WAIVER AND FIRST AMENDMENT
EXHIBIT
10.1
EXECUTION
VERSION
WAIVER
AND FIRST AMENDMENT
WAIVER
AND FIRST AMENDMENT, dated as of October 10, 2007 (this “First
Amendment”), to and under the Credit Agreement, dated
as of July 25, 2007 (as heretofore amended, supplemented or otherwise modified,
the “Credit Agreement”), among Beazer Homes USA, Inc., a Delaware
corporation (the “Borrower”), the several lenders from time to time
parties thereto (the “Lenders”) and Wachovia Bank, National Association,
as agent (in such capacity, the “Agent”).
W
I T
N E S S E T H :
WHEREAS,
the Borrower, the Lenders and the Agent are parties to the Credit
Agreement;
WHEREAS,
the Borrower has advised the Agent and the Lenders that it intends to restate
its financial statements for the fiscal quarters ended June 30, 2007, March
31,
2007 and December 31, 2006 and each of the fiscal years ended September 30,
2006, September 30, 2005, September 30, 2004, September 30, 2003 and September
30, 2002 and each fiscal quarter occurring during such fiscal years (the
“Restatement”) in connection with the findings and conclusions made by
the Borrower’s Audit Committee during its investigation of certain accounting
matters described on Schedule I (the “Audit Committee
Report”);
WHEREAS,
the Borrower has further advised, and hereby acknowledges to, the Agent and
the
Lenders that as a result of (x) the matters identified in the Audit Committee
Report giving rise to the Restatement and (y) the alleged violation of the
applicable Senior Indentures asserted by the applicable indenture trustee
thereunder in the notices of default delivered to the Borrower on September
6,
2007 and September 7, 2007, (i) Events of Default have occurred and are
continuing under Section 8.01(2) of the Credit Agreement by reason of the
Borrower’s breach of the representations and warranties contained in Sections
4.04 (Financial Statements) and Section 4.17 (Accuracy of Information) of the
Credit Agreement, (ii) Events of Default may have occurred and be continuing
under Section 8.01(2) of the Credit Agreement by reason of the Borrower’s breach
of the representations and warranties contained in Section 4.06 (Other
Agreements), Section 4.07 (Litigation) and Section 4.14 (Laws; Environment)
of
the Credit Agreement, (iii) Defaults and Events of Default have occurred and
are
continuing under Section 8.01(3) of the Credit Agreement by reason of the
Borrower’s failure to comply with the covenants contained in Section 5.08(1)
(Quarterly Financial Statements), Section 5.08(2) (Annual Financial Statements),
Section 5.08(7) (Compliance Certificate), Section 5.08(11) (Notice of Defaults
and Events of Default) and Section 5.09 (Subsidiary Reporting Requirements)
of
the Credit Agreement, (iv) Defaults and Events of Default may have occurred
and
be continuing under Section 8.01(3) of the Credit Agreement by reason of the
Borrower’s failure to comply with the covenant contained in Section 5.06
(Compliance with Laws) and Section 5.08(6) (Borrowing Base Certificate), (v)
Defaults and Events of Default will occur and be continuing under Section
8.01(3) of the Credit Agreement, but for the waivers contained in this First
Amendment, by reason of the Borrower’s failure to comply with the requirements
contained in Section 5.08(2) (Annual Financial Statements), Section 5.08(4)(b)
(Variance Analysis), Section 5.08(7) (Compliance Certificate) and Section
5.08(9) (Accountant’s Report) to deliver financial statements for the fiscal
year of the Borrower ending September 30, 2007 and the required accompanying
certificates and letter, (vi) Defaults and Events of Default will occur and
be
continuing under Section 8.01(3) of the Credit Agreement, but for the waivers
contained in this First Amendment, by reason of the Borrower’s failure to comply
with the requirements contained in Section 5.08(1) (Quarterly Financial
Statements), Section 5.08(4)(a) (Variance Analysis) and Section 5.08(7)
(Compliance Certificate) to deliver financial statements for the Borrower’s
fiscal quarter ending December 31, 2007 and the required accompanying
certificates, and (vii) Defaults and Events of Default will occur and be
continuing under Section 8.01(3) of the Credit Agreement, but for the waivers
contained in this First Amendment, by reason of the Borrower’s failure to comply
with the requirements contained in Section 5.09 (Subsidiary Reporting
Requirements) to deliver financial statements of the Borrower’s Subsidiaries;
and
WHEREAS,
the Borrower further acknowledges that as a result of the Defaults and Events
of
Default described in the immediately preceding paragraph, the Lenders have
no
obligation to make any further extensions of credit;
WHEREAS,
the Borrower has requested that the Lenders waive such Defaults and Events
of
Default to afford the Borrower an opportunity to restate its financial
statements and the financial statements of its Subsidiaries, and the Lenders
are
agreeable to such request but only upon the terms and subject to the conditions
set forth herein;
NOW,
THEREFORE, in consideration of the premises and the mutual agreements contained
herein, and for other valuable consideration the receipt of which is hereby
acknowledged, the Borrower, the Lenders, and the Agent agree as
follows:
SECTION
1. DEFINITIONS. Unless
otherwise defined herein, capitalized terms are used herein as defined in the
Credit Agreement.
SECTION
2. WAIVERS.
2.1 The
Lenders hereby waive:
(a)
any Defaults or Events of Default
under Section 8.01(2) and (3) of the Credit Agreement arising solely (i) by
reason of the representations and warranties contained in Sections 4.04
(Financial Statements), 4.06 (Other Agreements), 4.07 (Litigation), 4.14 (Law;
Environment) and 4.17 (Accuracy of Information) of the Credit Agreement having
proven to have been incorrect, incomplete or misleading as a result of the
matters identified in the Audit Committee Report giving rise to the Restatement
and (ii) by reason of the Borrower’s failure to comply with the covenants
contained in Section 5.06 (Compliance with Laws), Section 5.08(1) (Quarterly
Financial Statements), Section 5.08(2) (Annual Financial Statements), Section
5.08(4) (Variance Analysis), Section 5.08(6) (Borrowing Base Certificate),
Section 5.08(7) (Compliance Certificate), Section 5.08(10) (Notice of
Litigation), Section 5.08(11) (Notice of Defaults and Events of Default) and
Section 5.09 (Subsidiary Reporting Requirements) of the Credit Agreement as
a
result of the matters identified in the Audit Committee Report giving rise
to
the Restatement;
(b)
compliance with the covenants
contained in (i) Sections 5.08(2) (Annual Financial Statements), 5.08(4)(b)
(Variance Analysis), 5.08(7) (Compliance Certificate), 5.08(9) (Accountant’s
Report) and 5.09(2) (Annual Financial Statements) of the Credit Agreement for
the fiscal year of the Borrower ended September 30, 2007 and (ii) Sections
5.08(1) (Quarterly Financial Statements), 5.08(4)(a) (Variance Analysis),
5.08(7) (Compliance Certificate) and 5.09(1) (Quarterly Financial Statements)
of
the Credit Agreement for the fiscal quarter of the Borrower ending December
31,
2007, in each case as a result of the matters identified in the Audit Committee
Report giving rise to the Restatement; provided that the foregoing
waivers in this clause (b) above shall be conditioned upon (x) until delivery
of
the Restated Financial Statements in accordance with clause (y) below, the
Borrower furnishing to the Agent, within the time frames therefor set forth
in
Section 5.08(1), 5.08(2), 5.09(1) and 5.09(2) of the Credit Agreement, the
financial statements required therein except that such financial statements
shall not be required to be audited or reviewed by auditors and shall be
accompanied by a certificate of the President or the Chief Financial Officer
of
the Borrower certifying (i) that such financial statements were prepared in
good faith, based upon reasonable assumptions and fairly present, in all
material respects, the financial position and results of operations of the
Borrower for the period indicated, subject to the Restatement (such financial
statements, the “Interim Financial Statements”), (ii) the Borrower’s
compliance with all financial covenants, including without limitation those
set
forth in Section 6.10 and Article VII of the Credit Agreement, which certificate
shall set forth in reasonable detail the computation thereof and (iii) that
to
the best of his knowledge no Default or Event of Default has occurred and is
continuing, or if a Default or Event of Default has occurred and is continuing,
a statement as to the nature thereof and the action which is proposed to be
taken with respect thereto and (y) the Borrower furnishing to the Agent for
delivery to each of the Lenders no later than 3:00 p.m. (New York City time)
on
May 15, 2008 (i) the annual financial statements and related materials required
by Sections 5.08(2), 5.08(4)(b), 5.08(7), 5.08(9) and 5.09(2) of the Credit
Agreement in respect of the fiscal year of the Borrower ended September 30,
2007
and (ii) the quarterly financial statements and related materials required
by Sections 5.08(1), 5.08(4)(a), 5.08(7) and 5.09(1) of the Credit Agreement
in
respect of the fiscal quarter ending December 31, 2007 (all such financial
statements described in clauses (i) and (ii), the “Restated Financial
Statements”); and
(c)
any Defaults or Events of Default
under Section 8.01(2), (3) and (4) of the Credit Agreement arising solely as
a
result of the violation of the applicable Senior Indentures asserted by the
applicable indenture trustee thereunder in the notices of default delivered
to
the Borrower on September 6, 2007 and September 7, 2007 (it being understood
that the Lenders shall not be deemed to have waived any Defaults or Events
of
Default hereunder arising from the acceleration of the obligations under any
of
the Senior Indentures, whether or not as a result of the matters asserted in
such notices of default).
