal amount received by the
Bank for the account of the applicable Lending Office on account of its Loans,
which endorsement shall, in the absence of manifest error, be conclusive as to
the outstanding balance of the Loans made by the Bank; provided, however, that
the failure to make such notation with respect to any Loan or renewal,
conversion, or payment shall not limit or otherwise affect the obligations of
the Borrower hereunder.
This Note is one of the Notes referred to in, and is entitled
to the benefits of, the Amended and Restated Credit Agreement, dated as of
November 3, 1998, between the Borrower, the Guarantors, the Bank and certain
other banks parties thereto (which, as it may be amended, modified, renewed or
extended from time to time, is herein called the "Credit Agreement"). Terms used
herein which are defined in the Credit Agreement shall have their defined
meanings when used herein. The Credit Agreement, among other things, contains
provisions for acceleration of the maturity of this Note upon the happening of
certain stated events and also for prepayments on account of principal hereof
prior to the maturity of this Note upon the terms and conditions specified in
the Credit Agreement.
The Borrower hereby agrees to pay all reasonable costs and
expenses (including reasonable attorney's fees and expenses) paid or incurred by
the holder of this Note in the collection of any principal or interest payable
under this Note or the enforcement of this Note or any other Loan Documents.
This Note shall be governed by the laws of the State of
Illinois.
BEAZER HOMES USA, INC.
By:
-------------------------------
Name:
----------------------------
Title:
----------------------------
SCHEDULE TO NOTE
Unpaid Name of
Amount of Principal Person
Date Made Type of Principal Balance of Making
or Paid Loan Paid Note Notation
Exhibit A-2
AMENDED AND RESTATED NOTE
$
--------------------- ----------, ----
FOR VALUE RECEIVED, the undersigned, BEAZER HOMES USA, INC., a
Delaware corporation (the "Borrower") HEREBY PROMISES TO PAY to the order of
_______________________ (the "Bank") to THE FIRST NATIONAL BANK OF CHICAGO, as
Agent, at the Agent's Office located at One First National Plaza, Chicago, IL,
for the account of the applicable Lending Office of the Bank, in lawful money of
the United States and in immediately available funds, the principal amount of
_________________ Dollars ($_______) or the aggregate unpaid principal amount of
all Loans made to the Borrower by the Bank pursuant to the Credit Agreement and
outstanding on the Termination Date, whichever is less, and to pay interest from
the date of this Note, in like money, at said office for the account of the
applicable Lending Office, at the time and at a rate per annum as provided in
the Credit Agreement. The Bank is hereby authorized by the Borrower to endorse
on the schedule attached to the Note held by it the amount and type of each Loan
and each renewal, conversion, and payment of principal amount received by the
Bank for the account of the applicable Lending Office on account of its Loans,
which endorsement shall, in the absence of manifest error, be conclusive as to
the outstanding balance of the Loans made by the Bank; provided, however, that
the failure to make such notation with respect to any Loan or renewal,
conversion, or payment shall not limit or otherwise affect the obligations of
the Borrower hereunder.
This Amended and Restated Note amends and restates a certain
Note dated ___________ made by the Borrower payable to the order of the Bank in
the principal amount of $____________, which Note has been cancelled. This
Amended and Restated Note is one of the Notes referred to in, and is entitled to
the benefits of, the Amended and Restated Credit Agreement, dated as of November
3, 1998, between the Borrower, the Guarantors, the Bank and certain other banks
parties thereto (which, as it may be amended, modified, renewed or extended from
time to time, is herein called the "Credit Agreement"). Terms used herein which
are defined in the Credit Agreement shall have their defined meanings when used
herein. The Credit Agreement, among other things, contains provisions for
acceleration of the maturity of this Note upon the happening of certain stated
events and also for prepayments on account of principal hereof prior to the
maturity of this Note upon the terms and conditions specified in the Credit
Agreement.
The Borrower hereby agrees to pay all reasonable costs and
expenses (including reasonable attorney's fees and expenses) paid or incurred by
the holder of this Note in the collection of any principal or interest payable
under this Note or the enforcement of this Note or any other Loan Documents.
This Note shall be governed by the laws of the State of
Illinois.
BEAZER HOMES USA, INC.
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
SCHEDULE TO AMENDED AND RESTATED NOTE
Unpaid Name of
Amount of Principal Person
Date Made Type of Principal Balance of Making
or Paid Loan Paid Note Notation
Exhibit B
COMMITMENT AND ACCEPTANCE
This Commitment and Acceptance (this "Commitment and
Acceptance") dated as of _________, ____, is entered into among the parties
listed on the signature pages hereof. Capitalized terms used herein and not
otherwise defined herein shall have the meanings attributed to them in the
Credit Agreement (as defined below).
