REVOLVING CREDIT AGREEMENT
THIS REVOLVING CREDIT AGREEMENT is dated as of
November 1, 1993, and is made by and among FIRST HUNTINGDON
FINANCE CORP., a Delaware corporation (the "Borrower"), TOLL
BROTHERS, INC., a Delaware corporation ("Company") and the other
GUARANTORS (as hereinafter defined), the BANKS (as hereinafter
defined), and PNC BANK, NATIONAL ASSOCIATION, in its capacity as
agent for the Banks under this Agreement (hereinafter referred to
in such capacity as the "Agent").
WITNESSETH:
WHEREAS, the Borrower has requested the Banks to
provide a revolving credit facility to the Borrower in an
aggregate principal amount not to exceed $220,000,000 with a
$145,000,000 sublimit for issuance of letters of credit and
escrow agreements; and
WHEREAS, the revolving credit facility shall be used to
make loans or advances to the Guarantors or to provide letters of
credit or escrow agreements on behalf of the Guarantors; and
WHEREAS, the Banks are willing to provide such credit
upon the terms and conditions hereinafter set forth.
NOW, THEREFORE, the parties hereto, in consideration of
their mutual covenants and agreements hereinafter set forth and
intending to be legally bound hereby, covenant and agree as
follows:
ARTICLE I
CERTAIN DEFINITIONS
1.01 Certain Definitions. In addition to words and
terms defined elsewhere in this Agreement, the following words
and terms shall have the following meanings, respectively, unless
the context hereof clearly requires otherwise:
Additional Bank shall have the meaning given to
such term in Section 11.11(c).
Additional Bank Treasury Rate Ceiling shall mean
the rate computed pursuant to Paragraph (B) of the definition of
Treasury Rate with respect to an Additional Bank which elects to
make a Treasury Rate Term Loan pursuant to Section
11.11(c)(D)(1). The interest rate charged by such Additional
Bank on such Treasury Rate Term Loan may not exceed the
Additional Bank Treasury Rate Ceiling.
Adjusted Category 2 Borrowing Base Assets shall
mean the Category 2 Borrowing Base Assets reduced (but not below
zero) by the following amount (provided such amount is a positive
number): (A) the sum of Category 2 Borrowing Base Assets and
Category 3 Borrowing Base Assets, minus (B) two thirds (2/3) of
the sum of Category 1 Borrowing Base Assets, Category 2 Borrowing
Base Assets and Category 3 Borrowing Base Assets, and minus
(C) Category 3 Borrowing Base Assets.
Adjusted Category 3 Borrowing Base Assets shall
mean the Category 3 Borrowing Base Assets reduced (but not below
zero) by the difference between the following amounts (provided
such difference is a positive number): (A) the sum of Category 2
Borrowing Base Assets and Category 3 Borrowing Base Assets, minus
(B) two thirds (2/3) of the sum of Category 1 Borrowing Base
Assets, Category 2 Borrowing Base Assets and Category 3 Borrowing
Base Assets.
Adjusted Consolidated Senior Liabilities shall
mean Consolidated Senior Liabilities plus 50% of Consolidated
Contingent Liabilities.
Adjusted Shareholders' Equity shall mean as of
any date of determination Shareholders' Equity less the amount,
if any, by which the Mortgage Subsidiaries' Adjusted
Shareholders' Equity as of such date exceeds $20,000,000.
Affiliate as to any Person shall mean any other
Person (i) which directly or indirectly controls, is controlled
by, or is under common control with such Person, (ii) which
beneficially owns or holds 20% or more of any class of the voting
stock of such Person, or (iii) 20% or more of the voting stock
(or in the case of a person which is not a corporation, 20% or
more of the equity interest) of which is beneficially owned or
held, directly or indirectly, by such Person. Control, as used
herein, shall mean the possession, directly or indirectly, of the
power to direct or cause the direction of the management or
policies of a Person, whether through the ownership of voting
securities, by contract or otherwise, including the power to
elect a majority of the directors or trustees of a corporation or
trust, as the case may be.
Agent shall mean PNC Bank, National Association
and its successors.
Agent's Fee shall have the meaning assigned to
that term in Section 10.15 hereof.
Aggregate Credit Exposure shall mean as of any
date the sum of each of the amounts described in (A) through (C)
below outstanding on such date: (A) the aggregate outstanding
principal balance of the Loans made to the Borrower pursuant to
Sections 2.01, 11.11(c) or otherwise hereunder outstanding on
such date, plus (B) the aggregate undrawn face amount of the
Letters of Credit issued pursuant to Section 2.10, plus (C) the
obligations under the Escrow Agreements entered into pursuant to
Section 2.11. It is acknowledged that clauses (B) and (C)
exclude the undrawn face amount of Letters of Credit and
obligations under Escrow Agreements which Borrower has Cash
Collateralized.
Agreement shall mean this Credit Agreement as
the same may be supplemented or amended from time to time
including all schedules and exhibits hereto.
Agreement of Sale shall mean a written agreement
with a Person, which is not an Affiliate of the Company or any
Consolidated Subsidiary of the Company, for the sale of a unit
fully executed by all parties to such agreement which shall be in
form and substance satisfactory to Agent, which shall include no
contingency for the purchaser selling another residence, which
shall be accompanied by a non-refundable (except on terms set
forth in such agreement or as may be prevented by applicable law)
deposit equal to the lesser of (x) ten percent (10%) of the
purchase price of the unit sold, (y) the difference between the
purchase price set forth in such agreement and the amount of the
mortgage contingency set forth in such agreement (at least one-
half of which deposit shall have been paid in cash), and (z) the
maximum amount of deposit which applicable Law permits the seller
of such unit to retain if the closing for the sale of such unit
does not occur, and which shall provide that the purchase price
shall be paid in cash or by title company check or by certified
or bank check at or before the closing of the sale (such cash or
check may be obtained by the buyer from a loan provided by the
seller or an Affiliate of the seller), the date of which shall be
set forth in such agreement. For the purpose of clause (z)
above, applicable Law shall be deemed to prohibit seller from
retaining a deposit if it creates a presumption that the amount
of such deposit is unreasonable and as such may not be retained
by the seller.
Amount to be Collateralized shall have the
meaning assigned to such term in Section 2.14(d)(iii).
Assessment Rate for any day shall mean the rate
per annum (rounded upward to the nearest 1/100 of 1%) as
determined by the Agent in accordance with its usual procedures
(which determination shall be conclusive absent manifest error)
to be the annual assessment rate in effect on such day which is
payable by a member of the Bank Insurance Fund classified as
well-capitalized and within supervisory subgroup "A" (or a
comparable successor assessment risk classification) within the
meaning of 12 C.F.R. 327.3(d) (or any successor provision) to
the Federal Deposit Insurance Corporation (or any successor) for
such Corporation's (or such successor's) insuring time deposits
at offices of such institution in the United States. The CD Rate
shall be adjusted automatically as of the effective date of each
change in the Assessment Rate.
Assignment and Assumption Agreement shall mean
an Assignment and Assumption Agreement by and among a Purchasing
Bank, the Transferor Bank and the Agent, as Agent and on behalf
of the remaining Banks, substantially in the form of Exhibit A
hereto.
Assumed Joint Venture Loans shall mean loan
obligations of a Consolidated Subsidiary other than the Company
in favor of a Person which is not a Loan Party or an Affiliate of
a Loan Party secured by assets of such Consolidated Subsidiary
provided that (i) such Consolidated Subsidiary is not wholly
owned by the other Loan Parties; (ii) at the time the Loan
Parties acquired their interest in such Consolidated Subsidiary
such loans existed and were secured by such assets; and (iii) the
recourse for such loans is limited to such Consolidated
Subsidiary and any refinancing of such loans and any new loans
entered into by such Consolidated Subsidiary provided that with
respect to such loans, refinancings thereof and new loans (A) the
aggregate amount thereof shall not exceed the amount of the loans
which existed at the time the Loan Parties acquired their
interest in such Consolidated Subsidiary, (B) such loans,
refinancings and new loans shall not be secured by any assets of
such Consolidated Subsidiary other than those which secured the
loans which existed at the time the Loan Parties acquired such
interest, and (C) at least 80% of the amount thereof shall be
provided by the same lenders which provided the loans which
existed at the time the Loan Parties acquired such interest.
Assumed Purchase Money Loans shall mean loans
secured by assets purchased by a Consolidated Subsidiary and
assumed or entered into by such Consolidated Subsidiary on the
date of purchase provided that (i) the amount of such loans does
not exceed the purchase price thereof and (ii) recourse for such
loans is limited to the Consolidated Subsidiary; and any
amendment, modification, extension or refinancing of such loans
provided that with respect to the loans, as amended, modified,
extended, or refinanced (A) the aggregate amount thereof shall
not exceed the amount of the loans which existed at the time the
Consolidated Subsidiary purchased such assets, (B) such loans and
refinancings shall not be secured by any assets of such
Consolidated Subsidiary other than those initially purchased by
such Consolidated Subsidiary, and (C) at least 80% of the amount
thereof shall be provided by the same lenders which provided the
loans which existed at the time the Consolidated Subsidiary
purchased such assets.
Authorized Officer shall mean those individuals
designated by written notice to the Agent from the applicable
Loan Party, authorized to execute notices, reports and other
documents required hereunder. The Loan Parties may amend such
list of Persons from time to time by giving written notice of
such amendment to the Agent.
Bank Exclusion Event shall occur with respect to
any Bank if (A) such Bank becomes subject to the control of an
Official Body, or (B) all of the following shall occur (i) such
Bank breaches its obligation to make a Loan, issue or participate
in any Letter of Credit or enter into or participate in any
Escrow Agreement pursuant to Sections 2.10 and 2.11 hereof,
(ii) a Simple Majority of the Banks requests that such Bank be
excluded pursuant to Section 2.14 hereof, and (iii) Borrower
agrees to exclude such Bank and reduce or terminate its
Commitment.
Bank to be Removed shall have the meaning given
to such term in Section 2.14(c)(ii).
Bank to be Terminated shall have the meaning
given to such term in Section 2.14(b)(vii).
Banks shall mean the financial institutions
named on Schedule 1.01(c) hereto and their respective successors
and assigns as permitted hereunder, each of which is referred to
herein as a Bank.
Base Shareholders' Equity shall mean as of any
date of determination the sum of (i) $190,000,000; (ii) 50% of
the Homebuilder Consolidated Net Income for the period between
February 1, 1995 and October 31, 1995 provided that there is net
income (as opposed to a net loss), (iii) 50% of the Homebuilder
Consolidated Net Income for each fiscal year (or completed
portion of the fiscal year if the computation is made during that
fiscal year) in which there is net income (as opposed to net
loss) between November 1, 1995 through the date of determination;
plus (iv) the difference between the following amounts provided
that if such difference is less than zero, the amount of this
clause (iv) shall be zero: (A) 50% of the cash proceeds received
from the sale of additional shares of the Company's common stock
to Persons which are not Loan Parties, Unconsolidated
Subsidiaries or Affiliates (other than Xxxxxx X. Toll or Xxxxx X.
Toll) of the Company between February 1, 1995 through the date of
determination, less (B) 50% of the cash purchase price paid by
the Company to purchase shares of its common stock from Persons
which are not Loan Parties, Unconsolidated Subsidiaries or
Affiliates of the Company between February 1, 1995 through the
date of determination.
Benefit Arrangement shall mean at any time an
"employee benefit plan," within the meaning of Section 3(3) of
ERISA, which is neither a Plan or a Multiemployer Plan and which
is maintained, sponsored or otherwise contributed to, by any
member of the ERISA Group.
Bond Obligations shall have the meaning given to
such term in Section 8.01(a)(vi).
Borrower shall mean First Huntingdon Finance
Corp., a corporation organized and existing under the laws of the
State of Delaware.
Borrowing Base shall have the meaning given to
such term in Section 8.01(e).
Borrowing Base Assets shall mean collectively
Category 1 Borrowing Base Assets, Category 2 Borrowing Base
Assets and Category 3 Borrowing Base Assets.
Borrowing Date shall mean the one Business Day
in each week selected by Borrower for such week as the day on
which Loans are to be made, provided that Borrower may select as
additional Borrowing Dates: (i) the expiration date of any Euro-
Rate Interest Period or CD Rate Interest Period, and (ii) up to
an additional twelve (12) Business Days in any consecutive twelve
(12) month period.
Borrowing Tranche shall mean (i) with respect to
the CD Rate Portion, Loans to which the CD Rate Option applies,
and which, by reason of the selection of, conversion to or
renewal of such CD Rate Option on the same day, have the same
Interest Period, (ii) with respect to the Euro-Rate Portion,
Loans to which the Euro-Rate Option applies, and which, by reason
of the selection of, conversion to or renewal of such Euro-Rate
Option on the same day, have the same Interest Period, (iii) with
respect to the Prime Rate Portion of the Loans, Loans to which
the Prime Rate Option applies by reason of the selection of or
conversion to such Prime Rate Option, (iv) with respect to the
Federal Funds/Euro-Rate Portion of the Loans, Loans to which the
Federal Funds/Euro-Rate Option applies by reason of the selection
of or conversion to such Federal Funds/Euro-Rate Option, and
(v) with respect to the Treasury Rate Term Loans, the portion of
such Loans which have the same Borrowing Date and Treasury Rate
Term Loan Due Date.
Business Day shall mean (i) with respect to
matters relating to the Euro-Rate Option, a day on which banks in
the London interbank market are dealing in U.S. Dollar deposits
and on which commercial banks are open for domestic and
international business in Philadelphia, Pennsylvania, and
(ii) with respect to any other matter, a day on which commercial
banks are open for business in Philadelphia, Pennsylvania.
Cash Collateralize shall mean with respect to
any Escrow Agreement or Letter of Credit, that the Borrower shall
provide cash or other collateral satisfactory to the Escrow Bank
or Issuing Bank, as the case may be, in an amount equal to such
Escrow Bank's or Issuing Bank's contingent liability under such
Escrow Agreement or Letter of Credit, as the case may be, and
enter into such other indemnification agreements as such Escrow
Bank or Issuing Bank may require.
Category 1 Borrowing Base Assets shall mean the
following assets of the Loan Parties: (1) residential units and
buildings under construction; (2) completed residential units and
buildings; and (3) land (and related site improvements and land
development costs) under residential units and buildings under
construction or completed and land (and related site improvements
and land development costs) on which a unit is to be constructed
which is subject to an Agreement of Sale, except that any of the
foregoing assets described in clauses (1) through (3) above shall
be excluded from Category 1 Borrowing Base Assets if they are
Excluded Assets.
Category 2 Borrowing Base Assets shall mean site
improvements on land which is not subject to an Agreement of
Sale, except for site improvements which are Excluded Assets.
Category 3 Borrowing Base Assets shall mean
acquisition and development costs (excluding costs of site
improvements) of land which is not subject to an Agreement of
Sale, except for acquisition and development costs which are
Excluded Assets.
CD Rate shall mean with respect to the Loans
comprising any Borrowing Tranche to which the CD Rate Option
applies for any Interest Period, the interest rate per annum
determined by the Agent by adding:
(A) the rate per annum obtained by dividing
(the resulting quotient to be rounded upward to the
nearest 1/100 of 1%) (i) the rate of interest (which
shall be the same for each day in such CD Rate Interest
Period) which is the arithmetic average computed by the
Agent of the rates determined by the Agent in
accordance with its usual procedures (which
determination shall be conclusive absent manifest
error) to be the average of the secondary market bid
rates at or about 11:00 o'clock a.m., Eastern Time, on
the first day of such CD Rate Interest Period by
dealers of recognized standing in negotiable
certificates of deposit for the purchase at face value
of negotiable certificates of deposit for delivery on
such day in amounts comparable to such CD Rate Loan and
having maturities comparable to such CD Rate Interest
Period by (ii) a number equal to 1.00 minus the CD Rate
Reserve Percentage; and
(B) the Assessment Rate.
The CD Rate may also be expressed by the
following formula:
[average of the secondary market ]
CD Rate = [bid rates determined by the Agent] + Assessment Rate
[1.00 - CD Rate Reserve Percentage]
The CD Rate shall be adjusted with respect to the CD Rate Option
outstanding on the effective date of any change in the CD Rate
Reserve Percentage as of such effective date. The Agent shall
give prompt written notice to the Borrower of the CD Rate as
determined or adjusted in accordance herewith, which
determination shall be conclusive absent manifest error.
CD Rate Interest Period shall have the meaning
assigned to that term in Section 3.02 hereof.
CD Rate Option shall mean the rate of interest
determined pursuant to Section 3.01(a)(iv).
CD Rate Portion shall mean the portion of the
Loans bearing interest at any time under the CD Rate Option.
CD Rate Reserve Percentage shall mean the
effective percentage (expressed as a decimal, rounded upward to
the nearest 1/100 of 1%), as determined in good faith by the
Agent (which determination shall be conclusive absent manifest
error), which is in effect on such day as prescribed by the Board
of Governors of the Federal Reserve System (or any successor) for
determining the reserve requirements (including without
limitation supplemental, marginal and emergency reserve
requirements) of the Agent in respect of nonpersonal time
deposits in Dollars in the United States. The CD Rate shall be
adjusted automatically as of the effective date of each change in
the CD Rate Reserve Percentage.
CD Rate Spread shall have the meaning given to
such term in Section 3.01(a)(iv).
Change of Control shall mean any transaction or
group of transactions after which (i) Xxxxxx Xxxx and Xxxxx Xxxx
(and the executors, administrators or heirs of either or both of
them in the event of the death of either or both of them) shall
together own less than twenty-five percent (25%) of Company's
issued and outstanding common stock, or (ii) another partnership,
limited partnership, syndicate or other group which is deemed a
"person" within the meaning of Section 13(d)(3) of the Securities
Exchange Act of 1934 owns more of Company's issued and
outstanding common stock than is owned in the aggregate by Xxxxxx
Xxxx and Xxxxx Xxxx (and the executors, administrators or heirs
of either or both of them in the event of the death of either or
both of them).
Closing Date shall mean the Business Day on
which the first Loan shall be made, which shall be November 1,
1993.
Closing Fee shall have the meaning given to such
term in Section 2.05 hereof.
Collateral Documents shall have the meaning
given to such term in Section 7.01.
Commercial Purchase Money Loans shall mean any
of the following: (i) purchase money loans made by a financial
institution for the primary purpose of acquiring in separate
transactions commercial real estate rental projects which are
completed and substantially leased (meaning for this purpose that
80% or more of the rentable area is subject to existing leases
under which tenants are paying market rent and in respect of
which there is not payment default), (ii) purchase money loans
made by a financial institution for the primary purpose of
acquiring real estate substantially all of which (A) is a
Qualified Golf Course or will be developed by the Loan Parties as
a Qualified Golf Course, or (B) is used by a Loan Party as
offices or as a panel plant, or (iii) other loans which are
secured solely by the assets of a Qualified Golf Course owned by
one or more of the Guarantors and the amount of such loans does
not exceed 90% of the book value of such Qualified Golf Course.
Commitment shall mean as to any Bank at any
time, the amount set forth opposite its name on Schedule
1.01(C)(1) hereto in the column labeled "Commitment," and
thereafter on Schedule I to the most recent Assignment and
Assumption Agreement to which such Bank is a party, and
Commitments shall mean the aggregate Commitments of all of the
Banks.
Commitment Fee shall have the meaning assigned
to that term in Section 2.03 hereof.
Company shall mean Toll Brothers, Inc., a
Delaware corporation.
Company Debt Rating shall mean the lower of the
rating described in clause (1) or that described in clause (2)
below: (1) the second highest Qualified Rating obtained by the
Company, or (2) either (A) or (B) as applicable: (A) the
Qualified Rating obtained by the Company from Standard & Poor's
or from Xxxxx'x, as the case may be, if the Company has obtained
a Qualified Rating from only one of these two agencies; or (B)
the higher of the Qualified Rating obtained from Standard &
Poor's and Xxxxx'x if the Company has obtained Qualified Ratings
from both of these two agencies. As of the Fourth Amendment
Effective Date, each of the ratings of Xxxxx'x listed below is
deemed to be equivalent to the rating of Standard & Poor's listed
next to it:
Equivalent
Rating of
Xxxxx'x Standard & Poor's
Baa2 BBB
Baa3 BBB-
Ba1 BB+
Ba2 BB
Schedule 1.01(Q) shall on the Fourth Amendment Effective Date and
at all times thereafter: (1) list with respect to each Qualified
Rating Agency other than Xxxxx'x and Standard & Poor's the
ratings of such Agency which are equivalent to the four ratings
of Xxxxx'x and the four ratings of Standard & Poor's set forth
above for purposes of computing the Company Debt Rating and
(2) set forth the Company's computation of the Company Debt
Rating. It is acknowledged that the Company Debt Rating on the
Fourth Amendment Effective Date is BB+/Ba1.
Compliance Certificate shall have the meaning
given to such term in Section 8.02(b).
Confirmation of Exposure shall mean a schedule in
the form attached as Exhibit N which the Agent in its discretion
may prepare and distribute to the Banks showing each Bank's
Contingent Exposure and Net Exposure in Letters of Credit and
Escrow Agreements on the date thereof.
Consolidated Contingent Liabilities shall mean all
of the Company's and the Company's Homebuilder Consolidated
Subsidiaries' guarantees, endorsements (other than for collection
in the ordinary course of business) and other contingent
obligations in respect of the obligations of other persons or
entities who are not the Company or the Company's Homebuilder
Consolidated Subsidiaries (including contingent reimbursement
obligations in connection with letters of credit, escrow
agreements or Bond Obligations but excluding any of the foregoing
items which are also included in the definition of Consolidated
Senior Liabilities), all determined on a consolidated basis in
accordance with GAAP.
Consolidated Net Income shall mean, for any
period, the aggregate of the Net Income of the Company and its
Consolidated Subsidiaries for such period determined on a
consolidated basis in accordance with GAAP.
Consolidated Senior Liabilities shall mean the
Senior Liabilities of the Company and its Homebuilder
Consolidated Subsidiaries on a consolidated basis plus (except as
provided in the last sentence) the aggregate of the amounts
determined by multiplying the ownership interest of each
Consolidated Homebuilder Subsidiary, expressed as a percentage,
in the shareholders' equity of each Unconsolidated Subsidiary by
the liabilities of such Unconsolidated Subsidiary. For purposes
of the preceding sentence, percentage ownership interest shall be
calculated as the percentage ownership of the Company or such
Consolidated Homebuilder Subsidiary in the total shareholders'
equity of the Unconsolidated Subsidiary (the "Ownership
Percentage"). If the sum of (a) the aggregate of the amounts
determined by multiplying the Ownership Percentage of each
Consolidated Homebuilder Subsidiary in each Unconsolidated
Subsidiary by the shareholders' equity (or comparable measure of
equity) of each such Unconsolidated Subsidiary and (b) the
aggregate of the (i) Guarantees by any Loan Party of Indebtedness
of such Unconsolidated Subsidiary and (ii) loans payable or other
obligations of such Unconsolidated Subsidiary to Borrower or any
of the Loan Parties (excluding receivables secured by first
mortgage liens on real property which receivables do not exceed
the net realizable value of such real property and are not
subordinate to any other obligation of such Unconsolidated
Subsidiary) is less than 20% of Adjusted Shareholders' Equity,
then the amount referred to in the final phrase of the first
sentence need not be included in determining Company's
Consolidated Senior Liabilities.
Consolidated Subsidiaries shall mean the
Subsidiaries of the Company which are consolidated with the
Company for accounting purposes under GAAP.
Consolidated Subsidiary Shares shall mean the
issued and outstanding capital stock, partnership interests,
beneficial ownership interest, or other ownership interests, as
applicable, of each Consolidated Subsidiary of the Company.
Contingent Exposure shall mean at any time for
each Bank the aggregate of the face amount of outstanding Letters
of Credit which it has issued and the aggregate amount of its
obligations under outstanding Escrow Agreements to which it is a
party.
Development Agreement shall mean agreements
between the Loan Parties and municipalities or other Official
Bodies or utilities (both public or private) relating to the
development of real estate by the Guarantors as permitted under
this Agreement.
Dollar, Dollars, U.S. Dollars and the symbol $
shall mean lawful money of the United States of America.
Environmental Certificate shall have the meaning
given to such term in Section 8.02(e) hereof.
Environmental Complaint shall mean any written
complaint setting forth a cause of action for personal or
property damage or equitable relief, order, notice of violation,
citation, request for information issued pursuant to any
Environmental Laws by an Official Body, subpoena or other written
notice of any type relating to, arising out of, or issued
pursuant to any of the Environmental Laws or any Environmental
Conditions, as the case may be.
Environmental Conditions shall mean any conditions
of the environment, including, without limitation, the work
place, the ocean, natural resources (including flora or fauna),
soil, surface water, ground water, any actual or potential
drinking water supply sources, substrata or the ambient air,
relating to or arising out of, or caused by the use, handling,
storage, treatment, recycling, generation, transportation,
release, spilling, leaking, pumping, emptying, discharging,
injecting, escaping, leaching, disposal, dumping, threatened
release or other management or mismanagement of Regulated
Substances resulting from the use of, or operations on, the
Property.
Environmental Laws shall mean all federal, state,
local and foreign laws and regulations, including permits,
orders, judgments, consent decrees issued, or entered into,
pursuant thereto, relating to pollution or protection of human
health or the environment or employee safety in the work place.
Environmentally Approved Land shall mean land
owned by Borrower or a Guarantor as to which there has been
delivered to Agent an Environmental Certificate which either
(1) contains no exceptions on exhibit A thereto except for
Permitted Environmental Exceptions, or (2) if it contains any
exceptions other than Permitted Environmental Exceptions, such
land shall have either been (x) approved as acceptable by Agent,
which approval has not been reversed by a Simple Majority of
Banks, or (y) approved by a Simple Majority of Banks if Agent
initially does not approve such Environmental Certificate.
ERISA shall mean the Employee Retirement Income
Security Act of 1974, as the same may be amended or supplemented
from time to time, and any successor statute of similar import,
and the rules and regulations thereunder, as from time to time in
effect.
ERISA Group shall mean, at any time, the Borrower
and all members of a controlled group of corporations and all
trades or businesses (whether or not incorporated) under common
control and all other entities which, together with the Borrower,
are treated as a single employer under Section 414 of the
Internal Revenue Code.
Escrow Agreement shall mean any Existing Escrow
Agreement or New Escrow Agreement. An Escrow Agreement shall
cease to be an "Escrow Agreement" hereunder and governed by the
provisions applicable to Escrow Agreements at such time as the
Borrower shall Cash Collateralize such Escrow Agreement pursuant
to Section 2.11 or 2.14.
Escrow Agreement Issuance Limit shall mean as to
any Bank at any time the amount set forth opposite its name on
Schedule 1.01(C) hereto in the column labeled "Escrow Agreement
Issuance Limit," as amended from time to time.
Escrow Bank shall have the meaning given to such
term in Section 2.11.
Escrow Fee shall have the meaning given to such
term in Section 2.11(c).
Euro-Rate shall mean with respect to the Loans
comprising any Borrowing Tranche to which the Revolving Credit
Euro-Rate Option or the Term Loan Euro-Rate Option applies for
any Interest Period, the interest rate per annum determined by
the Agent by dividing (the resulting quotient rounded upward to
the nearest 1/100 of 1% per annum) (i) the rate of interest
determined by the Agent (which determination shall be conclusive
absent manifest error) to be the average of the rates of interest
per annum for deposits in U.S. Dollars offered by banks in the
London interbank market to major money center banks at
approximately 11:00 A.M. London time two (2) Business Days prior
to the first day of such Interest Period for delivery on the
first day of such Interest Period in amounts comparable to such
Borrowing Tranche and having maturities comparable to such
Interest Period, as such rates appear on the page of Reuters
Monitor Money Rate Service which displays London interbank
offered rates of major banks, by (ii) a number equal to 1.00
minus the Euro-Rate Reserve Percentage. The Euro-Rate may also
be expressed by the following formula:
[average of rates offered to ]
Euro-Rate = [major money center banks ]
[in the London interbank market]
[as determined by Agent ]
1.00 - Euro-Rate Reserve Percentage
The Euro-Rate shall be adjusted with respect to any Euro-Rate
Option outstanding on the effective date of any change in the
Euro-Rate Reserve Percentage as of such effective date. The
Agent shall give prompt notice to the Borrower of the Euro-Rate
as determined or adjusted in accordance herewith, which
determination shall be conclusive absent manifest error.
Euro-Rate Interest Period shall mean either the
Revolving Credit Euro-Rate Interest Period or the Term Loan Euro-
Rate Interest Period.
Euro-Rate Option shall mean either the Revolving
Credit Euro-Rate Option or the Term Loan Euro-Rate Option.
Euro-Rate Portion shall mean the portion of the
Loans bearing interest at any time under any Euro-Rate Option.
Euro-Rate Reserve Percentage shall mean the
percentage (expressed as a decimal rounded upward to the nearest
1/100 of 1%) as determined by the Agent (which determination
shall be conclusive absent manifest error) which is in effect
during any relevant period, as prescribed by the Board of
Governors of the Federal Reserve System (or any successor) for
determining the reserve requirements (including, without
limitation, supplemental, marginal and emergency reserve
requirements) with respect to eurocurrency funding (currently
referred to as "Eurocurrency Liabilities") of the Agent.
Euro-Rate Spread shall have the meaning given to
such term in Section 3.01(a)(ii).
Euro-Rate Term Loan shall mean any Loans subject
to the Term Loan Euro-Rate Option described in Section
3.01(b)(i).
Euro-Rate Term Loan Due Date shall have the
meaning given to such term in Section 3.01(b)(i).
Euro-Rate Term Loan Expiration Period shall mean
the time period between and including October 2, 1997 and
November 1, 1997.
Euro-Rate Term Loan Prepayment Premium shall mean
with respect to the payment of a Euro-Rate Term Loan prior to the
Euro-Rate Term Loan Due Date for any reason (whether voluntarily,
by acceleration or otherwise and whether in whole or in part),
except for prepayments required under Section 11.11(c) in
connection with the joinder of an Additional Bank, an amount
equal to the present value of product of the following: (a) one-
eighth of one percent (1/8%), (b) the amount of the Euro-Rate
Term Loan being prepaid, and (c) a fraction with a numerator
equal to the number of days from the prepayment date through the
Euro-Rate Term Loan Due Date and a denominator of 360 days. The
discount rate for the purpose of computing the present value
pursuant to the preceding sentence shall be the Treasury Rate
which would apply to a hypothetical Treasury Rate Term Loan if
the Banks were to make such a Loan on the prepayment date with a
term that expires on the Euro-Rate Term Loan Due Date.
Event of Default shall mean any of the Events of
Default described in Section 9.01 of this Agreement.
Excluded Assets shall mean any of the following
assets: (A) assets subject to any lien securing Indebtedness
referred to and otherwise permitted by Section 8.01(a) hereof
(except for Indebtedness hereunder and Permitted Purchase Money
Loans), (B) land, site improvements, development costs and units
or buildings constructed or under construction on such land if
the applicable Guarantor has not received Preliminary Approval
with respect to such land or if it is not Environmentally
Approved Land; and (C) payments for Options (Borrower may,
however, include the appraised value of Qualified Options when it
computes its Borrowing Base under the circumstances described in
Section 8.01(e)(ii)).
Excluded Mortgage Subsidiary Guaranties shall mean
as of any date of determination the lesser of (i) the aggregate
amount of guaranties of any of the Loan Parties directly or
indirectly of the obligation of any of the Mortgage Subsidiaries,
or (ii) $10,000,000.
Existing Agreement means the Amended and Restated
Revolving Credit Agreement, dated as of July 29, 1992, among
Borrower, the Company, certain Subsidiaries of the Company, Agent
and the Banks named therein, as amended.
Existing Escrow Agreements shall mean escrow
agreements described on Schedule 1.01(E) entered into by PNC Bank
pursuant to the Existing Agreement and which remain in effect on
the date hereof.
Existing Letters of Credit shall mean letters of
credit described on Schedule 1.01(E) which were issued by some of
the Banks pursuant to the Existing Agreement and which remain
outstanding on the date hereof.
Expiration Date shall mean June 16, 2000, or any
later date if the expiration date of this Agreement shall be
extended pursuant to the terms hereof.
Expiration Date Term Loan Treasury Rate Option
shall have the meaning given to such term in Section 3.01(b)(ii).
Federal Funds Effective Rate for any day shall
mean the rate per annum (based on a year of 360 days and actual
days elapsed and rounded upward to the nearest 1/100 of 1%)
announced by the Federal Reserve Bank of New York (or any
successor) computed by the Agent on such day as being the
weighted average of the rates on overnight Federal funds
transactions arranged by Federal funds brokers on the previous
trading day, as computed and announced by such Federal Reserve
Bank (or any successor) in substantially the same manner as such
Federal Reserve Bank computes and announces the weighted average
it refers to as the "Federal Funds Effective Rate" as of the date
of this Agreement; provided, if such Federal Reserve Bank (or its
successor) does not announce such rate on any day, the "Federal
Funds Effective Rate" for such day shall be the Federal Funds
Effective Rate for the last day of which such rate was announced.
Federal Funds/Euro-Rate Option shall mean the rate
of interest determined pursuant to Section 3.01(a)(iii).
Federal Funds/Euro-Rate Portion shall mean portion
of the Loans bearing interest at any time under the Federal
Funds/Euro-Rate Option.
Fifth Amendment shall mean the Fifth Amendment to
this Agreement dated as of July 25, 1995.
Fifth Amendment Effective Date shall mean the
effective date of the Fifth Amendment.
Financial Letter of Credit shall mean any Letter
of Credit issued on behalf of a Guarantor which is not a
Performance Letter of Credit and which is issued to a third party
to ensure payment by an Affiliate of the Company of a financial
obligation or satisfaction by such Affiliate of any other
obligation of such Affiliate.
First Level Debt Rating shall mean a Company Debt
Rating of (i) BBB or higher if the rating is provided by Standard
& Poor's, (ii) Baa2 or higher if the rating is provided by
Moody's or (iii) equivalent to or higher than a BBB rating by
Standard & Poor's or Baa2 by Moody's if the rating is provided by
a Qualified Rating Agency other than Standard & Poor's or
Moody's.
Fourth Amendment shall mean the Fourth Amendment
to this Agreement, dated June 16, 1995.
Fourth Amendment Effective Date shall mean the
effective date of the Fourth Amendment.
Fourth Amendment Fee shall have the meaning set
forth in Section 2.05.
Fourth Level Debt Rating shall mean a Company Debt
Rating of (i) BB or lower if the rating is provided by Standard &
Poor's, (ii) Ba2 or lower if the rating is provided by Moody's,
or (iii) equivalent to or lower than a BB rating by Standard &
Poor's or a Ba2 by Moody's if the rating is provided by a
Qualified Rating Agency other than Standard & Poor's or Moody's.
GAAP shall mean generally accepted accounting
principles as are in effect from time to time and applied on a
consistent basis (except for changes in application in which the
Borrower's independent certified public accountants concur) both
as to classification of items and amounts.
Guarantors shall mean the Company and each of the
other entities listed under the heading "Guarantors" on the
signature pages hereto and any additional persons which may from
time to time join this Agreement as Guarantors hereunder.
Guaranty of any Person shall mean any obligation
of such Person guaranteeing or in effect guaranteeing any
liability or obligation of any other Person in any manner,
whether directly or indirectly, including, without limiting the
generality of the foregoing, any performance bond or other
suretyship arrangement and any other form of assurance against
loss, except endorsement of negotiable or other instruments for
deposit or collection in the ordinary course of business.
Guaranty Agreement shall mean the Guaranty and
Suretyship Agreement in substantially the form attached hereto as
Exhibit C to be executed and delivered by each Guarantor to the
Agent for the benefit of the Banks.
Homebuilder Consolidated Net Income shall mean,
for any period, the aggregate of the Net Income of the Company
and its Homebuilder Consolidated Subsidiaries, excluding
insurance proceeds received in respect of a Senior Officer Life
Policy upon the death of a beneficiary thereunder.
Homebuilder Consolidated Subsidiaries shall mean
the Homebuilder Subsidiaries of the Company which are
consolidated with the Company for accounting purposes under GAAP.
Homebuilder Subsidiaries shall mean each of the
Subsidiaries of the Company except for the Mortgage Subsidiaries.
Indebtedness shall mean as to any Person at any
time and without duplication, any and all indebtedness,
obligations or liabilities (whether matured or unmatured,
liquidated or unliquidated, direct or indirect, absolute or
contingent, or joint or several) of such Person for or in respect
of: (i) borrowed money (excluding any loans to any Loan Party
from an insurance company with respect to which the sole recourse
of such company for repayment is the cash value of life insurance
issued by such company), (ii) amounts raised under or liabilities
in respect of any note purchase or acceptance credit facility,
(iii) reimbursement obligations under any letter of credit,
(iv) currency swap agreement, interest rate swap, cap, collar or
floor agreement or other interest rate management device, except
if such agreement or device (1) is entered into in the ordinary
course of the business of the Loan Parties or (2) is applicable
to other Indebtedness and is not treated as a liability under
GAAP, (v) any other transaction (including without limitation
forward sale or purchase agreements, capitalized leases and
conditional sales agreements) having the commercial effect of a
borrowing of money entered into by such Person to finance its
operations or capital requirements (but not including trade
payables and accrued expenses incurred in the ordinary course of
business which are not represented by a promissory note or other
evidence of indebtedness and which are not more than thirty (30)
days past due), or (vi) any Guaranty of Indebtedness for borrowed
money.
Indemnity shall mean the Amended and Restated
Indemnity Agreement in the form of Exhibit D between the Banks
and the Loan Parties relating to possible environmental
liabilities relating to the real property owned by the Loan
Parties.
Intercompany Agreement shall have the meaning
given to such term in Section 5.01(bb).
Intercompany Loans means the loans from the
Borrower to the Guarantors using the proceeds of Loans hereunder.
Intercompany Notes shall have the meaning given to
such term in Section 5.01(bb).
Intercompany Subordination Agreement shall have
the meaning given to such term in Section 5.01(bb).
Interest Payment Date shall mean each date
specified for the payment of interest in Section 4.03.
Interest Period shall mean either a CD Rate
Interest Period or any Euro-Rate Interest Period.
Interest Rate Option shall mean the CD Rate
Option, Revolving Credit Euro-Rate Option, the Prime Rate Option,
the Federal Funds/Euro-Rate Option, the Term Loan Euro-Rate
Option or the Term Loan Treasury Rate Option.
Internal Revenue Code shall mean the Internal
Revenue Code of 1986, as the same may be amended or supplemented
from time to time, and any successor statute of similar import,
and the rules and regulations thereunder, as from time to time in
effect.
