EXECUTION COPY
CREDIT AGREEMENT
DATED AS OF APRIL 8, 2004
AMONG
M.D.C. HOLDINGS, INC.
as Borrower
AND
THE LENDERS NAMED HEREIN
AND
BANK ONE, NA
as Administrative Agent
AND
WACHOVIA BANK, NATIONAL ASSOCIATION
as Syndication Agent
AND
BNP PARIBAS, GUARANTY BANK, KEYBANK NATIONAL ASSOCIATION,
SUNTRUST BANK, U.S. BANK NATIONAL ASSOCIATION AND
WASHINGTON MUTUAL BANK, FA
as Co-Documentation Agents
AND
CALIFORNIA BANK AND TRUST, COMERICA BANK AND
THE ROYAL BANK OF SCOTLAND PLC
as Co-Managing Agents
AND
AMSOUTH BANK AND BANK OF AMERICA, N.A.
as Co-Agents
BANC ONE CAPITAL MARKETS, INC.
Lead Arranger and Sole Book Manager
TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS............................................................................................1
ARTICLE II THE CREDITS..........................................................................................21
2.1 Commitment.....................................................................................21
2.2 Required Payments..............................................................................21
2.3 Ratable Loans..................................................................................21
2.4 Types of Advances..............................................................................21
2.5 Fees; Reduction and Increase in Commitment.....................................................21
2.6 Minimum Amount of Each Advance.................................................................24
2.7 Optional Principal Payments....................................................................24
2.8 Method of Selecting Types and Interest Periods for New Advances................................25
2.9 Conversion and Continuation of Outstanding Advances............................................25
2.10 Changes in Interest Rate, etc..................................................................26
2.11 Determination of Applicable LIBOR Rate Margin and Applicable Unused Commitment Rate............26
2.12 Rates Applicable After Event of Default........................................................27
2.13 Method of Payment..............................................................................28
2.14 Notes; Telephonic Notices......................................................................28
2.15 Interest Payment Dates; Interest Basis.........................................................28
2.16 Notification of Advances, Interest Rates, Prepayments and Commitment Reductions................28
2.17 Lending Installations..........................................................................29
2.18 Non-Receipt of Funds by Administrative Agent...................................................29
2.19 Swing Line.....................................................................................29
2.20 Withholding Tax Exemption......................................................................31
2.21 Extension of Facility Maturity Date............................................................31
2.22 Term Out Period................................................................................33
2.23 Replacement of Certain Lenders.................................................................34
ARTICLE III CHANGE IN CIRCUMSTANCES.............................................................................35
3.1 Yield Protection...............................................................................35
3.2 Changes in Capital Adequacy Regulations........................................................36
3.3 Availability of Types of Advances..............................................................37
3.4 Funding Indemnification........................................................................37
3.5 Lender Statements; Survival of Indemnity.......................................................37
i
ARTICLE IV THE LETTER OF CREDIT FACILITY........................................................................38
4.1 Facility Letters of Credit.....................................................................38
4.2 Limitations....................................................................................38
4.3 Conditions.....................................................................................39
4.4 Procedure for Issuance of Facility Letters of Credit...........................................39
4.5 Duties of LC Issuer............................................................................41
4.6 Participation..................................................................................42
4.7 Compensation for Facility Letters of Credit....................................................44
4.8 LC Issuer Reporting Requirements...............................................................44
4.9 Indemnification; Nature of LC Issuer's Duties..................................................45
4.10 Facility LC Collateral Account.................................................................46
4.11 Obligations of LC Issuer and Other Lenders.....................................................47
ARTICLE V CONDITIONS PRECEDENT..................................................................................47
5.1 Initial Advance................................................................................47
5.2 Each Advance...................................................................................49
ARTICLE VI REPRESENTATIONS AND WARRANTIES.......................................................................49
6.1 Existence and Standing.........................................................................49
6.2 Authorization and Validity.....................................................................50
6.3 No Conflict; Government Consent................................................................50
6.4 Financial Statements...........................................................................50
6.5 Material Adverse Change........................................................................51
6.6 Taxes..........................................................................................51
6.7 Litigation and Contingent Obligations..........................................................51
6.8 Subsidiaries...................................................................................51
6.9 ERISA..........................................................................................51
6.10 Accuracy of Information........................................................................52
6.11 Regulation U...................................................................................52
6.12 Material Agreements............................................................................52
6.13 Labor Disputes and Acts of God.................................................................52
6.14 Ownership......................................................................................52
6.15 Operation of Business..........................................................................52
6.16 Laws; Environment..............................................................................52
6.17 Investment Company Act.........................................................................53
6.18 Public Utility Holding Company Act.............................................................53
6.19 Subordinated Indebtedness......................................................................53
6.20 Indenture Provisions...........................................................................53
6.21 SDN List Designation...........................................................................53
ii
ARTICLE VII AFFIRMATIVE COVENANTS...............................................................................54
7.1 Financial Reporting............................................................................54
7.2 Use of Proceeds................................................................................56
7.3 Notice of Event of Default.....................................................................57
7.4 Conduct of Business............................................................................57
7.5 Taxes..........................................................................................57
7.6 Insurance......................................................................................57
7.7 Compliance with Laws...........................................................................57
7.8 Maintenance of Properties......................................................................57
7.9 Inspection.....................................................................................58
7.10 Environment....................................................................................58
7.11 New Guarantors.................................................................................58
7.12 Change in Schedules............................................................................58
ARTICLE VIII NEGATIVE COVENANTS.................................................................................59
8.1 Dividends; Repurchase of Stock.................................................................59
8.2 Indebtedness...................................................................................59
8.3 Merger.........................................................................................60
8.4 Sale of Assets.................................................................................61
8.5 Investments and Acquisitions...................................................................62
8.6 Liens..........................................................................................63
8.7 Affiliates.....................................................................................66
8.8 Modifications to Certain Indebtedness..........................................................66
8.9 Amendments of Indenture or Senior Notes........................................................66
8.10 Negative Pledge................................................................................66
ARTICLE IX FINANCIAL COVENANTS..................................................................................67
9.1 Consolidated Tangible Net Worth Test...........................................................67
9.2 Leverage Test; Interest Coverage Test..........................................................67
9.3 Consolidated Tangible Net Worth Floor..........................................................68
ARTICLE X EVENTS OF DEFAULT.....................................................................................69
10.1 Representations and Warranties.................................................................69
10.2 Non-payment....................................................................................69
10.3 Other Defaults.................................................................................69
10.4 Other Indebtedness.............................................................................69
10.5 Bankruptcy.....................................................................................70
10.6 Receiver.......................................................................................70
10.7 Judgment.......................................................................................70
iii
10.8 Unfunded Liabilities...........................................................................71
10.9 Withdrawal Liability...........................................................................71
10.10 Increased Contributions........................................................................71
10.11 Change in Control..............................................................................71
10.12 Dissolution....................................................................................71
10.13 Guaranty.......................................................................................71
10.14 Consolidated Tangible Net Worth Covenant.......................................................71
10.15 No Defaults....................................................................................71
ARTICLE XI ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES.......................................................72
11.1 Acceleration; Remedies.........................................................................72
11.2 Amendments.....................................................................................74
11.3 Preservation of Rights.........................................................................75
ARTICLE XII GENERAL PROVISIONS..................................................................................75
12.1 Survival of Representations....................................................................75
12.2 Governmental Regulation........................................................................75
12.3 Taxes..........................................................................................75
12.4 Headings.......................................................................................75
12.5 Entire Agreement...............................................................................75
12.6 Nature of Obligations; Benefits of this Agreement..............................................75
12.7 Expenses; Indemnification......................................................................76
12.8 Numbers of Documents...........................................................................76
12.9 Accounting.....................................................................................76
12.10 Severability of Provisions.....................................................................76
12.11 Nonliability of Lenders and LC Issuer..........................................................77
12.12 CHOICE OF LAW..................................................................................77
12.13 Arbitration....................................................................................77
12.14 CONSENT TO JURISDICTION........................................................................78
12.15 WAIVER OF JURY TRIAL...........................................................................79
12.16 Confidentiality................................................................................79
12.17 USA PATRIOT ACT NOTIFICATION...................................................................79
ARTICLE XIII ADMINISTRATIVE AGENT...............................................................................80
13.1 Appointment; Nature of Relationship............................................................80
13.2 Powers.........................................................................................80
13.3 General Immunity...............................................................................80
13.4 No Responsibility for Loans, Recitals, etc.....................................................80
13.5 Action on Instructions of Lenders..............................................................81
iv
13.6 Employment of Agents and Counsel...............................................................81
13.7 Reliance on Documents; Counsel.................................................................81
13.8 Agent's Reimbursement and Indemnification......................................................82
13.9 Notice of Default..............................................................................82
13.10 Rights as a Lender and LC Issuer...............................................................82
13.11 Lender Credit Decision.........................................................................83
13.12 Successor Administrative Agent.................................................................83
13.13 Agent and Arranger Fees........................................................................84
13.14 Delegation to Affiliates.......................................................................84
13.15 Co-Agents, Co-Documentation Agents, Co-Managing Agents, Syndication Agent, etc.................84
ARTICLE XIV RATABLE PAYMENTS....................................................................................84
14.1 Ratable Payments...............................................................................84
ARTICLE XV BENEFIT OF AGREEMENT, ASSIGNMENTS; PARTICIPATIONS....................................................85
15.1 Successors and Assigns.........................................................................85
15.2 Participations.................................................................................85
15.3 Assignments....................................................................................86
15.4 Dissemination of Information...................................................................87
15.5 Tax Treatment..................................................................................88
ARTICLE XVI NOTICES.............................................................................................88
16.1 Giving Notice..................................................................................88
16.2 Change of Address..............................................................................88
ARTICLE XVII COUNTERPARTS.......................................................................................88
v
LIST OF SCHEDULES AND EXHIBITS
EXHIBITS:
Exhibit A Form of Guaranty
Exhibit B Form of Note
Exhibit C Form of Commitment and Acceptance
Exhibit D Form of Borrowing Notice
Exhibit E Form of Opinion of General Counsel
Exhibit F Form of Compliance Certificate of Authorized Officer
(Financial Covenant Tests)
Exhibit G Form of Assignment and Assumption Agreement
SCHEDULES:
Schedule 1 Non-Guarantor Subsidiaries
Schedule 2 Commitments
Schedule 4.4 Existing Letters of Credit
Schedule 6.3 Required Orders, Consents and Approvals
Schedule 6.8 Subsidiaries
Schedule 8.2 Existing Indebtedness
Schedule 8.6 Existing Liens
vi
CREDIT AGREEMENT
THIS
CREDIT AGREEMENT is entered into as of April 8, 2004, among M.D.C.
HOLDINGS, INC., a Delaware corporation, as Borrower, the Lenders listed on the
signature pages of this Agreement, BANK ONE, NA, as Administrative Agent and
BANK ONE, ARIZONA, N.A. (solely for the purposes set forth in Section 4.4(f)).
RECITALS
A. M.D.C. Holdings, Inc., as borrower, Bank One, NA, as administrative
agent and the banks party thereto have entered into that certain Second Amended
and Restated
Credit Agreement dated July 30, 2002 (as amended, the "Prior
Credit
Agreement").
B. The parties hereto desire to replace the Prior
Credit Agreement with
this new
Credit Agreement.
NOW THEREFORE, the parties hereto hereby agree as follows:
ARTICLE I
DEFINITIONS
As used in this Agreement:
"AAA" is defined in Section 12.13.
"Acquisition" means any transaction, or any series of related
transactions, consummated on or after the date of this Agreement, by which
Borrower or any Guarantor (i) acquires any going concern or all or substantially
all of the assets of any firm, corporation or division thereof, whether through
purchase of assets, merger or otherwise or (ii) directly or indirectly acquires
(in one transaction or as the most recent transaction in a series of
transactions) at least a majority (in number of votes) of the securities of a
corporation which have ordinary voting power for the election of directors
(other than securities having such power only by reason of the happening of a
contingency) or a majority (by percentage or voting power) of the outstanding
partnership or other ownership interests of a partnership, joint venture,
limited liability company or other similar business organization.
"Additional Lender" is defined in Section 2.5(d)(i).
"Adjusted Consolidated Tangible Net Worth" means, at any date, (a)
Consolidated Tangible Net Worth, plus (b) the lesser of (i) fifty percent (50%)
of the Subordinated Indebtedness of Borrower and Guarantors (taken as a whole on
a consolidated basis) and (ii) $100,000,000.
1
"Administrative Agent" means Bank One, NA, in its capacity as
administrative agent for Lenders pursuant to Article XIII, and not in its
individual capacity as a Lender, and any successor Administrative Agent
appointed pursuant to Article XIII.
"Advance" means a borrowing hereunder consisting of the aggregate
amount of the several Loans made by Lenders (or Swing Line Advances made by
Swing Line Lender) to Borrower of the same Type and, in the case of a LIBOR
Advance, for the same Interest Period.
"Affected Lender" is defined in Section 2.23.
"Affiliate" of any Person means any other Person directly or indirectly
controlling, controlled by or under common control with such Person. A Person
shall be deemed to control another Person if the controlling Person beneficially
owns (within the meaning of Rule 13d-3 of the Securities Exchange Act of 1934,
as amended) 10% or more of any class of voting securities (or other ownership
interests) of the controlled Person or possesses, directly or indirectly, the
power to direct or cause the direction of the management or policies of the
controlled Person, whether through ownership of stock, by contract or otherwise.
"Aggregate Commitment" means the aggregate of the Commitments of all
Lenders, as increased or reduced from time to time pursuant to the terms hereof.
As of the date of this Agreement, the Aggregate Commitment is $700,000,000.
"Agreement" means this
Credit Agreement, as it may be amended or
modified and in effect from time to time.
"Agreement Accounting Principles" is defined in Section 12.9.
"Alternate Base Rate" means, for any day, a rate of interest per annum
equal to the higher of (i) the Prime Rate for such day and (ii) the sum of (a)
the Federal Funds Effective Rate for such day plus (b) 1/2 of 1% per annum.
"Applicable Letter of Credit Rate" means, as at any date of
determination, a rate per annum equal to the Applicable LIBOR Rate Margin.
"Applicable LIBOR Rate Margin" means, as at any date of determination,
the margin indicated in Section 2.11 as then applicable in the determination of
LIBOR Rates.
"Applicable Unused Commitment Rate" means, as at any date of
determination, the rate per annum indicated in Section 2.11 as then applicable
in the determination of the Unused Commitment Fee under Section 2.5(a).
"Arranger" means Banc One Capital Markets, Inc.
"Article" means an article of this Agreement unless another document is
specifically referenced.
"Assignment and Assumption" is defined in Section 15.3.1.
2
"Authorized Officer" means any one or more of the Chairman, President,
Senior Vice President or any Vice President, Chief Financial Officer, Treasurer,
or other officer of Borrower or a Guarantor, as applicable, acting singly or
together, in accordance with the applicable resolutions and bylaws of Borrower
or such Guarantor.
"Available Credit" means, at any date with respect to any Lender, the
amount (if any) by which such Lender's Commitment exceeds the sum of (i) the
outstanding principal balance of such Lender's Loans as of such date, plus (ii)
such Lender's ratable share (determined in accordance with Section 4.6) of the
Facility LC Obligations as of such date, plus (iii) an amount equal to such
Lender's ratable share of the outstanding Swing Line Advances.
"Average Daily Outstandings" means, for any quarter (or portion
thereof), the sum of (i) the outstanding principal balance of the Loans
(including the outstanding principal balance of the Swing Line Advances) plus
(ii) the outstanding amount of the Facility Letters of Credit, all calculated
for each day during the quarter (or portion thereof) for which the Unused
Commitment Fee is being computed, divided by the number of days in that quarter
(or portion thereof).
"Bank One" means Bank One, NA (headquartered in Chicago,
Illinois), in
its individual capacity, and its successors and assigns.
"Bank One, Arizona" means Bank One, Arizona, N.A., in its capacity as
an LC Issuer under Section 4.4(f).
"Bank One, Arizona LCs" is defined in Section 4.4(f).
"Borrower" means M.D.C. Holdings, Inc., a Delaware corporation, its
successors and assigns.
"Borrowing Base" means, with respect to an Inventory Valuation Date for
which it is to be determined, an amount equal to the sum (without duplication)
of the following assets of Borrower and each Guarantor (but only to the extent
that such assets are not subject to any Liens other than Permitted Liens):
(i) the Receivables, multiplied by ninety percent (90%); plus
(ii) the book value of Presold Units, multiplied by ninety
percent (90%); plus
(iii) the book value of Spec Units, multiplied by eighty
percent (80%); plus
(iv) the book value of Model Units, multiplied by seventy
percent (70%); plus
(v) the book value of Finished Lots, multiplied by seventy
percent (70%); plus
(vi) the book value of Land Under Development, multiplied by
fifty percent (50%); plus
(vii) the book value of Entitled Land, multiplied by thirty
percent (30%);
3
provided, however, that the aggregate (without duplication) of the amounts
calculated pursuant to clauses (v), (vi) and (vii) shall not exceed at any time
forty percent (40%) of the Borrowing Base.
"Borrowing Base Certificate" means a written certificate in a form
acceptable to Administrative Agent setting forth the amount of the Borrowing
Base with respect to the calendar month most recently completed, certified as
true and correct by an Authorized Officer of Borrower.
"Borrowing Date" means a date on which an Advance is made hereunder.
"Borrowing Notice" is defined in Section 2.8.
"Business Day" means (i) with respect to any borrowing, payment or rate
selection of LIBOR Advances, a day (other than a Saturday or Sunday) on which
banks generally are open in Chicago and New York for the conduct of
substantially all of their commercial lending activities and on which dealings
in United States dollars are carried on in the London interbank market, and (ii)
for all other purposes, a day (other than a Saturday or Sunday) on which banks
generally are open in Chicago and New York for the conduct of substantially all
of their commercial lending activities.
"Capitalized Lease" of a Person means any lease of Property by such
Person as lessee which would be capitalized on a balance sheet of such Person
prepared in accordance with Agreement Accounting Principles.
"Capitalized Lease Obligations" of a Person means the amount of the
obligations of such Person under Capitalized Leases which would be shown as a
liability on a balance sheet of such Person prepared in accordance with
Agreement Accounting Principles.
"Cash Equivalents" means:
(a) U.S. Treasury bills and notes;
(b) GNMA securities;
(c) debt insured by other agencies guaranteed by the full
faith and credit of the United States of America;
(d) commercial paper rated either "A1" or better by S&P or
"P1" by Xxxxx'x;
(e) Dutch Auction Preferred Stocks (DAP) rated either "AA" or
better by S&P or "Aa2" or better by Xxxxx'x;
(f) certificates of deposit issued by commercial banks,
savings banks or savings and loan associations whose short-term debt is
rated either "A1" or better by S&P or "P1" or better by Xxxxx'x, or if
such an institution is a subsidiary whose short-term debt is unrated,
then its parent corporation must have such a rating;
4
(g) bankers acceptances issued by financial institutions that
meet the requirements for certificates of deposit;
(h) deposits in institutions having the same qualifications
required for investments in certificates of deposit;
(i) repurchase agreements collateralized by any otherwise
acceptable collateral as defined above; and
(j) money market accounts a majority of whose assets are
composed of items described by any of the foregoing clauses (a) through
(i) through brokerage firms deemed acceptable by Borrower's management.
"Change in Control" means (a) as to Borrower, the acquisition by any
Person, or two or more Persons acting in concert, of beneficial ownership
(within the meaning of Rule 13d-3 of the Securities and Exchange Commission
under the Securities Exchange Act of 1934) of 50% or more of the outstanding
shares of voting stock of Borrower, or (b) as to any Guarantor, the acquisition
by any Person (except Borrower or one or more of the Guarantors), or two or more
Persons acting in concert of any beneficial ownership (within the meaning of
Rule 13d-3 of the Securities and Exchange Commission under the Securities
Exchange Act of 1934) of any of the outstanding shares of voting stock of such
Guarantor.
"Co-Agent" means each entity identified as such on the cover page of
this Agreement.
"Code" means the Internal Revenue Code of 1986, as amended, reformed or
otherwise modified from time to time.
"Co-Documentation Agent" means each entity identified as such on the
cover page of this Agreement.
"Collateral Shortfall Amount" is defined in Section 11.1(a).
"Co-Managing Agent" means each entity identified as such on the cover
page of this Agreement.
"Commitment" means, for each Lender, the obligation of such Lender to
make Loans, and to participate in the Facility Letters of Credit in accordance
with Section 4.6(a), not exceeding the amount set forth in Schedule 2 or as set
forth in any Commitment and Acceptance delivered pursuant to Section 2.5(d) or
as set forth in any Assignment and Assumption relating to any assignment that
has become effective pursuant to Section 15.3.3, as such amount may be modified
from time to time pursuant to the terms hereof.
"Commitment and Acceptance" is defined in Section 2.5(d)(i).
"Consolidated Indebtedness" means, at any date, the outstanding amount
of all Indebtedness (including without limitation any Subordinated Indebtedness)
of Borrower and Guarantors, without duplication, (taken as a whole on a
consolidated basis in conformity with
5
Agreement Accounting Principles). "Consolidated Indebtedness" shall specifically
exclude Indebtedness of any Non-Guarantor Subsidiary.
"Consolidated Interest Expense" means for any period, without
duplication, the aggregate amount of interest which, in conformity with
Agreement Accounting Principles, would be set opposite the caption "interest
expense" or any like caption on a consolidated income statement for Borrower and
Guarantors (specifically excluding the Non-Guarantor Subsidiaries), including,
without limitation, imputed interest included on Capitalized Lease Obligations,
all commissions, discounts and other fees and charges owed with respect to
Letters of Credit and bankers' acceptance financing, the net costs associated
with Rate Hedging Obligations, amortization of other financing fees and
expenses, the interest portion of any deferred payment obligation, amortization
of discount or premiums, if any, and all other noncash interest expense, other
than interest and other charges amortized to cost of sales. Consolidated
Interest Expense includes, with respect to Borrower and Guarantors (specifically
excluding the Non-Guarantor Subsidiaries), without duplication, all interest
included as a component of cost of sales for such period.
"Consolidated Interest Incurred" means for any period, without
duplication, the aggregate amount of interest which, in conformity with
Agreement Accounting Principles, would be set opposite the caption "interest
expense" or any like caption on a consolidated income statement for Borrower and
Guarantors (specifically excluding the Non-Guarantor Subsidiaries), including,
without limitation, imputed interest included on Capitalized Lease Obligations,
all commissions, discounts and other fees and charges owed with respect to
Letters of Credit and bankers' acceptance financing, the net costs associated
with Rate Hedging Obligations, amortization of other financing fees and
expenses, the interest portion of any deferred payment obligation, amortization
of discount or premium, if any, and all other noncash interest expense other
than interest and other charges amortized to cost of sales. Consolidated
Interest Incurred includes, with respect to Borrower and Guarantors, without
duplication, all capitalized interest for such period, all interest attributable
to discontinued operations for such period to the extent not set forth on the
income statement under the caption "interest expense" or any like caption, and
all interest actually paid by Borrower or any Guarantor (specifically excluding
the Non-Guarantor Subsidiaries) under any contingent obligation during such
period.
"Consolidated Net Income" means, for any period, the net income (or
loss) of Borrower on a consolidated basis for such period taken as a single
accounting period, determined in conformity with Agreement Accounting
Principles.
"Consolidated Senior Debt Borrowings" means, at any date, with respect
to Borrower and Guarantors, without duplication (taken as a whole on a
consolidated basis), the outstanding principal amount of all obligations
described in clauses (i), (iv) or (viii) of the definition of "Indebtedness"
(including the Obligations and the Senior Debt) calculated in accordance with
Agreement Accounting Principles but excluding (i) Indebtedness of any
Non-Guarantor Subsidiary, (ii) Indebtedness of Borrower to a Guarantor, a
Guarantor to Borrower or a Guarantor to another Guarantor, (iii) any
Subordinated Indebtedness and (iv) Indebtedness secured by collateral having a
value in excess of the amount of such Indebtedness.
6
"Consolidated Tangible Net Worth" means, at any date, (a) the
stockholders' equity of Borrower determined on a consolidated basis in
conformity with Agreement Accounting Principles less (i) its consolidated
Intangible Assets, and less (ii) loans and advances to directors, officers and
employees of Borrower but excluding (A) loans for purposes of exercising options
to purchase capital stock in Borrower to the extent not otherwise netted out in
the determination of stockholders' equity, and (B) any arms-length mortgage
loans made by any Subsidiary in the ordinary course of such Subsidiary's
business, and (C) any advances made to employees in the ordinary course of
business for travel and other items, and (D) other such loans and advances not
to exceed $5,000,000 in the aggregate outstanding at any one time, all
determined as of such date less (b) the Net Worth of the Non-Guarantor
Subsidiaries (taken as a whole on a consolidated basis). For purposes of this
definition "Intangible Assets" means the amount (to the extent reflected in
determining such consolidated stockholders' equity) of (1) all write-ups in the
book value of any asset owned by Borrower or any Subsidiary, (2) any amount,
however designated on the balance sheet, representing the excess of the purchase
price paid for assets or stock acquired over the value assigned thereto on the
books of Borrower or any Subsidiary, (3) all unamortized debt discount,
goodwill, patents, trademarks, service marks, trade names, copyrights,
organization or developmental expenses and other intangible items, and (4) all
items that would be considered intangible assets under Agreement Accounting
Principles.
"Consolidated Tangible Net Worth Test" is defined in Section 9.1.
"Controlled Group" means all members of a controlled group of
corporations and all trades or businesses (whether or not incorporated) under
common control which, together with Borrower, a Guarantor or any of their
respective Subsidiaries, are treated as a single employer under Section 414 of
the Code.
"Conversion/Continuation Notice" is defined in Section 2.9.
"Coverage Test Failure Quarter" is defined in Section 9.2(b).
"Dividend" means (i) any dividend paid or declared by Borrower or any
Guarantor, as applicable; (ii) any purchase, redemption, retirement or other
acquisition by Borrower or any Guarantor, as applicable, for value, or the
setting aside of any funds or issuance of any warrants for such purpose, of any
of the capital stock of Borrower or such Guarantor, as applicable, now or
hereafter outstanding or any interest therein; and (iii) as to any Guarantor,
any distribution of assets, properties, cash, rights, obligations or other
consideration or securities of such Guarantor, directly or indirectly, to
Borrower.
"Dollars" and the sign "$" mean lawful money of the United States of
America.
"EBITDA" means, for any period, without duplication, the following, all
as determined on a consolidated basis for Borrower and Guarantors (specifically
excluding the Non-Guarantor Subsidiaries) in conformity with Agreement
Accounting Principles,
(i) the sum of the amounts for such period of (a) Consolidated
Net Income (specifically excluding for purposes of this definition net
income of the Non-Guarantor Subsidiaries but including, however, any
dividends and reimbursements of taxes paid by any Non-Guarantor
Subsidiary to Borrower or any Guarantor), (b) Consolidated Interest
7
Expense, (c) charges against income for all federal, state and local
taxes, (d) depreciation expense, (e) amortization expense, (f) other
non-cash charges and expenses, and (g) any losses arising outside of
the ordinary course of business which have been included in the
determination of such Consolidated Net Income, less
(ii) any gains arising outside of the ordinary course of
business which have been included in the determination of such
Consolidated Net Income.
"Entitled Land" means parcels of land owned by Borrower or any
Guarantor which are zoned for the construction of single-family dwellings,
whether detached or attached (excluding mobile homes); provided, however, that
the term "Entitled Land" shall not include Land under Development, Finished Lots
or any real property upon which the construction of Housing Units has commenced
(as described in the definition of "Housing Unit").
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and any rule or regulation issued thereunder.
"Event of Default" means an event described in Article X after the
expiration of any applicable cure or notice period provided in Article X.
"Excluded Taxes" is defined in Section 3.1(i).
"Existing Letters of Credit" means, collectively, the Bank One, Arizona
LCs and the Other Existing LCs.
"Extension Request" is defined in Section 2.21(a).
"Facility Increase Request" is defined in Section 2.5(d)(i).
"Facility LC Collateral Account" is defined in Section 4.10.
"Facility LC Obligations" means, at any date, the sum of (i) the
aggregate undrawn face amount of all outstanding Facility Letters of Credit,
plus (ii) the aggregate amount paid by an LC Issuer on any Facility Letters of
Credit to the extent (if any) not reimbursed by Borrower or by Lenders under
Section 4.4.
"Facility Letter of Credit" means each Existing Letter of Credit and
any Letter of Credit issued by the LC Issuer for the account of Borrower or any
Guarantor in accordance with Article IV.
"Facility Letter of Credit Fee" means a fee, payable with respect to
each Facility Letter of Credit issued by the LC Issuer, in an amount per annum
equal to the product of (i) the Applicable Letter of Credit Rate (determined as
of the date on which the quarterly installment of such fee is due) and (ii) the
face amount of such Facility Letter of Credit. The Applicable Letter of Credit
Rate shall be adjusted, as applicable, from time to time, effective on the first
January 1, April 1, June 1 or October 1 to occur on or after any change in the
Applicable LIBOR Rate Margin.
8
"Facility Maturity Date" means April 7, 2009, as the same may be
extended as provided in Section 2.21.
"Facility Rating" means the publicly announced ratings by Moody's and
S&P on Borrower's Indebtedness evidenced by this Agreement and the Notes;
provided, however, (i) in the event of a difference in such ratings between S&P
and Moody's when both of such ratings are BBB- and Baa3 or better, the Facility
Rating shall be the higher of the two ratings, (ii) in the event of a difference
in such ratings between S&P and Moody's when one of such ratings is BB+ or Ba1,
the Facility Rating shall be the lower of the two ratings and (iii) in the event
Moody's or S&P (but not both) publicly announces such a rating, such rating
shall be the Facility Rating. The Facility Rating shall change if and when such
rating(s) change.
"Facility Termination Date" means the earlier of (i) the Facility
Maturity Date, or (ii) the last day of the Term Out Period (if applicable) then
in effect, as calculated pursuant to Section 2.22.
"Federal Funds Effective Rate" means, for any day, an interest rate per
annum equal to the weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by Federal
funds brokers on such day, as published for such day (or, if such day is not a
Business Day, for the immediately preceding Business Day) by the Federal Reserve
Bank of New York, or, if such rate is not so published for any day which is a
Business Day, the average of the quotations at approximately 10:00 a.m., Chicago
time, for such day on such transactions received by Administrative Agent from
three (3) Federal funds brokers of recognized standing selected by
Administrative Agent in its sole discretion.
"Financial Covenant Test" means each of the Consolidated Tangible Net
Worth Test and the Leverage Test. The covenant set forth in Section 9.3 shall
not constitute a Financial Covenant Test.
"Finished Lots" means parcels of land owned by Borrower or any
Guarantor which are duly recorded and platted for the construction of
single-family dwelling units, whether detached or attached (but excluding mobile
homes) and zoned for such use, with respect to which all requisite governmental
consents and approvals required for a building permit to be issued have been, or
could be, obtained; provided, however, that the term "Finished Lots" shall not
include any real property upon which the construction of a Housing Unit has
commenced (as described in the definition of "Housing Unit").
"Floating Rate" means, for any day, a rate per annum equal to the
Alternate Base Rate for such day.
"Floating Rate Advance" means an Advance which bears interest at the
Floating Rate.
"Floating Rate Loan" means a Loan which bears interest at the Floating
Rate.
"Fund" means any Person (other than a natural person) that is (or will
be) engaged in making, purchasing, holding or otherwise investing in commercial
loans and similar extensions of credit in the ordinary course of its business.
9
"GAAP" means generally accepted accounting principles in effect from
time to time, consistently applied.
"Guarantors" means RICHMOND AMERICAN HOMES OF CALIFORNIA, INC., a
Colorado corporation, RICHMOND AMERICAN HOMES OF MARYLAND, INC., a Maryland
corporation, RICHMOND AMERICAN HOMES OF NEVADA, INC., a Colorado corporation,
RICHMOND AMERICAN HOMES OF VIRGINIA, INC., a Virginia corporation, RICHMOND
AMERICAN HOMES OF ARIZONA, INC., a Delaware corporation, RICHMOND AMERICAN HOMES
OF COLORADO, INC., a Delaware corporation, RICHMOND AMERICAN HOMES OF WEST
VIRGINIA, INC., a Colorado corporation, RICHMOND AMERICAN HOMES OF CALIFORNIA
(INLAND EMPIRE), INC., a Colorado corporation, RICHMOND AMERICAN HOMES OF UTAH,
INC., a Colorado corporation, RICHMOND AMERICAN HOMES OF TEXAS, INC., a Colorado
corporation, RICHMOND AMERICAN HOMES OF FLORIDA, LP, a Colorado limited
partnership, RICHMOND AMERICAN HOMES OF DELAWARE, INC., a Colorado corporation,
RICHMOND AMERICAN HOMES OF
ILLINOIS, INC., a Colorado corporation, RICHMOND
AMERICAN HOMES OF NEW JERSEY, INC., a Colorado corporation, RICHMOND AMERICAN
HOMES OF PENNSYLVANIA, INC., a Colorado corporation, M.D.C. LAND CORPORATION, a
Colorado corporation, RICHMOND AMERICAN CONSTRUCTION, INC., a Delaware
corporation, RAH TEXAS HOLDINGS, LLC, a Colorado limited liability company and
RAH OF TEXAS, LP, a Colorado limited partnership, and their successors and
assigns, and any Subsidiary that shall hereafter become a Guarantor in
accordance with Section 7.11 hereof, and any successors and assigns of any of
the foregoing. "Guarantor" means any one of the Guarantors.
"Guaranty" means a Guaranty, in substantially the form of Exhibit A
hereto, duly executed by one or more Guarantors, as the same may be
supplemented, amended or modified and in effect from time to time.
"Housing Unit" means a single-family dwelling (where construction has
commenced), whether detached or attached (including condominiums but excluding
mobile homes), including the parcel of land on which such dwelling is located,
that is or will be available for sale by Borrower or a Guarantor. The
construction of a Housing Unit shall be deemed to have commenced upon
commencement of the trenching for the foundation of the Housing Unit. Each
"Housing Unit" is either a Presold Unit, a Spec Unit or a Model Unit.
"Housing Unit Closing" means a closing of the sale of a Housing Unit by
Borrower or a Guarantor to a bona fide purchaser for value.
"Increase Date" is defined in Section 2.5(d)(ii).
"Indebtedness" of a Person means, without duplication, such Person's
(i) obligations for borrowed money,
(ii) obligations representing the deferred purchase price of
Property or services (other than (A) trade accounts payable and accrued
expenses arising or occurring in the ordinary course of such Person's
business, and (B) obligations evidenced by the Permitted Liens
described in clause (vi) of the definition of Permitted Liens),
10
(iii) obligations, whether or not assumed, secured by Liens
on, or payable out of the proceeds or production from, Property now or
hereafter owned or acquired by such Person (other than the obligations
evidenced by the Permitted Liens described in clause (vi) of the
definition of Permitted Liens),
(iv) obligations which are evidenced by notes, bonds,
debentures, or other similar instruments,
(v) Capitalized Lease Obligations,
(vi) net liabilities under Rate Hedging Obligations,
(vii) all liabilities and obligations of others of the kind
described in clauses (i) through (vi) and (viii) that such Person has
guaranteed, or that are secured by Liens on Property now or hereafter
owned or acquired by such Person (other than the obligations evidenced
by the Permitted Liens described in clause (vi) of the definition of
Permitted Liens) or that are otherwise the legal liability of such
Person,
(viii) reimbursement obligations for which such Person is
obligated with respect to a Letter of Credit (which shall be included
in the face amount of such Letter of Credit, whether or not such
reimbursement obligations are due and payable), provided, however, that
Letters of Credit supporting performance obligations shall not be
included in Indebtedness unless and until such Letter of Credit is
drawn upon, and
(ix) a pro rata share of the Indebtedness of any joint venture
in which such Person holds an interest.