PRELIMINARY STATEMENTS
Reference is made to that certain Amended and Restated Credit
Agreement dated as of November 3, 1998, by and among Beazer Homes USA, Inc., as
Borrower, the Guarantors party thereto, The First National Bank of Chicago, as
Agent, and the Banks that are parties thereto (as the same may from time to time
be amended, modified, supplemented or restated, in whole or in part and without
limitation as to amount, terms, conditions or covenants, the "Credit
Agreement").
Pursuant to Section 2.22 of the Credit Agreement, the Borrower
has requested an increase in the Aggregate Commitments from $_____________ to
$______________. Such increase in the Aggregate Commitments is to become
effective on _____________, ____ (the "Increase Date") [THIS DATE IS TO BE
MUTUALLY AGREED UPON BY THE BORROWER, THE ACCEPTING BANK AND THE AGENT IN
ACCORDANCE WITH THE PROVISIONS OF SECTION 2.22(c) OF THE CREDIT AGREEMENT]. In
connection with such requested increase in the Aggregate Commitments, the
Borrower, the Agent and ________________ (the "Accepting Bank") hereby agree as
follows:
1. ACCEPTING BANK'S COMMITMENT. Effective as of the Increase
Date, [the Accepting Bank shall become a party to the Credit Agreement as a
Bank, shall have all of the rights and obligations of a Bank thereunder, shall
agree to be bound by the terms and provisions thereof and shall thereupon have a
Commitment under and for purposes of the Credit Agreement in the amount equal to
the][the Commitment of the Accepting Bank under the Credit Agreement shall be
increased from $______________ to the ] amount set forth opposite the Accepting
Bank's name on the signature pages hereof.
[2. REPRESENTATIONS AND AGREEMENTS OF THE ACCEPTING BANK. The
Accepting Bank (i) confirms that it has received a copy of the Credit Agreement,
together with copies of the financial statements requested by the Accepting Bank
and such other documents and information as it has deemed appropriate to make
its own credit analysis and decision to enter into the Commitment and
Acceptance, (ii) agrees that it will, independently and without reliance upon
the Agent or any Bank and based on such documents and information as it shall
deem appropriate at the time, continue to make its own credit decisions in
taking or not taking action under the Loan Documents, (iii) appoints and
authorizes the Agent to take such action as Agent on its behalf and to exercise
such powers under the Loan Documents as
are delegated to the Agent by the terms thereof, together with such powers as
are reasonably incidental thereto, (iv) agrees that it will perform in
accordance with their terms all of the obligations which by the terms of the
Loan Documents are required to be performed by it as a Bank, (v) agrees that its
payment instructions and notice instructions are as set forth in the attachment
to Schedule 1, (vi) confirms that none of the funds, monies, assets or other
consideration being used to make the commitment and acceptance hereunder are
"plan assets" as defined under ERISA and that its rights, benefits and interests
in and under the Loan Documents will not be "plan assets" under ERISA, [and
(vii) attaches the forms prescribed by the Internal Revenue Service of the
United States certifying that the Accepting Bank is entitled to receive payments
under the Loan Documents without deduction or withholding of any United States
federal income taxes.].*
*Paragraph 2 to be inserted only if the Accepting Bank is not already a party to
the Credit Agreement prior to the Increase Date, and subparagraph 2(vii) to be
inserted only if such Accepting Bank is not incorporated under the laws of the
United States, or a state thereof.]
3. REPRESENTATION OF BORROWER. The Borrower hereby
represents and warrants that as of the date hereof and as of the Increase Date,
no event or condition shall have occurred and then be continuing which
constitutes a Default or Event of Default.
4. GOVERNING LAW. This Commitment and Acceptance shall be
governed by the internal law, and not the law of conflicts, of the State of
Illinois.
5. NOTICES. For the purpose of notices to be given under the
Credit Agreement, the address of the Accepting Bank (until notice of a change is
delivered) shall be the address set forth in Schedule 1.
[REMAINDER OF PAGE LEFT INTENTIONALLY BLANK]
IN WITNESS WHEREOF, the parties hereto have executed this
Assignment AGREEMENT by their duly authorized officers as of the date first
above written.
BORROWER:
BEAZER HOMES USA, INC.