Investments in Mortgage Subsidiaries shall mean
the following: (i) investments or contributions by a Loan Party
directly or indirectly in the capital stock of or other payments
(except in connection with the transactions for fair value in the
ordinary course of business) to any of the Mortgage Subsidiaries,
(ii) loans by a Loan Party directly or indirectly to any of the
Mortgage Subsidiaries, (iii) guaranties by a Loan Party directly
or indirectly of the obligations of any of the Mortgage
Subsidiaries (except for the Excluded Mortgage Subsidiary
Guaranties) or (iv) other obligations, contingent or otherwise of
the Loan Parties to or for the benefit of any of the Mortgage
Subsidiaries.
Issuing Bank shall have the meaning given to such
term in Section 2.10(a).
Labor Contracts shall have the meaning assigned to
that term in Section 5.01(r).
Law shall mean any law (including common law),
constitution, statute, treaty, regulation, rule, ordinance,
opinion, release, ruling, order, injunction, writ, decree or
award of any Official Body.
L/C-Escrow Exposure shall mean the sum of the
aggregate undrawn face amount of Letters of Credit issued
pursuant to Section 2.10 plus the obligations under Escrow
Agreements entered into pursuant to Section 2.11.
L/C-Escrow Sublimit shall mean an amount equal to
the product of two-thirds (2/3) times the Revolving Credit
Commitments with such product rounded to the nearest number which
is an integral multiple of $5,000,000, or in the event such
product is an integral multiple of $2,500,000 but not of
$5,000,000, then rounded upward to the nearest integral multiple
of $5,000,000. The L/C Escrow Sublimit on the Fourth Amendment
Effective Date is $145,000,000.
Letter of Credit shall mean any Existing Letter of
Credit or New Letter of Credit. A Letter of Credit shall cease
to be a "Letter of Credit" hereunder and governed by the
provisions hereof applicable to Letters of Credit at such time as
the Borrower shall Cash Collateralize such Letter of Credit
pursuant to Section 2.10 or 2.14.
Letter of Credit Fee shall have the meaning
assigned to that term in Section 2.10.
Letter of Credit Issuance Limit shall mean as to
any Bank at any time, the amount set forth opposite its name on
Schedule 1.01(C) hereto in the column labeled "Letter of Credit
Limit" as amended from time to time.
Lien shall mean any mortgage, deed of trust,
pledge, lien, security interest, charge or other encumbrance or
security arrangement of any nature whatsoever, whether
voluntarily or involuntarily given, including but not limited to
any conditional sale or title retention arrangement, and any
assignment, deposit arrangement or lease intended as, or having
the effect of, security and any filed financing statement or
other notice of any of the foregoing (whether or not a lien or
other encumbrance is created or exists at the time of the
filing).
Loan Documents shall mean this Agreement, the
Notes, the Guaranty Agreement, the Indemnity, the Collateral
Documents, Intercompany Subordination Agreement and any other
instruments, certificates or documents delivered or contemplated
to be delivered hereunder or thereunder or in connection herewith
or therewith, as the same may be supplemented or amended from
time to time in accordance herewith or therewith, and Loan
Document shall mean any of the Loan Documents.
Loan Parties shall mean collectively the Borrower
and the Guarantors.
Loan Request shall mean a request for Loans made
in accordance with Sections 2.06 or 11.11(c) hereof or a request
to select, convert to or renew a CD Rate Option or a Euro-Rate
Option in accordance with Section 3.02 hereof.
Loans shall mean collectively and Loan shall mean
separately (a) all Loans or any Loan made by the Banks or one of
the Banks to the Borrower pursuant to Sections 2.01 or 11.11(c)
hereof, and (b) all amounts advanced pursuant to a Letter of
Credit or an Escrow Agreement, as provided in Section 2.12
hereof. Each Loan shall either be a Term Loan or a Revolving
Credit Loan.
Mandatory Reduction Date shall mean June 16, 1998
or any later date if the Mandatory Reduction Date shall be
extended pursuant to the terms hereof.
Mandatory Reduction Date Term Loan Treasury Rate
Option shall have the meaning given to such term in
Section 3.01(b)(ii).
Material Adverse Change shall mean any set of
circumstances or events which (a) has any material adverse effect
upon the validity or enforceability of this Agreement or any
other Loan Document, or (b) is material and adverse to the
business, properties, assets, financial condition or results of
operations of the Loan Parties taken as a whole.
month, with respect to a Euro-Rate Interest
Period, shall mean the interval between the days in consecutive
calendar months numerically corresponding to the first day of
such Interest Period. The last day of a calendar month shall be
deemed to be such numerically corresponding day for such calendar
month (i) if there is no such numerically corresponding day in
such calendar month, or (ii) if the first day of such Interest
Period is the last Business Day of a calendar month.
Moody's shall mean Xxxxx'x Investors Service,
Inc., or any successor.
Mortgage Banking Business shall mean the business
of issuing mortgage loans on residential properties (whether for
purchase of homes or refinancing of existing mortgages),
purchasing and selling mortgage loans, issuing securities backed
by mortgage loans, acting as a broker of mortgage loans, and
other activities customarily associated with mortgage banking and
related businesses.
Mortgage Subsidiaries shall mean any corporations,
limited partnerships or business trusts either organized after
the Closing Date or designated as a Mortgage Subsidiary after the
Closing Date, and in either instance, the capital stock of such
corporations, limited partnerships or business trusts shall be
owned by the Company or one or more of its Consolidated
Subsidiaries and such corporations, limited partnerships or
business trusts shall engage in the Mortgage Banking Business.
Mortgage Subsidiaries' Adjusted Shareholders'
Equity shall mean as of any date of determination stockholders'
equity less goodwill of the Mortgage Subsidiaries as of such date
determined on a consolidated basis in accordance with GAAP plus
any loans made by the Loan Parties to the Mortgage Subsidiaries
(except for intercompany payables to one or more of the Loan
Parties in respect of the Mortgage Subsidiaries' share of accrued
consolidated income tax liabilities which have not yet been paid
by the Loan Parties) or other Investments in Mortgage
Subsidiaries which are not included in the stockholders' equity
of the Mortgage Subsidiaries.
Mortgage Subsidiaries' Liabilities shall mean all
Indebtedness of any of the Mortgage Subsidiaries plus accrued
income taxes payable within one year.
Multiemployer Plan shall mean any employee benefit
plan which is a "multiemployer plan" within the meaning of
Section 4001(a)(3) of ERISA and to which the Borrower or any
member of the ERISA Group is then making or accruing an
obligation to make contributions or, within the preceding five
Plan years, has made or had an obligation to make such
contributions.
Multiple Employer Plan shall mean a Plan which has
two or more contributing sponsors (including the Borrower or any
member of the ERISA Group) at least two of whom are not under
common control, as such a plan is described in Sections 4063 and
4064 of ERISA.
Net Exposure shall mean with respect to each
Letter of Credit and Escrow Agreement: (i) in the case of the
Issuing Bank or Escrow Bank, as the case may be, its Contingent
Exposure less the interests purchased therein by other Banks; and
(ii) in the case of all other Banks, the interest therein which
they purchase.
Net Income shall mean for any period and for any
Person the net income of such Person, determined in accordance
with GAAP.
Net New Communities shall mean as of the end of
any fiscal quarter the number (which may not be negative) equal
to the excess, if any, of (i) the number of communities which
entered into Agreements of Sale during such fiscal quarter over
(ii) the number of communities which, during the one-year period
ending with the end of such fiscal quarter were for a period of
more than six (6) consecutive months entering into Agreements of
Sale.
New Escrow Agreement shall have the meaning given
to such term in Section 2.11(a).
New Letter of Credit shall have the meaning given
to such term in Section 2.10(a).
Non-electing Additional Bank shall have the
meaning given to such term in Section 4.04(a)(2).
Non-Extending Bank shall have the meaning given to
such term in Section 2.04(c).
Non-Extending Bank Removal Effective Date shall
have the meaning given to such term in Section 2.04.
Nonrecourse Indebtedness shall mean indebtedness
or other obligations secured by a lien on property to the extent
that the liability for such indebtedness or other obligations is
limited to the security of the property without liability on the
part of Company or any Consolidated Subsidiary for any
deficiency.
Notes shall mean collectively and Note shall mean
separately all the Notes of the Borrower in the form of Exhibit E
hereto evidencing the Loans together with all amendments,
extensions, renewals, replacements, refinancings or refundings
thereof in whole or in part.
Offered Amount shall have the meaning given to
such term in Section 2.15(a).
Official Body shall mean any national, federal,
state, local or other government or political subdivision or any
agency, authority, bureau, central bank, commission, department
or instrumentality of any of the foregoing, or any court,
tribunal, grand jury or arbitrator, in each case whether foreign
or domestic.
Option shall mean an option of one of the Loan
Parties to purchase land for construction of residential real
estate thereon.
PBGC shall mean the Pension Benefit Guaranty
Corporation established pursuant to Subtitle A of Title IV of
ERISA or any successor.
Performance Letter of Credit shall mean any letter
of credit issued on behalf of a Guarantor in favor of a
municipality or any other Official Body, including without
limitation any utility, water or sewer authority, or other
similar entity for the purpose of assuring such municipality,
other Official Body, utility, water or sewer authority or similar
entity that an Affiliate of the Company will properly and timely
complete work it has agreed to perform for the benefit of such
municipality, other Official Body, utility, water or sewer
authority or similar entity.
Permitted Additional Senior Indebtedness shall
mean Indebtedness of the Loan Parties not in excess of
$75,000,000 in the aggregate which meets each of the following
requirements: (A) such Indebtedness is unsecured; (B) Borrower
shall deliver to Agent copies of the agreements evidencing such
Indebtedness within two (2) Business Days after their execution;
(C) any covenants contained in the agreements evidencing such
Indebtedness which are more restrictive to the Loan Parties than
those contained herein governing the Indebtedness hereunder as
determined by the Agent at any time shall be incorporated by
reference herein; and (D) no more than $50,000,000 of the
principal amount of such Indebtedness is due before the
Expiration Date; provided that if the Expiration Date is extended
any Indebtedness which was Permitted Additional Senior
Indebtedness prior to such extension shall not be disqualified as
such merely because the extension caused the principal amount
thereof due before the Expiration Date to exceed $50,000,000, but
following such extension the Loan Parties may not increase the
principal amount of such Indebtedness which is due before the
Expiration Date until the aggregate thereof has been reduced
below $50,000,000.
Permitted Environmental Exception shall mean an
exception set forth on an Environmental Certificate which the
independent environmental engineer certifies can be cured by
remediation which shall cost less than $100,000 to complete. If
the engineer cannot determine and certify as to the cost of such
remediation the exception shall not be a Permitted Exception.
Permitted Euro-Rate Term Loan Paydown Period shall
mean a time period following the date of any Permitted Euro-Rate
Term Loan Prepayment equal to the following (i) if Borrower has
not previously made any Permitted Euro-Rate Term Loan Prepayment
during Borrower's current fiscal year, such time period shall be
twenty (20) calendar days; or (ii) if Borrower has previously
made a Permitted Euro-Rate Term Loan Prepayment during Borrower's
current fiscal year, such time period shall be a number of
calendar days equal to the difference between (A) twenty (20) and
(B) the number of calendar days between the date of such prior
Permitted Euro-Rate Term Loan Prepayment and the date on which
Borrower borrows Loans under the Term Loan Euro-Rate Option
pursuant to Section 3.01(b)(i)(D)(3) in an amount equal to such
prior Permitted Euro-Rate Term Loan Prepayment.
Permitted Euro-Rate Term Loan Prepayment shall
have the meaning given to such term in Section 3.01(b)(i).
Permitted Exceptions shall mean any nonconsensual
lien, claim, suit, judgment, tax, assessment, charge or levy
(collectively, a "Claim") against a Loan Party, except for the
Borrower or the Company, provided that the Company has
demonstrated to the Agent's satisfaction (i) that the Claim has
arisen from the discontinuation of operations of such Loan Party
and the Company has concluded that the continued operation of
such Loan Party is no longer beneficial to the Company, and
(ii) that the Loan Parties would still be in compliance with the
covenants contained in this Agreement if Company's consolidated
balance sheet as at the end of the immediately preceding fiscal
quarter and consolidated income statement for the three and
twelve months then ended had been adjusted to eliminate the
amount of the book value of all assets of any Loan Parties
against which all such Claims have been imposed which the Company
desires to treat as Permitted Exceptions and otherwise adjusted
in accordance with generally accepted accounting principles to
reflect to the fullest extent appropriate the financial
consequences to the Company on a consolidated basis of such
liens, claims, suits, judgements, taxes, assessments, charges and
levies and the elimination of such property.
Permitted Investment in Mortgage Subsidiaries
shall mean the Excluded Mortgage Subsidiary Guaranties and
Investments in the Mortgage Subsidiaries provided that the
aggregate amount of such Investments in Mortgage Subsidiaries
does not exceed the lesser of the following: (A) the sum of
(i) $20,000,000, plus (ii) 50% of Consolidated Net Income between
May 1, 1993 through the date of determination, or (B) 20% of
Shareholders' Equity as of the date of determination.
Permitted Liens shall mean:
(i) Liens for taxes, assessments, or similar
charges, incurred in the ordinary course of business and which
are not yet due and payable and pledges or deposits made in the
ordinary course of business to secure payment of workmen's
compensation, or to participate in any fund in connection with
workmen's compensation, unemployment insurance, old-age pensions
or other social security programs provided that liens permitted
in this subsection (i) may not in the aggregate exceed ten
percent (10%) of the Company's Adjusted Shareholders' Equity;
(ii) Statutory liens and other liens of mechanics,
workmen and contractors, provided that the liens permitted by
this subsection (ii) are not in excess of $1,000,000 individually
or $2,000,000 in the aggregate and either such liens have not
been filed or, if such liens have been filed, either (i) a stay
of enforcement thereof has been obtained within 60 days, or
(ii) such liens have been satisfied of record within 60 days
after the date of filing thereof;
(iii) Good faith escrows, pledges or deposits of
cash or cash equivalents made (A) by the Loan Parties in the
ordinary course of business to secure performance of bids,
tenders, contracts (other than for the repayment of borrowed
money) or leases, or to secure statutory obligations, or surety,
appeal, indemnity, performance or other similar bonds required in
the ordinary course of business, or (B) by third parties in favor
of the Loan Parties pursuant to Agreements of Sale;
(iv) Encumbrances consisting of zoning
restrictions, easements or other restrictions on the use of real
property, none of which materially impairs the use of such
property or the value thereof, and none of which is violated in
any material respect by existing or proposed structures or land
use;
(v) Liens, security interests and mortgages, if
any, in favor of the Agent for the benefit of the Banks;
(vi) Any Lien existing on the date of this
Agreement and described on Schedule 1.01(P) hereto provided that
the principal amount secured thereby is not hereafter increased
and no additional assets become subject to such Lien;
(vii) Liens securing Permitted Purchase Money Loans
and Permitted Non-Recourse Indebtedness described in the
definitions of such terms; and
(viii) The following, (A) if the validity or amount
thereof is being contested in good faith by appropriate and
lawful proceedings diligently conducted so long as levy and
execution thereon have been stayed and continue to be stayed or
(B) if a final judgment is entered and such judgment is
discharged within thirty (30) days of entry:
(1) Claims or Liens for taxes, assessments or
charges due and payable and subject to interest or
penalty, provided that the Loan Parties maintain such
reserves or other appropriate provisions as shall be
required by GAAP and pay all such taxes, assessments or
charges forthwith upon the commencement of proceedings
to foreclose any such Lien; or
(2) Claims, Liens or encumbrances upon, and
defects of title to, real or personal property,
including any attachment of personal or real property
or other legal process prior to adjudication of a
dispute on the merits;
(ix) Purchase money security interests in
equipment securing Indebtedness permitted under Section
8.01(a)(vii);
(x) Other Liens which are a Permitted Exception,
provided that there do not exist any such Permitted Exceptions on
the date hereof.
Permitted Nonrecourse Indebtedness shall mean
Indebtedness for money borrowed which is incurred by a Loan Party
in transactions for purposes of acquiring improved or unimproved
real estate and which is secured by such real estate and
improvements where (A) the amount of the investment of the Loan
Parties in the assets which are mortgaged, pledged or assigned to
secure such Indebtedness (in excess of the amount of the loan
secured by such mortgage, pledge or assignment) does not exceed
$1,000,000 and (B) either (x) the liability of the Loan Parties
for such Indebtedness is limited solely to the assets of the Loan
Parties which are mortgaged, pledged or assigned to secure such
Indebtedness or (y) only a Loan Party other than Company is
liable for the Indebtedness and the sum of the Shareholders'
Equity (including amounts owed by such Loan Party to Company or
another Loan Party or other Affiliate of the Company which is
either subordinate in right of payment to, or collection of which
is postponed in favor of, such Indebtedness) of, investments in,
and loans to such Loan Party does not exceed $1,000,000.
Permitted Purchase Money Loans shall mean,
collectively, Seller Purchase Money Loans, Commercial Purchase
Money Loans, Assumed Joint Venture Loans and Assumed Purchase
Money Loans.
Person shall mean any individual, corporation,
partnership, association, joint-stock company, trust,
unincorporated organization, joint venture, government or
political subdivision or agency thereof, or any other entity.
Plan shall mean at any time an employee pension
benefit plan (including a Multiple Employer Plan but not a
Multiemployer Plan) which is covered by Title IV of ERISA or is
subject to the minimum funding standards under Section 412 of the
Internal Revenue Code and either (i) is maintained by any member
of the ERISA Group for employees of any member of the ERISA Group
or (ii) has at any time within the preceding five years been
maintained by any entity which was at such time a member of the
ERISA Group for employees of any entity which was at such time a
member of the ERISA Group.
PNC Bank shall mean PNC Bank, National
Association.
Potential Default shall mean any event or
condition which with notice, passage of time or a determination
by the Agent or the Required Majority of Banks, or any
combination of the foregoing, would constitute an Event of
Default.
Preliminary Approval shall mean preliminary
approval from required state and local governmental authorities
and agencies of a Guarantor's or Consolidated Subsidiary's
preliminary development plan in accordance with the provisions of
the Pennsylvania Municipalities Planning Code or its equivalent
in any other jurisdiction in which the Company is doing business
such that in each instance there is vested in the Guarantor or
Consolidated Subsidiary the right to develop such real estate for
residential purposes substantially in accordance with the
intentions of such Guarantor or Consolidated Subsidiary subject
only to obtaining such additional approvals which do not impose
any material burdens on the Guarantor or Consolidated Subsidiary
and with respect to which there is no reasonable expectation that
final approval shall not be obtained.
Prime Rate shall mean the interest rate per annum
announced from time to time by the Agent at its Principal Office
as its then prime rate, which rate may not be the lowest rate
then being charged commercial borrowers by the Agent.
Prime Rate Option shall mean the rate of interest
determined pursuant to Section 3.01(a)(i) of the Agreement.
Prime Rate Portion shall mean the portion of the
Loans bearing interest at any time at the Prime Rate Option.
Principal Office shall mean the main banking
office of the Agent in Philadelphia, Pennsylvania.
Prohibited Transaction shall mean any prohibited
transaction as defined in Section 4975 of the Internal Revenue
Code or Section 406 of ERISA for which neither an individual nor
a class exemption has been issued by the United States Department
of Labor.
Property shall mean all real property, both owned
and leased, of the Loan Parties.
Purchasing Bank shall mean a Bank which becomes a
party to this Agreement by executing an Assignment and Assumption
Agreement.
Qualified Bank shall mean either (i) a bank with a
minimum issuer credit rating of "C" under Xxxxxxxx'x BankWatch or
an equivalent rating under a bank rating system acceptable to the
Agent and a Simple Majority of the Banks, or (ii) any other bank
approved by all Banks which have either a Letter of Credit
Issuance Limit or an Escrow Agreement Issuance Limit greater than
$1,000,000.
Qualified Golf Course shall mean a commercial golf
course and related club facilities which is located adjacent to
or in substantially immediate proximity of a residential
community developed or under development by one or more of the
Guarantors and the acquisition or development of which was
undertaken to facilitate development of such community.
Qualified Option shall mean an Option which, by
its terms and under applicable Law, may be assigned or pledged by
the Loan Party which holds such Option at any time to the Agent
or the Banks without the consent of any Person (other than such
Loan Party) or the fulfillment of any other conditions which have
not already been fulfilled.
Qualified Rating shall mean a public or private
rating of the Senior Indebtedness of the Company and its
Subsidiaries or the Indebtedness under the Agreement or an
implied rating of any Indebtedness of the Company and its
Subsidiaries senior to the Subordinated Indebtedness obtained
from a Qualified Rating Agency. A Qualified Rating must be one
of the following:
1. An actual rating of the Indebtedness
hereunder exclusive of any other Senior
Indebtedness;
2. An actual rating of the Senior Indebtedness;
3. An implied rating of the Indebtedness
hereunder exclusive of any other Senior
Indebtedness.
4. An implied rating of the Senior Indebtedness;
or
5. An implied rating of Indebtedness senior to
current outstanding Subordinated
Indebtedness.
If the Company receives more than one rating from a Qualified
Rating Agency, the rating which falls in the lowest number
category above shall be the Qualified Rating. (For example, if
the Company receives from a Qualified Rating Agency a rating
described in line 2 above and one described in line 4, the rating
described in line 2 shall be the Qualified Rating.) An implied
rating of any Indebtedness shall not be a Qualified Rating if it
assumes that such Indebtedness is secured. If any Qualified
Rating Agency provides more than one rating of the Company's
Senior Indebtedness or the Indebtedness under the Agreement, then
the rating falling in the lowest numbered category above shall be
the "Qualified Rating" hereunder. Schedule 1.01(Q) describes
each of the ratings of the Company's Senior Indebtedness or its
Indebtedness hereunder or the implied ratings which the parties
hereto have agreed shall be the Qualified Ratings as of the
Fourth Amendment Effective Date. Schedule 1.01(Q) shall be
revised at all times to reflect the list of Qualified Ratings
then in existence.
Qualified Rating Agency shall mean Xxxxx'x,
Standard & Poor's, the other agencies listed on Schedule 1.01(Q)
or any other nationally recognized rating agency which is
qualified to perform a public rating of the Company's Senior
Indebtedness and which is approved by a Required Majority of the
Banks pursuant to Section 5.01(ff). Schedule 1.01 shall be
revised at all times to reflect the list of Qualified Rating
Agencies then in existence.
Ratable Share shall mean the proportion that a
Bank's Commitment bears to the Commitments of all of the Banks.
If a Bank's Commitment is reduced pursuant to Section 2.14(b) to
equal the amount of its outstanding Loans, such Bank's Commitment
shall be treated as being equal to zero for purposes of computing
such Bank's Ratable Share.
Regular Business Activities shall mean the
activities of the Loan Parties of owning, developing,
constructing, selling, financing, managing and consulting in
respect of real estate, the holding of real estate for
investment, the business of mortgage brokerage and mortgage
banking, the business of real estate brokerage and the title
insurance business.
Regulated Substances shall mean any substance,
including without limitation Solid Waste, the generation,
manufacture, processing, distribution, treatment, storage,
disposal, transport, recycling, reclamation, use, reuse or other
management or mismanagement of which is regulated by the
Environmental Laws.
Regulation U shall mean Regulation U, T, G or X as
promulgated by the Board of Governors of the Federal Reserve
System, as amended from time to time.
Remaining Banks shall have the meaning given to
such term in Section 2.14(c).
Remediation Adjustment shall mean with respect to
any Environmentally Approved Land which is subject to a Permitted
Environmental Exception, 150% of the estimated remaining costs to
complete remediation necessary to cure such exception.
Removal Date shall have the meaning given to such
term in Section 2.14(c)(ii).
Reportable Event means a reportable event
described in Section 4043 of ERISA and regulations thereunder
with respect to a Plan or Multiemployer Plan.
Requested Increase shall have the meaning given to
such term in Section 2.15(a).
Required Majority shall mean (i) if there exists
no Event of Default or if an Event of Default exists and is
continuing but there are no Loans outstanding, Banks whose
Commitments aggregate at least 66 2/3% of the Commitments of all
of the Banks, or (ii) if an Event of Default exists and is
continuing and there are Loans outstanding, Banks whose Loans
outstanding aggregate at least 66 2/3% of the total principal
amount of the Loans outstanding hereunder. The Commitment and
outstanding Loans of a Bank shall not be included in determining
a Required Majority of Banks if a Bank Exclusion Event shall have
occurred and be continuing with respect to such Bank.
Required Threshold of Banks shall mean (i) at
least two (2) or more Banks or (ii) Kleinwort Xxxxxx Limited and
a majority of banks having a principal place of business and
making loans in England.
Revolving Credit Commitments shall mean at any
time the difference between the Commitments and the amount of
Treasury Rate Term Loans then outstanding; Revolving Credit
Commitment shall mean for each Bank at any time the difference
between such Bank's Commitment and its Treasury Rate Term Loan
(if any) then outstanding.
Revolving Credit Euro-Rate Interest Period shall
have the meaning given to such term in Section 3.02.
Revolving Credit Euro-Rate Option shall mean the
rate of interest determined pursuant to Section 3.01(a)(ii).
Revolving Credit Loans shall mean Loans subject to
the Prime Rate Option, Federal Funds/Euro-Rate Option, Revolving
Credit Euro-Rate Option or CD Rate Option described in Section
3.01(a).
Revolving Credit Ratable Share shall mean the
proportion that a Bank's Revolving Credit Commitment bears to the
Revolving Credit Commitments of all of the Banks. If a Bank's
Commitment is reduced pursuant to Section 2.14(b) to equal the
amount of its outstanding Loans, such Bank's Revolving Credit
Commitment shall be treated as being equal to zero for purposes
of computing such Bank's Revolving Credit Ratable Share.
Second Level Debt Rating shall mean a Company Debt
Rating of (i) BBB- if the rating is provided by Standard &
Poor's, (ii) Baa3 if the rating is provided by Xxxxx'x, or
(iii) equivalent to a BBB- rating by Standard & Poor's or a Baa3
rating by Xxxxx'x if the rating is provided by a Qualified Rating
Agency other than Standard & Poor's or Xxxxx'x.
Security Event shall have the meaning given to
such term in Section 7.02.
Seller Purchase Money Loans shall mean purchase
money loans made by the seller of improved or unimproved real
estate in separate transactions for the exclusive purpose of
acquiring such real estate for development and secured by a
mortgage lien on such real estate.
Senior Executive shall mean the Chairman of the
Board, President, Executive Vice President, Chief Financial
Officer, Chief Accounting Officer or General Counsel of any Loan
Party.
Senior Indebtedness shall mean the Indebtedness
under this Agreement and any Permitted Additional Senior
Indebtedness.
Senior Liabilities shall mean with respect to the
Company and its Homebuilder Consolidated Subsidiaries their
accrued income taxes payable within one year, their liabilities
under the Loans, and any other Indebtedness of them, except for
Subordinated Indebtedness, Performance Letters of Credit and
Escrow Agreements.
Senior Officer Life Policy shall mean a policy of
life insurance owned by the Company and insuring the life of
Xxxxx X. Toll or Xxxxxx X. Toll and naming the Company as the
beneficiary thereunder.
Shareholders' Equity shall mean as of any date of
determination stockholders' equity less goodwill of the Company
and its Consolidated Subsidiaries as of such date determined on a
consolidated basis in accordance with GAAP.
Simple Majority shall mean (i) if there exists no
Event of Default or if an Event of Default exists but there are
no Loans outstanding, Banks whose Commitments aggregate 51% or
more of the Commitments of all of the Banks, or (ii) if an Event
of Default exists and is continuing and there are Loans
outstanding, Banks whose Loans outstanding aggregate 51% or more
of the total principal amount of the Loans outstanding hereunder.
The Commitment and outstanding Loans of a Bank shall not be
included in determining a Simple Majority of Banks if a Bank
Exclusion Event shall have occurred and be continuing with
respect to such Bank.
Solid Waste shall mean any garbage, refuse or
sludge from any waste treatment plant, water supply treatment
plant or air pollution control facility generated by activities
on the Property, and any unpermitted release into the environment
or the work place of any material as a result of activities on
the Property, including without limitation, scrap and used
Regulated Substances.
Standard & Poor's shall mean Standard & Poor's
Ratings Group or any successor.
Subordinated Indebtedness shall have the meaning
given to such term in Section 8.01(a)(iii).
Subordinated Loan Documents shall mean at any time
the agreements and other documents then governing the
Subordinated Indebtedness.
Subsidiary of any Person at any time shall mean
(i) any corporation, partnership or trust (including a business
trust) in which such Person owns directly or indirectly through
one or more intermediaries any of the issued and outstanding
voting stock, partnership interests or other interests, and
(ii) any corporation, trust (including a business trust),
partnership or other entity which is controlled or capable of
being controlled by such Person or one or more of such Person's
Subsidiaries.
Term Loan Banks shall have the meaning given to
such term in Section 4.04(a)(2).
Term Loan Due Date shall mean the Treasury Rate
Term Loan Due Date with respect to Treasury Rate Term Loans and
the Euro-Rate Term Loan Due Date with respect to Euro-Rate Term
Loans.
Term Loan Euro-Rate Interest Period shall have the
meaning given to such term in Section 3.02.
Term Loan Euro-Rate Option shall mean the rate of
interest determined pursuant to Section 3.01(b)(i).
Term Loans shall mean either the Euro-Rate Term
Loans or the Treasury Rate Term Loans.
Term Loan Treasury Rate Option shall mean the rate
of interest determined pursuant to Section 3.01(b)(ii). The Term
Loan Treasury Rate Option shall be either a Mandatory Reduction
Date Term Loan Treasury Rate Option or an Expiration Date Term
Loan Treasury Rate Option.
Third Level Debt Rating shall mean a Company Debt
Rating of (i) BB+ if the rating is provided by Standard & Poor's,
(ii) Ba1 if the rating is provided by Xxxxx'x, or
(iii) equivalent to a BB+ rating by Standard & Poor's or a Ba1
rating by Xxxxx'x if the rating is provided by a Qualified Rating
Agency other than Standard & Poor's or Xxxxx'x.
Transferor Bank shall mean the selling Bank
pursuant to an Assignment and Assumption Agreement.
Treasury Rate shall mean (A) with respect to Term
Loans bearing interest under the Term Loan Treasury Rate Option
pursuant to an election under Section 3.01(b)(ii), the interest
rate per annum to be charged thereon determined by the Agent two
(2) Business Days prior to the effective date of such election as
the yield on a United States Treasury security with a life equal
to the time period between the effective date of such Term Loan
Treasury Rate Option and the Treasury Rate Term Loan Due Date;
(B) with respect to any Treasury Rate Term Loan made by an
Additional Bank pursuant to an election under Section
11.11(c)(D)(1), the maximum interest rate per annum which may be
charged thereon determined by the Agent two (2) Business Days
prior to the date on which such Treasury Rate Term Loan is made
as the yield on a United States Treasury security with a life
equal to the time period between the date on which such Loan is
to be made and the Treasury Rate Term Loan Due Date; and (C) with
respect to any proposed prepayment of a Treasury Rate Term Loan
pursuant to Section 4.04 or 4.05, the interest rate per annum to
be used in computing the Treasury Rate Term Loan Prepayment
Premium determined by the Agent two (2) Business Days prior to
the date of such prepayment if it is voluntary and on or after
such date if it is mandatory as the sum of the yield on a United
States Treasury security with a life equal to the time period
between the date on which such prepayment is to be made and the
Treasury Rate Term Loan Due Date. The Agent shall determine the
yield on United States Treasury securities pursuant to clauses
(A), (B) and (C) above based on (i) the display designated as
"Page 501 on the Telerate Service (or such other display as may
replace Page 501 on the Telerate Service) for actively traded
U.S. Treasury securities at 11:00 a.m. on the date on which such
yield is to be determined or (ii) if such yields shall not be
reported as of such time or the yields reported as of such time
shall not be ascertainable, the Treasury Constant Maturity Series
yields reported in the Federal Reserve Board's Statistical
Release H-15 (519) (or its successor publication) (the
"Statistical Release") published most recently next preceding (by
more than one (1) Business Day) the date of such computation. If
Telerate Service or the Statistical Release as the case may be do
not report the yield of a security with a life equal to the time
period specified in clauses (A), (B) or (C) above, the Agent
shall compute the yield on a hypothetical security with life
equal to such time period by interpolating linearly based on the
reported yield of the security with a life closest to and greater
than such time period and the reported yield of the security with
a life closest to and less than such time period.
Treasury Rate Term Loan shall mean any Loan which
is subject to the Term Loan Treasury Rate Option described in
Section 3.01(b)(ii).
Treasury Rate Term Loan Due Date shall have the
meaning given to such term in Section 3.01(b)(ii).
Treasury Rate Term Loan Election Period shall mean
(A) the period beginning on the Fifth Amendment Effective Date
and ending on the close of business on the 90th day after the
Fifth Amendment Effective Date; and (B) the period beginning on
each anniversary date of the Fifth Amendment Effective Date and
ending on the close of business on the 90th day after such date
provided that both of the following two conditions are met:
(1) the Borrower and the Banks shall have extended the Mandatory
Reduction Date on each occasion when such parties were permitted
to do so pursuant to Section 2.04 prior to such anniversary date
so that the Mandatory Reduction Date, as extended, shall be June
16 of the calendar year which is the third calendar year after
the calendar year in which such anniversary date falls and
(2) the Borrower has not elected the Term Loan Treasury Rate
Option prior to such anniversary date.
Treasury Rate Term Loan Prepayment Premium shall
mean with respect to the payment of a Treasury Rate Term Loan for
any reason (whether voluntarily, by acceleration or otherwise and
whether in whole or in part) prior to the Treasury Rate Term Loan
Due Date, a premium to be paid in connection therewith equal to
the present value of the product of the following: (a) the
positive difference (this clause (a) shall be deemed to equal
zero if such difference is less than zero) between (i) the
Treasury Rate applicable to the Treasury Rate Term Loan being
prepaid computed pursuant to clause (A) or (B) of the definition
of Treasury Rate and (ii) the Treasury Rate computed pursuant to
clause (C) of the definition of Treasury Rate which would apply
if a new Treasury Rate Term Loan were made on the date of the
proposed prepayment with a maturity equal to the remaining
maturity of the Treasury Rate Term Loan being prepaid, (b) the
amount being prepaid, and (c) a fraction with a numerator equal
to the number of days from the prepayment date through the
Treasury Rate Term Loan Due Date and a denominator of 365 or 366
days as the case may be. The discount rate for the purpose of
computing present value in the preceding sentence shall be the
Treasury Rate which would apply to a hypothetical new Treasury
Rate Term Loan if the Banks were to make such a Loan on the
prepayment date with a term that expires on Treasury Rate Term
Loan Due Date. An example of the computation of the Treasury
Rate Term Loan Prepayment Premium is set forth as Exhibit O
hereto. The discount rate shall be applied to the product of
items (a), (b) and (c) above using the methodology set forth in
the fourth step of the example attached as Exhibit O.
Unconsolidated Subsidiary shall mean any
Subsidiary of the Company which meets all of the following
requirements: (A) such Subsidiary is not consolidated with the
Company for accounting purposes under GAAP, (B) the Loan Parties
collectively own directly or indirectly through one or more
intermediaries at least 5% of the issued and outstanding voting
stock, partnership interests or other interests in such
Subsidiary, and (C) the aggregate of the Loan Parties'
investments in, contributions or loans to or guarantees or other
obligations for the benefit of such Subsidiary exceed $1,000,000.
1.02 Construction. Unless the context of this
Agreement otherwise clearly requires, references to the plural
include the singular, the singular the plural and the part the
whole, "or" has the inclusive meaning represented by the phrase
"and/or," and "including" has the meaning represented by the
phrase "including without limitation." References in this
Agreement to "determination" of or by the Agent or the Banks
shall be deemed to include good faith estimates by the Agent or
the Banks (in the case of quantitative determinations) and good
faith beliefs by the Agent or the Banks (in the case of
qualitative determinations). Whenever the Agent or the Banks are
granted the right herein to act in its or their sole discretion
or to grant or withhold consent such right shall be exercised in
good faith. The words "hereof," "herein," "hereunder" and
similar terms in this Agreement refer to this Agreement as a
whole and not to any particular provision of this Agreement. The
section and other headings contained in this Agreement and the
Table of Contents preceding this Agreement are for reference
purposes only and shall not control or affect the construction of
this Agreement or the interpretation thereof in any respect.
Section, subsection, schedule and exhibit references are to this
Agreement unless otherwise specified.
1.03 Accounting Principles. Except as otherwise
provided in this Agreement, all computations and determinations
as to accounting or financial matters and all financial
statements to be delivered pursuant to this Agreement shall be
made and prepared in accordance with GAAP (including principles
of consolidation where appropriate), and all accounting or
financial terms shall have the meanings ascribed to such terms by
GAAP.
ARTICLE II
CREDIT FACILITY
2.01 Commitments to Make Loans. Subject to the terms
and conditions hereof and relying upon the representations and
warranties herein set forth, each Bank severally agrees to make
loans (the "Loans") to the Borrower at any time or from time to
time on or after the date hereof to, but not including, the
Expiration Date in an aggregate principal amount not to exceed at
any one time such Bank's Revolving Credit Commitment minus the
sum of (i) such Bank's Net Exposure under outstanding Letters of
Credit issued pursuant to Section 2.10, (ii) such Bank's Net
Exposure under Escrow Agreements entered into pursuant to
Section 2.11 and (iii) such Bank's Euro-Rate Term Loans
outstanding. Within such limits of time and amount and subject
to the other provisions of this Agreement, the Borrower may
borrow, repay and reborrow pursuant to this Section 2.01 if
Borrower elects one of the revolving credit Interest Rate Options
pursuant to Section 3.01(a).
2.02 Nature of Banks' Obligations with Respect to
Loans. Each Bank shall be obligated to participate in each
request for Loans pursuant to Section 2.06 hereof in accordance
with its Revolving Credit Ratable Share. Treasury Rate Term
Loans made pursuant to Section 11.11(c) shall be made exclusively
by the Additional Bank described in such Section. The aggregate
of each Bank's Loans outstanding hereunder to the Borrower at any
time shall never exceed its Commitment minus the sum of its Net
Exposure under outstanding Letters of Credit plus its Net
Exposure under outstanding Escrow Agreements. The Borrower shall
not request a Loan pursuant to Section 2.01, 11.11(c) or
otherwise hereunder if such Loan would cause the Loan Parties to
violate the covenant contained in Section 8.01(e). The
obligations of each Bank hereunder are several. The failure of
any Bank to perform its obligations hereunder shall not affect
the obligations of the Borrower to any other party nor shall any
other party be liable for the failure of such Bank to perform its
obligations hereunder. The Banks shall have no obligation to
make Loans hereunder on or after the Expiration Date.