Indebtedness includes, without limitation, in the case of Borrower, the
Obligations (subject to clause (viii) above) and the obligations evidenced by
the Senior Notes and the documents executed in connection therewith.
"Indenture" means that certain Senior Debt Securities Indenture, dated
as of December 3, 2002 (the "Base Indenture"), as supplemented by (i) that
certain Supplemental Indenture dated December 3, 2002 relating to the issuance
of the 7.0% Senior Notes (as that term is defined in the definition of "Senior
Notes"), (ii) that certain Supplemental Indenture dated May 19, 2003 relating to
the issuance of the 5.5% Senior Notes (as that term is defined in the definition
of "Senior Notes"), (iii) that certain Second Supplemental Indenture dated
September 29, 2003 relating to the 7.0% Senior Notes, (iv) that certain Second
Supplemental Indenture dated September 29, 2003 relating to the 5.5% Senior
Notes, (v) that certain Third Supplemental Indenture dated February 12, 2004
relating to the 7.0% Senior Notes and (vi) that certain Third Supplemental
Indenture dated as of February 12, 2004 relating to the 5.5% Senior Notes, all
between Borrower and U.S. Bank National Association and pursuant to which the
Senior Notes were issued.
"Interest Coverage Test" is defined in Section 9.2(b).
"Interest Period" means, with respect to a LIBOR Advance, a period of
one, two, three or six months commencing on a Business Day selected by Borrower
pursuant to this Agreement.
11
Such Interest Period shall end on (but exclude) the day which corresponds
numerically to such date one, two, three or six months thereafter, provided,
however, that if there is no such numerically corresponding day in such next,
second, third or sixth succeeding month, such Interest Period shall end on the
last Business Day of such next, second, third or sixth succeeding month. If an
Interest Period would otherwise end on a day which is not a Business Day, such
Interest Period shall end on the next succeeding Business Day, provided,
however, that if said next succeeding Business Day falls in a new calendar
month, such Interest Period shall end on the immediately preceding Business Day.
No Interest Period shall extend beyond the Facility Termination Date (or, if the
provisions of Section 2.21(c) apply, the Previous Maturity Date).
"Inventory Valuation Date" means the last day of the most recent
calendar month with respect to which a Borrower is required to have delivered a
Borrowing Base Certificate pursuant to Section 7.1(vi) hereof.
"Investment" of a Person means any loan, advance, extension of credit
(other than accounts receivable arising in the ordinary course of business), or
contribution of capital by such Person to any other Person or any investment in,
or purchase or other acquisition of, the stock, partnership, joint venture or
limited liability company interests, notes, debentures or other securities of
any other Person made by such Person.
"Investment Grade Rating" means a Facility Rating of Baa3 (or higher)
from Moody's or BBB- (or higher) from S&P or, if there is no Facility Rating, a
Senior Public Debt Rating of Baa3 (or higher) from Moody's or BBB- (or higher)
from S&P.
"Issuance Date" means the date on which a Facility Letter of Credit is
issued, amended or extended.
"Land Under Development" means parcels of land owned by Borrower or any
Guarantor which are zoned for the construction of single-family dwelling units,
whether attached or detached (excluding mobile homes) and upon which the
construction of site improvements has commenced and is proceeding; provided,
however, that the term "Land Under Development" shall not include (i) Finished
Lots, (ii) Entitled Land, (iii) any real property upon which the construction of
a Housing Unit has commenced, or (iv) vacant land held by Borrower or any
Guarantor for future development or sale and designated as inactive land in the
footnotes to Borrower's or such Guarantor's financial statements.
"LC Issuer" means (i) solely with respect to the Bank One, Arizona LCs,
Bank One, Arizona, (ii) solely with respect to the Other Existing LCs, the Prior
LC Issuers, and (iii) with respect to all Facility Letters of Credit issued
after the date hereof, Bank One or such other Lender as Borrower, Administrative
Agent and such other Lender may agree upon, that may from time to time issue
Facility Letters of Credit.
"Lenders" means the lending institutions listed on the signature pages
of this Agreement and their respective successors and assigns.
"Lending Installation" means, with respect to a Lender or
Administrative Agent, any office, branch, banking subsidiary of the holding
company of a Lender or Administrative Agent,
12
or banking Affiliate of such Lender or Administrative Agent located in each
event in the United States.
"Letter of Credit" means a letter of credit or similar instrument which
is issued by a financial institution upon the application of a Person or upon
which such Person is an account party or for which such Person is in any way
liable.
"Leverage Ratio" means, at any date, the ratio (expressed as a
percentage) of (i) Consolidated Indebtedness to (ii) the sum of Consolidated
Indebtedness and Adjusted Consolidated Tangible Net Worth.
"Leverage Test" is defined in Section 9.2(a).
"LIBOR Advance" means an Advance which bears interest at a LIBOR Rate.
"LIBOR Base Rate" means, with respect to a LIBOR Advance for the
relevant Interest Period, the applicable British Bankers' Association London
interbank offered rate for deposits in U.S. dollars as reported by any generally
recognized financial information service as of 11:00 a.m. (London time) two
Business Days prior to the first day of such Interest Period, and having a
maturity equal to such Interest Period.
"LIBOR Loan" means a Loan which bears interest at a LIBOR Rate.
"LIBOR Rate" means, with respect to a LIBOR Advance for the relevant
Interest Period, the sum of (i) the quotient of (a) the LIBOR Base Rate
applicable to such Interest Period, divided by (b) one minus the Reserve
Requirement (expressed as a decimal) applicable to such Interest Period, plus
(ii) the Applicable LIBOR Rate Margin. The LIBOR Rate shall be rounded to the
next higher multiple of 1/16 of 1% if the rate is not such a multiple.
"Lien" means any lien (statutory or other), mortgage, pledge,
hypothecation, assignment (the purpose of which is to grant a security
interest), deposit arrangement (the purpose of which is to grant a security
interest), encumbrance or other security agreement or arrangement of any kind or
nature whatsoever the purpose of which is to grant a security interest, whether
or not filed or recorded or otherwise perfected (including the interest of a
vendor or lessor under any conditional sale, any Capitalized Lease or any lease
deemed to constitute a security interest or any other title retention
agreement).
"Loan" means, with respect to a Lender, such Lender's portion of any
Advance. For purposes of a Swing Line Advance, Swing Line Lender's portion of
such Advance is 100%.
"Loan Documents" means this Agreement, the Notes and any Reimbursement
Agreements.
"Material Adverse Effect" means a material adverse effect, based on
commercially reasonable standards, on (i) the business, Property, condition
(financial or otherwise), or results of operations of Borrower and Guarantors,
taken as a whole, (ii) the ability of Borrower to perform its obligations under
the Loan Documents, or (iii) the validity or enforceability under applicable law
of any of the Loan Documents or Guaranties or the rights or remedies of
13
Administrative Agent, Lenders or any LC Issuer thereunder (other than as to
clause (iii), a Material Adverse Effect resulting solely from the acts or
omissions of Administrative Agent and/or any Lender(s)). Items disclosed by
Borrower in its form 10-Q and form 10-K or any other filings with the Securities
and Exchange Commission shall not be deemed to have a Material Adverse Effect
solely because of such disclosure, and the existence and content of such
disclosure shall not be prima facie evidence of a Material Adverse Effect.
"Model Unit" means a Housing Unit constructed initially for inspection
by prospective purchasers that is not intended to be sold until all or
substantially all other Housing Units in the applicable subdivision are sold.
"Moody's" means Xxxxx'x Investors Service, Inc.
"Multiemployer Plan" means a Plan maintained pursuant to a collective
bargaining agreement or any other arrangement as described in Section 3(37) of
ERISA to which Borrower, any Guarantor or any member of the Controlled Group is
a party to which more than one employer is obligated to make contributions.
"Net Worth" means, at any date as to each Non-Guarantor Subsidiary
(taken as a whole on a consolidated basis), the sum of (A) all stockholders'
equity of such Non-Guarantor Subsidiary, less (B) all loans or advances made by
such Subsidiary to Borrower or any Guarantor and outstanding at such date, all
as determined in conformity with Agreement Accounting Principles.
"New Lender" is defined in Section 2.5(d)(i).
"Non-Guarantor Subsidiary" means each Subsidiary of Borrower that is
not a Guarantor. The Non-Guarantor Subsidiaries as of the date of this Agreement
are listed on Schedule 1.
"Non-Recourse Indebtedness" with respect to any Person means
Indebtedness of such Person (i) for which the sole legal recourse for collection
of principal and interest on such Indebtedness is against the specific property
identified in the instruments evidencing or securing such Indebtedness and such
property was acquired with the proceeds of such Indebtedness or such
Indebtedness was incurred within ninety (90) days after the acquisition of such
property and for which no other assets of such Person may be realized upon in
collection of principal or interest on such Indebtedness, or (ii) that
refinances Indebtedness described in clause (i) and for which the recourse is
limited to the same extent described in clause (i).
"Note" means a promissory note, in substantially the form of Exhibit B
hereto, duly executed by Borrower and payable to the order of a Lender in the
amount of its Commitment, including any amendment, modification, renewal or
replacement of such promissory note.
"Obligations" means all unpaid principal of and accrued and unpaid
interest on the Notes, the Facility LC Obligations, all accrued and unpaid fees
and all expenses, reimbursements, indemnities and other obligations of Borrower
to Lenders or to any Lender, Administrative Agent, any LC Issuer or any
indemnified party hereunder arising under the Loan Documents.
"Other Existing LCs" is defined in Section 4.4(g).
14
"Participants" is defined in Section 15.2.1.
"PBGC" means the Pension Benefit Guaranty Corporation, or any successor
thereto.
"Permitted Leverage Ratio" means, at the date hereof, 55%, as such
amount may hereafter be adjusted from time to time as provided in Sections
9.2(b) and 9.2(c).
"Permitted Liens" means, as to Borrower or any Guarantor, any of the
following:
(i) Liens for taxes, assessments or governmental charges or
levies on Borrower's or such Guarantor's Property if the same (A) shall
not at the time be delinquent or thereafter can be paid without
penalty, or (B) are being contested in good faith and by appropriate
proceedings and for which adequate reserves shall have been established
on Borrower's or such Guarantor's books in accordance with Agreement
Accounting Principles.
(ii) Liens imposed by law, such as carriers', warehousemen's,
mechanics' and materialmen's Liens and other similar Liens arising in
the ordinary course of business with respect to amounts that either (A)
are not yet delinquent, or (B) are delinquent but are being contested
in a timely manner in good faith by appropriate proceedings and for
which adequate reserves shall have been established on Borrower's or
Guarantor's books in accordance with Agreement Accounting Principles.
(iii) Utility easements, rights of way, zoning restrictions,
covenants, reservations, and such other burdens, encumbrances or
charges against real property, or other minor irregularities of title,
as are of a nature generally existing with respect to properties of a
similar character and which do not in any material way interfere with
the use thereof or the sale thereof in the ordinary course of business
of Borrower or such Guarantor.
(iv) Easements, dedications, assessment district or similar
Liens in connection with municipal financing and other similar
encumbrances or charges, in each case reasonably necessary or
appropriate for the development of real property of Borrower or such
Guarantor, and which are granted in the ordinary course of the business
of Borrower or such Guarantor, and which in the aggregate do not
materially burden or impair the fair market value or use of such real
property (or the project to which it is related) for the purposes for
which it is or may reasonably be expected to be held.
(v) Any option or right of first refusal to purchase real
property granted to the master developer or the seller of real property
that arises as a result of the non-use or non-development of such real
property by Borrower or such Guarantor.
(vi) Any agreement or contract to participate in the income or
revenue or to pay lot premiums, in each case derived from the sale of
Housing Units and granted in the ordinary course of business to the
seller of the real property upon which the Housing Unit is constructed.
15
"Person" means any natural person, corporation, firm, joint venture,
partnership, limited liability company, association, enterprise, trust or other
entity or organization, or any government or political subdivision or any
agency, department or instrumentality thereof.
"Plan" means an employee pension benefit plan which is covered by Title
IV of ERISA or subject to the minimum funding standards under Section 412 of the
Code as to which Borrower, any Guarantor or any member of the Controlled Group
may have any liability.
"Presold Unit" means a Housing Unit owned by Borrower or any Guarantor
that is subject to a bona fide written agreement between Borrower or such
Guarantor and a third Person purchaser for sale in the ordinary course of
Borrower's or such Guarantor's business of such Housing Unit and the related
lot, accompanied by a xxxx xxxxxxx money deposit or down payment in an amount
that is customary, and subject only to ordinary and customary contingencies to
the purchaser's obligation to buy the Housing Unit and related lot.
"Previous Maturity Date" is defined in Section 2.21(c).
"Prime Rate" means the per annum rate announced by the Lender acting as
the Administrative Agent from time to time as its "prime rate" (it being
acknowledged that such announced rate may not necessarily be the lowest rate
charged by the Lender acting as Administrative Agent to any of its customers),
which Prime Rate shall change simultaneously with any change in such announced
rate.
"Prior
Credit Agreement" is defined in Recital A.
"Prior LC Issuers" means those Lenders party to the Prior
Credit
Agreement that have issued the Other Existing LCs.
"Prior Lenders" means the "Banks" as defined in the Prior Credit
Agreement.
"Property" of a Person means any and all property, whether real,
personal, tangible, intangible, or mixed, of such Person, or other assets owned,
leased or operated by such Person.
"Public Indebtedness" means Indebtedness evidenced by notes,
debentures, or other similar instruments issued after the date of this Agreement
pursuant to either (i) a registered public offering or (ii) a private placement
of such instruments in accordance with an exemption from registration under the
Securities Act of 1933 and/or the Securities Exchange Act of 1934 or similar
law.
"Purchasers" is defined in Section 15.3.1.
"Rate Hedging Obligations" of a Person means any and all obligations of
such Person, whether absolute or contingent and howsoever and whensoever
created, arising, evidenced or acquired (including all renewals, extensions and
modifications thereof and substitutions therefor), under (i) any and all
agreements, devices or arrangements designed to protect at least one of the
parties thereto from the fluctuations of interest rates, exchange rates or
forward rates applicable to such party's assets, liabilities or exchange
transactions, including, but not limited to, dollar-denominated or
cross-currency interest rate exchange agreements, forward currency
16
exchange agreements, interest rate cap or collar protection agreements, forward
rate currency or interest rate options, puts and warrants, and (ii) any and all
cancellations, buy backs, reversals, terminations or assignments of any of the
foregoing.
"Receivables" means the net proceeds payable to, but not yet received
by, Borrower or any Guarantor following a Housing Unit Closing.
"Refinancing Indebtedness" means Indebtedness that refunds, refinances
or extends any Indebtedness (or that refunds, refinances or extends any refund,
refinancing or extension of such Indebtedness), but only to the extent that
(i) the Refinancing Indebtedness is subordinated to or pari
passu with the Obligations (or a Guarantor's obligations under its
Guaranty, as applicable) to the same extent as the Indebtedness being
refunded, refinanced or extended,
(ii) the Refinancing Indebtedness is scheduled to mature no
earlier than the then current maturity date of such Indebtedness,
(iii) such Refinancing Indebtedness is in an aggregate amount
that is equal to or less than the sum of the aggregate amount then
outstanding plus all amounts committed but undisbursed under the
Indebtedness being refunded, refinanced or extended,
(iv) the Person or Persons liable for the payment of such
Refinancing Indebtedness are the same Person or Persons (or
successor(s) thereto) that were liable for the Indebtedness being
refunded, refinanced or extended when such Indebtedness was initially
incurred, and
(v) such Refinancing Indebtedness is incurred within 120 days
after the Indebtedness being refunded, refinanced or extended is so
refunded, refinanced or extended.
"Regulation D" means Regulation D of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor thereto
or other regulation or official interpretation of said Board of Governors
relating to reserve requirements applicable to member banks of the Federal
Reserve System.
"Regulation U" means Regulation U of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor thereto
or other regulation or official interpretation of said Board of Governors
relating to the extension of credit by banks for the purpose of purchasing or
carrying margin stocks applicable to member banks of the Federal Reserve System.
"Reimbursement Agreement" means, with respect to a Facility Letter of
Credit, such form of application therefor and form of reimbursement agreement
therefor (whether in a single or several documents, taken together) as an LC
Issuer may employ in the ordinary course of business for its own account, with
such modifications thereto as may be agreed upon by such LC Issuer and Borrower
and as are not materially adverse (in the reasonable judgment of such LC
17
Issuer and Administrative Agent) to the interests of Lenders; provided, however,
in the event of any conflict between the terms of any Reimbursement Agreement
and this Agreement, the terms of this Agreement shall control.
"Rejecting Lender" is defined in Section 2.21(b).
"Related Business" means any of the following lines of business or
business activity of the type conducted by Borrower, Guarantors and their
Subsidiaries on the date hereof: (i) the home building business, (ii) the
residential mortgage loan business, (iii) the real estate development business,
(iv) the title insurance agency and settlement business, and (v) the insurance
agency business.
"Replacement Lender" is defined in Section 2.23.
"Reportable Event" means a reportable event as defined in Section 4043
of ERISA and the regulations issued under such Section, with respect to a Plan,
excluding, however, such events as to which the PBGC by regulation waived the
requirement of Section 4043(a) of ERISA that it be notified within thirty (30)
days of the occurrence of such event; provided, however, that a failure to meet
the minimum funding standard of Section 412 of the Code and of Section 302 of
ERISA shall be a Reportable Event regardless of the issuance of any such waiver
of the notice requirement in accordance with either Section 4043(a) of ERISA or
waiver of the funding requirements under Section 412(d) of the Code.
"Required Lenders" means Lenders in the aggregate having at least
66-2/3% of the Aggregate Commitment or, if the Aggregate Commitment has been
terminated, Lenders in the aggregate holding at least 66-2/3% of the aggregate
unpaid principal amount of the outstanding Advances.
"Reserve Requirement" means, with respect to an Interest Period, the
maximum aggregate reserve requirement (including all basic, supplemental,
marginal and other reserves) which is imposed under Regulation D on Eurocurrency
liabilities (as defined therein).
"S&P" means Standard & Poor's Ratings Services.
"SEC Filing" means any form 10-K, form 10-Q or form 8-K of Borrower
hereafter filed by Borrower with the Securities and Exchange Commission and
delivered to Administrative Agent pursuant to Section 7.1(xii).
"Section" means a numbered section of this Agreement, unless another
document is specifically referenced.
"Senior Debt" means the Senior Notes or, if the Senior Notes are
refinanced, the Refinancing Indebtedness with respect thereto.
"Senior Notes" means (a) the 7.0% Senior Notes due 2012 of Borrower
issued in the original principal amount of $150,000,000 pursuant to the
Indenture (the "7% Senior Notes") and (b) the 5.5% Senior Notes due 2013 of
Borrower issued in the original principal amounts of
18
$150,000,000 and $200,000,000, respectively, pursuant to the Indenture (the
"5.5% Senior Notes").
"Senior Public Debt Rating" means the publicly announced ratings by
Xxxxx'x and S&P on Borrower's Senior Debt or other Public Indebtedness of
Borrower that is pari passu with the Obligations; provided, however, (i) in the
event of a difference in such ratings between S&P and Xxxxx'x when each of such
ratings is BBB- and Baa3 or better, the Senior Public Debt Rating shall be the
higher of the two ratings, (ii) in the event of a difference in such ratings
between S&P and Xxxxx'x when one of such ratings is BB+ or Ba1, the Senior
Public Debt Rating shall be the lower of the two ratings and (iii) in the event
Xxxxx'x or S&P (but not both) publicly announces such a rating, such rating
shall be the Senior Public Debt Rating. The Senior Public Debt Rating shall
change if and when such rating(s) change.
"Significant Subsidiary" means any Non-Guarantor Subsidiary that has a
Net Worth equal to or exceeding $1,000,000.00.
"Single Employer Plan" means a Plan maintained by Borrower, any
Guarantor or any member of the Controlled Group for employees of Borrower, any
Guarantor or any member of the Controlled Group.
"Spec Unit" means any Housing Unit owned by Borrower or any Guarantor
that is not a Presold Unit or a Model Unit.
"Subordinated Indebtedness" means any Indebtedness of Borrower or any
Guarantor (a) which has a maturity date that is later than the Facility Maturity
Date and (b) the payment of which Indebtedness is subordinated to payment of the
Obligations or to such Guarantor's Guaranty of the Obligations (as applicable)
to the satisfaction of the Required Lenders. Subordinated Indebtedness shall
specifically not include Indebtedness of any Guarantor to Borrower or Borrower
to any Guarantor.
"Subsidiary" of a Person means (i) any corporation more than 50% of the
outstanding securities having ordinary voting power for the election of the
board of directors of which shall at the time be beneficially owned (within the
meaning of Rule 13d-3 of the Securities Exchange Act of 1934, as amended)
directly or indirectly, by such Person or by one or more of its Subsidiaries or
by such Person and one or more of its Subsidiaries, or (ii) any partnership,
association, joint venture, limited liability company or similar business
organization more than 50% of the ownership interests having ordinary voting
power of which shall at the time be so owned or controlled. Unless otherwise
expressly provided, all references herein to a "Subsidiary" shall mean a direct
or indirect Subsidiary of Borrower.
"Substantial Portion" means, with respect to the Property of Borrower
and Guarantors, taken as a whole, Property which represents more than 10% of
Consolidated Tangible Net Worth, as would be shown in the consolidated financial
statements of Borrower as of the beginning of the fiscal quarter in which such
determination is made.
"Swing Line Advances" has the meaning set forth in Section 2.19.
19
"Swing Line Advance Maturity Date" means that day that is the second
Business Day following the date in which a Swing Line Advance was funded by
Swing Line Lender.
"Swing Line Lender" means Bank One, NA.
"Syndication Agent" means each entity identified as such on the cover
page of this Agreement.
"Term Out Date" is defined in Section 2.22(a).
"Term Out Period" means the period of time commencing on the Term Out
Date and expiring on the Facility Termination Date.
"Transferee" is defined in Section 15.4.
"Type" means, with respect to any Advance, its nature as a Floating
Rate Advance or LIBOR Advance.
"Unfunded Liabilities" means the amount (if any) by which the present
value of all vested nonforfeitable benefits under all Single Employer Plans
exceeds the fair market value of the assets of such Plans allocable to such
benefits, all determined as of the then most recent valuation date for such
Plans, using the actuarial methods and assumptions utilized in the actuarial
report for each such Plan as of such date.
"Unmatured Event of Default" means an event which but for the lapse of
time or the giving of notice, or both, would constitute an Event of Default.
"Unused Commitment" means, at any date with respect to any Lender, the
amount (if any) by which such Lender's Commitment exceeds the sum of (i) the
outstanding principal balance of such Lender's Loans as of such date (including,
in the case of Swing Line Lender, the Swing Line Advances), plus (ii) such
Lender's ratable share (determined in accordance with Section 4.6) of the
outstanding amount of the Facility Letters of Credit.
"Unused Commitment Fee" means a fee payable by Borrower to each Lender
with respect to such Lender's Unused Commitment, calculated in accordance with
Section 2.5(a).
"Wholly-Owned Subsidiary" of a Person means (i) any Subsidiary all of
the outstanding voting securities (or the power to elect the board of directors)
of which shall at the time be beneficially owned (within the meaning of Rule
13d-3 of the Securities Exchange Act of 1934, as amended) directly or
indirectly, by such Person or one or more Wholly-Owned Subsidiaries of such
Person, or by such Person and one or more Wholly-Owned Subsidiaries of such
Person, or (ii) any partnership, association, joint venture, limited liability
company or similar business organization 100% of the ownership interests having
ordinary voting power of which shall at the time be so owned or controlled.
The foregoing definitions shall be equally applicable to both the
singular and plural forms of the defined terms.
20
ARTICLE II
THE CREDITS
2.1 Commitment. From and including the date of this Agreement and prior
to the Facility Termination Date, each Lender severally agrees, on the terms and
conditions set forth in this Agreement, to make Loans to Borrower and to
participate in Facility Letters of Credit (as provided in Article IV) from time
to time in amounts not to exceed in the aggregate at any one time outstanding
the amount of its Commitment; provided, however, that (i) a Lender shall not be
required to make any Loan or Loans in excess of the amount of such Lender's then
Available Credit, and (ii) at any time at which Borrower does not have an
Investment Grade Rating, the aggregate principal amount of all Consolidated
Senior Debt Borrowings outstanding at any time and from time to time shall not
exceed the Borrowing Base determined as of the most recent Inventory Valuation
Date. The Commitments to lend hereunder shall expire on the Facility Termination
Date.
2.2 Required Payments. Any outstanding Advances and all other unpaid
Obligations shall be paid in full by Borrower on the Facility Termination Date.
Additionally, if for any reason at any time either (i) the principal amount of
all Advances plus the aggregate amount of the Facility LC Obligations
outstanding exceeds the Aggregate Commitment, or (ii) at any time at which
Borrower does not have an Investment Grade Rating, the aggregate principal
amount of all Consolidated Senior Debt Borrowings exceeds the Borrowing Base
determined as of the most recent Inventory Valuation Date, then Borrower shall,
within five (5) Business Days after notice from Administrative Agent, make a
payment to Administrative Agent for the benefit of Lenders in an amount equal to
such excess principal amount.
2.3 Ratable Loans. Each Advance hereunder, including without
limitation, any Advance made by Lenders pursuant to Section 2.19(d), but
excluding Swing Line Advances, shall consist of Loans made by the several
Lenders ratably in proportion to the ratio that their respective Commitments
bear to the Aggregate Commitment. Swing Line Advances shall consist of Loans
made by Swing Line Lender.
2.4 Types of Advances. The Advances may be Floating Rate Advances or
LIBOR Advances, or a combination thereof, selected by Borrower in accordance
with Sections 2.8 and 2.9.
2.5 Fees; Reduction and Increase in Commitment.
(a) Unused Commitment Fee. Borrower agrees to pay to
Administrative Agent for the account of Lenders an Unused Commitment
Fee, at a rate per annum equal to the Applicable Unused Commitment
Rate, calculated on the basis of a 360-day year in accordance with this
Section from the date hereof and to and including the Facility
Termination Date, and payable quarterly in arrears on the first day of
each January, April, July and October hereafter and on the Facility
Termination Date. For each quarter (or portion thereof), the Unused
Commitment Fee shall be equal to (A) the average daily Aggregate
Commitment during such quarter (or portion thereof) minus (B) the
Average Daily Outstandings for such quarter (or portion thereof), with
the resulting number
21
multiplied by (C) the Applicable Unused Commitment Rate, and the final
product divided by (D) four (4). Each Lender (including Swing Line
Lender) shall be entitled to a share of the Unused Commitment Fee in
the proportion that (x) such Lender's average daily Unused Commitment
for such quarter (or portion thereof) bears to (y) the average daily
aggregate Unused Commitments of all Lenders for such quarter (or
portion thereof). If the Unused Commitment Fee is being computed for
less than a full quarter, the number used in clause (D) above shall be
computed on a daily basis for the number of days for which the fee is
being computed. The Unused Commitment Fee shall continue to be payable
during the Term Out Period. All accrued Unused Commitment Fees shall be
payable on the effective date of any termination of the obligations of
Lenders to make Loans hereunder.
(b) Extension Fee. If the Facility Maturity Date is extended
pursuant to the provisions of Section 2.21, then Borrower shall pay an
extension fee for each such extension as provided in Section 2.21(d).
(c) Reductions in Aggregate Commitment. Borrower may
permanently reduce the Aggregate Commitment in whole, or in part
ratably among Lenders (in proportion to the ratio that their respective
Commitment bear to the Aggregate Commitment) in integral multiples of
$5,000,000 at any time or from time to time, upon at least three (3)
Business Days' written notice to Administrative Agent, which notice
shall specify the amount of any such reduction; provided, however, that
the amount of the Aggregate Commitment may not be reduced below the sum
of (i) the aggregate principal amount of the outstanding Advances plus
(ii) the Facility LC Obligations.
(d) Increases in Aggregate Commitment.
(i) Subject to the provisions of this Section 2.5(d)(i) and
Section 2.5(d)(v), Borrower may, at any time and from time to time,
request ("Facility Increase Request"), by notice to Administrative
Agent, Administrative Agent's approval of an increase of the Aggregate
Commitment within the limitations hereinafter set forth, which Facility
Increase Request shall set forth the amount of such requested increase.
Within twenty (20) days of such Facility Increase Request,
Administrative Agent shall advise Borrower of its approval or
disapproval thereof; failure to so advise Borrower shall constitute
disapproval. Upon approval of Administrative Agent, the Aggregate
Commitment may be so increased either by having financial institutions
(other than Lenders then holding a Commitment hereunder) approved by
Borrower and Administrative Agent ("New Lenders") become Lenders
hereunder and/or by having any one or more of Lenders then holding a
Commitment hereunder (at their respective election in their sole
discretion) that have been approved by Borrower and Administrative
Agent increase the amount of their Commitments (any such Lender that
elects to increase its Commitment and any New Lender being hereinafter
referred to as a "Additional Lender"), provided that (A) unless
otherwise agreed by Borrower and Administrative Agent, the Commitment
of any New Lender shall not be less than $10,000,000 (and, if in excess
thereof, in integral multiples of $5,000,000), (B) unless otherwise
agreed by Borrower and Administrative Agent, the increase in the
Commitment of any Lender shall be not less than $10,000,000 (and, if in
excess thereof, in integral multiples of $5,000,000); (C) the Aggregate
Commitment shall
22
not exceed $850,000,000; (D) Borrower and each Additional Lender shall
have executed and delivered a commitment and acceptance (the
"Commitment and Acceptance") substantially in the form of Exhibit C
hereto, and Administrative Agent shall have accepted and executed the
same; (E) Borrower shall have executed and delivered to Administrative
Agent a Note or Notes payable to the order of each Additional Lender,
each such Note to be in the amount of such Additional Lender's
Commitment or increased Commitment (as applicable); (F) Borrower shall
have delivered to Administrative Agent an opinion of counsel and
certificate of Borrower's general counsel (substantially similar to the
forms of opinion attached hereto as Exhibit E, modified to apply to the
increase in the Aggregate Commitment and each Note and Commitment and
Acceptance executed and delivered in connection therewith); (G)
Guarantors shall have consented in writing to the new Commitments or
increases in Commitments (as applicable) and shall have agreed that
their Guaranties continue in full force and effect; and (H) Borrower
and each Additional Lender shall otherwise have executed and delivered
such other instruments and documents as Administrative Agent shall have
reasonably requested in connection with such new Commitment or increase
in the Commitment (as applicable). The form and substance of the
documents required under clauses (D) through (H) above shall be fully
acceptable to Administrative Agent. Administrative Agent shall promptly
provide written notice to Lenders following any such increase in the
Aggregate Commitment hereunder and shall promptly furnish to Lenders
copies of the documents required under clauses (D), (F), (G) and (H)
above.
(ii) On the effective date of any increase in the Aggregate
Commitment pursuant to the provisions hereof ("Increase Date"), which
Increase Date shall be mutually agreed upon by Borrower, each
Additional Lender and Administrative Agent, each Additional Lender
shall make a payment to Administrative Agent in an amount sufficient,
upon the application of such payments by all Additional Lenders to the
reduction of the outstanding Floating Rate Advances held by Lenders, to
cause the principal amount outstanding under the Floating Rate Loans
made by all Lenders (including any Additional Lender) to be in the
proportion of their respective Commitments (as of such Increase Date).
Borrower hereby irrevocably authorizes each Additional Lender to fund
to Administrative Agent the payment required to be made pursuant to the
immediately preceding sentence for application to the reduction of the
outstanding Floating Rate Loans held by each Lender, and each such
payment shall constitute a Floating Rate Loan hereunder. Such
Additional Lender shall not participate in any LIBOR Advances that are
outstanding on the Increase Date, but, if Borrower shall at any time on
or after such Increase Date convert or continue any LIBOR Advance
outstanding on such Increase Date, Borrower shall be deemed to repay
such LIBOR Advance on the date of the conversion or continuation
thereof and then to reborrow as a LIBOR Advance a like amount on such
date so that each Additional Lender shall make a LIBOR Loan on such
date in its pro rata share of such LIBOR Advance. Each Additional
Lender shall also make a Loan in the amount of its pro rata share of
all Advances made on or after such Increase Date and shall otherwise
have all of the rights and obligations of a Lender hereunder on and
after such Increase Date. Notwithstanding the foregoing, upon the
occurrence of an Event of Default prior to the date on which an
Additional Lender is holding Loans equal to its pro rata share of all
Advances hereunder, such Additional Lender shall, upon notice from
Administrative Agent, on or after the date on
23
which the Obligations are accelerated or become due following such
Event of Default, pay to Administrative Agent (for the account of the
other Lenders, to which Administrative Agent shall pay their pro rata
shares upon receipt) a sum equal to such Additional Lender's pro rata
share of each Advance then outstanding with respect to which such
Additional Lender does not then hold a Loan equal to its pro rata share
thereof.
(iii) On the Increase Date and the making of the Loans by an
Additional Lender in accordance with the provisions of the first
sentence of Section 2.5(d)(ii), such Additional Lender shall also be
deemed to have irrevocably and unconditionally purchased and received,
without recourse or warranty, from Lenders party to this Agreement
immediately prior to the Increase Date, an undivided interest and
participation in any Facility Letter of Credit then outstanding,
ratably, such that all Lenders (including each Additional Lender) hold
participation interests in each such Facility Letter of Credit in the
proportion of their respective Commitments (as so increased).
(iv) Nothing contained herein shall constitute, or otherwise
be deemed to be, a commitment or agreement on the part of any Lender to
increase its Commitment hereunder at any time or a commitment or
agreement on the part of Borrower or Administrative Agent to give or
grant any Lender the right to increase its Commitment hereunder at any
time.
(v) Notwithstanding anything to the contrary contained herein,
Borrower may not request an increase in the Aggregate Commitment during
the Term Out Period, and, if Borrower has requested an increase in the
Aggregate Commitment prior to the Term Out Period but the Term Out
Period commences prior to the effective date of such increase, such
increase shall not take effect. Notwithstanding anything to the
contrary contained herein, no increase of the Aggregate Commitment may
be effected under this Section 2.5(d) if (x) an Unmatured Event of
Default or Event of Default shall be in existence on the effective date
of such increase or would occur after giving effect thereto or (y) any
representation or warranty made or deemed made by Borrower in any Loan
Document or any Guarantor in any Guaranty is not (or would not be) true
or correct in any material respect on the effective date of such
increase (except to the extent any such representation or warranty is
stated to relate solely to an earlier date, in which case such
representation or warranty shall be true and correct on and as of such
earlier date).
2.6 Minimum Amount of Each Advance. Except with respect to Swing Line
Advances, each Advance shall be in the minimum amount of $2,000,000 (and in
multiples of $1,000,000 if in excess thereof).
2.7 Optional Principal Payments. Borrower may at any time or from time
to time pay, without penalty or premium, all Floating Rate Advances outstanding
with respect to Borrower, or, in a minimum aggregate amount of $1,000,000 or any
integral multiple of $500,000 in excess thereof (except with respect to Swing
Line Advances), any portion of the outstanding Floating Rate Advances upon one
(1) Business Day's prior notice to Administrative Agent. Borrower may, (i) upon
one (1) Business Days' prior notice to Administrative Agent, pay, without
penalty or premium, any LIBOR Advance in full on the last day of the Interest
Period for such LIBOR
24
Advance, and (ii) upon three (3) Business Days' prior notice to Administrative
Agent, prepay any LIBOR Advance in full prior to the last day of the Interest
Period for such LIBOR Advance, provided that Borrower shall also pay at the time
of such prepayment all amounts payable with respect thereto pursuant to Section
3.4 hereof.
2.8 Method of Selecting Types and Interest Periods for New Advances.
Borrower shall select the Type of Advance and, in the case of each LIBOR
Advance, the Interest Period applicable to each Advance from time to time.