By:
-----------------------
Name:
Title:
AGENT:
THE FIRST NATIONAL BANK OF
CHICAGO, as Agent
By:
-----------------------
Name:
Title:
$ ACCEPTING BANK:
------------------
[NAME OF ACCEPTING BANK]
By:
-----------------------
Name:
Title:
Exhibit C
The opinion of Paul, Hastings, Janofsky & Walker LLP, to be
rendered pursuant to Section 3.01(5) of the Credit Agreement dated as of
November 3, 1998 (the "Credit Agreement"; any capitalized term used herein and
not otherwise defined herein shall have the meaning assigned to such term in the
Credit Agreement) among Beazer Homes USA, Inc., the Original Guarantors parties
thereto, the banks whose names appear on the signature pages thereof and The
First National Bank of Chicago, as Agent, shall be substantially to the
following effect:
a) The Borrower and each of Beazer Mortgage Corporation, a
Delaware corporation, Beazer Homes Corp., a Tennessee corporation, Beazer Homes
Sales Arizona Inc., a Delaware corporation, Beazer Homes Holding Corp., a
Delaware corporation, Beazer Homes Texas Holdings, Inc., a Delaware corporation
and Beazer Homes Texas, L.P., a Delaware limited partnership (collectively the
"Guarantors") is a corporation duly incorporated (or, in the case of Beazer
Homes Texas, L.P., a partnership duly formed), validly existing, and in good
standing under the laws of the jurisdiction of its incorporation or formation
and has all requisite power and authority, corporate or otherwise, to conduct
its business, to own its properties and to execute and deliver, and to perform
all of its obligations under the Loan Documents.
b) The execution and delivery by the Borrower and each
Guarantor of the Loan Documents and the performance of their respective
obligations thereunder have been duly authorized by all necessary corporate or
other action and do not and will not (i) require any consent or approval of its
stockholders, (ii) violate any provision of any law, rule or regulation
(including, without limitation, Regulation G, T, U or X of the Board of
Governors of the Federal Reserve System), or, to our knowledge, any order, writ,
judgment, injunction, decree, determination or award presently in effect having
applicability to it which violation would (x) impair its ability to perform its
obligations under the Loan Documents or (y) have a material adverse effect on
its financial condition, properties, or operations, or on its charter or
by-laws, (iii) to our knowledge, result in a breach of or constitute a default
under any indenture or lease or loan or credit agreement or any other material
agreement or instrument to which it is a party or by which it or its properties
may be bound or affected, or (iv) to our knowledge, result in, or require, the
creation or imposition of any Lien upon any of the properties now owned or
hereafter acquired by it.
c) No authorization, consent, approval, license, exemption of
or filing or registration with any court or governmental department, commission,
board, bureau, agency or instrumentality, domestic or foreign, is or will be
necessary for
the valid execution, delivery or performance by the Borrower and each Guarantor
of the Loan Documents.
d) Except as have been disclosed to the Agent and the Banks in
writing, there are to our knowledge no actions, suits or proceedings pending or
threatened against the Borrower or any Subsidiary or their properties before any
court or governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign, the probable outcome of which would have a
material adverse effect on the consolidated financial condition, properties, or
operations of the Borrower and its Subsidiaries taken as a whole.
In rendering the foregoing opinion with respect to Beazer
Homes Corp., we have relied upon the opinion of Tune, Entrekin & White as to
matters of Tennessee law.
In rendering the foregoing opinion we express no opinion as to
the effect (if any) of any laws of any jurisdiction, except those of the General
Corporation Law and Revised Uniform Limited Partnership Act of the State of
Delaware, the Federal laws of the United States and, to the extent provided for
in the preceding paragraph, the laws of Tennessee.
We express no opinion with respect to Beazer Realty Corp., a
Georgia corporation, Beazer/Squires Realty, Inc., a North Carolina corporation
or Panitz Homes Realty, Inc., a Florida corporation.
Exhibit D
The opinion of Illinois counsel to be rendered pursuant to
Section 3.01(5) of the Credit Agreement dated as of November 3, 1998 (the
"Credit Agreement"; any capitalized term used herein and not otherwise defined
herein shall have the meaning assigned to such term in the Credit Agreement)
among Beazer Homes USA, Inc., the Guarantors parties thereto, the banks whose
names appear on the signature page thereof and The First National Bank of
Chicago, as Agent, shall be substantially to the following effect:
The Loan Documents, when executed and delivered by the parties
thereto, will constitute the legal, valid and binding obligations of the
Borrower and each Guarantor enforceable against it in accordance with their
respective terms, except as enforcement of such terms may be limited by
bankruptcy, insolvency, reorganization, liquidation, moratorium, fraudulent
transfer or similar laws affecting creditors' rights generally or by general
equitable principles.
Counsel is a member of the Bar of the State of Illinois.
In rendering the foregoing opinion we express no opinion as to
the effect (if any) of any laws of any jurisdiction, except those of the State
of Illinois and the Federal laws of the United States.
Exhibit E
The First National Bank of Chicago,
as Agent
One First National Plaza
Chicago, Illinois 60670
Re: Credit Agreement dated as of November
3, 1998 (the "Credit Agreement")
among Beazer Homes USA, Inc., the
Guarantors parties thereto, and
each of the banks ("Banks")
parties thereto
Ladies and Gentlemen:
We have acted as your special counsel in connection with the
Credit Agreement. Terms used in the Credit Agreement are used herein as defined
therein.