2.03 Commitment Fee. Accruing from the date hereof
until the Expiration Date, the Borrower agrees to pay to the
Agent for the account of each Bank, as consideration for such
Bank's Commitment hereunder, a commitment fee (the "Commitment
Fee") at a rate per annum (computed on the basis of a year of 365
or 366 days, as the case may be, and actual days elapsed) on
which shall be determined at any time based on the Company Debt
Rating at such time as follows:
Rate of
Commitment Fee
Company (expressed as a
Debt Rating percentage per annum)
First Level Debt Rating 3/16%
Second Level Debt Rating 1/4%
Third Level Debt Rating 3/8%
or lower rating
The foregoing rate shall change automatically with any change in
the Company Debt Rating. The Commitment Fee shall be computed by
applying the foregoing rate to the average daily difference
between the amount of such Bank's Commitment as the same may be
constituted from time to time less the sum of its outstanding
Loans and its Net Exposure in Letters of Credit and Escrow
Agreements. All Commitment Fees shall be payable in arrears on
the first Business Day of each February, May, August and November
after the date hereof and on the earlier of (x) the Expiration
Date and (y) acceleration of the Notes. Borrower's obligation to
pay a Commitment Fee to a Bank shall terminate whenever a Bank
Exclusion Event shall have occurred and be continuing with
respect to such Bank.
2.04 Extension by Banks of the Mandatory Reduction Date
or Expiration Date.
(a) Mandatory Reduction Date. Borrower may
request a one-year extension of the Mandatory Reduction Date by
delivering written notice of such request to the Banks on or
after Borrower delivers the annual financial statements to the
Banks for the fiscal year ending October 31, 1995 or any
subsequent fiscal year pursuant to Section 8.02(a)(ii), but
before April 30 of the following fiscal year.
(b) Expiration Date. Borrower may request (1) a
two-year extension of the Expiration Date by delivering written
notice of such request to the Banks on or after Borrower delivers
the annual financial statements to the Banks for the fiscal year
ending October 31, 1996 pursuant to Section 8.02(a)(ii), but
before April 30 of the following fiscal year, and (2) if the
Expiration Date has been extended pursuant to clause (1) above,
Borrower may request a one-year extension of the Expiration Date
by delivering written notice of such request to the Banks on or
after Borrower delivers the annual financial statements to the
Banks for the fiscal year ending October 31, 1997 or any
subsequent fiscal year pursuant to Section 8.02(a)(ii), but
before April 30 of the following fiscal year. The Expiration
Date shall never be extended to a date which is more than five
(5) years (1826 or 1827 days, as the case may be) after the
effective date of such extension.
(c) Mandatory Reduction Date or Expiration Date.
The Banks agree to respond to the Borrower's request for an
extension of the Mandatory Reduction Date pursuant to Section
2.04(a) or the Expiration Date pursuant to Section 2.04(b) within
seventy-five (75) days following the Banks' receipt of such
request; provided, however, that the Required Majority of Banks
must consent to any extension of the Mandatory Reduction Date or
Expiration Date, as the case may be, and the failure of any Bank
to respond within such time period shall constitute a rejection
by such Bank of Borrower's request for an extension. If Borrower
requests an extension of the Mandatory Reduction Date or
Expiration Date and such Mandatory Reduction Date or Expiration
Date (before its extension) is fewer than 75 days following
Borrower's request for such extension, the Banks shall be deemed
to reject such request if they do not respond to such request
before such Mandatory Reduction Date or Expiration Date, as the
case may be. A Bank which fails to respond within such 75-day
time period may within 60 days after the expiration of such
period rescind its rejection and join in the extension if a
Simple Majority of Banks approved of the extension on or before
the expiration of such 75-day period. The extension will be
approved if Banks which approved the request within the 75-day
period, together with Banks which rescind their rejections
pursuant to the preceding sentence, comprise a Required Majority
of Banks. If the Required Majority of Banks agree to extend the
Mandatory Reduction Date or Expiration Date, as the case may be,
but one or more of the Banks do not agree to such extension
(hereinafter referred to as a "Non-Extending Bank"), then the
extension shall be effective only if the Borrower shall have
completed all of the steps required to remove the Non-Extending
Bank pursuant to Section 2.14(c) on or before the Mandatory
Reduction Date or Expiration Date (before giving effect to the
requested extension; hereinafter referred to as the "Non-
Extending Bank Removal Date"), so that the Removal Date (as
defined in Section 2.14(c)) shall be the Non-Extending Bank
Removal Date. Notwithstanding the preceding sentence, the
Borrower and the Non-Extending Bank may with the consent of a
Simple Majority of the Banks agree to have the removal of the
Non-Extending Bank pursuant to Section 2.14(c) occur on a
mutually acceptable date prior to the Non-Extending Bank Removal
Date so that the Removal Date (as defined in Section 2.14(c))
shall be such agreed upon date.
2.05 Fourth Amendment Fee. The Borrower agrees to pay
to the Agent for the account of each Bank, as consideration for
such Bank's agreements under the Fourth Amendment, a
nonrefundable fee equal to three-fortieths of one percent (3/40%)
of such Bank's Commitment, payable on the Fourth Amendment
Effective Date (the "Fourth Amendment Fee").
2.06 Loan Requests. Except as otherwise provided
herein, the Borrower may from time to time prior to the
Expiration Date request the Banks to make Loans, or renew or
convert the Interest Rate Option applicable to existing Loans, by
the delivery to the Agent, not later than 10:00 A.M. Philadelphia
time (i) three (3) Business Days prior to the proposed Borrowing
Date with respect to the making of Loans to which the Revolving
Credit Euro-Rate Option, Term Loan Euro-Rate Option or Term Loan
Treasury Rate Option applies or the conversion to or the renewal
of the Revolving Credit Euro-Rate Option or Term Loan Euro-Rate
Option for any Loans; (ii) one (1) Business Day prior to the
proposed Borrowing Date with respect to the making of a Loan to
which the Federal Funds/Euro-Rate Option applies or the
conversion to or renewal of the Federal Funds/Euro-Rate Option
for any Loans; (iii) one (1) Business Day prior to the proposed
Borrowing Date with respect to the making of a Loan to which
either the CD Rate Option or the Prime Rate Option applies or the
conversion to or renewal of the CD Rate Option for any Loans; and
(iv) the last day of the preceding Interest Period with respect
to the conversion to the Prime Rate Option for any Loan, of a
duly completed request therefor substantially in the form of
Exhibit F hereto by telephone and confirmed on the same day in
writing by letter, facsimile or telex in such form (each, a "Loan
Request"). Each Loan Request shall be irrevocable and shall
specify (i) the proposed Borrowing Date; (ii) the aggregate
amount of the proposed Loans comprising the Borrowing Tranche,
which shall be in integral multiples of $100,000 and not less
than $2,000,000 for Loans to which the CD Rate Option or
Revolving Credit Euro-Rate Option applies, not less than the
lesser of $200,000 or the maximum amount available for Loans to
which the Prime Rate Option or the Federal Funds/Euro-Rate Option
applies and shall equal or exceed $25,000,000 but not exceed
$50,000,000 for Loans to which the Expiration Date Term Loan
Treasury Rate Option applies and shall equal or exceed
$25,000,000 but not exceed $75,000,000 for Loans to which the
Mandatory Reduction Date Term Loan Treasury Rate Option applies;
(iii) whether the CD Rate Option, Revolving Credit Euro-Rate
Option, Prime Rate Option, Federal Funds/Euro-Rate Option, Term
Loan Treasury Rate Option or Term Loan Euro-Rate Option shall
apply to the proposed Loans comprising the Borrowing Tranche; and
(iv) in the case of Loans to which the CD Rate Option or any
Euro-Rate Option applies, an appropriate CD Rate or Euro-Rate
Interest Period for the proposed Loans comprising the Borrowing
Tranche.
2.07 Making Loans. The Agent shall, promptly after
receipt by it of a Loan Request pursuant to Section 2.06, notify
the Banks of its receipt of such Loan Request specifying:
(i) the proposed Borrowing Date and the time and method of
disbursement of such Loan; (ii) the amount and type of such Loan
and the applicable CD Rate Interest Period or Euro-Rate Interest
Period (if any); and (iii) the apportionment among the Banks of
the Loans as determined by the Agent in accordance with their
respective Revolving Credit Ratable Shares. Each Bank shall
remit the principal amount of each Loan to the Agent in
immediately available funds at the Principal Office prior to
12:00 Noon Philadelphia time such that the Agent is able to, and
the Agent shall, to the extent the Banks have made funds
available to it for such purpose, fund such Loan to the Borrower
in U.S. Dollars and same day funds at the Principal Office on the
Borrowing Date, provided that if any Bank fails to remit such
funds to the Agent in a timely manner the Agent may elect in its
sole discretion to fund with its own funds the Loan of such Bank
on the Borrowing Date.
2.08 Notes. The obligation of the Borrower to repay
the aggregate unpaid principal amount of the Loans made to it by
each Bank, together with interest thereon, shall be evidenced by
a promissory note of the Borrower dated the Closing Date in
substantially the form attached hereto as Exhibit E payable to
the order of each Bank in a face amount equal to the Commitment
of such Bank.
2.09 Use of Proceeds. The proceeds of the Loans shall
be used by Borrower solely to make Intercompany Loans to the
Guarantors which shall be used by the Guarantors as working
capital, for other corporate purposes and to satisfy amounts
advanced pursuant to Letters of Credit and Escrow Agreements.
2.10 Letter of Credit Sublimit.
(a) Letter of Credit Requests. The Borrower may
request that a Bank (such Bank or any Bank which issued an
Existing Letter of Credit each shall be referred to as the
"Issuing Bank" with respect to its Letter of Credit) issue, on
the terms and conditions hereinafter set forth, letters of credit
on behalf of a Guarantor (each a "New Letter of Credit"). Each
Existing Letter of Credit has, and each New Letter of Credit
shall have, a maximum stated maturity date on or before the
earlier of the following two dates: (1) four years from the date
on which such Letter of Credit is issued, or (2) one year after
the Expiration Date. For purposes of this subsection, "stated
maturity" is the expiration date of the Letter of Credit without
giving effect to any future extension thereof under an automatic
renewal provision, provided that such automatic renewal provision
permits the Issuing Bank to elect not to extend by giving written
notice of cancellation to the beneficiary. If the termination
date of the Issuing Bank's obligations under a Letter of Credit
shall extend beyond the Expiration Date, Borrower agrees to Cash
Collateralize such Letter of Credit at least fifteen (15) days
prior to the Expiration Date. Borrower also agrees to Cash
Collateralize Letters of Credit as described in Section 2.14(d)
and as otherwise set forth in this Agreement. In no event shall
(i) the aggregate undrawn face amount of the Letters of Credit
issued pursuant to this Section 2.10 by any Bank at any time
exceed that Bank's Letter of Credit Issuance Limit; (ii) the L/C-
Escrow Exposure exceed at any time the L/C-Escrow Sublimit;
(iii) the Aggregate Credit Exposure at any time exceed the
Commitments; or (iv) Borrower request any Letter of Credit if the
issuance thereof would cause the Loan Parties to violate the
covenant contained in Section 8.01(e).
(b) Documentation; Notices to Agent. The Banks
will issue Letters of Credit which are either Performance Letters
of Credit or Financial Letters of Credit. Borrower shall deliver
to the Issuing Bank, with a copy being delivered simultaneously
to Agent, its duly completed application for issuance on the
Issuing Bank's standard form therefor together with such other
related documents as Agent or the Issuing Bank may reasonably
require. Provided the conditions set forth in this Agreement
have been met, such Issuing Bank shall within five Business Days
following receipt of such application and documents acceptable to
Agent and such Issuing Bank issue its Letter of Credit in a form
and containing such terms and conditions as are acceptable to
Agent and such Issuing Bank and as otherwise directed by
Borrower. Each Issuing Bank and Borrower have advised Agent of
the face amount and nature (Performance or Financial) of, and
provided to Agent photocopies of, all existing Letters of Credit
issued by such Issuing Bank, and will notify the Agent of all
future Letters of Credit on the date the Issuing Bank issues such
Letters of Credit and provide Agent photocopies thereof within
five Business Days following the day thereof and shall notify
Agent of any increase or decrease in the face amount of any
Letter of Credit issued by such Issuing Bank on the date of such
increase or decrease. The Borrower and Guarantors agree to be
bound by the terms of the Issuing Bank's application and/or
agreement for Letters of Credit and the Issuing Bank's written
regulations and customary practices relating to Letters of
Credit, though such interpretation may be different from the Loan
Parties' own, and it is understood and agreed that, except in the
case of gross negligence or willful misconduct, the Issuing Bank
shall not be liable for any error, negligence and/or mistakes,
whether of omission or commission, in following the Borrower's
instructions or those contained in the Letters of Credit or any
modifications, amendments or supplements thereto.
(c) Letter of Credit Fees. The Borrower shall
pay (i) to the Agent for the account of the Banks a fee (the
"Letter of Credit Fee") equal to three-quarters of one percent
(3/4%) per annum (subject to adjustment below) of the daily
average of the face amount of all Letters of Credit to be
allocated among the Banks based on their Net Exposures in
outstanding Letters of Credit, and (ii) to the Agent for the
account of each Issuing Bank a fronting fee equal to one-eighth
of one percent (1/8%) per annum (subject to adjustment below) of
the daily average face amount of the Letters of Credit issued by
such Issuing Bank. Letter of Credit Fees and the fronting fees
shall be computed based on a year of 365 or 366 days, as the case
may be. If the face amount of Financial Letters of Credit issued
by the Banks hereunder shall at any time exceed $5,000,000,
(i) the Letter of Credit Fee in respect of such excess shall
equal a rate per annum equal to the Euro-Rate Spread then in
effect and (ii) the fronting fee in respect of such excess shall
equal one-eighth of one percent (1/8%) per annum. The Letter of
Credit Fee and fronting fee each shall be payable quarterly in
arrears commencing with the first Business Day of each February,
May, August and November following issuance of each Letter of
Credit and on the expiration date of such Letter of Credit.
2.11 Escrow Agreement Sublimit.
(a) Escrow Agreement Requests. Borrower may
request that any Bank (such Bank or any Bank which is a party to
an Existing Escrow Agreement each shall be referred to as an
"Escrow Bank" with respect to its Escrow Agreement) on behalf of
Guarantor enter into an agreement or other similar arrangements
with a municipality or any other Official Body, including without
limitation any utility, water or sewer authority, or other
similar entity in which a Guarantor or Affiliate of the Company
conducts its business for the purpose of assuring such
municipality or other Official Body that such Guarantor or
Affiliate will properly and timely complete work it has agreed to
perform for the benefit of such municipality or other Official
Body, under the terms of which the New Escrow Bank will agree to
set aside or otherwise make available a specified amount of funds
which will be paid to such municipality or other Official Body in
the event such Guarantor or Affiliate fails to perform such work
(each a "New Escrow Agreement"). Each Existing Escrow Agreement
has, and each New Escrow Agreement shall have, a maximum stated
maturity date on or before the earlier of the following two
dates: (1) four years from the date on which such Escrow
Agreement becomes effective, or (2) one year after the Expiration
Date. For purposes of this subsection, "stated maturity" is the
expiration date of the Escrow Agreement without giving effect to
any future extension thereof under an automatic renewal
provision, provided that such automatic renewal provision permits
the Escrow Bank to elect not to extend by giving written notice
of cancellation to the beneficiary. If the termination date of
the Escrow Bank's obligations under an Escrow Agreement shall
extend beyond the Expiration Date, Borrower agrees to Cash
Collateralize such Escrow Agreement at least fifteen (15) days or
prior to the Expiration Date. Borrower also shall Cash
Collateralize Escrow Agreements as described in Section 2.14(d)
and otherwise in this Agreement. In no event shall (i) the
aggregate obligations under Escrow Agreements entered into
pursuant to this Section 2.11 by any Bank exceed such Bank's
Escrow Agreement Issuance Limit; (ii) the L/C-Escrow Exposure
exceed, at any time, the L/C-Escrow Sublimit; (iii) the Aggregate
Credit Exposure exceed, at any time, the Commitments, or
(iv) Borrower request that an Escrow Bank enter into an Escrow
Agreement if entering into such Escrow Agreement would cause the
Loan Parties to violate the covenant contained in Section
8.01(e).
(b) Documentation; Notices to Agent. Borrower
shall deliver to the Escrow Bank, with a copy being delivered
simultaneously to Agent, its request for the Escrow Bank to enter
into an Escrow Agreement, together with such other related
documents as Agent or the Escrow Bank may reasonably require, and
provided the conditions set forth in this Agreement have been
met, the Escrow Bank will enter into an Escrow Agreement in a
form and containing such terms and conditions as are acceptable
to Agent and the Escrow Bank and as otherwise directed by
Borrower. The Escrow Bank and Borrower have advised Agent of the
amount of the Escrow Bank's obligations under all existing Escrow
Agreements to which it is a party, and provided to Agent
photocopies of all such Escrow Agreements, and will notify Agent
of all future Escrow Agreements on the date Escrow Bank enters
into any such future Escrow Agreements and provide the Agent
photocopies thereof within five Business Days following the date
thereof and shall notify Agent of any increase or decrease in the
amount of the outstanding obligation under any Escrow Agreement
to which the Escrow Bank is a party on the effective date of such
increase or decrease. It is understood and agreed that, except
in the case of gross negligence or willful misconduct, the Escrow
Bank shall not be liable for any error, negligence and/or
mistakes, whether of omission or commission, in following the
Borrower's instructions or those contained in the Escrow
Agreements or any modifications, amendments or supplements
thereto.
(c) Escrow Agreement Fees. The Borrower shall
pay (i) to the Agent for the account of the Banks a fee (the
"Escrow Fee") equal to three quarters of one percent (3/4%) per
annum to be allocated among the Banks based on their Net
Exposures in outstanding Escrow Agreements, and (ii) to the Agent
for the account of the Escrow Bank a fronting fee equal to one-
eighth of one percent (1/8%) per annum, which fees shall be
computed on the daily average outstanding obligations of the
Escrow Bank under the Escrow Agreements and shall be payable
quarterly in arrears commencing with the first Business Day of
each February, May, August and November following issuance of
each Escrow Agreement and on the expiration date of such Escrow
Agreement. Escrow Fees and the fronting fees shall be computed
based on a year of 365 or 366 days, as the case may be.
2.12 Reimbursement of Advances on Letters of Credit or
Escrow Agreements. Borrower and each Guarantor on whose behalf
each Letter of Credit and each Escrow Agreement is issued hereby
agree, notwithstanding the terms of any documents executed and
delivered under Sections 2.10(b) and 2.11(b) to the contrary, to
reimburse each Issuing Bank for all amounts advanced pursuant to
each Letter of Credit and to reimburse all Escrow Banks for all
sums advanced pursuant to each Escrow Agreement. If the
foregoing sums are not immediately reimbursed by Borrower or the
Guarantor for whom such Letter of Credit or Escrow Agreement was
issued, the unreimbursed sum shall become, at the time of the
advance a Revolving Credit Loan from the Banks (unless an event
described in Section 9.01(m) (without giving effect to the 30-day
grace period) or (n) has occurred and is continuing in which case
such sum shall not be a Loan but shall remain payable by Borrower
and the Guarantors in the same manner and on the same terms as if
it were a Loan from the Banks) and shall thereafter bear interest
under the Prime Rate Option in accordance with the provisions
contained in Section 3.01. Each such Issuing Bank and Escrow
Bank shall give written notice to any Guarantor for whom each
Letter of Credit or Escrow Agreement was issued who failed
immediately to reimburse the sums advanced and also shall notify
the Agent of such unreimbursed draw. Agent shall promptly notify
the Banks of such draw.
2.13 Participations in Letters of Credit and Escrow
Agreements; Responsibility of Issuing and Escrow Banks.
(i) Each Bank shall, notwithstanding the Letter
of Credit Issuance Limits and Escrow Agreement Issuance Limits,
purchase from time to time from each other Bank an undivided
interest in such other Bank's Contingent Exposure in Letters of
Credit which it has issued and Escrow Agreements to which it is a
party as may be necessary to result in the Net Exposure of each
Bank in each Letter of Credit and Escrow Agreement being equal to
such Bank's Revolving Credit Ratable Share of such Contingent
Exposure. The Banks shall purchase interests in the Contingent
Exposures of each of the other Banks or such interests shall be
reduced whenever such Contingent Exposures are increased or
reduced for any reason so that the Net Exposure of each Bank
shall always equal its Revolving Credit Ratable Share of the
Contingent Exposures of all of the Banks except for short-term
differences which arise after an Additional Bank joins the
Agreement as described in Section 11.11(c). The Agent may in its
sole discretion from time to time prepare and distribute to each
Bank a Confirmation of Exposure. Each Bank shall review such
Confirmation of Exposure and notify the Agent within two Business
Days of its receipt thereof if it believes the Confirmation of
Exposure incorrectly lists the amount of its Contingent Exposure
in Letters of Credit or Escrow Agreements or any other
information. Agent may assume that the information contained in
the Confirmation of Exposure is correct if a Bank does not notify
the Agent of an error therein within such two-day period,
provided that a Bank may subsequently correct an error in the
Confirmation of Exposure but shall be responsible for any loss
resulting from such delay.
(ii) The purchases by each Bank of interests in
Letters of Credit and Escrow Agreements pursuant to Section
2.13(i) shall be absolute, irrevocable and unconditional and
shall be enforceable by every other Bank both before and after an
Event of Default shall have occurred and be continuing and both
before and after the Expiration Date shall have passed. In the
event any draw under a Letter of Credit issued by an Issuing Bank
or payment under an Escrow Agreement entered into by an Escrow
Bank is for any reason not immediately reimbursed directly by
Borrower or by all Banks making Loans subject to the Prime Rate
Option, each Bank immediately upon demand by Agent shall
severally (and not jointly) reimburse such Issuing Bank or an
Escrow Bank, as the case may be, in an amount equal to its
Revolving Credit Ratable Share of the amount by which such
Issuing Bank or an Escrow Bank has not been reimbursed in
immediately available funds without any setoff, counterclaim or
deduction of any kind, and Borrower shall remain obligated to
repay upon demand such amounts to the Banks with interest thereon
at the rate which would otherwise be borne by a Loan subject to
the Prime Rate Option hereunder.
(iii) Without limiting the generality of any of the
foregoing, each Bank, the Borrower and the Guarantor on whose
behalf a Letter of Credit is issued or an Escrow Agreement is
entered into shall assume all risks of the acts, omissions, or
misuse of each Letter of Credit and each Escrow Agreement by any
beneficiary thereof; and, each Issuing Bank and each Escrow Bank
(except to the extent of its gross negligence or willful
misconduct) shall not be responsible for: (a) the form, validity,
sufficiency, accuracy, genuineness or legal effect of any Letter
of Credit or Escrow Agreement issued by it or any document
submitted by any party in connection with the application for and
issuance of such Letter of Credit or Escrow Agreement, even if it
should in fact prove to be in any or all respects invalid,
insufficient, inaccurate, fraudulent or forged; (b) the form,
validity, sufficiency, accuracy, genuineness or legal effect of
any instrument or document transferring or assigning or
purporting to transfer or assign any Letter of Credit or Escrow
Agreement 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; (c) failure of the beneficiary under
any Letter of Credit or Escrow Agreement to comply fully with
conditions required in order to demand payment under such Letter
of Credit or Escrow Agreement; (d) errors, omissions,
interruptions or delays in transmission or delivery of any
messages, by mail, cable, telegraph, telex or otherwise; or
(e) any loss or delay in the transmission or otherwise of any
documents, requests, or drafts required in order to make a
disbursement or other payment under any such Letter of Credit or
Escrow Agreement. Any action taken or omitted to be taken by an
Issuing Bank or Escrow Bank (without gross negligence or willful
misconduct on its part) shall be binding upon each Bank, and
shall not put any such Issuing Bank or Escrow Bank under any
resulting liability to any Bank, the Borrower or such Guarantor,
and each Bank (jointly and severally in proportion to its
Revolving Credit Ratable Share), the Borrower and such Guarantor,
jointly and severally, agree to indemnify and hold each such
Issuing Bank and Escrow Bank harmless from and against any and
all losses, liabilities, claims, obligations, penalties, actions,
damages, suits, judgments, costs, expenses (including reasonable
fees of counsel to such Issuing Bank or Escrow Bank), or
disbursements imposed on, incurred by or asserted against any
such Issuing Bank or Escrow Bank, in any way relating to or
arising from it acting or refraining from acting in its capacity
as such, except if the same results from such Issuing Bank's or
Escrow Bank's gross negligence or willful misconduct.
(iv) On the date on which the Borrower shall Cash
Collateralize a Letter of Credit or an Escrow Agreement pursuant
to Section 2.10, 2.11 or 2.14 (but not pursuant to Section
9.02(a)), the Letters of Credit or Escrow Agreements so
collateralized shall cease to be Letters of Credit or Escrow
Agreements hereunder, each Bank other than the Escrow Bank or
Issuing Bank shall be deemed to sell to the Issuing Bank or
Escrow Bank its undivided interest in the Letters of Credit or
Escrow Agreements and in such collateral and indemnification
agreements in exchange for its Net Exposure in such Letters of
Credit or Escrow Agreements (which Net Exposure shall be reduced
to zero).
2.14 Reduction of Commitment.
(a) Pro Rata Reduction. The Borrower shall have
the right at any time and from time to time upon five (5)
Business Days' prior written notice to the Agent to reduce
permanently, in a minimum amount of $5,000,000 of principal and
whole multiples of $500,000 for any amount over $5,000,000, or
terminate the Commitments based first on the Revolving Credit
Ratable Shares of the Banks until such Revolving Credit Ratable
Shares have been reduced to zero and then based on the Ratable
Shares of the Banks without penalty or premium, except as
hereinafter set forth, provided that any such reduction or
termination shall be accompanied by (a) the payment in full of
any Commitment Fee then accrued on the amount of such reduction
or termination and (b) prepayment first of the Revolving Credit
Loans and then of the Term Loans, together with the full amount
of interest accrued on the principal sum to be prepaid (and all
amounts referred to in Sections 4.04 and 4.06 hereof), to the
extent that the aggregate amount thereof then outstanding plus
the outstanding face amount of Letters of Credit and obligations
under Escrow Agreements exceeds the Commitments as so reduced or
terminated. From the effective date of any such reduction or
termination the obligations of Borrower to pay the Commitment Fee
pursuant to Section 2.03 shall correspondingly be reduced or
cease.
(b) Bank Exclusion Event. Upon the occurrence of
a Bank Exclusion Event with respect to any Bank, the following
shall occur:
(i) Reduction of Commitment. Such Bank's
Commitment shall be reduced to equal the sum of its Loans
outstanding and its Contingent Exposure under Letters of Credit
which it has issued and Escrow Agreements to which it is a party.
Such Bank's Commitment shall be further reduced immediately upon
the repayment or other reduction of such Loans, Letters of Credit
or obligations under Escrow Agreements (including repayments or
reductions pursuant to clause (v) below and any other payments or
reductions). Such Bank shall not be permitted to make any new
Loans, issue any Letters of Credit, enter into any Escrow
Agreements or receive any Commitment Fees.
(ii) Termination of Payments. Such Bank
shall receive interest on its Loans but shall not receive
payments of principal on its Loans until either (A) the Loans of
all Banks become due and payable pursuant to Section 9.02 (at
such time this Section 2.14(b)(ii) shall cease to apply to such
Loans), (B) such Loans become due and payable upon the Treasury
Rate Term Loan Due Date or Euro-Rate Term Loan Due Date, as
applicable, if such Loans are Term Loans, or (C) the Expiration
Date (without giving effect to any extension thereof occurring
after the Bank Exclusion Event) (the "Next Expiration Date").
Borrower and a Simple Majority of Banks may waive this Section
2.14(b)(ii) to accelerate payment of principal on such Loans.
(iii) Termination of Voting Rights. Such
Bank shall not be entitled to vote on any actions which require
approval of the Banks and its Commitment and outstanding Loans
shall be excluded in determining whether a Required Majority or
Simple Majority has approved of such action.
(iv) Extension of Expiration Date. Such
Bank shall be treated as a Non-Extending Bank under Section 2.04
in the event that Borrower requests an extension of the
Expiration Date pursuant to Section 2.04, and the Bank shall be
removed pursuant to the procedures set forth in Sections 2.04 and
2.14(c). (Such Bank will not be permitted to vote under Section
2.04 and its Commitment will be excluded in determining whether a
Required Majority has approved of the request.)
(v) Assignment of Interest. A Simple
Majority of the Banks may require such Bank to assign all of its
rights and interests hereunder to another Bank or to a new bank
which shall be a Qualified Bank. If the assignment is to a new
bank it shall be subject to Borrower's approval of such new bank
which approval shall not be unreasonably withheld. Such
assignment shall be subject to the acceptance of the assignee and
its execution of the Assignment and Assumption Agreement and the
other requirements of Section 11.11(b) hereof.
(vi) Termination of Commitment. A Simple
Majority of the Banks may request that the Commitment of such
Bank be terminated and that such Bank be removed as a Bank
hereunder. Such termination shall be subject to the consent of
the Borrower which shall not be unreasonably withheld. If
Borrower consents to such termination, such Bank shall be removed
pursuant to the procedures set forth in Section 2.14(b)(vii).
(vii) Procedures for Termination. If a Bank
is to be removed (the "Bank to be Terminated") as a Bank
hereunder pursuant to this Section 2.14. The provisions of
Section 2.14(b)(i) through (iv) shall remain in effect with
respect to the Bank to be Terminated, except as set forth below:
(A) The transactions described in this
paragraph (A) shall occur simultaneously as soon as any
increase in the Net Exposure of any of the Banks which
may occur as a result of such transactions will not
cause the sum of the Net Exposure and Loans outstanding
of such Banks to exceed their Commitments. The Bank to
be Terminated shall cease to participate in or
otherwise be liable upon any Letters of Credit or
Escrow Agreements issued by any other Bank or to which
any other Bank is a party. The Net Exposure of the
other Banks in such Letters of Credit and Escrow
Agreements shall be increased according to their
Revolving Credit Ratable Shares. Each of the other
Banks shall cease to participate in or otherwise be
liable upon any Letters of Credit issued by the Bank to
be Terminated or to which the Bank to be Terminated is
a party. The Commitment of the Bank to be Terminated
shall be reduced to equal the amount of its Loans
outstanding (as the same may be reduced pursuant to
paragraph (B) below or by reason of other payments
thereon from time to time) plus its Contingent Exposure
in Letters of Credit and Escrow Agreements which it has
issued or entered into.
(B) The waiver contained in the second sentence
of Section 2.14(b)(ii) may be made by Borrower alone
without the approval of a Simple Majority of the Banks
so that Borrower may accelerate payment on the Loans of
the Bank to be Terminated at any time.
(C) The Bank to be Terminated shall deliver its
original Note to the Borrower within one Business Day
of the completion of the events described in
subsections (A) and (B) above and repayment by the
Borrower of all Loans of the Bank to be Terminated.
(viii) No Waiver. The procedures set forth
in clauses (i) through (vii) above do not constitute a cure of
any default committed by a Bank which is subject to a Bank
Exclusion Event and neither the Borrower nor the other Banks
waive any rights or remedies against such a Bank by electing to
apply the provisions in such clauses to such Bank.
(c) Bank Extension or Mutual Agreement.
(i) Mutual Agreement. The Borrower and
any Bank may at any time with the consent of a Simple Majority of
the Banks agree that Borrower shall remove such Bank effective
upon a mutually agreed upon date pursuant to the procedures set
forth in Section 2.14(c)(ii) below.
(ii) Bank Removal. Borrower shall complete
all of the following steps with respect to any Non-Extending Bank
which is to be removed pursuant to Section 2.04 [Extension of
Expiration Date] or any Bank which is to be removed pursuant to
Section 2.14(c)(i) [Mutual Agreement] (in either case referred to
as the "Bank to be Removed"; the date on which such removal is to
take place under Section 2.04 or 2.14(c)(i), as the case may be,
is referred to as "Removal Date"): (i) Borrower shall on the
Removal Date repay the Loans of such Banks to be Removed and all
interest accrued thereon (whether or not then due and payable)
and any other amount which is then due to such Bank to be Removed
but has not yet been paid; (ii) if the Bank to be Removed is an
Issuing Bank under any Letters of Credit and the termination date
of such Letters of Credit extends beyond the Removal Date,
Borrower shall Cash Collateralize such Letters of Credit at least
fifteen (15) days prior to the Removal Date; and (iii) if any
Bank to be Removed is an Escrow Bank under any Escrow Agreements
and the termination date of such Escrow Bank's obligations
thereunder extends beyond the Removal Date, Borrower shall Cash
Collateralize such Escrow Agreements at least fifteen (15) days
prior to the Removal Date. (Borrower is not required to repay
any of the Loans of, or provide cash or other collateral to, any
of the Banks other than the Bank to be Removed (hereinafter
referred to as the "Remaining Banks") when it makes the
repayments or provides the collateral described in clauses (i)
through (iii) of the preceding sentence.) The following shall
occur on the Removal Date, subject to Borrower's completion of
steps listed in clauses (i) through (iii) above: (A) the
Commitment of the Bank to be Removed and its participation in and
Net Exposure under Letters of Credit or Escrow Agreements issued
or entered into by the Remaining Banks shall terminate; and
(B) the Bank to be Removed shall cease to be a Bank hereunder.
(d) Automatic Reduction on Mandatory Reduction
Date.
(i) Reduction of Commitments. The amount
of the Commitment of each Bank shall be reduced automatically and
permanently on the Mandatory Reduction Date by 50% of the amount
of such Commitment immediately before such date so that (i) each
Bank's Commitment on and immediately after the Mandatory
Reduction Date shall equal 50% of the amount of its Commitment
immediately prior to such date, and (ii) the aggregate of the
Commitments on and immediately after the Mandatory Reduction Date
shall equal 50% of the amount of the aggregate of the Commitments
immediately before such date.
(ii) Reduction of Escrow Agreement and
Letter of Credit Limits and Sublimits. The amount of the Escrow
Agreement Issuance Limit and the Letter of Credit Issuance Limit
of each Bank and the L/C-Escrow Sublimit each shall be reduced
automatically and permanently on the Mandatory Reduction Date as
follows:
(A) Escrow Agreement Issuance Limit. The
amount of each Bank's Escrow Agreement Issuance Limit
on and after the Mandatory Reduction Date shall be
equal to the greater of (1) 50% of the amount of such
Escrow Agreement Issuance Limit immediately before the
Mandatory Reduction Date or (2) the amount of such
Bank's obligations as the Escrow Bank under Escrow
Agreements. If the amount in clause (2) of the
sentence above exceeds the amount in clause (1), then,
so long as such excess continues to exist: (y) such
Bank's Escrow Agreement Issuance Limit shall be reduced
automatically as the amount in clause (2) decreases
(i.e., due to the termination or expiration of Escrow
Agreements to which it is a party), and (z) the
Borrower may not request from such Bank, and such Bank
may not enter into, additional Escrow Agreements
pursuant to this Agreement.
(B) Letter of Credit Issuance Limit. The
amount of each Bank's Letter of Credit Issuance Limit
on and after the Mandatory Reduction Date shall be
equal to the greater of (1) 50% of the amount of such
Letter of Credit Issuance Limit immediately before the
Mandatory Reduction Date or (2) the amount of such
Bank's obligations as the Issuing Bank under Letters of
Credit. If the amount in clause (2) of the sentence
above exceeds the amount in clause (1), then, so long
as such excess continues to exist: (y) such Bank's
Letter of Credit Issuance Limit shall be reduced
automatically as the amount in clause (2) decreases
(i.e., due to the termination or expiration of Letters
of Credit which it has issued), and (z) the Borrower
may not request from such Bank, and such Bank may not
issue, any additional Letters of Credit pursuant to
this Agreement.
(C) L/C-Escrow Sublimit. The amount of the
L/C-Escrow Sublimit shall be equal to the greater of
(1) two-thirds (2/3) of the amount of the Commitments
(rounded upward to the nearest number which is an
integral multiple of $5,000,000) after reduction of
such Commitments or (2) the amount the L/C-Escrow
Exposure on the Mandatory Reduction Date. If the L/C-
Escrow Exposure exceeds the L/C-Escrow Sublimit, then,
so long as such excess continues to exist: (y) the
L/C-Escrow Sublimit shall be reduced automatically as
the L/C-Escrow Exposure decreases (i.e., due to the
termination or expiration of Escrow Agreements or
Letters of Credit), and (z) the Borrower may not
request that any Bank enter into any Escrow Agreements
or issue any Letters of Credit.
(iii) Repayment of Loans; Cash
Collateralization of Escrow Agreements and Letters of Credit. If
the Aggregate Credit Exposure exceeds the amount of the
Commitments on the Mandatory Reduction Date (after the
Commitments have been reduced on such date), Borrower shall repay
Loans on the Mandatory Reduction Date in the amount of the lesser
of (A) such excess or (B) the amount of Loans outstanding.
Borrower shall repay all Revolving Credit Loans before it repays
any Treasury Rate Term Loans pursuant to the first sentence. Any
repayment of a Treasury Rate Term Loan on the Mandatory Reduction
Date pursuant to the first sentence of this clause (iii) shall be
subject to the Treasury Rate Term Loan Prepayment Premium. If
the aggregate of the undrawn face amount of Letters of Credit
scheduled to expire after the Mandatory Reduction Date plus
obligations under the Escrow Agreements scheduled to terminate
after the Mandatory Reduction Date exceeds the amount of
Commitments on such Mandatory Reduction Date after reduction of
such Commitments (such excess shall be referred to as the "Amount
to be Collateralized"), then Borrower shall, on or before the
date which is fifteen (15) days before such Mandatory Reduction
Date, Cash Collateralize Letters of Credit and Escrow Agreements
in an aggregate amount equal to or exceeding such Amount to be
Collateralized. Borrower shall select outstanding Escrow
Agreements and Letters of Credit for Cash Collateralization for
purposes of the preceding sentence in the following order of
priority: (i) first, Borrower shall select Escrow Agreements and
Letters of Credit in reverse order of the amount of obligations
under or face amount of, as the case may be, such Escrow
Agreements or Letters of Credit (so that, for example, a Letter
of Credit will be Cash Collateralized before an Escrow Agreement
if the face amount of the Letter of Credit will exceed the
obligations under the Escrow Agreement on the Mandatory Reduction
Date); (ii) second, if (A) two or more Letters of Credit shall
have the same face amount, (B) the amount of the obligations
under two or more Escrow Agreements shall be the same or (C) the
face amount of a Letter of Credit shall equal the amount of the
obligations under an Escrow Agreement, then, in such event,
Borrower shall Cash Collateralize such Letters of Credit and
Escrow Agreements (the obligations under or face amounts of which
are the same) in order of the amount of the Contingent Exposure
of the Issuing Banks or Escrow Banks which issued or entered into
such Letters of Credit or Escrow Agreements (so that, for
example, if more than one Bank is the Escrow Bank or Issuing Bank
under such Escrow Agreements or Letters of Credit all of such
Escrow Agreements and Letters of Credit issued by the Bank with
the highest Contingent Exposure would be Cash Collateralized
before any of such Escrow Agreements or Letters of Credit issued
by any other Bank would be Cash Collateralized).
2.15 Increase in Commitments.
(a) Existing Banks.