Borrower shall give Administrative Agent irrevocable notice (a "Borrowing
Notice") in the form of Exhibit D not later than (a) noon, Chicago time, one (1)
Business Day before the Borrowing Date of each Floating Rate Advance (except a
Swing Line Advance), (b) noon, Chicago time, three (3) Business Days before the
Borrowing Date of each LIBOR Advance, and (c) 2:00 p.m., Chicago time, on the
Borrowing Date of each Swing Line Advance, specifying:
(i) the Borrowing Date, which shall be a Business Day, of such
Advance,
(ii) whether the Advance is a Swing Line Advance,
(iii) the aggregate amount of such Advance,
(iv) except in the case of a Swing Line Advance, the Type of
Advance selected; provided, however, that the aggregate number of LIBOR
Advances outstanding at any one time shall not exceed five (5), and
(v) in the case of each LIBOR Advance, the Interest Period
applicable thereto.
Not later than noon, Chicago time, on each Borrowing Date, each Lender shall
make available its Loan or Loans, in funds immediately available in Chicago to
Administrative Agent at its address specified pursuant to Article XVI.
Administrative Agent will make the funds so received from Lenders available to
the applicable Borrower at Administrative Agent's aforesaid address.
Disbursements of Advances (other than Swing Line Advances) may be made not more
frequently than one time per Business Day. Disbursements of all Swing Line
Advances to Borrower may be made not more frequently than one time per Business
Day, or on a more frequent basis as Swing Line Lender may agree. Interest on all
Advances shall be calculated on the basis of a 360-day year, based on the actual
days elapsed.
2.9 Conversion and Continuation of Outstanding Advances. Floating Rate
Advances shall continue as Floating Rate Advances unless and until such Floating
Rate Advances are converted into LIBOR Advances. Each LIBOR Advance shall
continue as a LIBOR Advance until i the end of the then applicable Interest
Period therefor, at which time such LIBOR Advance shall be automatically
converted into a Floating Rate Advance unless Borrower shall have given
Administrative Agent a Conversion/Continuation Notice requesting that, at the
end of such Interest Period, such LIBOR Advance either continues as a LIBOR
Advance for the same or another Interest Period or be repaid. Subject to the
terms of Section 2.6, Borrower may elect from time to time to convert all or any
part of an Advance of any Type into any other Type or Types of Advances;
provided, however, that any conversion of any LIBOR Advance may be made on, and
only on, the last day of the Interest Period applicable thereto, and further
provided
25
that the aggregate number of LIBOR Advances outstanding at any one time shall
not exceed five (5).
Borrower shall give Administrative Agent irrevocable notice (a
"Conversion/Continuation Notice") of each conversion of an Advance or
continuation of a LIBOR Advance not later than noon, Chicago time, at least one
(1) Business Day, in the case of a conversion into a Floating Rate Advance, or
three (3) Business Days, in the case of a conversion into or continuation of a
LIBOR Advance, prior to the date of the requested conversion or continuation,
specifying:
(i) the requested date which shall be a Business Day, of such
conversion or continuation;
(ii) the aggregate amount and Type of the Advance which is to
be converted or continued; and
(iii) the amount and Type(s) of Advance(s) into which such
Advance is to be converted or continued and, in the case of a
conversion into or continuation of a LIBOR Advance, the Interest Period
applicable thereto.
2.10 Changes in Interest Rate, etc. Each Floating Rate Advance shall
bear interest on the outstanding principal amount thereof, for each day from and
including the date such Advance is made or is converted from a LIBOR Advance
into a Floating Rate Advance pursuant to Section 2.9 to but excluding the date
it becomes due or is converted into a LIBOR Advance pursuant to Section 2.9
hereof, at a rate per annum equal to the Floating Rate for such day. Changes in
the rate of interest on any Advance maintained as a Floating Rate Advance will
take effect simultaneously with each change in the Floating Rate. Each LIBOR
Advance shall bear interest from and including the first day of the Interest
Period applicable thereto to (but not including) the last day of such Interest
Period at the interest rate determined as applicable to such LIBOR Advance. No
Interest Period may end after the Facility Termination Date.
2.11 Determination of Applicable LIBOR Rate Margin and Applicable
Unused Commitment Rate.
(a) Pricing Grid. The Applicable LIBOR Rate Margin and the
Applicable Unused Commitment Rate shall be determined by reference to
(i) the Facility Rating or, if no Facility Rating exists, by reference
to the Senior Public Debt Rating, and (ii) the Leverage Ratio in
accordance with the following table:
XXXXX X XXXXX XX XXXXX XXX XXXXX XX
----------------- ------------------ --------------- --------------------------
Facility Rating or Senior BBB+/Baa1 or BBB/Baa2 BBB-/Baa3 BB+/Ba1 or below or no
Public Debt Rating higher Facility Rating or
Senior Public Debt Rating
Leverage Ratio Less than or Greater than 30% Greater than Greater than 50% and
equal to 30% and less than or 40% and less than less than or equal
equal to 40% or equal to 50% to 55%
26
LEVEL I LEVEL II LEVEL III LEVEL IV
----------------- ------------------ --------------- --------------------------
Applicable LIBOR Rate 0.875% 1.00% 1.25% 1.50%
Margin
Applicable Unused 0.175% 0.20% 0.25% 0.30%
Commitment Rate
In the event of a difference of one level between (x) the
Leverage Ratio and (y) the Facility Rating or Senior Public Debt Rating
(as applicable), the lower pricing shall apply; if the difference is
more than one level, the level that is one level lower than the higher
pricing shall apply.
(b) Adjustment. The Applicable Unused Commitment Rate shall be
adjusted, as applicable from time to time, effective on (i) the first
Business Day after any change in the Facility Rating or the Senior
Public Debt Rating, as applicable or (ii) the fifth (5th) Business Day
following the delivery by Borrower, pursuant to Section 7.1(i) or (ii),
of annual or quarterly financial statements evidencing a change in the
Leverage Ratio. The Applicable LIBOR Rate Margin in respect of any
LIBOR Advance shall be adjusted, as applicable from time to time,
effective on the first day of the Interest Period for any LIBOR Advance
after (i) any change in the Facility Rating or the Senior Public Debt
Rating, as applicable, or (ii) the fifth (5th) Business Day following
the delivery by Borrower, pursuant to Section 7.1(i) or (ii), of annual
or quarterly financial statements evidencing a change in the Leverage
Ratio.
2.12 Rates Applicable After Event of Default. Notwithstanding anything
to the contrary contained in Section 2.8, 2.9 or 2.10, during the continuance of
an Event of Default the Required Lenders may, at their option, by notice to
Borrower (which notice may be revoked at the option of the Required Lenders
notwithstanding any provision of Section 11.2 requiring unanimous consent of
Lenders to changes in interest rates), declare that no Advance may be made as,
converted into or continued as a LIBOR Advance. Notwithstanding anything to the
contrary contained in Section 2.8, 2.9 or 2.10, during the continuance of an
Unmatured Event of Default the Required Lenders may, at their option, by notice
to Borrower (which notice may be revoked at the option of the Required Lenders
notwithstanding any provision of Section 11.2 requiring unanimous consent of
Lenders to changes in interest rates), declare that no Advance may be made as or
converted into a LIBOR Advance. During the continuance of an Event of Default,
the Required Lenders may, at their option, by notice to Borrower (which notice
may be revoked at the option of the Required Lenders notwithstanding any
provision of Section 11.2 requiring unanimous consent of Lenders to changes in
interest rates), declare that (i) each LIBOR Advance shall bear interest for the
remainder of the applicable Interest Period at the rate otherwise applicable to
such Interest Period plus 2% per annum and (ii) each Floating Rate Advance shall
bear interest at a rate per annum equal to the Floating Rate otherwise
applicable to the Floating Rate Advance plus 2% per annum.
27
2.13 Method of Payment. All payments of the Obligations hereunder shall
be made, without setoff, deduction, or counterclaim, in immediately available
funds to Administrative Agent at Administrative Agent's address specified
pursuant to Article XVI, or at any other Lending Installation of Administrative
Agent specified in writing by Administrative Agent to Borrower, by 1:00 p.m.
(local time at the place of receipt) on the date when due (or with respect to
Swing Line Advances, in accordance with Section 2.19), and, except for Swing
Line Advances shall be applied ratably by Administrative Agent among Lenders, in
proportion to the ratio that each Lender's Commitment bears to the Aggregate
Commitment. Each payment delivered to Administrative Agent for the account of
any Lender shall be delivered promptly by Administrative Agent to such Lender in
the same type of funds that Administrative Agent received at its address
specified pursuant to Article XVI or at any Lending Installation specified in a
notice received by Administrative Agent from such Lender. If Administrative
Agent receives, for the account of a Lender, a payment from Borrower and fails
to remit such payment to such Lender on the Business Day such payment is
received (if received by 1:00 p.m., Chicago time, by Administrative Agent) or on
the next Business Day (if received after 1:00 p.m., Chicago time, by
Administrative Agent), Administrative Agent shall pay to such Lender interest on
such payment at a rate per annum equal to the Federal Funds Effective Rate for
each day for which such payment is so delayed.
2.14 Notes; Telephonic Notices. Each Lender is hereby authorized to
record the principal amount of each of its Loans and each repayment on the
schedule attached to its Note; provided, however, that the failure to so record
shall not affect Borrower's obligations under such Note. Borrower hereby
authorizes Administrative Agent to extend, convert or continue Advances, effect
selections of Types of Advances and to transfer funds based on telephonic
notices made by any person or persons who Administrative Agent in good faith
believes to be acting on behalf of Borrower. Borrower agrees to deliver promptly
to Administrative Agent a written confirmation, if such confirmation is
requested by Administrative Agent, of each telephonic notice signed by an
Authorized Officer of Borrower. If the written confirmation differs in any
material respect from the action taken by Administrative Agent, the records of
Administrative Agent shall govern absent manifest error.
2.15 Interest Payment Dates; Interest Basis. Interest accrued on each
Advance shall be payable on the first day of each calendar month, commencing
with the first such date to occur after the date hereof, and on any date on
which the Advance is prepaid, whether due to acceleration or otherwise. Interest
shall be payable for the day an Advance is made but not for the day of any
payment on the amount paid if payment is received prior to noon (local time at
the place of receipt). If any payment of principal of or interest on an Advance
shall become due on a day which is not a Business Day, such payment shall be
made on the next succeeding Business Day, and such extension of time shall be
included in computing interest in connection with such payment.
2.16 Notification of Advances, Interest Rates, Prepayments and
Commitment Reductions. Promptly after receipt thereof, Administrative Agent will
notify each Lender of the contents of each Aggregate Commitment reduction
notice, Borrowing Notice, Conversion/Continuation Notice, and repayment notice
received by it hereunder. Administrative Agent will notify each Lender of the
interest rate applicable to each LIBOR Advance promptly upon determination of
such interest rate and will give each Lender prompt notice of each change
28
in the Floating Rate, the Applicable LIBOR Rate Margin or the Applicable Unused
Commitment Rate.
2.17 Lending Installations. Each Lender may book its Loans at any
Lending Installation selected by such Lender and may change its Lending
Installation from time to time. All terms of this Agreement shall apply to any
such Lending Installation and the Notes shall be deemed held by each Lender for
the benefit of such Lending Installation. Each Lender may, by written or telex
notice to Administrative Agent and Borrower, designate a Lending Installation
through which Loans will be made by it and for whose account Loan payments are
to be made.
2.18 Non-Receipt of Funds by Administrative Agent. Unless Borrower or a
Lender, as the case may be, notifies Administrative Agent prior to the date on
which such payment is due to Administrative Agent of (i) in the case of a
Lender, the proceeds of a Loan or (ii) in the case of Borrower, a payment of
principal, interest, fees or other amounts due under the Loan Documents to
Administrative Agent for the account of Lenders, that it does not intend to make
such payment, Administrative Agent may assume that such payment has been made.
Administrative Agent may, but shall not be obligated to, make the amount of such
payment available to the intended recipient in reliance upon such assumption. If
Borrower or such Lender, as the case may be, has not in fact made such payment
to Administrative Agent, the recipient of such payment shall, on demand by
Administrative Agent, repay to Administrative Agent the amount so made available
together with interest thereon in respect of each day during the period
commencing on the date such amount was so made available by Administrative Agent
until the date Administrative Agent recovers such amount at a rate per annum
equal to (a) in the case of payment by a Lender, the Federal Funds Effective
Rate for such day or (b) in the case of payment by Borrower, the interest rate
applicable to the relevant Advance.
2.19 Swing Line. Notwithstanding the minimum amount of an Advance that
may be requested and the minimum amount of an Advance repaid under this
Agreement, Lenders desire to permit Advances to Borrower in amounts that may be
less than the minimum Advance amounts required under Section 2.6, and Lenders
desire to permit Borrower to repay such Advances in amounts that may be less
than the minimum repayment amounts required under Section 2.7. Such Advances
made pursuant to this Section 2.19 shall be deemed to be Advances for purposes
of this Agreement and are referred to herein as "Swing Line Advances." Swing
Line Advances shall be requested, advanced, and repaid in accordance with the
provisions and limitations of this Agreement relating to all Advances, subject
to the following:
(a) Aggregate Limit. The aggregate amount of all outstanding
Swing Line Advances shall not exceed at any one time $30,000,000. The
Swing Line Advances and the purchase by Lenders of interests therein
pursuant to Section 2.19(d) below shall also be subject to the
limitations contained in Section 2.1.
(b) Interest. Swing Line Advances bear interest at the greater
of (i) the Alternate Base Rate, minus 0.50% per annum and (ii) a rate
equal to the LIBOR Rate for a one-month Interest Period if such rate
had been selected by Borrower on the date Borrower requested such Swing
Line Advance (the use of such LIBOR Rate in determining interest shall
not affect the Swing Line Maturity Date of any Swing Line Advance or
cause any Swing Line Advance to constitute a LIBOR Advance).
29
(c) Funding Swing Line Advances. Swing Line Advances shall be
funded by Swing Line Lender pursuant to the procedures set forth in
Section 2.8 of this Agreement. The principal amount of each Swing Line
Advance, together with all accrued interest, shall be repaid by
Borrower to Swing Line Lender in same day funds by 4:00 p.m. (or such
later time as may be acceptable to Swing Line Lender), Chicago time, on
the Swing Line Advance Maturity Date.
(d) Repayment of Swing Line Advances. If Borrower fails to pay
any Swing Line Advances on the applicable Swing Line Advance Maturity
Date, then such Advances shall no longer be Swing Line Advances, but
shall continue to be Floating Rate Advances for purposes of this
Agreement. Each Lender shall be deemed to have irrevocably and
unconditionally purchased and received from Swing Line Lender an
undivided interest and participation (ratably in proportion to the
ratio that such Lender's Commitment bears to the Aggregate Commitment)
in such Advances. In such event, as of 11:59 p.m., Chicago time, on the
Swing Line Advance Maturity Date, Administrative Agent shall notify
each Lender of the total principal amount of all matured Swing Line
Advances and each Lender's ratable share thereof. Upon receipt of such
notice, each Lender shall promptly and unconditionally pay to
Administrative Agent for the account of Swing Line Lender the amount of
such Lender's share (ratably in proportion to the ratio that such
Lender's Commitment bears to the Aggregate Commitment) of such payment
in same day funds, and Administrative Agent shall promptly pay such
amount, and any other amounts received by Administrative Agent for
Swing Line Lender's account pursuant to this Section 2.19(d), to Swing
Line Lender. If Administrative Agent so notifies such Lender prior to
10:00 a.m., Chicago time, on any Business Day, such Lender shall make
available to Administrative Agent for the account of Swing Line Lender,
such Lender's share of the amount of such payment on such Business Day
in same day funds. If Administrative Agent notifies such Lender after
10:00 a.m., Chicago time, on any Business Day, such Lender shall make
available to Administrative Agent for the account of Swing Line Lender
such Lender's share of the amount of such payment on the next
succeeding Business Day in same day funds. If and to the extent such
Lender shall not have so made its share of the amount of such payment
available to Administrative Agent for the account of Swing Line Lender,
such Lender agrees to pay to Administrative Agent for the account of
Swing Line Lender forthwith on demand such amount, together with
interest thereon, for each day from the date such payment was first due
until the date such amount is paid to Administrative Agent for the
account of Swing Line Lender, at the Federal Funds Effective Rate. The
failure of any Lender to make available to Administrative Agent for the
account of Swing Line Lender such Lender's share of any such payment
shall not relieve any other Lender of its obligation hereunder to make
available to Administrative Agent for the account of Swing Line Lender
its share of any payment on the date such payment is to be made.
(e) Advances. The payments made by Lenders to Swing Line
Lender in reimbursement of Swing Line Advances shall constitute, and
Borrower hereby expressly acknowledges and agrees that such payments
shall constitute, Advances hereunder to Borrower and such payments
shall for all purposes be treated as Advances to Borrower
(notwithstanding that the amounts thereof may not comply with the
provisions of Section
30
2.6 and 2.7). Such Advances shall be Floating Rate Advances, subject to
Borrower's rights under Article II hereof.
2.20 Withholding Tax Exemption. At least five (5) Business Days prior
to the first date on which interest or fees are payable hereunder for the
account of any Lender, each Lender (if any) that is not incorporated under the
laws of the United States of America, or a state thereof (each, a "Non-U.S.
Lender"), agrees that it will deliver to Borrower and Administrative Agent two
(2) duly completed copies of United States Internal Revenue Service Form W-8BEN
or W-8ECI, certifying in either case that such Lender is entitled to receive
payments under this Agreement and the Notes without deduction or withholding of
any United States federal taxes and an Internal Revenue Service Form W-8 or W-9,
certifying that such Lender is entitled to a complete exemption from United
States backup withholding tax. Each Non-U.S. Lender further undertakes to
deliver to Borrower and Administrative Agent (x) renewals or additional copies
of such form (or a successor form) on or before the date that such form expires
or becomes obsolete and (y) after the occurrence of any event requiring a change
in the most recent forms so delivered by it, additional forms or amendments
thereto or extensions or renewals thereof as may be reasonably requested by
Borrower or Administrative Agent. All forms or amendments or renewals provided
for in the preceding sentence shall certify that such Lender is entitled to
receive payments under this Agreement and the Notes without deduction or
withholding of any United States federal taxes, unless an event (including
without limitation any change in treaty, law or regulation) has occurred prior
to the date on which any such delivery would otherwise be required which renders
all such forms inapplicable or which would prevent such Lender from duly
completing and delivering any such form with respect to it and such Lender
advises Borrower and Administrative Agent that it is not capable of receiving
payments without any deduction or withholding of United States federal tax.
If a Lender does not provide duly executed forms to Borrower and
Administrative Agent within the time periods set forth in the preceding
paragraph, Borrower or Administrative Agent shall (to the extent Borrower has
not already done so) withhold taxes from payments to such Lender at the
applicable statutory rates and Borrower shall not be required to pay any
additional amounts as a result of such withholding. Upon the reasonable request
of Borrower or Administrative Agent, each Lender that has not provided the forms
or other documents, as provided above, on the basis of being a "United States
person," shall submit to Borrower and Administrative Agent a certificate or
other evidence to the effect that it is such a "United States person."
2.21 Extension of Facility Maturity Date.
(a) Extension Requests. Borrower may request a one-year
extension of the Facility Maturity Date by submitting a request for an
extension to Administrative Agent no more than 48 months nor less than
46 months prior to the then scheduled Facility Maturity Date. At the
time of or prior to the delivery of such request, Borrower shall
propose to Administrative Agent the amount of the fees that Borrower
agrees to pay with respect to such one-year extension if approved by
Lenders (such request for an extension, together with the fee proposal,
being herein referred to as the "Extension Request"). Promptly upon
(but not later than five (5) Business Days after) receipt of the
Extension Request, Administrative Agent shall notify each Lender of the
contents thereof and shall
31
request each Lender to approve the Extension Request. Each Lender
approving the Extension Request shall deliver its written approval no
later than sixty (60) days after the date of the Extension Request. If
the approval of all Lenders is received by Administrative Agent within
sixty (60) days after the date of the Extension Request (or as
otherwise provided in Section 2.21(b)), Administrative Agent shall
promptly so notify Borrower and each Lender, and the Facility Maturity
Date shall be extended by one (1) year, and in such event Borrower may
thereafter request further extension(s) of the then scheduled Facility
Maturity Date in accordance with this Section 2.21. If any Lender does
not deliver to Administrative Agent such Lender's written approval to
any Extension Request within sixty (60) days after the date of such
Extension Request, the Facility Maturity Date shall not be extended,
except as otherwise provided in Section 2.21(b) or 2.21(c).
(b) Rejecting Lenders/Full Assignment. If (i) any Lenders
whose pro rata shares of the Aggregate Commitment do not exceed 25% of
the Aggregate Commitment ("Rejecting Lenders") shall not approve an
Extension Request, (ii) all rights and obligations of such Rejecting
Lenders under this Agreement and under the other Loan Documents and
Guaranties (including, without limitation, their Commitment and all
Loans owing to them) shall have been assigned, within ninety (90) days
following such Extension Request, in accordance with Section 2.23, to
one or more Replacement Lenders who shall have approved in writing such
Extension Request at the time of such assignment, and (iii) no other
Lender shall have given written notice to Administrative Agent of such
Lender's withdrawal of its approval of the Extension Request,
Administrative Agent shall promptly so notify Borrower and each Lender,
and the Facility Maturity Date shall be extended by one (1) year, and
in such event Borrower may thereafter request further extension(s) as
provided in Section 2.21(a).
(c) Rejecting Lenders/No Full Assignment. If (i) one or more
Rejecting Lenders shall not approve an Extension Request, (ii) the
provisions of clause (ii) of Section 2.21(b) do not apply and (iii) no
other Lender shall have given written notice to Administrative Agent of
such Lender's withdrawal of its approval of the Extension Request,
Administrative Agent shall promptly notify Borrower and each Lender and
any Replacement Lender, and the Facility Maturity Date shall be
extended by one (1) year (subject to the limitations set forth in this
Section 2.21(c)), and in such event Borrower may thereafter request
further extension(s) as provided in Section 2.21(a); provided, however,
that (A) the Aggregate Commitment shall be automatically reduced,
effective as of the Facility Maturity Date as determined prior to such
extension (the "Previous Maturity Date") and shall equal the aggregate
Commitments of Lenders who are not Rejecting Lenders and Lenders who
are Replacement Lenders; (B) all rights and obligations of such
Rejecting Lenders under this Agreement and under the other Loan
Documents (including, without limitation, their Commitment and all
Loans owing to them) shall either be (1) assigned to Replacement
Lenders pursuant to Section 2.21(b), or (2) terminated, effective as of
the Previous Maturity Date (or such earlier date as Borrower and
Administrative Agent may designate, in which case the reduction of the
Aggregate Commitment provided for in clause (A) above shall occur on
such earlier date); (C) if and to the extent such Rejecting Lender's
Commitment is assigned to one or more Replacement Lenders, such
assignment shall be effected in accordance with the
32
provisions of Section 2.23; and (D) if and to the extent such Rejecting
Lender's Commitment is terminated, Borrower shall pay to Administrative
Agent on the date of such termination, solely for the account of such
Rejecting Lender, all amounts due and owing such Rejecting Lender
hereunder or under any other Loan Document, including without
limitation the aggregate outstanding principal amount of the Loans owed
to such Rejecting Lender with respect to the terminated Commitment,
together with accrued interest thereon through the date of such
termination, all amounts payable under Sections 3.1 and 3.2 with
respect to such Rejecting Lender and all fees payable to such Rejecting
Lender hereunder with respect to the terminated Commitment (and payment
of such amount may not be waived except with the consent of each
Rejecting Lender, as more specifically provided in Section 11.2(i));
and upon such Rejecting Lender's termination, such Rejecting Lender
shall cease to be a party hereto but shall continue to be entitled to
the benefits of Article III and Section 12.7, as well as to any fees
accrued hereunder and not yet paid, and shall continue to be obligated
under Section 13.8 with respect to obligations and liabilities accruing
prior to such termination of such Rejecting Lender's Commitment.
(d) Approval of Extension. Within ten (10) days after
Administrative Agent's notice to Borrower that all (or some, as
applicable) of Lenders have approved an Extension Request (whether
pursuant to Section 2.21(a), (b) or (c)), Borrower shall pay to
Administrative Agent for the account of each Lender approving the
extension and each Replacement Lender an extension fee in the amount
provided in the Extension Request.
(e) No Default. Notwithstanding anything to the contrary
contained herein, no extension of the Facility Maturity Date may be
effected under this Section 2.21 if (x) an Unmatured Event of Default
or Event of Default shall be in existence on the effective date of such
extension or would occur after giving effect thereto or (y) any
representation or warranty made or deemed made by Borrower in any Loan
Document or any Guarantor in any Guaranty is not (or would not be) true
or correct in any material respect on the effective date of such
increase (except to the extent any such representation or warranty is
stated to relate solely to an earlier date, in which case such
representation or warranty shall be true and correct on and as of such
earlier date).
2.22 Term Out Period.
(a) Commencement of Term Out Period. If pursuant to the
provisions of Section 9.1 or 9.2(e) the Term Out Period shall commence
(the date of commencement thereof (as provided in Section 9.1 or
9.2(e), as applicable) is herein referred to as the "Term Out Date"),
and the provisions of this Section 2.22 shall apply.
33
(b) Term Out Period. From and after three (3) calendar months
after the Term Out Date, the Aggregate Commitment (and each Lender's
Commitment) in effect as of the Term Out Date shall be reduced on the
first day after the end of each three-month period by a percentage of
such Aggregate Commitment amount (or such Lender's Commitment amount)
as follows:
Percentage Percentage
of Commitment of Commitment
Period Reduction Remaining
------------------------ ------------- -------------
3 calendar months after
Term Out Date 16.666% 83.334%
6 calendar months after
Term Out Date 16.667% 66.667%
9 calendar months after
Term Out Date 16.667% 50.000%
12 calendar months after
Term Out Date 16.666% 33.334%
15 calendar months after
Term Out Date 16.667% 16.667%
18 calendar months after
Term Out Date 16.667% 0%
The commencement of the Term Out Period shall not extend the Facility
Termination Date.
2.23 Replacement of Certain Lenders. In the event a Lender (the
"Affected Lender"):
(i) shall have requested compensation from Borrower under
Sections 3.1 or 3.2 to cover additional costs incurred by such Lender
that are not being incurred generally by the other Lenders, or
(ii) shall have delivered a notice pursuant to Section 3.3
that such Affected Lender is unable to extend LIBOR Loans for reasons
not generally applicable to the other Lenders, or
(iii) is a Rejecting Lender pursuant to Section 2.21,
then, in any such case, and at any time after such event occurs,
Borrower or Administrative Agent may make written demands on such
Affected Lender (with a copy to Administrative Agent in the case of a
demand by Borrower and a copy to Borrower in the case of a demand by
Administrative Agent) for the Affected Lender to assign, and
34
such Affected Lender shall assign, pursuant to one or more duly
executed assignment agreements in substantially the form provided for
in Section 15.3.1, within five (5) Business Days after the date of such
demand, to one or more financial institutions that comply with the
provisions of Section 15.3, and that are selected by Borrower or
Administrative Agent, that are reasonably acceptable to Administrative
Agent and Borrower, that Borrower and/or Administrative Agent, as the
case may be, shall have engaged for such purpose (each, a "Replacement
Lender"), all of such Affected Lender's rights and obligations under
this Agreement and the other Loan Documents and Guaranties (including,
without limitation, its Commitment and all Loans owing to it) in
accordance with Section 15.3. If any Affected Lender fails to execute
and deliver such assignment agreements within thirty (30) days after
demand, then such Affected Lender shall have no further right to
receive any amounts payable under Sections 3.1 and 3.2 with respect to
such Affected Lender.
Administrative Agent agrees, upon the occurrence of such events with
respect to an Affected Lender and upon written request of Borrower, to use its
reasonable efforts to obtain the commitments from one or more financial
institutions to act as a Replacement Lender. Administrative Agent is authorized,
but shall not be obligated to, execute one or more of such assignment agreements
as attorney-in-fact for any Affected Lender failing to execute and deliver the
same within five (5) Business Days after the date of such demand. Further, with
respect to such assignment, the Affected Lender shall have concurrently
received, in cash, all amounts due and owing to the Affected Lender hereunder or
under any other Loan Document, including without limitation the aggregate
outstanding principal amount of the Loans owed to such Lender, together with
accrued interest thereon through the date of such assignment, amounts payable
under Sections 3.1 and 3.2 with respect to such Affected Lender and all fees
payable to such Affected Lender hereunder; provided that, upon such Affected
Lender's replacement, such Affected Lender shall cease to be a party hereto but
shall continue to be entitled to the benefits of Article III and Section 12.7,
as well as to any fees accrued hereunder and not yet paid, and shall continue to
be obligated under Section 13.8 with respect to obligations and liabilities
accruing prior to the replacement of such Affected Lender.
ARTICLE III
CHANGE IN CIRCUMSTANCES
3.1 Yield Protection. If, on or after the date of this Agreement, the
adoption or phase-in of any law or any governmental or quasi-governmental rule,
regulation, policy, guideline or directive (whether or not having the force of
law), or any change in the interpretation or administration thereof by any
governmental or quasi-governmental authority, central bank or comparable agency
charged with the interpretation or administration thereof, or compliance by any
Lender or applicable Lending Installation or LC Issuer with any request or
directive (whether or not having the force of law) of any such authority,
central bank or comparable agency:
(i) subjects any Lender or any applicable Lending Installation
or LC Issuer to any tax, duty, charge or withholding on or from
payments due from Borrower (excluding
35
any taxes imposed on, or based on, or determined by reference to the
net income of any Lender or applicable LC Issuer or Lending
Installation, including, without limitation, franchise taxes,
alternative minimum taxes and any branch profits tax (collectively,
"Excluded Taxes")), any taxes imposed on, or based on, or determined by
reference to or changes the basis of taxation of payments to any Lender
or LC Issuer in respect of its Loans, Facility Letters of Credit or
participations therein or other amounts due it hereunder (except for
Excluded Taxes) or
(ii) imposes or increases or deems applicable any reserve,
assessment, insurance charge, special deposit or similar requirement
against assets of, deposits with or for the account of, or credit
extended by, any Lender or any applicable Lending Installation or LC
Issuer (other than reserves and assessments taken into account in
determining the interest rate applicable to LIBOR Rates), or
(iii) imposes any other condition or requirement the result of
which is to increase the cost to any Lender or any applicable Lending
Installation or LC Issuer of making, funding or maintaining loans or
reduces any amount receivable by any Lender or any applicable Lending
Installation in connection with loans, or requires any Lender or any
applicable Lending Installation or LC Issuer to make any payment
calculated by reference to the amount of loans held or interest or fees
received by it, by an amount deemed material by such Lender,
then, within fifteen (15) days after demand by such Lender, Borrower
shall pay such Lender that portion of such increased expense incurred
or reduction in an amount received which such Lender or LC Issuer
determines is attributable to making, funding and maintaining its Loans
and its Commitment or issuing or participating in Facility Letters of
Credit; provided, however, that Borrower shall not be required to
increase any such amounts payable to any Lender in respect of clause
(i) above (1) if such Lender or LC Issuer fails to comply with the
requirements of Section 2.20 hereof or (2) to the extent that such
Lender or LC Issuer determines, in its sole reasonable discretion, that
it can, after notice from Borrower, through reasonable efforts,
eliminate or reduce the amount of tax liabilities payable (without
additional costs or expenses unless Borrower agrees to bear such costs
or expenses) or other disadvantages or risks (economic or otherwise) to
such Lender or LC Issuer or Administrative Agent. If any Lender or LC
Issuer receives a refund in respect of any amount described in clause
(i), (ii) and (iii) above for which such Lender or LC Issuer has
received payment from Borrower hereunder, such Lender or LC Issuer
shall promptly notify Borrower of such refund and such Lender or LC
Issuer shall repay the amount of such refund to Borrower, provided that
Borrower, upon the request of such Lender or LC Issuer, agrees to
return such refund to such Lender or LC Issuer in the event such Lender
or LC Issuer is required to repay such refund. The determination as to
whether any Lender or LC Issuer has received a refund shall be made by
such Lender or LC Issuer and such determination shall be conclusive
absent manifest error.
3.2 Changes in Capital Adequacy Regulations. If a Lender or LC Issuer
determines the amount of capital required or expected to be maintained by such
Lender or LC Issuer, any Lending Installation of such Lender or LC Issuer or any
corporation controlling such Lender or LC Issuer is increased as a result of a
Change, then, within fifteen (15) days after demand by
36
such Lender or LC Issuer, Borrower shall pay such Lender or LC Issuer the amount
necessary to compensate for any shortfall in the rate of return on the portion
of such increased capital which such Lender or LC Issuer determines is
attributable to this Agreement, its Loans or its obligation to make Loans
hereunder, or its issuance or maintenance of or participation in, or commitment
to issue, to maintain or to participate in, the Facility Letters of Credit
hereunder (after taking into account such Lender's or LC Issuer's policies as to
capital adequacy). "Change" means (i) any change after the date of this
Agreement in the Risk-Based Capital Guidelines or (ii) any adoption or phase-in
of or change in any other law, governmental or quasi-governmental rule,
regulation, policy, guideline, interpretation, or directive (whether or not
having the force of law) after the date of this Agreement which affects the
amount of capital required or expected to be maintained by any Lender, LC
Issuer, Lending Installation or any corporation controlling any Lender or LC
Issuer. "Risk-Based Capital Guidelines" means (A) the risk-based capital
guidelines in effect in the United States on the date of this Agreement,
including transition rules, and (B) the corresponding capital regulations
promulgated by regulatory authorities outside the United States implementing the
July 1988 report of the Basle Committee on Banking Regulation and Supervisory
Practices Entitled "International Convergence of Capital Measurements and
Capital Standards," including transition rules, and any amendments to such
regulations adopted prior to the date of this Agreement.
3.3 Availability of Types of Advances. If any Lender determines and
notifies Administrative Agent that maintenance of any of such Lender's LIBOR
Loans at a suitable Lending Installation would violate any applicable law, rule,
regulation or directive, whether or not having the force of law, Administrative
Agent shall suspend the availability of the affected Type of Advance and require
any LIBOR Advances of the affected Type to be repaid; or if the Required Lenders
determine and notify Administrative Agent that (i) deposits of a type or
maturity appropriate to match fund LIBOR Advances are not available,
Administrative Agent shall suspend the availability of the affected Type of
Advance with respect to any LIBOR Advances made after the date of any such
determination, or (ii) an interest rate applicable to a Type of Advance does not
accurately reflect the cost of making a LIBOR Advance of such Type, then, if for
any reason whatsoever the provisions of Section 3.1 are inapplicable,
Administrative Agent shall suspend the availability of the affected Type of
Advance with respect to any LIBOR Advance made after the date of any such
determination.
3.4 Funding Indemnification. If any payment of a LIBOR Advance occurs
on a date which is not the last day of the applicable Interest Period, whether
because of acceleration, prepayment or otherwise, or a LIBOR Advance is not made
on the date specified by Borrower for any reason other than default by Lenders,
Borrower will indemnify each Lender for any loss or cost or expense incurred by
it resulting therefrom, including, without limitation, any loss or cost in
liquidating or employing deposits acquired to fund or maintain the LIBOR
Advance.
3.5 Lender Statements; Survival of Indemnity. To the extent reasonably
possible, each Lender shall designate an alternate Lending Installation with
respect to its LIBOR Advances to reduce any liability of Borrower to such Lender
under Sections 3.1 and 3.2 or to avoid the unavailability of a Type of Advance
under Section 3.3, so long as such designation is not disadvantageous to such
Lender. Each Lender or LC Issuer shall deliver a written statement of such
Lender or LC Issuer as to the amount due, if any, under Sections 3.1, 3.2 or
3.4. Such written statement shall set forth in reasonable detail the
calculations upon which such Lender or
37
LC Issuer determined such amount and shall be final, conclusive and binding on
Borrower in the absence of manifest error. Determination of amounts payable
under such Sections in connection with a LIBOR Advance shall be calculated as
though each Lender funded its LIBOR Advance through the purchase of a deposit of
the type and maturity corresponding to the deposit used as a reference in
determining the LIBOR Advance applicable to such Loan, whether in fact that is
the case or not. Unless otherwise provided herein, the amount specified in the
written statement shall be payable within three (3) Business Days after receipt
by Borrower of the written statement. The obligations of Borrower under Sections
3.1, 3.2 and 3.4 shall survive payment of the Obligations and termination of
this Agreement.