We have examined the opinions (the "Opinions") and other
documents delivered by the Borrower and the Guarantors pursuant to Article III
of the Credit Agreement. We have assumed the genuineness of all signatures, the
authenticity of all documents submitted to us as originals, the conformity to
the originals of all documents submitted to us as copies and the due authority
of all persons executing the same. We have relied as to factual matters on the
documents which we have reviewed, and as to matters of law covered by the
Opinions on such Opinions. We are qualified to practice law in the State of
Illinois and we do not purport to be experts on, or to express any opinion
herein concerning, the laws of any other jurisdiction.
Subject to the exceptions expressed in the preceding paragraph
and while we have not independently considered the matters covered by the
Opinions to the extent necessary to enable us to express the conclusions therein
stated, we are of the opinion that the Opinions and other documents
delivered pursuant to Article III of the Credit Agreement are substantially
responsive to the requirements of said Section. In that regard, we note that
such Section does not require the Opinions to address matters relating to Beazer
Realty Corp., a Georgia corporation, Beazer/Squires Realty, Inc., a North
Carolina corporation, or Panitz Homes Realty, Inc., a Florida corporation.
Very truly yours,
Exhibit F
The opinion of local counsel to be rendered pursuant to
Section 3.01(10) of the Credit Agreement dated as of November 3, 1998, "Credit
Agreement"; any capitalized term used herein and not otherwise defined herein
shall have the meaning assigned to such term in the Credit Agreement) among
Beazer Homes USA, Inc., the Guarantors parties thereto, the banks whose names
appear on the signature page thereof and The First National Bank of Chicago, as
Agent, shall be substantially to the following effect:
a) The Guarantor is a corporation duly incorporated validly
existing, and in good standing under the laws of the jurisdiction of its
incorporation, and has all requisite power and authority, corporate or
otherwise, to conduct its business, to own its properties and to execute and
deliver, and to perform all of its obligations under the Loan Documents.
b) The execution and delivery by the Guarantor of the Credit
Agreement and the performance of its obligations thereunder have been duly
authorized by all necessary corporate or other action and do not and will not
(i) require any consent or approval of its stockholders, or (ii) violate any
provision of any law, rule or regulation (including, without limitation,
Regulation G, T, U or X of the Board of Governors of the Federal Reserve
System), or, to our knowledge, any order, writ, judgment, injunction, decree,
determination or award presently in effect having applicability to it which
violation would (x) impair its ability to perform its obligations under the Loan
Documents (y) have a material adverse effect on its financial condition,
properties, or operations, or on its charter or by-laws.
c) No authorization, consent, approval, license, exemption of
or filing or registration with any court or governmental department, commission,
board, bureau, agency or instrumentality, domestic or foreign, is or will be
necessary for the valid execution, delivery or performance by the Guarantor of
the Credit Agreement.
d) Except as have been disclosed to the Agent and the Banks in
writing, there are to our knowledge no actions, suits or proceedings pending or
threatened against the Guarantor or its properties before any court or
governmental department, commission, board, bureau, agency or instrumentality,
domestic or foreign, the probable outcome of which would have a material adverse
effect on the consolidated financial condition, properties, or operations of the
Guarantor.
Counsel is a member of the Bar of the State of ______________.
In rendering the foregoing opinion we express no opinion as to
the effect (if any) of any laws of any jurisdiction, except those of the State
of ______________, and the Federal laws of the United States.
Exhibit G
CERTIFICATE
This Certificate is delivered pursuant to the Amended and
Restated Credit Agreement dated as of November 3, 1998 among Beazer Homes USA,
Inc., The First National Bank of Chicago as Agent, the Banks party thereto and
the Guarantors party thereto (the "Credit Agreement"). Capitalized terms used
herein and not defined herein shall have the meanings provided therefor in the
Credit Agreement. This Certification is delivered in connection with [a notice
requesting a Borrowing under Section 2.03 OR a notice requesting issuance,
amendment or extension of a Facility Letter of Credit under Section 13.04]*.
The undersinged hereby certifies as follows:
1. The representations and warranties contained in Article IV
of the Credit Agreement are correct on and as of the [date of such Borrowing OR
Issuance Date]* as though made on and as of such date except to the extent that
any such representation or warranty is stated to relate solely to an earlier
date, in which case such representation or warranty is correct as of such
earlier date.
2. No Default or Event of Default has occurred and is
continuing and would result from [such Borrowing OR the issuance, amendment or
extension of such Facility Letter of Credit]*.