SECTION
3. AMENDMENTS
AND OTHER AGREEMENTS.
3.1 Amendment
to Section 1.01.
(a) Section
1.01 of the Credit Agreement is hereby amended by inserting the following new
definitions in their appropriate alphabetical order:
“Acceptable
Appraisal” means an appraisal commissioned by and addressed to the Agent
(reasonably acceptable to the Agent as to form, assumptions, substance, and
appraisal date), prepared by a qualified professional appraiser reasonably
acceptable to the Agent, and complying in all material respects with the
requirements of the Federal Financial Institutions Reform, Recovery and
Enforcement Act of 1989.
“Aggregate
Outstanding Extensions of Credit” means, at any time, the sum of the aggregate
principal amount of all Loans (including all Swing Line Loans) and the Facility
Letter of Credit Obligations, in each case outstanding at such
time.
“Appraised
Value” means, with respect to any Real Property or any portion thereof, the
appraised value of such Real Property or portion thereof set forth in the
most-recent Acceptable Appraisal obtained by the Agent pursuant to the Loan
Documents. The Appraised Value of (a) a Real Property shall be
adjusted to take into account any portion that has been sold or otherwise
transferred, and (b) a portion of a Real Property shall be calculated based
upon the Acceptable Appraisal for such Real Property and allocated to such
portion of such Real Property by the Borrower based upon a reasonable
methodology approved by the Agent, including a methodology to reflect the value
of ongoing or completed construction of Housing Units and improvements to Lots
under Development.
“Adjusted
Cash Flow from Operations” means, for any period of four consecutive fiscal
quarters of the Borrower and its Subsidiaries (other than those Subsidiaries
that are not Guarantors), the sum of (a) the cash generated by (or used in)
operating activities, as calculated on the quarterly financial statements for
the Borrower and its Subsidiaries, on a consolidated basis for such period,
as
determined in accordance with GAAP, such amount being reflected in the line
item
designated “Net Cash (used in) provided by operating activities” on the
Borrower’s quarterly financial statements, plus (b) Interest Incurred of the
Borrower and its Subsidiaries, on a consolidated basis for such four consecutive
fiscal quarters, as determined in accordance with GAAP.
“Audit
Committee Report” has the meaning set forth in the First Amendment.
“Cash
Collateral Agreement” means the Cash Collateral Agreement to be executed and
delivered by the Borrower in accordance with Section 5.16, in form and substance
reasonably satisfactory to the Agent and the Borrower.
“Collateral”
means all property of the Loan Parties, now owned or hereafter acquired, upon
which a Lien is purported to be created by any Security Document.
“Collateral
Agreement” means the Collateral Agreement to be executed and delivered by the
Borrower and each Subsidiary Guarantor in accordance with Section 5.16, in
form
and substance reasonably satisfactory to the Agent and the
Borrower.
“Collateral
Release Conditions” means the collective reference to the following conditions:
(a) the Restated Financial Statements shall have been filed with the Securities
and Exchange Commission, (b) no Default or Event of Default shall have occurred
and be continuing under this Agreement, (c) the Senior Notes Resolution shall
have occurred and (d) the Borrower shall have maintained an Interest Coverage
Ratio (determined for the last four quarter period then most recently ended)
of
not less than 1.75 to 1.00 for two consecutive fiscal quarters then most
recently ended.
“Collateral
Release Date” means the date on which the Collateral Release Conditions have
been satisfied in accordance with Section 2.01.2(b)(v).
“Construction
Inspector” means the architectural or engineering firm or such party which the
Agent shall designate to perform various services on behalf of the Agent and
the
Lenders. The services to be performed by the Construction Inspector
shall include inspections, review of the plans and all proposed changes to
them,
preparation of a “cost breakdown” construction analysis, periodic inspections of
construction work for conformity with the plans, approval of draw requests
and
the issuance of reports and certifications solely for the benefit of the Agent
and the Lenders and shall not impose upon the Agent or any Lender any obligation
to make inspections, or to correct or require any other Person to correct any
defects, or to notify any Person with respect to such defects,.
“First
Amendment” means the Waiver and First Amendment, dated as of October 10,
2007, to and under this Agreement.
“First
Amendment Effective Date” means the date that the First Amendment becomes
effective in accordance with its terms.
“Interest
Incurred” means, for any period, the sum (on a consolidated basis for the
Borrower and its Subsidiaries (other than those Subsidiaries which are not
Guarantors)) of all interest incurred (whether expensed or capitalized) of
the
Borrower and its Subsidiaries, less the amount of interest income for such
period.
“Loan
Party” means the Borrower and each Guarantor.
“Mortgaged
Property” means the real estate of the Loan Parties, as to which the Agent for
the benefit of the Lenders has been granted a Lien pursuant to a
Mortgage.
“Mortgages”
means each of the mortgages, deeds of trust and similar instruments (including
any spreader, amendment, restatement or similar modification of any existing
Mortgage) made by any Loan Party in favor of the Agent or for the benefit of
the
Agent, for the benefit of the Lenders, in form and substance reasonably
satisfactory to the Agent and the Borrower.