ARTICLE IV
THE LETTER OF CREDIT FACILITY
4.1 Facility Letters of Credit. Each LC Issuer agrees, on the terms and
conditions set forth in this Agreement, to issue from time to time for the
account of Borrower or a Guarantor designated by Borrower, through such offices
or branches as it and Borrower may jointly agree, one or more Facility Letters
of Credit in accordance with this Article IV, during the period commencing on
the date hereof and ending on the Business Day prior to the Facility Termination
Date. Each Facility Letter of Credit shall be either (i) a standby letter of
credit to support obligations of Borrower or a Guarantor designated by Borrower,
contingent or otherwise, arising in the ordinary course of business, or (ii) a
documentary letter of credit in respect of the purchase of goods or services by
Borrower or such Guarantor in the ordinary course of business.
4.2 Limitations. No LC Issuer shall issue, amend or extend, at any
time, any Facility Letter of Credit:
(i) if the aggregate maximum amount then available for drawing
under Letters of Credit issued by such LC Issuer, after giving effect
to the Facility Letter of Credit or amendment or extension thereof
requested hereunder, shall exceed any limit imposed by law or
regulation upon such LC Issuer;
(ii) if, after giving effect to the Facility Letter of Credit
or amendment or extension thereof requested hereunder, the aggregate
principal amount of the Facility LC Obligations would exceed
$350,000,000;
(iii) that, in the case of the issuance of a Facility Letter
of Credit, is in, or in the case of an amendment of a Facility Letter
of Credit, increases the face amount thereof by, an amount in excess of
the then Available Credit of all Lenders in the aggregate;
(iv) if, after giving effect to the Facility Letter of Credit
or amendment or extension thereof requested hereunder, at any time at
which Borrower does not have an Investment Grade Rating the aggregate
principal amount of all Consolidated Senior Debt Borrowings would
exceed the Borrowing Base determined as of the most recent Inventory
Valuation Date;
38
(v) if such LC Issuer receives written notice from
Administrative Agent at or before noon, Chicago time, on the proposed
Issuance Date of such Facility Letter of Credit that one or more of the
conditions precedent contained in Sections 5.1 or 5.2, as applicable,
would not on such Issuance Date be satisfied, unless such conditions
are thereafter satisfied and written notice of such satisfaction is
given to such LC Issuer by Administrative Agent;
(vi) that has an expiration date (taking into account any
automatic renewal provisions thereof) that is later than one (1) year
after the Issuance Date, or such later time as the LC Issuer may agree;
provided, however, in no event shall the expiration date be later than
the Business Day next preceding the scheduled Facility Termination
Date; or
(vii) that is in a currency other than Dollars.
4.3 Conditions. In addition to being subject to the satisfaction of the
conditions contained in Sections 5.1 and 5.2, as applicable, the issuance of any
Facility Letter of Credit is subject to the satisfaction in full of the
following conditions:
(i) Borrower shall have delivered to the LC Issuer at such
times and in such manner as the LC Issuer may reasonably prescribe a
Reimbursement Agreement and such other documents and materials as may
be reasonably required pursuant to the terms thereof, and the proposed
Facility Letter of Credit shall be reasonably satisfactory to such LC
Issuer in form and content; and
(ii) as of the Issuance Date no order, judgment or decree of
any court, arbitrator or governmental authority shall enjoin or
restrain such LC Issuer from issuing the Facility Letter of Credit and
no law, rule or regulation applicable to such LC Issuer and no
directive from and governmental authority with jurisdiction over the LC
Issuer shall prohibit such LC Issuer from issuing Letters of Credit
generally or from issuing that Facility Letter of Credit.
4.4 Procedure for Issuance of Facility Letters of Credit.
(a) Request for Facility Letter of Credit. Borrower shall give
the LC Issuer and Administrative Agent not less than five (5) Business
Days' prior written notice of any requested issuance of a Facility
Letter of Credit under this Agreement. Such notice shall specify (i)
the stated amount of the Facility Letter of Credit requested, (ii) the
requested Issuance Date, which shall be a Business Day, (iii) the date
on which such requested Facility Letter of Credit is to expire, which
date shall be in compliance with the requirements of Section 4.2(vi),
(iv) the purpose for which such Facility Letter of Credit is to be
issued (which shall be a purpose permitted pursuant to Sections 4.1 and
7.2), and (v) the Person for whose benefit the requested Facility
Letter of Credit is to be issued. At the time such request is made,
Borrower shall also provide Administrative Agent and the LC Issuer with
a copy of the form of the Facility Letter of Credit it is requesting be
issued.
39
(b) LC Issuer. Within two (2) Business Days after receipt of a
request for issuance of a Facility Letter of Credit in accordance with
Section 4.4(a), the LC Issuer shall approve or disapprove, in its
reasonable discretion, the form of such requested Facility Letter of
Credit, but the issuance of such approved Facility Letter of Credit
shall continue to be subject to the provisions of this Article IV. The
LC Issuer shall use reasonable efforts to notify Borrower of any
changes in the LC Issuer's policies or procedures that could reasonably
be expected to affect adversely the LC Issuer's approval of the form of
any requested Facility Letters of Credit.
(c) Confirmation of Issuance. Upon receipt of a request for
issuance of a Facility Letter of Credit in accordance with Section
4.4(a), Administrative Agent shall determine, as of the close of
business on the day it receives such request, whether the issuance of
such Facility Letter of Credit would be permitted under the provisions
of Sections 4.2(ii), (iii) and (iv) and, prior to the close of business
on the second Business Day after Administrative Agent received such
request, Administrative Agent shall notify the LC Issuer and Borrower
(in writing or by telephonic notice confirmed promptly thereafter in
writing) whether issuance of the requested Facility Letter of Credit
would be permitted under the provisions of Sections 4.2(ii), (iii) and
(iv). If Administrative Agent notifies the LC Issuer and the applicable
Borrower that such issuance would be so permitted, then, subject to the
terms and conditions of this Article IV and provided that the
applicable conditions set forth in Sections 5.1 and 5.2 have been
satisfied, the LC Issuer shall, on the requested Issuance Date, issue
the requested Facility Letter of Credit in accordance with the LC
Issuer's usual and customary business practices. The LC Issuer shall
give Administrative Agent written notice, or telephonic notice
confirmed promptly thereafter in writing, of the issuance of a Facility
Letter of Credit.
(d) Extension and Amendment. An LC Issuer shall not extend or
amend any Facility Letter of Credit unless the requirements of this
Section 4.4 are met as though a new Facility Letter of Credit were
being requested and issued; provided, however, that if the Facility
Letter of Credit, as originally issued, sets forth such extension or
amendment, then the LC Issuer shall so extend or amend the Facility
Letter of Credit upon the request of Borrower given in the manner set
forth in Section 4.4(a) and upon satisfaction of the terms and
conditions of Section 4.4(c).
(e) Other Letters of Credit. Any Lender may, but shall not be
obligated to, issue to Borrower or any Guarantor Letters of Credit
(that are not Facility Letters of Credit) for its own account, and at
its own risk. None of the provisions of this Article IV shall apply to
any Letter of Credit that is not a Facility Letter of Credit.
(f) Bank One, Arizona LCs. Bank One, Arizona issued prior to
the date of the Prior Credit Agreement, and there are currently
outstanding pursuant to the Prior Credit Agreement, those certain
Letters of Credit identified in Schedule 4.4 hereto as having been
issued by Bank One, Arizona (as the same may be extended or amended
(but not increased) by Bank One, Arizona in accordance with this
Agreement, the "Bank One, Arizona LCs"). The Bank One, Arizona LCs
shall remain outstanding after the date of this Agreement and, from and
after the date of this Agreement, shall constitute Facility Letters of
Credit for all purposes under this Agreement and shall be subject to
all terms
40
and conditions hereof. On the date hereof, simultaneously with the
payment made to the Prior Lenders under Section 5.1(ix), the
participation of the Prior Lenders in the Bank One, Arizona LCs shall
terminate and Bank One, Arizona shall be deemed to have sold and
transferred, and each Lender shall be deemed to have irrevocably and
unconditionally purchased and received from Bank One, Arizona, in each
case without further action on the part of any Person, an undivided
interest and participation (ratably in proportion to the ratio that
such Lender's Commitment bears to the Aggregate Commitment) in each
such Bank One, Arizona LCs. Each Lender severally agrees to fund any
disbursements by Bank One, Arizona pursuant to the Bank One, Arizona
LCs by funding in accordance with Section 4.6. Bank One, Arizona shall
have all of the rights, duties and obligations of the LC Issuer but
solely with respect to the Bank One, Arizona LCs. Bank One, Arizona
shall not have the right, duty or obligation to issue any Facility
Letters of Credit other than the Bank One, Arizona LCs heretofore
issued and shall not increase the face amount of any Bank One, Arizona
LCs. Upon request by Borrower, Bank One, Arizona may extend or
otherwise amend (but without increasing the face amount thereof) any
Bank One, Arizona LCs, subject to and in accordance with the provisions
of this Agreement. Bank One, Arizona joins in this Agreement solely for
the purposes set forth in this Section 4.4(f) and does not hold any
Commitment or any other interest as a Lender hereunder except the
rights, duties and obligations as LC Issuer with respect to the Bank
One, Arizona LCs.
(g) Other Existing LCs. Pursuant to the Prior Credit
Agreement, certain of the Prior LC Issuers have issued prior to the
date hereof, and there are currently outstanding, those certain Letters
of Credit identified in Schedule 4.4 hereto as having been issued by
the Prior LC Issuers identified therein (as the same may be extended,
amended or increased by any such Prior LC Issuer in accordance with
this Agreement, the "Other Existing LCs"). The Other Existing LCs shall
remain outstanding after the date of this Agreement and, from and after
the date of this Agreement, shall constitute Facility Letters of Credit
for all purposes under this Agreement and shall be subject to all terms
and conditions hereof. On the date hereof, simultaneously with the
payment made to the Prior Lenders under Section 5.1(ix), the
participation of the Prior Lenders in the Other Existing LCs shall
terminate and the Prior LC Issuers that have issued such Other Existing
LCs shall be deemed to have sold and transferred, and each Lender shall
be deemed to have irrevocably and unconditionally purchased and
received from such Prior LC Issuers, in each case without further
action on the part of any Person, an undivided interest and
participation (ratably in proportion to the ratio that such Lender's
Commitment bears to the Aggregate Commitment) in each such Other
Existing LCs. Each Lender severally agrees to fund any disbursements by
the Prior LC Issuers that have issued such Other Existing LCs pursuant
to the Other Existing LCs by funding in accordance with Section 4.6.
4.5 Duties of LC Issuer. Any action taken or omitted to be taken by an
LC Issuer under or in connection with any Facility Letter of Credit, if taken or
omitted in the absence of willful misconduct or gross negligence, shall not put
such LC Issuer under any resulting liability to any Lender or, assuming that
such LC Issuer has complied with the procedures specified in Section 4.4,
relieve any Lender of its obligations hereunder to such LC Issuer. In
determining whether to pay under any Facility Letter of Credit, the LC Issuer
shall have no obligation relative to Lenders
41
other than to confirm that any documents required to be delivered under such
Facility Letter of Credit appear to have been delivered in compliance and that
they appear to comply on their face with the requirements of such Facility
Letter of Credit.
4.6 Participation.
(a) Proportionate Share of Lenders. Immediately upon issuance
by an LC Issuer of any Facility Letter of Credit in accordance with
Section 4.4, each Lender shall be deemed to have irrevocably and
unconditionally purchased and received from such LC Issuer, without
recourse or warranty, an undivided interest and participation (ratably
in proportion to the ratio that such Lender's Commitment bears to the
Aggregate Commitment) in such Facility Letter of Credit.
(b) Payment by LC Issuer. In the event that an LC Issuer makes
any payment under any Facility Letter of Credit and Borrower shall not
have repaid such amount to such LC Issuer on or before the date of such
payment by such LC Issuer, such LC Issuer shall promptly so notify
Administrative Agent, which shall promptly so notify each Lender. Upon
receipt of such notice, each Lender severally agrees that it shall
promptly and unconditionally pay to Administrative Agent for the
account of such LC Issuer the amount of such Lender's share (ratably in
proportion to the ratio that such Lender's Commitment bears to the
Aggregate Commitment) of such payment in same day funds, and
Administrative Agent shall promptly pay such amount, and any other
amounts received by Administrative Agent for such LC Issuer's account
pursuant to this Section 4.6(b), to such LC Issuer. If Administrative
Agent so notifies such Lender prior to 10:00 a.m., Chicago time, on any
Business Day, such Lender shall make available to Administrative Agent
for the account of such LC Issuer such Lender's share of the amount of
such payment on such Business Day in same day funds. If and to the
extent such Lender shall not have so made its share of the amount of
such payment available to Administrative Agent for the account of such
LC Issuer, such Lender agrees to pay to Administrative Agent for the
account of such LC Issuer forthwith on demand such amount, together
with interest thereon, for each day from the date such payment was
first due until the date such amount is paid to Administrative Agent
for the account of such LC Issuer, at the Federal Funds Effective Rate.
The failure of any Lender to make available to Administrative Agent for
the account of such LC Issuer such Lender's share of any such payment
shall not relieve any other Lender of its obligation hereunder to make
available to Administrative Agent for the account of such LC Issuer its
share of any payment on the date such payment is to be made.
(c) Advances. The payments made by Lenders to an LC Issuer in
reimbursement of amounts paid by it under a Facility Letter of Credit
shall constitute, and Borrower hereby expressly acknowledges and agrees
that such payments shall constitute, Advances hereunder to Borrower and
such payments shall for all purposes be treated as Advances to Borrower
(notwithstanding that the amounts thereof may not comply with the
provisions of Section 2.6). Such Advances shall be Floating Rate
Advances, subject to Borrower's rights under Article II hereof.
42
(d) Copies of Documents. Upon the request of Administrative
Agent or any Lender, an LC Issuer shall furnish to the requesting
Administrative Agent or Lender copies of any Facility Letter of Credit
or Reimbursement Agreement to which such LC Issuer is party and such
other documentation as may reasonably be requested by Administrative
Agent or a Lender.
(e) Obligations of Lenders. The obligations of Lenders to make
payments to Administrative Agent for the account of an LC Issuer with
respect to a Facility Letter of Credit shall be irrevocable, not
subject to any qualification or exception whatsoever and shall be made
in accordance with, but not subject to, the terms and conditions of
this Agreement under all circumstances notwithstanding:
(i) any lack of validity or enforceability of this
Agreement, any Facility Letter of Credit (except where due to
the gross negligence or willful misconduct of the LC Issuer),
or any of the other Loan Documents;
(ii) the existence of any claim, setoff, defense or
other right which Borrower may have at any time against a
beneficiary named in a Facility Letter of Credit or any
transferee of any Facility Letter of Credit (or any Person for
whom any such transferee may be acting), such LC Issuer,
Administrative Agent, any Lender, or any other Person, whether
in connection with this Agreement, any Facility Letter of
Credit, the transactions contemplated herein or any unrelated
transactions (including any underlying transactions between
Borrower or any Subsidiary and the beneficiary named in any
Facility Letter of Credit) other than the defense of payment
in accordance with this Agreement or a defense based on the
gross negligence or willful misconduct of the LC Issuer;
(iii) any draft, certificate or any other document
presented under the Facility Letter of Credit proving to be
forged, fraudulent, invalid or insufficient in any respect of
any statement therein being untrue or inaccurate in any
respect so long as the payment by the LC Issuer under such
Facility Letter of Credit against presentation of such draft,
certificate or other document shall not have constituted gross
negligence or willful misconduct;
(iv) the surrender or impairment of any security for
the performance or observance of any of the terms of any of
the Loan Documents;
(v) any failure by Administrative Agent or the LC
Issuer to make any reports required pursuant to Section 4.8;
or
43
(vi) the occurrence of any Event of Default or
Unmatured Event of Default.
4.7 Compensation for Facility Letters of Credit.
(a) Payment of Facility Letter of Credit Fee. Borrower agrees
to pay to Administrative Agent, in the case of each outstanding
Facility Letter of Credit (including without limitation the Existing
Letters of Credit), the Facility Letter of Credit Fee therefor, payable
in quarterly installments in arrears, not later than five (5) Business
Days following Administrative Agent's delivery to Borrower of each
quarterly statement of Facility Letter of Credit Fees provided for in
paragraph (c) below, commencing with the calendar quarter next
following the Issuance Date or, in the case of the Existing Letters of
Credit, next following the date hereof. The initial installment of the
Facility Letter of Credit Fees for the Existing Letters of Credit shall
be a pro rata portion of the annual Facility Letter of Credit Fee for
the period commencing on the date hereof and ending on the day
preceding such payment date. The initial installment of the Facility
Letter of Credit Fee for any Facility Letter of Credit hereafter issued
shall be a pro rata portion of the annual Facility Letter of Credit Fee
for the period commencing on the Issuance Date and ending on the day
preceding such payment date. Facility Letter of Credit Fees shall be
calculated, on a pro rata basis for the period to which such payment
applies, for actual days that will elapse during such period, on the
basis of a 360-day year. Administrative Agent shall promptly remit such
Facility Letter of Credit Fees, when paid, as follows: (i) to the LC
Issuer as an issuance fee in an amount equal to the product of (A)
0.125% per annum and (B) the face amount of the Facility Letters of
Credit with respect to which such Facility Letters of Credit Fees have
been paid, and (ii) the balance of such Facility Letter of Credit Fees
to Lenders (including the LC Issuer) (ratably in the proportion that
each Lender's Commitment bears to the Aggregate Commitment).
(b) Amounts Owed to LC Issuer. An LC Issuer shall have the
right to receive solely for its own account, and in addition to the
issuance fee provided for in Section 4.7(a)(i), such amounts as
Borrower may agree, in writing, to pay for such LC Issuer's
out-of-pocket costs of issuing and servicing Facility Letters of
Credit.
(c) Quarterly Statement. Administrative Agent shall, with
reasonable promptness following receipt from all LC Issuers of the
reports provided for in Section 4.8 for the months of March, June,
September and December, respectively, deliver to Borrower a quarterly
statement of the Facility Letter of Credit Fees then due and payable.
4.8 LC Issuer Reporting Requirements. Each LC Issuer shall, no later
than the third (3rd) Business Day following the last day of each month, provide
to Administrative Agent a schedule of the Facility Letters of Credit issued by
it, in form and substance reasonably satisfactory to Administrative Agent,
showing the Issuance Date, account party, original face amount, amount (if any)
paid thereunder, expiration date and the reference number of each Facility
Letter of Credit outstanding at any time during such month (and whether such
Facility Letter of Credit is a performance Letter of Credit or financial Letter
of Credit) and the aggregate amount (if any) payable by Borrower to such LC
Issuer during the month pursuant to Section
44
3.2. Copies of such reports shall be provided promptly to each Lender and
Borrower by Administrative Agent.
4.9 Indemnification; Nature of LC Issuer's Duties.
(a) Indemnity. In addition to amounts payable as elsewhere
provided in this Article IV, Borrower hereby agrees to protect,
indemnify, pay and hold harmless Administrative Agent and each Lender
and LC Issuer from and against any and all claims, demands,
liabilities, damages, losses, costs, charges and expenses (including
reasonable attorneys' fees) arising from the claims of third parties
against Administrative Agent, LC Issuer or Lender as a consequence,
direct or indirect, of (i) the issuance of any Facility Letter of
Credit for Borrower other than, in the case of an LC Issuer, as a
result of its willful misconduct or gross negligence, or (ii) the
failure of an LC Issuer issuing a Facility Letter of Credit for
Borrower to honor a drawing under such Facility Letter of Credit as a
result of any act or omission, whether rightful or wrongful, of any
present or future de jure or de facto government or governmental
authority.
(b) Assumption of Risk. As among Borrower, Lenders,
Administrative Agent and LC Issuer, Borrower assumes all risks of the
acts and omissions of, or misuse of Facility Letters of Credit by, the
respective beneficiaries of such Facility Letters of Credit. In
furtherance and not in limitation of the foregoing, neither the LC
Issuer nor Administrative Agent nor any Lender shall be responsible:
(i) for the form, validity, sufficiency, accuracy,
genuineness or legal effect of any document submitted by any
party in connection with the application for and issuance of
the Facility Letters of Credit, even if it should in fact
prove to be in any or all respects invalid, insufficient,
inaccurate, fraudulent or forged;
(ii) for the validity or sufficiency of any
instrument transferring or assigning or purporting to transfer
or assign a Facility Letter of Credit or the rights or
benefits thereunder or proceeds thereof, in whole or in part,
which may prove to be invalid or ineffective for any reason;
(iii) for failure of the beneficiary of a Facility
Letter of Credit to comply fully with conditions required in
order to draw upon such Facility Letter of Credit;
(iv) for errors, omissions, interruptions or delays
in transmission or delivery of any messages, by mail, cable,
telegraph, telex or otherwise, whether or not they be in
cipher;
(v) for errors in interpretation of technical terms;
45
(vi) for any loss or delay in the transmission or
otherwise of any document required in order to make a drawing
under any Facility Letter of Credit or of the proceeds
thereof;
(vii) for the misapplication by the beneficiary of a
Facility Letter of Credit of the proceeds of any drawing under
such Facility Letter of Credit; and
(viii) for any consequences arising from causes
beyond the control of Administrative Agent, the LC Issuer and
Lenders including, without limitation, any act or omission,
whether rightful or wrongful, of any present or future de jure
or de facto government or governmental authority. None of the
above shall affect, impair, or prevent the vesting of any of
the LC Issuer's rights or powers under this Section 4.9.
(c) Good Faith. In furtherance and extension and not in
limitation of the specific provisions hereinabove set forth, any action
taken or omitted by an LC Issuer under or in connection with the
Facility Letters of Credit or any related certificates, if taken or
omitted in good faith under commercially reasonable standards, shall
not put such LC Issuer, Administrative Agent or any Lender under any
resulting liability to Borrower or relieve Borrower of any of its
obligations hereunder to any such Person.
(d) Certain Acts of LC Issuer. Notwithstanding anything to the
contrary contained in this Section 4.9, Borrower shall have no
obligation to indemnify an LC Issuer under this Section 4.9 in respect
of any liability incurred by such LC Issuer arising primarily out of
the willful misconduct or gross negligence of such LC Issuer, as
determined by a court of competent jurisdiction, or out of the wrongful
dishonor by such LC Issuer of a proper demand for payment made under
the Facility Letters of Credit issued by such LC Issuer, unless such
dishonor was made at the request of Borrower.
4.10 Facility LC Collateral Account. Borrower agrees that it will, upon
the request of Administrative Agent and until the final expiration date of any
Facility Letter of Credit and thereafter as long as any amount is payable to any
LC Issuer or Lender in respect of any Facility Letter of Credit, maintain a
special collateral account pursuant to arrangements satisfactory to
Administrative Agent (the "Facility LC Collateral Account") at Administrative
Agent's office at the address specified pursuant to Article XVI, in the name of
Borrower but under the sole dominion and control of Administrative Agent, for
the ratable benefit of Lenders and in which Borrower shall have no interest
other than as set forth in Section 11.1. Borrower hereby pledges, assigns and
grants to Administrative Agent, on behalf of and for the ratable benefit of
Lenders, a security interest in all of Borrower's right, title and interest in
and to all funds which may from time to time be on deposit in the Facility LC
Collateral Account to secure the prompt and complete payment and performance of
the Facility LC Obligations and any other amounts in respect of any Facility
Letter of Credit or Reimbursement Agreement as shall from time to time have
become due and payable by Borrower to any Lender or LC Issuer under the Loan
Documents. Administrative Agent will invest any funds on deposit from time to
time in the Facility LC Collateral Account in certificates of deposit of the
Lender acting as Administrative
46
Agent and having a maturity not exceeding 30 days. Nothing in this Section 4.10
shall (i) obligate Borrower to deposit any funds in the Facility LC Collateral
Account other than as required in Section 11.1 or (ii) obligate Administrative
Agent to require Borrower to make deposits in the Facility LC Collateral Account
or limit the right of Administrative Agent to release any funds held in the
Facility LC Collateral Account, in each case other than as required by Section
11.1.
4.11 Obligations of LC Issuer and Other Lenders. Except to the extent
that a Lender shall have agreed to be designated as an LC Issuer, no Lender
shall have any obligation to accept or approve any request for, or to issue,
amend or extend, any Letter of Credit, and the obligations of the LC Issuer to
issue, amend or extend any Facility Letter of Credit are expressly limited by
and subject to the provisions of this Article IV.
ARTICLE V
CONDITIONS PRECEDENT
5.1 Initial Advance. Lenders shall not be required to make the initial
Advance hereunder, and the LC Issuer shall not be required to issue the initial
Facility Letter of Credit hereunder, unless Borrower has paid to Administrative
Agent (a) the fees for the account of Lenders set forth in Arranger's letter to
Lenders dated February 18, 2004 and (b) the fees for the account of
Administrative Agent and Arranger set forth in the letter agreement dated
February 13, 2004 (and accepted by Borrower on February 13, 2004) herewith among
Administrative Agent, Arranger and Borrower, and Borrower has furnished to
Administrative Agent with sufficient copies for Lenders:
(i) Copies of the articles or certificate of
incorporation of Borrower, together with all amendments, and a
certificate of good standing, all certified by the appropriate
governmental officer in the jurisdiction of incorporation, and any
other information required by Section 326 of the USA PATRIOT ACT or
necessary for Administrative Agent or any Lender to verify the identity
of Borrower as required by Section 326 of the USA PATRIOT ACT.
(ii) Copies of the articles or certificate of
incorporation of each Guarantor that is a corporation, together with
all amendments, certified by an authorized officer of such Guarantor
and a certificate of good standing from the appropriate governmental
officer in the jurisdiction of incorporation.
(iii) Copies, certified by the Secretary or Assistant
Secretary of Borrower and each Guarantor that is a corporation, of each
such corporation's by-laws and of its Board of Directors' resolutions
(and resolutions of other bodies, if any are deemed necessary by
counsel for any Lender), or, in the case of each Guarantor that is not
a corporation,
47
other appropriate consents and approvals, authorizing the execution of
the Loan Documents and the Guaranties.
(iv) For each Guarantor that is a limited liability
company or limited partnership (A) a copy of the certificate or
articles of formation or certificate of limited partnership (as
applicable), certified by the appropriate officer of such Guarantor's
manager, managing member or general partner, (B) a certificate of good
standing from the appropriate governmental officer in the jurisdiction
of formation and (C) a copy, certified by the appropriate officer of
such Guarantor or of such Guarantor's manager, managing member or
general partner, of such Guarantor's operating agreement or limited
partnership, as applicable.
(v) Incumbency certificates, executed by the
Secretary or Assistant Secretary of Borrower and each Guarantor (or, in
the case of a Guarantor that is not a corporation, the appropriate
officer of such Guarantor or of its manager, managing member or general
partner), which shall identify by name and title and bear the signature
of the officers of the such corporation (or other applicable entity)
authorized to sign the Loan Documents and the Guaranty (as applicable)
and (if applicable) to make borrowings hereunder and to request, apply
for and execute Facility Letter of Credit Reimbursement Agreements with
respect to Facility Letters of Credit hereunder, upon which
certificates Administrative Agent, Lenders and the LC Issuer shall be
entitled to rely until informed of any change in writing by Borrower or
the applicable Guarantor.
(vi) A written opinion of General Counsel of
Borrower, addressed to Administrative Agent and Lenders in
substantially the form of Exhibit E hereto.
(vii) Notes payable to the order of each of Lenders.
(viii) The Guaranty duly executed by the Guarantors.
(ix) Such written money transfer instructions, in
form acceptable to Administrative Agent, addressed to Administrative
Agent and signed by an Authorized Officer, as Administrative Agent may
have reasonably requested.
(x) Evidence satisfactory to Administrative Agent of
payment in full (which payment may be made from the proceeds of the
initial Advance hereunder) of all obligations of Borrower and
Guarantors under the Prior Credit Agreement (including without
limitation principal, accrued and unpaid interest and fees, and amounts
(if any) payable under Section 3.4 of the Prior Credit Agreement).
(xi) Such other documents as any Lender or LC Issuer
or their respective counsel may have reasonably requested.
48
5.2 Each Advance. Lenders shall not be required to make any Advance
(other than (a) the conversion of an Advance of one Type to an Advance of
another Type that does not increase the aggregate amount of outstanding Advances
and (b) Advances pursuant to Section 2.19(d)), unless on the applicable
Borrowing Date, and an LC Issuer shall not be required to issue, amend or extend
a Facility Letter of Credit unless on the applicable Issuance Date:
(i) There exists no Event of Default or Unmatured Event of
Default.
(ii) The representations and warranties contained in Article
VI are true and correct in all material respects as of such Borrowing
Date or Issuance Date except to the extent any such representation or
warranty is stated to relate solely to an earlier date, in which case
such representation or warranty shall be true and correct in all
material respects on and as of such earlier date and except for changes
permitted by this Agreement. Solely for purposes of this Section 5.2,
the representations and warranties in Sections 6.5 and 6.7 relate
solely to the date of this Agreement.
(iii) After the making of such Advance or issuance of such
Facility Letter of Credit, (A) the principal amount of all Advances
plus the aggregate amount of the Facility LC Obligations outstanding
shall not exceed the Aggregate Commitment, and (B) at any time at which
Borrower does not have an Investment Grade Rating, the aggregate
principal amount of all Consolidated Senior Debt Borrowings shall not
exceed the Borrowing Base (determined as of the most recent Inventory
Valuation Date).
(iv) Borrower shall have delivered to Administrative Agent,
within the time period specified in Section 2.8, a duly completed
Borrowing Notice in substantially the form of Exhibit D hereto.
(v) All legal matters incident to (A) the making of such
Advance shall be reasonably satisfactory to Administrative Agent and
its counsel and (B) the issuance of such Facility Letter of Credit
shall be reasonably satisfactory to Administrative Agent, such LC
Issuer and their respective counsel.
Each Borrowing Notice with respect to each such Advance and each
request for a Facility Letter of Credit shall constitute a representation and
warranty by Borrower that the conditions contained in Sections 5.2(i) and (ii)
have been satisfied.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
Borrower represents and warrants to Lenders and Administrative Agent
that:
6.1 Existence and Standing. Borrower is a corporation duly
incorporated, validly existing and in good standing under the laws of its
jurisdiction of incorporation and has all
49
requisite authority to conduct its business in each jurisdiction in which its
business is conducted (except to the extent that a failure to maintain such
existence, good standing or authority would not reasonably be expected to have
and does not have a Material Adverse Effect). Each Guarantor is a corporation,
limited liability company or limited partnership (as applicable) duly
incorporated or formed, validly existing and in good standing under the laws of
its jurisdiction of incorporation or formation and has all requisite authority
to conduct its business in each jurisdiction in which its business is conducted
(except to the extent that a failure to maintain such existence, good standing
or authority would not reasonably be expected to have and does not have a
Material Adverse Effect).
6.2 Authorization and Validity. Borrower has the corporate power and
authority to execute and deliver the Loan Documents and to perform its
obligations hereunder and thereunder. The execution and delivery by Borrower of
the Loan Documents and the performance of its obligations thereunder have been
duly authorized and the Loan Documents constitute legal, valid and binding
obligations of Borrower enforceable against Borrower in accordance with their
terms, subject to bankruptcy, insolvency or similar laws affecting the
enforcement of creditors' rights generally and general principles of equity.
Each Guarantor has the corporate, limited liability company or limited
partnership (as applicable) power and authority to execute and deliver the
Guaranty delivered by it and to perform its obligations thereunder. The
execution and delivery by each Guarantor of such Guaranty and the performance of
its obligations thereunder have been duly authorized, and each Guaranty
constitutes the legal, valid and binding obligations of such Guarantor
enforceable against such Guarantor in accordance with its terms, subject to
bankruptcy, insolvency or similar laws affecting the enforcement of creditors'
rights generally and general principles of equity.
6.3 No Conflict; Government Consent. Neither the execution and delivery
by Borrower of the Loan Documents or by Guarantors of the Guaranties, nor the
consummation of the transactions herein contemplated, nor compliance with the
provisions hereof or thereof will violate in any material respect any law, rule,
regulation, order, writ, judgment, injunction, decree or award binding on
Borrower or any Guarantor or Borrower's or a Guarantor's certificate of
incorporation, bylaws, certificate or articles of formation, operating
agreement, certificate of limited partnership, or limited partnership agreement
or the provisions of any indenture (including without limitation the Indenture),
instrument or agreement to which Borrower or any Guarantor is a party or is
subject, or by which it, or its Property, is bound, or conflict with or
constitute a default thereunder, or result in the creation or imposition of any
Lien in, of or on the Property of Borrower or any Guarantor pursuant to the
terms of any such indenture, instrument or agreement. Except as set forth on
Schedule 6.3 hereto, no order, consent, approval, license, authorization, or
validation of, or filing, recording or registration with, or exemption by, any
governmental or public body or authority, or any subdivision thereof, is
required to authorize, or is required in connection with the execution, delivery
and performance of, or the legality, validity, binding effect or enforceability
of, any of the Loan Documents or the Guaranty.
6.4 Financial Statements. The December 31, 2003 consolidated and
consolidating financial statements of Borrower (and its Subsidiaries) delivered
to Lenders were prepared pursuant to the rules and regulations of the Securities
and Exchange Commission. Such statements fairly present, in all material
respects, the financial condition and operations of Borrower and its
Subsidiaries on a consolidated or consolidating basis (as applicable) at such
50
date and the results of their operations for the period then ended on a
consolidated or consolidating basis (as applicable).
6.5 Material Adverse Change. Since the date of the financial statements
of Borrower described in Section 6.4, there has been no change in the business,
Property, condition (financial or otherwise) or results of operations of
Borrower and Guarantors (taken as a whole) that has had or would reasonably be
expected to have a Material Adverse Effect. The foregoing representation and
warranty is made solely as of the date of this Agreement.
6.6 Taxes. Borrower and each Guarantor have filed all United States
federal income tax returns and all other material tax returns which are required
to be filed and have paid all taxes due pursuant to said returns or pursuant to
any assessment received by Borrower or a Guarantor, except such taxes, if any,
as are being contested in good faith and as to which adequate reserves have been
provided. No tax Liens (except Permitted Liens) have been filed and no claims
are being asserted with respect to any such taxes that have had or would
reasonably be expected to have a Material Adverse Effect. The charges, accruals
and reserves on the books of Borrower and each Guarantor in respect of any taxes
or other governmental charges are adequate in accordance with Agreement
Accounting Principles.
6.7 Litigation and Contingent Obligations. Except as set forth in
Borrower's form 10-K report for the period ending December 31, 2003 or (with
respect to any litigation, arbitration, governmental investigation, proceeding
or inquiry commenced after the date hereof) in any SEC Filing, there is no
litigation, arbitration, governmental investigation, proceeding or inquiry
pending or, to the knowledge of any Authorized Officer, threatened against or
affecting Borrower or any Guarantor that has had or would reasonably be expected
to have a Material Adverse Effect. Other than any liability incident to such
litigation, arbitration or proceedings, neither Borrower nor any Guarantor have
any material contingent obligations not provided for or disclosed in the
financial statements (whether quarterly or annual) of Borrower and Guarantors
that have been most recently delivered by Borrower and Guarantors to
Administrative Agent that has had or would reasonably be expected to have a
Material Adverse Effect.