3. Upon [such Borrowing OR the issuance, amendment or
extension of such Facility Letter of Credit]*, the Permitted Senior Debt shall
not exceed the Borrowing Base as set forth in the Borrowing Base Certificate
delivered by the Borrower to the Agent as of the most recent Inventory Valuation
Date, which Borrowing Base Certificate is true and correct as of such Inventory
Valuation Date.
Date:
--------------- ----------------------------
David J. Weiss
Executive Vice President and
Chief Financial Officer
Beazer Homes USA, Inc.
*Include appropriate portion of bracketed provision
Exhibit H
Subsidiaries of Borrower
State of Borrower's
Subsidiary Incorporation % Ownership
Beazer Mortgage Corporation Delaware 100%
Beazer Homes Corp. Tennessee 100%
Beazer Home Sales Arizona Inc. Delaware 100%
Beazer Realty Corp. Georgia 100%
Beazer/Squires Realty, Inc. North Carolina 100%
Panitz Homes Realty, Inc. Florida 100%
Beazer Homes Holdings Corp. Delaware 100%
Beazer Homes Texas Holdings, Inc. Delaware 100%
Beazer Homes Texas, L.P. Delaware 99%(1)
United Home Insurance
Corporation Vermont 100%
- --------
(1) The remaining 1% is held by Beazer Homes Texas Holdings, Inc.
Exhibit I
ASSIGNMENT AGREEMENT
This Assignment Agreement (this "Assignment Agreement")
between _____________ (the "Assignor") and __________________ (the "Assignee")
is dated as of _____________, 19__. The parties hereto agree as follows:
1. PRELIMINARY STATEMENT. The Assignor is a party to a Credit
Agreement (which, as it may be amended, modified, renewed or extended from time
to time, is herein called the "Credit Agreement") described in Item 1 of
Schedule 1 attached hereto ("Schedule 1"). Capitalized terms used herein and not
otherwise defined herein shall have the meanings attributed to them in the
Credit Agreement.
2. ASSIGNMENT AND ASSUMPTION. The Assignor hereby sells and
assigns to the Assignee, and the Assignee hereby purchases and assumes from the
Assignor, an interest in and to the Assignor's rights and obligations under the
Credit Agreement such that after giving effect to such assignment the Assignee
shall have purchased pursuant to this Assignment Agreement the percentage
interest specified in Item 3 of Schedule 1 of all outstanding rights and
obligations under the Credit Agreement relating to the facilities listed in Item
3 of Schedule 1 and the other Loan Documents. The Commitment (or Loans, if the
applicable Commitment has been terminated) purchased by the Assignee hereunder
is set forth in Item 3 of Schedule 1.
3. EFFECTIVE DATE. The effective date of this Assignment
Agreement (the "Effective Date") shall be the later of the date specified in
Item 3 of Schedule 1 or two Business Days (or such shorter period agreed to by
the Agent) after a Notice of Assignment substantially in the form of Exhibit 1
attached hereto has been delivered to the Agent. Such Notice of Assignment must
include any consents required to be delivered to the Agent by Section 12.03 of
the Credit Agreement (including the consent of the Agent). In no event will the
Effective Date occur if the payments required to be made by the Assignee to the
Assignor on the Effective Date under Sections 4 and 5 hereof are not made on the
proposed Effective Date. The Assignor will notify the Assignee of the proposed
Effective Date no later than the Business Day prior to the proposed Effective
Date. As of the Effective Date, (i) the Assignee shall have the rights and
obligations of a Bank under the Loan Documents with respect to the rights and
obligations assigned to the Assignee hereunder and (ii) the Assignor shall
relinquish its rights and be released from its corresponding obligations under
the Loan Documents with respect to the rights and obligations assigned to the
Assignee hereunder.
