Exhibit 10.23
$305,000,000
AMENDED AND RESTATED CREDIT AGREEMENT
DATED AS OF APRIL 4, 2003
AMONG
TECHNICAL OLYMPIC USA, INC.
AS BORROWER
AND
THE LENDERS AND ISSUERS PARTY HERETO
AND
CITICORP NORTH AMERICA, INC.
AS ADMINISTRATIVE AGENT
FLEET NATIONAL BANK,
AS DOCUMENTATION AGENT
XXXXXXX XXXXX XXXXXX INC.
AS SOLE ARRANGER AND SOLE BOOK MANAGER
WEIL, GOTSHAL & XXXXXX LLP
000 XXXXX XXXXXX
XXX XXXX, XXX XXXX 00000-0000
TABLE OF CONTENTS
PAGE
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Article I Definitions, Interpretation And Accounting Terms............................... 1
Section 1.1 Defined Terms......................................................... 1
Section 1.2 Computation of Time Periods........................................... 31
Section 1.3 Accounting Terms and Principles....................................... 31
Section 1.4 Certain Terms......................................................... 31
Article II The Facility................................................................... 32
Section 2.1 The Revolving Credit Commitments...................................... 32
Section 2.2 Borrowing Procedures.................................................. 32
Section 2.3 Swing Loans........................................................... 33
Section 2.4 Letters of Credit..................................................... 35
Section 2.5 Reduction and Termination of the Revolving Credit Commitments......... 40
Section 2.6 Repayment of Loans.................................................... 40
Section 2.7 Evidence of Debt...................................................... 40
Section 2.8 Optional Prepayments.................................................. 41
Section 2.9 Mandatory Prepayments................................................. 41
Section 2.10 Interest.............................................................. 42
Section 2.11 Conversion/Continuation Option........................................ 43
Section 2.12 Fees.................................................................. 44
Section 2.13 Payments and Computations............................................. 45
Section 2.14 Special Provisions Governing Eurodollar Rate Loans.................... 48
Section 2.15 Capital Adequacy...................................................... 49
Section 2.16 Taxes................................................................. 50
Section 2.17 Substitution of Lenders............................................... 51
Section 2.18 Facility Extension.................................................... 52
Section 2.19 Facility Increase..................................................... 54
Article III Conditions To Loans And Letters Of Credit...................................... 55
Section 3.1 Conditions Precedent to the Effectiveness of this Agreement .......... 55
Section 3.2 Conditions Precedent to Each Loan and Letter of Credit................ 57
Section 3.3 Determinations of Initial Borrowing Conditions........................ 58
Article IV Representations and Warranties................................................. 58
Section 4.1 Corporate Existence; Compliance with Law.............................. 58
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Section 4.2 Corporate Power; Authorization; Enforceable Obligations............... 58
Section 4.3 Ownership of Borrower; Subsidiaries................................... 59
Section 4.4 Financial Statements.................................................. 60
Section 4.5 Material Adverse Change............................................... 61
Section 4.6 Solvency.............................................................. 61
Section 4.7 Litigation ........................................................... 61
Section 4.8 Taxes................................................................. 61
Section 4.9 Full Disclosure....................................................... 62
Section 4.10 Margin Regulations.................................................... 62
Section 4.11 No Burdensome Restrictions; No Defaults............................... 62
Section 4.12 Investment Company Act; Public Utility Holding Company Act............ 63
Section 4.13 Use of Proceeds....................................................... 63
Section 4.14 Insurance............................................................. 63
Section 4.15 Labor Matters......................................................... 63
Section 4.16 ERISA................................................................. 64
Section 4.17 Environmental Matters................................................. 64
Section 4.18 Intellectual Property................................................. 65
Section 4.19 Title; Real Property.................................................. 65
Section 4.20 Related Documents..................................................... 66
Section 4.21 Non-Guarantor Subsidiaries............................................ 67
Article V Financial Covenants............................................................ 67
Section 5.1 Consolidated Tangible Net Worth....................................... 67
Section 5.2 Maximum Total Indebtedness to Consolidated Tangible Net Worth Ratio... 67
Section 5.3 Land Bank Indebtedness to Consolidated Tangible Net Worth Ratio ...... 67
Section 5.4 Minimum Fixed Charge Coverage Ratio................................... 67
Section 5.5 Unsold Land to Consolidated Tangible Net Worth........................ 67
Section 5.6 Unsold Units to Units Closed.......................................... 68
Section 5.7 Unimproved Land to Consolidated Tangible Net Worth.................... 68
Section 5.8 Model Homes to Units Closed........................................... 68
Article VI Reporting Covenants............................................................ 68
Section 6.1 Financial Statements.................................................. 68
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Section 6.2 Default Notices....................................................... 70
Section 6.3 Litigation............................................................ 70
Section 6.4 Notices under Related Documents....................................... 70
Section 6.5 SEC Filings; Press Releases........................................... 70
Section 6.6 Labor Relations....................................................... 70
Section 6.7 Tax Returns........................................................... 71
Section 6.8 Insurance............................................................. 71
Section 6.9 ERISA Matters......................................................... 71
Section 6.10 Environmental Matters................................................. 71