6.8 Subsidiaries. Schedule 6.8 hereto contains an accurate list of all
of the Subsidiaries of Borrower, setting forth their respective jurisdictions of
incorporation or formation and the percentage of their respective capital stock,
membership or partnership interests owned by Borrower or its Subsidiaries. All
of the issued and outstanding shares of capital stock of those Subsidiaries that
are corporations have been duly authorized and validly issued and are fully paid
and non-assessable. All of the Non-Guarantor Subsidiaries are listed on Schedule
1 hereto.
6.9 ERISA. The Unfunded Liabilities of all Single Employer Plans do not
in the aggregate exceed $5,000,000. The withdrawal liabilities to Multiemployer
Plans of the Guarantor, Borrower and any other member of the Controlled Group do
not, and are not reasonably expected to, exceed $5,000,000 in the aggregate.
Each Plan complies in all material respects with all applicable requirements of
law and regulations, no Reportable Event has occurred with respect to any Plan,
neither Borrower, nor any Guarantor nor any other member of the Controlled Group
has withdrawn from any Multiemployer Plan or initiated steps to do so, and no
steps have been taken to terminate any Plan.
51
6.10 Accuracy of Information. All factual information heretofore or
contemporaneously furnished in writing by or on behalf of Borrower or any
Guarantor to Administrative Agent or any LC Issuer for purposes of or in
connection with this Agreement or any transaction contemplated hereby is, and
all other such factual information hereafter furnished in writing by or on
behalf of Borrower or any Guarantor to Administrative Agent or any LC Issuer
will be, true and accurate (taken as a whole), in all material respects, on the
date as of which such information is dated or certified and not incomplete by
omitting to state any material fact necessary to make such information (taken as
a whole) not misleading at such time.
6.11 Regulation U. Neither Borrower, nor any Guarantor nor any
Subsidiary is engaged principally, or as one of its important activities, in the
business of extending credit for the purpose of purchasing or carrying Margin
Stock (as defined in Regulation U).
6.12 Material Agreements. Neither Borrower nor any Guarantor is in
default in the performance, observance or fulfillment of any of the obligations,
covenants or conditions contained in (i) any agreement to which it is a party,
or (ii) any agreement or instrument evidencing or governing Indebtedness, which
default has had or would reasonably be expected to have a Material Adverse
Effect.
6.13 Labor Disputes and Acts of God. Neither the business nor the
Property of Borrower or of any Guarantor is affected by any fire, explosion,
accident, strike, lockout, or other labor dispute, drought, storm, hail,
earthquake, embargo, act of God or of the public enemy, or other casualty
(whether or not covered by insurance), which has had or would reasonably be
expected to have a Material Adverse Effect.
6.14 Ownership. Borrower and each Guarantor have title to, or valid
leasehold interests in, all of their respective properties and assets, real and
personal, including the properties and assets and leasehold interests reflected
in the financial statements referred to in Section 6.4 (except to the extent
that (i) such properties or assets have been disposed of in the ordinary course
of business or (ii) the failure to have such title has not had and would not
reasonably be expected to have a Material Adverse Effect).
6.15 Operation of Business. Borrower and each Guarantor possess all
licenses, permits, franchises, patents, copyrights, trademarks, and trade names,
or rights thereto, to conduct their respective businesses substantially as now
conducted, and as presently proposed to be conducted, with such exceptions as
have not had and would not reasonably be expected to have a Material Adverse
Effect.
6.16 Laws; Environment. Except as set forth in Borrower's form 10-K
report for the period ending December 31, 2003 or (with respect to matters
arising after the date hereof) in any SEC Filing, (a) Borrower and each
Guarantor have duly complied, and their businesses, operations and Property are
in compliance, in all material respects, with the provisions of all federal,
state, and local statutes, laws, codes, and ordinances and all rules and
regulations promulgated thereunder (including without limitation those relating
to the environment, health and safety); (b) Borrower and each Guarantor have
been issued all required federal, state, and local permits, licenses,
certificates, and approvals relating to (1) air emissions; (2) discharges to
surface water or groundwater; (3) solid or liquid waste disposal; (4) the use,
generation, storage,
52
transportation, or disposal of toxic or hazardous substances or hazardous wastes
(intended hereby and hereafter to include any and all such materials listed in
any federal, state, or local law, code, or ordinance and all rules and
regulations promulgated thereunder as hazardous); or (5) other environmental,
health or safety matters; (c) except in accordance with a valid governmental
permit, license, certificate or approval, to the best knowledge of Borrower,
there has been no material emission, spill, release, or discharge into or upon
(1) the air; (2) soils, or any improvements located thereon; (3) surface water
or groundwater; or (4) the sewer, septic system or waste treatment, storage or
disposal system servicing any Property of Borrower or a Guarantor, of any toxic
or hazardous substances or hazardous wastes at or from such Property; (d)
neither Borrower nor any Guarantor has received notice of any written complaint,
order, directive, claim, citation, or notice from any governmental authority or
any person or entity with respect to violations of law or damage by reason of
Borrower's or any Guarantor's (1) air emissions; (2) spills, releases, or
discharges to soils or improvements located thereon, surface water, groundwater
or the sewer, septic system or waste treatment, storage or disposal systems
servicing any Property; (3) solid or liquid waste disposal; (4) use, generation,
storage, transportation, or disposal of toxic or hazardous substances or
hazardous waste; or (5) other environmental, health or safety matters affecting
Borrower or any Guarantor or its business, operation or Property; and (e)
neither Borrower nor any Guarantor has any material Indebtedness, obligation, or
liability, absolute or contingent, matured or not matured, with respect to the
storage, treatment, cleanup, or disposal of any solid wastes, hazardous wastes,
or other toxic or hazardous substances (including without limitation any such
indebtedness, obligation, or liability with respect to any current regulation,
law or statute regarding such storage, treatment, cleanup, or disposal). A
matter will not constitute a breach of this Section 6.16 unless it is reasonably
likely to result in a Material Adverse Effect.
6.17 Investment Company Act. Neither Borrower nor any Guarantor is an
"investment company" or a company "controlled" by an "investment company,"
within the meaning of the Investment Company Act of 1940, as amended.
6.18 Public Utility Holding Company Act. Neither Borrower nor any
Guarantor nor any Subsidiary is a "holding company" or a "subsidiary company" of
a "holding company," or an "affiliate" of a "holding company" or of a
"subsidiary company" of a "holding company," within the meaning of the Public
Utility Holding Company Act of 1935, as amended.
6.19 Subordinated Indebtedness. There is no Subordinated Indebtedness
outstanding as of the date of this Agreement.
6.20 Indenture Provisions. Each Guarantor is a Restricted Subsidiary,
as that term is defined in the Indenture. Each Guarantor is a Wholly-Owned
Subsidiary of Borrower.
6.21 SDN List Designation. Neither Borrower nor any of its Subsidiaries
is an entity named on the Specially Designated National and Blocked Persons
(SDN) list issued by the Office of Foreign Asset Control of the Department of
the Treasury of the United States of America.
53
ARTICLE VII
AFFIRMATIVE COVENANTS
During the term of this Agreement, unless the Required Lenders shall
otherwise consent in writing:
7.1 Financial Reporting. Borrower will maintain, and each Guarantor
will maintain, a system of accounting established and administered in accordance
with GAAP, and furnish to Lenders:
(i) Within 100 days after the close of each fiscal year, (A)
an unqualified (or qualified as reasonably acceptable to Administrative
Agent) audited consolidated financial statements of Borrower certified
by one of the "Big Four" accounting firms or other nationally
recognized independent certified public accountants, reasonably
acceptable to Lenders, prepared in accordance with GAAP on a
consolidated basis, including balance sheets as of the end of such
fiscal year and statements of income and retained earnings and a
statement of cash flows, in each case setting forth in comparative form
the figures for the preceding fiscal year, and (B) unaudited financial
statements, prepared in accordance with GAAP (excluding footnotes) on a
consolidating basis for Borrower (and its Subsidiaries), including
balance sheets as of the end of such fiscal year and statements of
income and retained earnings and a statement of cash flows, in each
case setting forth in comparative form the figures for the preceding
fiscal year.
(ii) Within sixty (60) days after the close of the first three
(3) quarterly periods of each fiscal year, for Borrower, on a
consolidated basis and on a consolidating basis, unaudited financial
statements, including balance sheets as of the end of such period,
statements of income and retained earnings, and a statement of cash
flows for the portion of the fiscal year ending with such fiscal
period, all certified by an Authorized Officer. All such balance sheets
shall set forth in comparative form figures for the preceding year end.
All such income statements shall reflect current period and
year-to-date figures.
(iii) Annually, together with the financial statements
described in clause (i) above, a copy of the business plan of Borrower
and each Guarantor (on a consolidated basis) for the upcoming two (2)
fiscal years, including, as to Borrower, a consolidated balance sheet,
statement of income and projection of cash flows.
(iv) Within sixty (60) days of the end of each of the first
three quarterly periods of each fiscal year, a quarterly variance
analysis comparing actual quarterly results versus projected quarterly
results for the fiscal quarter most recently ended, including an
analysis of revenues, Housing Unit Closings and operating profits (by
operating division) for such period, and such other items as
54
are reasonably requested by Administrative Agent, together with a
written explanation of material variances.
(v) Within 100 days after the end of each fiscal year, a
variance analysis comparing actual annual results versus the business
plan for the fiscal year most recently ended, including an analysis of
revenues, Housing Unit Closings and operating profits (by operating
division) for such period, and such other items as are reasonably
requested by Administrative Agent, together with a written explanation
of material variances.
(vi) By the twenty-fifth day of each calendar month (and
without regard to whether Borrower has an Investment Grade Rating), a
Borrowing Base Certificate of an Authorized Officer of Borrower, with
respect to the Inventory Valuation Date occurring on the last day of
the immediately preceding calendar month.
(vii) Within sixty (60) days after the end of each quarterly
period of each fiscal year, a report identifying as to Borrower and its
Subsidiaries the inventory of real estate operations, including land
and Housing Units as of such date, designated in the same categories as
are identified in Borrower's corporate status report currently
delivered to Administrative Agent; such summary shall include a
delineation of sold or unsold items in each category.
(viii) Within sixty (60) days after the end of each of the
first three quarterly periods, and within one hundred (100) days after
the end, of each fiscal year, a certificate of an Authorized Officer of
Borrower as to Borrower's compliance with the Financial Covenant Tests
in the form of Exhibit F hereto.
(ix) Within 270 days after the close of each fiscal year, a
statement of the Unfunded Liabilities of each Single Employer Plan,
certified as correct by an actuary enrolled under ERISA (which
requirement may be satisfied by the delivery of the most recent
actuarial valuation of each such Single Employer Plan).
(x) As soon as possible and in any event within ten (10) days
after Borrower knows that any Reportable Event has occurred with
respect to any Plan, a statement, signed by an Authorized Officer of
Borrower, describing said Reportable Event and the action which
Borrower proposes to take with respect thereto.
(xi) As soon as possible, and in any event within thirty (30)
days after Borrower knows or has reason to know that any circumstances
exist that constitute grounds entitling the PBGC to institute
proceedings to terminate a Plan subject to ERISA with respect to
Borrower or any member of the Controlled Group and promptly but in any
event within two (2) Business Days of receipt by Borrower, any
Guarantor or any member of the Controlled Group of notice that the PBGC
intends to terminate a Plan or appoint a trustee to administer the
same,
55
and promptly but in any event within five (5) Business Days of the
receipt of notice concerning the imposition of withdrawal liability in
excess of $500,000 with respect to Borrower, any Guarantor or any
member of the Controlled Group, a certificate of an Authorized Officer
setting forth all relevant details of such event and the action which
Borrower proposes to take with respect thereto.
(xii) Promptly after the sending or filing thereof, copies of
all proxy statements, financial statements, SEC Filings (exclusive of
exhibits unless otherwise requested by Administrative Agent), and
reports which Borrower sends to its stockholders, and copies of all
regular (except form S-8), periodic, and special reports, and all
effective registration statements (exclusive of exhibits unless
otherwise requested by Administrative Agent) which Borrower is required
to file with the Securities and Exchange Commission or any governmental
authority which may be substituted therefor, or with any national
securities exchange.
(xiii) Promptly after the commencement thereof, notice of all
actions, suits and proceedings before any court or governmental
department, commission, board, bureau, agency, or instrumentality,
domestic or foreign, affecting Borrower or a Guarantor (a) which, if
determined adversely to Borrower or Guarantor, could reasonably be
expected to have a Material Adverse Effect or (b) in which liability in
excess of $2,500,000 (in the aggregate with respect to any action, suit
or proceeding) is claimed and alleged against Borrower or such
Guarantor.
(xiv) As soon as possible and in any event within ten (10)
days after receipt by Borrower or any Guarantor, a copy of (a) any
written notice or claim to the effect that Borrower or any Guarantor is
or may be liable to any Person as a result of the release of any toxic
or hazardous waste or substance into the environment, and (b) any
notice alleging any violation of any federal, state or local
environmental, health or safety law or regulation by Borrower or any
Guarantor which, in the case of either (a) or (b), could reasonably be
expected to have a Material Adverse Effect or could result in liability
to Borrower or any Guarantor in excess of $2,500,000 (in the aggregate
with respect to any notice or claim).
(xv) Promptly after the occurrence of any change in the
business, Property, condition (financial or otherwise) or results of
operations of Borrower and Guarantors (taken as a whole) that has had
or would reasonably be expected to have a Material Adverse Effect,
notice thereof.
(xvi) Such other information (including non-financial
information) as Administrative Agent may from time to time reasonably
request.
7.2 Use of Proceeds. Subject to the limitations contained in this
Agreement, Borrower will use the proceeds of Advances for its or any one or more
Guarantor's own acquisition, development and/or holding of real property and the
construction of improvements in connection with the home building or other
Related Businesses of Borrower or such Guarantor (including
56
payment of reimbursement obligations with respect to Facility Letters of
Credit), general corporate purposes, and to repay outstanding Advances (and, in
the case of the initial Advance, to repay amounts outstanding under the Prior
Credit Agreement). The Borrower will not, nor will it permit any Subsidiary to,
use any of the proceeds of the Advances to purchase or carry any "margin stock"
(as defined in Regulation U).
7.3 Notice of Event of Default. Borrower will give prompt notice in
writing to Administrative Agent of the occurrence of (i) any Event of Default or
Unmatured Event of Default and (ii) any other development, financial or
otherwise, that has had or would be reasonably expected to have a Material
Adverse Effect.
7.4 Conduct of Business. Except as otherwise permitted under this
Agreement, Borrower and each Guarantor will carry on and conduct business in the
same general manner and in substantially the same fields of enterprise as
presently conducted and to do all things necessary to remain duly incorporated,
validly existing and in good standing as a domestic corporation, limited
liability company or limited partnership (as applicable) in their respective
jurisdictions of incorporation or formation and maintain all requisite authority
to conduct business in each jurisdiction in which business is conducted;
provided, however, that nothing contained herein shall prohibit the dissolution
of any Guarantor as long as Borrower or another Guarantor succeeds to the
assets, liabilities and business of the dissolved Guarantor. Without limitation
of the foregoing, Borrower shall at all times engage principally in the Related
Businesses.
7.5 Taxes. Borrower and each Guarantor will pay prior to delinquency
all taxes, assessments and governmental charges and levies upon them or their
income, profits or Property, except (i) those that solely encumber property
abandoned or in the process of being abandoned and with respect to which there
is no recourse to Borrower or any Subsidiary; (ii) those that are being
contested in good faith by appropriate proceedings and with respect to which
adequate reserves have been established in accordance with GAAP, and (iii) to
the extent that the failure to do so would not reasonably be expected to have
and does not have a Material Adverse Effect.
7.6 Insurance. Borrower and each Guarantor will maintain with
financially sound and reputable insurance companies insurance on all their
Property in such amounts and covering such risks as is consistent with sound
business practice, and Borrower will furnish to Administrative Agent upon
request full information as to the insurance carried.
7.7 Compliance with Laws. Borrower and each Guarantor will comply with
all laws, rules, regulations, orders, writs, judgments, injunctions, decrees or
awards to which it may be subject, except to the extent that the failure to do
so would not reasonably be expected to have and does not have a Material Adverse
Effect.
7.8 Maintenance of Properties. Borrower and each Guarantor will do all
things necessary to maintain, preserve, protect and keep its Property in good
repair, working order and condition, except to the extent that the failure to do
so would not reasonably be expected to have and does not have a Material Adverse
Effect.
57
7.9 Inspection. Borrower and each Guarantor will permit Administrative
Agent and Lenders, by their respective representatives and agents, to inspect
any of the Property, corporate (or partnership) books and financial records of
Borrower and such Guarantor to examine and make copies of the books of accounts
and other financial records of Borrower and such Guarantor, and to discuss the
affairs, finances and accounts of Borrower and such Guarantor with, and to be
advised as to the same by, their respective officers at such reasonable times
and intervals as Administrative Agent may designate.
7.10 Environment. Borrower and each Guarantor will (i) comply, in all
material respects, with the provisions of all federal, state, and local
environmental, health, and safety laws, codes and ordinances, and all rules and
regulations issued thereunder; (ii) promptly contain and remove or otherwise
remediate any hazardous discharge from or affecting the Property of Borrower or
any Guarantor, to the extent required by and in compliance with all applicable
laws; (iii) promptly pay any fine or penalty assessed in connection therewith or
contest the same in good faith; (iv) permit Administrative Agent to inspect such
Property, to conduct tests thereon, and to inspect all books, correspondence,
and records pertaining thereto at reasonable hours and places; and (v) at the
request of the Required Lenders, and at Borrower's expense, provide a report of
a qualified environmental engineer, satisfactory in scope, form, and content to
the Required Lenders, and such other and further assurances reasonably
satisfactory to the Required Lenders that any new condition or occurrence
hereafter identified in any SEC Filing has been corrected; provided that a
failure to comply with the provisions of clauses (i) through (v) of this Section
7.10 shall not constitute an Event of Default or an Unmatured Event of Default
unless such noncompliance has resulted in or is reasonably likely to result in a
Material Adverse Effect.
7.11 New Guarantors. If, as of the end of any calendar quarter, any
Subsidiary of Borrower (whether now existing or hereafter created or acquired
but excluding Lion Warranty Corporation, Lion Insurance Company, HomeAmerican
Mortgage Corporation, American Home Title & Escrow Company and American Home
Insurance Agency, Inc. and any other Subsidiary that is not in the homebuilding
business and is in a regulated business (such as insurance) ) that is not a
Guarantor shall be a Significant Subsidiary, then, unless the Required Lenders
shall otherwise consent in writing, Borrower shall, within forty-five (45) days
of the end of such quarter, (i) cause such Significant Subsidiary to execute and
deliver to Administrative Agent a Supplemental Guaranty in the form attached to
and provided for in the Guaranty, pursuant to which such Guarantor shall become
a party thereunder and (ii) deliver or cause to be delivered, by and with
respect to such Significant Subsidiary, certificates, opinions and other
documents substantially similar to those referred to in Sections 5.1(i), (ii),
(iii), (iv), (v) and (vi) and such other documents as any Lender or LC Issuer or
their respective counsel may reasonably request; all of the foregoing shall be
in form and substance satisfactory to Administrative Agent.
7.12 Change in Schedules. Promptly following the occurrence of but in
any event not later than forty-five (45) days following any quarter in which
there shall occur any event or circumstance as a result of which either of
Schedules 1 or 6.8 ceases to be accurate in all material respects, Borrower
shall furnish to Administrative Agent the applicable revised Schedule and shall
certify that such revised Schedule is true, correct and complete in all material
respects, and such revised Schedule shall be substituted for the applicable
Schedule hereunder.
58
ARTICLE VIII
NEGATIVE COVENANTS
During the term of the Agreement, unless the Required Lenders shall
otherwise consent in writing:
8.1 Dividends; Repurchase of Stock. Borrower will not, directly or
indirectly, declare, make or pay, or incur any liability to make or pay, or
cause or permit to be declared, made or paid, any Dividend, or purchase, or
incur any obligation to purchase, any capital stock of Borrower either (a)
during the Term-Out Period or (b) if, prior to or after giving effect to the
declaration and payment of any Dividend or purchase of such stock, there shall
exist any Event of Default under this Agreement or any violation of any
Financial Covenant Test (without regard to whether the Term Out Period has
commenced).
8.2 Indebtedness. Neither Borrower nor any Guarantor will create, incur
or suffer to exist any Indebtedness, except, without duplication and without
duplication as to Borrower and Guarantors:
(i) The Loans.
(ii) Indebtedness existing on the date hereof (and not
otherwise permitted under this Section 8.2) and described in Schedule
8.2 hereto and Refinancing Indebtedness with respect thereto.
(iii) Indebtedness of Borrower's mortgage lending and
financial asset management Subsidiaries.
(iv) Rate Hedging Obligations.
(v) Intercompany Indebtedness between Borrower, any Guarantor
and/or any Subsidiary (subject to the limitations contained in Section
8.5(vii)).
(vi) Trade accounts payable and accrued expenses arising or
occurring in the ordinary course of business.
(vii) Indebtedness constituting Capitalized Lease Obligations.
(viii) Indebtedness with respect to Letters of Credit
(including Facility Letters of Credit).
(ix) Indebtedness secured by purchase-money Liens permitted
under Section 8.6(iii).
(x) Subordinated Indebtedness.
(xi) Non-Recourse Indebtedness incurred in the ordinary course
of business.
59
(xii) Performance bonds, completion bonds, guarantees of
performance, and guarantees of Indebtedness of a special district
entered into in the ordinary course of business.
(xiii) Indebtedness of a Person existing as of the time of the
Acquisition of such Person by Borrower or any Guarantor, provided that,
after giving effect to such Acquisition, Borrower is in compliance with
the terms of this Agreement (including without limitation the Financial
Covenant Tests).
(xiv) Indebtedness evidenced by the Senior Notes and
Refinancing Indebtedness with respect thereto.
(xv) Public Indebtedness, so long as such Indebtedness is
either Subordinated Indebtedness or pari passu with the Obligations (or
Guarantors' obligations under the Guaranties, if applicable).
(xvi) Indebtedness of Borrower or a Guarantor secured by a
Lien on real property owned by Borrower or such Guarantor, where (A)
the real property is not related to Housing Units or Land Under
Development, and (B) the aggregate outstanding amount of such
Indebtedness, plus all amounts committed but undisbursed in connection
with such Indebtedness, does not exceed seventy-five percent (75%) of
the fair market value of the real property encumbered by such Lien.
(xvii) Indebtedness, except Public Indebtedness, not otherwise
permitted by this Section 8.2 in an aggregate amount outstanding at any
time not to exceed $60,000,000.
(xviii) From and after, but not prior to, the first to occur
of (A) the Term Out Date and (B) the day that is two years prior to the
Facility Maturity Date (as the same may be extended pursuant to this
Agreement), Indebtedness secured by a Lien permitted under Section
8.6(xxi).
(xix) Indebtedness of Borrower which arises pursuant to a
guarantee of payment or collection executed by Borrower, guaranteeing
the Indebtedness of one or more Guarantors which is permitted under
clauses (i) through (xviii) of this Section 8.2.
8.3 Merger. Neither Borrower nor any Guarantor will merge or
consolidate with or into any other Person, unless:
(i) (A) any Guarantor is merging with any other Guarantor; (B)
any Guarantor is merging with Borrower, and Borrower is the continuing
corporation; (C) a Guarantor is merging with a Person that is not a
Subsidiary of Borrower and such transaction is in compliance with the
provisions of Section 8.4(b); or (D) a Non-Guarantor Subsidiary is
merging with Borrower or any Guarantor, and Borrower or a Guarantor, as
applicable, is the continuing corporation; and
60
(ii) no Event of Default shall exist or shall occur after
giving effect to such transaction; and
(iii) after giving effect to such transaction, Borrower shall
be in compliance with the Financial Covenant Tests; and
(iv) (a) the other Person to the transaction is in a Related
Business or (b) if not in a Related Business, such transaction is in
compliance with the provisions of Section 8.5(vii), and Borrower or a
Guarantor, if involved in the merger, is the continuing corporation;
and
(v) the transaction is not otherwise prohibited under this
Agreement.
8.4 Sale of Assets.
(a) Neither Borrower nor any Guarantor will lease, sell or
otherwise dispose of its Property, in a single transaction or a series
of transactions, to any other Person (other than Borrower or another
Guarantor) except for (i) sales or leases in the ordinary course of
business, (ii) leases, sales or other dispositions of its Property
that, together with all other Property of Borrower and Guarantors
previously leased, sold or disposed of (other than in the ordinary
course of business) as permitted by this Section during the month in
which any such lease, sale or other disposition occurs, do not
constitute a Material Portion of the Property of Borrower and
Guarantors (taken as a whole) and (iii) transfers of assets by a
Guarantor to another Guarantor (including any Subsidiary that becomes a
Guarantor by executing and delivering a Guaranty to Administrative
Agent at the time at which such assets are transferred to such
Subsidiary).
(b) Borrower shall not sell or transfer or cause to be sold or
transferred (other than to Borrower or another Guarantor), in a single
transaction or a series of transactions (i) all or substantially all of
the assets of any Guarantor or (ii) such securities or other ownership
interests in a Guarantor as would result in such Guarantor ceasing to
be a Subsidiary of Borrower (whether by merger, consolidation, sale,
assignment or otherwise) unless (A) any such transaction is (and, if it
were the sale of all of the assets of such Guarantor, would be) in
compliance with the provisions of Section 8.4(a) and (B) following such
transaction and the release of such Guarantor provided for below,
Borrower would be in compliance with its obligations under this
Agreement. Upon not less than 30 days' prior written request from
Borrower, accompanied by a certificate of Borrower certifying as to the
foregoing, Administrative Agent shall deliver, at the time of the
consummation of such transaction, a release of such Guarantor from its
obligations under the Guaranty, and such entity shall cease to be a
Guarantor hereunder.
(c) For purposes of this Section 8.4, "Material Portion"
means, with respect to the Property of Borrower and Guarantors (taken
as a whole), Property which represents more than 25% of the book value
of all assets of Borrower and
61
Guarantors (taken as a whole). If a Material Portion of the Property of
Borrower and Guarantors (taken as a whole) is leased, sold or disposed
of in violation of this Section 8.4, Borrower shall pay to
Administrative Agent for the benefit of Lenders at the time of such
lease, sale or disposal, all amounts owed by Borrower pursuant to
Section 2.2, taking into account the effect of such lease, sale or
disposal.
8.5 Investments and Acquisitions. Neither Borrower nor any Guarantor
will make or suffer to exist any Investments (including without limitation,
loans and advances to, and other Investments in, Subsidiaries), or commitments
therefor, or to create any Subsidiary or to become or remain a partner in any
partnership or joint venture, or to make any Acquisition of any Person, except:
(i) Investments in Cash Equivalents.
(ii) Loans or advances made to officers, directors or
employees of Borrower or any Guarantor or any Subsidiary.
(iii) Carryback loans made in the ordinary course of business
in conjunction with the sale of Property of Borrower or such Guarantor.
(iv) Investments in interests in issuances of collateralized
mortgage obligations, mortgages, mortgage loan servicing or other
mortgage related assets.
(v) Investments in contract rights granted by, entitlements
granted by, interests in securities issued by, or tangible assets of,
political subdivisions or enterprises thereof related to the home
building or real estate operations of Borrower or any Guarantor or any
Subsidiary, including without limitation Investments in special
districts as described in Section 8.2(xii).
(vi) Investments in existing Subsidiaries (subject, in the
case of Non-Guarantor Subsidiaries, to the provisions of Section
8.5(vii)) and other Investments in existence on the date hereof.
(vii) Investments in (A) Non-Guarantor Subsidiaries or (B)
other Persons whose primary business is not a Related Business, in an
amount (in the aggregate for both clause (A) and clause (B))
outstanding at any one time not to exceed 25% of Adjusted Consolidated
Tangible Net Worth, provided that retained earnings of such
Non-Guarantor Subsidiaries and Persons described in clause (B) shall
not be deemed part of such Investment.
(viii) The Acquisition of or Investment in a business or
entity engaged primarily in a Related Business, provided that (a)
immediately upon the consummation of any such Acquisition or Investment
Borrower and each Guarantor is in compliance with the terms, covenants
and conditions of this Agreement (including without limitation the
Financial Covenant Tests and the provisions of Section 8.5(vii)), and
(b) Borrower shall deliver to Administrative Agent a certificate,
signed by an Authorized Officer, certifying to the best
62
knowledge of Borrower, that, on the date of, and taking into account,
the consummation of such Acquisition, and based on the reasonable
assumptions set forth in such Certificate, no Event of Default has
occurred and is continuing, and Borrower is in compliance with the
Financial Covenant Tests.
(ix) The creation of new Subsidiaries engaged primarily in a
Related Business (or the purpose of which is principally to preserve
the use of a name in which such business is conducted), subject to the
limitations contained in Section 8.5(vii).
(x) Stock, obligations or securities received in satisfaction
of debts owing to Borrower or any Guarantor in the ordinary course of
business.
(xi) Pledges or deposits in cash by Borrower or a Guarantor to
support surety bonds, performance bonds or guarantees of completion in
the ordinary course of business.
(xii) Loans representing intercompany Indebtedness between
Borrower, any Guarantor and/or any Subsidiary, subject to the
limitations contained in Section 8.5(vii).
(xiii) Investments pursuant to Borrower's or a Guarantor's
employment compensation plans or agreements.
(xiv) Payments on account of the purchase, redemption or other
acquisition or retirement for value, or any payment in respect of any
amendment (in anticipation of or in connection with any such
retirement, acquisition or defeasance) in whole or in part, of any
shares of capital stock or other securities of Borrower, but only to
the extent the same is permitted under the Indenture.
(xv) Investments, in addition to those enumerated in this
Section 8.5, in an aggregate amount outstanding at any time not to
exceed $5,000,000.
8.6 Liens. Neither Borrower nor any Guarantor will create, incur, or
suffer to exist any Lien in, of or on the Property of Borrower or any Guarantor,
except:
(i) Permitted Liens.
(ii) Liens for taxes, assessments or governmental charges or
levies which solely encumber property abandoned or in the process of
being abandoned and with respect to which there is no recourse to
Borrower or any Guarantor or any Subsidiary.
(iii) Purchase-money Liens on any Property hereafter acquired
or the assumption of any Lien on Property existing at the time of such
acquisition (and not created in contemplation of such acquisition), or
a Lien incurred in connection with any conditional sale or other title
retention or a Capitalized Lease; provided that
63
(a) Any Property subject to any of the foregoing is
acquired by Borrower or any Guarantor in the ordinary course
of its respective business and the Lien on any such Property
attaches to such asset concurrently or within ninety (90) days
after the acquisition thereof;
(b) The obligation secured by any Lien so created,
assumed, or existing shall not exceed ninety percent (90%) of
the cost the Property covered thereby by Borrower or any
Guarantor acquiring the same; and
(c) Each Lien shall attach only to the Property so
acquired.
(iv) Liens existing on the date hereof (and not otherwise
permitted under this Section 8.6) and described in Schedule 8.6 hereto
and Liens securing Refinancing Indebtedness with respect thereto, but
only to the extent such Liens encumber the same collateral in whole or
in part as the previous Liens securing the Indebtedness being refunded,
refinanced or extended.
(v) Liens incurred in the ordinary course of business not
otherwise permitted by this covenant, provided that the aggregate
amount of Indebtedness secured by such Liens outstanding at any time
shall not exceed $60,000,000.
(vi) Judgments and similar Liens arising in connection with
court proceedings; provided the execution or enforcement thereof is
stayed and the claim is being contested in good faith, with adequate
reserves therefor being maintained by Borrower or such Guarantor in
accordance with GAAP.
(vii) Liens securing Non-Recourse Indebtedness of Borrower or
any Guarantor, where the amount of such Indebtedness is greater than
fifty percent (50%) of the fair market value of the Property encumbered
by the Liens.
(viii) Liens existing with respect to Indebtedness of a Person
acquired in an Acquisition permitted by this Agreement.
(ix) Liens arising out of pledges or deposits under worker's
compensation laws, unemployment insurance, old age pensions, or other
social security or retirement benefits, or similar legislation.
(x) Liens incurred or deposits made to secure the performance
of tenders, bids, leases, statutory obligations, surety and appeal
bonds, progress payments, government contracts, utility services and
other obligations of like nature in each case incurred in the ordinary
course of business.
(xi) Leases or subleases granted to others not materially
interfering with the ordinary course of business of Borrower or any
Guarantor.
64
(xii) Any interest in or title of a lessor to property subject
to any Capitalized Lease Obligations.
(xiii) Liens in favor of the trustee named therein arising
under the Indenture and liens for trustee's fees and similar costs
under any Refinancing Indebtedness of the Senior Notes.
(xiv) Any option, contract or other agreement to sell or
purchase an asset or participate in the income or revenue derived
therefrom.
(xv) Any legal right of, or right granted in good faith to, a
lender or lenders to which Borrower or a Guarantor may be indebted to
offset against, or appropriate and apply to the payment of, such
Indebtedness any and all balances, credits, deposits, accounts, or
monies of Borrower or a Guarantor with or held by such lender or
lenders.
(xvi) Any pledge or deposit of cash or property by Borrower or
any Guarantor in conjunction with obtaining surety and performance
bonds and letters of credit required to engage in constructing on-site
and off-site improvements or as otherwise required by political
subdivisions or other governmental authorities in the ordinary course
of business.
(xvii) Liens incurred in the ordinary course of business as
security for Borrower's or any Guarantor's obligations with respect to
indemnification in favor of title insurance providers.
(xviii) Letters of Credit, bonds or other assets pledged to
secure insurance in the ordinary course of business.
(xix) Liens on assets securing warehouse lines of credit and
other credit facilities to finance the operations of Borrower's
mortgage lending Subsidiaries and/or financial asset management
Subsidiaries and Liens related to issuances of CMOs and
mortgage-related securities, so long as such assets are owned by such
mortgage lending Subsidiaries and financial asset Subsidiaries.
(xx) Liens described in Section 8.2(xvi) securing the
Indebtedness described therein, so long as (i) each such Lien attaches
only to the real property described in Section 8.2(xvi) and (ii) the
obligation secured by such Lien is limited to repayment of the
Indebtedness permitted under Section 8.2(xvi).
(xxi) From and after, but not prior to, the first to occur of
(A) the Term Out Date and (B) the day that is two years prior to the
Facility Maturity Date (as the same may be extended pursuant to this
Agreement), Liens incurred in the ordinary course of business not
otherwise permitted by this covenant, provided that (1) the Liens
encumber real property owned by the obligor of the applicable
Indebtedness, provided that Borrower or any Guarantor may be the
obligor of such Indebtedness and Borrower or any Guarantor may
guarantee such Indebtedness, and (2) the obligations secured by any
Lien shall not exceed eighty
65
percent (80%) of the fair market value of the real property encumbered
thereby (if the obligations do not relate to the construction of
improvements on, or development of, the real property) or eighty
percent (80%) of the value of the real property encumbered thereby as
if all improvements to be located thereon have been completed (if the
obligations relate to the construction of improvements on the real
property), as applicable.
Notwithstanding anything herein to the contrary, neither Borrower nor any
Guarantor will, create, incur, or suffer to exist any Lien in, of or on the
capital stock of any Guarantor.
8.7 Affiliates. Neither Borrower nor any Guarantor will enter into any
transaction (including, without limitation, the purchase or sale of any Property
or service) with, or make any payment or transfer to, any Affiliate (other than
a Subsidiary) except (i) in the ordinary course of business and pursuant to the
reasonable requirements of Borrower's or such Guarantor's business and upon fair
and reasonable terms no less favorable to Borrower or such Guarantor than
Borrower or such Guarantor would obtain in a comparable arms-length transaction,
(ii) Investments permitted under Section 8.5, (iii) pursuant to employment
compensation plans and agreements, and (iv) with officers, directors and
employees of Borrower or any Subsidiary so long as the same are duly authorized
pursuant to the articles of incorporation or bylaws (or procedures conducted in
accordance therewith) of Guarantor or Borrower.