“Mortgage
Condition” means, as to any Qualified Real Property of the Loan Parties, (a) the
Agent shall have received a Mortgage with respect to each Mortgaged Property
encumbered by such Mortgage, executed and delivered by a duly authorized officer
of each party thereto, (b) if requested by the Agent, the Agent shall have
received, and the title insurance company issuing the policy referred to in
clause (c) below (the “Title Insurance Company”) shall have received,
maps or plats or an as-built survey of the sites of the Mortgaged Properties
either certified to the Agent and the Title Insurance Company in a manner
satisfactory to them, dated a date reasonably satisfactory to the Agent and
the
Title Insurance Company by an independent professional licensed land surveyor
reasonably satisfactory to the Agent and the Title Insurance Company or
otherwise acceptable to the Title Insurance Company to induce the Title
Insurance Company to remove any survey exception from the policy referred to
in
clause (c) below and issue customary survey-dependent endorsements, (c) the
Agent shall have received in respect of each Mortgaged Property a mortgagee’s
title insurance policy (or policies) or marked up unconditional binder for
such
insurance, in each case in form and substance reasonably satisfactory to the
Agent, (d) the Agent shall have received evidence satisfactory to it that all
premiums in respect of each such policy referred to in clause (c) above, all
charges for mortgage recording tax, and all related expenses, if any, have
been
paid, (e) if requested by the Agent, the Agent shall have received (A) a policy
of flood insurance that (1) covers any parcel of improved real property that
is
encumbered by any Mortgage and (2) provides coverage in an amount not less
than
the outstanding principal amount of the indebtedness secured by such Mortgage
that is reasonably allocable to such real property or the maximum limit of
coverage made available with respect to the particular type of property under
the National Flood Insurance Act of 1968, whichever is less, and (B)
confirmation that the Borrower has received the notice required pursuant to
Section 208(e)(3) of Regulation H of the Board, (f) the Agent shall have
received a copy of all recorded documents referred to, or listed as exceptions
to title in, the policy or policies referred to in clause (c) above and a copy
of all other material documents affecting the Mortgaged Properties, (g) the
Agent shall have received evidence that counterparts of such Mortgages have
been
filed in the offices that the Agent may reasonably deem necessary or desirable
in order to create a valid Lien on the property described therein in favor
of
the Agent and evidence that all other actions that the Agent may reasonably
deem
necessary or desirable in order to create valid and perfected first priority
Liens on the Mortgaged Properties has been taken, subject to Liens permitted
by
Section 6.01(1) through (6) to the extent such Liens are senior in priority
to
the Lien created by the Mortgage by operation of law and Liens that are
exceptions to coverage in the title policies referred to in clause (c) above
and
(h) the Agent shall have received a letter of opinion of local counsel addressed
to the Agent and the Lenders in states in which the Qualified Real Property
is
located with respect to the enforceability and validity of the Mortgages and
any
related fixture filings in form and substance reasonably satisfactory to the
Administrative Agent.
“Permitted
Secured Debt Conditions” means, with respect to any Secured Debt permitted to be
incurred under Section 6.02, the collective reference to the following
conditions: (i) no Default or Event of Default shall have occurred and be
continuing and (ii) all representations and warranties shall be true and correct
in all material respects immediately prior to, and immediately after giving
effect to, the incurrence of such Secured Debt.
“Qualified
Real Property” means, with respect to any Loan Party, all Real Property that is
owned solely by such Person; provided that no Real Property shall be
considered for inclusion as Qualified Real Property unless (a) the Agent shall
have received an Acceptable Appraisal (the fees and expenses associated with
such Acceptable Appraisal to be paid by the Borrower in accordance with the
terms of this Agreement), (b) the Agent shall be satisfied that all actions
necessary or desirable in order to create perfected first priority Lien on
such
real property have been taken, including, the filing and recording of Mortgages
and (c) the Agent shall have received an environmental assessment report, in
form and substance reasonably satisfactory to the Agent from an environmental
consulting firm reasonably satisfactory to the Agent (it being understood that
in satisfaction of this clause (c), the Agent shall accept Phase I environmental
reports which have been prepared no more than two years prior to the date of
delivery thereof or if any such report was prepared more than two years prior
to
the date of delivery thereof, an environmental database update with respect
thereto, so long as each such report and update is in form and substance
reasonably satisfactory to the Agent).
“Real
Property” means all of those plots, pieces or parcels of land now owned, leased
or hereafter acquired or leased by a Loan Party (the “Land”), together
with the right, title and interest of such Loan Party in and to the streets,
the
land lying in the bed of any streets, roads or avenues, opened or proposed,
in
front of, the air space and development rights pertaining to the Land and the
right to use such air space and development rights, all rights of way,
privileges, liberties, tenements, hereditaments and appurtenances belonging
or
in any way appertaining thereto, all fixtures, all easements now or hereafter
benefiting the Land and all royalties and rights appertaining to the use and
enjoyment of the Land necessary for the residential development of such Land,
together with all of the buildings and other improvements now or hereafter
erected on the Land, and any fixtures appurtenant thereto. It is
understood that any calculation of the book value of Real Property shall be
calculated as of the month end last reported in a Borrowing Base
Certificate.
“Restated
Financial Statements” has the meaning set forth in the First
Amendment.
“Restated
Financial Statements Delivery Date” means the date on which the Restated
Financial Statements shall have been delivered in accordance with Section 2.1(b)
of the First Amendment.
“Restatement”
has the meaning set forth in the First Amendment.
“Secured
Borrowing Base” means, with respect to any date of determination, an amount
equal to the sum of the following assets of the Loan Parties with respect which
the Borrower shall have satisfied the Secured Borrowing Base
Conditions: an amount equal to (i) 100% of the Unrestricted Cash
plus (ii) 100% of the book value of Receivables from Housing Unit
Closings plus (iii) 30% of the book value of Lots under
Development plus (iv) 50% of the book value of Finished Lots plus
(v) 65% of the book value of Speculative Housing Units plus (vi) 80% of
the book value of Housing Units under Contract; provided that if the
Agent has an Acceptable Appraisal with respect to a Real Property (or any
portion thereof) that is included in the Secured Borrowing Base, then the amount
of availability includable in the Secured Borrowing Base attributable to such
Real Property (or portion thereof) shall be equal to the lesser of (A) the
amounts calculated as set forth above and (B) the amounts that would be
calculated as set forth using the Appraised Value of such Real Property (or
portion thereof) instead of book value. Notwithstanding anything to
the contrary herein, (x) not more than 30% of the total aggregate Secured
Borrowing Base (including, without limitation, Unrestricted Cash and
Receivables) shall be comprised of Lots Under Development and Finished Lots
and
(y) not more than 25% of the total aggregate Secured Borrowing Base (including,
without limitation, Unrestricted Cash and Receivables) shall be comprised of
Secured Borrowing Base Assets of the type described in the foregoing clauses
(iii) through (vi) that relate to property located in a Single
Market.
“Secured
Borrowing Base Assets” means those assets of the Loan Parties with respect to
which the Secured Borrowing Base Conditions shall have been
satisfied.
“Secured
Borrowing Base Conditions” means those conditions set forth on Schedule
IV.
“Security
Documents” means the collective reference to the Cash Collateral Agreement, the
Collateral Agreement, the Mortgages and all other security documents hereafter
delivered to the Agent granting a Lien on any property of any Person to secure
the Obligations of the Loan Parties under any Loan Document.
“Senior
Notes Litigation” means the litigation captioned “Beazer Homes USA, Inc. v. U.S.
Bank National Association and U.S. Bank Trust National Association”, Civil
Action, File No. 1:07-CV-2006-JEC, pending in the United States District Court
for the Northern District of Georgia (Atlanta Division), commenced on or about
September 10, 2007.
“Senior
Notes Resolution” means, so long as no action has been taken by the applicable
trustee under the Senior Indentures to exercise rights and remedies thereunder,
the occurrence of either (i) a final and nonappealable order entered in favor
of
the Borrower in the Senior Notes Litigation or (ii) any settlement of the Senior
Notes Litigation by entry of a final, nonappealable order dismissing the Senior
Notes Litigation with prejudice.
“Single
Market” means the reference to each separate metropolitan statistical area
identified on Schedule V, as updated by the Borrower from time to
time.
(b) Section
1.01 of the Credit Agreement is hereby amended by inserting in the definition
of
“Borrowing Base Availability” after “Borrowing Base” therein the phrase “or the
Secured Borrowing Base, as applicable,”.
(c) Section
1.01 of the Credit Agreement is hereby amended by inserting in the definition
of
“Borrowing Base Debt” after “means” the phrase: “(a) at any time prior to the
Collateral Release Date, the Aggregate Outstanding Extensions of Credit and
(b)
at any time on and after the Collateral Release Date,”.
(d) Section
1.01 of the Credit Agreement is hereby amended by inserting in the definition
of
“Inventory Valuation Date” at the end thereof immediately before the period
therein “and, at any time prior to the Collateral Release Date, Section
2.01.2(b)(ix)”.