(i) Procedures. Subject to the
limitations contained in Section 2.15(c), Borrower may from time
to time request an increase in the Commitments of the Banks by
sending a notice thereof to all of the Banks and the Agent. Such
notice shall specify the total amount of increase requested by
the Borrower (the "Requested Increase") which amount shall not
exceed the amount permitted in Section 2.15(c) below. Each Bank
shall respond in writing to Borrower (with a copy simultaneously
sent to the Agent), within forty-five (45) days after receiving
such notice from Borrower, stating the maximum amount, if any, by
which it is willing to increase its Commitment (the "Offered
Amount"). If the total of the Offered Amount for all of the
Banks is less than the Requested Increase, each Bank's Commitment
shall increase by its Offered Amount and the Borrower may offer
the difference to a new bank pursuant to Section 2.15(b) below.
If the total of the Offered Amount for all of the Banks is
greater than the Requested Increase, the Requested Increase shall
be allocated in proportion to the Offered Amounts.
(ii) Effect on Letter of Credit and Escrow
Limits. Whenever a Bank increases its Commitment hereunder,
(1) the L/C-Escrow Sublimit shall increase by an amount equal to
2/3 of the increased of such Bank's Commitment, and (2) its
Letter of Credit Issuance Limit and its Escrow Agreement Issuance
Limit each shall be increased by multiplying the current limit
times a fraction equal to its new Commitment after giving effect
to the increase in its Commitment divided by its Commitment
before such increase. Following any increase in Commitments
pursuant to this Section 2.15(a), the Agent shall send to the
Banks and the Borrower a revised Schedule 1.01(C) setting forth
the new Commitments. Such schedule shall replace the existing
Schedule 1.01(C) if no Bank objects thereto within 10 days of its
receipt thereof.
(b) New Banks. Subject to the limitations
contained in Section 2.15(c), Borrower may from time to time
request that a new bank join this Agreement and provide a
Commitment hereunder, provided that Borrower shall at least 30
days prior to the date on which such bank joins this Agreement
notify the Agent of the name of such proposed new bank and the
amount of its proposed Commitment, Letter of Credit Issuance
Limit and Escrow Agreement Issuance Limit and the amount of
Treasury Rate Term Loans it shall make pursuant to Section
11.11(c) (if any) and deliver satisfactory evidence to the Agent
that such proposed new bank is a Qualified Bank. Such bank shall
join this Agreement pursuant to the procedures contained in
Section 11.11.
(c) Limitations on Increases.
(i) Borrower may not request an increase
in the Commitments and the Commitments shall not be increased
pursuant to Section 2.15(a) and (b) if: (1) after giving effect
to the proposed increase in Commitments, the Commitments shall
exceed $240,000,000 if the proposed increase shall occur on or
before June 16, 1996, (2) after giving effect to the proposed
increase in Commitments, the aggregate of the increases in the
Commitments pursuant to Sections 2.15(a) and (b) plus the
increase requested by Borrower during the 12-month period
beginning June 16, 1997 or during any 12-month period beginning
on June 16, of any year thereafter shall exceed $40,000,000;
provided that the Commitments may be increased by more than the
amounts permitted in this clause (2) or clause (1) above in any
year upon the consent of the Simple Majority of the Banks which
shall not be unreasonably withheld; (3) there exists an Event of
Default or Potential Default on the date of such request or on
the effective date of such increase; or (4) after giving effect
to the proposed increase in Commitments the Commitments shall
exceed $300,000,000.
(ii) The Commitment of any Bank shall not
be increased if its Commitment already exceeds, or with any such
increase would exceed, one-third of the total of all Commitments
to Borrower, and no Bank shall become a party to this Agreement
with a Commitment in excess of one-third of the total of all
Commitments at such time.
ARTICLE III
INTEREST RATES
3.01 Interest Rate Options. The Borrower shall pay
interest in respect of the outstanding unpaid principal amount of
the Loans at the rates under the Prime Rate Option, Federal
Funds/Euro-Rate Option, CD Rate Option, Revolving Credit Euro-
Rate Option, Term Loan Euro-Rate Option or Term Loan Treasury
Rate Option selected by it as set forth below applicable to the
Loans it being understood that, subject to the provisions of this
Agreement, including without limitation restrictions imposed on
the selection of interest rates governing the Term Loans and on
the repayment of the Term Loans set forth below, the Borrower may
select different Interest Rate Options and different CD Rate
Interest Periods or Euro-Rate Interest Periods to apply
simultaneously to the Loans comprising different Borrowing
Tranches and may convert to or renew one or more Interest Rate
Options with respect to all or any portion of the Loans
comprising any Borrowing Tranche provided that there shall not be
at any one time outstanding more than nine (9) Borrowing Tranches
in the aggregate among all the Loans accruing interest at the CD
Rate Option or any Euro-Rate Option. The Agent's determination
of a rate of interest and any change therein shall in the absence
of manifest error be conclusive and binding upon all parties
hereto. If at any time the designated rate applicable to any
Loan made by any Bank exceeds such Bank's highest lawful rate,
the rate of interest on such Bank's Loan shall be limited to such
Bank's highest lawful rate.
(a) Revolving Credit Interest Rate Options.
The Borrower shall have the right at any time to select from the
following Interest Rate Options applicable to Loans:
(i) Prime Rate Option: A fluctuating rate
per annum (computed on the basis of a year of 365 or 366 days, as
the case may be, and actual days elapsed) equal to the Prime
Rate, such interest rate to change automatically from time to
time effective as of the effective date of each change in the
Prime Rate;
(ii) Revolving Credit Euro-Rate Option: A
rate per annum (computed on the basis of a year of 360 days and
actual days elapsed) equal to the Euro-Rate plus a percentage per
annum (the "Euro-Rate Spread") which shall be determined at any
time based on the Company Debt Rating at such time as follows:
Euro-Rate
Spread (expressed
Company as basis points
Debt Rating per annum)
First Level Debt Rating 75.0
Second Level Debt Rating 100.0
Third Level Debt Rating 112.5
Fourth Level Debt Rating 127.5
The Euro-Rate Spread shall change automatically with any change
in the Company Debt Rating. Any Borrowing Tranche of Loans under
the Revolving Credit Euro-Rate Option outstanding on the Fourth
Amendment Effective Date will remain outstanding for the duration
of the Interest Period applicable thereto but shall be subject to
the interest rates set forth above; or
(iii) Federal Funds/Euro-Rate Option: A
rate per annum (computed on the basis of a year of 365 or 366
days, as the case may be, and actual days elapsed) equal to the
greater of (1) sum of the Federal Funds Effective Rate plus the
Euro-Rate Spread plus one quarter of one percent (1/4%) or (2)
the one-month Euro-Rate plus the Euro-Rate Spread; the rate under
this option shall be computed each day; the rate in clause (1)
shall be computed each day based on the weighted average of the
rates on overnight Federal funds transactions on the trading day
which precedes such day and the rate in clause (2) shall be
computed each day as the Euro-Rate which would apply to a
borrowing to be made two Business Days after such day with an
Interest Period of one month;
(iv) CD Rate Option: A rate per annum
(computed on the basis of a year of 360 days and actual days
elapsed) equal to the CD Rate plus a percentage per annum (the
"CD Rate Spread") which shall be determined at any time based on
the Company Debt Rating at such time as follows:
CD Rate
Spread (expressed
Company as basis points
Debt Rating per annum)
First Level Debt Rating 90.0
Second Level Debt Rating 115.0
Third Level Debt Rating 127.5
Fourth Level Debt Rating 142.5
The CD Rate Spread shall change automatically with any change in
the Company Debt Rating. Any Borrowing Tranche of Loans under
the CD Rate Option outstanding on the Fourth Amendment Effective
Date will remain outstanding for the duration of the Interest
Period applicable thereto but shall be subject to the interest
rates set forth above; or
(b) Term Loan Interest Rate Options. Borrower
shall select an Interest Rate Option set forth in either clause
(i) or clause (ii) below, subject to the terms and conditions in
such clause.
(i) Term Loan Euro-Rate Option. A rate per
annum (computed on the basis of a year of 360 days and actual
days elapsed) equal to the Euro-Rate plus the Euro-Rate Spread,
subject to the following conditions:
(A) The Interest Period applicable to each
election under this clause (i) shall be one month.
(B) It is acknowledged that Borrower made
its first election under this clause (i) and such election became
effective on November 30, 1994 and such first election applied to
$25,000,000 of Loans.
(C) Following Borrower's first election
under this clause (i) Borrower has renewed prior to the Fifth
Amendment Effective Date and shall continue to renew after such
date its election with respect to the entire amount of Loans
covered by such first election (or such lesser amount outstanding
(if any) if Borrower prepays some or all of those Loans pursuant
to Paragraph (D), (E) or (F) below) for additional consecutive
one-month Interest Periods, with each new Interest Period to
start on the expiration of the prior Interest Period and with the
last such Interest Period to end within the Euro-Rate Term Loan
Expiration Period. Any Borrowing Tranche of Loans under the Term
Loan Euro-Rate Option outstanding on the Fourth Amendment
Effective Date will remain outstanding for the duration of the
Interest Period applicable thereto but shall be subject to the
interest rate set forth above which went into effect on such
Fourth Amendment Effective Date.
(D) Borrower may repay Loans subject to
the Term Loan Euro-Rate Option (each referred to as a "Permitted
Euro-Rate Term Loan Prepayment") before the Euro-Rate Term Loan
Due Date without paying the Euro-Rate Term Loan Prepayment
Premium, subject to the following conditions:
(1) Each Permitted Euro-Rate Term
Loan Prepayment shall be subject to Borrower's indemnity
obligations described in Section 4.06 if Borrower makes such
prepayment prior to the expiration of the applicable Term Loan
Euro-Rate Interest Period.
(2) Borrower may make Permitted Euro-
Rate Term Loan Prepayments on no more than two dates during any
fiscal year of the Borrower.
(3) Following each Permitted Euro-
Rate Term Loan Prepayment, Borrower shall borrow new Loans under
the Term Loan Euro-Rate Option in an amount equal to such
Permitted Euro-Rate Term Loan Prepayment. Borrower shall borrow
such new Loans on a single Business Day which shall fall on or
before the expiration of the Permitted Euro-Rate Term Loan
Paydown Period immediately following such Permitted Euro-Rate
Term Loan Prepayment.
(4) After Borrower borrows Loans
pursuant to clause (3) above, Borrower shall renew its election
under the Term Loan Euro-Rate Option with respect to the entire
amount of such Loans for additional consecutive one-month
Interest Periods, with each new Interest Period to start on the
expiration of the prior Interest Period and with the last such
Interest Period to end within the Euro-Rate Term Loan Expiration
Period. Borrower may prepay all or a portion of the Loans
described in the preceding sentence pursuant to Borrower's
prepayment rights set forth in this Paragraph (D) or in Paragraph
(E) below. If Borrower prepays a portion of such Loans, Borrower
shall renew its election under the Term Loan Euro-Rate Option
pursuant to the first sentence in this clause (4) only with
respect to the portion of such Loans which Borrower has not
repaid.
(5) Borrower may fund a Permitted
Euro-Rate Term Loan Prepayment using the proceeds of a Loan under
the Prime Rate Option, CD Rate Option or Revolving Credit Euro-
Rate Option which Borrower has requested in accordance with the
terms of this Agreement.
(E) Borrower may repay Loans subject to
the Term Loan Euro-Rate Option before the Euro-Rate Term Loan Due
Date subject to the prepayment penalty described in Sections 4.04
and 4.05 and to Borrower's indemnity obligations described in
Section 4.06.
(F) Borrower shall repay all Loans subject
to the Term Loan Euro-Rate Option on the effective date of an
election by Borrower under the Term Loan Treasury Rate Option
contained in clause (ii) below. Thereafter, Borrower may not
elect to have Loans bear interest under the Term Loan Euro-Rate
Option. Borrower's repayment of Euro-Rate Term Loans pursuant to
this clause (F) shall not be subject to the prepayment penalty
described in Sections 4.04 or 4.05 but shall be subject to
Borrower's indemnity obligations described in Section 4.06.
(G) Borrower shall repay each Borrowing
Tranche of Loans which are subject to the Term Loan Euro-Rate
Option on the last day of the applicable Interest Period when
such day falls within the Euro-Rate Term Loan Expiration Period
(referred to as the "Euro-Rate Term Loan Due Date"); provided,
however, that if Borrower does not repay a Borrowing Tranche of
Euro-Rate Term Loans on or before the Euro-Rate Term Loan Due
Date with respect to such Borrowing Tranche and such Euro-Rate
Term Loan Due Date occurs prior to the Expiration Date, Borrower
shall be deemed to request and the Banks shall be deemed to make
a Revolving Credit Loan under the Prime Rate Option in an amount
equal to the aggregate amount of such Borrowing Tranche with a
Borrowing Date on the Euro-Rate Term Loan Due Date and the
proceeds of such Loan shall be deemed to repay such Borrowing
Tranche.
(ii) Term Loan Treasury Rate Option. A rate per
annum (computed on the basis of a year of 365 or 366 days as the
case may be and actual days elapsed) equal to the Treasury Rate
in effect two (2) Business Days prior to the effective date of
Borrower's election to have Loans bear interest at the Treasury
Rate plus one and three hundred and twenty-five thousandths of
one percent (1.325%), subject to the following conditions:
(A) The Borrower shall make each election
hereunder, and such election must become effective, during the
Treasury Rate Term Loan Election Period.
(B) Each election by Borrower under this
clause (ii) shall govern at least $25,000,000 of Loans. The
aggregate of all Treasury Rate Term Loans may not at any time
exceed $75,000,000. The aggregate of Term Loans subject to the
Expiration Date Term Loan Treasury Rate Option (as described in
clause (D) below) may not at any time exceed $50,000,000.
(C) Borrower shall repay all Loans subject
to the Term Loan Euro-Rate Option on the effective date of
Borrower's first election under this clause (ii).
(D) Each election by Borrower under this
clause (ii) shall state the due date of the Loans subject to the
Term Loan Treasury Rate Option (the "Treasury Rate Term Loan Due
Date") which due date shall be either (a) the earlier of the
Mandatory Reduction Date or three (3) years from the effective
date of such election (a "Mandatory Reduction Date Term Loan
Treasury Rate Option") or (b) the earlier of the Expiration Date
or five (5) years from the effective date of such election (an
"Expiration Date Term Loan Treasury Rate Option"); provided,
however, that Borrower may elect only the Mandatory Reduction
Date Term Loan Treasury Rate Option (and may not elect the
Expiration Date Term Loan Treasury Rate Option) if Borrower makes
its election under this clause (ii) during a Treasury Rate Term
Loan Election Period which falls in 1996 or any year after 1996
and the Treasury Rate Term Loan Due Date in such event shall be
the Mandatory Reduction Date (and not the Expiration Date). If
Borrower elects a Term Loan Treasury Rate Option hereunder and
the Mandatory Reduction Date or Expiration Date is extended after
such election, the Treasury Rate Term Loan Due Date shall not be
extended by reason of the extension of such Mandatory Reduction
Date or Expiration Date, as the case may be. Borrower shall
repay the Treasury Rate Term Loans on the Treasury Rate Term Loan
Due Date; provided, however, that if Borrower does not repay the
Treasury Rate Term Loans on or before the Treasury Rate Term Loan
Due Date and the following two conditions exist, Borrower shall
be deemed to request and the Banks shall be deemed to make a
Revolving Credit Loan under the Prime Rate Option in an amount
equal to the aggregate amount of the Treasury Rate Term Loans
with a Borrowing Date on the Treasury Rate Term Loan Due Date and
the proceeds of such Loan shall be deemed to repay the Treasury
Rate Term Loans: (1) the Treasury Rate Term Loan Due Date occurs
prior to the Expiration Date, and (2) there exist no Non-electing
Additional Banks so that on the Treasury Rate Term Loan Due Date
the proportion of each Bank's Treasury Rate Term Loan to all of
the Banks' Treasury Rate Term Loans equals such Bank's Ratable
Share;
(E) Borrower may repay Loans subject to the
Term Loan Treasury Rate Option before the Treasury Rate Term Loan
Due Date subject to the prepayment penalty described in Sections
4.04 and 4.05.
(c) Rate Quotations. The Borrower may call the
Agent on or before the date on which a Loan Request is to be
delivered to receive an indication of the rates then in effect,
but it is acknowledged that such projection shall not be binding
on the Agent or the Banks nor affect the rate of interest which
thereafter is actually in effect when the election is made.
3.02 Interest Periods. At any time when the Borrower
shall select, convert to or renew the CD Rate Option, Revolving
Credit Euro-Rate Option, Term Loan Euro-Rate Option or Term Loan
Treasury Rate Option, the Borrower shall notify the Agent thereof
by delivering a Loan Request at least one (1) Business Day prior
to the effective date of a CD Rate Option, three (3) Business
Days prior to the effective date of a Revolving Credit Euro-Rate
Option, the Term Loan Treasury Rate Option or the Term Loan Euro-
Rate Option, and one (1) Business Day prior to the effective date
of the Federal Funds/Euro-Rate Option. The notice shall specify
an interest period during which such Option shall apply, such
periods may be (i) 30, 60, 90, 180, 270 or 360 days in the event
of a CD Rate Option (the "CD Rate Interest Period"), provided
that the Banks shall not be required to accept a request by
Borrower for a CD Interest Period of 270 or 360 days unless all
of the Banks in their discretion agree to such a period,
(ii) one, two, three or six, nine or twelve months in the event
of a Revolving Credit Euro-Rate Option provided that the Banks
shall not be required to accept a request by Borrower for an
interest period of nine or twelve months unless all of the Banks
in their discretion agree to such a period (the "Revolving Credit
Euro-Rate Interest Period"), (iii) one month in the event of the
Term Loan Euro-Rate Option (the "Term Loan Euro-Rate Interest
Period"), subject to Borrower's obligation to renew such option
as < >described in Section 3.01(b)(i); (iv) for a period
beginning on the date of the election and ending on the Mandatory
Reduction Date in the case of a Mandatory Reduction Date Term
Loan Treasury Rate Option, and (v) for a period beginning on the
date of the election and ending on the Expiration Date in the
case of an Expiration Date Term Loan Treasury Rate Option. The
CD Rate Interest Period and any Euro-Rate Interest Period shall
be subject to the following additional requirements:
(a) any CD Rate Interest Period or Euro-Rate
Interest Period which would otherwise end on a date which is not
a Business Day shall be extended to the next succeeding Business
Day unless such Business Day falls in the next calendar month, in
which case such CD Rate Interest Period or Euro-Rate Interest
Period shall end on the next preceding Business Day;
(b) any Euro-Rate Interest Period which begins
on the last day of a calendar month for which there is no
numerically corresponding day in the subsequent calendar month
during which such Interest Period is to end shall end on the last
Business Day of such subsequent month;
(c) the CD Rate Portion and the Euro-Rate
Portion for each CD Rate Interest Period and Euro-Rate Interest
Period shall be in integral multiples of $100,000 and each such
Portion shall not be less than $2,000,000;
(d) the Borrower shall not select, convert to
or renew a CD Rate Interest Period or a Euro-Rate Interest Period
for any portion of the Loans that would end after the Expiration
Date; and
(e) in the case of the renewal of a CD Rate
Option at the end of a CD Rate Interest Period or the renewal of
a Euro-Rate Option at the end of a Euro-Rate Interest Period, the
first day of the new Interest Period shall be the last day of the
preceding Interest Period, without duplication in payment of
interest for such day.
3.03 Interest After Default. To the extent permitted
by Law, upon the occurrence and during the continuation of an
Event of Default, any principal, interest, fee or other amount
payable hereunder shall bear interest for each day thereafter
until paid in full (before and after judgment) at a rate per
annum which shall be equal to (2%) per annum above the Prime
Rate. The Borrower acknowledges that such increased interest
rate reflects, among other things, the fact that such Loans or
other amounts have become a substantially greater risk given
their default status and that the Banks are entitled to
additional compensation for such risk.
3.04 CD Rate or Euro-Rate Unascertainable.
If on any date on which a CD Rate or a Euro-Rate
would otherwise be determined, the Agent shall have determined
(which determination shall be conclusive absent manifest error)
that:
(i) adequate and reasonable means do not exist
for ascertaining such CD Rate or Euro-Rate, or
(ii) a contingency has occurred which materially
and adversely affects the secondary market for negotiable
certificates of deposit maintained by dealers of recognized
standing relating to the CD Rate or the London interbank market
relating to the Euro-Rate, then the Agent shall promptly so notify
the Banks and the Borrower thereof. Upon such date as shall be specified
in such notice (which shall not be earlier than the date such notice is
given) the obligation of the Banks to allow the Borrower to
select, convert to or renew a CD Rate Option or a Euro-Rate
Option shall be suspended until the Agent shall have later
notified the Borrower or such Bank of the Agent's determination
(which determination shall be conclusive absent manifest error)
that the circumstances giving rise to such previous determination
no longer exist. If at any time the Agent makes a determination
under this Section 3.04 and the Borrower has previously notified
the Agent of its selection of, conversion to or renewal of a CD
Rate Option or a Euro-Rate Option and such Interest Rate Option
has not yet gone into effect, such notification shall be deemed
to provide for selection of, conversion to or renewal of the
Prime Rate Option otherwise available with respect to such Loans.
If Agent makes a determination under this Section 3.04, the
Borrower shall, subject to the Borrower's indemnification
obligations under Section 4.06(b), as to any Loan of the Bank to
which a CD Rate Option or a Euro-Rate Option applies, on the date
specified in such notice either convert such Loan to the Prime
Rate Option otherwise available with respect to such Loan or
prepay such Loan in accordance with Section 4.04 hereof. Absent
due notice from the Borrower of conversion or prepayment such
Loan shall automatically be converted to the Prime Rate Option
otherwise available with respect to such Loan upon such specified
date.
3.05 Selection of Interest Rate Options. If the
Borrower fails to select a CD Rate Interest Period or a Revolving
Credit Euro-Rate Interest Period in accordance with the
provisions of Section 3.02 in the case of renewal of the CD Rate
Portion or Euro-Rate Portion of a Revolving Credit Loan, as the
case may be, the Borrower shall be deemed to have converted such
Revolving Credit Loan or portion thereof to the Prime Rate Option
otherwise available with respect to such Revolving Credit Loan,
commencing upon the last day of that Interest Period. If
Borrower does not repay in full any Term Loan on the Term Loan
Due Date, whether pursuant to a deemed repayment of such Term
Loan under Section 3.01(b) or otherwise, the unpaid portion of
such Term Loan shall bear interest at the interest rate
applicable under the Prime Rate Option until it is repaid
(subject to increase under Section 3.03). If the Borrower does
not renew the Term Loan Euro-Rate Option when it is required to
renew such option pursuant to Section 3.01(b)(i), the Borrower
shall be deemed to have renewed such Term Loan Euro-Rate Option
for an additional one-month Interest Period, commencing upon the
last day of the current Interest Period.
ARTICLE IV
PAYMENTS
4.01 Payments. All payments and prepayments to be
made in respect of principal, interest, Commitment Fees, Closing
Fees, Letter of Credit Fees, Escrow Fees, Agent's Fee or other
fees or amounts due from the Borrower hereunder shall be payable
prior to 12:00 noon (Philadelphia time) on the date when due
without presentment, demand, protest or notice of any kind, all
of which are hereby expressly waived by the Borrower, and without
setoff, counterclaim or other deduction of any nature, and an
action therefor shall immediately accrue. Such payments shall be
made to the Agent at the Principal Office for the ratable
accounts of the Banks with respect to the Loans in U.S. Dollars
and in same day funds, and the Agent shall promptly distribute
such amounts to the Banks in same day funds, provided that in the
event payments are received by 12:00 noon (Philadelphia time) by
the Agent with respect to the Loans and such payments are not
distributed to the Banks on the same day received by the Agent,
the Agent shall pay the Banks the federal funds effective rate
with respect to the amount of such payments for each day held by
the Agent and not distributed to the Banks. The Agent's and each
Bank's statement of account, ledger or other relevant record
shall, in the absence of manifest error, be conclusive as the
statement of the amount of principal of, interest on and Euro-
Rate Term Loan Prepayment Premium or Treasury Rate Term Loan
Prepayment Premium with respect to the Loans and other amounts
owing under this Agreement and shall be deemed an "account
stated."
4.02 Pro Rata Treatment of Banks. Obligations of the
Banks to make Loans and rights to receive payments hereunder
shall be allocated among the Banks as set forth below except as
expressly provided in Section 2.04 [Extension of Expiration
Date], Section 2.14(b) [Bank Exclusion Event], Section 2.14(c)
[Bank Extension or Mutual Agreement], Section 3.04 [CD Rate or
Euro-Rate Unascertainable], Section 4.04(b) [Voluntary
Prepayments], Section 4.06(a) [Additional Compensation in Certain
Circumstances] or Section 11.11(c) [Additional Bank]:
(i) Obligations to make Revolving Credit
Loans or Term Loans shall be allocated based on Revolving Credit
Ratable Shares as of the date on which such Loans are made,
except that an Additional Bank being added pursuant to clause
11.11(c) may make a Treasury Rate Term Loan in which the other
Banks shall not participate as more fully set forth in Section
11.11(c);
(ii) Payments of principal on Loans
comprising each Borrowing Tranche shall be allocated to the Banks
based on the amount of such Loans (it being acknowledged that
each Treasury Rate Term Loan made by an Additional Bank on the
date of its joinder hereto in respect of a Borrowing Tranche of
Treasury Rate Term Loans outstanding on such date shall be deemed
to be part of such Borrowing Tranche for purposes of this
sentence) held by each Bank and payments of interest on such
Loans shall be allocated to the Banks based on the amount of
interest due to each Bank on its outstanding principal (it being
acknowledged that the rate of interest payable to an Additional
Bank on its Treasury Rate Term Loans may differ from the rate
payable to the other Banks on their Treasury Rate Term Loans).
If each of the conditions listed in Clauses (A) through (C) below
exists on the date on which a payment on any Loan is made then
such payment shall be allocated on a pro-rata basis between the
holders of the Term Loans and holders of the Revolving Credit
Loans based upon the respective amounts of such Term Loans and
Revolving Credit Loans outstanding if it is a payment of
principal and shall be allocated on a pro rata basis between
holders of the Term Loans and holders of the Revolving Credit
Loans based on the amount of interest due to such holders if it
is a payment of interest: (A) an Event of Default exists and is
continuing and has not been waived, (B) the Loans have been
accelerated or otherwise shall have become due, and (C) Treasury
Rate Term Loans are outstanding and the fractional share of one
or more of the Banks in the total amount of outstanding Treasury
Rate Term Loans does not equal its fractional share of the total
amount of outstanding Revolving Credit Loans;
(iii) Net Exposures under Letters of Credit
and Escrow Agreement shall be allocated based on the Revolving
Credit Ratable Shares, except for certain temporary deviations
which may occur after an Additional Bank joins this Agreement as
described in Section 11.11(c);
(iv) Commitment Fees, Letter of Credit Fees
and Escrow Fees shall be allocated as set forth in Sections 2.03,
2.10(c) and 2.11(c); and
(v) Other fees or amounts due from the
Borrower hereunder to the Banks with respect to the Loans shall
be allocated in proportion to the applicable Loans outstanding
and if there are no Loans outstanding, in proportion to the
Ratable Share of each Bank.
4.03 Interest Payment Dates. Interest on Loans shall
be payable in arrears and billed monthly by Agent on the first
day of each month on account of the prior month and shall be due
and payable to the Agent for the ratable account of the Banks not
later than the twelfth day of such month. Interest on mandatory
prepayments of principal under Section 4.05 shall be due on the
date such mandatory prepayment is due.
4.04 Voluntary Prepayments.
(a)
(1) Revolving Credit Loans. The Borrower
shall have the right at its option from time to time to prepay
the Revolving Credit Loans in whole or part without premium or
penalty (except as provided in Section 4.06 hereof):
(i) at any time with respect to any
Revolving Credit Loan to which the Prime Rate Option applies,
(ii) on the last day of the applicable CD
Rate Interest Period or Euro-Rate Interest Period with respect to
Revolving Credit Loans to which a CD Rate Option or a Euro-Rate
Option applies,
(iii) on the date specified in a notice by
any Bank pursuant to Section 3.04 [CD Rate or Euro-Rate
Unascertainable] hereof with respect to any Revolving Credit Loan
to which a CD Rate Option or a Euro-Rate Option applies.
(2) Treasury Rate Term Loans.
(A) Prepayment Premium. The Borrower
shall have the right at its option to prepay the Treasury Rate
Term Loans in whole or in part at any time at the principal
amount so prepaid plus a premium in an amount equal to the
Treasury Rate Term Loan Prepayment Premium (if any).
(B) Adjustments Required if
Additional Banks Have Joined This Agreement. This Section
4.04(a)(2)(B) applies if (1) one or more Additional Banks have
joined this Agreement after the Fifth Amendment Effective Date
and Treasury Rate Term Loans were outstanding on the date of such
Additional Bank's joinder and the Borrower and such Additional
Bank did not elect pursuant to clause (D)(1) of Section 11.11(c)
to have such Additional Bank make a Treasury Rate Term Loan (each
Additional Bank described in this clause (1) shall be referred to
as a "Non-electing Additional Bank") and (2) the Borrower pays in
whole or in part after the effective date of such Non-electing
Additional Bank's joinder the Treasury Rate Term Loans of the
Banks (the "Term Loan Banks") which had Treasury Rate Term Loans
outstanding on such effective date. It is acknowledged that the
following shall occur when the Borrower pays the Treasury Rate
Term Loans, whether or not such payment occurs before, on or
after the maturity of such Loans: (i) the Revolving Credit
Commitments of each Term Loan Bank shall increase in an amount
equal to the reduction of its Treasury Rate Term Loan; and
(ii) the Revolving Credit Ratable Share of each Term Loan Bank
shall increase and the Revolving Credit Ratable Share of each
Non-electing Additional Bank shall decrease. The following
adjustments will be made on or after such payment in order to
make the allocations of existing Revolving Credit Loans and Net
Exposures equal to the Banks' new Revolving Credit Ratable
Shares, provided that no Event of Default exists and is
continuing and has not been waived: (A) on the first Business
Day of the fiscal quarter following the date of such payment, the
Net Exposure of each Term Loan Bank in outstanding Letters of
Credit and Escrow Agreements shall increase and the Net Exposure
of each Non-electing Bank thereon shall decrease so that the Net
Exposure of each Bank shall then equal its Revolving Credit
Ratable Share; no adjustments in such Net Exposures shall be made
prior to such Business Day; (B) on the date on which Borrower
makes such payment, Borrower shall repay all outstanding
Revolving Credit Loans to which the Prime Rate Option applies and
reborrow a like amount of Revolving Credit Loans under the Prime
Rate Option from the Banks according to their new Revolving
Credit Ratable Shares; (C) if the Borrower should (i) renew after
the date of such payment the CD Rate Option or Euro-Rate Option
with respect to Revolving Credit Loans existing on such date, or
(ii) convert after the date of such payment from the CD Rate
Option or Euro-Rate Option to a different Interest Rate Option
with respect to Revolving Credit Loans existing on such date,
Borrower shall be deemed to repay the applicable Revolving Credit
Loans on the conversion or renewal date, as the case may be, and
then reborrow a similar amount on such date so that the Banks
shall participate in such Revolving Credit Loans after such
renewal or conversion date according to their new Revolving
Credit Ratable Shares; except as provided in this clause (C)
above interests of the Banks in Revolving Credit Loans to which
either the CD Rate Option or the Euro-Rate Option applies which
are outstanding on the date of the payment shall not be adjusted;
and (D) the Banks shall participate in all Loans made after the
payment date according to their Revolving Credit Ratable Shares.
(3) Euro-Rate Term Loans.
(A) Permitted Euro-Rate Term Loan
Prepayments. The Borrower may make Permitted Euro-Rate Term Loan
Prepayments at the times permitted under Section 3.01(b)(i) or
prepayments of the Euro-Rate Term Loan in connection with an
election under the Term Loan Treasury Rate Option described in
Section 3.01(b)(ii)(C), in each instance subject to Borrower's
indemnity obligations described in Section 4.06 if such
prepayment is made on any day other than the last day of the
applicable Term Loan Euro-Rate Interest Period;
(B) Other Prepayments. The Borrower
may make prepayments of the Euro-Rate Term Loans other than
Permitted Euro-Rate Term Loan Prepayments (or prepayments
pursuant to an election under the Term Loan Treasury Rate Option)
(which prepayments are governed by Paragraph (A) above) in whole
or in part:
(i) on the last day of the applicable
Euro-Rate Interest Period at the principal amount so prepaid plus
a premium in an amount equal to the Euro-Rate Term Loan
Prepayment Premium;
(ii) on any day other than that
specified in clause (i) above at the principal amount so prepaid
plus a premium in an amount equal to the Euro-Rate Term Loan
Prepayment Premium and subject to Borrower's indemnity
obligations described in Section 4.06.
(iii) if a Bank delivers a notice
pursuant to Section 3.04 [Euro-Rate Unascertainable] hereof with
respect to such Bank's Euro-Rate Term Loan, Borrower may prepay
such Euro-Rate Term Loan on the date specified in such notice
plus a premium equal to the Euro-Rate Term Loan Prepayment
Premium.
Borrower shall provide a prepayment notice to the Agent
on or before the date on which it prepays any Revolving Credit
Loan and at least three (3) Business Days before it prepays any
of the Term Loans. Such notice shall set forth the following
information:
(x) the date, which shall be a Business Day, on
which the proposed prepayment is to be made;
(y) the total principal amount of such
prepayment, which (1) if Borrower is prepaying
Revolving Credit Loans such principal amount shall not
be less than $1,000,000, (2) if the Borrower is
prepaying Treasury Rate Term Loans and one or more Non-
electing Additional Banks exist at the time of such
prepayment, such principal amount shall not be less
than $5,000,000 and shall be in integral multiples of
$1,000,000, or (3) if the Borrower is either prepaying
the Euro-Rate Term Loans, or is prepaying the Treasury
Rate Term Loans and there do not exist any Non-electing
Additional Banks at the time of such prepayments, such
principal amount shall not be less than $1,000,000 and
shall be in integral multiples of $1,000,000.
All prepayment notices shall be irrevocable. The
following amounts shall be due and payable on the date specified
in a prepayment notice as the date on which the proposed
prepayment is to be made: (i) the principal amount of the Loans
for which a prepayment notice is given, (ii) the interest on such
principal amount except with respect to Loans to which the Prime
Rate Option applies, (iii) any Euro-Rate Term Loan Prepayment
Premium or Treasury Rate Term Loan Prepayment Premium and
(iv) any related indemnity obligations. Unless otherwise
specified by the Borrower with respect to prepayments of the CD
Rate Portion or Euro-Rate Portion of the Revolving Credit Loans
permitted under Section 4.04(a)(i), (ii) or (iii) above, all
prepayments of the Revolving Credit Loans shall be applied first
to the Prime Rate Portion of such Loans, then to the CD Rate
Portion of such Loans, and then to the Euro-Rate Portion of such
Loans, subject to Section 4.06(b) hereof.
(b) In the event any Bank gives notice under
Section 4.06(a) [Additional Compensation in Certain
Circumstances] hereof, Borrower may at any time after the date on
which Borrower receives such notice notify Agent and such Bank
that Borrower desires to replace such Bank with a new bank
designated by Borrower in the notice, provided that Borrower
shall deliver satisfactory evidence to Agent that such proposed
new bank is a Qualified Bank at least fifteen Business Days prior
to such replacement. The Bank to be replaced shall assign all of
its Commitment and Loans hereunder to the new bank pursuant to
the procedures for assignments contained in Section 11.11(b)
below.
4.05 Mandatory Prepayments.
(a) Commitments or Borrowing Base Exceeded.
Whenever (i) the sum of the outstanding principal balance of
Loans by the Banks plus the aggregate undrawn face amount of
outstanding Letters of Credit issued pursuant to Section 2.10
plus the obligations under the Escrow Agreements entered into
pursuant to Section 2.11 exceeds the Commitments, or (ii) the
covenant contained in Section 8.01(e) is violated, Borrower shall
make, within one (1) Business Day after the Borrower learns of
such excess or violation, as the case may be, and whether or not
the Agent has given notice to such effect, a mandatory prepayment
of principal of the Loans equal to such excess as necessary to
cure such violation, together with accrued interest on such
principal amount.
(b) Application Among Interest Rate Options;
Indemnity. All prepayments required pursuant to this Section
4.05 shall first be applied among the Interest Rate Options to
the principal amount of the Revolving Credit Loans subject to a
Prime Rate Option, then to Revolving Credit Loans subject to the
Federal Funds/Euro-Rate Option, then to Revolving Credit Loans
subject to the CD Rate Option, then to Revolving Credit Loans
subject to the Revolving Credit Euro-Rate Option then to the Term
Loans. In accordance with Section 4.06(b), the Borrower shall
indemnify the Banks for any loss or expense including loss of
margin incurred with respect to any such prepayments applied
against Loans subject to a CD Rate Option or a Euro-Rate Option
on any day other than the last day of the applicable CD Rate
Interest Period or Euro-Rate Interest Period.
(c) Premiums and Adjustments Upon Prepayment of
Term Loans. Any prepayment whether pursuant to this Section 4.05
or otherwise (A) of the Treasury Rate Term Loans shall be subject
to the Treasury Rate Term Loan Prepayment Premium and to the
adjustments described in Section 4.04(a)(2)(B), or (B) of the
Euro-Rate Term Loans shall be subject to the Euro-Rate Term Loan
Prepayment Premium, except for (1) a prepayment immediately
followed by a reborrowing required pursuant to Section 11.11(c)
in connection with joinder of an Additional Bank or
(2) prepayments described in Section 4.04(a)(3)(A).
4.06 Additional Compensation in Certain
Circumstances.
(a) Increased Costs or Reduced Return Resulting
From Taxes, Reserves, Capital Adequacy Requirements, Expenses,
Etc. If any introduction of any new Law, guideline or
interpretation or any change in any Law, guideline or
interpretation or application of a Law by any Official Body
charged with the interpretation or administration thereof or
compliance with any request or directive (whether or not having
the force of Law) of any central bank or other Official Body:
(i) subjects at least a Required Threshold
of Banks to any tax or changes the basis of taxation with respect
to this Agreement, the Notes, the Loans, the Letters of Credit or
the Escrow Agreements or payments by the Borrower of principal,
interest, Commitment Fees, or other amounts due from the Borrower
hereunder or under the Notes (except for taxes on the overall net
income of such Bank),
(ii) imposes, modifies or deems applicable
any reserve, special deposit or similar requirement against
credits or commitments to extend credit extended by, or assets
(funded or contingent) of, deposits with or for the account of,
or other acquisitions of funds by, at least a Required Threshold
of Banks, or
(iii) imposes, modifies or deems applicable
any capital adequacy or similar requirement (A) against assets
(funded or contingent) of, or letters of credit, other credits or
commitments to extend credit extended by, at least a Required
Threshold of Banks, or (B) otherwise applicable to the
obligations of at least a Required Threshold of Banks under this
Agreement, and the result of any of the foregoing is to increase
the cost to, reduce the income receivable by, or impose any
expense (including loss of margin) upon at least a Required
Threshold of Banks each with respect to this Agreement, the Notes
or the making, maintenance or funding of any part of the Loans
(or, in the case of any capital adequacy or similar requirement,
to have the effect of reducing the rate of return on the capital
of at least a Required Threshold of Banks, taking into
consideration such Banks' customary policies with respect to
capital adequacy), such Banks shall from time to time notify the
Borrower and the Agent of the amount determined in good faith
(using any averaging and attribution methods employed in good
faith) by such Banks (which determination shall be conclusive
absent manifest error) to be necessary to compensate such Banks
for such increase in cost, reduction of income or additional
expense for periods on and after the date on which such Banks
notify Borrower thereof. Such notice shall set forth in
reasonable detail the basis for such determination and shall be
delivered within three (3) months after the date on which a
Required Threshold of Banks have become aware of such increase in
cost reduction in income or additional expenses and ascertained
the amount thereof. Such amount shall be due and payable by the
Borrower to such Banks thirty (30) days after such notice is
given.