8.8 Modifications to Certain Indebtedness. Neither Borrower nor any
Guarantor will make any amendment or modification to the subordination
provisions of any indenture, note or other agreement evidencing or governing (i)
as to Borrower, any Subordinated Indebtedness, and (ii) as to any Guarantor,
Indebtedness that has been subordinated to Guarantor's obligations under the
Guaranty.
8.9 Amendments of Indenture or Senior Notes. Neither Borrower nor any
Guarantor will amend or modify the Indenture or the Senior Notes, except for
amendments or modifications that do not (i) impose upon Borrower or any
Guarantor obligations not contained therein as of the date of this Agreement
(except as otherwise hereinafter provided), or (ii) otherwise adversely affect
Borrower or any Guarantor. Nothing contained in this Section 8.9 shall (a)
prohibit issuance by Borrower of additional Senior Notes pursuant to the
Indenture, provided the same does not violate any other provision of this
Agreement or (b) prohibit any Guarantor from guarantying the obligations of
Borrower under the Senior Notes and Indenture.
8.10 Negative Pledge. Neither Borrower nor any Guarantor will directly
or indirectly enter into any agreement (other than (A) this Agreement, (B) the
Indenture and any indenture or similar agreement executed in connection with any
Refinancing Indebtedness of the Senior Notes and (C) any indenture or similar
agreement executed in connection with any Public Indebtedness permitted under
Section 8.2(xv)) with any Person that prohibits or restricts or limits the
ability of Borrower or Guarantors to create, incur, pledge or suffer to exist
any Lien in favor of Lenders granted pursuant to the terms of this Agreement
upon any real property assets of Borrower or any Guarantor; provided, however,
that those agreements creating Liens permitted under Sections 8.6(iii), (iv),
(vii), (viii), (xix), (xx) and (xxi) may prohibit, restrict or limit other Liens
on those assets encumbered by the Liens created by such agreements.
66
ARTICLE IX
FINANCIAL COVENANTS
During the term of this Agreement, unless the Required Lenders shall
otherwise consent in writing:
9.1 Consolidated Tangible Net Worth Test. Consolidated Tangible Net
Worth shall not be less than (i) $776,018,000 plus (ii) fifty percent (50%) of
consolidated net income of Borrower and the Guarantors earned after December 31,
2003 (excluding any quarter in which there is a loss but applying consolidated
net income of Borrower and the Guarantors thereafter first to such loss before
determining fifty percent (50%) of such amount for purposes of this calculation)
plus (iii) fifty percent (50%) of the net proceeds or other consideration
received by Borrower for capital stock issued by Borrower after December 31,
2003 (the foregoing covenant, as adjusted as provided in the next succeeding
sentence, is herein referred to as the "Consolidated Tangible Net Worth Test").
Notwithstanding the foregoing, in the event that Borrower shall at any time
engage in an Acquisition equaling or exceeding $100,000,000, the minimum
Consolidated Tangible Net Worth for the Consolidated Tangible Net Worth Test
shall be adjusted to the sum of (i) 80% of the Consolidated Tangible Net Worth
immediately following the closing of such Acquisition, (ii) an amount equal to
50% of the consolidated net income of Borrower and Guarantors earned after the
closing of such Acquisition (excluding any quarter in which there is a loss but
applying net income thereafter first to such loss before determining 50% of such
amount for purposes of this calculation) and (iii) 50% of the net proceeds or
other consideration received by Borrower for any capital stock issued after the
closing of such Acquisition. Borrower's compliance with the Consolidated
Tangible Net Worth Test shall be measured on a quarterly basis, based on the
financial statements delivered to Administrative Agent pursuant to Section 7.1.
Borrower's failure to satisfy the Consolidated Tangible Net Worth Test shall not
constitute an Event of Default or an Unmatured Event of Default; provided,
however, that if Borrower fails to satisfy the Consolidated Tangible Net Worth
Test at the end of any fiscal quarter, then the Term Out Period shall commence
on the first day following such fiscal quarter as provided in Section 2.22.
9.2 Leverage Test; Interest Coverage Test.
(a) Leverage Test. The Leverage Ratio shall not exceed the
then applicable Permitted Leverage Ratio (the "Leverage Test").
(b) Interest Coverage Test. If at any time Borrower shall fail
to maintain, for two (2) consecutive fiscal quarters, a ratio,
determined as of the last day of each fiscal quarter for the
four-quarter period ending on such day, of (i) EBITDA for such period
to (ii) Consolidated Interest Incurred for such period, of at least
2.00 to 1.0 (the "Interest Coverage Test"), then the Permitted Leverage
Ratio for the same fiscal quarter with respect to which Borrower shall
have so failed the Interest Coverage Test (i.e., the second of such two
(2) consecutive fiscal quarters, which quarter is herein referred to as
the "Coverage Test Failure Quarter"), shall be decreased as follows:
(i) if the Permitted Leverage Ratio for the fiscal quarter preceding
the Coverage Test Failure Quarter was 55%, the Permitted Leverage Ratio
shall be decreased by 5% to 50%; and (ii) if the
67
Permitted Leverage Ratio for the fiscal quarter preceding the Coverage
Test Failure Quarter was less than 55%, the Permitted Leverage Ratio
shall be decreased by 2.5%.
(c) Adjustment of Permitted Leverage Ratio. If at any time at
which the Permitted Leverage Ratio is less than 55%, Borrower shall
satisfy the Interest Coverage Test (which for purposes of this Section
9.2(c) shall be deemed satisfied only if, on the same day on which
Borrower satisfies the Interest Coverage Test, Borrower is also in
compliance with the Leverage Test), then the Permitted Leverage Ratio,
effective as of the fiscal quarter immediately following the fiscal
quarter with respect to which Borrower shall have so satisfied the
Interest Coverage Test, shall be increased as follows: (i) upon
satisfaction of the Interest Coverage Test on a date on which the
Permitted Leverage Ratio is 50%, the Permitted Leverage Ratio for the
next fiscal quarter shall be increased to 55%; and (ii) upon
satisfaction of the Interest Coverage Test on a date on which the
Permitted Leverage Ratio is less than 50%, the Permitted Leverage Ratio
for the next fiscal quarter shall be increased by 2.5%. In no event
shall the Permitted Leverage Ratio exceed 55%.
(d) Effectiveness of Change in Permitted Leverage Ratio. Any
decrease of the Permitted Leverage Ratio provided for in this Section
9.2 shall be effective as of the Coverage Test Failure Quarter as
provided in Section 9.2(b), and the Permitted Leverage Ratio (as so
decreased) shall remain in effect thereafter unless and until adjusted
as provided in Section 9.2(b) or (c). Any increase in the Permitted
Leverage Ratio shall be effective as of the fiscal quarter next
succeeding the fiscal quarter in which Borrower satisfies the Interest
Coverage Test as provided in Section 9.2(c), and the Permitted Leverage
Ratio (as so increased) shall remain in effect thereafter unless and
until adjusted as provided in Section 9.2(b) or (c)
(e) Measure of Compliance. Borrower's satisfaction of the
Interest Coverage Test shall be measured on a quarterly basis, based on
the financial statements delivered to Administrative Agent pursuant to
Section 7.1. A failure to satisfy the Leverage Test or the Interest
Coverage Test shall not constitute an Event of Default or an Unmatured
Event of Default; provided, however, if Borrower fails to satisfy the
Leverage Test for two (2) consecutive fiscal quarters (the first of
which may be the Coverage Test Failure Quarter), then the Term Out
Period shall commence on the day following such fiscal quarter as
provided in Section 2.22.
9.3 Consolidated Tangible Net Worth Floor. Consolidated Tangible Net
Worth shall not be less than (i) $485,011,000, plus (ii) an amount equal to 50%
of the quarterly consolidated net income of Borrower and Guarantors earned after
December 31, 2003 (excluding any quarter in which there is a loss but applying
consolidated net income thereafter first to such loss before determining 50% of
such amount for purposes of this calculation), plus (iii) 50% of the net
proceeds or other consideration received by Borrower for any capital stock
issued after December 31, 2003. Notwithstanding the foregoing, in the event that
Borrower shall at any time engage in an Acquisition equaling or exceeding
$100,000,000, the minimum Consolidated Tangible Net Worth requirement for this
covenant shall be adjusted to the sum of (i) 50% of Consolidated Tangible Net
Worth immediately following the closing of such Acquisition, (ii) an amount
equal to 50% of the consolidated net income of Borrower and Guarantors earned
after
68
the closing of such Acquisition (excluding any quarter in which there is a loss
but applying net income thereafter first to such loss before determining 50% of
such amount for purposes of this calculation) and (iii) 50% of the net proceeds
or other consideration received by Borrower for any capital stock issued after
the closing of such Acquisition. Borrower's compliance with the foregoing
covenant shall be measured on a quarterly basis, based on the financial
statements delivered to Administrative Agent pursuant to Section 7.1.
ARTICLE X
EVENTS OF DEFAULT
The occurrence of any one or more of the following events shall
constitute an Event of Default:
10.1 Representations and Warranties. Any representation or warranty
made or deemed made by or on behalf of Borrower or any Guarantor to Lenders, the
LC Issuer or Administrative Agent under or in connection with this Agreement,
any Loan Document, any Guaranty, or any certificate or information delivered in
connection with this Agreement or any other Loan Document or Guaranty shall not
be true and correct in any material respect on the date as of which made, and,
with respect to any matter which is reasonably capable of being cured, Borrower
or such Guarantor, as applicable, shall have failed to cure the occurrence
causing the representation or warranty to be materially untrue or incorrect
within thirty (30) days after notice thereof by Administrative Agent to
Borrower.
10.2 Non-payment. Nonpayment of principal of any Note when due
(including without limitation non-payment under clause (D) of Section 2.21(c)),
or nonpayment of interest upon any Note or of any fees or other obligations
under any of the Loan Documents within five (5) days after billing therefor by
Administrative Agent or Lenders.
10.3 Other Defaults. The breach by Borrower (other than a breach which
constitutes an Event of Default under any other Section of this Article X) of
any of the terms or provisions of this Agreement which is not remedied within
thirty (30) days after notice thereof to Borrower.
10.4 Other Indebtedness.
(a) Failure of Borrower or any Guarantor to pay when due
(after any applicable grace period and after notice from the holder
thereof) any Indebtedness (other than Non-Recourse Indebtedness) equal
to or exceeding $10,000,000 (in the aggregate); or
(b) The default (after any applicable grace period and after
notice from the holder thereof) by Borrower or any Guarantor in the
performance of any term, provision or condition contained in any
agreement under which any Indebtedness (other than Non-Recourse
Indebtedness) equal to or exceeding $10,000,000 (in the aggregate) was
created or is governed; or
69
(c) Any other event shall occur or condition exist (after any
applicable grace period and after notice from the holder thereof), the
effect of which is to cause, or to permit the holder or holders of any
Indebtedness (other than Non-Recourse Indebtedness) of Borrower or any
Guarantor equal to or exceeding $10,000,000 to cause such Indebtedness
to become due prior to its stated maturity; or
(d) Any Indebtedness (other than Non-Recourse Indebtedness) of
Borrower or any Guarantor equal to or exceeding $10,000,000 (in the
aggregate) shall be declared to be due and payable or required to be
prepaid (other than by a regularly scheduled payment) prior to the
stated maturity thereof (after any applicable grace period and after
notice from the holder thereof); or
(e) Borrower or any Guarantor shall not pay, or shall admit in
writing its inability to pay, its debts generally as they become due.
10.5 Bankruptcy. Borrower or any Guarantor shall:
(i) have an order for relief entered with respect to it under
the Federal bankruptcy laws as now or hereafter in effect;
(ii) make an assignment for the benefit of creditors;
(iii) apply for, seek, consent to, or acquiesce in, the
appointment of a receiver, custodian, trustee, examiner, liquidator or
similar official for it or any Substantial Portion of the Property of
Borrower and Guarantors;
(iv) institute any proceeding seeking an order for relief
under the Federal bankruptcy laws as now or hereafter in effect or
seeking to adjudicate it a bankrupt or insolvent, or seeking
dissolution, winding up, liquidation, reorganization, arrangement,
adjustment or composition of it or its debts under any law relating to
bankruptcy, insolvency or reorganization or relief of debtors or fail
to file, within the applicable time period for the filing thereof, an
answer or other pleading denying the material allegations of any such
proceeding filed against it; or
(v) fail to contest in good faith any appointment or
proceeding described in Section 10.6.
10.6 Receiver. A receiver, trustee, examiner, liquidator or similar
official shall be appointed for Borrower or any Guarantor or any Substantial
Portion of the Property of Borrower and Guarantors without the application,
approval or consent of Borrower or any Guarantor, or a proceeding described in
Section 10.5(iv) shall be instituted against Borrower or any Guarantor and such
appointment continues undischarged or such proceeding continues undismissed or
unstayed for a period of sixty (60) consecutive days.
10.7 Judgment. Borrower or any Guarantor shall fail within thirty (30)
days to pay, bond or otherwise discharge any judgment or order for the payment
of money in excess of $10,000,000 which has not been stayed on appeal or is not
otherwise being appropriately
70
contested in good faith and for which contested judgments adequate reserves are
being maintained by Borrower or such Guarantor in accordance with GAAP.
10.8 Unfunded Liabilities. The Unfunded Liabilities of all Single
Employer Plans shall exceed in the aggregate $5,000,000 or any Reportable Event
shall occur in connection with any Plan, which Reportable Event has had or would
reasonably be expected to have a Material Adverse Effect.
10.9 Withdrawal Liability. Borrower, any Guarantor or any member of the
Controlled Group shall have been notified by the sponsor of a Multiemployer Plan
that it has incurred withdrawal liability to such Multiemployer Plan in an
amount which, when aggregated with all other amounts required to be paid to
Multiemployer Plans by Borrower or any Guarantor or any other member of the
Controlled Group as withdrawal liability (determined as of the date of such
notification), exceeds $5,000,000 or requires payments exceeding $2,000,000 per
annum; provided, however, that such event shall not constitute an Event of
Default as long as Borrower, such Guarantor or the Controlled Group member, as
applicable, is contesting in good faith the imposition of withdrawal liability.
10.10 Increased Contributions. Borrower, any Guarantor, or any other
member of the Controlled Group shall have been notified by the sponsor of a
Multiemployer Plan that such Multiemployer Plan is in reorganization, if as a
result of such reorganization the aggregate annual contributions of Borrower,
Guarantors and the other members of the Controlled Group (taken as a whole) to
all Multiemployer Plans which are then in reorganization have been or will be
increased over the amounts contributed to such Multiemployer Plans for the
respective plan years of each such Multiemployer Plan immediately preceding the
plan year in which the reorganization occurs by an amount exceeding $5,000,000.
10.11 Change in Control. Any Change in Control shall occur.
10.12 Dissolution. The dissolution or liquidation of Borrower or any
Guarantor shall occur, except as permitted under Section 8.3.
10.13 Guaranty. Any Guaranty shall fail to remain in full force or
effect with respect to any Guarantor or any action shall be taken by any
Guarantor to discontinue or to assert the invalidity or unenforceability of any
Guaranty, or any Guarantor shall fail to comply with any of the terms or
provisions of any Guaranty, or any Guarantor denies that it has any further
liability under any Guaranty or gives notice to such effect.
10.14 Consolidated Tangible Net Worth Covenant. The breach by Borrower
of the covenant contained in Section 9.3.
10.15 No Defaults. The occurrence of any of the following events shall
specifically not be an Event of Default or an Unmatured Event of Default under
this Agreement:
(a) The breach of any Financial Covenant Test (except that the
breach by Borrower of the covenant in Section 9.3 shall constitute an
Event of Default, notwithstanding that it also constitutes a breach of
a Financial Covenant Test).
71
(b) If any Guarantor shall apply for, seek, consent to, or
acquiesce in, the appointment of a receiver, custodian, trustee,
examiner, liquidator or similar official for it or for a Significant
Amount of its Property, or if a receiver, custodian, trustee, examiner,
liquidator or similar official shall be appointed for any Guarantor
without its application, approval or consent for it or for a
Significant Amount of its Property; provided, however, that upon the
occurrence and during the continuation of the foregoing, all Property
of such Guarantor shall be automatically excluded from the Borrowing
Base; and provided further, that upon any such appointment for any
Property of any Guarantor that is not a Significant Amount of its
Property (which appointment shall not be an Event of Default or
Unmatured Event of Default under this Agreement), such Property shall
be automatically excluded from the Borrowing Base. "Significant Amount"
means, with respect to the Property of such Guarantor and its
Subsidiaries, taken as a whole, Property which represents more than 10%
of the book value of the assets of such Guarantor as would be shown on
the financial statements of such Guarantor as of the beginning of the
fiscal quarter in which such determination is made, all as determined
in accordance with Agreement Accounting Principles.
ARTICLE XI
ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES
11.1 Acceleration; Remedies.
(a) If any Event of Default described in Section 10.5 or 10.6
occurs with respect to Borrower, the obligations of Lenders to make
Loans and of any LC Issuer to issue Facility Letters of Credit
hereunder shall automatically terminate and the Obligations shall
immediately become due and payable without any election or action on
the part of Administrative Agent or any Lender or LC Issuer, Borrower
will be and become thereby unconditionally obligated, without any
further notice, act or demand, to pay to Administrative Agent an amount
in immediately available funds, which funds shall be held in the
Facility LC Collateral Account, equal to the difference of (x) the
amount of Facility LC Obligations at such time, less (y) the amount on
deposit in the Facility LC Collateral Account at such time which is
free and clear of all rights and claims of third parties and has not
been applied as provided in paragraph (c) below (such difference, the
"Collateral Shortfall Amount"). If any other Event of Default occurs,
the Required Lenders (or Administrative Agent with the written consent
of the Required Lenders) may (i) terminate or suspend the obligations
of Lenders to make Loans and of each LC Issuer to issue Facility
Letters of Credit hereunder, or declare the Obligations to be due and
payable, or both, whereupon the Obligations shall become immediately
due and payable, without presentment, demand, protest or notice of any
kind, all of which Borrower hereby expressly waives and (ii) upon
notice to Borrower and in addition to the continuing right to demand
payment of all amounts payable under this Agreement, make demand on
Borrower to pay, and Borrower shall, forthwith upon such demand and
without any further notice or act, pay to Administrative Agent the
Collateral Shortfall Amount, which funds shall be deposited in the
Facility LC Collateral Account.
72
(b) If at any time while any Event of Default is continuing,
Administrative Agent determines that the Collateral Shortfall Amount at
such time is greater than zero, Administrative Agent may, and at the
direction of the Required Lenders shall, make demand on Borrower to
pay, and Borrower shall, forthwith upon such demand and without any
further notice or act, pay to Administrative Agent the Collateral
Shortfall Amount, which funds shall be deposited in the Facility LC
Collateral Account.
(c) Administrative Agent may, at any time or from time to time
after funds are deposited in the Facility LC Collateral Account, apply
such funds to the payment of the Facility LC Obligations and any other
amounts in respect of any Facility Letter of Credit or Reimbursement
Agreement as shall from time to time have become due and payable by
Borrower to any Lender or LC Issuer under the Loan Documents.
(d) At any time while any Event of Default is continuing,
neither Borrower nor any Person claiming on behalf of or through
Borrower shall have any right to withdraw any of the funds held in the
Facility LC Collateral Account. After all of the Obligations have been
indefeasibly paid in full and the Aggregate Commitment has been
terminated, any funds remaining in the Facility LC Collateral Account
shall be returned by Administrative Agent to Borrower or paid to
whomever may be legally entitled thereto at such time.
(e) If, within five (5) days after acceleration of the
maturity of the Obligations or termination of the obligations of
Lenders to make Loans hereunder as a result of any Event of Default
(other than any Event of Default as described in Section 10.5 or 10.6
with respect to Borrower) and before any judgment or decree for the
payment of the Obligations due shall have been obtained or entered, the
Required Lenders (in their sole discretion) shall so direct,
Administrative Agent shall, by notice to Borrower, rescind and annul
such acceleration and/or termination.
(f) Upon the occurrence of any Event of Default and upon the
directive of the Required Lenders, Administrative Agent or (but only
upon directive of the Required Lenders) any Lender shall proceed to
protect, exercise and enforce the rights and remedies of Administrative
Agent and Lenders under the Loan Documents and the Guaranties against
Borrower, any Guarantor and any other party and such other rights and
remedies as are provided by law or equity.
(g) The order and manner in which Lenders' rights and remedies
are to be exercised shall be determined by the Required Lenders in
their sole discretion, and all payments received by Administrative
Agent and Lenders, or any of them, shall be applied first to the costs
and expenses (including attorneys' fees and disbursements) of
Administrative Agent and of Lenders, and thereafter paid pro rata to
each Lender in the same proportions that each Lender's Commitment bears
to the Aggregate Commitment, without priority or preference among
Lenders. Regardless of how each Lender may treat payments for the
purpose of its own accounting, for the purpose of computing Borrower's
obligations hereunder and under the Notes, payments shall be applied
first, to the costs and expenses of Administrative Agent and Lenders,
as set forth above, second, to the payment of accrued and unpaid
interest due under any Loan Documents to and including
73
the date of such application (ratably, and without duplication,
according to the accrued and unpaid interest due under each of the Loan
Documents), and third, to the payment of all other amounts (including
principal and fees) then owing to Administrative Agent or Lenders under
the Loan Documents or Guaranties. No application of payments will cure
any Event of Default, or prevent acceleration, or continued
acceleration, of amounts payable under the Loan Documents or
Guaranties, or prevent the exercise, or continued exercise, of rights
or remedies of Lenders hereunder or thereunder or at law or in equity.
11.2 Amendments. Subject to the provisions of this Article XI, the
Required Lenders (or Administrative Agent with the consent in writing of the
Required Lenders) and Borrower (in the case of the Loan Documents) or Guarantors
(in the case of the Guaranties) may enter into agreements supplemental hereto or
thereto for the purpose of adding or modifying any provisions to the Loan
Documents or Guaranties or changing in any manner the rights of Lenders or
Borrower (in the case of the Loan Documents) or Guarantors (in the case of the
Guaranties) or waiving any Event of Default hereunder; provided, however, that
(a) no such supplemental agreement shall, without the consent of the Required
Lenders, amend the definition of the term "Borrowing Base" or the definition of
any defined term contained in the definition of the term "Borrowing Base" and
(b) no such supplemental agreement shall, without the consent of each Lender
affected thereby:
(i) Extend the maturity of any Loan or Note or forgive all or
any portion of the principal amount thereof, or reduce the rate of, or
extend the time of payment of, interest or fees thereon;
(ii) Release any Guarantor from any of its obligations under
its Guaranty (except as provided in Section 8.4(b));
(iii) Change the percentage specified in the definition of
Required Lenders;
(iv) Increase the amount of the Commitment of any Lender
hereunder (except as may be agreed by such Lender pursuant to Section
2.5(d)), or permit Borrower to assign its rights under this Agreement;
(v) Amend the percentage set forth in Section 2.21(b); or
(vi) Amend this Section 11.2, Section 12.7 or Section 14.1.
No amendment of any provision of this Agreement relating to Administrative Agent
shall be effective without the written consent of Administrative Agent.
Administrative Agent may waive payment or reduce the amount of the fees referred
to in Section 13.13 or the fee required under Section 15.3.3 without obtaining
the consent of any other party to this Agreement. No amendment of any provision
of this Agreement relating to Facility Letters of Credit shall be effective
without the written consent of each LC Issuer affected thereby. No amendment of
any provision of this Agreement relating to Swing Line Advances shall be
effective without the written consent of the Swing Line Lender.
74
11.3 Preservation of Rights. No delay or omission of any Lender or LC
Issuer or Administrative Agent to exercise any right under the Loan Documents or
Guaranties shall impair such right or be construed to be a waiver of any Event
of Default or an acquiescence therein, and the making of a Loan or the issuance,
amendment or extension of a Facility Letter of Credit notwithstanding the
existence of an Event of Default or the inability of Borrower to satisfy the
conditions precedent to such Loan or Facility Letter of Credit shall not
constitute any waiver or acquiescence. Any single or partial exercise of any
such right shall not preclude other or further exercise thereof or the exercise
of any other right, and no waiver, amendment or other variation of the terms,
conditions or provisions of the Loan Documents or Guaranties whatsoever shall be
valid unless in writing signed by Lenders (and, if applicable, Administrative
Agent) required pursuant to Section 11.2, and then only to the extent in such
writing specifically set forth. All remedies contained in the Loan Documents and
Guaranties or by law afforded shall be cumulative and all shall be available to
Administrative Agent, the LC Issuer and Lenders until the Obligations have been
paid in full.
ARTICLE XII
GENERAL PROVISIONS
12.1 Survival of Representations. All representations and warranties of
Borrower contained in this Agreement shall survive delivery of the Notes and the
making of the Loans and the issuance, amendment or extension of any Facility
Letter of Credit herein contemplated.
12.2 Governmental Regulation. Anything contained in this Agreement to
the contrary notwithstanding, no Lender or LC Issuer shall be obligated to
extend credit to Borrower in violation of any limitation or prohibition provided
by any applicable statute or regulation effective after the date of this
Agreement.
12.3 Taxes. Any recording, intangible, filing or stamp fees or taxes or
other similar assessments or charges made by any governmental or revenue
authority in respect of the Loan Documents shall be paid by Borrower, together
with interest and penalties, if any.
12.4 Headings. Section headings in the Loan Documents are for
convenience of reference only, and shall not govern the interpretation of any of
the provisions of the Loan Documents.
12.5 Entire Agreement. The Loan Documents and the letter agreement(s)
referred to in this Agreement embody the entire agreement and understanding
among Borrower, Administrative Agent and Lenders and supersede all prior
agreements and understandings among Borrower, Administrative Agent, and Lenders
relating to the subject matter thereof.
12.6 Nature of Obligations; Benefits of this Agreement.
(a) The respective obligations of Lenders hereunder are
several and not joint and no Lender shall be the partner or agent of
any other (except to the extent to which Administrative Agent is
authorized to act as such). The failure of any Lender to perform
75
any of its obligations hereunder shall not relieve any other Lender
from any of its obligations hereunder.
(b) This Agreement shall not be construed so as to confer any
right or benefit upon any Person other than the parties to this
Agreement and their respective successors and assigns.
12.7 Expenses; Indemnification. Borrower shall reimburse Administrative
Agent for any reasonable outside attorneys' fees and costs paid or incurred by
Administrative Agent in connection with the preparation, negotiation, execution,
delivery, review, amendment, modification, and administration of the Loan
Documents and Guaranties. Borrower also agrees to reimburse Administrative
Agent, Lenders and each LC Issuer for any reasonable costs and out-of-pocket
expenses (including reasonable outside attorneys' fees and time charges of
attorneys for Administrative Agent, Lenders and such LC Issuer) paid or incurred
by Administrative Agent, any Lender or such LC Issuer in connection with the
collection and enforcement of the Loan Documents and Guaranties. Borrower
further agrees to indemnify Administrative Agent and each Lender and LC Issuer,
and their respective directors, officers and employees against all losses,
claims, damages, penalties, judgments, liabilities and expenses (including,
without limitation, all expenses of litigation or preparation therefor whether
or not Administrative Agent or any Lender or LC Issuer is a party thereto) which
any of them may pay or incur arising out of or relating to this Agreement, the
other Loan Documents, the Guaranties, the transactions contemplated hereby or
the direct or indirect application or proposed application of the proceeds of
any Loan hereunder (except to the extent the same is determined in a final
non-appealable judgment by a court of competent jurisdiction to have arisen from
the gross negligence or willful misconduct of the indemnified Person or the
failure of the indemnified Person to comply with regulatory requirements
applicable to it). The obligations of Borrower under this Section shall survive
the termination of this Agreement.
12.8 Numbers of Documents. All statements, notices, closing documents,
and requests hereunder shall be furnished to Administrative Agent with
sufficient counterparts so that Administrative Agent may furnish one to each of
Lenders.
12.9 Accounting. Except as provided to the contrary herein, all
accounting terms used herein shall be interpreted and all accounting
determinations hereunder shall be made in accordance with GAAP applied on a
basis consistent with the consolidated audited financial statements of Borrower
as of December 31, 1994 ("Agreement Accounting Principles"). If any change in
GAAP from the principles used in preparing such statements would have a material
effect upon the results of any calculation required by or compliance with any
provision of this Agreement, then such calculation shall be made or calculated
and compliance with such provision shall be determined using accounting
principles used in preparing the consolidated audited financial statements of
Borrower as of December 31, 1994. For purposes of determining compliance by the
Borrower with the covenants in this Agreement, the application of Financial
Accounting Standards Board Interpretation Number 46 shall be disregarded with
respect to a financial consolidation of any Person which is not a Subsidiary of
the Borrower.
12.10 Severability of Provisions. Any provision in any Loan Document or
Guaranty that is held to be inoperative, unenforceable, or invalid in any
jurisdiction shall, as to that
76
jurisdiction, be inoperative, unenforceable, or invalid without affecting the
remaining provisions in that jurisdiction or the operation, enforceability, or
validity of that provision in any other jurisdiction, and to this end the
provisions of all Loan Documents and Guaranties are declared to be severable.
12.11 Nonliability of Lenders and LC Issuer. The relationship between
Borrower and Lenders and Administrative Agent shall be solely that of borrower
and lender. Neither Administrative Agent nor any Lender or LC Issuer shall have
any fiduciary responsibilities to Borrower. Neither Administrative Agent nor any
Lender or LC Issuer undertakes any responsibility to Borrower to review or
inform Borrower of any matter in connection with any phase of Borrower's
business or operations.
12.12 CHOICE OF LAW. THE LOAN DOCUMENTS (OTHER THAN THOSE CONTAINING A
CONTRARY EXPRESS CHOICE OF LAW PROVISION) SHALL BE CONSTRUED IN ACCORDANCE WITH
THE INTERNAL LAWS (AND NOT THE LAW OF CONFLICTS) OF THE STATE OF
ILLINOIS, BUT
GIVING EFFECT TO FEDERAL LAWS APPLICABLE TO NATIONAL BANKS.
12.13 Arbitration. Subject to the provisions of this Section 12.13,
Borrower, Lenders and Administrative Agent agree to submit to binding
arbitration any and all claims, disputes and controversies between or among them
(and their respective employees, officers, directors, attorneys, and other
agents if permitted by law or a contract between them and such persons) relating
to this Agreement and the Loan Documents and the negotiation, execution,
collateralization, administration, repayment, modification, extension or
collection thereof or arising thereunder. Such arbitration shall proceed in
Chicago,
Illinois, shall be governed by
Illinois law and shall be conducted in
accordance with the Commercial Arbitration Rules of the American Arbitration
Association (the "AAA"), as modified in this Section 12.13. Judgment upon the
award rendered by each arbitrator(s) may be entered in any court having
jurisdiction.
(a) Nothing in the preceding paragraph, nor the exercise of
any right to arbitrate thereunder, shall limit the right of any party
hereto (1) subject to provisions of applicable law, to exercise
self-help remedies such as setoff or repossession or other self-help
remedies provided in this Agreement or any other Loan Document; or (2)
to obtain provisional or ancillary remedies such as replevin,
injunctive relief, attachment, or appointment of a receiver from a
court having jurisdiction, before, during or after the pendency of any
arbitration proceeding, or (3) to defend or obtain injunctive or other
equitable relief from a court of competent jurisdiction against the
foregoing or assert mandatory counterclaims, if any, prior to and
during the pendency of a determination in arbitration of issues of
performance, default, damages and other such claims and disputes.
(b) Arbitration hereunder shall be before a three-person panel
of neutral arbitrators, consisting of one person from each of the
following categories: (1) an attorney who has practiced in the area of
commercial real estate law for at least ten (10) years; (2) a person
with at least ten (10) years' experience in real estate lending; and
(3) a person with at least ten (10) years' experience in the
77
homebuilding industry. The AAA shall submit a list of persons meeting
the criteria outlined above for each category of arbitrator, and the
parties shall select one person from each category in the manner
established by the AAA.
(c) In any dispute between the parties that is arbitratable
hereunder, where the aggregate of all claims and the aggregate of all
counterclaims is an amount less than Fifty Thousand And No/100ths
Dollars ($50,000), the arbitration shall be before a single neutral
arbitrator to be selected in accordance with the Commercial Rules of
the American Arbitration Association and shall proceed under the
Expedited Procedures of said Rules.
(d) In any arbitration hereunder, the arbitrators shall decide
(by documents only or with a hearing, at the arbitrators' discretion)
any pre-hearing motions which are substantially similar to pre-hearing
motions to dismiss for failure to state a claim or motions for summary
adjudication.
(e) In any arbitration hereunder, discovery shall be permitted
in accordance with the
Illinois Code of Civil Procedure. Scheduling of
such discovery may be determined by the arbitrators, and any discovery
disputes shall be finally determined by the arbitrators.
(f) The
Illinois rules of evidence shall control the admission
of evidence at the hearing in any arbitration conducted hereunder;
provided, however, no error by the arbitrators in application of the
rules of evidence shall be grounds, as such, for vacating the
arbitrators' award.
(g) Notwithstanding any AAA rule to the contrary, the
arbitration award shall be in writing and shall specify the factual and
legal basis for the award, including findings of fact and conclusions
of law.
(h) Each party shall each bear its own costs and expenses and
an equal share of the arbitrators' costs and administrative fees of
arbitration.
12.14 CONSENT TO JURISDICTION. BORROWER AND EACH LENDER HEREBY
IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF ANY UNITED STATES
FEDERAL OR
ILLINOIS STATE COURT SITTING IN CHICAGO,
ILLINOIS IN ANY ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO ANY LOAN DOCUMENTS AND BORROWER AND
EACH LENDER HEREBY IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF SUCH ACTION
OR PROCEEDING MAY BE HEARD AND DETERMINED IN ANY SUCH COURT AND IRREVOCABLY
WAIVES ANY OBJECTION IT MAY NOW OR HEREAFTER HAVE AS TO THE VENUE OF ANY SUCH
SUIT, ACTION OR PROCEEDING BROUGHT IN SUCH A COURT OR THAT SUCH COURT IS AN
INCONVENIENT FORUM. NOTHING IN THIS SECTION 12.14 SHALL LIMIT THE RIGHT OF
ADMINISTRATIVE AGENT OR ANY LENDER OR LC ISSUER TO BRING PROCEEDINGS AGAINST
BORROWER IN THE COURTS OF ANY OTHER JURISDICTION. SUBJECT TO THE PROVISIONS OF
SECTION 12.13, UNLESS PROHIBITED BY LAW, ANY JUDICIAL PROCEEDING BY
78
BORROWER AGAINST ADMINISTRATIVE AGENT OR ANY LENDER OR LC ISSUER OR ANY
AFFILIATE OF ADMINISTRATIVE AGENT OR ANY LENDER OR LC ISSUER INVOLVING, DIRECTLY
OR INDIRECTLY, ANY MATTER IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED
WITH ANY LOAN DOCUMENT SHALL BE BROUGHT IN A COURT IN CHICAGO,
ILLINOIS.
12.15 WAIVER OF JURY TRIAL. SUBJECT TO THE PROVISIONS OF SECTION 12.13,
BORROWER, ADMINISTRATIVE AGENT AND EACH LENDER AND LC ISSUER HEREBY WAIVE TRIAL
BY JURY IN ANY JUDICIAL PROCEEDING INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER
(WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT OF,
RELATED TO, OR CONNECTED WITH ANY LOAN DOCUMENT OR THE RELATIONSHIP ESTABLISHED
THEREUNDER.