4. PAYMENTS, OBLIGATIONS. On and after the Effective Date, the
Assignee shall be entitled to receive from
the Agent all payments of principal, interest and fees with respect to the
interest assigned hereby. The Assignee shall advance funds directly to the Agent
with respect to all Loans and reimbursement payments made on or after the
Effective Date with respect to the interest assigned hereby. [In consideration
for the sale and assignment of Loans hereunder, (i) the Assignee shall pay the
Assignor on the Effective Date, an amount equal to the principal amount of the
portion of all ABR Loans assigned to the Assignee hereunder and (ii) with
respect to each LIBOR Loan made by the Assignor and assigned to the Assignee
hereunder which is outstanding on the Effective Date, (a) on the last day of the
Interest Period therefor or (b) on such earlier date agreed to by the Assignor
and the Assignee or (c) on the date on which any such LIBOR Loan either becomes
due (by acceleration or otherwise) or is prepaid (the date as described in the
foregoing clauses (a), (b) or (c) being hereinafter referred to as the "Payment
Date"), the Assignee shall pay the Assignor an amount equal to the principal
amounts of the portion of such LIBOR Loan assigned to the Assignee which is
outstanding on the Payment Date. If the Assignor and the Assignee agree that the
Payment Date for such LIBOR Loan shall be the Effective Date, they shall agree
to the interest rate applicable to the portion of such Loan assigned hereunder
for the period from the Effective Date to the end of the existing Interest
Period applicable to such LIBOR Loan (the "Agreed Interest Rate") and any
interest received by the Assignee in excess of the Agreed Interest Rate shall be
remitted to the Assignor. In the event interest for the period from the
Effective Date to but not including the Payment Date is not paid by the Borrower
with respect to any LIBOR Loan sold by the Assignor to the Assignee hereunder,
the Assignee shall pay to the Assignor interest for such period on the portion
of such LIBOR Loan sold by the Assignor to the Assignee hereunder at the
applicable rate provided by the Credit Agreement. In the event a prepayment of
any LIBOR Loan which is existing on the Payment Date and assigned by the
Assignor to the Assignee hereunder occurs after the Payment Date but before the
end of the Interest Period applicable to such LIBOR Loan, the Assignee shall
remit to the Assignor the excess of the prepayment penalty paid with respect to
the portion of such LIBOR Loan assigned to the Assignee hereunder over the
amount which would have been paid if such prepayment penalty was calculated
based on the Agreed Interest Rate. The Assignee will also promptly remit to the
Assignor (i) any principal payments received from the Agent with respect to
LIBOR Loans prior to the Payment Date and (ii) any amounts of interest on Loans
and fees received from the Agent which relate to the portion of the Loans
assigned to the Assignee hereunder for periods prior to the Effective Date, in
the case of ABR Loans, or the Payment Date, in the case of LIBOR Loans, and not
previously paid by the Assignee to the Assignor.]* In the event that either
party hereto receives any payment to which the other party hereto is entitled
under this Assignment Agreement, then the party receiving such amount shall
promptly remit it to the other party hereto.
*The parties may insert alternative payment provisions in lieu of the payment
terms included in this Exhibit.
5. FEES PAYABLE BY THE ASSIGNEE. [To the extent applicable,
the Assignee shall pay to the Assignor a fee on each day on which a payment of
interest or commitment fee is made under the Credit Agreement with respect to
the amounts assigned to the Assignee hereunder (other than a payment of interest
or commitment fee for the period prior to the Effective Date or, in the case of
LIBOR Loans, the Payment Date, which the Assignee is obligated to deliver to the
Assignor pursuant to Section 4 hereof). The amount of such fee shall be the
difference between (i) the interest or fee, as applicable, paid with respect to
the amounts assigned to the Assignee hereunder and (ii) the interest or fee, as
applicable, which would have been paid with respect to the amounts assigned to
the Assignee hereunder if each interest rate was ___ of 1% less than the
interest rate paid by the Borrower or if the commitment fee was _____ of 1% less
than the commitment fee paid by the Borrower, as applicable. In addition, the
Assignee agrees to pay ____% of the recordation fee required to be paid to the
Agent pursuant to the Credit Agreement in connection with this Assignment
Agreement.]*
*The parties may insert alternative payment provisions in lieu of the payment
terms included in this Exhibit.
6. REPRESENTATIONS OF THE ASSIGNOR: LIMITATIONS ON THE
ASSIGNOR'S LIABILITY. The Assignor represents and warrants that it is the legal
and beneficial owner of the interest being assigned by it hereunder and that
such interest is free and clear of any adverse claim created by the Assignor. It
is understood and agreed that the assignment and assumption hereunder are made
without recourse to the Assignor and that the Assignor makes no other
representation or warranty of any kind to the Assignee. Neither the Assignor nor
any of its officers, directors, employees, agents or attorneys shall be
responsible for (i) the due execution, legality, validity, enforceability,
genuineness, sufficiency or collectibility of any Loan Documents, including
without limitation, documents granting the Assignor and the other Banks a
security interest in assets of the Borrower, any Subsidiary, or any Guarantor,
(ii) any representation, warranty or statement made in or in connection with any
of the Loan Documents, (iii) the financial condition or creditworthiness of the
Borrower, any Subsidiary, or any Guarantor, (iv) the performance of or
compliance with any of the terms or provisions of any of the Loan Documents, (v)
inspecting any of the property, books or records of the Borrower, any
Subsidiary, or any Guarantor, (vi) the validity, enforceability, perfection,
priority, condition, value or sufficiency of any collateral securing or
purporting to secure the Loans or (vii) any mistake, error of judgment, or
action taken or omitted to be taken in connection with the Loans or the Loan
Documents.