(e) Section
1.01 of the Credit Agreement is hereby amended by deleting in its entirety
the
definition of “Loan Documents” inserting in lieu thereof the
following:
“Loan
Documents” means this Agreement, the Notes, the Guaranties, the Security
Documents, the Reimbursement Agreements, and any and all documents delivered
hereunder or pursuant hereto.”.
(f) Section
1.01 of the Credit Agreement is hereby amended by inserting in the definition
of
“Secured Debt” immediately after the word “excluding” the phrase “the
Obligations, the obligations under the Senior Indentures and”.
(g) Section
1.01 of the Credit Agreement is hereby amended by inserting in the definition
of
“Unrestricted Cash” at the end thereof immediately prior to the period therein
“, except to the extent such cash is identified as “restricted” as a result of
the Liens pursuant to the Security Documents”.
3.2 Amendments
to Section 2.01.2
(a) Section
2.01.2 of the Credit Agreement is hereby amended by deleting such Section in
its
entirety and inserting in lieu thereof the following:
“Section
2.01.2 Borrowing Bases.
(a)
Borrowing Base. At any time after the Collateral Release Date
when the Borrower’s senior unsecured long-term debt does not have a rating of
BBB- or higher from S&P or Baa3 or higher from Xxxxx’x, (i) the aggregate
amount of Borrowing Base Debt at any one time outstanding may not exceed the
Borrowing Base as of the most recent Inventory Valuation Date and (ii) no Loan
shall be made, and no Facility Letter of Credit shall be issued or amended,
that
would have the effect of increasing the then outstanding amount of the Borrowing
Base Debt to an amount exceeding such Borrowing Base, provided that a
Loan shall not be deemed to have increased the amount of the Borrowing Base
Debt
to the extent that the proceeds of such Loan are immediately used to repay
a
Swing Line Loan theretofore included in the Borrowing Base Debt.
(b) Secured
Borrowing Base. (i) On and after the First Amendment Effective
Date, (A) the aggregate amount of Aggregate Outstanding Extensions of Credit
at
any one time outstanding shall not exceed the Secured Borrowing Base as of
the
most recent date of determination and (B) no Loan shall be made, and no Facility
Letter of Credit shall be issued or amended, if after giving effect to the
incurrence of such Loan or the issuance or amendment of such Facility Letter
of
Credit, the then outstanding amount of the Aggregate Outstanding Extensions
of
Credit shall exceed the Secured Borrowing Base as of the most recent date of
determination; provided that a Loan shall not be deemed to have increased
the amount of the Aggregate Outstanding Extensions of Credit to the extent
that
the proceeds of such Loan are immediately used to repay a Swing Line Loan
theretofore included in the calculation of Aggregate Outstanding Extensions
of
Credit. On and after the Collateral Release Date, the Borrower shall
no longer be required to comply with this Section 2.01.2(b), which Section
shall
have no further force and effect.
(ii) The
Borrower may, upon not less than seven days’ prior notice, request in writing
that the Agent release its Liens on Mortgaged Properties or any portion thereof
that the Borrower or the applicable Loan Party has a Housing Unit under Contract
to be sold in the ordinary close of business with a closing date that is within
thirty days of the requested release. In the event that the Agent
receives such request in accordance herewith, then the Agent shall release
its
Liens on such Mortgaged Property (or the portion thereof, including any related
personal property) within five Business Days prior to the date of the Housing
Unit Closing so long as the net proceeds of such sale are paid to the Agent
to
be applied to repay the outstanding Loans and/or cash collateralize outstanding
Facility Letters of Credit. Upon the release of the Agent’s Liens on
any portion of the Mortgaged Properties, such portion of the Mortgaged
Properties shall no longer be included in the calculation of the Secured
Borrowing Base as reflected in the next Borrowing Base Certificate to be
delivered by the Borrower.
(iii) With
respect to Unrestricted Cash or Mortgaged Property included in the calculation
of the Secured Borrowing Base, from time to time, the Borrower may request
in
writing (which in the case of any release of Unrestricted Cash in exchange
for
the pledge of Mortgaged Property, shall include a certification that any such
Unrestricted Cash released shall be paid in immediately available funds to
the
Loan Party which shall have pledged such Mortgaged Property substituting
therefor), that the Agent release its Lien on (x) such Unrestricted Cash, (y)
such Mortgaged Property (or any portion thereof, including any related personal
property) in order to substitute one or more Mortgaged Properties in lieu
thereof or (z) on Unrestricted Cash or Mortgaged Property (or any portion
thereof, including any related personal property), or any combination thereof
as
the Borrower may determine in its sole discretion at any time that the Secured
Borrowing Base exceeds the Aggregate Outstanding Extensions of Credit as of
the
most recent date of determination in an amount not to exceed such
excess. In the event that the Agent receives such request in
accordance herewith, then the Agent shall, (A) so long as no Event of Default
has occurred and is continuing or would result therefrom and (B) either after
giving effect to such release and any substitution of Mortgaged Properties
(or
any portion thereof) (I) the Aggregate Outstanding Extensions of Credit does
not
exceed the lesser of the Secured Borrowing Base and the Aggregate Commitment,
or
(II) the Required Lenders approve such release, then within ten days of such
request, release its Lien on such Unrestricted Cash or such Mortgaged Property
(or any portion thereof, including any related personal property);
provided that (X) if Unrestricted Cash is subject to the request for
release, (Y) in the case of a release described in clause (z) above or (Z)
if
Mortgaged Property subject to the request for a release constitutes more than
10% of the book value of the aggregate Secured Borrowing Base Assets used in
the
calculation of the Secured Borrowing Base, then the Borrower shall provide
to
the Agent an updated Borrowing Base Certificate evidencing compliance with
the
Secured Borrowing Base as described above. Any Unrestricted Cash
released hereunder in exchange for Mortgaged Property shall be paid in
immediately available funds to the Loan Party which shall have pledged such
Mortgaged Property substituting therefor. Upon the release of the
Agent’s Liens on any Unrestricted Cash or Mortgaged Property, such Unrestricted
Cash or Mortgaged Property shall no longer be included in the calculation of
the
Secured Borrowing Base.
(iv) A
Loan Party may,
without the consent of any Lender, the Agent or any other Person, (A) make
immaterial dispositions (including, but not limited to, lot line
adjustments) of portions of any Mortgaged Property for dedication or public
use
to, or permit the creation of Liens to secure the levy of special assessments
in
favor of, governmental authorities, community development districts and property
owners’ associations, (B) make immaterial dispositions of portions of the
Mortgaged Property to third parties for the purpose of resolving any
encroachment issues, (C) grant easements, restrictions, covenants, reservations
and rights-of-way for resolving minor encroachment issues or for access, water
and sewer lines, telephone, cable and internet lines, electric lines or other
utilities or for other similar purposes, and (D) consent to or join in any
land
use or other development approval documents (including subdivision plats,
easements and the like) provided that such disposition, grant or consent is
usual and customary in the normal course of the Borrower’s development business
and otherwise does not materially impair the value, utility or operation of
the
applicable Mortgaged Property. In connection with any disposition or
creation of any Lien or any grant or consent permitted pursuant to this Section,
the Agent shall execute and deliver or cause to be executed and delivered any
instrument reasonably necessary or appropriate in the case of the dispositions
referred to above to release the portion of the Mortgaged Property affected
by
such disposition from the Lien of the applicable Mortgage, or to subordinate
the
Lien of the applicable Mortgage, or acknowledge that the Lien of any Mortgage
is
subordinate, to such Liens, easements, restrictions, covenants, reservations
and
rights-of-way or other similar grants, or to evidence such consent or joinder,
in each case upon receipt by the Agent of (x) five Business Days’ prior written
notice thereof; (y) a copy of the applicable instrument or instruments of
disposition or subordination; and (z) a certificate from an officer of the
Borrower stating that such disposition is usual and customary in the normal
course of the Borrower’s development business and otherwise does not materially
impair the value, utility or operation of the applicable Mortgaged
Property.