12.16 Confidentiality. Each Lender and Administrative Agent agree to
use commercially reasonable efforts to keep confidential any financial reports
and other information from time to time supplied to them by Borrower hereunder
to the extent that such information is not and does not become publicly
available through or with the consent or acquiescence of Borrower, except for
disclosure (i) to Administrative Agent and the other Lenders or to a Transferee,
(ii) to legal counsel, accountants, and other professional advisors to a Lender,
Administrative Agent or a Transferee, (iii) to regulatory officials, (iv) to any
Person as required by law, regulation, or legal process, (v) to any Person in
connection with any legal proceeding to which that Lender is a party, and (vi)
permitted by Section 15.4. Any Lender or Administrative Agent disclosing such
information shall use commercially reasonable efforts to advise the Person to
whom such information is disclosed of the foregoing confidentiality agreement
and to direct such Person to comply therewith.
12.17 USA PATRIOT ACT NOTIFICATION. The following notification is
provided to Borrower pursuant to Section 326 of the USA Patriot Act of 2001, 31
U.S.C. Section 5318:
IMPORTANT INFORMATION ABOUT PROCEDURES FOR OPENING A NEW ACCOUNT. To help the
government fight the funding of terrorism and money laundering activities,
Federal law requires all financial institutions to obtain, verify, and record
information that identifies each person or entity that opens an account,
including any deposit account, treasury management account, loan, other
extension of credit, or other financial services product. What this means for
Borrower: When Borrower opens an account, if Borrower is an individual,
Administrative Agent and Lenders will ask for Borrower's name, residential
address, tax identification number, date of birth, and other information that
will allow Administrative Agent and Lenders to identify Borrower, and, if
Borrower is not an individual, Administrative Agent and Lenders will ask for
Borrower's name, tax identification number, business address, and other
information that will allow Administrative Agent and Lenders to identify
Borrower. Administrative Agent and Lenders may also ask, if Borrower is an
individual, to see Borrower's driver's license or other identifying documents,
and, if Borrower is not an individual, to see Borrower's legal organizational
documents or other identifying documents.
79
ARTICLE XIII
ADMINISTRATIVE AGENT
13.1 Appointment; Nature of Relationship. Bank One, NA is hereby
appointed by each Lender as its contractual representative (herein referred to
as "Administrative Agent") hereunder and under each other Loan Document and
Guaranty, and each Lender irrevocably authorizes Administrative Agent to act as
the contractual representative of such Lender with the rights and duties
expressly set forth herein and in the other Loan Documents and Guaranties.
Administrative Agent agrees to act as such contractual representative upon the
express conditions contained in this Article XIII. Notwithstanding the use of
the defined term "Administrative Agent," it is expressly understood and agreed
that Administrative Agent shall not have any fiduciary responsibilities to any
Lender by reason of this Agreement or any other Loan Document or Guaranty and
that Administrative Agent is merely acting as the contractual representative of
Lenders with only those duties as are expressly set forth in this Agreement and
the other Loan Documents and Guaranties. In its capacity as Lenders' contractual
representative, Administrative Agent (i) does not hereby assume any fiduciary
duties to any Lender, (ii) is a "representative" of Lenders within the meaning
of the term "secured party" as defined in the Illinois Uniform Commercial Code
and (iii) is acting as an independent contractor, the rights and duties of which
are limited to those expressly set forth in this Agreement and the other Loan
Documents and Guaranties. Each Lender hereby agrees not to assert any claim
against Administrative Agent on any agency theory or any other theory of
liability for breach of fiduciary duty, all of which claims each Lender hereby
waives.
13.2 Powers. Administrative Agent shall have and may exercise such
powers under the Loan Documents and Guaranties as are specifically delegated to
Administrative Agent by the terms of each thereof, together with such powers as
are reasonably incidental thereto. Administrative Agent shall have no implied
duties to Lenders, or any obligation to Lenders to take any action thereunder
except any action specifically provided by the Loan Documents and Guaranties to
be taken by Administrative Agent.
13.3 General Immunity. Neither Administrative Agent nor any of its
directors, officers, agents or employees shall be liable to Borrower, Lenders or
any Lender for any action taken or omitted to be taken by it or them hereunder
or under any other Loan Document or Guaranty or in connection herewith or
therewith except to the extent such action or inaction is determined in a final
non-appealable judgment by a court of competent jurisdiction to have arisen from
the gross negligence or willful misconduct of such Person.
13.4 No Responsibility for Loans, Recitals, etc. Neither Administrative
Agent nor any of its directors, officers, agents or employees shall be
responsible for or have any duty to ascertain, inquire into, or verify (a) any
statement, warranty or representation made in connection with any Loan Document
or Guaranty or any borrowing hereunder; (b) the performance or observance of any
of the covenants or agreements of any obligor under any Loan Document or
Guaranty, including, without limitation, any agreement by an obligor to furnish
information directly to each Lender; (c) the satisfaction of any condition
specified in Article V, except receipt of items required to be delivered solely
to Administrative Agent; (d) except as otherwise provided in this Article XIII,
the existence or possible existence of any Event of Default or
80
Unmatured Event of Default; (e) the validity, enforceability, effectiveness,
sufficiency or genuineness of any Loan Document or Guaranty or any other
instrument or writing furnished in connection therewith; (f) the value,
sufficiency, creation, perfection or priority of any Lien in any collateral
security; or (g) the financial condition of Borrower or any guarantor of any of
the Obligations or of any of Borrower's or any such guarantor's respective
Subsidiaries. Notwithstanding anything to the contrary herein, Administrative
Agent shall make available promptly after the date of this Agreement to any
Lender copies of all Loan Documents and Guaranties in its possession which are
requested by any such Lender. Administrative Agent shall also furnish to all
Lenders promptly copies of any notices of an Unmatured Event of Default or Event
of Default issued by Administrative Agent to Borrower and copies of financial
statements and compliance certificates required by this Agreement that are
received by Administrative Agent from Borrower (and not furnished directly by
Borrower to Administrative Agent). Promptly after any officer of Administrative
Agent that is responsible for administration of the Agreement has actual
knowledge of the occurrence of an Unmatured Event of Default or an Event of
Default hereunder, the Administrative Agent shall so notify Lenders.
13.5 Action on Instructions of Lenders. Administrative Agent shall in
all cases be fully protected in acting, or in refraining from acting, hereunder
and under any other Loan Document or Guaranty in accordance with written
instructions signed by the Required Lenders (except as otherwise provided in
Section 11.2), and such instructions and any action taken or failure to act
pursuant thereto shall be binding on all Lenders. Lenders hereby acknowledge
that Administrative Agent shall be under no duty to take any discretionary
action permitted to be taken by it pursuant to the provisions of this Agreement
or any other Loan Document or Guaranty unless it shall be requested in writing
to do so by the Required Lenders. Administrative Agent shall be fully justified
in failing or refusing to take any action hereunder and under any other Loan
Document or Guaranty unless it shall first be indemnified to its satisfaction by
Lenders pro rata against any and all liability, cost and expense that it may
incur by reason of taking or continuing to take any such action.
13.6 Employment of Agents and Counsel. Administrative Agent may execute
any of its duties as Administrative Agent hereunder and under any other Loan
Document or Guaranty by or through employees, agents, and attorneys-in-fact and
shall not be answerable to Lenders, except as to money or securities received by
it or its authorized agents, for the default or misconduct of any such agents or
attorneys-in-fact selected by it with reasonable care. Administrative Agent
shall be entitled to advice of counsel concerning the contractual arrangement
between Administrative Agent and Lenders and all matters pertaining to
Administrative Agent's duties hereunder and under any other Loan Document or
Guaranty.
13.7 Reliance on Documents; Counsel. Administrative Agent shall be
entitled to rely upon any Note, notice, consent, certificate, affidavit, letter,
telegram, facsimile, electronic mail message, statement, paper or document
believed by it to be genuine and correct and to have been signed or sent by the
proper person or persons, and, in respect to legal matters, upon the opinion of
counsel selected by Administrative Agent, which counsel may be employees of
Administrative Agent. For purposes of determining compliance with the conditions
specified in Sections 5.1 and 5.2, each Lender that has signed this Agreement
shall be deemed to have been given an opportunity to review, and either to have
(a) consented to, approved or accepted or to be satisfied with, or (b) to have
waived its right to disapprove, each document or other matter
81
required thereunder to be consented to or approved by or acceptable or
satisfactory to a Lender unless Administrative Agent shall have received notice
from such Lender prior to the applicable date specifying its objection thereto.
13.8 Agent's Reimbursement and Indemnification. Lenders agree to
reimburse and indemnify Administrative Agent ratably in proportion to their
respective Commitments (or, if the Commitments have been terminated, in
proportion to the then outstanding amount of the Loans held by the Lenders)
their Commitments immediately prior to such termination) (i) for any amounts not
reimbursed by Borrower for which Administrative Agent is entitled to
reimbursement by Borrower under the Loan Documents or any Guaranty or under the
Guaranties, (ii) for any other expenses incurred by Administrative Agent on
behalf of Lenders, in connection with the preparation, execution, delivery,
administration and enforcement of the Loan Documents or Guaranties (including,
without limitation, for any expenses incurred by Administrative Agent in
connection with any dispute between Administrative Agent and any Lender or
between two or more Lenders) that is not reimbursed by Borrower and (iii) for
any liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind and nature whatsoever which
may be imposed on, incurred by or asserted against Administrative Agent in any
way relating to or arising out of the Loan Documents or Guaranties or any other
document delivered in connection therewith or the transactions contemplated
thereby (including, without limitation, for any such amounts incurred by or
asserted against Administrative Agent in connection with any dispute between
Administrative Agent and any Lender or between two or more Lenders), or the
enforcement of any of the terms of the Loan Documents or Guaranties or of any
such other documents, provided that no Lender shall be liable for any of the
foregoing to the extent any of the foregoing is found in a final non-appealable
judgment by a court of competent jurisdiction to have resulted from the gross
negligence or willful misconduct of Administrative Agent. The obligations of
Lenders under this Section 13.8 shall survive payment of the Obligations and
termination of this Agreement.
13.9 Notice of Default. Administrative Agent shall not be deemed to
have knowledge or notice of the occurrence of any Event of Default or Unmatured
Event of Default hereunder (other than a failure by Borrower to make a payment
to Administrative Agent hereunder) unless Administrative Agent has received
written notice from a Lender or Borrower referring to this Agreement describing
such Event of Default or Unmatured Event of Default and stating that such notice
is a "notice of default". In the event that Administrative Agent receives such a
notice, Administrative Agent shall give prompt notice thereof to Lenders.
13.10 Rights as a Lender and LC Issuer. In the event Administrative
Agent is a Lender, Administrative Agent shall have the same rights and powers
hereunder and under any other Loan Document or Guaranty with respect to its
Commitment and its Loans as any Lender and may exercise the same as though it
were not Administrative Agent, and the term "Lender" or "Lenders" shall, at any
time when Administrative Agent is a Lender, unless the context otherwise
indicates, include Administrative Agent in its individual capacity. In the event
Administrative Agent is an LC Issuer, Administrative Agent shall have the rights
and powers of an LC Issuer hereunder and may exercise the same as though it were
not Administrative Agent, and the term "LC Issuer" shall, at any time when
Administrative Agent is an LC Issuer, unless the context otherwise indicates,
include and mean Administrative Agent in its capacity as an LC
82
Issuer. Administrative Agent and its Affiliates may accept deposits from, lend
money to, and generally engage in any kind of trust, debt, equity or other
transaction, in addition to those contemplated by this Agreement or any other
Loan Document or Guaranty, with Borrower or any of its Subsidiaries in which
Borrower or such Subsidiary is not restricted hereby from engaging with any
other Person.
13.11 Lender Credit Decision. Each Lender acknowledges that it has,
independently and without reliance upon Administrative Agent, Arranger or any
other Lender and based on the financial statements prepared by Borrower and such
other documents and information as it has deemed appropriate, made its own
credit analysis and decision to enter into this Agreement and the other Loan
Documents. Each Lender also acknowledges that it will, independently and without
reliance upon Administrative Agent, Arranger or any other Lender and based on
such documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action under
this Agreement and the other Loan Documents and Guaranties. Except for any
notice, report, document or other information expressly required to be furnished
to Lenders by Administrative Agent or Arranger hereunder, neither Administrative
Agent nor Arranger shall have any duty or responsibility (either initially or on
a continuing basis) to provide any Lender with any notice, report, document,
credit information or other information concerning the affairs, financial
condition or business of Borrower or any of its Affiliates that may come into
the possession of Administrative Agent or Arranger (whether or not in their
respective capacity as Administrative Agent or Arranger) or any of their
Affiliates.
13.12 Successor Administrative Agent. Administrative Agent may resign
at any time by giving written notice thereof to Lenders and Borrower, such
resignation to be effective upon the appointment of a successor Administrative
Agent or, if no successor Administrative Agent has been appointed, sixty (60)
days after the retiring Administrative Agent gives notice of its intention to
resign. Administrative Agent may be removed at any time with or without cause by
written notice received by Administrative Agent from the Required Lenders, such
removal to be effective on the date specified by the Required Lenders. The
consent of Borrower shall be required prior to any removal of Administrative
Agent becoming effective; provided, however, that if an Event of Default has
occurred and is continuing, the consent of Borrower shall not be required. Upon
any such resignation or removal, the Required Lenders shall have the right to
appoint, on behalf of Borrower and Lenders, a successor Administrative Agent. If
no successor Administrative Agent shall have been so appointed by the Required
Lenders within 45 days after the resigning Administrative Agent's giving notice
of its intention to resign, then the resigning Agent may appoint, on behalf of
Borrower and Lenders, a successor Administrative Agent. Notwithstanding the
previous sentence, Administrative Agent may at any time without the consent of
Borrower or any Lender, appoint any of its Affiliates which is a commercial bank
as a successor Administrative Agent hereunder. If Administrative Agent has
resigned or been removed and no successor Administrative Agent has been
appointed, Lenders may perform all the duties of Administrative Agent hereunder
and Borrower shall make all payments in respect of the Obligations to the
applicable Lender and for all other purposes shall deal directly with Lenders.
No successor Administrative Agent shall be deemed to be appointed hereunder
until such successor Administrative Agent has accepted the appointment. Any such
successor Administrative Agent shall be a commercial bank having capital and
retained earnings of at least $100,000,000. Upon the acceptance of any
appointment as Administrative Agent hereunder by a
83
successor Administrative Agent, such successor Administrative Agent shall
thereupon succeed to and become vested with all the rights, powers, privileges
and duties of the resigning or removed Administrative Agent. Upon the
effectiveness of the resignation or removal of Administrative Agent, the
resigning or removed Administrative Agent shall be discharged from its duties
and obligations hereunder and under the Loan Documents and Guaranties. After the
effectiveness of the resignation or removal of an Administrative Agent, the
provisions of this Article XIII shall continue in effect for the benefit of such
Administrative Agent in respect of any actions taken or omitted to be taken by
it while it was acting as Administrative Agent hereunder and under the other
Loan Documents and Guaranties. In the event that there is a successor to
Administrative Agent by merger, or Administrative Agent assigns its duties and
obligations to an Affiliate pursuant to this Section 13.12, then the term "Prime
Rate" as used in this Agreement shall mean the prime rate, base rate or other
analogous rate of the new Administrative Agent.
13.13 Agent and Arranger Fees. Borrower agrees to pay to Administrative
Agent and Arranger, for their respective accounts, the fees agreed to by
Borrower, Administrative Agent and Arranger pursuant to that certain letter
agreement dated February 13, 2004, or as otherwise agreed from time to time.
13.14 Delegation to Affiliates. Borrower and Lenders agree that
Administrative Agent may delegate any of its duties under this Agreement to any
of its Affiliates. Any such Affiliate (and such Affiliate's directors, officers,
agents and employees) which performs duties in connection with this Agreement
shall be entitled to the same benefits of the indemnification, waiver and other
protective provisions to which Administrative Agent is entitled under Articles
XII and XIII.
13.15 Co-Agents, Co-Documentation Agents, Co-Managing Agents,
Syndication Agent, etc. No Lender identified in this Agreement as a Co-Agent,
Co-Documentation Agent, Co-Managing Agent or Syndication Agent shall have any
right, power, obligation, liability, responsibility or duty under this Agreement
other than those applicable to all Lenders as such. Without limiting the
foregoing, none of such Lenders shall have or be deemed to have a fiduciary
relationship with any Lender. Each Lender hereby makes the same acknowledgments
with respect to such Lenders as it makes with respect to Administrative Agent in
Section 13.11.
ARTICLE XIV
RATABLE PAYMENTS
14.1 Ratable Payments. If any Lender (whether by setoff or otherwise)
has payment made to it upon its Loans (other than payments received pursuant to
Sections 3.1, 3.2 or 3.4) in a greater proportion than that received by any
other Lender, such Lender agrees, promptly upon demand, to purchase a portion of
the Loans held by the other Lenders so that after such purchase each Lender will
hold its ratable proportion of Loans. If any Lender, whether in connection with
common law right of setoff or amounts which might be subject to common law right
of setoff or otherwise, receives collateral or other protection for its
Obligations or such amounts which may be subject to setoff, such Lender agrees,
promptly upon demand, to take such action necessary such that all Lenders share
in the benefits of such collateral ratably in proportion to their Loans.
84
In case any such payment is prevented, restricted or otherwise impeded by legal
process, or otherwise, appropriate further adjustments shall be made.
ARTICLE XV
BENEFIT OF AGREEMENT, ASSIGNMENTS; PARTICIPATIONS
15.1 Successors and Assigns. The terms and provisions of the Loan
Documents shall be binding upon and inure to the benefit of Borrower and Lenders
and their respective successors and assigns permitted hereby, except that (i)
Borrower shall not have the right to assign its rights or obligations under the
Loan Documents without the prior written consent of each Lender, (ii) any
assignment by any Lender must be made in compliance with Section 15.3, and (iii)
any transfer by participation must be made in compliance with Section 15.2. Any
attempted assignment or transfer by any party not made in compliance with this
Section 15.1 shall be null and void, unless such attempted assignment or
transfer is treated as a participation in accordance with Section 15.3.2. The
parties to this Agreement acknowledge that clause (ii) of this Section 15.1
relates only to absolute assignments and this Section 15.1 does not prohibit
assignments creating security interests, including, without limitation, (x) any
pledge or assignment by any Lender of all or any portion of its rights under
this Agreement and any Note to a Federal Reserve Bank or (y) in the case of a
Lender which is a Fund, any pledge or assignment of all or any portion of its
rights under this Agreement and any Note to its trustee in support of its
obligations to its trustee; provided, however, that no such pledge or assignment
creating a security interest shall release the transferor Lender from its
obligations hereunder unless and until the parties thereto have complied with
the provisions of Section 15.3. Administrative Agent may treat the Person which
made any Loan or which holds any Note as the owner thereof for all purposes
hereof unless and until such Person complies with Section 15.3; provided,
however, that Administrative Agent may in its discretion (but shall not be
required to) follow instructions from the Person which made any Loan or which
holds any Note to direct payments relating to such Loan or Note to another
Person. Any assignee or transferee of the rights to any Loan or any Note agrees
by acceptance of such assignment to be bound by all the terms and provisions of
the Loan Documents. Any request, authority or consent of any Person, who at the
time of making such request or giving such authority or consent is the owner of
the rights to any Loan (whether or not a Note has been issued in evidence
thereof), shall be conclusive and binding on any subsequent holder or assignee
of the rights to such Loan.
15.2 Participations.
15.2.1 Permitted Participants; Effect. Any Lender may at any
time sell to one or more banks or other entities that are not, and that are not
Affiliates of a Person, in the home building business ("Participants")
participating interests in any Loan owing to such Lender, any Note held by such
Lender, any Commitment of such Lender or any other interest of such Lender under
the Loan Documents and Guaranties. In the event of any such sale by a Lender of
participating interests to a Participant, such Lender's obligations under the
Loan Documents shall remain unchanged, such Lender shall remain solely
responsible to the other parties hereto for the performance of such obligations,
such Lender shall remain the owner of its Loans and the holder of any Note
issued to it in evidence thereof for all purposes under the Loan Documents
85
and Guaranties, all amounts payable by Borrower under this Agreement shall be
determined as if such Lender had not sold such participating interests, and
Borrower and Administrative Agent shall continue to deal solely and directly
with such Lender in connection with such Lender's rights and obligations under
the Loan Documents and Guaranties.
15.2.2 Voting Rights. Each Lender shall retain the sole right
to approve, and/or grant its consent to, without the consent of any Participant,
any amendment, modification or waiver of or other matter relating to any
provision of the Loan Documents or Guaranties.
15.2.3 Waiver of Setoff. Each Participant shall be deemed to
have waived any and all rights of setoff, including any common law right of
setoff, in respect of its participating interest in amounts owing under the Loan
Documents and Guaranties.
15.2.4 Benefit of Certain Provisions. Borrower agrees that
each Participant shall be entitled to the benefits of Sections 3.1, 3.2, 3.4 and
12.11 to the same extent as if it were a Lender and had acquired its interest by
assignment pursuant to Section 15.3, provided that (i) a Participant shall not
be entitled to receive any greater payment under Section 3.1 or 3.2 than the
Lender who sold the participating interest to such Participant would have
received had it retained such interest for its own account, unless the sale of
such interest to such Participant is made with the prior written consent of
Borrower, (ii) any Participant asserting any claim to the benefits described
herein shall assert the same through the Lender from which it acquired such
participation interest, and (iii) any Participant not incorporated under the
laws of the United States of America or any State thereof agrees to comply with
the provisions of Section 2.20 to the same extent as if it were a Lender.
15.3 Assignments.
15.3.1 Permitted Assignments. Any Lender may at any time
assign to one or more banks or other entities that are not, and are not
Affiliates of a Person, in the home building business ("Purchasers") all or any
part of its rights and obligations under the Loan Documents and Guaranties. Such
assignment ("Assignment and Assumption") shall be substantially in the form of
Exhibit G or in such other form as may be agreed to by the parties thereto. Each
such assignment shall either be in an amount equal to the entire applicable
Commitment and Loans of the assigning Lender or (unless each of Borrower and
Administrative Agent otherwise consents) be in an aggregate amount not less than
$2,000,000. The amount of the assignment shall be based on the Commitment or
outstanding Loans (if the Commitment has been terminated) subject to the
assignment, determined as of the date of such assignment or as of the "Trade
Date," if the "Trade Date" is specified in the assignment.
15.3.2 Consents. The consent of Borrower shall be required
prior to an assignment becoming effective unless the Purchaser is a Lender,
provided that the consent of Borrower shall not be required if an Event of
Default has occurred and is continuing. The consent of Administrative Agent
shall be required prior to an assignment becoming effective unless the Purchaser
is a Lender. Any consent required under this Section 15.3.2 shall not be
unreasonably withheld or delayed.
86
15.3.3 Effect; Effective Date. Upon (i) delivery to
Administrative Agent of an assignment, together with any consents required by
Sections 15.3.1 and 15.3.2, and (ii) payment by the assignee of a $5,000 fee to
Administrative Agent for processing such assignment (unless such fee is waived
by Administrative Agent), such assignment shall become effective on the
effective date specified in such assignment. The assignment shall contain a
representation by the Purchaser to the effect that none of the consideration
used to make the purchase of the Commitment and Loans under the applicable
assignment agreement constitutes "plan assets" as defined under ERISA and that
the rights and interests of the Purchaser in and under the Loan Documents will
not be "plan assets" under ERISA. On and after the effective date of such
assignment, such Purchaser shall for all purposes be a Lender party to this
Agreement and any other Loan Document executed by or on behalf of Lenders and
shall have all the rights and obligations of a Lender under the Loan Documents
and Guaranties, to the same extent as if it were an original party thereto, and
the transferor Lender shall be released with respect to the Commitment and Loans
assigned to such Purchaser without any further consent or action by Borrower,
Lenders or Administrative Agent. In the case of an assignment covering all of
the assigning Lender's rights and obligations under this Agreement, such Lender
shall cease to be a Lender hereunder but shall continue to be entitled to the
benefits of, and subject to, those provisions of this Agreement and the other
Loan Documents which survive payment of the Obligations and termination of the
applicable agreement. Any assignment or transfer by a Lender of rights or
obligations under this Agreement that does not comply with this Section 15.3
shall be treated for purposes of this Agreement as a sale by such Lender of a
participation in such rights and obligations in accordance with Section 15.2.
Upon the consummation of any assignment to a Purchaser pursuant to this Section
15.3.3, the transferor Lender, Administrative Agent and Borrower shall, if the
transferor Lender or the Purchaser desires that its Loans be evidenced by Notes,
make appropriate arrangements so that new Notes or, as appropriate, replacement
Notes are issued to such transferor Lender and new Notes or, as appropriate,
replacement Notes, are issued to such Purchaser, in each case in principal
amounts reflecting their respective Commitments, as adjusted pursuant to such
assignment.
15.3.4 Register. Administrative Agent, acting solely for this
purpose as an agent of Borrower, shall maintain at one of its offices in
Chicago, Illinois a copy of each Assignment and Assumption delivered to it and a
register for the recordation of the names and addresses of Lenders, and the
Commitments of, and principal amounts of the Loans owing to, each Lender
pursuant to the terms hereof from time to time (the "Register"). The entries in
the Register shall be conclusive, absent manifest error, and Borrower,
Administrative Agent and Lenders may treat each Person whose name is recorded in
the Register pursuant to the terms hereof as a Lender hereunder for all purposes
of this Agreement, notwithstanding notice to the contrary. The Register shall be
available for inspection by Borrower at any reasonable time and from time to
time upon reasonable prior notice.
15.4 Dissemination of Information. Borrower authorizes each Lender to
disclose to any Participant or Purchaser or any other Person acquiring an
interest in the Loan Documents by operation of law (each a "Transferee") and any
prospective Transferee any and all non-public information in such Lender's
possession concerning the creditworthiness of Borrower, Guarantors and their
Subsidiaries; provided that each Transferee and prospective Transferee agrees to
be bound by Section 12.16 of this Agreement.
87
15.5 Tax Treatment. If any interest in any Loan Document is transferred
to any Transferee which is organized under the laws of any jurisdiction other
than the United States or any State thereof, the transferor Lender shall cause
such Transferee, concurrently with the effectiveness of such transfer, to comply
with the provisions of Section 2.20.
ARTICLE XVI
NOTICES
16.1 Giving Notice. Except as otherwise permitted by Section 2.14 with
respect to borrowing notices, all notices and other communications provided to
any party hereto under this Agreement or any other Loan Document shall be in
writing or by facsimile and addressed or delivered to such party at its address
set forth below its signature hereto or at such other address as may be
designated by such party in a notice to the other parties. Any notice, if mailed
and properly addressed with postage prepaid, shall be deemed given when
received; any notice, if transmitted by facsimile, shall be deemed given when
transmitted.
16.2 Change of Address. Borrower, Administrative Agent and any Lender
and LC Issuer may each change the address for service of notice upon it by a
notice in writing to the other parties hereto.
ARTICLE XVII
COUNTERPARTS
This Agreement may be executed in any number of counterparts, all of
which taken together shall constitute one agreement, and any of the parties
hereto may execute this Agreement by signing any such counterpart. This
Agreement shall be effective when it has been executed by Borrower,
Administrative Agent, and all Lenders and each party has notified Administrative
Agent by telex or telephone, that it has taken such action.
88
IN WITNESS WHEREOF, Borrower, Lenders, and Administrative Agent have
executed this Agreement as of the date first above written.
BORROWER:
M.D.C. HOLDINGS, INC.,
a Delaware corporation
By: /s/ Xxxx X. Xxxxxx
--------------------------------------------
Name: Xxxx X. Xxxxxx, Senior Vice President
0000 Xxxxx Xxxxxxxx Xxxxx 000
Xxxxxx, Xxxxxxxx 00000
Attention: Xxxx X. Xxxxxx
89
LENDERS:
BANK ONE, NA, Individually,
As Administrative Agent and as LC Issuer
By: /s/ Xxxxxxx Xxxxxx
--------------------------------------------
Name: Xxxxxxx Xxxxxx, Associate Director
000 Xxxxx Xxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxx Xxxxxxxxx
90
SIGNATURE PAGE TO M.D.C. HOLDINGS, INC. CREDIT AGREEMENT
WACHOVIA BANK, NATIONAL ASSOCIATION,
INDIVIDUALLY AND AS SYNDICATION AGENT
By: /s/ Xxxxx X. Xxxxxxxx
-------------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Assistant Vice President
Address:
000 Xxxxxxxxx Xxxxxx, XX, 00xx Xxxxx
Xxxxxxx, XX 00000
Attn: Xxxxx X. Xxxxxxxx
SIGNATURE PAGE TO M.D.C. HOLDINGS, INC. CREDIT AGREEMENT
BNP PARIBAS
By: /s/ Xxxx X. Xxxxxx
-------------------------------------------
Name: Xxxx X. Xxxxxx
Title: Managing Director
By: /s/ X. Xxxxxxx
-------------------------------------------
Name: X. Xxxxxxx
Title: Managing Director
Address:
000 Xxxxx Xxxxxxxx Xxxxxx
Xxxxx 0000
Xxx Xxxxxxx, XX 00000
Attn: Xxxx Xxxxxx
SIGNATURE PAGE TO M.D.C. HOLDINGS, INC. CREDIT AGREEMENT
GUARANTY BANK, INDIVIDUALLY AND AS
CO-DOCUMENTATION AGENT
By: /s/ Xxxxxxx X. Xxxx
-------------------------------------------
Name: Xxxxxxx X. Xxxx
Title: Senior Vice President
Address:
0000 Xxxxxxx Xxxxxx
Xxxxxx, XX 00000
Attn: Xxxxx Xxxx
SIGNATURE PAGE TO M.D.C. HOLDINGS, INC. CREDIT AGREEMENT
SUNTRUST BANK, INDIVIDUALLY AND AS
CO-DOCUMENTATION AGENT
By: /s/ Xxxxxxx X. Xxxxxxxx
-------------------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: Senior Vice President
Address:
0000 Xxxxx Xxxxxxxxx
Mail Code ALX 0000
Xxxxx 000
Xxxxxx, XX 00000-0000
Attn: W. Xxxx Xxxxxxx
and to:
00000 Xxxxxxxxxx Xxxxxxxx
Xxxxxxxx, XX 00000
Attn: Xxxxxx Xxxxxx
SIGNATURE PAGE TO M.D.C. HOLDINGS, INC. CREDIT AGREEMENT
KEYBANK NATIONAL ASSOCIATION,
INDIVIDUALLY AND AS CO-DOCUMENTATION AGENT
By: /s/ Xxxxxx X. XxxXxxxxxxxxxx
-------------------------------------------
Name: Xxxxxx X. XxxXxxxxxxxxxx
Title: Vice President
Address:
0 Xxxx Xxxxx, Xxxxx 000
Xxxxxx, XX 00000
Attn: Xxxxxxx X. Xxxxxx, Senior Vice President
With a copy to:
KeyBank National Association
0000 Xxxxxxxx, Xxxxx 000
Xxxxxx, XX 00000
Attn: Xxxxxx X. XxxXxxxxxxxxxx,
Vice President
SIGNATURE PAGE TO M.D.C. HOLDINGS, INC. CREDIT AGREEMENT
WASHINGTON MUTUAL BANK, FA,
INDIVIDUALLY AND AS CO-DOCUMENTATION AGENT
By: /s/ Xxxxxx Xxxxxxx
-------------------------------------------
Name: Xxxxxx Xxxxxxx
Title: Vice President
Address:
0000 XxXxxxx Xxxxx
Xxxxx 000
Xxxxxxxx, XX 00000
Attn: Xxx Xxxxxxx
SIGNATURE PAGE TO M.D.C. HOLDINGS, INC. CREDIT AGREEMENT
U.S. BANK NATIONAL ASSOCIATION,
INDIVIDUALLY AND AS CO-DOCUMENTATION AGENT
By: /s/ Xxxxxxx X. Xxxxxx
-------------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Sr Vice President
Address:
000 00xx Xxxxxx, 0xx Xxxxx
Xxxxxx, XX 00000
Attn: Xxxxxxxxxxx X. Xxxxxxxx
SIGNATURE PAGE TO M.D.C. HOLDINGS, INC. CREDIT AGREEMENT
CALIFORNIA BANK AND TRUST,
INDIVIDUALLY AND AS CO-MANAGING AGENT
By: /s/ Xxxxxxxx Xxxxxxxxx
-------------------------------------------
Name: Xxxxxxxx Xxxxxxxxx
Title: Senior Vice President
Address:
0000 Xxxxx Xxxxxxx Xxx., Xxxxx 0000
Xxxxxxx, XX 00000
Attn: Xxxxxxxx Xxxxxxxxx
SIGNATURE PAGE TO M.D.C. HOLDINGS, INC. CREDIT AGREEMENT
COMERICA BANK, INDIVIDUALLY AND AS
CO-MANAGING AGENT
By: /s/ Xxxxxxx X. Xxxxx
-------------------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Assistant Vice President
Address:
000 Xxxxxxxx Xxxxxx
XX 0000
Xxxxxxx, XX 00000
Attn: Xxxxxxx Xxxxx
SIGNATURE PAGE TO M.D.C. HOLDINGS, INC. CREDIT AGREEMENT
THE ROYAL BANK OF SCOTLAND PLC,
INDIVIDUALLY AND AS CO-MANAGING AGENT
By: /s/ Xxxxxx Xxxxx
-------------------------------------------
Name: Xxxxxx Xxxxx
Title: Senior Vice President
Address:
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Attn: Xxxxx Xxxx
SIGNATURE PAGE TO M.D.C. HOLDINGS, INC. CREDIT AGREEMENT
AMSOUTH BANK, INDIVIDUALLY AND AS
CO-AGENT
By: /s/ Xxxxx Xxxxxxxx
-------------------------------------------
Name: Xxxxx Xxxxxxxx
Title: SR VP
Address:
0000 0xx Xxxxxx Xxxxx-XXX 00
Xxxxxxxxxx, XX 00000
Attention: Xxxxx Xxxxxxxx
SIGNATURE PAGE TO M.D.C. HOLDINGS, INC. CREDIT AGREEMENT
BANK OF AMERICA, N.A., INDIVIDUALLY
AND AS CO-AGENT
By: /s/ Xxxx X. Xxxxxx-Xxxxxx
-------------------------------------------
Name: Xxxx X. Xxxxxx-Xxxxxx
Title: Managing Director
Address:
000 Xxxxx XxXxxxx Xxxxxx
Mail Code: IL1-231-10-35
Xxxxxxx, XX 00000
Attn: Xxxx Xxxxxx-Xxxxxx
SIGNATURE PAGE TO M.D.C. HOLDINGS, INC. CREDIT AGREEMENT
BANK OF THE WEST
By: /s/ Xxxx Xxxxxx
-------------------------------------------
Name: Xxxx Xxxxxx
Title: Senior Vice President & Manager
By: /s/ Xxxxx Xxxxxxxxxxxx
-------------------------------------------
Name: Xxxxx Xxxxxxxxxxxx
Title: Vice President - Syndications
Address:
0000 Xxxxx Xxxx., 0X
Xxxxxx Xxxxx, XX 00000
Attn: Xxxx Xxxxxx, Senior Vice President
& Manager - Loan Administration
and to:
000 Xxxxx Xxxxx Xxxxxx
Xxx Xxxxxxx, XX 00000
Attn: Xxxxx Xxxxxxxxxxxx
Vice President - Syndications
SIGNATURE PAGE TO M.D.C. HOLDINGS, INC. CREDIT AGREEMENT
CITICORP NORTH AMERICA, INC.
By: /s/ Xxxxx Xxxxxx
-------------------------------------------
Name: Xxxxx Xxxxxx
Title: Vice President
Address:
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attn: Xxxxx Xxxxxxx
SIGNATURE PAGE TO M.D.C. HOLDINGS, INC. CREDIT AGREEMENT
COMPASS BANK
By: /s/ Xxxxx X. Xxxxx
-------------------------------------------
Name: Xxxxx X. Xxxxx
Title: Executive Vice President
Address:
0000 Xxxx Xxxxxxxx Xxxx
Xxxxxxxxx, XX 00000
Attn: Xxxxx X. Xxxxx
Bank One, Arizona, N.A. executes this Agreement solely for the purposes set
forth in Section 4.4(f).