7. REPRESENTATIONS OF THE ASSIGNEE. The Assignee (i) confirms
that it has received a copy of the Credit Agreement, together with copies of
such financial statements requested by the Assignee and such other documents and
information as it has
deemed appropriate to make its own credit analysis and decision to enter into
this Assignment Agreement, (ii) agrees that it will, independently and without
reliance upon the Agent, the Assignor or any other Bank and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking action under the Loan
Documents, (iii) appoints and authorizes the Agent to take such action as agent
on its behalf and to exercise such powers under the Loan Documents as are
delegated to the Agent by the terms thereof, together with such powers as are
reasonably incidental thereto, (iv) agrees that it will perform in accordance
with their terms all of the obligations which by the terms of the Loan Documents
are required to be performed by it as a Bank, (v) agrees that its payment
instructions and notice instructions are as set forth in the attachment to
Schedule 1, (vi) confirms that none of the funds, monies, assets or other
consideration being used to make the purchase and assumption hereunder are "plan
assets" as defined under ERISA and that its rights, benefits and interests in
and under the Loan Documents will not be "plan assets" under ERISA, [and (vii)
attaches the forms prescribed by the Internal Revenue Service of the United
States certifying that the Assignee is entitled to receive payments under the
Loan Documents without deduction or withholding of any United States federal
income taxes]* and (viii) represents and warrants that the assignment hereunder
does not and will not, as of the effective date of such assignment, result in
any increased costs or expenses, including without limitation pursuant to
Section 2.14 or 2.15 of the Credit Agreement, payable by the Borrower or any
Guarantor.
*to be inserted if the Assignee is not incorporated under the laws of the United
States, or a state thereof.
8. INDEMNITY. The Assignee agrees to indemnify and hold the
Assignor harmless against any and all losses, costs and expenses (including,
without limitation, reasonable attorneys' fees) and liabilities incurred by the
Assignor in connection with or arising in any manner from the Assignee's
non-performance of the obligations assumed under this Assignment Agreement.
9. SUBSEQUENT ASSIGNMENTS. After the Effective Date, the
Assignee shall have the right pursuant to Section 12.03 of the Credit Agreement
to assign the rights which are assigned to the Assignee hereunder to any entity
or person, provided that (i) any such subsequent assignment does not violate any
of the terms or conditions of the Loan Documents or any law, rule, regulation,
order, writ, judgment, injunction or decree and that all consents required under
the terms of the Loan Documents have been obtained and (ii) unless the prior
written consent of the Assignor is obtained, the Assignee is not thereby
released from its obligations to the Assignor hereunder, if any remain
unsatisfied, including, without limitation, its obligations under Sections 4, 5
and 8 hereof.
10. REDUCTIONS OF AGGREGATE COMMITMENTS. If any reduction in
the Aggregate Commitments (other than pursuant to Section 2.19(c) of the Credit
Agreement) occurs between the date of this Assignment Agreement and the
Effective Date, the percentage interest specified in Item 3 of Schedule 1 shall
remain the same, but the dollar amount purchased shall be recalculated based on
the reduced Commitment of the Assignor.
11. ENTIRE AGREEMENT. This Assignment Agreement and the
attached Notice of Assignment embody the entire agreement and understanding
between the parties hereto and supersede all prior agreements and understandings
between the parties hereto relating to the subject matter hereof.
12. GOVERNING LAW. This Assignment Agreement shall be governed
by and construed in accordance with, the laws of the State of Illinois without
regard to principles of conflict of laws.
13. NOTICES. Notices shall be given under this Assignment
Agreement in the manner set forth in the Credit Agreement. For the purpose
hereof the addresses of the parties hereto (until notice of a change is
delivered) shall be the addresses set forth in the attachment to Schedule 1.
IN WITNESS WHEREOF, the parties hereto have executed this
Assignment Agreement by their duly authorized officers as of the date first
above written.
[NAME OF ASSIGNOR]
By:
--------------------------------
Title:
-----------------------------
[NAME OF ASSIGNEE]
By:
--------------------------------
Title:
-----------------------------
SCHEDULE 1
to Assignment Agreement
1. Description and Date of Credit Agreement:
2. Date of Assignment Agreement: _________________, 19__
3. Amounts (As of Date of Item 2 above):
Facility Facility Facility
1* 2* 3*
a. Total of Commitments
(Loans)** under
Credit Agreement $_______ $_______ $_______
b. Assignee's Percentage
of each Facility
purchased under the
Assignment
Agreement*** _______% _______% _______%
c. Amount of Assigned
Share in each Facility
purchased under the
Assignment Agreement $_______ $_______ $_______
d. Assignee's aggregate
Commitment Amount
(Loan Amount)***
Purchased Hereunder: $_______ $_______ $_______
e. Proposed Effective
Date: ________ ________ ________
Accepted and Agreed:
[NAME OF ASSIGNOR] [NAME OF ASSIGNEE]
By: By:
------------------------ ------------------------
Title: Title:
--------------------- ---------------------
*Insert specific facility names per Credit Agreement
**If a Commitment has been terminated, insert outstanding Loans
in place of Commitment
***Percentage taken to 10 decimal places
Attachment to SCHEDULE 1 to ASSIGNMENT AGREEMENT
Attach Assignor's Administrative Information Sheet, which must
include notice address for the Assignor and the Assignee and the ABR Loan
Lending Office address and the LIBOR Loan Lending Office address for the
Assignee.