(v) The
Agent and the Lenders hereby agree that (A) upon satisfaction of the Collateral
Release Conditions, all of the security interests in, and Liens on, the
Collateral, shall be deemed to be forever released, discharged and terminated,
(B) upon satisfaction of the Permitted Secured Debt Conditions, all of the
security interests and Liens shall be deemed to be forever released, discharged
and terminated on the applicable Collateral being pledged to the secured party
providing the Secured Debt only to the extent such Secured Debt is permitted
under Section 6.02 (it being understood that, in the case of this clause (B),
no
Liens shall be released, discharged or terminated on Collateral included in
the
Secured Borrowing Base and the proceeds thereof) and (C) upon the occurrence
of
the Termination Date prior to the Collateral Release Date and payment in full
of
all the outstanding Obligations (or, with respect to outstanding Facility
Letters of Credit, cash collateralization or other arrangements reasonably
satisfactory to Issuing Lenders therefor and the Agent) all of the security
interests in, and Liens on, the Collateral, shall be deemed to be forever
released, discharged and terminated. In the case of the foregoing
clause (A), all provisions herein related to the Secured Borrowing Base and
Liens of the Agent on Collateral shall be deemed automatically terminated and
of
no further force and effect from and after the date that the Collateral Release
Conditions shall have been satisfied. From and after the date
that the Collateral Release Conditions or the Permitted Secured Debt Conditions,
as the case may be, shall have been satisfied or the Termination Date shall
have
occurred and all outstanding Obligations shall have been paid in full (or,
with
respect to outstanding Facility Letters of Credit, cash collateralized or
provided for pursuant to other arrangements reasonably satisfactory to Issuing
Lenders therefor and the Agent), the Agent shall (x) execute (as applicable)
and
deliver Uniform Commercial Code termination statements (and to, the extent
permitted under the Uniform Commercial Code in effect in any relevant
jurisdiction, does hereby authorize the Loan Parties from and after the date
that the Collateral Release Conditions or the Permitted Secured Debt Conditions,
as the case may be, shall have been satisfied to file, or cause to be filed,
such termination statements), intellectual property release documents and such
other instruments of release and discharge pertaining to the security interests
and other Liens granted to the Agent pursuant to the Security Documents in
any
of the Collateral being so released as the Borrower may reasonably request
to
effectuate, or reflect of public record, the release and discharge of all such
security interests and Liens and (y) deliver promptly all Collateral in its
possession to the extent that the Liens on such Collateral are being released,
discharged or terminated. All of the foregoing deliveries shall be at
the expense of the Borrower, with no liability to the Agent or any Lender,
and
with no representation or warranty by or recourse to the Agent or any
Lender.
(vi) The
Agent will be entitled to obtain, and at the request of Required Lenders shall
obtain, at Borrower’s expense a new Acceptable Appraisal of each Real Property
(or any portion thereof) included in the Secured Borrowing Base, but not more
than once every twelve (12) months during the term of this Agreement;
provided that, in addition to the foregoing, the Agent will be entitled
to obtain, at the Borrower’s expense, additional Acceptable Appraisals of any
such Real Property (or any portion thereof) if (x) an Event of Default
exists or (y) an appraisal is required under applicable Law.
(vii) The
Secured Borrowing Base shall be administered by the Agent in accordance with
such requirements as may be established by the Agent from time to
time. Administration of the Secured Borrowing Base shall include,
without limitation:
(A) Inspections. The
Agent, Construction Inspector or their respective employees, agents or
representatives shall be entitled to inspect the Collateral included in the
Secured Borrowing Base from time to time, as follows: (I) at the Agent's option,
but typically no more than once each quarter, the Construction Inspector may
review the inventory status from the financial records of the Loan Parties,
which will include sales reports, copies of contracts, paid invoices, etc.;
(II)
at the Agent's option, a portion of the vertical construction will be selected
at random, but extensions will not be predicated upon satisfactory inspections
prior to the extension of such credit; (III) at the Agent's option, at least
once each quarter, the Construction Inspector may review up to 5% of the Housing
Units of two divisions of the Loan Parties included in the Secured Borrowing
Base; (IV) land development work for Mortgaged Properties in which Loan
proceeds are requested to be advanced will be inspected periodically by the
Construction Inspector at the Agent's sole discretion; and (V) material negative
variances will be discussed with the Borrower and, if not satisfactorily
resolved, will be reflected in the current month’s Borrowing Base
Certificate. All inspections made by the Agent, Construction
Inspector or their respective employees, agents or representatives, shall be
made solely and exclusively for the protection and benefit of the Lenders and
neither the Borrower nor any other Person shall be entitled to claim any loss
or
damage against the Agent, the Construction Inspector, any Lender or any of
their
respective employees, agents or representatives for failure to properly
discharge any alleged duties of the Agent.
(B) Work-in-Progress
Documentation. The Agent shall be
entitled
to inspect not more than once each quarter the documentation with respect to
all
work-in-progress including, without limitation, sales contracts, end loan
commitments, buyer deposits, lot purchase closing statements, certificates
of
occupancy, notices of commencement, etc. Further, the Agent may
request such documentation monthly with respect to a random sample pool of
such
documentation.
(C) Budget. Upon
request of the Agent from time to time, a budget setting forth the estimates
of
the total cost of construction for specific Housing Units included in the
Secured Borrowing Base shall be provided by the Borrower to the Agent, at the
Borrower’s sole expense.
(D) Plan
and Cost Review. Upon request of the Agent from time to time,
plans and cost budgets with respect to land development work in respect of
Mortgaged Properties included in the Secured Borrowing Base shall be provided
by
the Borrower to the Agent, at the Borrower’s expense.
(E) Title
Updates. The Agent may require, from time to time, such title
updates (including without limitation, ownership and encumbrance reports) with
respect to the Collateral in the Secured Borrowing Base to confirm the lien
status of such Collateral (in particular, that the Security Documents continue
to constitute a first lien on and security interest in such Collateral subject
only to Permitted Encumbrances), as the Agent deems reasonably prudent all
at
the Borrower’s sole expense.
(viii) The
Borrower shall pay all reasonable fees and expenses associated with any of
the
actions taken under this Section 2.01.2(b) including, without limitation,
(A) all reasonable fees and charges with respect to any appraisal,
re-appraisal, and survey costs, (B) title insurance charges and premiums,
(C) title search or examination costs, including abstracts, abstractors'
certificates and uniform commercial code searches, (D) judgment and tax
lien searches for each Loan Party, (E) reasonable fees and costs of
environmental investigations site assessments and remediations,
(F) recordation taxes, documentary taxes, transfer taxes and mortgage
taxes, and (G) filing and recording fees.
(ix) The
Secured Borrowing Base shall be calculated at the times and in the manner set
forth below in this Section:
(A) Within
thirty-five (35) days after the end of each calendar month, beginning with
the
calendar month ending October 31, 2007, and at such other times as the Agent
or
the Required Lenders may reasonably require, the Borrower shall provide the
Agent with a Borrowing Base Certificate showing the Borrower’s calculations of
the components of the Secured Borrowing Base together with all documentation
and
other data supporting such calculations as the Agent may require. The
Agent shall have a period of five Business Days following receipt of a Borrowing
Base Certificate to notify the Borrower of its disapproval
thereof. Failure of the Agent to so notify the Borrower within such
five Business Day period shall be deemed approval and such Secured Borrowing
Base as set forth in such Borrowing Base Certificate shall be effective as
of
the date approved (or deemed approved) by the Agent. The amount so
approved (or deemed approved) shall constitute the Secured Borrowing Base until
such time as a new Borrowing Base Certificate is delivered and approved in
accordance with this Section.
(B) In
the event that the Agent timely notifies the Borrower of its disapproval of
a
Borrowing Base Certificate, then the Agent shall notify the Borrower in writing
of the amount of the Secured Borrowing Base as reasonably determined by the
Agent and the basis of such determination, and the effective date thereof (which
shall be the date of the giving of such notice by the Agent), and such amount
shall thereupon and thereafter constitute the Secured Borrowing Base which
shall
remain in effect until such time as a new Borrowing Base Certificate is
delivered and approved in accordance with this Section.