(b) Indemnity. In addition to the compensation
required by subsection (a) of this Section 4.06, the Borrower
shall indemnify each Bank against all liabilities, losses or
expenses (including loss of margin, any loss or expense incurred
in liquidating or employing deposits from third parties and any
loss or expense incurred in connection with funds acquired by a
Bank to fund or maintain Loans subject to the CD Rate Option or
any Euro-Rate Option) which such Bank sustains or incurs as a
consequence of any
(i) payment, prepayment, conversion or
renewal of any Loan to which the CD Rate Option or any Euro-Rate
Option applies on a day other than the last day of the
corresponding Interest Period (whether or not such payment or
prepayment is then due), except for payments or prepayments
required by Section 3.04 and except that Borrower's indemnity
obligations in connection with the repayment of the Euro-Rate
Term Loans pursuant to Section 3.01(b)(ii)(C) shall be limited to
any loss of margin, any loss or expense incurred in liquidating
or employing deposits from third parties and any losses or
expenses incurred by each Bank in connection with funds acquired
by such Bank to fund or maintain such Euro-Rate Term Loans,
(ii) attempt by the Borrower to revoke
(expressly, by later inconsistent notices or otherwise) in whole
or part any notice relating to Loan Requests under Sections 2.06,
3.02 or 11.11(c) or prepayments under Section 4.04, or
(iii) default by the Borrower in the
performance or observance of any covenant or condition contained
in this Agreement or any other Loan Document, including without
limitation any failure of the Borrower to pay when due (by
acceleration or otherwise) any principal, interest, Commitment
Fee or any other amount due hereunder.
If any Bank sustains or incurs any such loss or expense
it shall from time to time notify the Borrower of the amount
determined in good faith by such Bank (which determination shall
be conclusive absent manifest error and may include such
assumptions, allocations of costs and expenses and averaging or
attribution methods as such Bank shall deem reasonable) to be
necessary to indemnify such Bank for such loss or expense. Such
notice shall set forth in reasonable detail the basis for such
determination. Such amount shall be due and payable by the
Borrower to such Bank thirty (30) days after such notice is
given.
(c) Reduction in Indemnity. If any Bank
sustains losses, expenses or reductions in income and has
requested reimbursement therefor pursuant to Section 4.06(a) and
(b) and such Bank ceases to sustain such losses, expenses or
reductions in income, the reimbursement obligations of Borrower
shall terminate as appropriate to reflect the cessation of such
losses, expenses or reductions in income.
(d) Replacement of a Bank. If a Bank sustains
or incurs a loss or expense or reduction of income and requests
reimbursement therefor from the Borrower pursuant to Sections
4.06(a) or (b), Borrower may within thirty (30) days after the
date on which Borrower receives such request notify Agent and
such Bank that Borrower desires to replace such Bank with a new
bank designated by Borrower in the notice, provided that (i)
Borrower shall deliver satisfactory evidence to the Agent that
such proposed new bank is a Qualified Bank at least fifteen
Business Days prior to such replacement and (ii) Borrower shall
have paid any amounts due pursuant to Section 4.06(a) or (b) to
the Bank to be replaced on or before such replacement. The Bank
to be replaced shall assign all of its Commitment and Loans
hereunder to the new bank pursuant to the procedures for
assignments contained in Section 11.11(b) below.
ARTICLE V
REPRESENTATIONS, WARRANTIES AND AFFIRMATIVE COVENANTS
5.01 Representations and Warranties. The Loan
Parties jointly and severally represent, warrant, covenant and
agree as set forth below. The covenants set forth below shall
remain in effect until payment in full of the Loans and interest
thereon, satisfaction of all of the Loan Parties' other
obligations hereunder and termination of the Commitment. Each
statement contained below which uses the word "will" or "shall"
and describes a future event does not constitute a representation
or warranty by the Loan Parties with respect to the future but
rather constitutes a covenant of the Loan Parties with respect to
their future actions or obligations. Each reference to Loan
Parties (below and otherwise in this Agreement) is intended to
refer to those entities which have joined this Agreement as Loan
Parties as of the applicable date so that an entity which exists
but is not required to join this Agreement until after the end of
the fiscal quarter pursuant to Section 11.12 shall not be bound
by the covenants herein until it has joined this Agreement.
(a) Organization and Qualification. On the
date hereof and at all times in the future, each of the Loan
Parties is or will continue to be, as the case may be, a
corporation or partnership, duly organized, validly existing and
in good standing under the laws of their respective jurisdiction
of organization. Each of the Loan Parties is licensed or
qualified to conduct business and is in good standing in each
jurisdiction in which its ownership or lease of property or the
nature of its business makes such license or qualification
necessary and such license or qualification is material to the
operation of such Loan Party's business. The Loan Parties have
and shall continue to have the lawful power to own or lease their
properties and to engage in the business they presently conduct
or propose to conduct. The Loan Parties are and shall continue
to be duly licensed or qualified and in good standing in each
jurisdiction where the property owned or leased by them or the
nature of the business transacted by them or both makes such
licensing or qualification necessary and such license or
qualification is material to the operation of such Loan Party's
business. Notwithstanding the foregoing, any violation or
failure of this Section 5.01(a) shall be permitted if it
constitutes a Permitted Exception or if it results from a
liquidation, merger, consolidation or disposition permitted under
Sections 8.01(f) or (g), provided that no such Permitted
Exceptions exist on the Closing Date.
(b) Capitalization and Ownership. As of
June 5, 1995, the authorized capital stock of the Company
consisted of 40,000,000 shares, of which 33,528,948 shares were
issued and outstanding. As of June 5, 1995, there were no
material options, warrants or other rights outstanding to
purchase any such shares except as described in the Form 10-Q
filed with the Securities and Exchange Commission for the fiscal
quarter ended April 30, 1995.
(c) Consolidated Subsidiaries. Schedule
5.01(c) attached hereto and, as the same may be amended from time
to time, states as of the date hereof and hereafter will state as
of the date on which the Company delivers, or is required to
deliver (whichever is earlier) its Compliance Certificate
pursuant to Section 8.02(b) the name of each of the Company's
Consolidated Subsidiaries, its jurisdiction and type of
organization and its authorized capital stock, its Consolidated
Subsidiary Shares and the owners thereof and whether such
Consolidated Subsidiary is a Guarantor hereunder. The Company
and each Consolidated Subsidiary of the Company have and shall
continue to have good and marketable title to all of the
Consolidated Subsidiary Shares they purport to own, free and
clear in each case of any Lien except for dispositions or other
transfers in connection with liquidations, mergers,
consolidations or disposition permitted under Sections 8.01(f) or
(g). All Consolidated Subsidiary Shares in existence from time
to time have been or will continue to be validly issued and are
fully paid and nonassessable.
(d) Power and Authority. Each of the Loan
Parties now has and shall continue to have (except if it should
cease to exist pursuant to a liquidation, merger, consolidation
or disposition permitted under Sections 8.01(f) or (g)) full
power to enter into, execute, deliver and carry out this
Agreement and the other Loan Documents to which it is a party, to
incur the Indebtedness contemplated by the Loan Documents and to
perform its obligations under the Loan Documents to which it is a
party and all such actions have been duly authorized by all
necessary proceedings on its part.
(e) Validity and Binding Effect. This
Agreement has been and each other Loan Document, when duly
executed and delivered by each of the Loan Parties, will have
been duly and validly executed and delivered by such Loan Party.
This Agreement and each of the other Loan Documents now
constitutes legal, valid and binding obligations of each of the
Loan Parties, enforceable against such Loan Parties in accordance
with their respective terms and shall continue to constitute such
legal, valid and binding obligations except to the extent any
unenforceability does not have a material adverse effect on the
ability of the Banks to substantially realize the benefits of the
Loan Documents (it being understood that the parties will work
together to remedy any such illegality, invalidity or
unenforceability), except to the extent that enforceability of
any of the foregoing Loan Documents may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws
affecting the enforceability of creditors' rights generally or
limiting the right of specific performance.
(f) No Conflict. Neither the execution and
delivery of this Agreement or the other Loan Documents by the
Loan Parties nor the consummation of the transactions herein or
therein contemplated or compliance with the terms and provisions
hereof or thereof by them will conflict with, constitute a
default under or result in any breach of (i) the terms and
conditions of the certificate of incorporation, by-laws or other
organizational documents of any of the Loan Parties or (ii) of
any Law or of any material agreement or instrument or order,
writ, judgment, injunction or decree to which such Loan Party is
a party or by which it is bound or to which it is subject, or
result in the creation or enforcement of any Lien, charge or
encumbrance whatsoever upon any property (now or hereafter
acquired) of such Loan Party.
(g) Litigation. There are not now and except
for Permitted Exceptions will not in the future be any actions,
suits, proceedings or investigations pending or, to the knowledge
of the Loan Parties, threatened against any of the Loan Parties
at law or equity before any Official Body which individually or
in the aggregate may reasonably be expected to result in any
Material Adverse Change. Neither the Borrower nor any other Loan
Party is or except for Permitted Exceptions in the future shall
be in violation of any order, writ, injunction or any decree of
any Official Body which may reasonably be expected to result in
any Material Adverse Change.
(h) Title to Properties. Each Loan Party now
has and shall continue to have good and marketable title to all
properties, assets (tangible or intangible) and other rights
which it purports to own or which are reflected as owned on its
books and records, free and clear of all Liens and encumbrances
except Permitted Liens, and imperfections of title (excluding
Liens) which do not materially reduce the value of such
properties, assets and rights in the aggregate. Assets of the
Loan Parties under lease or located on leased real property are
not material to the business of the Loan Parties.
(i) Financial Statements.
Historical Statements. The Company has
delivered to the Agent copies of its audited consolidated year-
end financial statements for and as of the end of the two fiscal
years ended October 31, 1991 and October 31, 1992, respectively
(the "Annual Statements"). In addition, the Company has
delivered to the Agent copies of its unaudited consolidated
interim financial statements for the fiscal year to date and as
of the end of the fiscal quarter ended July 31, 1993 (the
"Interim Statements") (the Annual and Interim Statements being
collectively referred to as the "Historical Statements"). The
Historical Statements were compiled from the books and records
maintained by the Company's management, are correct and complete
and fairly represent the consolidated financial condition of the
Company and its Consolidated Subsidiaries as of their dates and
the results of operations for the fiscal periods then ended and
have been prepared in accordance with GAAP consistently applied,
subject (in the case of the Interim Statements) to normal year-
end audit adjustments. Since October 31, 1992 no Material
Adverse Change has occurred.
(j) Margin Stock. None of the Loan Parties
engages or intends to engage principally, or as one of its
important activities, in the business of extending credit for the
purpose, immediately, incidentally or ultimately, of purchasing
or carrying margin stock (within the meaning of Regulation U).
No part of the proceeds of any Loan has been or will be used,
immediately, incidentally or ultimately, to purchase or carry any
margin stock or to extend credit to others for the purpose of
purchasing or carrying any margin stock or to refund Indebtedness
originally incurred for such purpose, or for any purpose which
entails a violation of or which is inconsistent with the
provisions of the regulations of the Board of Governors of the
Federal Reserve System. None of the Loan Parties holds or
intends to hold margin stock in such amounts that more than 25%
of the reasonable value of the assets of any Loan Party are or
will be represented by margin stock.
(k) Full Disclosure. Neither this Agreement
nor any other Loan Document, nor any certificate, statement,
agreement or other documents furnished to the Agent or any Bank
in connection herewith or therewith, contains any untrue
statement of a material fact or omits to state a material fact
necessary in order to make the statements contained herein and
therein, in light of the circumstances under which they were
made, not misleading. There is no fact known to any Senior
Executive of the Company about a fact which could reasonably be
expected to result in a Material Adverse Change, which has not
been set forth in the Agreement or in the certificates,
statements, agreements or other documents furnished in writing to
the Agent and the Banks prior to or at the date hereof in
connection with the transactions contemplated hereby.
(l) Taxes; Payment of Liabilities. On the date
hereof and at all times in the future all federal, state, local
and other tax returns required to have been filed with respect to
the Loan Parties have been or will have been, as the case may be,
filed and payment or adequate provision made for the payment of
all taxes, fees, assessments and other governmental charges which
have or may become due pursuant to said returns or to assessments
received except to the extent that such taxes, fees, assessments
and other charges are being contested in good faith by
appropriate proceedings diligently conducted and for which such
reserves or other appropriate provisions, if any, as shall be
required by GAAP shall have been made. Each of the Loan Parties
shall duly pay and discharge all other liabilities to which it is
subject or which are asserted against it, promptly as and when
the same shall become due and payable, including all assessments
and governmental charges upon it or any of its properties,
assets, income or profits, prior to the date on which penalties
attach thereto, except to the extent that such liabilities,
assessments or charges, are being contested in good faith and by
appropriate and lawful proceedings diligently conducted and for
which such reserve or other appropriate provisions, if any, as
shall be required by GAAP shall have been made. Notwithstanding
the foregoing, any violations or failures of this Section shall
be permitted if they are not materially adverse to the business
of the applicable Loan Party or they constitute a Permitted
Exception provided that there exist no such Permitted Exceptions
on the Closing Date.
(m) Consents and Approvals. No consent,
approval, exemption, order or authorization of, or a registration
or filing with any Official Body or any other Person is required
by any Law or any agreement in connection with the execution,
delivery and carrying out of this Agreement and the other Loan
Documents by the Loan Parties.
(n) No Event of Default; Compliance with
Instruments. On the date hereof and at all times in the future
no event has occurred and is continuing or will occur and be
continuing and no condition exists or will exist which
constitutes an Event of Default or a Potential Default which
might not be cured before it results in an Event of Default.
None of the Loan Parties is or will be in violation of (i) any
term of its certificate of incorporation, by-laws, certificates
of partnership, partnership agreement or other organizational
documents, as applicable, or (ii) any material agreement or
instrument to which it is a party or by which it or any of its
properties may be subject or bound where such violation would
reasonably be expected to result in a Material Adverse Change.
(o) Patents, Trademarks, Copyrights, Licenses,
Etc. Each Loan Party now owns or possesses and shall continue to
own or possess all the material patents, trademarks, service
marks, trade names, copyrights, licenses, registrations,
franchises, permits and rights necessary to own and operate its
properties and to carry on its business as conducted and planned
to be conducted by such Loan Party, without known conflict with
the rights of others, except for violations or failures which
constitute Permitted Exceptions. There are no such Permitted
Exceptions on the date hereof.
(p) Insurance. The Company shall on a
consolidated basis insure the properties and assets of the Loan
Parties against loss or damage by fire and such other insurable
hazards as such assets are commonly insured (including fire,
extended coverage, property damage, worker's compensation, public
liability and business interruption insurance) and against other
risks (including errors and omissions) in such amounts as similar
properties and assets are insured by prudent companies in similar
circumstances carrying on similar businesses, and with reputable
and financially sound insurers, including self-insurance to the
extent customary, all as reasonably determined by the Agent. At
the request of the Agent, the Company shall deliver (x) an
original certificate of insurance signed by the Loan Parties'
independent insurance broker describing and certifying as to the
existence of the insurance then in effect with respect to the
Loan Parties required to be maintained by this Agreement and the
other Loan Documents, together with riders and endorsements
relating to such insurances and proof of premium payments
(y) from time to time a summary schedule indicating all insurance
then in force with respect to the Borrower and (z) originals or
copies of the policies relating to such insurance. Such policies
of insurance shall contain endorsements, in form and substance
acceptable to the Agent, which shall (i) specify the Agent as an
additional insured, mortgagee and lender loss payee as its
interests may appear, with the understanding that any obligation
imposed upon the insured (including, without limitation, the
liability to pay premiums) shall be the sole obligation of the
Borrower and not that of the insured and (ii) provide that no
reduction in the type and amount of coverage, cancellation or
termination of such policies for any reason (including, without
limitation, non-payment of premium) nor any change therein shall
be effective until at least thirty (30) days after receipt by the
Agent of written notice of such cancellation or change. The
insurance policies of the Loan Parties on the date hereof comply
with the foregoing covenant.
(q) Compliance with Laws. Each of the Loan
Parties now is and shall continue to be in compliance in all
material respects with all applicable Laws (other than
Environmental Laws which are specifically addressed in subsection
(v) in all jurisdictions in which such Loan Party is presently or
will be doing business except for violations or failures which
constitute Permitted Exceptions. There are no such Permitted
Exceptions on the date hereof.
(r) Material Contracts. Except for the
Development Agreements and the documents governing the
Subordinated Indebtedness none of the Loan Parties is a party to
a contract relating to its business operations, including,
without limitation, all employee benefit plans, employment
agreements, collective bargaining agreements and labor contracts
(the "Labor Contracts") which, if breached, directly or
indirectly would reasonably be expected to result in a Material
Adverse Change. All such material contracts are valid, binding
and enforceable upon the applicable Loan Party and each of the
parties thereto in accordance with their respective terms, and
there is no default thereunder, to the Loan Parties' knowledge,
with respect to parties other than the Loan Parties.
(s) Investment Companies. None of the Loan
Parties is an "investment company" registered or required to be
registered under the Investment Company Act of 1940 or under the
"control" of an "investment company" as such terms are defined in
the Investment Company Act of 1940 and shall not become such an
"investment company" or under such "control."
(t) Plans and Benefit Arrangements. Except as
set forth on Schedule 5.01(t) hereto or to the extent a violation
of the foregoing would not reasonably be expected to result in a
Material Adverse Change:
(i) The Company and each member of the
ERISA Group now are and shall continue to be in compliance in all
material respects with any applicable provisions of ERISA with
respect to all Benefit Arrangements, Plans and Multiemployer
Plans. There has not been any Prohibited Transaction with
respect to any Benefit Arrangement or any Plan or, to the best
knowledge of the Company, with respect to any Multiemployer Plan
or Multiple Employer Plan, which could result in any material
liability of the Company or any other member of the ERISA Group
and the Company shall not permit a Prohibited Transaction to
occur. The Company and all members of the ERISA Group have made
and will make when due any and all payments required to be made
under any agreement relating to a Multiemployer Plan or a
Multiple Employer Plan or any Law pertaining thereto. With
respect to each Plan and Multiemployer Plan, the Company and each
member of the ERISA Group (i) have fulfilled and will continue to
fulfill in all material respects their obligations under the
minimum funding standards of ERISA, (ii) have not incurred and
will not incur any liability to the PBGC and (iii) have not had
asserted and will not have asserted against them any penalty for
failure to fulfill the minimum funding requirements of ERISA.
(ii) To the best of the Company's knowledge
now and at anytime in the future, each Multiemployer Plan and
Multiple Employer Plan is and shall be able to pay benefits
thereunder when due.
(iii) Neither the Company nor any other
member of the ERISA Group has instituted or shall institute
proceedings to terminate any Plan.
(iv) No event requiring notice to the PBGC
under Section 302(f)(4)(A) of ERISA has occurred or is reasonably
expected to occur or shall in the future occur or be reasonably
expected to occur with respect to any Plan, and no amendment with
respect to which security is required under Section 307 of ERISA
has been made or is reasonably expected to be made to any Plan.
(v) The aggregate actuarial present value
of all benefit liabilities (whether or not vested) under each
Plan, determined on a plan termination basis, as disclosed from
time to time in and as of the date of the actuarial reports for
such Plan shall not exceed the aggregate fair market value of the
assets of such Plan.
(vi) Neither the Company nor any other
member of the ERISA Group has incurred or reasonably expects to
incur or shall in the future incur or reasonably expect to incur
any material withdrawal liability under ERISA to any
Multiemployer Plan or Multiple Employer Plan. Neither the
Company nor any other member of the ERISA Group has been or shall
be notified by any Multiemployer Plan or Multiple Employer Plan
that such Multiemployer Plan or Multiple Employer Plan has been
terminated within the meaning of Title IV of ERISA and, to the
best knowledge of the Company, no Multiemployer Plan or Multiple
Employer Plan is or shall be reasonably expected to be
reorganized or terminated, within the meaning of Title IV of
ERISA.
(vii) To the extent that any Benefit
Arrangement is insured, the Company and all members of the ERISA
Group have paid and shall pay when due all premiums required to
be paid. To the extent that any Benefit Arrangement is funded
other than with insurance, the Company and all members of the
ERISA Group have made and shall make when due all contributions
required to be paid for all prior periods.
(u) Employment Matters. The Loan Parties are
and shall continue to be in compliance with the Labor Contracts
and all applicable federal, state and local labor and employment
Laws including, but not limited to, those related to equal
employment opportunity and affirmative action, labor relations,
minimum wage, overtime, child labor, medical insurance
continuation, worker adjustment and relocation notices,
immigration controls and worker and unemployment compensation,
where the failure to comply would constitute a Material Adverse
Change. There are and shall continue to be no outstanding
grievances, arbitration awards or appeals therefrom arising out
of the Labor Contracts or current or threatened strikes,
picketing, handbilling or other work stoppages or slowdowns at
facilities of the Company or any Consolidated Subsidiary of the
Company which in any case would constitute a Material Adverse
Change. The Company has delivered to the Agent true and correct
copies of each of the Labor Contracts.
(v) Environmental Matters. Except as disclosed
on Schedule 5.01(v) hereto:
(i) Except for violations or failures
which are not reasonably likely to result in a Material Adverse
Change, none of the Loan Parties has received or shall receive
any Environmental Complaint from any Official Body or private
Person alleging that any Loan Party or any prior or subsequent
owner of the Property is a potentially responsible party under
the Comprehensive Environmental Response, Cleanup and Liability
Act, 42 U.S.C. 9601, et seq., and none of the Loan Parties has
any reason to believe that such an Environmental Complaint might
be received. There are and shall continue to be no pending or,
to any Loan Party's knowledge, threatened Environmental
Complaints relating to any Loan Party or, to any Loan Party's
knowledge, any prior or subsequent owner of the Property
pertaining to, or arising out of, any Environmental Conditions.
(ii) Except for conditions, violations or
failures which individually and in the aggregate are not
reasonably likely to result in a Material Adverse Change, there
are and shall continue to be no circumstances at, on or under the
Property that constitute a breach of or non-compliance with any
of the Environmental Laws, and there are and shall continue to be
no past or present Environmental Conditions at, on or under the
Property or, to any Loan Party's knowledge, at, on or under
adjacent property, that prevent compliance with the Environmental
Laws at the Property.
(iii) Neither the Property nor any
structures, improvements, equipment, fixtures, activities or
facilities thereon or thereunder now or in the future shall
contain or use Regulated Substances except in compliance with
Environmental Laws. There are and shall continue to be no
processes, facilities, operations, equipment or any other
activities at, on or under the Property, or, to any Loan Party's
knowledge, at, on or under adjacent property, that currently
result in the release or threatened release of Regulated
Substances on to the Property, except to the extent that such
releases or threatened releases are not a breach of or otherwise
not a violation of the Environmental Laws, or are not likely to
result in a Material Adverse Change.
(iv) Except for violations or failures
which individually or in the aggregate are not likely to result
in a Material Adverse Change, there are and shall continue to be
no underground storage tanks, or underground piping associated
with such tanks, used for the management of Regulated Substances
at, on or under the Property that do not have a full operational
secondary containment system in place and are not in compliance
with all Environmental Laws, and there are no abandoned
underground storage tanks or underground piping associated with
such tanks, previously used for the management of Regulated
Substances at, on or under the Property that have not been either
abandoned in place, or removed, in accordance with the
Environmental Laws.
(v) Except for violations or failures
which individually or in the aggregate are not likely to result
in a Material Adverse Change, each Loan Party has and shall have
all material permits, licenses, authorizations and approvals
necessary under the Environmental Laws for the conduct of the
business of such Loan Party as then conducted by such Loan Party.
The Loan Parties have submitted and will continue to submit all
material notices, reports and other filings required by the
Environmental Laws to be submitted to an Official Body which
pertain to past and current operations on the Property.
(vi) Except for violations which
individually and in the aggregate are not likely to result in a
Material Adverse Change, all past and present on-site generation,
storage, processing, treatment, recycling, reclamation or
disposal of Solid Waste at, on, or under the Property and all
off-site transportation, storage, processing, treatment,
recycling, reclamation or disposal of Solid Waste has been and
shall continue to be done in accordance with the Environmental
Laws.
(w) Senior Debt Status. The obligations of the
Borrower under this Agreement and the Notes and each Guarantor
under the Guaranty Agreement do rank and will rank at least pari
passu in priority of payment with all other indebtedness of the
Borrower or such Guarantor except indebtedness of the Borrower or
such Guarantor to the extent secured by Permitted Liens.
(x) Maintenance of Properties and Leases. Each
Loan Party shall maintain in good repair, working order and
condition (ordinary wear and tear excepted) in accordance with
the general practice of other businesses of similar character and
size, all of those properties useful or necessary to its
business, and from time to time, make or cause to be made all
appropriate repairs, renewals or replacements thereof, except for
any violations or failures which constitute Permitted Exceptions.
There are no such Permitted Exceptions on the date hereof.
(y) Visitation Rights. Each Loan Party shall
permit any of the officers or authorized employees or
representatives of the Agent or any of the Banks to visit and
inspect any of its properties and to examine and make excerpts
from its books and records and discuss its business affairs,
finances and accounts with the Senior Executives, all in such
detail and at such times and as often as any of the Banks may
reasonably request, provided that each Bank shall provide the
Borrower and the Agent with reasonable notice prior to any visit
or inspection.
(z) Keeping of Records and Books of Account.
The books and records of the Loan Parties shall be maintained so
as to enable the Company to issue consolidated financial
statements in accordance with GAAP and as otherwise required by
applicable Laws of any Official Body having jurisdiction over the
Loan Parties, and in which full, true and correct entries shall
be made in all material respects of all the dealings and business
and financial affairs of the Loan Parties as a group.
(aa) Use of Proceeds. The Borrower and each
Guarantor will use the proceeds of the Loans only for lawful
purposes in accordance with Section 2.09 hereof as applicable and
such uses shall not contravene any applicable Law or any other
provision hereof.
(bb) Intercompany Loans, Loans and Advances to
the Borrower. Borrower shall make Intercompany Loans available
to the Guarantors using proceeds of the Loans. Each Intercompany
Loan shall be evidenced either by a promissory note of the
obligor under such Intercompany Loan (individually, an
"Intercompany Note" and collectively, the "Intercompany Notes")
or an intercompany account agreement between Borrower and the
obligor under such Intercompany Loan (individually, an
"Intercompany Agreement" and collectively, the "Intercompany
Agreements") which shall provide for repayment of such
Intercompany Loans on such terms as Borrower and Guarantors
agree. Each Intercompany Loan shall be subordinated to the
Guarantors' obligations under the Guaranty Agreements pursuant to
the terms of the Intercompany Subordination Agreement in the form
attached as Exhibit I (the "Intercompany Subordination
Agreement") and shall become due and payable upon the
acceleration of the Notes pursuant to Section 9.02 hereof after
the occurrence of an Event of Default hereunder. Any
Intercompany Note or Intercompany Agreement may in turn be
assigned by Borrower to another Guarantor as a capital
contribution to such Guarantor. The originals of the
Intercompany Notes and the Intercompany Agreements shall be
retained by Borrower or such assignee until the occurrence of a
Security Event after which they shall be subject to the
provisions of Section 7.01 hereof. Borrower shall establish and
maintain such books and records relating to Intercompany Loans
and other investments in Guarantors as are required to enable it
and Agent to trace advances and repayments of principal of
Intercompany Loans and other investments in Guarantors.
(cc) Appraisals.
(i) Procedures. The Loan Parties shall
cooperate with Banks and the appraiser in making appraisals of
the Borrowing Base Assets which Agent, at the direction of a
Simple Majority of Banks, may from time to time request.
Borrower may, within 10 days following any such request by Agent,
specify which other of Borrowing Base Assets and which of the
Loan Parties' Qualified Options it requests to have similarly
appraised. Following the first to occur of (A) completion of all
appraisals requested at any one time by Agent and Borrower under
this Section 5.01(cc), and (B) a date specified by Agent no
earlier than 45 days after the last request for an appraisal has
(or could have) been made by Borrower in accordance with the
immediately preceding sentence, the appraised values of all
Borrowing Base Assets which have been appraised (rather than
their book value) shall be used for purposes of applying the
covenant contained in Section 8.01(e)(i). The percentages in
that Section applicable to Category 1 Borrowing Base Assets
whether or not appraised shall thereafter be 85% rather than 90%.
If the Loan parties would be in compliance with the covenant
contained in Section 8.01(e)(i) without giving effect to
appraised values of assets or other adjustments pursuant to this
Section 5.01(cc), Borrower may include one or more of the Loan
Parties' Qualified Options at their appraised value in computing
the Borrowing Base for purposes of complying with Section
8.01(e)(i) as modified hereby. Banks shall have the right to
request appraisals pursuant to this Section 5.01(cc) not more
than two times in any consecutive twelve-month period and shall
specify in such request all of the assets as for which it desires
appraisals.
(ii) Costs. Any appraisals requested by
Agent and Borrower pursuant to Section 5.01(cc)(i) shall be at
Banks' expense (shared ratably among the Banks) (except
appraisals requested pursuant to the provisions of Section
8.01(e)(ii) which shall always be at Borrower's expense), unless
using such appraised values and a percentage of 85% to Category 1
Borrowing Base Assets rather than 90% would result in the
covenant contained in Section 8.01(e)(i) being exceeded, in which
event all such appraisals shall be at Borrower's expense.
(iii) Appraisers. Any appraisals pursuant
to this Section 5.01(cc) shall be made by one or more appraisers
for all properties (there shall be no more than one appraiser for
each property) located in each state selected by Borrower from a
list of at least three appraisers submitted by Agent with respect
to such state at the time it makes its request. All appraisers
submitted by Agent pursuant to this Section 5.01(cc) shall either
be listed on Exhibit J attached hereto or be appraisers who have
been approved by a Simple Majority of Banks and Borrower and in
either event have committed to prepare appraisals within 45 days
following the date such appraisals are requested. Agent, with
the approval of a Simple Majority of Banks, and Borrower may
agree from time to time to add any appraisers to or delete any
appraisers listed on Exhibit J, provided that there are at least
three approved appraisers for each state at all times. Agent
shall have the right to request Borrower to approve appraisers
pursuant to this Section 5.01(cc)(iii) not more than once with
respect to each state in any consecutive twelve-month period.
(dd) Collateral Documents. Borrower and
Guarantors shall execute and deliver to the Agent the Collateral
Documents within ninety (90) days following the Closing Date as
more fully described in Section 7.01.
(ee) Mortgage Subsidiaries. The Loan Parties
shall notify Agent of the creation of any Mortgage Subsidiary
within seven (7) Business Days after such creation. Such notice
shall include the name, state of incorporation and ownership of
the capital stock thereof. The Loan Parties shall cause the
Mortgage Subsidiaries to engage exclusively in Mortgage Banking
Business. The Loan Parties shall deliver information relating to
the organization, operation and finances of the Mortgage
Subsidiaries as the Agent may reasonably request.
(ff) Senior Indebtedness Ratings.
(1) Delivery of Qualified Ratings. The Company
shall at all times have received at least two Qualified Ratings
of the Company's Senior Indebtedness or the Indebtedness under
the Agreement or any Indebtedness senior to the Subordinated
Indebtedness from at least two Qualified Rating Agencies, at
least one of which shall be either Moody's or Standard & Poor's,
and the Company shall have contracted with each such Qualified
Rating Agency for the periodic modification and updating of such
Qualified Ratings. As of the Fourth Amendment Effective Date
those ratings described on Schedule 1.01(Q) shall be the
Qualified Ratings hereunder. If the Company desires to obtain a
Qualified Ratings from an agency which is not a Qualified Rating
Agency as of the Fourth Amendment Effective Date, the Company
must obtain the approval by the Required Majority of Banks of
such agency pursuant to Section 5.01(ff)(2) below before the
Company requests such a rating. The Company shall notify the
Agent of any new rating of the Company's Senior Indebtedness or
its Indebtedness under this Agreement which the Company or any of
its Subsidiaries receives or any modification of an existing
rating of any such Indebtedness which the Company or any
Subsidiary receives, in each instance within two (2) Business
Days following the date of such receipt. The Company shall
deliver to the Agent copies of any documents which the Company
receives evidencing, describing or explaining or relating to such
new or modified Rating within such two- (2-) Business Day Period.
Any new rating which meets the requirements of a Qualified Rating
(contained in the definition of such term) or change in an
existing Qualified Rating shall be effective under this Agreement
(i) on the date on which the Company receives such new or
modified rating if such rating would result in any higher
Commitment Fee or interest rate or no change in any Commitment
Fee or interest rate under Section 2.03 or 3.01 and (ii) on the
date on which the Company notifies the Agent of such new or
modified Rating if such Rating would result in a lower Commitment
Fee or interest rate under Section 2.03 or 3.01. If the Company
shall at any time fail to have two Qualified Ratings of which at
least one Qualified Rating is from either Standard & Poor's or
Moody's pursuant to the first sentence above: (i) the Company
shall immediately notify Agent of such failure; and (ii) the
Company Debt rating shall be deemed to be a Fourth Level Debt
Rating for all purposes under this Agreement immediately upon the
occurrence of such failure whether or not the Company delivers
the notice described in clause (i). The Company Debt Rating
shall continue to be a Fourth Level Debt Rating until such time
as the Company (1) cures such failure and is in compliance with
the first sentence above and (2) otherwise qualifies for a rating
higher than a Fourth Level Debt Rating pursuant to the procedures
set forth herein.
(2) Approval of Qualified Rating Agencies.
Moody's, Standard & Poor's and the Agencies listed on Part 1 of
Schedule 1.01(Q) shall be Qualified Rating Agencies on and
immediately after the Fourth Amendment Effective Date. The
Company may request that the Banks approve of other agencies
after the Fourth Amendment Effective Date pursuant to the
following procedures. The Company shall deliver to the Agent,
information provided by the proposed rating agency describing its
rating scale, the nature of the rating which the Company proposes
to request from such agency and any other information reasonably
requested by the Agent or the Banks regarding such agency. Such
information shall include a comparison of such rating agency's
rating scale with those of Moody's and Standard & Poor's if such
comparison is available. The Company also shall deliver to the
Agent a revised Part 1 of Schedule 1.01(Q) which identifies those
ratings of the proposed agency which the Company believes are
equivalent to the ratings of Moody's and Standard & Poor's listed
in the definition of "Company Debt Rating." Such proposed agency
shall become a Qualified Agency hereunder and the Company's
proposed Part 1 of Schedule 1.01(Q) shall replace the existing
Part 1 of such Schedule if the Required Majority of Banks approve
in writing such agency and such revised Part 1.
5.02 Updates to Schedules. Should any of the
information or disclosures provided on Schedules 5.01(t) and
5.01(v) attached hereto become outdated or incorrect in any
material respect, the Company shall promptly provide the Agent in
writing with such revisions or updates to such Schedule as may be
necessary or appropriate to update or correct the applicable
schedules hereto (i) simultaneously with or promptly following
the notice by any of the Loan Parties of a breach of covenant
which renders one or more of such schedules misleading or
(ii) within 5 Business Days following the Agent's request that
Borrower provide updates to either of those Schedules; provided,
however that neither Schedule 5.01(t) nor 5.01(v) shall be deemed
to have been amended, modified or superseded by any such
correction or update, nor shall any breach of warranty or
representation resulting from the inaccuracy or incompleteness of
either Schedule be deemed to have been cured thereby, unless and
until the Required Majority of Banks, in their sole and absolute
discretion, shall have accepted in writing such revisions or
updates to such Schedule. Borrower shall deliver to Agent an
updated Schedule 5.01(c), together with the delivery of
Borrower's quarterly Compliance Certificate pursuant to
Section 8.02(b) if the information contained on the Schedule
5.01(c) then in effect shall have changed.
ARTICLE VI
CONDITIONS OF LENDING
ISSUING LETTERS OF CREDIT OR
ENTERING INTO ESCROW AGREEMENTS
The obligation of each Bank to make Loans, issue
Letters of Credit or enter into Escrow Agreements hereunder is
subject to the performance by each of the Loan Parties of its
obligations to be performed hereunder at or prior to the making
of any such Loans and to the satisfaction of the following
further conditions:
6.01 Closing Date. On the Closing Date:
(a) Each of the Loan Parties shall have
performed and complied with all covenants and conditions hereof;
no Event of Default or Potential Default which might not be cured
before it results in an Event of Default under this Agreement
shall have occurred and be continuing or shall exist; and there
shall be delivered to the Agent for the benefit of each Bank a
certificate of each of the Loan Parties, dated the Closing Date
and signed by the Chief Executive Officer, President or Chief
Financial Officer of such Loan Party, to each such effect.
(b) There shall be delivered to the Agent for
the benefit of each Bank a certificate dated the Closing Date and
signed by the Secretary or an Assistant Secretary of each of the
Loan Parties, certifying as appropriate as to:
(i) all corporate or partnership action
taken by the Loan Parties in connection with this Agreement and
the other Loan Documents;
(ii) the names of the officer or officers
authorized to sign this Agreement and the other Loan Documents
and the true signatures of such officer or officers and
specifying the Authorized Officers permitted to act on behalf of
the Loan Parties for purposes of this Agreement and the true
signatures of such officers, on which the Agent and each Bank may
conclusively rely; and
(iii) copies of its organizational documents
of, including its certificate of incorporation, bylaws and
corporate resolutions if it is a corporation or its partnership
agreement and certificates of limited partnership or fictitious
name registration if it is a partnership, as in effect on the
Closing Date certified by the appropriate state official where
such documents are filed in a state office together with
certificates from the appropriate state officials as to the
continued existence and good standing of each of the Loan Parties
in each state where organized or qualified to do business. The
Agent in its discretion may accept appropriate updates to
organizational documents previously delivered to the Agent in
lieu of new copies thereof.
(c) Guaranty Agreement, Notes, Intercompany
Subordination Agreement, and Indemnity shall have been duly
executed and delivered to the Agent for the benefit of the Banks.