EXHIBIT 1
to Assignment Agreement
NOTICE
OF ASSIGNMENT
_______________________, 19__
To: [NAME OF BORROWER]*
----------------------
----------------------
[NAME OF AGENT]
----------------------
----------------------
From: [NAME OF ASSIGNOR] (the "Assignor")
[NAME OF ASSIGNEE] (the "Assignee")
1. We refer to that certain Credit Agreement (the "Credit
Agreement") described in Item I of Schedule 1 attached hereto ("Schedule 1").
Capitalized terms used herein and not otherwise defined herein shall have the
meanings attributed to them in the Credit Agreement.
2. This Notice of Assignment (this "Notice") is given and
delivered to [the Borrower and]* the Agent pursuant to Section 12.03 of the
Credit Agreement.
3. The Assignor and the Assignee have entered into an
Assignment Agreement, dated as of __________, 19__ (the "Assignment"), pursuant
to which, among other things, the Assignor has sold, assigned, delegated and
transferred to the Assignee, and the Assignee has purchased, accepted and
assumed from the Assignor the percentage interest specified in Item 3 of
Schedule 1 of all outstanding rights and obligations under the Credit Agreement
relating to the facilities listed in Item 3 of Schedule 1. The Effective Date of
the Assignment shall be the later of the date specified in Item 5 of Schedule 1
or two Business Days (or such shorter period as agreed to by the Agent) after
this Notice of Assignment and any consents and fees required by Section 12.03 of
the Credit Agreement have been delivered to the Agent, provided that the
Effective Date shall not occur if any condition precedent agreed to by the
Assignor and the Assignee has not been satisfied.
*To be included only if consent must be obtained from the Borrower pursuant to
Section 12.03 of the Credit Agreement.
4. The Assignor and the Assignee hereby give to the Borrower
and the Agent notice of the assignment and delegation referred to herein. The
Assignor will confer with the Agent before the date specified in Item 5 of
Schedule 1 to determine if the Assignment Agreement will become effective on
such date pursuant to Section 3 hereof, and will confer with the Agent to
determine the Effective Date pursuant to Section 3 hereof if it occurs
thereafter. The Assignor shall notify the Agent if the Assignment Agreement does
not become effective on any proposed Effective Date as a result of the failure
to satisfy the conditions precedent agreed to by the Assignor and the Assignee.
At the request of the Agent, the Assignor will give the Agent written
confirmation of the satisfaction of the conditions precedent.
5. The Assignor or the Assignee shall pay to the Agent on or
before the Effective Date the processing fee of $4,000.00 required by Section
12.03 of the Credit Agreement.
6. If any Notes are outstanding on the Effective Date, the
Assignor and the Assignee request and direct that the Agent prepare and cause
the Borrower to execute and deliver new Notes or, as appropriate, replacement
Notes, to the Assignor and the Assignee. The Assignor and, if applicable, the
Assignee each agree to deliver to the Agent the original Note received by it
from the Borrower upon its receipt of a new Note (or replacement Note) in the
appropriate amount, whereupon such original Note shall be marked "canceled" and
returned to the Borrower.
7. The Assignee advises the Agent that notice and payment
instructions are set forth in the attachment to Schedule 1.
8. The Assignee hereby represents and warrants that none of
the funds, monies, assets or other consideration being used to make the purchase
pursuant to the Assignment Agreement are "plan assets" as defined under ERISA
and that its rights, benefits, and interests in and under the Loan Documents
will not be "plan assets" under ERISA.
9. The Assignee authorizes the Agent to act as its agent under
the Loan Documents in accordance with the terms thereof. The Assignee
acknowledges that the Agent has no duty to supply information with respect to
the Borrower or the Loan Documents to the Assignee until the Assignee becomes a
party to the Credit Agreement.*
*May be eliminated if Assignee is a party to the Credit Agreement
prior to the Effective Date.
NAME OF ASSIGNOR NAME OF ASSIGNEE
By: By:
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Title: Title:
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ACKNOWLEDGED [AND CONSENTED ACKNOWLEDGED [AND CONSENTED
TO] BY(NAME OF AGENT] TO] BY (NAME OF BORROWER]
By: By:
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Title: Title:
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[Attach photocopy of Schedule 1 to Assignment)