(C) Each
determination of the Secured Borrowing Base in accordance with this Section
shall be binding and conclusive upon the parties hereto, provided that
the Lenders are not bound to rely on information and figures provided by the
Borrower if the Agent reasonably determines in good faith that it would be
inappropriate to do so. Nothing contained herein shall be deemed to
restrict the Borrower from submitting additional Borrowing Base Certificates
to
the Agent for its approval at times other than those required
hereunder.”.
3.3 Amendment
to Section 2.05. Sections 2.05(a) and (b) of the Credit Agreement are
hereby amended by deleting the subsection in its entirety and inserting in
lieu
thereof the following:
“(a) On
and after the First
Amendment Effective Date, but prior to the date of the Senior Notes Resolution,
the Applicable Eurodollar Margin shall be 3.50%. On and after the
date of the Senior Notes Resolution, the Applicable Eurodollar Margin shall
be
determined by reference to the Leverage Ratio in accordance with the following
pricing grid and the provisions of this Section 2.05:
|
Leverage
Ratio
|
Less
than
1.00x
|
Greater
than
or
equal to
1.00x
and less
than
1.25x
|
Greater
than or
equal
to 1.25x
and
less than
1.75x
|
Greater
than
or
equal to
1.75x
|
|
Applicable
Eurodollar
Margin
|
1.50%
|
1.75%
|
2.00%
|
2.25%
|
(b) The
Applicable
Eurodollar Margin under the foregoing pricing grid shall be determined with
reference to the Leverage Ratio as of the last day of each fiscal
quarter. The determination of the Leverage Ratio shall be made from
the then most recent annual or quarterly financial statements of the Borrower
delivered by the Borrower pursuant to Sections 5.08(1) and 5.08(2) or, at any
time prior to delivery of the Restated Financial Statements in accordance with
the First Amendment, pursuant to the Interim Financial Statements (as defined
in
the First Amendment) and the adjustment, if any, to the Applicable Eurodollar
Margin shall take place on, and be effective from and after, the fifth Business
Day after the date on which the Agent has received such financial
statements.”.
3.4 Amendments
to Section 2.11.
(a) Section
2.11 is hereby amended by adding immediately after Section 2.11(b) therein
a new
Section 2.11(c) as follows:
“(c) If
at any time after
the Borrower complies with Section 5.16 but prior to the Collateral Release
Date, the Aggregate Outstanding Extensions of Credit exceeds the lesser of
the
Borrowing Base and the Aggregate Commitment, then the Borrower shall within
two
Business Days thereafter prepay Loans and/or cash collateralize the Facility
Letter of Credit Obligations in an aggregate amount equal to any such
excess.”.
3.5 Amendment
to Section 2.22.1. Section 2.22.1(b) of the Credit Agreement is
hereby amended by adding at the end of the sentence therein the
following: “, provided that as to any Facility Letter of
Credit issued prior to the Collateral Release Date, the Borrower shall not
request Facility Letters of Credit for any purposes other than for such purposes
which are permitted to be secured by a “Permitted Lien” under, and as defined
in, each of the Senior Indentures without regard to the provisions of clause
(xi) thereunder”.
3.6 Amendments
to Section 2.22.3. Section 2.22.3 of the Credit Agreement is
hereby amended by (a) adding at the end of clause (iii)(a) of such Section
the
following proviso “; provided that as to any representations and
warranties made prior to the Restated Financial Statements Delivery Date, this
condition shall be deemed to have been waived solely to the extent that the
representations and warranties contained in Section 4.04 (Financial Statements),
Section 4.06 (Other Agreements), Section 4.07 (Litigation), Section 4.14 (Law;
Environment) and Section 4.17 (Accuracy of Information) are incorrect,
incomplete or misleading as a result of (or in the case of the representations
and warranties contained in Section 4.07, directly resulting from) the matters
identified in the Audit Committee Report giving rise to the restatement of
the
Borrower’s financial statements (it being understood that any certificate to be
delivered pursuant to this Section may be so qualified)” and (b) adding after
the phrase “If applicable under Section 7.03” at the beginning of clause
(iii)(c) of such Section “at any time after the Collateral Release
Date”.
3.7 Amendment
to Section 2.22.6. Section 2.22.6 of the Credit Agreement is
hereby amended by:
(a)
deleting the “The” at the
beginning of paragraph (c) of such Section and substituting in lieu thereof
“(i) At any time after the Collateral Release Date, the”’
and
(b)
adding a new paragraph (ii) at the
end of paragraph (c) of such Section as follows:
“(ii) At
any time prior to the Collateral Release Date, if any draft is paid under any
Facility Letter of Credit, the Borrower shall reimburse the Issuing Lender
for
the amount of (a) the draft so paid and (b) any taxes, fees, charges or other
costs or expenses incurred by the Issuing Lender in connection with such
payment, not later than 12:00 Noon, Charlotte, North Carolina time, on (i)
the
Business Day immediately following the day that the Borrower receives notice
of
such draft, if such notice is received on such day prior to 10:00 A.M.,
Charlotte, North Carolina time, or (ii) if clause (i) above does not apply,
the
second Business Day following the day that the Borrower receives such
notice. Each such payment shall be made to the Issuing Lender at its
address for notices referred to herein in Dollars and in immediately available
funds. Interest shall be payable on any such amounts from the date on
which the relevant draft is paid until payment in full at the rate set forth
in
(x) until the Business Day next succeeding the date when such payment is
required as set forth above, Section 2.07(a) and (y) thereafter, Section
2.07(d).”.
3.8 Amendments
to Section 3.02. Section 3.02 of the Credit Agreement is hereby
amended by (a) adding at the end of clause (1)(a) of such Section the following
proviso “; provided that this condition shall be deemed to have been
waived solely to the extent that the representations and warranties contained
in
Section 4.04 (Financial Statements), Section 4.06 (Other Agreements), Section
4.07 (Litigation), Section 4.14 (Law; Environment) and Section 4.17 (Accuracy
of
Information) of the Credit Agreement are incorrect, incomplete or misleading
as
a result of (or in the case of the representations and warranties contained
in
Section 4.07, directly resulting from) the matters identified in the Audit
Committee Report giving rise to the restatement of the Borrower’s financial
statements (it being understood that any certificate to be delivered pursuant
to
this Section may be so qualified)” and (b) adding after the phrase “If
applicable under Section 7.03” at the beginning of clause (1)(c) of such Section
“at any time after the Collateral Release Date”.
3.9 Amendment
to Article IV. Article IV of the Credit Agreement is hereby
amended by adding immediately after Section 4.17 the following new Sections
4.18
and 4.19:
“4.18. Security
Documents. (a) After the execution and delivery thereof in
accordance with Section 5.16 until the Collateral Release Date or other release
thereof permitted under this Agreement, each of the Cash Collateral Agreement
and the Collateral Agreement is effective to create in favor of the Agent,
for
the benefit of the Lenders, a legal, valid and enforceable security interest
in
the Collateral described therein and proceeds thereof. In the case of
the other Collateral described in the Collateral Agreement, when financing
statements in appropriate form are filed in the appropriate jurisdictions,
the
Collateral Agreement shall constitute a fully perfected Lien on all right,
title
and interest of the Borrower and the Guarantors in such Collateral (other than
such Collateral in which a security interest cannot be perfected by filing
of a
financing statement under the UCC as in effect at the relevant time in the
relevant jurisdiction) and the proceeds thereof, as security for the Obligations
(as defined in the Cash Collateral Agreement or the Collateral Agreement, as
applicable), in each case prior and superior in right to any other Person except
(other than with respect to the Cash Collateral Agreement), Liens permitted
under Section 6.01(1) through (6) .