(d) There shall be delivered to the Agent for
the benefit of each Bank a written opinion of Xxxxxxx Xxxxxxxx
Xxxxxxx Chicco Foxman & Xxxxx, counsel for the Loan Parties (who
may rely on the opinions of such other counsel as may be
acceptable to the Agent), dated the Closing Date and in form and
substance satisfactory to the Agent and its counsel:
(i) as to the matters set forth in
Exhibit G hereto; and
(ii) as to such other matters incident to
the transactions contemplated herein as the Agent may reasonably
request.
(e) All legal details and proceedings in
connection with the transactions contemplated by the Agreement
and the other Loan Documents shall be in form and substance
satisfactory to the Agent and counsel for the Agent, and the
Agent shall have received all such other counterpart originals or
certified or other copies of such documents and proceedings in
connection with such transactions, in form and substance
satisfactory to the Agent and said counsel, as the Agent or said
counsel may reasonably request.
(f) The Borrower shall pay or cause to be paid
to the Agent for itself and for the account of the Banks to the
extent not previously paid the Closing Fees, all other commitment
and other fees accrued through the Closing Date and the costs and
expenses for which the Agent and the Banks are entitled to be
reimbursed.
(g) All material consents required to
effectuate the transactions contemplated hereby shall have been
obtained.
(h) Prior to the Closing Date, there shall be
no material change in the management of any of the Loan Parties
and there shall be delivered to the Agent for the benefit of each
Bank a certificate dated the Closing Date and signed by the Chief
Executive Officer, President or Chief Financial Officer of each
of the Loan Parties to such effect.
(i) The making of the Loans shall not
contravene any Law applicable to the Loan Parties or any of the
Banks.
(j) No action, proceeding, investigation,
regulation or legislation shall have been instituted, threatened
or proposed before any court, governmental agency or legislative
body to enjoin, restrain or prohibit, or to obtain damages in
respect of this Agreement or the consummation of the transactions
contemplated hereby or which, in the Agent's sole discretion,
would make it inadvisable to consummate the transactions
contemplated by this Agreement or any of the other Loan
Documents.
(k) The banks under the Existing Agreement
shall have delivered appropriate payoff letters or other
documents confirming that the Existing Agreement shall be
terminated and the banks thereunder paid in full effective as of
the Closing Date.
6.02 Each Additional Loan, Letter of Credit or Escrow
Agreement. At the time of making any Loans, issue additional
Letters of Credit or enter into Escrow Agreements other than
those made, issued or entered into on the Closing Date hereunder
and after giving effect thereto: (A) each of the Loan Parties
shall have performed and complied in all material respects with
all covenants and conditions hereof; (B) no Event of Default or
Potential Default which might not be cured before it results in
an Event of Default shall have occurred and be continuing or
shall exist; (C) no proceeding shall have occurred and be
continuing which would be an Event of Default under Section
9.01(m) except that such proceeding has not yet remain
undismissed, or unstayed and in effect for a period of thirty
(30) days (as required in Section 9.01(m)) and such proceeding is
against (i) the Borrower, (ii) the Company, or (iii) one or more
of the Guarantors and book value of the assets of such Guarantors
collectively exceeds 25% of the aggregate book value of the
assets of all of the Guarantors; (D) the making of the Loans, the
issuing of Letters of Credit or entering into such Escrow
Agreements shall not contravene any Law applicable to the Loan
Parties or any of the Banks; and (E) the Borrower shall have
delivered to the Agent a duly executed and completed Loan Request
if they are requesting a Loan.
ARTICLE VII
SECURITY
7.01 Granting of Security.
(a) Creation of Liens. Upon the occurrence of
any Security Event, each of Borrower and Guarantors will create
liens under mortgages, deeds of trust, assignments, pledges, and
security agreements upon all of its properties and assets,
whether now owned or hereafter acquired, including without
limitation real estate, personal property, agreements of sale,
purchase options stock or partnership interests in Affiliates and
the Intercompany Notes and Intercompany Agreement of Guarantors
and any collateral for any thereof, in favor of Agent on behalf
of Banks, so that obligations of the Loan Parties to the Banks
under Revolving Credit Loans and Term Loans and otherwise
hereunder or under the other Loan Documents shall be secured
equally and ratably by all of Borrower's and Guarantors' assets.
(b) Delivery and Recordation of Documents. All
instruments creating or perfecting such mortgages, deeds of
trust, assignments, pledges and security interests (collectively
with the Guaranty, the "Collateral Documents") shall be
substantially in the forms approved by Agent and Banks with such
changes as Agent may approve including, without limitation, such
changes as may be required by virtue of differences in the laws
of the state where the collateral is located, and shall be
accompanied by such additional documents and agreements relating
thereto, including additional evidence of casualty and liability
insurance, copies of subdivision plans, and environmental
studies, and legal opinions as Agent may require. In furtherance
of the foregoing, Borrower and each Guarantor shall execute and
deliver to the Agent within ninety (90) days after the Closing
Date all of the Collateral Documents (other than the Guaranty
Agreement which shall have been executed and delivered pursuant
to Section 6.01) relating to assets owned by the Loan Parties as
of the Closing Date. Borrower and each Guarantor shall execute,
acknowledge (if required) and deliver to the Agent all Collateral
Documents relating to each property acquired by the Borrower or
Guarantors after the Closing Date within thirty (30) days after
acquiring such property. The Banks shall grant a reasonable
extension of time for delivery of any Collateral Document as to
which additional time to correct or complete the applicable legal
description or related title work is required because of
circumstances beyond Borrower's or Guarantor's reasonable
control. The Agent shall hold the Collateral Documents in escrow
until the occurrence of a Security Event. Upon the occurrence of
a Security Event, the Collateral Documents shall, without further
act on the part of Borrower or Guarantors, be fully delivered to
Agent free of any limitation or restriction imposed by this
Agreement and shall be recorded or filed by Agent, at Borrower's
expense, in all locations as Agent may deem necessary or
appropriate. From time to time upon request of Agent following
the occurrence of a Security Event, Borrower and Guarantors shall
provide to Agent such information as may be required to update
and correct any property descriptions constituting a part of any
Collateral Documents to reflect sales or other dispositions of
portions of the property so described.
(c) Power of Attorney. Each of Borrower and
Guarantors hereby appoints any officer or agent of the Agent as
its true and lawful attorney, for it and in its name, place and
stead, to make, execute, deliver, and cause to be recorded or
filed any or all such mortgages, deeds of trust, assignments,
pledges and security interests and additional documents and
agreements relating thereto, granting unto said attorney full
power to do any and all things he may consider reasonably
necessary or appropriate to be done with respect to the
Collateral Documents as fully and effectively as Borrower and
Guarantors might or could do, and hereby ratifying and confirming
all its said attorney shall lawfully do or cause to be done by
virtue hereof. This power of attorney is coupled with an
interest and shall be irrevocable for the term of this Agreement
and all transactions hereunder.
7.02 Security Events. Each of the following shall be
a security event ("Security Event") hereunder unless waived by a
Required Majority of Banks in writing:
(a) the occurrence of an Event of Default
hereunder;
(b) the financial statements required by
Section 8.02(a)(ii) hereof are accompanied by an opinion which
contains a qualification which is, in the reasonable judgment of
a Simple Majority of Banks, adverse;
(c) the Loan Parties fail to comply with
Section 8.01(e)(i) for a period of five (5) Business Days after
Borrower becomes aware thereof without giving effect to any
adjustment pursuant to Sections 8.01(e)(ii) or 5.01(cc).
7.03 Release of Liens. Borrower may request that the
Agent on behalf of the Banks release the Liens which it acquires
in the assets of the Loan Parties pursuant to Section 7.01 hereof
following a Security Event if Borrower cures such Security Event
and at any time thereafter no Security Event shall exist for a
period of 12 consecutive calendar months. If Borrower
establishes to Agent's satisfaction that no Security Event has
existed for such 12-month period, Agent shall, after receiving
such notice, execute and record appropriate releases and take
other appropriate steps to release the Liens created pursuant to
Section 7.01. Thereafter, the Loan Parties shall comply with the
covenants contained in Section 7.01 which apply prior to the
occurrence of a Security Event.
ARTICLE VIII
NEGATIVE COVENANTS
8.01 Negative Covenants. The Loan Parties, jointly
and severally, covenant and agree that until payment in full of
the Loans and interest thereon, satisfaction of all of the Loan
Parties' other obligations hereunder and termination of the
Commitments, the Loan Parties shall comply with the following
negative covenants:
(a) Indebtedness. Each of the Loan Parties
shall not, at any time create, incur, assume or suffer to exist
any Indebtedness, except
(i) Indebtedness under the Loan Documents;
(ii) Existing Indebtedness as set forth on
Schedule 8.01(a)(ii) hereto;
(iii) Existing subordinated Indebtedness
described on Schedule 8.01(a)(iii) hereto and any other unsecured
Indebtedness subordinated under terms as favorable to the Banks
as the terms of the subordination governing the Indebtedness
described on Schedule 8.01(a)(iii) as determined by the Agent in
its sole discretion (collectively the "Subordinated
Indebtedness");
(iv) Intercompany Loans which are evidenced
by Intercompany Notes or an Intercompany Agreement which has been
delivered to the Agent in accordance with the provisions of
Section 5.01(bb) or any other unsecured obligations of any
Guarantor or Borrower to any other Guarantor or to Borrower;
(v) Permitted Additional Senior
Indebtedness;
(vi) Unsecured obligations in respect of
improvement and/or maintenance bonds provided by insurance
companies where required by municipalities (collectively, the
"Bond Obligations");
(vii) Indebtedness secured by purchase money
security interests in equipment or evidenced by leases of
equipment or leases of real property capitalized by Company for
accounting purposes, provided that the aggregate of all such
Indebtedness does not exceed ten percent (10%) of Company's
Adjusted Shareholders' Equity;
(viii) Permitted Nonrecourse Indebtedness;
(ix) Seller Purchase Money Loans;
(x) Commercial Purchase Money Loans;
(xi) Assumed Joint Venture Loans;
(xii) Assumed Purchase Money Loans;
(xiii) Obligations to return deposits of cash
or notes described in clause (iii) of the definition of
"Permitted Liens";
(xiv) The Permitted Investment in Mortgage
Subsidiaries.
(b) Affiliate Transactions. The Loan Parties
shall not enter into or carry out any transaction (including,
without limitation, purchasing property or services from or
selling property or services to any Loan Party or any Affiliate
of the Loan Parties) unless such transaction is not otherwise
prohibited by this Agreement, is entered into in the ordinary
course of business upon fair and reasonable arm's-length terms
and conditions and is in accordance with all applicable law,
except that notwithstanding the foregoing (i) this Section
8.01(b) shall not apply to a transaction if all of the parties to
the transaction are Loan Parties and are directly or indirectly
wholly-owned by the Company; (ii) this Section 8.01(b) shall not
prohibit a Loan Party which is directly or indirectly wholly-
owned by the Company from entering into a transaction with other
Loan Parties or Affiliates thereof which are not directly or
indirectly wholly-owned by the Company provided that the term of
such transaction are more favorable to the wholly-owned Loan
Party than to the other parties to the transaction; and (iii)
this Section 8.01(b) shall not prohibit the Company from
purchasing stock of the Company from the estate of Xxxxxx X. Toll
or Xxxxx X. Toll following his death using the insurance proceeds
received by the Company in respect of a Senior Officer Life
Policy.
(c) Guaranties. The Loan Parties shall not at
any time, directly or indirectly, become or be liable in respect
of any Guaranty, or assume, guarantee, become surety for, endorse
or otherwise agree, become or remain directly or contingently
liable upon or with respect to any obligation or liability of any
other person except for (i) guaranties of Indebtedness permitted
under Section 8.01(a), (ii) endorsements of negotiable
instruments for deposit or collection in the usual course of
business, (iii) covenants to hold Persons who are not Affiliates
of the Loan Parties harmless or indemnify such Persons for losses
contained in contracts entered into in the ordinary course of
business, (iv) agreements to indemnify officers and directors of
the Company and the other Loan Parties in their capacity as such
officers and directors pursuant to articles of incorporation or
bylaws of such entities, indemnification agreements entered into
by such entities or by law, (v) guaranties for the benefit of
Affiliates of the Loan Parties, and (vi) guaranties of completion
or guaranties of payment related to on- and off-site improvements
and utilities required in order to permit the sale of residential
units in the ordinary course of business.
(d) Loans and Investments. The Loan Parties
shall not at any time make or suffer to remain outstanding any
loan or advance to, or purchase, acquire or own any stock, bonds,
notes or securities of, or any partnership interest (whether
general or limited) in, or any other investment or interest in,
or make any capital contribution to, any other Person, or agree,
become or remain liable to do any of the foregoing, except:
(i) trade credit extended on usual and
customary terms in the ordinary course of business including
mortgage loans to purchasers of houses from the Guarantors;
(ii) advances to employees to meet expenses
incurred by such employees in the ordinary course of business in
the aggregate not exceeding $5,000,000;
(iii) acquisitions of stock or other
interests in Persons and acquisitions of interests in assets
within the limitations contained in Section 8.01(f);
(iv) loans, advances and investments in
other Loan Parties and in other Consolidated Subsidiaries;
(v) cash equivalents;
(vi) loans to employees, except for Xxxxxx
Xxxx and Xxxxx Xxxx, to purchase stock of the Company in
connection with stock option plans or stock purchase plans;
(vii) the Permitted Investment in Mortgage
Subsidiaries.
(e) Loans; Permitted Purchase Money Loans;
Letters of Credit and Permitted Additional Senior Indebtedness.
(i) The Loan Parties shall not permit the
sum of:
(A) all Loans from all Banks,
(B) all Permitted Purchase Money
Loans of all Loan Parties,
(C) all Financial Letters of Credit,
and
(D) all Permitted Additional Senior
Indebtedness, except for any such Indebtedness which
consists of Performance Letters of Credit,
to exceed the lesser of the following (collectively referred to
as the "Borrowing Base"):
(1) the sum of the following:
(x) 90% of the book value
determined in accordance with GAAP of
Category 1 Borrowing Base Assets, after
reduction for any Remediation Adjustments
applicable to the land included in the
Category 1 Borrowing Base Assets, and
(y) 60% of the book value
determined in accordance with GAAP of
Adjusted Category 2 Borrowing Base Assets,
and
(z) 50% of the book value
determined in accordance with GAAP of
Adjusted Category 3 Borrowing Base Assets,
after reduction for any Remediation
Adjustments applicable to the land included
in the Adjusted Category 3 Borrowing Base
Assets; or
(2) 360% of the book value
determined in accordance with GAAP of Category 1 Borrowing Base
Assets, after reduction for any Remediation Adjustments
applicable to the land included in Category 1 Borrowing Base
Assets.
An example of the computation of this Borrowing Base is set forth
on Exhibit H hereto. It is acknowledged that the applicable
percentage in clause (x) above will change from 90% to 85% and
some or all of the assets described in clauses (x), (y) and (z)
above will be valued using appraised values rather than book
values if Borrower or Banks request appraisals pursuant to and as
more fully set forth in Sections 8.01(e)(ii) or 5.01(cc).
(ii) If at any time the covenant contained
in Section 8.01(e)(i) would be exceeded, Company shall have the
right, and if Company exercises such right Banks shall also have
the right, at Borrower's expense, to have one or more of the
Borrowing Base Assets appraised following substantially the same
procedural requirements as are set forth in Section 5.01(cc).
After obtaining such an appraisal: (1) the value of any
appraised asset for purposes of Section 8.01(e)(i) shall be its
appraised value less any Remediation Adjustments rather than its
book value less such adjustments, (2) the percentage for purposes
of applying the covenant contained in Section 8.01(e)(i) to
Category 1 Borrowing Base Assets shall be 85% rather than 90%,
and (3) the percentages for purposes of applying such covenant to
Category 2 Borrowing Base Assets and Category 3 Borrowing Base
Assets shall remain at 60% and 50%, respectively. If the sum of
Loans and Permitted Purchase Money Loans exceeds at any time 90%
of the book value of the Borrowing Base Assets, then
notwithstanding the immediately preceding sentence, the covenant
contained in Section 8.01(e)(i) shall be deemed breached. If and
so long as Company avails itself of the foregoing right to have
any assets appraised and to have such assets included at the
appraised values, Agent at the direction of a Simple Majority of
Banks, shall have the right to request, at Borrower's expense, a
reappraisal of any such asset up to two times in any twelve-month
period. If any such reappraisal indicates that the value of such
asset is either higher or lower than that indicated on any
previous appraisal, such asset shall thereafter be included at
the value established by the most recent reappraisal.
(f) Liquidations, Mergers, Consolidations,
Acquisitions. Each of the Loan Parties shall not, and shall not
permit any other Consolidated Subsidiary of the Company to wind-
up, liquidate or dissolve its affairs, convey, sell, lease or
otherwise distribute or dispose of (whether in one transaction or
in a series of transactions other than in the ordinary course of
business) all or a substantial portion (which for this purpose
shall mean dispositions during the period which includes the
elapsed portion of the Company's current fiscal quarter and the
immediately preceding three fiscal quarters of an aggregate of
25% or more of Company's consolidated assets as of the beginning
of such period) of its properties or assets (whether now owned or
hereafter acquired), or enter into any transaction of merger or
consolidation except (a) for a merger or mergers of another
entity or entities into Company where the aggregate purchase
price for all such entities acquired in one fiscal year either
pursuant to merger or consolidations referred to in this Section
8.01(f) or by acquisition of stock or other interests in Persons
referred to in Section 8.01(d) or by acquisition of interests in
assets referred to in Section 8.01(d) is less than one hundred
fifty percent (150%) of Adjusted Shareholders' Equity, determined
as of the end of the prior fiscal year, (b) any other merger or
consolidation in respect of which Banks have been provided with
all such information as they have requested and which a Required
Majority of Banks have either approved in writing or not
disapproved within thirty (30) days following their receipt of
such information, or, in the case of a merger or consolidation
with a residential real estate development company, a Simple
Majority of Banks have either approved in writing or not
disapproved within thirty (30) days following their receipt of
such information, and (c) that any Loan Party other than the
Company or the Borrower may merge, consolidate or liquidate into
any other Loan Party provided that the Company or Borrower shall
be the surviving corporation if it is a party to such merger,
consolidation or liquidation and, after giving effect to any
merger referred to in this Section, no Event of Default, or event
which, with the passage of time or the giving of notice, or both
would constitute an Event of Default, shall exist.
(g) Dispositions of Assets or Subsidiaries.
The Loan Parties shall not sell, convey, assign, lease, abandon
or otherwise transfer or dispose of, voluntarily or
involuntarily, any of its properties or assets, tangible or
intangible (including but not limited to sale, assignment,
discount or other disposition of accounts, contract rights,
chattel paper, equipment or general intangibles with or without
recourse or of capital stock, shares of beneficial interest or
partnership interests of another Loan Party or an Affiliate of a
Loan Party), except:
(i) transactions involving the sale of
Inventory in the ordinary course of business;
(ii) any sale, transfer or lease of assets
which are no longer necessary or required in the conduct of such
Loan Party's business;
(iii) any sale, transfer or lease of assets
to any other Loan Party;
(iv) any sale, transfer or lease of assets
which are replaced by substitute assets acquired or leased; or
(v) mergers and consolidations permitted
in Section 8.01(f); or
(vi) any transfer or disposition of assets
which is a Permitted Exception.
(h) Subsidiaries, Partnerships and Joint
Ventures. The Loan Parties shall not own or create directly or
indirectly any Subsidiaries of which any Loan Parties
individually or the Loan Parties collectively own, directly or
indirectly, through one or more intermediaries, 80% or more of
the outstanding stock, partnership interests or other interests,
except for (i) the Mortgage Subsidiary, (ii) those Subsidiaries
which are or shall become Loan Parties and Guarantors of the
Indebtedness hereunder, and (iii) any entity which has Assumed
Joint Venture Loans or Assumed Purchase Money Loans and the
aggregate amount thereof exceeds 80% of the Indebtedness
(including liabilities to any Consolidated Subsidiaries of the
Company or its Affiliates under intercompany loans) of such
Subsidiary. The Loan Parties may cause any other Subsidiary they
form or acquire subsequent to the date hereof, to become a Loan
Party and Guarantor. Subsidiaries shall join the Agreement
pursuant to the procedures contained in Section 11.12 hereof.
(i) Continuation of or Change in Business. The
Loan Parties shall not (a) permit more than five percent (5%) of
the consolidated assets of the Company and its Homebuilder
Consolidated Subsidiaries (excluding the Permitted Investment in
Mortgage Subsidiaries) to be applicable to business activities
unrelated to the Regular Business Activities of Company and its
Homebuilder Consolidated Subsidiaries, (b) permit more than
twenty percent (20%) of the consolidated assets of the Company
and its Homebuilder Consolidated Subsidiaries (excluding the
Permitted Investment in Mortgage Subsidiaries) which are
applicable to their Regular Business Activities to be related to
other than their residential real estate activities, or
(c) change the legal form in which Company conducts its business
activities.
(j) Change in Control. The Company shall not
permit any Change of Control of the Company to occur.
(k) Changes in Subordinated Loan Documents.
Except as provided in the following sentence, the Borrower and
the Company shall not, and shall not permit any Loan Party to,
amend or modify any provisions of the Subordinated Loan Documents
without providing at least thirty (30) calendar days' prior
written notice to the Agent and the Banks, and obtaining the
prior written consent of the Required Majority of Banks. The
Loan Parties may amend the agreements evidencing the Subordinated
Indebtedness without obtaining the consent of the Required
Majority of the Banks if after giving effect to such amendment
(A) the subordination provisions therein would be permitted under
Section 8.01(a)(iii), and (B) Agent in its sole discretion
determines that the covenants governing such Subordinated
Indebtedness are no more onerous than those contained under this
Agreement.
(l) Plans and Benefit Arrangements. The Loan
Parties shall not:
(i) fail to satisfy the minimum funding
requirements of ERISA and the Internal Revenue Code with respect
to any Plan;
(ii) request a minimum funding waiver from
the Internal Revenue Service with respect to any Plan;
(iii) engage in a Prohibited Transaction
with any Plan, Benefit Arrangement or Multiemployer Plan which,
alone or in conjunction with any other circumstances or set of
circumstances resulting in liability under ERISA, would
constitute a Material Adverse Change;
(iv) permit the aggregate actuarial present
value of all benefit liabilities (whether or not vested) under
each Plan, determined on a plan termination basis, as disclosed
in the most recent actuarial report completed with respect to
such Plan, to exceed, as of any actuarial valuation date, the
fair market value of the assets of such Plan;
(v) fail to make when due any contribution
to any Multiemployer Plan that the Company or any member of the
ERISA Group may be required to make under any agreement relating
to such Multiemployer Plan, or any Law pertaining thereto;
(vi) withdraw (completely or partially)
from any Multiemployer Plan or withdraw (or be deemed under
Section 4062(e) of ERISA to withdraw) from any Multiple Employer
Plan, where any such withdrawal is likely to result in a material
liability of Borrower or any member of the ERISA Group;
(vii) terminate, or institute proceedings to
terminate, any Plan, where such termination is likely to result
in a material liability to the Borrower or any member of the
ERISA Group;
(viii) make any amendment to any Plan with
respect to which security is required under Section 307 of ERISA;
or
(ix) fail to give any and all notices and
make all disclosures and governmental filings required under
ERISA or the Internal Revenue Code, where such failure is likely
to result in a Material Adverse Change.
(m) Changes in Organizational Documents.
Neither the Company nor the Borrower shall amend in any respect
its certificate of incorporation without providing at least
thirty (30) calendar days' prior written notice to the Agent and
the Banks and, in the event such change would be adverse to the
Banks as determined by the Agent in its sole discretion,
obtaining the prior written consent of the Required Majority of
Banks. Notwithstanding the foregoing, the Company may amend its
certificate of incorporation to increase the number of authorized
shares of its common or preferred stock or to create one or more
series of preferred stock (as the creation of such series of
preferred stock is currently contemplated by the Company's
certificate of incorporation and Section 151 of the Delaware
General Corporation Law) without obtaining the consent of the
Banks or notifying the Agent and the Banks thereof.
(n) Development Limitations. The Loan Parties
shall not:
(i) Permit as of the end of any fiscal
quarter of Company the number of housing units in multi-family
projects of Guarantors and other Consolidated Subsidiaries on
which construction has commenced (whether under construction or
completed) and which are not subject to an Agreement of Sale to
exceed in the aggregate the product of 24 multiplied by each
separate multi-family project then under development by one of
Guarantors or another Consolidated Subsidiary (excluding units
which had been but are no longer subject to an Agreement of Sale
solely because of a breach by the purchaser thereunder). For
purposes of this Section 8.01(n), (A) the construction of a unit
through the completion of the foundation will not be considered
the commencement of construction of a unit, (B) two or more
projects with substantially similar product type and price will
be considered separate projects if marketed as separate projects
and are not located adjacent to each other, and (C) substantially
dissimilar product types even within the same subdivision or
community will be considered separate projects.
(ii) Permit as of the end of any fiscal
quarter of Company the number of housing units in each separate
single family community of Guarantors and other Consolidated
Subsidiaries then under development on which construction has
commenced (whether under construction or completed) and which are
not subject to an Agreement of Sale (excluding units which had
been but are no longer subject to an Agreement of Sale solely
because of a breach by the purchaser thereunder) to exceed the
sum of (A) six (6) plus (B) an additional number of units in that
community certified by the Company to have been constructed as
additional models, but in no event shall the number of such
additional units exceed four (4) in any community nor shall the
sum of all additional models exceed in the aggregate one for
every community under development. The Guarantors may develop
communities which contain single family housing units under
construction which are not subject to any Agreement of Sale in
excess of the amounts permitted above if construction of such
units was commenced before the applicable Guarantor acquired the
real estate comprising such community, subject to the following
limitations:
(1) the total number of such
communities may not exceed five (5) at any one time;
(2) the total number of acquired
units which are not subject to an Agreement of Sale in
any such community may not exceed twenty-five (25);
(3) the total number of units
constructed by such Guarantor in any such community
after the Guarantor acquires such real estate shall
comply with the numerical limitations set forth in the
first sentence of this Section 8.01(n)(ii) (the units
described in clause (2) above which were in existence
at the time the Guarantor acquired such real estate
shall be excluded in determining Guarantor's compliance
with the limitations in that first sentence).
(iii) Permit as of the end of any fiscal
quarter of Company the total number of housing units of
Guarantors and other Consolidated Subsidiaries on which
construction has commenced (whether under construction or
completed) and which are not subject to an Agreement of Sale to
exceed the sum of (A) thirty-five percent (35%) of the total
number of housing units sold by Guarantors and other Consolidated
Subsidiaries during the immediately preceding four fiscal
quarters (whether or not such Guarantor or other Consolidated
Subsidiary was owned by Company during the entire four quarter
period) plus (B) an amount equal to the product of three (3)
multiplied by the number of Net New Communities, provided that
for purposes of determining compliance with the foregoing
covenant, a housing unit which had been but is no longer subject
to an Agreement of Sale solely because of a breach by the
purchaser thereunder shall not be included as an unsold unit so
long as the total number of unsold units, including any such
units which had previously been subject to an Agreement of Sale,
dues not exceed the sum of (x) forty percent (40%) of the total
number of housing units sold by the Guarantors and other
Consolidated Subsidiaries during the immediately preceding four
fiscal quarters, and (y) the amount calculated in accordance with
subsection (B) above.
(iv) Permit as of the end of any fiscal
quarter of Company the total amount of either commercial or
industrial space held or to be held by Guarantors or other
Consolidated Subsidiaries for lease on which construction has
commenced (whether under construction or completed) but which is
either not leased to third parties at fair market rents, not
subject to a valid and binding agreement of sale or not subject
to a permanent financing commitment, in either of the latter two
cases in form and substance and with a buyer or a lender
acceptable to Agent and under which all approvals and
preconditions have been satisfied (except completion of
construction and related preconditions which by their nature
cannot or would not be satisfied until closing under such
agreement or commitment) to exceed 100,000 leasable square feet.
Within the 100,000 square feet of unleased space permitted by the
foregoing provision, not more than the lesser of (i) 50,000
leasable square feet, or (ii) the number of leasable square feet
the total construction cost of which would not exceed $5,000,000
will be commercial office space. Notwithstanding the foregoing
limitations, Borrower and Guarantors may acquire, hold or develop
real estate which is used as offices by Borrower or any
Guarantor. The existing panel plant facility of Company located
in Morrisville, Pennsylvania, any additional panel plant facility
and any Qualified Golf Course developed or acquired by the Loan
Parties shall not be included as commercial or industrial space
for purposes of this Section 8.01(n)(iv).
(v) Acquire or own real estate which has
not at any time while owned or controlled by the Company or a
Consolidated Subsidiary received Preliminary Approval and, except
for Qualified Golf Courses, which has an acquisition and carrying
cost in the aggregate more than the greater of (i) $25,000,000 or
(ii) twenty percent (20%) of Adjusted Shareholders' Equity, or
acquire or own real estate, except for golf clubs, which is not
presently and was not at any time while owned by the Company or a
Consolidated Subsidiary zoned for residential development having
an acquisition and carrying cost in the aggregate more than the
greater of (i) $15,000,000 or (ii) fifteen percent (15%) of
Adjusted Shareholders' Equity, in either case not including
within such limitations real estate acquired subject to Permitted
Non-Recourse Indebtedness.
(vi) If Borrower determines as of the end
of any fiscal quarter that it is not in compliance with any of
the covenants contained in Sections 8.01(n)(i) through (iv), it
shall have a period of twenty days after the end of such quarter
within which to complete such action as may be necessary to
comply with the limitations otherwise applicable as of the end of
such quarter.
(o) Senior Leverage. The Loan Parties shall
not at any time permit the ratio of (i) Consolidated Senior
Liabilities less the amount of any Permitted Nonrecourse
Indebtedness to (ii) the sum of Adjusted Shareholders' Equity
plus outstanding Subordinated Indebtedness to exceed 1.15 to 1.0.
(p) Mortgage Subsidiaries Leverage. The Loan
Parties shall not permit the ratio of Mortgage Subsidiary
Liabilities to Mortgage Subsidiaries' Adjusted Shareholders'
Equity to exceed 10.0 to 1.0.
(q) Senior Leverage Plus Contingent
Liabilities. The Loan Parties shall not at any time permit the
ratio of Adjusted Consolidated Senior Liabilities to the sum of
Adjusted Shareholders' Equity plus outstanding Subordinated
Indebtedness to exceed 1.50 to 1.0.
(r) Subordinated Debt to Equity. The Loan
Parties shall not at any time permit Subordinated Indebtedness to
exceed the sum of: (A) two times Adjusted Shareholders' Equity
up to and including $150,000,000 (in Adjusted Shareholders'
Equity), plus (B) 1.0 times the excess of Adjusted Shareholders'
Equity over $150,000,000 (in Adjusted Shareholders' Equity).
(s) Minimum Adjusted Shareholders' Equity. The
Loan Parties shall not permit Adjusted Shareholders' Equity to be
less than Base Shareholders' Equity calculated at the end of each
fiscal quarter.
(t) Incorporation by Reference. Any covenants
contained in agreements evidencing Permitted Additional Senior
Indebtedness which are more restrictive to the Loan Parties than
the covenants contained herein as determined by the Agent shall
be incorporated by reference herein.
8.02 Reporting Requirements. The Loan Parties,
jointly and severally, covenant and agree that until payment in
full of the Loans and interest thereon, satisfaction of all of
the Loan Parties' other obligations hereunder and termination of
the Commitments, the Company or the Borrower, as applicable, will
furnish or cause to be furnished to the Agent and each of the
Banks:
(a) Financial Statements.
(i) Quarterly Statements.
(A) As soon as available and in any
event within fifty (50) calendar days after the end of each
fiscal quarter in each fiscal year consolidated financial
statements of the Company and its Consolidated Subsidiaries,
consisting of a balance sheet as of the end of such fiscal
quarter and related statements of income and cash flows for the
fiscal year through the end of such quarter, all in reasonable
detail and certified (subject to normal year-end audit
adjustments) by the Chief Executive Officer, President, Chief
Financial Official or Chief Accounting Officer of the Company as
having been prepared in accordance with GAAP, consistently
applied, and setting forth in comparative form the statements of
income and cash flows for the corresponding period in the
previous fiscal year.
(B) Together with the delivery of the
Compliance Certificate pursuant to Section 8.02(b)(i), separate
balance sheets and income statements showing the financial
positions as of the end of the previous fiscal quarter and
results of operations for the fiscal year through the end of such
quarter of the Homebuilder Consolidated Subsidiaries and Mortgage
Subsidiaries with aggregate totals that correspond to the
consolidated figures which appear on the financial statements
delivered for such quarter described in Section 8.02(a)(i)(A) in
a form acceptable to the Required Majority of Banks.
(ii) Annual Statements. As soon as
available and in any event within ninety-five (95) days after the
end of each fiscal year of the Company, consolidated financial
statements of the Company and its Consolidated Subsidiaries
consisting of a balance sheet as of the end of such fiscal year,
and related statements of income and cash flows for the fiscal
year then ended, all in reasonable detail and setting forth in
comparative form the financial statements as of the end of and
for the preceding fiscal year, and certified by independent
certified public accountants of nationally recognized standing
reasonably satisfactory to the Agent. The certificate or report
of accountants shall be free of qualifications which is adverse
in the reasonable judgement of a Simple Majority of the Banks.
(iii) Discussions with Certified Public
Accountants; Disclosure. Upon the request of a Simple Majority
of the Banks, the Agent shall discuss Company's affairs directly
with Company's independent certified public accountants after
notice to Company and opportunity of Company to be present at any
such discussions. Agent or any Bank is authorized to show or
deliver a copy of any financial statement or any other
information relating to the business, operations or financial
condition of Company which may be furnished to Agent or come to
its attention pursuant to this Agreement or otherwise, to any
regulatory body or agency having jurisdiction over any Bank and
to any bank or other financial institution which is a present or
potential participant with any Bank, provided that Agent or such
Bank has taken appropriate steps to ensure the confidentiality of
such information in a manner satisfactory to the Company.
(b) Compliance Certificate; Joinders; Updates
to Schedules of the Borrower.
(i) Compliance Certificate. (i) Within 10
days following the earlier of (A) delivery of the financial
statements of the Company to the Agent and to the Banks pursuant
to Sections 8.02(a)(i) and (ii) hereof, or (B) the due date for
such delivery, a certificate of the Loan Parties signed by the
Chief Executive Officer, President, Chief Financial Officer or
Chief Accounting Officer of the Loan Parties in the form of
Exhibit L hereto (the "Compliance Certificate"), to the effect
that, except as described pursuant to Section 8.02(g) below,
(i) the Loan Parties have performed and complied with all
covenants and conditions hereof, (ii) no Event of Default or
Potential Default which might not be cured before it becomes an
Event of Default exists and is continuing on the date of such
certificate, (iii) containing calculations in sufficient detail
to demonstrate compliance as of the date of the financial
statements with all financial covenants contained in Section 8.01
hereof, and (iv) a list of any changes which have occurred since
delivery of the most recent Compliance Certificate pursuant to
this Section 8.02(b) in the states and counties in which the
business offices, panel plants or other operating facilities of
the Loan Parties are located.
(ii) Joinders. Together with the delivery
of the Compliance Certificate pursuant to Section 8.02(b)(i), the
joinders of Guarantors pursuant to Section 11.12.
(iii) Updates to Schedules. Together with
the delivery of the Compliance Certificate pursuant to Section
8.02(b)(i), any update to Schedule 5.01(c) described in Section
5.02.
(c) Project Reports. As soon as practicable,
and in any event within thirty (30) days after the end of each
calendar month, statements accompanied by a certificate of the
chief financial officer, chief accounting officer or controller
of Company, accurately setting forth at a date proximate to the
end of the prior month sales reports showing unit sales and
unsold inventory completed or under construction by Guarantors in
connection with each project of Guarantors together with such
additional detail as to such sales and inventory as a Simple
Majority of Banks may reasonably request.
(d) Purchase Money Loan Reports. As soon as
practicable, and in any event within sixty (60) days after the
end of each fiscal quarter, information as to the amount of and
the name of the borrower under each Permitted Purchase Money Loan
incurred during such quarter, a copy of the note evidencing such
Permitted Purchase Money Loan (and the address of the payee of
such note if not indicated thereon), a description of the real
estate covered by such Permitted Purchase Money Loan and an
update as to the outstanding principal amount of all Permitted
Purchase Money Loans as of the end of such quarter.
(e) Environmental Certificates. Prior to the
acquisition by any Guarantor of any parcel of real property
having a cost of $1,000,000 or more or containing ten (10) or
more acres, a completed Certificate (including accompanying Phase
I environmental report which shall be in conformity with (i) the
Agent's "Minimum Requirements for Phase I Environmental
Assessments," as in effect on the date hereof, and (ii) any
additions or modifications thereto the extent that such
modifications or additions reflect a change in the law or
industry standards or are otherwise satisfactory to Borrower) in
respect of such property in substantially the form of Exhibit B
attached hereto (an "Environmental Certificate") from an
independent environmental engineer reasonably acceptable to
Agent. Agent shall notify the other Banks of any decision
disapproving an Environmental Certificate which contains any
exceptions on exhibit A thereto, and the other Banks shall have
ten (10) Business Days to reverse such disapproval by the vote of
a Simple Majority of Banks in the absence of which vote Agent's
decision shall stand. Borrower or such Guarantor shall have the
right from time to time to submit another Environmental
Certificate in respect of land which was not initially
Environmentally Approved Land following the cleanup of any
hazardous materials which constituted exceptions to a prior
Environmental Certificate in respect of such land. Agent shall
not be liable to any other Bank or to any Loan Party for any
initial approval or disapproval of any Environmental Certificate
made by it in good faith.
(f) Subordinated Indebtedness Documentation.
As promptly as possible upon receipt by any Loan Party, copies of
each draft of documentation intended to relate to or evidence
Subordinated Indebtedness proposed to be incurred by any Loan
Party.
(g) Notice of Default. Promptly after any
Senior Executive of any Loan Party has learned of the occurrence
of an Event of Default or Potential Default which might not be
cured before it becomes an Event of Default, a certificate signed
by the Chief Executive Officer, President, Chief Financial
Officer or Chief Accounting Officer of such Loan Party setting
forth the details of such Event of Default or Potential Default
which might not be before it becomes an Event of Default and the
action which such Loan Party proposes to take with respect
thereto.
(h) Notice of Litigation. Promptly after the
commencement thereof, notice of all actions, suits, proceedings
or investigations before or by any Official Body or any other
Person against any Loan Party which would be required to be
reported by the Company on Forms 10-Q, 10-K or 8-K filed with the
Securities and Exchange Commission.
(i) Certain Events. Written notice to the
Agent within the time limits set forth in Section 8.01(m), any
amendment to the organizational documents of any of the Company
or the Borrower.