BANK ONE, ARIZONA, N.A.
By: /s/ Xxxxxxx Xxxxxx
-------------------------------------------
Name: Xxxxxxx Xxxxxx
000 Xxxxx Xxxxxxxx Xxxxxx
Xxxxxxx, XX 00000
Attention: Xxxx Xxxxxxxxx
EXHIBIT A
GUARANTY
TO: BANK ONE, NA, a national banking association, as Administrative Agent
for Lenders that are parties to the Credit Agreement dated as of April
8, 2004 (as amended, supplemented or otherwise modified from time to
time, the "Credit Agreement"), among M.D.C. HOLDINGS, INC., a Delaware
corporation, Lenders, and Administrative Agent, and to Lenders.
Capitalized terms not otherwise defined herein shall have the meaning
set forth in the Credit Agreement.
FOR VALUABLE CONSIDERATION, RICHMOND AMERICAN HOMES OF CALIFORNIA,
INC., a Colorado corporation, RICHMOND AMERICAN HOMES OF MARYLAND, INC., a
Maryland corporation, RICHMOND AMERICAN HOMES OF NEVADA, INC., a Colorado
corporation, RICHMOND AMERICAN HOMES OF VIRGINIA, INC., a Virginia corporation,
RICHMOND AMERICAN HOMES OF ARIZONA, INC., a Delaware corporation, RICHMOND
AMERICAN HOMES OF COLORADO, INC., a Delaware corporation, RICHMOND AMERICAN
HOMES OF WEST VIRGINIA, INC., a Colorado corporation, RICHMOND AMERICAN HOMES OF
CALIFORNIA (INLAND EMPIRE), INC., a Colorado corporation, RICHMOND AMERICAN
HOMES OF UTAH, INC., a Colorado corporation, RICHMOND AMERICAN HOMES OF TEXAS,
INC., a Colorado corporation, RICHMOND AMERICAN HOMES OF FLORIDA, LP, a Colorado
limited partnership, RICHMOND AMERICAN HOMES OF DELAWARE, INC., a Colorado
corporation, RICHMOND AMERICAN HOMES OF ILLINOIS, INC., a Colorado corporation,
RICHMOND AMERICAN HOMES OF NEW JERSEY, INC., a Colorado corporation, RICHMOND
AMERICAN HOMES OF PENNSYLVANIA, INC., a Colorado corporation, M.D.C. LAND
CORPORATION, a Colorado corporation, RICHMOND AMERICAN CONSTRUCTION, INC., a
Delaware corporation, RAH TEXAS HOLDINGS, LLC, a Colorado limited liability
company and RAH OF TEXAS, LP, a Colorado limited partnership (hereinafter
collectively called "Guarantors" and individually a "Guarantor"), whose address
is set forth after their signatures below, unconditionally, jointly and
severally, guarantee and promise to pay to Administrative Agent, for the benefit
of Lenders and their respective successors, endorsees, transferees and assigns,
or order, within one (1) business day after demand, in lawful money of the
United States, (i) the Notes, principal and interest and all other sums payable
thereunder, or at the election of Administrative Agent any one or more
installments thereof, in the event that Borrower fails to punctually pay any one
or more installments of the Note (principal and/or interest), or any other sum
payable thereunder at the time and in the manner provided therein; and (ii) all
other indebtedness of Borrower to Administrative Agent or to any Lender arising
under or in connection with the Notes, the Credit Agreement or any Loan
Documents (the indebtedness evidenced by the Notes together with all other
indebtedness specified above is hereinafter collectively called the
"Indebtedness").
1. The obligations of Guarantors hereunder are separate and independent of
the obligations of Borrower and of any other guarantor, and a separate action or
actions may be brought and prosecuted against any one or more of Guarantors
whether action is brought against
1
Borrower or any other guarantor or whether Borrower or any other guarantor is
joined in any action or actions. The obligations of Guarantors hereunder shall
survive and continue in full force and effect until payment in full of the
Indebtedness is actually received by Administrative Agent for the benefit of
Lenders and the period of time has expired during which any payment made by
Borrower or any Guarantor to Administrative Agent for the benefit of Lenders may
be determined to be a Preferential Payment (defined below), notwithstanding any
release or termination of Borrower's or any other guarantor's liability by
express or implied agreement with Administrative Agent or any Lender or by
operation of law and notwithstanding that the Indebtedness or any part thereof
is deemed to have been paid or discharged by operation of law or by some act or
agreement of Administrative Agent or Lenders. For purposes of this Guaranty, the
Indebtedness shall be deemed to be paid only to the extent that Administrative
Agent, on behalf of Lenders, actually receives immediately available funds.
2. Guarantors agree that to the extent Borrower or any Guarantor makes
any payment to Administrative Agent or Lenders in connection with the
Indebtedness, and all or any part of such payment is subsequently invalidated,
declared to be fraudulent or preferential, set aside or required to be repaid by
Administrative Agent or Lenders or paid over to a trustee, receiver or any other
entity, whether under any bankruptcy act or otherwise (any such payment is
hereinafter referred to as a "Preferential Payment"), then this Guaranty shall
continue to be effective or shall be reinstated, as the case may be, and, to the
extent of such payment or repayment by Administrative Agent or Lenders, the
Indebtedness or part thereof intended to be satisfied by such Preferential
Payment shall be revived and continued in full force and effect as if said
Preferential Payment had not been made.
3. Guarantors are providing this Guaranty at the instance and request
of Borrower to induce Administrative Agent and Lenders to extend or continue
financial accommodations to Borrower. Guarantors hereby represent and warrant
that Guarantors are and will continue to be fully informed about all aspects of
the financial condition and business affairs of Borrower that Guarantors deem
relevant to the obligations of Guarantors hereunder and hereby waive and fully
discharge Administrative Agent and each Lender from any and all obligations to
communicate to Guarantors any information whatsoever regarding Borrower or
Borrower's financial condition or business affairs. Guarantors acknowledge that
Borrower owns, directly or indirectly, all of the issued and outstanding shares
of stock of each Guarantor, that Guarantors and Borrower are engaged in related
businesses, and that Guarantors will derive substantial direct and indirect
benefit from the extension of credit by Lenders evidenced by the Indebtedness.
4. Guarantors authorize Administrative Agent and Lenders, without
notice or demand and without affecting Guarantors' liability hereunder, from
time to time, to: (a) renew, modify, compromise, extend, accelerate or otherwise
change the time for payment of, or otherwise change the terms of the
Indebtedness or any part thereof, including increasing or decreasing the rate of
interest thereon; (b) release, substitute or add any one or more endorsers, or
other guarantors; (c) take and hold security for the payment of this Guaranty or
the Indebtedness, and enforce, exchange, substitute, subordinate, waive or
release any such security; (d) proceed against such security and direct the
order or manner of sale of such security as Administrative Agent in its
discretion may determine; and (e) apply any and all payments from Borrower, any
Guarantor or any other guarantor, or recoveries from such security, in such
order or manner as Administrative Agent in its discretion may determine.
2
5. Guarantors waive and agree not to assert: (a) any right to require
Administrative Agent or Lenders to proceed against Borrower or any other
guarantor, to proceed against or exhaust any security for the Indebtedness, to
pursue any other remedy available to Administrative Agent and Lenders, or to
pursue any remedy in any particular order or manner; (b) the benefit of any
statute of limitations affecting Guarantors' liability hereunder or the
enforcement hereof; (c) demand, diligence, presentment for payment, protest and
demand, and notice of extension, dishonor, protest, demand, nonpayment and
acceptance of this Guaranty; (d) notice of the existence, creation or incurring
of new or additional indebtedness of Borrower to Administrative Agent or any
Lender; and (e) any defense arising by reason of any disability or other defense
of Borrower or by reason of the cessation from any cause whatsoever (other than
payment in full of all amounts demanded to be paid by Guarantors under this
Guaranty) of the liability of Borrower for the Indebtedness. Guarantors hereby
expressly consent to any impairment of collateral, including, but not limited
to, failure to perfect a security interest and release collateral and any such
impairment or release shall not affect Guarantors' obligations hereunder. Until
payment in full of the Indebtedness, Guarantors shall have no right of
subrogation and hereby waive any right to enforce any remedy which
Administrative Agent and Lenders now have, or may hereafter have, against
Borrower, and waive any benefit of, and any right to participate in, any
security now or hereafter held by Administrative Agent on behalf of Lenders.
6. (a) If from time to time Borrower shall have liabilities or
obligations to any Guarantor, whether absolute or contingent, joint, several, or
joint and several, such liabilities and obligations (the "Subordinated
Indebtedness") and any and all assignments as security, grants in trust, liens,
mortgages, security interests, other encumbrances, and other interests and
rights securing such liabilities and obligations shall at all times be fully
subordinate to payment and performance in full of the Obligations. Guarantors
agree that such liabilities and obligations of Borrower to Guarantors shall not
be secured by any assignment as security, grant in trust, lien, mortgage,
security interest, other encumbrance or other interest or right in any property,
interests in property, or rights to property of such Borrower. Guarantors and,
by their acceptance of this Guaranty, Administrative Agent and each Lender agree
that (i) so long as no Event of Default has occurred and is continuing, payments
of principal and interest on the Subordinated Indebtedness may be made by
Borrower and accepted by Guarantors as such payments become due; and (ii) after
the occurrence and during the continuation of an Event of Default, Borrower
shall not make and Guarantor shall not accept any payments with respect to the
Subordinated Indebtedness. If, notwithstanding the foregoing, subsequent to an
Event of Default, any Guarantor receives any payment from Borrower, such payment
shall be held in trust by such Guarantor for the benefit of Administrative Agent
and Lenders, shall be segregated from the other funds of such Guarantor, and
shall forthwith be paid by such Guarantor to Administrative Agent for the
benefit of Lenders and applied to payment of the Obligations whether or not then
due.
(b) In the event of any distribution, division, or
application, partial or complete, voluntary or involuntary, by operation of law
or otherwise, of all or any part of the assets of Borrower, or the proceeds
thereof, to creditors of Borrower, by reason of the liquidation, dissolution, or
other winding up of Borrower's business, or in the event of any receivership,
insolvency or bankruptcy proceedings by or against Borrower, or assignment for
the benefit of creditors, or of any proceedings by or against Borrower for any
relief under any
3
bankruptcy or insolvency laws, or relating to the relief of debtors,
readjustment of indebtedness, reorganizations, arrangements, compositions or
extensions, or of any other event whereby it becomes necessary or desirable to
file or present claims against Borrower for the purpose of receiving payment
thereof, or on account thereof, then and in any such event, any payment or
distribution of any kind or character, either in cash or other property, which
shall be made or shall be payable with respect to any Subordinated Indebtedness
shall be paid over to Administrative Agent on behalf of Lenders for application
to the payment of the Obligations, whether due or not due, and no payments shall
be made upon or in respect of the Subordinated Indebtedness unless and until the
Obligations shall have been paid and satisfied in full. In any such event, all
claims of Administrative Agent and Lenders and all claims of Guarantors shall,
at the option of Administrative Agent and Lenders, forthwith become due and
payable without demand or notice.
(c) In the event of any distribution, division, or
application, partial or complete, voluntary or involuntary, by operation of law
or otherwise, of all or any part of the assets of Borrower, or the proceeds
thereof, to creditors of Borrower, by reason of the liquidation, dissolution, or
other winding up of Borrower's business, or in the event of any receivership,
insolvency or bankruptcy proceedings by or against Borrower, or assignment for
the benefit of creditors, or of any proceedings by or against Borrower for any
relief under any bankruptcy or insolvency laws, or relating to the relief of
debtors, readjustment of indebtedness, reorganizations, arrangements,
compositions or extensions, or of any other event whereby it becomes necessary
or desirable to file or present claims against Borrower for the purpose of
receiving payment thereof, or on account thereof, each of the Guarantors
irrevocably authorizes and empowers Administrative Agent, or any person
Administrative Agent may designate, to act as attorney for such Guarantor with
full power and authority in the name of such Guarantor, or otherwise, to make
and present such claims or proofs of claims against Borrower on account of the
Subordinated Indebtedness as Administrative Agent, or its appointee, may deem
expedient and proper and, if necessary, to vote such claims in any proceedings
and to receive and collect for the benefit of Lenders any and all dividends or
other payments and disbursements made thereon in whatever form they may be paid
or issued, and to give acquittance therefor and to apply same to the
Obligations, and Guarantors hereby agree, from time to time and upon request, to
make, execute and deliver to Administrative Agent such powers of attorney,
assignments, endorsements, proofs of claim, pleadings, verifications,
affidavits, consents, agreements or other instruments as may be requested by
Administrative Agent in order to enable Administrative Agent and Lenders to
enforce any and all claims upon, or with respect to, the Subordinated
Indebtedness, and to collect and receive any and all payments or distributions
which may be payable or deliverable at any time upon or with respect to the
Subordinated Indebtedness.
(d) Except as otherwise permitted herein, should any payment
or distribution or security or proceeds thereof be received by any Guarantor
upon or with respect to the Subordinated Indebtedness prior to the satisfaction
of the Obligations, such Guarantor will forthwith deliver the same to
Administrative Agent on behalf of Lenders in precisely the form as received
except for the endorsement or assignment of such Guarantor where necessary for
application on the Obligations, whether due or not due, and until so delivered
the same shall be held in trust by such Guarantor as property of Administrative
Agent on behalf of Lenders. In the event of the failure of any Guarantor to make
any such endorsement or assignment,
4
Administrative Agent, or any of its officers or employees, on behalf of
Administrative Agent, is hereby irrevocably authorized to make the same.
(e) Each Guarantor agrees to maintain in its records notations
satisfactory to Administrative Agent of the rights and priorities of
Administrative Agent and Lenders hereunder, and from time to time, upon request,
to furnish Administrative Agent for the benefit of Lenders with sworn financial
statements. Lenders and Administrative Agent may inspect the books of account
and any records of Guarantors at any time during business hours. Each Guarantor
agrees that any promissory note now or hereafter evidencing the Subordinated
Indebtedness shall be nonnegotiable and shall be marked with a specific
statement that the indebtedness thereby evidenced is subject to the provisions
of this Guaranty.
7. (a) The provisions of this Guaranty are severable, and in any action
or proceeding involving any state corporate law, or any state, federal or
foreign bankruptcy, insolvency, reorganization or other law affecting the rights
of creditors generally, if the obligations of any Guarantor under this Guaranty
would otherwise be held or determined to be avoidable, invalid or unenforceable
on account of the amount of such Guarantor's liability under this Guaranty,
then, notwithstanding any other provision of this Guaranty to the contrary, the
amount of such liability shall, without any further action by the Guarantors,
Administrative Agent or any Lender, be automatically limited and reduced to the
highest amount that is valid and enforceable as determined in such action or
proceeding (such highest amount determined hereunder being the relevant
Guarantor's "Maximum Liability"). This Paragraph 7(a) with respect to the
Maximum Liability of the Guarantors is intended solely to preserve the rights of
Administrative Agent hereunder to the maximum extent not subject to avoidance
under applicable law, and neither the Guarantor nor any other person or entity
shall have any right or claim under this Paragraph 7(a) with respect to the
Maximum Liability, except to the extent necessary so that the obligations of the
Guarantors hereunder shall not be rendered voidable under applicable law.
(b) Each of the Guarantors agrees that the Guaranteed Obligations may
at any time and from time to time exceed the Maximum Liability of each
Guarantor, and may exceed the aggregate Maximum Liability of all other
Guarantors, without impairing this Guaranty or affecting the rights and remedies
of Administrative Agent hereunder. Nothing in this Paragraph 7(b) shall be
construed to increase any Guarantor's obligations hereunder beyond its Maximum
Liability.
(c) In the event any Guarantor (a "Paying Guarantor") shall make any
payment or payments under this Guaranty or shall suffer any loss as a result of
any realization upon any collateral granted by it to secure its obligations
under this Guaranty, each other Guarantor (each a "Non-Paying Guarantor") shall
contribute to such Paying Guarantor an amount equal to such Non-Paying
Guarantor's "Pro Rata Share" of such payment or payments made, or losses
suffered, by such Paying Guarantor. For the purposes hereof, each Non-Paying
Guarantor's "Pro Rata Share" with respect to any such payment or loss by a
Paying Guarantor shall be determined as of the date on which such payment or
loss was made by reference to the ratio of (i) such Non-Paying Guarantor's
Maximum Liability as of such date (without giving effect to any right to
receive, or obligation to make, any contribution hereunder) or, if such
Non-Paying Guarantor's Maximum Liability has not been determined, the aggregate
amount of all monies received by
5
such Non-Paying Guarantor from Borrower after the date hereof (whether by loan,
capital infusion or by other means) to (ii) the aggregate Maximum Liability of
all Guarantors hereunder (including such Paying Guarantor) as of such date
(without giving effect to any right to receive, or obligation to make, any
contribution hereunder), or to the extent that a Maximum Liability has not been
determined for any Guarantors, the aggregate amount of all monies received by
such Guarantors from Borrower after the date hereof (whether by loan, capital
infusion or by other means). Nothing in this Paragraph 7(c) shall affect any
Guarantor's several liability for the entire amount of the Guaranteed
Obligations (up to such Guarantor's Maximum Liability). Each of the Guarantors
covenants and agrees that its right to receive any contribution under this
Guaranty from a Non-Paying Guarantor shall be subordinate and junior in right of
payment to all the Guaranteed Obligations. The provisions of this Paragraph 7(c)
are for the benefit of both Administrative Agent and Guarantors and may be
enforced by any one, or more, or all of them in accordance with the terms
hereof.
8. It is not necessary for Administrative Agent or any Lender to
inquire into the powers of Borrower or the officers, directors, members,
managers, partners, trustees or agents acting or purporting to act on its
behalf, and any of the Indebtedness made or created in reliance upon the
professed exercise of such powers shall be guaranteed hereunder.
9. Each Guarantor agrees to deliver to Administrative Agent and Lenders
financial statements and other financial information relating to such Guarantor
in form and level of detail, and containing certifications, as required pursuant
to Section 7.1 of the Credit Agreement. Each Guarantor further agrees to comply
all covenants, representations and warranties in the Credit Agreement relating
to Guarantor.
10. Guarantors agree to pay all attorneys' fees and all other costs and
expenses which may be incurred by Administrative Agent or any Lender in
enforcing this Guaranty.
11. This Guaranty sets forth the entire agreement of Guarantors,
Administrative Agent and Lenders with respect to the subject matter hereof and
supersedes all prior oral and written agreements and representations by
Administrative Agent or any Lender to Guarantors. No modification or waiver of
any provision of this Guaranty or any right of Administrative Agent or any
Lender hereunder and no release of any Guarantor from any obligation hereunder
shall be effective unless in a writing executed by an authorized officer of
Administrative Agent and each Lender. There are no conditions, oral or
otherwise, on the effectiveness of this Guaranty.
12. This Guaranty shall inure to the benefit of Administrative Agent
and each Lender and their respective successors and assigns and shall be binding
upon each Guarantor and its successors and assigns. Administrative Agent and
each Lender may assign this Guaranty in whole or in part without notice.
13. THIS GUARANTY SHALL BE CONSTRUED IN ACCORDANCE WITH THE INTERNAL
LAWS (AND NOT THE LAW OF CONFLICTS) OF THE STATE OF ILLINOIS, BUT GIVING EFFECT
TO FEDERAL LAWS APPLICABLE TO NATIONAL BANKS.
6
14. Subject to the provisions of this Paragraph 14, each Guarantor
agrees, and Lenders and Administrative Agent by accepting this Guaranty agree,
that they shall submit to binding arbitration any and all claims, disputes and
controversies between or among them (and their respective employees, officers,
directors, attorneys, and other agents if permitted by law or a contract between
them and such persons) relating to this Guaranty and the Loan Documents and the
negotiation, execution, collateralization, administration, repayment,
modification, extension or collection thereof or arising thereunder. Such
arbitration shall proceed in Chicago, Illinois, shall be governed by Illinois
law and shall be conducted in accordance with the Commercial Arbitration Rules
of the American Arbitration Association (the "AAA") as modified in this
Paragraph 14. Judgment upon the award rendered by each arbitrator(s) may be
entered in any court having jurisdiction.
(a) Nothing in the preceding paragraph, nor the exercise of
any right to arbitrate thereunder, shall limit the right of any party hereto (1)
subject to provisions of applicable law, to exercise self-help remedies such as
setoff or repossession or other self-help remedies provided in the Credit
Agreement or any other Loan Document; or (2) to obtain provisional or ancillary
remedies such as replevin, injunctive relief, attachment, or appointment of a
receiver from a court having jurisdiction, before, during or after the pendency
of any arbitration proceeding, or (3) to defend or obtain injunctive or other
equitable relief against the foregoing or assert mandatory counterclaims, if
any, prior to and during the pendency of a determination in arbitration of
issues of performance, default, damages and other such claims and disputes.
(b) Arbitration hereunder shall be before a three-person panel
of neutral arbitrators, consisting of one person from each of the following
categories: (1) an attorney who has practiced in the area of commercial real
estate law for at least ten (10) years; (2) a person with at least ten (10)
years' experience in real estate lending; and (3) a person with at least ten
(10) years' experience in the homebuilding industry. The AAA shall submit a list
of persons meeting the criteria outlined above for each category of arbitrator,
and the parties shall select one person from each category in the manner
established by the AAA.
(c) In any dispute between the parties that is arbitratable
hereunder, where the aggregate of all claims and the aggregate of all
counterclaims is an amount less than Fifty Thousand and No/100ths Dollars
($50,000.00), the arbitration shall be before a single neutral arbitrator to be
selected in accordance with the Commercial Rules of the American Arbitration
Association and shall proceed under the Expedited Procedures of said Rules.
(d) In any arbitration hereunder, the arbitrators shall decide
(by documents only or with a hearing, at the arbitrators' discretion) any
pre-hearing motions which are substantially similar to pre-hearing motions to
dismiss for failure to state a claim or motions for summary adjudication.
(e) In any arbitration hereunder, discovery shall be permitted
in accordance with the Illinois Code of Civil Procedure. Scheduling of such
discovery may be determined by the arbitrators, and any discovery disputes shall
be finally determined by the arbitrators.
7
(f) The Illinois rules of evidence shall control the admission
of evidence at the hearing in any arbitration conducted hereunder, provided,
however, no error by the arbitrators in application of the Rules of Evidence
shall be grounds, as such, for vacating the arbitrators' award.
(g) Notwithstanding any AAA rule to the contrary, the
arbitration award shall be in writing and shall specify the factual and legal
basis for the award, including findings of fact and conclusions of law.
(h) Each party shall each bear its own costs and expenses and
an equal share of the arbitrators' costs and administrative fees of arbitration.
15. GUARANTORS, AND LENDERS BY ACCEPTING THIS GUARANTY, HEREBY
IRREVOCABLY SUBMIT TO THE NON-EXCLUSIVE JURISDICTION OF ANY UNITED STATES
FEDERAL OR ILLINOIS STATE COURT SITTING IN CHICAGO, ILLINOIS IN ANY ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO ANY LOAN DOCUMENTS AND ANY GUARANTOR,
AND LENDERS BY ACCEPTING THIS GUARANTY, HEREBY IRREVOCABLY AGREE THAT ALL CLAIMS
IN RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN ANY SUCH
COURT AND IRREVOCABLY WAIVE ANY OBJECTION IT MAY NOW OR HEREAFTER HAVE AS TO THE
VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN SUCH A COURT OR THAT
SUCH COURT IS AN INCONVENIENT FORUM. NOTHING IN THIS PARAGRAPH 15 SHALL LIMIT
THE RIGHT OF ADMINISTRATIVE AGENT OR ANY LENDER OR LC ISSUER TO BRING
PROCEEDINGS AGAINST ANY GUARANTOR IN THE COURTS OF ANY OTHER JURISDICTION.
SUBJECT TO THE PROVISIONS OF PARAGRAPH 14, UNLESS PROHIBITED BY LAW, ANY
JUDICIAL PROCEEDING BY ANY GUARANTOR AGAINST ADMINISTRATIVE AGENT OR ANY LENDER
OR LC ISSUER OR ANY AFFILIATE OF ADMINISTRATIVE AGENT OR ANY LENDER OR LC ISSUER
INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER IN ANY WAY ARISING OUT OF, RELATED
TO, OR CONNECTED WITH THIS GUARANTY OR ANY OTHER LOAN DOCUMENT SHALL BE BROUGHT
IN A COURT IN CHICAGO, ILLINOIS.
16. SUBJECT TO THE PROVISIONS OF PARAGRAPH 14, EACH GUARANTOR HEREBY
WAIVES TRIAL BY JURY IN ANY JUDICIAL PROCEEDING INVOLVING, DIRECTLY OR
INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN ANY
WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH THE GUARANTY, ANY OTHER LOAN
DOCUMENT OR THE RELATIONSHIP ESTABLISHED THEREUNDER.
17. Guarantors acknowledge that the rights and responsibilities of
Administrative Agent under this Guaranty with respect to any action taken by
Administrative Agent or the exercise or non-exercise by Administrative Agent of
any option, right, request, judgment or other right or remedy provided for
herein or resulting or arising out of this Guaranty shall, as between
Administrative Agent and Lenders, be governed by the Credit Agreement and by
such other agreements with respect thereto as may exist from time to time among
them, but, as between Administrative Agent and Guarantors, Administrative Agent
shall be conclusively presumed to
8
be acting as agent for Lenders with full and valid authority so to act or
refrain from acting, and Guarantors shall not be under any obligation or
entitlement to make any inquiry respecting such authority.
18. Pursuant to Section 7.11 of the Credit Agreement, additional
Subsidiaries shall become obligated as Guarantors hereunder (each as fully as
though an original signatory hereto) by executing and delivering to
Administrative Agent a supplemental guaranty in the form of Exhibit A attached
hereto (with blanks appropriately filled in), together with such additional
supporting documentation required pursuant to Section 7.11 of the Credit
Agreement.
IN WITNESS WHEREOF these presents are executed as of April 8, 2004.
GUARANTORS:
RICHMOND AMERICAN HOMES OF
CALIFORNIA, INC.
By:
-------------------------------------------
Name: Xxxx X. Xxxxxx
Title: Vice President
RICHMOND AMERICAN HOMES OF
MARYLAND, INC.
By:
-------------------------------------------
Name: Xxxx X. Xxxxxx
Title: Vice President
RICHMOND AMERICAN HOMES OF
NEVADA, INC.
By:
-------------------------------------------
Name: Xxxx X. Xxxxxx
Title: Vice President
9
RICHMOND AMERICAN HOMES OF
VIRGINIA, INC.
By:
-------------------------------------------
Name: Xxxx X. Xxxxxx
Title: Vice President
RICHMOND AMERICAN HOMES OF
ARIZONA, INC.
By:
-------------------------------------------
Name: Xxxx X. Xxxxxx
Title: Vice President
RICHMOND AMERICAN HOMES OF
COLORADO, INC.
By:
-------------------------------------------
Name: Xxxx X. Xxxxxx
Title: Vice President
RICHMOND AMERICAN HOMES OF WEST
VIRGINIA, INC.
By:
-------------------------------------------
Name: Xxxx X. Xxxxxx
Title: Vice President
RICHMOND AMERICAN HOMES OF
CALIFORNIA (INLAND EMPIRE), INC.
By:
-------------------------------------------
Name: Xxxx X. Xxxxxx
Title: Vice President
10
RICHMOND AMERICAN HOMES OF UTAH, INC.
By:
-------------------------------------------
Name: Xxxx X. Xxxxxx
Title: Vice President
RICHMOND AMERICAN HOMES OF TEXAS, INC.
By:
-------------------------------------------
Name: Xxxx X. Xxxxxx
Title: Vice President
RICHMOND AMERICAN HOMES OF FLORIDA, LP.
By: Richmond American Homes of California
(Inland Empire), Inc., its general partner
By:
-------------------------------------------
Name: Xxxx X. Xxxxxx
Title: Vice President
RICHMOND AMERICAN HOMES OF DELAWARE, INC.
By:
-------------------------------------------
Name: Xxxx X. Xxxxxx
Title: Vice President
RICHMOND AMERICAN HOMES OF ILLINOIS, INC.
By:
-------------------------------------------
Name: Xxxx X. Xxxxxx
Title: Vice President
11
RICHMOND AMERICAN HOMES OF NEW JERSEY, INC.
By:
-------------------------------------------
Name: Xxxx X. Xxxxxx
Title: Vice President
RICHMOND AMERICAN HOMES OF
PENNSYLVANIA, INC.
By:
-------------------------------------------
Name: Xxxx X. Xxxxxx
Title: Vice President
M.D.C. LAND CORPORATION
By:
-------------------------------------------
Name: Xxxx X. Xxxxxx
Title: Vice President
RICHMOND AMERICAN CONSTRUCTION, INC.
By:
-------------------------------------------
Name: Xxxx X. Xxxxxx
Title: Vice President
RAH TEXAS HOLDINGS, LLC
By:
-------------------------------------------
Name: Xxxx X. Xxxxxx
Title: Vice President
12
RAH OF TEXAS, LP
By: Richmond American Homes of Texas, Inc.,
its general partner
By:
-------------------------------------------
Name: Xxxx X. Xxxxxx
Title: Vice President
13
EXHIBIT A TO GUARANTY
FORM OF SUPPLEMENTAL GUARANTY
[Date]
Bank One, NA, as Administrative Agent
for Lenders
Ladies and Gentlemen:
Reference is hereby made to (i) that certain Credit Agreement dated as
of April 8, 2004, among M.D.C. Holdings, Inc., the Lenders from time to time
parties thereto ("Lenders"), and Bank One, NA, as Administrative Agent
("Administrative Agent") for Lenders (as amended, restated, supplemented or
otherwise modified from time to time, the "Credit Agreement") and (ii) that
certain Guaranty, dated as of April 8, 2004, executed and delivered by the
Guarantors parties thereto in favor of Administrative Agent, for the benefit of
Lenders (as amended, restated, supplemented or otherwise modified from time to
time, the "Guaranty"). Terms not defined herein which are defined in the Credit
Agreement shall have for the purposes hereof the respective meanings provided
therein.
In accordance with Section 7.11 of the Credit Agreement and Paragraph
18 of the Guaranty, the undersigned, [GUARANTOR] ____________, a corporation
[limited partnership/limited liability company] organized under the laws of
___________, hereby elects to be a "Guarantor" for all purposes of the Credit
Agreement and the Guaranty, respectively, effective from the date hereof.
Without limiting the generality of the foregoing, the undersigned
hereby agrees to perform all the obligations of a Guarantor under, and to be
bound in all respects by the terms of, the Guaranty, to the same extent and with
the same force and effect as if the undersigned were a direct signatory thereto.
This Supplemental Guaranty shall be construed in accordance with and
governed by the internal laws of the State of Illinois (but otherwise without
regard to the conflict of laws provisions).
IN WITNESS WHEREOF, this Supplemental Guaranty has been duly executed
by the undersigned as of the __ day of ____, 200_.
[GUARANTOR]
By:
-------------------------------------------
Name:
Title:
14
EXHIBIT B
PROMISSORY NOTE
$______________ April __, 0000
Xxxxxxx, Xxxxxxxx
FOR VALUE RECEIVED, M.D.C. HOLDINGS, INC., a Delaware corporation
("Maker"), hereby promises and agrees to pay to the order of
__________________________________ ("Payee"), the principal sum of
_____________________________________ DOLLARS ($_____________) in lawful money
of the United States of America, or, if less than such principal amount, the
aggregate unpaid principal amount of all Advances made to Maker by the Payee
pursuant to the Credit Agreement hereinafter referenced. Such payment shall be
made on the Facility Termination Date, as defined in the Credit Agreement.
Maker shall pay interest from the date hereof on the unpaid principal
amount of this Note from time to time outstanding during the period from the
date hereof until such principal amount is paid in full at the rates, determined
in the manner, and on the dates or occurrences specified in the Credit Agreement
(as hereinafter defined).
This promissory note is one of the Notes referred to in the Credit
Agreement dated as of April __, 2004, among Maker, Bank One, NA, as
Administrative Agent, and Lenders that are parties thereto (as the same may be
amended, modified, replaced, or renewed from time to time, the "Credit
Agreement") and is entitled to the benefits of the Credit Agreement and the Loan
Documents. Capitalized terms used in this Note without definition shall have the
same meanings as are ascribed to such terms in the Credit Agreement.
Both principal and interest are payable to Administrative Agent for the
account of Payee pursuant to the terms of the Credit Agreement. All Advances
made by Payee pursuant to the Credit Agreement and all payments of the principal
amount of such Advances, shall be endorsed by the holder of this Note on the
schedule attached hereto. Failure to record such Advances or payment shall not
diminish any rights of Payee or relieve Makers of any liability hereunder or
under the Credit Agreement. This Note is subject to prepayment and its maturity
is subject to acceleration, in each case upon the terms provided in the Credit
Agreement.
This Note may not be modified or discharged orally, by course of
dealing or otherwise, but only by a writing duly executed by the holder hereof.
In the event that any action, suit or proceeding is brought by the
holder hereof to collect this Note, Maker agrees to pay and shall be liable for
all costs and expenses of collection, including without limitation, reasonable
attorneys' fees and disbursements.
Maker and all sureties, guarantors and/or endorsers hereof (or of any
obligation hereunder) and accommodation parties hereon (all of which, including
Maker, are each hereinafter called a "Surety") each: (a) waive any homestead or
exemption laws and right thereunder affecting the full collection of this Note;
(b) waive any and all formalities in
1
connection with this Note to the maximum extent allowed by law, including (but
not limited to) demand, diligence, presentment for payment, protest and demand,
and notice of extension, dishonor, protest, demand and nonpayment of this Note;
and (c) consent that Holder may extend the time of payment or otherwise modify
the terms of payment of any part or the whole of the debt evidenced by this
Note, at the request of any other person liable hereon, and such consent shall
not alter nor diminish the liability of any person hereon.
In addition, each Surety waives and agrees not to assert: (a) any right
to require the holder hereof to proceed against any other Surety, to proceed
against or exhaust any security for the Note, to pursue any other remedy
available to the holder hereof, or to pursue any remedy in any particular order
or manner; (b) the benefit of any statute of limitations affecting its liability
hereunder or the enforcement hereof; (c) the benefits of any legal or equitable
doctrine or principle of marshalling; (d) notice of the existence, creation or
incurring of new or additional indebtedness of Maker to the holder hereof; or
(e) any defense arising by reason of any disability or other defense of Maker or
by reason of the cessation from any cause whatsoever (other than payment in
full) of the liability of Maker for payment of this Note. Until payment in full
of this Note and the holder hereof has no obligation to make any further
advances of the proceeds hereof, no Surety shall have any right of subrogation
and each hereby waives any right to enforce any remedy which the holder hereof
now has, or may hereafter have, against Maker or any other Surety, and waives
any benefit of, and any right to participate in, any security now or hereafter
held by the holder hereof.
Maker agrees that to the extent any Surety makes any payment to the
holder hereof in connection with the indebtedness evidenced by this Note, and
all or any part of such payment is subsequently invalidated, declared to be
fraudulent or preferential, set aside or required to be repaid by Holder or paid
over to a trustee, receiver or any other entity, whether under any bankruptcy
act or otherwise (any such payment is hereinafter referred to as a "Preferential
Payment"), then the indebtedness of Maker under this Note shall continue or
shall be reinstated, as the case may be, and, to the extent of such payment or
repayment by the holder hereof, the indebtedness evidenced by this Note or part
thereof intended to be satisfied by such Preferential Payment shall be revived
and continued in full force and effect as if said Preferential Payment had not
been made.
This Note has been delivered in the City of Chicago and State of
Illinois, and shall be enforced under and governed by the laws of the State of
Illinois applicable to contracts made and to be performed entirely within said
state, without references to any choice or conflicts of law principles.
M.D.C. HOLDINGS, INC., a Delaware corporation
By:
-------------------------------------------
Name: Xxxx X. Xxxxxx
Title: Senior Vice President
2