(b) Upon
execution and delivery thereof until the Collateral Release Date or other
release thereof permitted under this Agreement, each of the Mortgages is
effective to create in favor of the Agent, for the benefit of the Lenders,
a
legal, valid and enforceable Lien on the Mortgaged Properties described therein
and proceeds thereof, and when the Mortgages are filed in the appropriate
recording offices, each such Mortgage shall constitute a fully perfected Lien
on, and security interest in, all right, title and interest of Borrower and
the
Guarantors in the Mortgaged Properties and the proceeds thereof, as security
for
the Obligations (as defined in the relevant Mortgage), in each case prior and
superior in right to any other Person (other than those exceptions to title
set
forth in the applicable title insurance policy described in clause (c) of the
definition of Mortgage Conditions).
4.19 Certain
Representations and Warranties. So long as waivers contained in
Section 2.1(b) of the First Amendment are in effect, the representations and
warranties contained in Section 4.04 (Financial Statements), Section 4.06 (Other
Agreements), Section 4.07 (Litigation), Section 4.14 (Law; Environment) and
Section 4.17 (Accuracy of Information) shall be deemed to be made as set forth
in this Agreement except that such representations and warranties shall be
deemed to be made with an exception for (or in the case of the representations
and warranties contained in Section 4.07, the matters directly resulting from)
the matters identified in the Audit Committee Report giving rise to the
Restatement.”.
3.10 Amendment
to Section 5.08. Section 5.08(6) of the Credit Agreement is
hereby amended by inserting the phrase “ending at any time after the Collateral
Release Date” immediately after the words “calendar month” in the second line of
such Section.
3.11 Amendment
to Section 5.15. Section 5.15 of the Credit Agreement is hereby
amended by inserting immediately after the defined term “Title Companies” in the
last sentence therein the parenthetical “(other than Beazer Title Agency of
Arizona, LLC)”.
3.12 Amendment
to Article V. Article V of the Credit Agreement is hereby amended
by adding immediately after Section 5.15 the following:
“Section
5.16 Post-Closing
Matters. Within five Business Days after the First
Amendment Effective Date, deliver, and cause each Subsidiary to deliver, to
the
Agent evidence of the actions specified on Schedule 5.16(1), (2), (3), (5),
(6),
(7) and (8) and within ten Business Days after the First Amendment Effective
Date, deliver, and cause each Subsidiary to deliver, to the Agent evidence
of
the actions specified on Schedule 5.16(4); provided that each such date
may be extended by the Agent acting in its reasonable discretion and in each
case upon terms and conditions reasonably satisfactory to the
Agent.”.
3.13 Amendment
to Section 6.01. Section 6.01 of the Credit Agreement is hereby
amended by (i) deleting the period at the end of paragraph (7),
(ii) inserting in lieu thereof “;” and (iii) adding at the end thereof
immediately after paragraph (7) in such section the following:
“(8) Liens
pursuant to the Security Documents.”
3.14 Amendment
to Section 6.11. Section 6.11 of the Credit Agreement is hereby
amended by (a) deleting the “and” immediately prior clause (d) therein and
inserting in lieu thereof a comma and (b) adding immediately after clause (d)
therein the following: “and (e) any amendments of the Senior
Indentures, in form and substance reasonably satisfactory to the Agent, in
connection with a Senior Notes Resolution”.
3.15 Amendments
to Section 7.01. Section 7.01 of the Credit Agreement is hereby
amended by deleting the dollar amount “$1,000,000,000” in clause (i) in such
Section and inserting in lieu thereof the dollar amount
“$900,000,000”.
3.16 Amendment
to Section 7.03. Section 7.03 of the Credit Agreement is hereby
amended by inserting the phrase “after the Collateral Release Date” immediately
after the words “At any time” in the first line of such Section.
3.17 Amendment
to Section 7.04.
(a) Section
7.04 of the Credit Agreement is hereby amended by deleting the subsection in
its
entirety and inserting in lieu thereof the following:
“Section
7.04 Interest Coverage
Ratio. The Borrower shall maintain an Interest Coverage Ratio of
not less than the ratio set forth below opposite such fiscal quarter, which
ratio shall be determined as of the last day of each fiscal quarter for the
four-quarter period ending on such day:
|
Fiscal
Quarter
|
Interest
Coverage Ratio
|
|
|
September
30, 2007
|
1.00
to 1.00
|
|
|
December
31, 2007
|
0.50
to 1.00
|
|
|
March
31, 2008
|
0.25
to 1.00
|
|
|
June
30, 2008
|
0.25
to 1.00
|
|
|
September
30, 2008
|
0.25
to 1.00
|
|
|
December
31, 2008
|
0.25
to 1.00
|
|
|
March
31, 2009
|
0.50
to 1:00
|
|
|
June
30, 2009
|
0.50
to 1.00
|
|
|
September
30, 2009
|
0.75
to 1.00
|
|
|
December
31, 2009
|
1.00
to 1.00
|
|
|
March
31, 2010
|
1.25
to 1.00
|
|
|
June
30, 2010
|
1.50
to 1.00
|
|
|
September
30, 2010 and
each
fiscal quarter
thereafter
|
1.75
to 1.00
|
3.18 Amendment
to Section 7.06. Section 7.06 of the Credit Agreement is hereby
amended by deleting such Section in its entirety and inserting in lieu thereof
the following:
“Section
7.06 Minimum Liquidity. If as of
the last day of the fiscal quarter most recently ended (a) the Interest Coverage
Ratio is less than 1.75 to 1.00 and (b) the ratio of Adjusted Cash Flow From
Operations for the last four quarters then ended to Interest Incurred by the
Loan Parties for the last four quarters then ended is less than 1.75 to 1.00,
on
and after such day, the Borrower shall maintain Unrestricted Cash not included
in the Secured Borrowing Base, together with any Borrowing Base Availability,
in
an amount of not less than $120,000,000.”.
3.19 Amendment
to Section 8.01. Section 8.01 of the Credit Agreement is hereby
amended by (a) adding at the end of Section 8.01(3) the phrase “except as
otherwise provided in Section 8.01(12)” and (b) adding at the end of such
Section immediately after paragraph (10) therein new paragraphs (11), (12)
and
(13) as follows:
“(11) Except
with respect to releases of Liens permitted under this Agreement, any of the
Security Documents prior to the Collateral Release Date shall cease, for any
reason, to be in full force and effect, or any Loan Party or any Affiliate
of
any Loan Party shall so assert, or prior to the Collateral Release Date any
Lien
created by any of the Security Documents shall cease to be enforceable and
of
the same effect and priority purported to be created thereby;
(12) Any
Loan Party shall default in the observance or performance of (a) any covenant
contained in Section 5.16 or (b) prior to the Collateral Release Date, any
term,
covenant or agreement contained in the Cash Collateral Agreement, the Collateral
Agreement or any Mortgage, and such default contained in this clause (b) shall
continue unremedied for 30 consecutive days;
(13) Any
adverse judgment shall have been entered in the Senior Notes Litigation, and
such adverse judgment shall not have been stayed, annulled or rescinded within
60 days of being entered;”.
3.20 Amendment
to Credit Agreement. The Credit Agreement is hereby amended
by:
(a) adding
new Schedules IV, V and 5.16 thereto in the form attached hereto as Exhibits
A,
B and C;
(b) deleting
Exhibit D in its entirety and inserting in lieu thereof a new Exhibit D in
the
form attached hereto as Exhibit D; and
(c) deleting
Schedules 4.07 and 4.14 in their entirety and inserting in lieu thereof new
Schedules 4.07 and 4.14 attached hereto as Exhibits E and F.
SECTION
4. CONDITIONS
PRECEDENT.