(j) Other Reports and Information. Promptly
upon their becoming available to any of the Loan Parties:
(i) management letters submitted to the
Company by independent accountants in connection with any annual
or interim audit and other information provided by such
accountants at the request of the Agent and at the expense of the
Banks,
(ii) any reports, notices or proxy
statements generally distributed by the Company to its
stockholders on a date no later than the date supplied to the
stockholders,
(iii) regular or periodic reports, including
Forms 10-K, 10-Q and 8-K, registration statements and
prospectuses, filed by the Company with the Securities and
Exchange Commission,
(iv) such other reports and information as
the Banks may from time to time reasonably request.
(k) Notices Regarding Plans and Benefit
Arrangements. (i) Promptly upon becoming aware of the occurrence
thereof, notice (including the nature of the event and, when
known, any action taken or threatened by the Internal Revenue
Service or the PBGC with respect thereto) of:
(A) any Reportable Event with respect to
the Company or any member of the ERISA Group (regardless of
whether the obligation to report said Reportable Event to the
PBGC has been waived),
(B) any Prohibited Transaction which could
subject the Company or any member of the ERISA Group to a civil
penalty assessed pursuant to Section 502(i) of ERISA or a tax
imposed by Section 4975 of the Internal Revenue Code in
connection with any Plan, Benefit Arrangement or any trust
created thereunder,
(C) any assertion of material withdrawal
liability with respect to any Multiemployer Plan,
(D) any partial or complete withdrawal
from a Multiemployer Plan by the Company or any member of the
ERISA Group under Title IV of ERISA (or assertion thereof), where
such withdrawal is likely to result in material withdrawal
liability,
(E) any cessation of operations (by the
Company or any member of the ERISA Group) at a facility in the
circumstances described in Section 4063(e) of ERISA,
(F) withdrawal by the Company or any
member of the ERISA Group from a Multiple Employer Plan,
(G) a failure by the Company or any member
of the ERISA Group to make a payment to a Plan required to avoid
imposition of a lien under Section 302(f) of ERISA,
(H) the adoption of an amendment to a Plan
requiring the provision of security to such Plan pursuant to
Section 307 of ERISA, or
(I) any change in the actuarial
assumptions or funding methods used for any Plan, where the
effect of such change is to materially increase or materially
reduce the unfunded benefit liability or obligation to make
periodic contributions.
(ii) Promptly after receipt thereof, copies
of (a) all notices received by the Company or any member of the
ERISA Group of the PBGC's intent to terminate any Plan
administered or maintained by the Company or any member of the
ERISA Group, or to have a trustee appointed to administer any
such Plan; and (b) at the request of the Agent or any Bank each
annual report (IRS Form 5500 series) and all accompanying
schedules, the most recent actuarial reports, the most recent
financial information concerning the financial status of each
Plan administered or maintained by the Company or any member of
the ERISA Group, and schedules showing the amounts contributed to
each such Plan by or on behalf of the Company or any member of
the ERISA Group in which any of their personnel participate or
from which such personnel may derive a benefit, and each Schedule
B (Actuarial Information) to the annual report filed by the
Company or any member of the ERISA Group with the Internal
Revenue Service with respect to each such Plan.
(iii) Promptly upon the filing thereof,
copies of any Form 5310, or any successor or equivalent form to
Form 5310, filed with the PBGC in connection with the termination
of any Plan.
ARTICLE IX
DEFAULT
9.01 Events of Default. An Event of Default shall
mean the occurrence or existence of any one or more of the
following events or conditions (whatever the reason therefor and
whether voluntary, involuntary or effected by operation of Law):
(a) Borrower fails to pay within five (5) days
after the date on which notice is given by Agent or any Bank to
Borrower of Borrower's failure to pay when due, whether on demand
or otherwise, any Indebtedness to a Bank hereunder, including but
not limited to, principal of any Note or any interest thereon or
the Commitment Fees or other fees, provided that Borrower shall
not be entitled to any such notice if Agent or any Bank has given
such notice three times in any consecutive twelve month period,
in which event any such failure to pay shall be an Event of
Default if not cured within five (5) days after the due date
therefor;
(b) Any representation or warranty made at any
time by any of the Loan Parties herein or by any of the Loan
Parties in any other Loan Document, or in any certificate, other
instrument or statement furnished pursuant to the provisions
hereof or thereof, shall prove to have been false or misleading
in any material respect as of the time it was made or furnished;
(c) Any of the Loan Parties shall default in
the observance or performance of any covenant contained in
Section 5.01(y) or Section 8.01 hereof and such default shall not
be cured within 30 days following the date on which any Senior
Executive becomes aware of the occurrence thereof (such grace
period to be applicable only in the event such default can be
remedied by corrective action of the Loan Parties as determined
by the Agent in its sole discretion);
(d) The Borrower shall fail to provide cash or
other collateral satisfactory to, and indemnification agreements
as required by, an Issuing Bank pursuant to Section 2.10 or 2.14
or an Escrow Bank pursuant to Section 2.11 or 2.14 on or before
the later of the following dates: (i) fifteen (15) calendar days
after such Issuing Bank or Escrow Bank, as the case may be, or
the Agent notifies Borrower that Borrower must provide such
collateral and enter into agreements, or (ii) the date on which
Borrower is required to have provided such collateral and entered
into such agreements;
(e) Any of the Loan Parties shall default in
the observance or performance of any other covenant, condition or
provision hereof or of any other Loan Document and such default
shall continue unremedied for a period of thirty (30) days after
any Senior Executive becomes aware of the occurrence thereof
(such grace period to be applicable only in the event such
default can be remedied by corrective action of the Loan Parties
as determined by the Agent in its sole discretion);
(f) A default or event of default shall occur
at any time under or in connection with (i) any Subordinated
Indebtedness with an unpaid principal balance, whether singly or
in the aggregate, in excess of $1,000,000 and any applicable
notice or grace period in respect thereof has expired, thereby
entitling the holder(s) of such Subordinated Indebtedness to
declare the unpaid principal of, and any interest on, such
Subordinated Indebtedness due and payable, (ii) any Bond
Obligations in excess of $1,000,000 individually or $2,000,000 in
the aggregate, or (iii) except for defaults or events of default
which constitute Permitted Exceptions, defaults or events of
default in any other agreement (except for agreements evidencing
Nonrecourse Indebtedness) involving borrowed money or the
extension of credit or any other Indebtedness under which any
Loan Party may be obligated as borrower or guarantor in excess of
$2,000,000 in the aggregate, and such default or event of default
consists of the failure to pay (beyond any period of grace
permitted with respect thereto, whether waived or not) any
indebtedness when due (whether at stated maturity, by
acceleration or otherwise) or if such default or event of default
permits or causes the acceleration of any indebtedness (whether
or not such right shall have been waived) or the termination of
any commitment to lend;
(g) Any final judgments or orders for the
payment of money in excess of $1,000,000 individually or
$2,000,000 in the aggregate shall be entered against any Loan
Party by a court having jurisdiction in the premises which
judgment is not discharged, vacated, bonded or stayed pending
appeal within a period of thirty (30) days from the date of
entry, except for violations which constitute Permitted
Exceptions;
(h) Any of the Loan Documents (i) shall cease
to be legal, valid and binding agreements enforceable against the
party executing the same or such party's successors and assigns
(as permitted under the Loan Documents) in accordance with the
respective terms thereof or shall in any way be terminated
(except in accordance with its terms) or become or be declared
ineffective or inoperative or cease to give or provide the
respective Liens, security interests, rights, titles, interests,
remedies, powers or privileges intended to be created thereby and
the effect thereof has a material adverse effect on the ability
of the Banks to substantially realize the benefits of the Loan
Documents (it being understood that the parties will work
together to remedy any such illegality, invalidity or
unenforceability), or (ii) shall in any way be challenged or
contested by any of the Loan Parties;
(i) A notice of lien or assessment in excess of
$500,000 is filed of record with respect to all or any part of
any of the Loan Parties' assets by the United States, or any
department, agency or instrumentality thereof, or by any state,
county, municipal or other governmental agency, including,
without limitation, the Pension Benefit Guaranty Corporation, or
if any taxes or debts owing at any time or times hereafter to any
one of these becomes payable and the same is not paid within
thirty (30) days after the same becomes payable, except for
violations which constitute Permitted Exceptions;
(j) Any of the Loan Parties ceases to be
solvent or admits in writing its inability to pay its debts as
they mature, except for violations which constitute Permitted
Exceptions;
(k) Any of the following occurs: (i) any
Reportable Event, which the Agent determines in good faith
constitutes grounds for the termination of any Plan by the PBGC
or the appointment of a trustee to administer or liquidate any
Plan, shall have occurred and be continuing; (ii) proceedings
shall have been instituted or other action taken to terminate any
Plan, or a termination notice shall have been filed with respect
to any Plan; (iii) a trustee shall be appointed to administer or
liquidate any Plan; (iv) the PBGC shall give notice of its intent
to institute proceedings to terminate any Plan or Plans or to
appoint a trustee to administer or liquidate any Plan; and, in
the case of the occurrence of (i), (ii), (iii) or (iv) above, the
Agent determines in good faith that the amount of Company's
liability is likely to exceed 10% of its Adjusted Shareholders'
Equity; (v) the Company or any member of the ERISA Group shall
fail to make any contributions when due to a Plan or a
Multiemployer Plan; (vi) the Company or any member of the ERISA
Group shall make any amendment to a Plan with respect to which
security is required under Section 307 of ERISA; (vii) the
Company or any member of the ERISA Group shall withdraw
completely or partially from a Multiemployer Plan; (viii) the
Company or any member of the ERISA Group shall withdraw (or shall
be deemed under Section 4062(e) of ERISA to withdraw) from a
Multiple Employer Plan; or (ix) any applicable Law is adopted,
changed or interpreted by any Official Body with respect to or
otherwise affecting one or more Plans, Multiemployer Plans or
Benefit Arrangements and, with respect to any of the events
specified in (v), (vi), (vii), (viii) or (ix), the Agent
determines in good faith that any such occurrence would be
reasonably likely to materially and adversely affect the total
enterprise represented by the Company and the other members of
the ERISA Group;
(l) The Loan Parties as a whole cease to
conduct, or one or more of the Loan Parties are enjoined,
restrained or in any way prevented by court order from conducting
business which constitutes all or a material part of the business
of the Loan Parties taken as a whole and such injunction,
restraint or other preventive order is not dismissed within
thirty (30) days after the entry thereof, except for violations
which constitute Permitted Exceptions;
(m) A proceeding shall have been instituted in
a court having jurisdiction in the premises seeking a decree or
order for relief in respect of any Loan Party in an involuntary
case under any applicable bankruptcy, insolvency, reorganization
or other similar law now or hereafter in effect, or a receiver,
liquidator, assignee, custodian, trustee, sequestrator,
conservator (or similar official) of such Loan Party for any
substantial part of its property, or for the winding-up or
liquidation of its affairs, and such proceeding shall remain
undismissed or unstayed and in effect for a period of thirty (30)
consecutive days or such court shall enter a decree or order
granting any of the relief sought in such proceeding, except for
violations which constitute Permitted Exceptions; or
(n) Any Loan Party shall commence a voluntary
case under any applicable bankruptcy, insolvency, reorganization
or other similar law now or hereafter in effect, shall consent to
the entry of an order for relief in an involuntary case under any
such law, or shall consent to the appointment or taking
possession by a receiver, liquidator, assignee, custodian,
trustee, sequestrator, conservator (or other similar official) of
itself or for any substantial part of its property or shall make
a general assignment for the benefit of creditors, or shall fail
generally to pay its debts as they become due, or shall take any
action in furtherance of any of the foregoing, except for
violations which constitute Permitted Exceptions.
9.02 Consequences of Event of Default.
(a) If an Event of Default specified under
subsections (a) through (l) of Section 9.01 hereof shall occur
and be continuing (i) the Banks shall be under no further
obligation to make Loans, issue Letters of Credit or enter into
Escrow Agreements hereunder (provided that a Required Majority of
the Banks may continue to bind the Banks to make Loans, issue
Letters of Credit and enter into Escrow Agreements to the extent
the Banks agree upon at the time by sending written notice of
such election to the other Banks and all of the Banks shall be
bound by such agreement) and (ii) upon the request of a Simple
Majority of the Banks, the Agent shall by written notice to the
Borrower, declare the unpaid principal amount of the Notes then
outstanding and all interest accrued thereon, any unpaid fees and
all other Indebtedness of the Borrower to the Banks hereunder and
thereunder to be forthwith due and payable, and the same shall
thereupon become and be immediately due and payable to the Agent
for the benefit of each Bank without presentment, demand, protest
or any other notice of any kind, all of which are hereby
expressly waived, and (iii) upon the request of a Simple Majority
of the Banks, the Agent shall require the Borrower to, and the
Borrower shall thereupon, deposit in a non-interest bearing
account with the Agent, as cash collateral for its obligations
under the Loan Documents, an amount equal to the maximum amount
currently or at any time thereafter available to be drawn on all
outstanding Letters of Credit and obligations under Escrow
Agreements, and the Borrower hereby pledges to the Agent and the
Banks, and grants to the Agent and the Banks a security interest
in, all such cash as security for such obligations. Upon the
curing of all existing Events of Default to the satisfaction of
the Required Majority of Banks, the Agent shall return such cash
collateral to the Borrower; and
(b) If an Event of Default specified under
subsections (m) or (n) of Section 9.01 hereof shall occur, the
Banks shall be under no further obligations to make Loans, issue
Letters of Credit or enter into Escrow Agreements hereunder and
the unpaid principal amount of the Notes then outstanding and all
interest accrued thereon, any unpaid fees and all other
Indebtedness of the Loan Parties to the Banks hereunder and
thereunder shall be immediately due and payable, without
presentment, demand, protest or notice of any kind, all of which
are hereby expressly waived; and
(c) If an Event of Default shall occur and be
continuing, any Bank to whom any obligation is owed by the Loan
Parties hereunder or under any other Loan Document or any
participant of such Bank which has agreed in writing to be bound
by the provisions of Section 11.11(b) hereof and any branch,
subsidiary or affiliate of such Bank or participant anywhere in
the world shall have the right, in addition to all other rights
and remedies available to it, without notice to the Loan Parties,
to set-off against and apply to the then unpaid balance of all
the Loans and all other obligations of the Loan Parties hereunder
or under any other Loan Document any debt owing to, and any other
funds held in any manner for the account of, the Loan Parties by
such Bank or participant or by such branch, subsidiary or
affiliate, including, without limitation, all funds in all
deposit accounts (whether time or demand, general or special,
provisionally credited or finally credited, or otherwise) now or
hereafter maintained by the Loan Parties for its own account (but
not including funds held in custodian or trust accounts) with
such Bank or participant or such branch, subsidiary or affiliate.
Such right shall exist whether or not any Bank or the Agent shall
have made any demand under this Agreement or any other Loan
Document, whether or not such debt owing to or funds held for the
account of the Loan Parties is or are matured or unmatured and
regardless of the existence or adequacy of any Collateral,
Guaranty or any other security, right or remedy available to any
Bank or the Agent; and
(d) If an Event of Default shall occur and be
continuing and the Agent shall have accelerated the maturity of
Loans of the Borrower or such Loans otherwise shall have been
accelerated pursuant to any of the foregoing provisions of this
Section 9.02, the Agent, at the request of a Simple Majority of
the Banks, will proceed to protect and enforce its and the Banks'
rights by suit in equity, action at law and/or other appropriate
proceeding, whether for the specific performance of any covenant
or agreement contained in this Agreement or the Notes, including
as permitted by applicable Law the obtaining of the ex parte
appointment of a receiver, and, if such amount shall have become
due, by declaration or otherwise, proceed to enforce the payment
thereof or any other legal or equitable right of the Agent or the
Banks; and
(e) In addition to the other remedies set forth
in this Section 9.02, as provided in Section 7.01(b) and 7.02
hereof, the occurrence of an Event of Default hereunder shall
constitute a Security Event, entitling the Agent to record all
Collateral Documents;
(f) From and after the date on which the Agent
has taken any action pursuant to this Section 9.02 upon the
authorization of a Simple Majority of the Banks and until all
obligations of the Loan Parties have been paid in full, any and
all proceeds received by the Agent from any sale or other
disposition of the collateral under the Collateral Documents, if
any, or any part thereof, or the exercise of any other remedy by
the Agent, shall be applied as follows:
(i) first, to reimburse the Agent and the
Banks for out-of-pocket costs, expenses and disbursements,
including without limitation reasonable attorneys' fees and legal
expenses, incurred by the Agent or the Banks in connection with
realizing on such collateral or collection of any obligations of
the Loan Parties under any of the Loan Documents, including
advances made by the Banks or any one of them or the Agent for
the reasonable maintenance, preservation, protection or
enforcement of, or realization upon, such collateral, including
without limitation, advances for taxes, insurance, repairs and
the like and reasonable expenses incurred to sell or otherwise
realize on, or prepare for sale or other realization on, any of
such collateral;
(ii) second, to the repayment of all
Indebtedness then due and unpaid of the Loan Parties to the Banks
incurred under this Agreement or any of the Loan Documents,
whether of principal, interest, fees, expenses or otherwise, in
such manner as the Agent may determine in its discretion, subject
to the requirement that payments of principal and interest and
other amounts be allocated to the Banks on a pro rata basis as
set forth in Section 4.02; and
(iii) the balance, if any, as required by
Law.
(g) In addition to all of the rights and
remedies contained in this Agreement or in any of the other Loan
Documents, the Agent shall have all of the rights and remedies
under applicable Law, all of which rights and remedies shall be
cumulative and non-exclusive, to the extent permitted by Law.
The Agent may, and upon the request of the Simple Majority of
Banks shall, exercise all post-default rights granted to the
Agent and the Banks under the Loan Documents or applicable Law.
9.03 Notice of Sale. Any notice required to be given
by the Agent of a sale, lease, or other disposition of the
collateral under the Collateral Documents, if any, or any other
intended action by the Agent, if given ten (10) days prior to
such proposed action, shall constitute commercially reasonable
and fair notice thereof to the Loan Parties.
ARTICLE X
THE AGENT
10.01 Appointment. Each Bank hereby irrevocably
designates, appoints and authorizes PNC Bank to act as Agent for
such Bank under this Agreement to execute and deliver or accept
on behalf of each of the Banks the other Loan Documents. Each
Bank hereby irrevocably authorizes, and each holder of any Note
by the acceptance of a Note shall be deemed irrevocably to
authorize, the Agent to take such action on its behalf under the
provisions of this Agreement and the other Loan Documents and any
other instruments and agreements referred to herein, and to
exercise such powers (other than voting rights, which each Bank
reserves for itself and does not authorize the Agent to exercise
on its behalf) and to perform such duties hereunder as are
specifically delegated to or required of the Agent by the terms
hereof, together with such powers as are reasonably incidental
thereto. PNC Bank agrees to act as the Agent on behalf of the
Banks to the extent provided in this Agreement.
10.02 Delegation of Duties. The Agent may perform any
of its duties hereunder by or through agents or employees
(provided such delegation does not constitute a relinquishment of
its duties as Agent) and, subject to Sections 10.05 and 10.06
hereof, shall be entitled to engage and pay for the advice or
services of any attorneys, accountants or other experts
concerning all matters pertaining to its duties hereunder and to
rely upon any advice so obtained.
10.03 Nature of Duties; Independent Credit
Investigation. The Agent shall have no duties or
responsibilities except those expressly set forth in this
Agreement and the Collateral Documents and no implied covenants,
functions, responsibilities, duties, obligations, or liabilities
shall be read into this Agreement and the Collateral Documents or
otherwise exist. The duties of the Agent shall be mechanical and
administrative in nature; the Agent shall not have by reason of
this Agreement a fiduciary or trust relationship in respect of
any Bank; and nothing in this Agreement, expressed or implied, is
intended to or shall be so construed as to impose upon the Agent
any obligations in respect of this Agreement except as expressly
set forth herein. In performing its duties and functions under
this Agreement and the Collateral Documents, Agent will exercise
the same care which it normally exercises in making and handling
loans and in handling collateral in which it alone is interested,
but it does not assume any further responsibility. Each Bank
expressly acknowledges (i) that the Agent has not made any
representations or warranties to it and that no act by the Agent
hereafter taken, including any review of the affairs of the Loan
Parties, shall be deemed to constitute any representation or
warranty by the Agent to any Bank; (ii) that it has made and will
continue to make, without reliance upon the Agent, its own
independent investigation of the financial condition and affairs
and its own appraisal of the creditworthiness of the Loan Parties
in connection with this Agreement and the making and continuance
of the Loans hereunder; and (iii) except as expressly provided
herein, that the Agent shall have no duty or responsibility,
either initially or on a continuing basis, to provide any Bank
with any credit or other information with respect thereto,
whether coming into its possession before the making of any Loan
or at any time or times thereafter.
10.04 Actions in Discretion of Agent; Instructions
from the Banks. The Agent agrees, upon the written request of
the Simple Majority of Banks, to take or refrain from taking any
action of the type specified as being within the Agent's rights,
powers or discretion herein, provided 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 any other
Loan Document or applicable Law. In the absence of a request by
the Simple Majority of Banks, the Agent shall have authority, in
its sole discretion, to take or not to take any such action,
unless this Agreement specifically requires the consent of the
Simple Majority of Banks or all of the Banks. Any action taken
or failure to act pursuant to such instructions or discretion
shall be binding on the Banks, subject to Section 10.06 hereof.
Subject to the provisions of Section 10.06, no Bank shall have
any right of action whatsoever against the Agent as a result of
the Agent acting or refraining from acting hereunder in
accordance with the instructions of the Simple Majority of Banks,
or in the absence of such instructions, in the absolute
discretion of the Agent.
10.05 Reimbursement and Indemnification of Agent by
the Borrower. The Borrower unconditionally agrees to pay or
reimburse the Agent and save the Agent harmless against
(a) liability for the payment of all reasonable out-of-pocket
costs, expenses and disbursements, including but not limited to
fees and expenses of legal counsel, appraisers and environmental
consultants (except that no appraisers or environmental
consultants have been or shall be engaged in connection with
matters described in clauses (i) or (ii) below or in connection
with the enforcement of this Agreement or any other Loan Document
prior to an Event of Default), incurred by the Agent (i) in
connection with the development, negotiation, preparation,
printing, execution and syndication of this Agreement and the
other Loan Documents, (ii) relating to any requested amendments,
waivers or consents pursuant to the provisions hereof, (iii) in
connection with the enforcement of this Agreement or any other
Loan Document or collection of amounts due hereunder or
thereunder or the proof and allowability of any claim arising
under this Agreement or any other Loan Document, whether in
bankruptcy or receivership proceedings or otherwise, and (iv) in
any workout, restructuring or in connection with the protection,
preservation, exercise or enforcement of any of the terms hereof
or of any rights hereunder or under any other Loan Document or in
connection with any foreclosure, collection or bankruptcy
proceedings, (b) liability for reasonable fees and expenses of
legal counsel in connection with the administration (including
documentation of Collateral upon the occurrence of a Security
Event), interpretation and performance of this Agreement and the
other Loan Documents not in excess of $50,000 in any fiscal year
of the Company exclusive of fees and expenses relating to the
documentation of Collateral, and (c) 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 its capacity as such, in any way relating
to or arising out of this Agreement or any other Loan Documents
or any action taken or omitted by the Agent hereunder or
thereunder, provided that the Borrower shall not be liable for
any portion of such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or
disbursements if the same results from the Agent's gross
negligence or willful misconduct, or if the Borrower was not
given notice of the subject claim and the opportunity to
participate in the defense thereof, at its expense, or if the
same results from a compromise or settlement agreement entered
into without the consent of the Borrower. In addition, the
Borrower agrees to reimburse and pay all reasonable out-of-pocket
expenses of the Agent's regular employees and agents engaged
periodically to perform audits of the Loan Parties' books,
records and business properties.
10.06 Exculpatory Provisions. Neither the Agent nor
any of its directors, officers, employees, agents, attorneys or
affiliates shall (a) be liable to any Bank for any action taken
or omitted to be taken by it or them hereunder, or in connection
herewith including without limitation pursuant to any Loan
Document, unless caused by its or their own gross negligence or
willful misconduct, (b) be responsible in any manner to any of
the Banks for the effectiveness, enforceability, genuineness,
validity or the due execution of this Agreement or any other Loan
Documents or for any recital, representation, warranty, document,
certificate, report or statement herein or made or furnished
under or in connection with this Agreement or any other Loan
Documents, or (c) be under any obligation to any of the Banks to
ascertain or to inquire as to the performance or observance of
any of the terms, covenants or conditions hereof or thereof on
the part of the Loan Parties, or the financial condition of the
Loan Parties, or the existence or possible existence of any Event
of Default or Potential Default. Neither the Agent nor any Bank
nor any of their respective directors, officers, employees,
agents, attorneys or affiliates shall be liable to the Loan
Parties for consequential damages resulting from any breach of
contract, tort or other wrong in connection with the negotiation,
documentation, administration or collection of the Loans or any
of the Loan Documents.
10.07 Reimbursement and Indemnification of Agent by
Banks. Each Bank agrees to reimburse and indemnify the Agent (to
the extent not reimbursed by the Borrower and without limiting
the obligation of the Borrower to do so) in proportion to its
Ratable Share from and against 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
its capacity as such, in any way relating to or arising out of
this Agreement or any other Loan Documents or any action taken or
omitted by the Agent hereunder or thereunder, provided that no
Bank shall be liable for any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements (a) if the same results
from the Agent's gross negligence or willful misconduct, or
(b) if such Bank was not given notice of the subject claim and
the opportunity to participate in the defense thereof, at its
expense, or (c) if the same results from a compromise and
settlement agreement entered into without the consent of such
Bank. In addition, each Bank agrees promptly upon demand to
reimburse the Agent (to the extent not reimbursed by the Borrower
and without limiting the obligation of the Borrower to do so) in
proportion to its Ratable Share for all amounts due and payable
by the Borrower to the Agent in connection with the Agent's
periodic audit of the Loan Parties' books, records and business
properties.
10.08 Reliance by Agent. The Agent shall be entitled
to rely upon any writing, telegram, telex or teletype message,
resolution, notice, consent, certificate, letter, cablegram,
statement, order or other document or conversation by telephone
or otherwise believed by it to be genuine and correct and to have
been signed, sent or made by the proper Person or Persons, and
upon the advice and opinions of counsel and other professional
advisers selected by the Agent. The Agent shall be fully
justified in failing or refusing to take any action hereunder
unless it shall first be indemnified to its satisfaction by the
Banks against any and all liability and expense which may be
incurred by it by reason of taking or continuing to take any such
action.
10.09 Notice of Default. The Agent shall not be
deemed to have knowledge or notice of the occurrence of any
Potential Default or Event of Default unless the Agent has
received written notice from a Bank or the Borrower referring to
this Agreement, describing such Potential Default or Event of
Default and stating that such notice is a "notice of default."
10.10 Notices; Litigation.
(a) The Agent shall promptly send to each Bank
a copy of all notices received from the Borrower pursuant to the
provisions of this Agreement or the other Loan Documents promptly
upon receipt thereof. The Agent shall promptly notify the
Borrower and the other Banks of each change in the Prime Rate and
the effective date thereof.
(b) Agent will promptly furnish to Banks copies
of all material reports, certificates and other written
statements furnished by Borrower or Guarantors to Agent pursuant
to this Agreement (and which are not required by this Agreement
to have been sent directly to Banks by Borrower or Guarantors);
provided that if furnishing such copies of any nonfinancial
materials is impractical or not beneficial to the Banks in
Agent's judgment, Agent may make such copies available for
inspection at Agent's offices at reasonable times during its
business hours upon reasonable advance notice to Agent by the
Bank requesting such inspection; provided further that Agent
assumes no responsibility for the authenticity, validity,
accuracy or completeness of any such financial or nonfinancial
materials. Agent will keep Banks informed of the status of
payments of principal and interest on the Loans and any fees and
expenses. Agent will promptly furnish to Banks copies of any
proposed modifications to this Agreement or the Collateral
Documents presented to Agent for approval.
(c) Agent will give to Banks prompt telephonic
notice (confirmed in writing) (i) of any changes to the forms of
the Collateral Documents proposed to be made by Agent prior to
their execution by Borrower or Guarantors (which changes shall be
deemed approved by Banks unless within three (3) Business Days of
such notice a Required Majority of Banks objects thereto), and
(ii) that a Bank has requested a meeting or polling of Banks with
respect to a matter that requires the vote of Banks, but, in the
absence of willful misconduct or gross negligence of Agent, no
failure to give any such notice shall result in liability on the
part of Agent for failing to provide the notices described in (i)
and (ii) above. No knowledge, information or notice relating to
this Agreement or the Collateral Documents will be deemed to have
been received by Agent for purposes of this Agreement until such
time as it has been received in the department or division to
which notices are required to be given to the Agent hereunder.
(d) Agent shall give each Bank prompt notice of
any litigation commenced by or against Agent and/or Banks with
respect to this Agreement or any matter referred to herein of
which Agent receives written notice and of any other disposition
of or realization upon the collateral covered by the Collateral
Documents of which Agent receives written notice.
Notwithstanding the foregoing, after the receipt of notice of any
litigation or other proceeding and of any proposed action by
Agent with respect to settling, prosecuting or defending such
litigation or other proceeding, a Required Majority of Banks
shall have the right to disapprove any such proposed action and
to direct Agent to take such other action as such Required
Majority of Banks may direct, provided that the Agent shall not
be required to take any action thereunder unless one or more
Banks shall have offered to the Agent indemnity acceptable to the
Agent in its sole discretion against costs, expenses and
liabilities to be incurred in compliance with such direction.
10.11 Banks in Their Individual Capacities. With
respect to its Commitments and the Loans made by it, the Agent
shall have the same rights and powers hereunder as any other Bank
and may exercise the same as though it were not the Agent, and
the term "Banks" shall, unless the context otherwise indicates,
include the Agent in its individual capacity. PNC Bank and its
affiliates and each of the Banks and their respective affiliates
may, without liability to account, except as prohibited herein,
make Loans to, accept deposits from, discount drafts for, act as
trustee under indentures of, and generally engage in any kind of
banking or trust business with, the Borrower and its affiliates,
in the case of the Agent, as though it were not acting as Agent
hereunder and in the case of each Bank, as though such Bank were
not a Bank hereunder.
10.12 Holders of Notes. The Agent may deem and treat
any payee of any Note as the owner thereof for all purposes
hereof unless and until written notice of the assignment or
transfer thereof shall have been filed with the Agent. Any
request, authority or consent of any Person who at the time of
making such request or giving such authority or consent is the
holder of any Note shall be conclusive and binding on any
subsequent holder, transferee or assignee of such Note or of any
Note or Notes issued in exchange therefor.
10.13 Equalization of Banks. The Banks and the
holders of any participation in any Notes agree among themselves
that, with respect to all amounts received by any Bank or any
such holder for application on any obligation hereunder or under
any Note or under any such participation, whether received by
voluntary payment, by realization upon security, by the exercise
of the right of set-off or banker's lien, by counterclaim or by
any other non-pro rata source, equitable adjustment will be made
in the manner stated in the following sentence so that, in
effect, all such excess amounts will be shared ratably among the
Banks and such holders as provided in Section 4.02, except as
otherwise provided in Sections 2.04, 2.14, 3.04, 4.04(b), 4.06(a)
or 11.11(c) hereof. The Banks or any such holder receiving any
such amount shall purchase for cash from each of the other Banks,
by depositing such cash with the Agent for the ratable benefit of
the other Banks, an interest in such Bank's Loans in such amount
as shall result in a ratable participation by the Banks and each
such holder in the aggregate unpaid amount under the Notes,
provided that if all or any portion of such excess amount is
thereafter recovered from the Bank or the holder making such
purchase, such purchase shall be rescinded and the purchase price
restored to the extent of such recovery, together with interest
or other amounts, if any, required by law (including court order)
to be paid by the Bank or the holder making such purchase.
10.14 Successor Agent. The Agent may resign as Agent
upon not less than sixty (60) days' prior written notice to the
Borrower and the Banks or a Simple Majority of the Banks may
remove the Agent upon not less than sixty (60) days' prior
written notice to the Borrower and Agent. If the Agent shall
resign or be removed under this Agreement, then either (a) the
Simple Majority of Banks shall appoint from among the Banks a
successor agent for the Banks, subject to the acceptance of such
successor, or (b) if a successor agent shall not be so appointed
and approved within the sixty (60) day period following the
Agent's notice to the Banks of its resignation or Banks' notice
to Agent of Agent's removal, then the Agent (in the case of a
resignation) or the Simple Majority of the Banks (in the case of
a removal) shall appoint, with the consent of the Borrower, such
consent not to be unreasonably withheld, a successor agent who
shall, subject to the acceptance of such successor, serve as
Agent until such time as the Simple Majority of Banks appoint a
successor agent. Upon its appointment pursuant to either clause
(a) or (b) above, such successor agent shall succeed to the
rights, powers and duties of the Agent and the term "Agent" shall
mean such successor agent, effective upon its appointment, and
the former Agent's rights, powers and duties as Agent shall be
terminated without any other or further act or deed on the part
of such former Agent or any of the parties to this Agreement.
After the resignation of any Agent hereunder, the provisions of
this Article X shall inure to the benefit of such former Agent
and such former Agent shall not by reason of such resignation be
deemed to be released from liability for any actions taken or not
taken by it while it was an Agent under this Agreement.
10.15 Agent's Fee. The Borrower shall pay to the
Agent a nonrefundable fee (the "Agent's Fee") equal to $100,000
per annum (subject to adjustment below) payable in equal
quarterly installments in arrears on the first Business Day of
each February, May, August and November after the date hereof and
on the date on which all Loans shall be paid in full and all
Letters of Credit and Escrow Agreements shall have expired or
terminated. The first installment of the Agent's Fee shall be
prorated from the Closing Date to the date of payment and the
final installment shall be prorated from the date of the last
quarterly installment until the obligations of Borrower hereunder
are paid in full and all Letters of Credit and Escrow Agreements
have expired or terminated.
10.16 Availability of Funds. Unless the Agent shall
have been notified by a Bank prior to the date upon which a Loan
is to be made that such Bank does not intend to make available to
the Agent such Bank's portion of such Loan, the Agent may assume
that such Bank has made or will make such proceeds available to
the Agent on such date and the Agent may, in reliance upon such
assumption (but shall not be required to), make available to the
Borrower a corresponding amount. If such corresponding amount is
not in fact made available to the Agent by such Bank, the Agent
shall be entitled to recover such amount on demand from such Bank
(or, if such Bank fails to pay such amount forthwith upon such
demand from the Borrower) together with interest thereon, in
respect of each day during the period commencing on the date such
amount was made available to the Borrower and ending on the date
the Agent recovers such amount, at a rate per annum equal to the
applicable interest rate in respect of the Loan.
10.17 Calculations. In the absence of gross
negligence or willful misconduct, the Agent shall not be liable
for any error in computing the amount payable to any Bank whether
in respect of the Loans, fees or any other amounts due to the
Banks under this Agreement. In the event an error in computing
any amount payable to any Bank is made, the Agent, the Borrower
and each affected Bank shall, forthwith upon discovery of such
error, make such adjustments as shall be required to correct such
error, and any compensation by Agent to the Banks or the Banks to
the Agent therefor will be calculated at the Federal Funds
Effective Rate and any compensation by the Borrower to the Banks
or the Banks to the Borrower therefor will be calculated at the
applicable interest rate relating to such amount.
10.18 Beneficiaries. Except as expressly provided
herein, the provisions of this Article X are solely for the
benefit of the Agent and the Banks, and the Loan Parties shall
not have any rights to rely on or enforce any of the provisions
hereof. In performing its functions and duties under this
Agreement, the Agent shall act solely as agent of the Banks and
does not assume and shall not be deemed to have assumed any
obligation toward or relationship of agency or trust with or for
the Loan Parties.
ARTICLE XI
MISCELLANEOUS
11.01 Modifications, Amendments or Waivers. With the
written consent of the Required Majority of Banks, the Agent,
acting on behalf of all the Banks, and the Borrower on behalf of
the Loan Parties may from time to time enter into written
agreements amending or changing any provision of this Agreement
or any other Loan Document or the rights of the Banks or the Loan
Parties hereunder or thereunder, or may grant written waivers or
consents to a departure from the due performance of the
obligations of the Loan Parties hereunder or thereunder. Any
such agreement, waiver or consent made with such written consent
shall be effective to bind all the Banks; provided, that:
(a) Without the written consent of all the
Banks, no such agreement, waiver or consent may be made which
will:
(i) Reduce the amount of the Commitment
Fee or any other fees payable to any Bank hereunder, or amend
Sections 4.02 [Pro Rata Treatment of Banks], 10.06 [Exculpatory
Provisions] and 10.13 [Equalization of Banks] hereof;
(ii) Whether or not any Loans are
outstanding, extend the time for payment of principal or interest
of any Loan, or reduce the principal amount of or the rate of
interest borne by any Loan, or otherwise affect the terms of
payment of the principal of or interest of any Loan except that
approval of a rating agency as a Qualified Rating Agency shall
require only the Required Majority of Banks and not all of the
Banks;
(iii) Modify any provision regarding the
Cash Collateralization of Letters of Credit or Escrow Agreements,
or except for sales of assets permitted by Section 8.02(g),
release any collateral or other security, if any, for any of the
Loan Parties' obligations hereunder; or
(iv) Amend this Section 11.01, change the
definition of Required Majority of Banks, or change any
requirement providing for the Banks or the Required Majority of
Banks to authorize the taking of any action hereunder; and
(b) Without the written consent of any Bank, no
such agreement, waiver or consent may be made which will increase
such Bank's Commitment.
(c) Amendments, changes, waivers or consents
shall be made upon the request of a Simple Majority of the Banks
if this Agreement expressly so provides.
11.02 No Implied Waivers; Cumulative Remedies; Writing
Required. No course of dealing and no delay or failure of the
Agent or any Bank in exercising any right, power, remedy or
privilege under this Agreement or any other Loan Document shall
affect any other or future exercise thereof or operate as a
waiver thereof; nor shall any single or partial exercise thereof
or any abandonment or discontinuance of steps to enforce such a
right, power, remedy or privilege preclude any further exercise
thereof or of any other right, power, remedy or privilege. The
rights and remedies of the Agent and the Banks under this
Agreement and any other Loan Documents are cumulative and not
exclusive of any rights or remedies which they would otherwise
have. Any waiver, permit, consent or approval of any kind or
character on the part of any Bank of any breach or default under
this Agreement or any such waiver of any provision or condition
of this Agreement must be in writing and shall be effective only
to the extent specifically set forth in such writing.