4.1 Effective
Date. This First Amendment shall become effective as of the date
first set forth above (the “First Amendment Effective Date”) following
the date on which all of the following conditions have been satisfied or
waived:
(a) Execution
and Delivery. The Agent shall have received:
(1) this
First Amendment, executed and delivered by a duly authorized officer of the
Borrower and the Lenders constituting Required Lenders;
(2) an
executed Acknowledgment and Consent, in the form set forth as Exhibit H hereto,
or a facsimile transmission thereof, from each Guarantor (such Acknowledgment
and Consent, together with this First Amendment, the “Amendment
Documents”);
(3) all
fees
required to be paid, and all reasonable out-of-pocket expenses for which
invoices have been presented (including reasonable fees, disbursements and
other
charges of counsel to the Agent), on or before the First Amendment Effective
Date;
(4) a
certificate duly executed by the Chief Financial Officer of the Borrower
certifying that no Default or Event of Default shall have occurred and be
continuing on the First Amendment Effective Date after giving effect to this
First Amendment.
(b) The
Agent
shall have received for the account of each Lender entitled thereto, an
amendment fee in an amount equal to 0.35% of such Lender’s Commitment calculated
as of the First Amendment Effective Date, but such fees shall be payable (i)
only to each Lender that has delivered (including by way of facsimile or
electronic mail) its executed signature page to this Amendment to the attention
of Xxxxxx Trust or Xxxxxxxxx Xxxxxxxxx, of Xxxxxxx Xxxxxxx & Xxxxxxxx LLP,
000 Xxxxxxxxx Xxx., Xxx Xxxx, Xxx Xxxx 00000, telecopy number 000-000-0000,
email xxxxxx@xxxxxx.xxx or xxxxxxxxxx@xxxxxx.xxx at or prior to 5:00
P.M., New York time, on Wednesday, October 10, 2007, and (ii) only if the
Borrower executes this Amendment; and
(c) After
giving effect to this Amendment, there shall be no Default or Event of
Default.
SECTION
5. GENERAL.
5.1 Representations
and Warranties.
(a) In
order
to induce the Agents and the Lenders to enter into this Amendment, the Borrower
hereby represents and warrants to the Agents, the Arrangers and the Lenders
that
after giving effect to this Amendment, the representations and warranties of
the
Borrower contained in the Credit Agreement and the other Loan Documents are
true
and correct in all material respects on and as of the First Amendment Effective
Date (after giving effect hereto) as if made on and as of the First Amendment
Effective Date (except where such representations and warranties expressly
relate to an earlier date in which case such representations and warranties
were
true and correct in all material respects as of such earlier date);
provided that the representations and warranties contained in Section
4.04 (Financial Statements), Section 4.06 (Other Agreements), Section 4.07
(Litigation), Section 4.14 (Law; Environment) and Section 4.17 (Accuracy of
Information) shall be deemed to be made as set forth in the Credit Agreement
except that such representations and warranties shall be deemed to be made
with
an exception for the matters identified in the Audit Committee Report giving
rise to the Restatement.
(b) In
order
to induce the Agents and the Lenders to enter into this Amendment, the Borrower
hereby represents and warrants to the Agents, the Arrangers and the Lenders
that
each of the Borrower and the Guarantors has all necessary corporate power and
authority to execute and deliver the Amendment Documents; the execution and
delivery by each such party of the Amendment Documents have been duly authorized
by all necessary corporate action on its part; and the Amendment Documents
have
been duly executed and delivered by each such party and constitute each such
party’s legal, valid and binding obligation, enforceable in accordance with its
terms.
5.2 Notice
of Effectiveness. The Agent shall promptly advise the Lenders and
the Borrower that this Amendment has become effective and of the First Amendment
Effective Date.
5.3 APPLICABLE
LAW AND JURISDICTION. THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HERETO SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NORTH CAROLINA.
5.4 Counterparts. This
First Amendment may be executed by the parties hereto in any number of separate
counterparts and all of said counterparts taken together shall be deemed to
constitute one and the same instrument.
5.5 Successors
and Assigns. This First Amendment shall be binding upon and inure
to the benefit of the Borrower and its successors and assigns, and upon the
Agents and the Lenders and each of their respective successors and
assigns. The execution and delivery of this Amendment by any Lender
prior to the First Amendment Effective Date shall be binding upon its successors
and assigns and shall be effective as to any loans or commitments assigned
to it
after such execution and delivery.
5.6 Continuing
Effect. Except as expressly amended hereby, the Credit Agreement
as amended by this First Amendment shall continue to be and shall remain in
full
force and effect in accordance with its terms. This First Amendment
shall not constitute an amendment or waiver of any provision of the Credit
Agreement not expressly referred to herein and shall not be construed as an
amendment, waiver or consent to any action on the part of the Borrower that
would require an amendment, waiver or consent of the Agent or the Lenders except
as expressly stated herein. Any reference to the “Credit Agreement”
in any Credit Document or any related documents shall be deemed to be a
reference to the Credit Agreement as amended by this First
Amendment.
5.7 Headings. Section
headings used in this First Amendment are for convenience of reference only,
are
not part of this First Amendment and are not to affect the constructions o,
or
to be taken into consideration in interpreting, this First
Amendment.
IN
WITNESS WHEREOF, the parties hereto have caused this First Amendment to be
executed and delivered by their respective duly authorized officers as of the
date first above written.
|
BORROWER:
|
BEAZER
HOMES USA, INC.,
|
a
Delaware corporation
By: /s/
Xxxxx X. Xxxxxxx
Name:
Xxxxx X. Xxxxxxx
Title:
Executive Vice President
|
|
WACHOVIA
BANK, NATIONAL
ASSOCIATION,
|
|
|
as
Agent and as a Lender
|
By:
/s/ R. Xxxxx
Xxxxxxxxxx
Name:
R.
Xxxxx Xxxxxxxxxx
Title: Senior
Vice President
|
|
CITIBANK,
N.A.,
as a Lender
|
By:
/s/ Xxxxx
XxXxxxx
Name:
Xxxxxx XxXxxxxx
Title: Vice
President
|
|
BNP
PARIBAS,
as a Lender
|
By: /s/
Xxxxx
Xxxxxxxxx
Name: Xxxxx
Xxxxxxxxx
Title: Managing
Director
By: /s/
Xxxxxxx
Xxxxxx
Name: Xxxxxxx
Xxxxxx
Title: Vice
President
|
|
THE
ROYAL BANK OF
SCOTLAND,
as a Lender
|
By:
/s/ Xxxxxxx
XxXxxxx
Name: Xxxxxxx
XxXxxxx
Title: Senior
Vice President
|
|
GUARANTY
BANK,
as a Lender
|
By:
/s/ Xxx
Xxxxxx
Name: Xxx
Xxxxxx
Title: Senior
Vice President
|
|
REGIONS
FINANCIAL
CORPORATION,
as
a
Lender
|
By:
/s/ Xxxxxx
XxXxxxxxx
Name: Xxxxxx
XxXxxxxxx
Title: Assistant
Vice President
|
|
JPMORGAN
CHASE BANK,
N.A.,
as a Lender
|
By:
/s/ Xxxxx X.
Xxxxx
Name: Xxxxx
X. Xxxxx
Title: Vice
President
|
|
CITY
NATIONAL BANK, a national banking association, as a
Lender
|
By:
/s/ Xxxxxx
Xxxxxxx
Name: Xxxxxx
Xxxxxxx
Title: Vice
President
PNC
BANK, N.A., as a Lender
By:
/s/ Xxxxxxx X.
Xxxx
Name: Xxxxxxx
X. Xxxx
Title: Senior
Vice President
UBS
LOAN FINANCE, LLC, as a Lender
By:
/s/ Xxxx X.
Xxxx
Name: Xxxx
X. Xxxx
Title: Associate
Director Banking Products Services, US
By:
/s/ Xxxx X.
Xxxxx
Name: Xxxx
X. Xxxxx
Title: Associate
Director Banking Products Services, US
COMERICA
BANK, as a Lender
By:
/s/ Xxxxx
Xxxxxxxxx
Name: Xxxxx
Xxxxxxxxx
Title: Vice
President