11.03 Reimbursement and Indemnification of Banks by
the Borrower; Taxes. The Borrower agrees unconditionally upon
demand to pay or reimburse to each Bank (other than the Agent, as
to which the Borrower's obligations are set forth in Section
10.05) and to save such Bank harmless against (i) liability for
the payment of all reasonable out-of-pocket costs, expenses and
disbursements (including fees and expenses of counsel for each
Bank except with respect to (a) and (b) below), incurred by such
Bank (a) relating to any amendments, waivers or consents pursuant
to the provisions hereof, (b) in connection with the enforcement
of this Agreement or any other Loan Document, or collection of
amounts due hereunder or thereunder prior to an Event of Default,
(c) in connection with (1) the enforcement of this Agreement or
any Loan Document after an Event of Default, (2) collection of
amounts due hereunder or thereunder after an Event of Default or
(3) the proof and allowability of any claim arising under this
Agreement or any other Loan Document, in each instance whether in
bankruptcy or receivership proceedings or otherwise, and (d) in
any workout, restructuring or in connection with the protection,
preservation, exercise or enforcement of any of the terms hereof
or of any rights hereunder or under any other Loan Document or in
connection with any foreclosure, collection or bankruptcy
proceedings, or (ii) 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 such Bank, in its
capacity as such, in any way relating to or arising out of this
Agreement or any other Loan Documents or any action taken or
omitted by such Bank hereunder or thereunder, provided that the
Borrower shall not be liable for any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements (A) if the same results
from such Bank's gross negligence or willful misconduct, or
(B) if the Borrower was not given notice of the subject claim and
the opportunity to participate in the defense thereof, at its
expense, or (C) if the same results from a compromise or
settlement agreement entered into without the consent of the
Borrower. The Banks will attempt to minimize the fees and
expenses of legal counsel for the Banks which are subject to
reimbursement by the Borrower hereunder by considering the usage
of one law firm to represent the Banks and the Agent if
appropriate under the circumstances. The Borrower agrees
unconditionally to pay all stamp, document, transfer, recording
or filing taxes or fees and similar impositions now or hereafter
determined by the Agent or any Bank to be payable in connection
with this Agreement or any other Loan Document, and the Borrower
agrees unconditionally to save the Agent and the Banks harmless
from and against any and all present or future claims,
liabilities or losses with respect to or resulting from any
omission to pay or delay in paying any such taxes, fees or
impositions.
11.04 Holidays. Whenever any payment or action to be
made or taken hereunder shall be stated to be due on a day which
is not a Business Day, such payment or action shall be made or
taken on the next following Business Day (except as provided in
Section 3.02(a) with respect to CD Rate Interest Periods or Euro-
Rate Interest Periods), and such extension of time shall be
included in computing interest or fees, if any, in connection
with such payment or action.
11.05 Funding by Branch, Subsidiary or Affiliate.
(a) Notional Funding. Each Bank shall have the
right from time to time, without notice to any Loan Party, to
deem any branch, subsidiary or affiliate (which for the purposes
of this Section 11.05 shall mean any corporation or association
which is directly or indirectly controlled by or is under direct
or indirect common control with any corporation or association
which directly or indirectly controls such Bank) of such Bank to
have made, maintained or funded any Loan to which any Euro-Rate
Option applies at any time, provided that immediately following
(on the assumption that a payment were then due from the Borrower
to such other office) and as a result of such change the Bank may
not invoke Section 3.04 and the Borrower would not be under any
greater financial obligation pursuant to Section 4.06 hereof than
it would have been in the absence of such change. Notional
funding offices may be selected by each Bank without regard to
the Bank's actual methods of making, maintaining or funding the
Loans or any sources of funding actually used by or available to
such Bank.
(b) Actual Funding. Without relieving such
Bank of any obligation or liability hereunder, each Bank shall
have the right from time to time to make or maintain any Loan by
arranging for a branch, subsidiary or affiliate of such Bank to
make or maintain such Loan subject to the last sentence of this
Section 11.05(b). If any Bank causes a branch, subsidiary or
affiliate to make or maintain any part of the Loans hereunder,
all terms and conditions of this Agreement shall, except where
the context clearly requires otherwise, be applicable to such
part of the Loans to the same extent as if such Loans were made
or maintained by such Bank but in no event shall any Bank's use
of such a branch, subsidiary or affiliate to make or maintain any
part of the Loans hereunder cause such Bank or such branch,
subsidiary or affiliate to incur any cost or expenses payable by
any Borrower hereunder or under any Loan Document or require the
Borrower to pay any other compensation to any Bank (including,
without limitation, any expenses incurred or payable pursuant to
Section 4.06 hereof) which would otherwise not be incurred or
allow such Bank, branch subsidiary or affiliate to invoke
Section 3.04 hereof.
11.06 Notices. All notices, requests, demands,
directions and other communications (collectively "notices")
given to or made upon any party hereto under the provisions of
this Agreement shall be by telephone or in writing (including
telex or facsimile communication) unless otherwise expressly
permitted hereunder and shall be delivered or sent by telex or
facsimile to the Borrower or Guarantors at the addresses and
numbers set forth under their respective names on the signature
pages hereof and to the Agent or the Banks at the addresses and
numbers set forth on Schedule 1.01(C) hereof or, in each
instance, in accordance with any subsequent unrevoked written
direction from any party to the others. All notices shall,
except as otherwise expressly herein provided, be effective
(a) in the case of telex or facsimile, when received, (b) in the
case of hand-delivered notice, when hand delivered, (c) in the
case of telephone, when telephoned, provided, however, that in
order to be effective, telephonic notices must be confirmed in
writing no later than the next day by letter, facsimile or telex,
(d) if given by mail, four (4) days after such communication is
deposited in the mails with first class postage prepaid, return
receipt requested, and (e) if given by any other means (including
by air courier), when delivered; provided, that notices to the
Agent shall not be effective until received. Any Bank giving any
notice to any Loan Party shall simultaneously send a copy thereof
to the Agent, and the Agent shall promptly notify the other Banks
of the receipt by it of any such notice.
11.07 Severability. The provisions of this Agreement
are intended to be severable. If any provision of this Agreement
shall be held invalid or unenforceable in whole or in part in any
jurisdiction such provision shall, as to such jurisdiction, be
ineffective to the extent of such invalidity or unenforceability
without in any manner affecting the validity or enforceability
thereof in any other jurisdiction or the remaining provisions
hereof in any jurisdiction.
11.08 Governing Law. This Agreement shall be deemed
to be a contract under the laws of the Commonwealth of
Pennsylvania and for all purposes shall be governed by and
construed and enforced in accordance with the laws of the
Commonwealth of Pennsylvania without regard to its conflict of
laws principles.
11.09 Prior Understanding. This Agreement supersedes
all prior understandings and agreements, whether written or oral,
between the parties hereto and thereto relating to the
transactions provided for herein and therein, including any prior
confidentiality agreements and commitments, except to the extent
letters of credit previously issued by any Bank are to become
Letters of Credit hereunder.
11.10 Duration; Survival. All representations and
warranties of the Loan Parties contained herein or made in
connection herewith shall survive the making of Loans and shall
not be waived by the execution and delivery of this Agreement,
any investigation by the Agent or the Banks, the making of Loans,
or payment in full of the Loans. All covenants and agreements of
the Loan Parties contained in Sections 5.01, 8.01 and 8.02 herein
shall continue in full force and effect from and after the date
hereof so long as the Borrower may borrow hereunder and until
termination of the Commitments and payment in full of the Loans.
All covenants and agreements of the Borrower contained herein
relating to the payment of principal, interest, premiums,
additional compensation or expenses and indemnification,
including those set forth in the Notes, Article IV and Sections
10.05, 10.07 and 11.03 hereof, shall survive payment in full of
the Loans and termination of the Commitments.
11.11 Successors and Assigns; Assignment and
Participations; Additional Banks.
(a) Successors and Assigns. This Agreement
shall be binding upon and shall inure to the benefit of the
Banks, the Agent, the Loan Parties and their respective
successors and assigns, except that the Loan Parties may not
assign or transfer any of their rights and obligations hereunder
or any interest herein.
(b) Assignments and Participations. Each Bank
may, at its own cost, make assignments of or sell participations
in all or any part of its Commitment and the Loans made by it,
subject to the consent of the Borrower and the Agent with respect
to any assignee, such consent not to be unreasonably withheld,
and provided that (i) assignments shall be made only to Qualified
Banks; (ii) assignments may not be made in amounts less than
$5,000,000; (iii) no Bank which is a party hereunder may reduce
its Commitment to an amount less than the greater of
(A) $10,000,000; or (B) 50% of its initial Commitment; and
(iv) if a Bank assigns less than 100% of its Commitment it shall
assign a proportion of its outstanding Term Loans and its
outstanding Revolving Credit Loans which, in each instance,
equals the proportion of its Commitment which it is assigning.
In the case of an assignment, upon receipt by the Agent of the
Assignment and Assumption Agreement, the assignee shall have, to
the extent of such assignment (unless otherwise provided
therein), the same rights, benefits and obligations as it would
have if it had been a signatory Bank hereunder, the Commitments
in Section 2.01 and the appropriate Ratable Shares and Revolving
Credit Ratable Shares shall be adjusted accordingly, and upon
surrender of any Note subject to such assignment, the Borrower
shall execute and deliver a new Note to the assignee in an amount
equal to the amount of the Commitment assumed by it and a new
Note to the assigning Bank in an amount equal to the Commitment
retained by it hereunder. The assigning Bank shall pay to the
Agent a service fee in the amount of $2,000 for each assignment,
payable on or before the effective date of the assignment. In
the case of a participation, the participant shall only have the
rights specified in Section 9.02(c) (the participant's rights
against such Bank in respect of such participation to be those
set forth in the agreement executed by such Bank in favor of the
participant relating thereto and not to include any voting rights
except with respect to changes of the type referenced in clauses
(i), (ii), or (iii) under Section 11.01 hereof), all of such
Bank's obligations under this Agreement or any other Loan
Document shall remain unchanged and all amounts payable by the
Loan Parties hereunder or thereunder shall be determined as if
such Bank had not sold such participation. Each Bank may furnish
any publicly available information concerning the Loan Parties
and any other information concerning the Loan Parties in the
possession of such Bank from time to time to assignees and
participants (including prospective assignees or participants)
provided such assignees and participants agree to be bound by the
provisions of Section 11.13 hereof.
(c) Additional Bank. Any bank becoming a party
to this Agreement pursuant to Section 2.15 hereof (each an
"Additional Bank") shall execute and deliver to Agent a joinder
to this Agreement, in substantially the form attached hereto as
Exhibit M and otherwise satisfactory to Banks and Borrower. Upon
execution and delivery of such joinder, such Additional Bank
shall be a party hereto and added to Schedule 1.01(C) and shall
be one of the Banks hereunder for all purposes except that such
Additional Bank's rights shall be limited in the following
respects as more fully set forth in such joinder: (A) such
Additional Bank shall not participate in Letters of Credit or
Escrow Agreements pursuant to Section 2.13 hereof or be entitled
to issue new Letters of Credit or Escrow Agreements until the
first Business Day of the fiscal quarter following the effective
date of the joinder, (B) on the effective date of such joinder
the Borrower shall repay all outstanding Loans to which the Prime
Rate Option applies and reborrow a like amount of Loans under the
Prime Rate Option from the Banks, including the Additional Bank,
according to their new Revolving Credit Ratable Shares, (C) such
Additional Bank shall not participate in any Loans to which
either the CD Rate Option, the Revolving Credit Euro-Rate Option,
the Term Loan Euro-Rate Option or the Term Loan Treasury Rate
Option applies which are outstanding on the effective date of
such joinder but shall participate in all new Loans made to
Borrower after the effective date of such joinder including,
without limitation, new Loans and renewals and conversions of
Loans subject to the CD Rate Option, the Revolving Credit Euro-
Rate Option, the Term Loan Euro-Rate Option or the Term Loan
Treasury Rate Option; and (D) if Treasury Rate Term Loans are
outstanding on the date of such joinder, Borrower and such
Additional Bank may elect either: (1) to have such Additional
Bank make a Treasury Rate Term Loan to the Borrower on the
effective date of such joinder in an amount equal to such
Additional Bank's Ratable Share of each Borrowing Tranche (the
Additional Bank shall make a separate Treasury Rate Term Loan for
each such Borrowing Tranche) of Treasury Rate Term Loans
outstanding (after giving effect to the Treasury Rate Term Loan
to be made by such Additional Bank) with a term that expires on
the Treasury Rate Term Loan Due Date with respect to the Loans
comprising such Borrowing Tranche and bearing interest at a rate
which is less than or equal to the Additional Bank Treasury Rate
Ceiling with respect to such Borrowing Tranche computed by the
Agent two (2) Business Days prior to the making of such Loan;
Borrower shall deliver a Loan Request to the Agent at least three
(3) Business Days before the effective date of such joinder; or,
alternatively (2) not to have such Additional Bank make any
Treasury Rate Term Loans in which case such Additional Bank shall
not have an interest in, make or otherwise participate in the
Treasury Rate Term Loans or in repayments thereof when required
or permitted under this Agreement; it is acknowledged that an
election under this clause (2) shall result in such Additional
Bank's having a Revolving Credit Commitment equal to its
Commitment, while other Banks will have Revolving Credit
Commitments which are less than their Commitments; when Borrower
repays the Treasury Rate Term Loans of such other Banks their
Revolving Credit Commitments and participations in Revolving
Credit Loans, Letters of Credit and Escrow Agreements will
increase and certain adjustments will be made as more fully
discussed in Section 4.04(a)(2)(B). If Borrower should (i) renew
after the effective date of such joinder the CD Rate Option or
Euro-Rate Option with respect to Revolving Credit Loans or Euro-
Rate Term Loan existing on such date (it is acknowledged that the
Borrower is required to renew the Euro-Rate Option applicable to
Euro-Rate Term Loan for successive one-month Interest Periods
with the last such period ending on the Euro-Rate Term Loan Due
Date as described in Section 3.01(b)(i) or (ii) convert after the
date of such joinder from the CD Rate Option or any Euro-Rate
Option to a different Interest Rate Option with respect to
Revolving Credit Loans existing on such date, Borrower shall be
deemed to repay the applicable Revolving Credit Loans or Euro-
Rate Term Loans on the conversion or renewal date, as the case
may be, and then reborrow a similar amount on such date so that
the Additional Bank shall participate in such Revolving Credit
Loans or Euro-Rate Term Loans after such renewal or conversion
date. Any prepayment by Borrower of any portion of the Euro-Rate
Term Loans pursuant to the preceding sentence shall not be
subject to the Euro-Rate Term Loan Prepayment Premium. Schedule
1.01(C) shall be amended and restated on the date of such joinder
to read as set forth on the attachment to such joinder.
Simultaneously with the execution and delivery of such joinder,
Borrower shall execute a Note and deliver it to such Additional
Bank together with originals of such other documents described in
Section 6.01 hereof as such Additional Bank may reasonably
require. Agent, Borrower and Guarantors shall acknowledge any
joinders delivered pursuant to this Section 11.11(c) and promptly
provide copies thereof to each of the other Banks. All joinders
shall be effective and binding upon all Banks without any
requirement for the execution of such joinder by the Banks other
than the Additional Bank.
11.12 Joinder of Guarantors.
(i) Subsidiaries which are required or elect to
join this Agreement pursuant to Section 8.01(h) must execute and
deliver to Agent a joinder to this Agreement, the Guaranty and
the Indemnity in substantially the form attached hereto as
Exhibit K and otherwise satisfactory to Agent. The Loan Parties
shall deliver such joinders to the Agent on a quarterly basis
simultaneously with their delivery of the Compliance Certificate
pursuant to Section 8.02(b) and such joinders shall be due on the
due date for the delivery of the Compliance Certificate. Upon
execution and delivery of a joinder, a Subsidiary shall be a
party hereto, an obligor under the Guaranty and the Indemnity,
one of the Loan Parties and Guarantors hereunder, under the
Indemnity and each of the other Loan Documents for all purposes,
all as of the date of such joinder. Each such additional Loan
Party and Guarantor shall simultaneously with the delivery of
such joinder deliver to Banks originals of such other documents
described in Section 6.01 [First Loans], provided, however, that
no opinion of counsel shall be required in connection with the
joinder of any such Subsidiary.
(ii) Agent shall acknowledge any joinders
delivered pursuant to this Section 11.12 and promptly provide
copies thereof to Banks and Loan Parties and Guarantors. All
joinders shall be effective and binding upon all Banks and Loan
Parties and Guarantors without any requirement for the execution
of such joinder by Banks and Loan Parties or Guarantors.
(iii) The Borrower shall not become or agree to
become a general or limited partner in any general or limited
partnership or a joint venturer in any joint venture.
11.13 Confidentiality. The Agent and the Banks each
agree to keep confidential all information obtained from the
Borrower which is nonpublic and confidential or proprietary in
nature (including any information the Borrower specifically
designates as confidential), except as provided below, and to use
such information only in connection with their respective
capacities under this Agreement and for the purposes contemplated
hereby. The Agent and the Banks shall be permitted to disclose
such information (i) to outside legal counsel, accountants and
other professional advisors who need to know such information in
connection with the administration and enforcement of this
Agreement, subject to agreement of such Persons to maintain the
confidentiality, (ii) assignees and participants as contemplated
by Section 11.11, (iii) to the extent requested by any bank
regulatory authority or, with notice to the Borrower, as
otherwise required by applicable Law or by any subpoena or
similar legal process, or in connection with any investigation or
proceeding arising out of the transactions contemplated by this
Agreement, (iv) if it becomes publicly available other than as a
result of a breach of this Agreement or becomes available from a
source not subject to confidentiality restrictions, or (v) the
Borrower shall have consented to such disclosure.
11.14 Counterparts. This Agreement may be executed by
different parties hereto on any number of separate counterparts,
each of which, when so executed and delivered, shall be an
original, and all such counterparts shall together constitute one
and the same instrument.
11.15 Exceptions. The representations, warranties and
covenants contained herein shall be independent of each other and
no exception to any representation, warranty or covenant shall be
deemed to be an exception to any other representation, warranty
or covenant contained herein unless expressly provided, nor shall
any such exceptions be deemed to permit any action or omission
that would be in contravention of applicable Law.
11.16 Consent to Forum; Waiver of Jury Trial. For all
purposes hereunder and under any of the Loan Documents, each of
the Loan Parties hereby irrevocably consents to the nonexclusive
jurisdiction of the Court of Common Pleas of Philadelphia County
and the United States District Court for the Eastern District of
Pennsylvania, and waives personal service of any and all process
upon it and consents that all such service of process be made by
certified or registered mail directed to the Loan Parties at the
addresses provided for in Section 11.06 hereof and service so
made shall be deemed to be completed upon actual receipt thereof.
The Loan Parties waive any objection to jurisdiction and venue of
any action instituted against it as provided herein and agree not
to assert any defense based on lack of jurisdiction or venue.
The Loan Parties, the Agent and the Banks hereby waive trial by
jury in any action, suit, proceeding or counterclaim of any kind
arising out of or related to this Agreement, any other Loan
Document or any collateral under the Collateral Documents to the
full extent permitted by Law.
11.17 Tax Withholding Clause. At least five (5)
Business Days prior to the first date on which interest or fees
are payable hereunder for the account of any Bank, each Bank that
is not incorporated under the laws of the United States of
America or a state thereof agrees that it will deliver to each of
the Borrower and the Agent two (2) duly completed copies of
(i) Internal Revenue Service Form W-9, 4224 or 1001, or other
applicable form prescribed by the Internal Revenue Service,
certifying in either case that such Bank is entitled to receive
payments under this Agreement and the other Loan Documents
without deduction or withholding of any United States federal
income taxes, or is subject to such tax at a reduced rate under
an applicable tax treaty, or (ii) Form W-8 or other applicable
form or a certificate of the Bank indicating that no such
exemption or reduced rate is allowable with respect to such
payments. Each Bank which so delivers a Form W-8, W-9, 4224 or
1001 further undertakes to deliver to each of the Borrower and
the Agent two (2) additional copies of such form (or a successor
form) on or before the date that such form expires or becomes
obsolete or after the occurrence of any event requiring a change
in the most recent form so delivered by it, and such amendments
thereto or extensions or renewals thereof as may be reasonably
requested by the Borrower or the Agent, either certifying that
such Bank is entitled to receive payments under this Agreement
and the other Loan Documents without deduction or withholding of
any United States federal income taxes or is subject to such tax
at a reduced rate under an applicable tax treaty or stating that
no such exemption or reduced rate is allowable. The Agent shall
be entitled to withhold United States federal income taxes at the
full withholding rate unless the Bank establishes an exemption or
at the applicable reduced rate as established pursuant to the
above provisions.
11.18 Existing Agreement. The Loan Parties and the
Banks acknowledge that the Agreement replaces the Existing
Agreement effective as of the Closing Date and the Existing
Agreement shall terminate effective as of the Closing Date.
11.19 Pari Passu Treatment of Loans. Revolving Credit
Loans and Term Loans shall be pari passu in priority of repayment
and collection. All Liens and Guaranties and other security
granted by the Loan Parties shall secure such Revolving Credit
Loans and Term Loans on a pari passu basis.
EXHIBIT O
EXAMPLE OF
COMPUTATION OF TREASURY RATE TERM
LOAN PREPAYMENT PREMIUM
Assume the following facts:
1. Banks make a $30,000,000 Mandatory Reduction Date Treasury Rate
Term Loan to Borrower on August 1, 1995. Yield of a hypothetical
Treasury security with a maturity equal to the maturity of the
$30,000,000 loans (computed by interpolation of rates) is computed
to be 8% at 11:00 a.m. two Business Days before the Borrowing
Date so that interest rate on the Treasury Rate Term Loan is 9.325%
(8% + 1.325%). The due date is June 16, 1998 (the Mandatory
Reduction Date).
2. Borrower prepays the Treasury Rate Term Loan on <^>February
<^>16, 1998. The yield of a Treasury security with <^>120 days
until maturity (or a hypothetical Treasury security with such a
maturity computed by interpolation of rates) is 6% at 11:00 a.m. two
Business Days prior to the prepayment date.
The Treasury Rate Term Loan Prepayment Premium is computed as follows:
1st: Compute difference between Treasury Rate on the Treasury Rate
Term Loan to be prepaid and the Treasury Rate which would be
charged if a Treasury Rate Term Loan were made on the date of the
proposed prepayment with a maturity equal to the remaining maturity
of the Treasury Rate Term Loan:
<^>8.0% minus <^>6.0% <^>= 2%
2nd: Compute the number of years remaining until maturity, partial years
are expressed as a decimal:
Number of days until maturity in
1998 (<^>120) divided by 365 = .<^>3288 years
3rd: Multiply rate differential from step 1 above times the principal
amount being prepaid ($30,000,000) times the number of years to
maturity from Step 2 above.
2% x $30,000,000 x <^>.3288 = $<^>197,280
4th: Discount amount computed in Step 3 to present value using a
discount rate equal to the current rate on a Treasury security with a
remaining maturity of 122 days (that discount rate is 6% - see item 2
in "Facts" above):
A. Compute monthly interest
lost: $<^>197,280 (from Step 3)
divided by 4 months = $<^>49,320
B. Discount monthly interest lost
(i.e., 4 monthly payments of
$<^>49,320 each - See A above) to its
present value using a 6% per
annum discount rate: = $<^>194,838
Treasury Rate Term Loan Prepayment Premium = $<^>194,838
EXHIBIT 1
AMENDED AND RESTATED ARTICLES I THROUGH XI
OF THE REVOLVING CREDIT AGREEMENT
(Cover page, table of contents,
first paragraph and recitals
are also attached for convenience)
REVOLVING CREDIT AGREEMENT
by and among
FIRST HUNTINGDON FINANCE CORP.,
TOLL BROTHERS, INC.
and its Subsidiaries
and
THE BANKS PARTY HERETO
and
PNC BANK, NATIONAL ASSOCIATION, as Agent
Dated as of November 1, 1993, as Amended
on July 25, 1995
TABLE OF CONTENTS
Page
ARTICLE I CERTAIN DEFINITIONS . . . . . . . . . . . . . . . . . . 1
1.01 Certain Definitions . . . . . . . . . . . . . . . 1
1.02 Construction. . . . . . . . . . . . . . . . . . .33
1.03 Accounting Principles . . . . . . . . . . . . . .34
ARTICLE II CREDIT FACILITY . . . . . . . . . . . . . . . . . . . .34
2.01 Commitments to Make Loans . . . . . . . . . . . .34
2.02 Nature of Banks' Obligations with
Respect to Loans. . . . . . . . . . . . . . . . .34
2.03 Commitment Fee. . . . . . . . . . . . . . . . . .35
2.04 Extension by Banks of the Mandatory
Reduction Date or Expiration Date . . . . . . . .35
2.05 Fourth Amendment Fee. . . . . . . . . . . . . . .37
2.06 Loan Requests . . . . . . . . . . . . . . . . . .37
2.07 Making Loans. . . . . . . . . . . . . . . . . . .37
2.08 Notes . . . . . . . . . . . . . . . . . . . . . .38
2.09 Use of Proceeds . . . . . . . . . . . . . . . . .38
2.10 Letter of Credit Sublimit . . . . . . . . . . . .38
(a) Letter of Credit Requests . . . . . . . . .38
(b) Documentation; Notices to Agent . . . . . .39
(c) Letter of Credit Fees . . . . . . . . . . .39
2.11 Escrow Agreement Sublimit . . . . . . . . . . . .40
(a) Escrow Agreement Requests . . . . . . . . .40
(b) Documentation; Notices to Agent . . . . . .41
(c) Escrow Agreement Fees . . . . . . . . . . .41
2.12 Reimbursement of Advances on Letters
of Credit or Escrow Agreements. . . . . . . . . .41
2.13 Participations in Letters of Credit
and Escrow Agreements; Responsibility
of Issuing and Escrow Banks . . . . . . . . . . .42
2.14 Reduction of Commitment . . . . . . . . . . . . .44
(a) Pro Rata Reduction. . . . . . . . . . . . .44
(b) Bank Exclusion Event. . . . . . . . . . . .44
(c) Bank Extension or Mutual
Agreement . . . . . . . . . . . . . . . . .46
2.15 Increase in Commitments . . . . . . . . . . . . .49
(a) Existing Banks. . . . . . . . . . . . . . .49
(b) New Banks . . . . . . . . . . . . . . . . .50
(c) Limitations on Increases. . . . . . . . . .50
ARTICLE III INTEREST RATES. . . . . . . . . . . . . . . . . . . . .51
3.01 Interest Rate Options . . . . . . . . . . . . . .51
(a) Revolving Credit Interest Rate
Options . . . . . . . . . . . . . . . . . .51
(b) Term Loan Interest Rate Options . . . . . .53
(c) Rate Quotations . . . . . . . . . . . . . .56
3.02 Interest Periods. . . . . . . . . . . . . . . . .56
3.03 Interest After Default. . . . . . . . . . . . . .57
3.04 CD Rate or Euro-Rate Unascertainable. . . . . . .57
3.05 Selection of Interest Rate Options. . . . . . . .58
ARTICLE IV PAYMENTS. . . . . . . . . . . . . . . . . . . . . . . .59
4.01 Payments. . . . . . . . . . . . . . . . . . . . .59
4.02 Pro Rata Treatment of Banks . . . . . . . . . . .59
4.03 Interest Payment Dates. . . . . . . . . . . . . .60
4.04 Voluntary Prepayments . . . . . . . . . . . . . .60
4.05 Mandatory Prepayments . . . . . . . . . . . . . .64
(a) Commitments or Borrowing Base
Exceeded. . . . . . . . . . . . . . . . . .64
(b) Application Among Interest Rate
Options; Indemnity. . . . . . . . . . . . .64
4.06 Additional Compensation in Certain
Circumstances . . . . . . . . . . . . . . . . . .64
(a) Increased Costs or Reduced
Return Resulting From Taxes,
Reserves, Capital Adequacy
Requirements, Expenses, Etc.. . . . . . . .64
(b) Indemnity . . . . . . . . . . . . . . . . .65
(c) Reduction in Indemnity. . . . . . . . . . .66
(d) Replacement of a Bank . . . . . . . . . . .66
ARTICLE V REPRESENTATIONS, WARRANTIES AND AFFIRMATIVE
COVENANTS . . . . . . . . . . . . . . . . . . . . . . .67
5.01 Representations and Warranties. . . . . . . . . .67
(a) Organization and Qualification. . . . . . .67
(b) Capitalization and Ownership. . . . . . . .67
(c) Consolidated Subsidiaries . . . . . . . . .68
(d) Power and Authority . . . . . . . . . . . .68
(e) Validity and Binding Effect . . . . . . . .68
(f) No Conflict . . . . . . . . . . . . . . . .68
(g) Litigation. . . . . . . . . . . . . . . . .69
(h) Title to Properties . . . . . . . . . . . .69
(i) Financial Statements. . . . . . . . . . . .69
(j) Margin Stock. . . . . . . . . . . . . . . .70
(k) Full Disclosure . . . . . . . . . . . . . .70
(l) Taxes; Payment of Liabilities . . . . . . .70
(m) Consents and Approvals. . . . . . . . . . .71
(n) No Event of Default; Compliance
with Instruments. . . . . . . . . . . . . .71
(o) Patents, Trademarks, Copyrights,
Licenses, Etc.. . . . . . . . . . . . . . .71
(p) Insurance . . . . . . . . . . . . . . . . .71
(q) Compliance with Laws. . . . . . . . . . . .72
(r) Material Contracts. . . . . . . . . . . . .72
(s) Investment Companies. . . . . . . . . . . .72
(t) Plans and Benefit Arrangements. . . . . . .72
(u) Employment Matters. . . . . . . . . . . . .74
(v) Environmental Matters . . . . . . . . . . .74
(w) Senior Debt Status. . . . . . . . . . . . .75
(x) Maintenance of Properties and
Leases. . . . . . . . . . . . . . . . . . .76
(y) Visitation Rights . . . . . . . . . . . . .76
(z) Keeping of Records and Books of
Account . . . . . . . . . . . . . . . . . .76
(aa) Use of Proceeds . . . . . . . . . . . . . .76
(bb) Intercompany Loans, Loans and
Advances to the Borrower. . . . . . . . . .76
(cc) Appraisals. . . . . . . . . . . . . . . . .77
(dd) Collateral Documents. . . . . . . . . . . .78
(ee) Mortgage Subsidiaries . . . . . . . . . . .78
5.02 Updates to Schedules. . . . . . . . . . . . . . .80
ARTICLE VI CONDITIONS OF LENDING ISSUING LETTERS OF
CREDIT OR ENTERING INTO ESCROW AGREEMENTS . . . . . . .80
6.01 Closing Date. . . . . . . . . . . . . . . . . . .80
6.02 Each Additional Loan, Letter of Credit
or Escrow Agreement . . . . . . . . . . . . . . .82
ARTICLE VII SECURITY. . . . . . . . . . . . . . . . . . . . . . . .83
7.01 Granting of Security. . . . . . . . . . . . . . .83
(a) Creation of Liens . . . . . . . . . . . . .83
(b) Delivery and Recordation of
Documents . . . . . . . . . . . . . . . . .83
(c) Power of Attorney . . . . . . . . . . . . .84
7.02 Security Events . . . . . . . . . . . . . . . . .84
7.03 Release of Liens. . . . . . . . . . . . . . . . .84
ARTICLE VIII NEGATIVE COVENANTS. . . . . . . . . . . . . . . . . . .85
8.01 Negative Covenants. . . . . . . . . . . . . . . .85
(a) Indebtedness. . . . . . . . . . . . . . . .85
(b) Affiliate Transactions. . . . . . . . . . .86
(c) Guaranties. . . . . . . . . . . . . . . . .86
(d) Loans and Investments . . . . . . . . . . .87
(e) Loans; Permitted Purchase Money
Loans; Letters of Credit and
Permitted Additional Senior
Indebtedness. . . . . . . . . . . . . . . .87
(f) Liquidations, Mergers,
Consolidations, Acquisitions. . . . . . . .89
(g) Dispositions of Assets or
Subsidiaries. . . . . . . . . . . . . . . .90
(h) Subsidiaries, Partnerships and
Joint Ventures. . . . . . . . . . . . . . .90
(i) Continuation of or Change in
Business. . . . . . . . . . . . . . . . . .90
(j) Change in Control . . . . . . . . . . . . .91
(k) Changes in Subordinated Loan
Documents . . . . . . . . . . . . . . . . .91
(l) Plans and Benefit Arrangements. . . . . . .91
(m) Changes in Organizational
Documents . . . . . . . . . . . . . . . . .92
(n) Development Limitations . . . . . . . . . .92
(o) Senior Leverage . . . . . . . . . . . . . .95
(p) Mortgage Subsidiaries Leverage. . . . . . .95
(q) Senior Leverage Plus Contingent
Liabilities . . . . . . . . . . . . . . . .95
(r) Subordinated Debt to Equity . . . . . . . .95
(s) Minimum Adjusted Shareholders'
Equity. . . . . . . . . . . . . . . . . . .95
(t) Incorporation by Reference. . . . . . . . .95
8.02 Reporting Requirements. . . . . . . . . . . . . .95
(a) Financial Statements. . . . . . . . . . . .96
(b) Compliance Certificate;
Joinders; Updates to Schedules
of the Borrower . . . . . . . . . . . . . .97
(c) Project Reports . . . . . . . . . . . . . .97
(d) Purchase Money Loan Reports . . . . . . . .97
(e) Environmental Certificates. . . . . . . . .98
(f) Subordinated Indebtedness
Documentation . . . . . . . . . . . . . . .98
(g) Notice of Default . . . . . . . . . . . . .98
(h) Notice of Litigation. . . . . . . . . . . .98
(i) Certain Events. . . . . . . . . . . . . . .99
(j) Other Reports and Information . . . . . . .99
(k) Notices Regarding Plans and
Benefit Arrangements. . . . . . . . . . . .99
ARTICLE IX DEFAULT . . . . . . . . . . . . . . . . . . . . . . . 100
9.01 Events of Default . . . . . . . . . . . . . . . 100
9.02 Consequences of Event of Default. . . . . . . . 104
9.03 Notice of Sale. . . . . . . . . . . . . . . . . 106
ARTICLE X THE AGENT . . . . . . . . . . . . . . . . . . . . . . 107
10.01 Appointment . . . . . . . . . . . . . . . . . . 107
10.02 Delegation of Duties. . . . . . . . . . . . . . 107
10.03 Nature of Duties; Independent Credit
Investigation . . . . . . . . . . . . . . . . . 107
10.04 Actions in Discretion of Agent;
Instructions from the Banks . . . . . . . . . . 108
10.05 Reimbursement and Indemnification of
Agent by the Borrower . . . . . . . . . . . . . 108
10.06 Exculpatory Provisions. . . . . . . . . . . . . 109
10.07 Reimbursement and Indemnification of
Agent by Banks. . . . . . . . . . . . . . . . . 109
10.08 Reliance by Agent . . . . . . . . . . . . . . . 110
10.09 Notice of Default . . . . . . . . . . . . . . . 110
10.10 Notices; Litigation . . . . . . . . . . . . . . 110
10.11 Banks in Their Individual Capacities. . . . . . 111
10.12 Holders of Notes. . . . . . . . . . . . . . . . 112
10.13 Equalization of Banks . . . . . . . . . . . . . 112
10.14 Successor Agent . . . . . . . . . . . . . . . . 112
10.15 Agent's Fee . . . . . . . . . . . . . . . . . . 113
10.16 Availability of Funds . . . . . . . . . . . . . 113
10.17 Calculations. . . . . . . . . . . . . . . . . . 113
10.18 Beneficiaries . . . . . . . . . . . . . . . . . 114
ARTICLE XI MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . 114
11.01 Modifications, Amendments or Waivers. . . . . . 114
11.02 No Implied Waivers; Cumulative
Remedies; Writing Required. . . . . . . . . . . 115
11.03 Reimbursement and Indemnification of
Banks by the Borrower; Taxes. . . . . . . . . . 115
11.04 Holidays. . . . . . . . . . . . . . . . . . . . 116
11.05 Funding by Branch, Subsidiary or
Affiliate . . . . . . . . . . . . . . . . . . . 116
(a) Notional Funding. . . . . . . . . . . . . 116
(b) Actual Funding. . . . . . . . . . . . . . 117
11.06 Notices . . . . . . . . . . . . . . . . . . . . 117
11.07 Severability. . . . . . . . . . . . . . . . . . 118
11.08 Governing Law . . . . . . . . . . . . . . . . . 118
11.09 Prior Understanding . . . . . . . . . . . . . . 118
11.10 Duration; Survival. . . . . . . . . . . . . . . 118
11.11 Successors and Assigns; Assignment and
Participations; Additional Banks. . . . . . . . 118
(a) Successors and Assigns. . . . . . . . . . 118
(b) Assignments and Participations. . . . . . 119
(c) Additional Bank . . . . . . . . . . . . . 119
11.12 Joinder of Guarantors . . . . . . . . . . . . . 121
11.13 Confidentiality . . . . . . . . . . . . . . . . 122
11.14 Counterparts. . . . . . . . . . . . . . . . . . 122
11.15 Exceptions. . . . . . . . . . . . . . . . . . . 122
11.16 Consent to Forum; Waiver of Jury
Trial . . . . . . . . . . . . . . . . . . . . . 122
11.17 Tax Withholding Clause. . . . . . . . . . . . . 123
11.18 Existing Agreement. . . . . . . . . . . . . . . 123
11.19 Pari Passu Treatment of Loans . . . . . . . . . 123
SCHEDULES
SCHEDULE 1.01(C) COMMITMENTS OF BANKS
SCHEDULE 1.01(E) EXISTING LETTERS OF CREDIT AND ESCROW
AGREEMENTS
SCHEDULE 1.01(P) PERMITTED LIENS
SCHEDULE 1.01(Q) QUALIFIED RATING AGENCIES; QUALIFIED RATINGS;
COMPANY DEBT RATING
SCHEDULE 5.01(c) SUBSIDIARIES
SCHEDULE 5.01(t) EMPLOYEE BENEFIT PLAN DISCLOSURES
SCHEDULE 5.01(v) ENVIRONMENTAL DISCLOSURES
SCHEDULE 8.02(a)(ii) PERMITTED OTHER INDEBTEDNESS
SCHEDULE 8.02(a)(iii) PERMITTED SUBORDINATED INDEBTEDNESS
EXHIBITS
EXHIBIT A ASSIGNMENT AND ASSUMPTION AGREEMENT
EXHIBIT B ENVIRONMENTAL CERTIFICATE
EXHIBIT C GUARANTY AND SURETYSHIP AGREEMENT
EXHIBIT D INDEMNITY AGREEMENT
EXHIBIT E NOTE
EXHIBIT F LOAN REQUEST FORM
EXHIBIT G OPINION OF COUNSEL
EXHIBIT H EXAMPLE OF BORROWING BASE COMPUTATION
EXHIBIT I INTERCOMPANY SUBORDINATION AGREEMENT
EXHIBIT J APPRAISERS
EXHIBIT K GUARANTOR JOINDER
EXHIBIT L COMPLIANCE CERTIFICATE
EXHIBIT M BANK JOINDER
EXHIBIT N CONFIRMATION OF EXPOSURE
EXHIBIT O EXAMPLE OF COMPUTATION OF TREASURY RATE TERM
LOAN PREPAYMENT PREMIUM