Section 6.11 Borrowing Base Determination.......................................... 72
Section 6.12 Material Contractual Obligations...................................... 73
Section 6.13 Other Information..................................................... 73
Article VII Affirmative Covenants.......................................................... 73
Section 7.1 Preservation of Corporate Existence, Etc.............................. 73
Section 7.2 Compliance with Laws, Etc............................................. 73
Section 7.3 Conduct of Business................................................... 73
Section 7.4 Payment of Taxes, Etc................................................. 73
Section 7.5 Maintenance of Insurance.............................................. 74
Section 7.6 Maintenance of Contractual Obligations................................ 74
Section 7.7 Transactions with Affiliates.......................................... 74
Section 7.8 Access................................................................ 74
Section 7.9 Keeping of Books...................................................... 75
Section 7.10 Maintenance of Properties, Etc........................................ 75
Section 7.11 Application of Proceeds............................................... 75
Section 7.12 Environmental......................................................... 75
Section 7.13 Additional Collateral and Guaranties.................................. 75
Section 7.14 Interest Rate Contracts............................................... 76
Section 7.15 Real Property......................................................... 76
Article VIII Negative Covenants............................................................. 77
Section 8.1 Indebtedness.......................................................... 77
Section 8.2 Liens, Etc............................................................ 78
Section 8.3 Investments........................................................... 79
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Section 8.4 Sale of Assets........................................................ 80
Section 8.5 Restricted Payments................................................... 80
Section 8.6 Restriction on Fundamental Changes.................................... 81
Section 8.7 Change in Nature of Business.......................................... 82
Section 8.8 Transactions with Affiliates.......................................... 82
Section 8.9 Restrictions on Subsidiary Distributions; No New Negative Pledge...... 82
Section 8.10 Modification of Constituent Documents................................. 82
Section 8.11 Modification of Related Documents..................................... 83
Section 8.12 Modification of Other Indebtedness Agreements......................... 83
Section 8.13 Accounting Changes; Fiscal Year....................................... 83
Section 8.14 Margin Regulations.................................................... 83
Section 8.15 Operating Leases; Sale/Leasebacks..................................... 84
Section 8.16 Cancellation, Prepayment of Indebtedness.............................. 84
Section 8.17 No Speculative Transactions........................................... 84
Section 8.18 Compliance with ERISA................................................. 84
Section 8.19 Environmental......................................................... 85
Section 8.20 Acquisitions of Unentitled Land Prohibited............................ 85
Section 8.21 High-Rise Construction Prohibited..................................... 85
Article IX Events of Default.............................................................. 85
Section 9.1 Events of Default..................................................... 85
Section 9.2 Remedies.............................................................. 87
Section 9.3 Actions in Respect of Letters of Credit............................... 87
Section 9.4 Rescission............................................................ 88
Article X The Administrative Agent....................................................... 88
Section 10.1 Authorization and Action.............................................. 88
Section 10.2 Administrative Agent's Reliance, Etc.................................. 89
Section 10.3 The Administrative Agent Individually................................. 89
Section 10.4 Lender Credit Decision................................................ 90
Section 10.5 Indemnification....................................................... 90
Section 10.6 Successor Administrative Agent........................................ 90
Section 10.7 Concerning the Collateral and the Collateral Documents................ 91
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Section 10.8 Collateral Matters Relating to Related Obligations.................... 92
Article XI Miscellaneous.................................................................. 93
Section 11.1 Amendments, Waivers, Etc.............................................. 93
Section 11.2 Assignments and Participations........................................ 95
Section 11.3 Costs and Expenses.................................................... 98
Section 11.4 Indemnities........................................................... 99
Section 11.5 Limitation of Liability............................................... 100
Section 11.6 Right of Set-off...................................................... 100
Section 11.7 Sharing of Payments, Etc.............................................. 101
Section 11.8 Notices, Etc.......................................................... 101
Section 11.9 No Waiver; Remedies................................................... 103
Section 11.10 Binding Effect........................................................ 103
Section 11.11 Governing Law......................................................... 104
Section 11.12 Submission to Jurisdiction; Service of Process........................ 104
Section 11.13 Waiver of Jury Trial.................................................. 104
Section 11.14 Marshaling; Payments Set Aside........................................ 104
Section 11.15 Section Titles........................................................ 105
Section 11.16 Execution in Counterparts............................................. 105
Section 11.17 Entire Agreement...................................................... 105
Section 11.18 Confidentiality....................................................... 105
Section 11.19 Documents Evidence the Same Indebtedness.............................. 106
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SCHEDULES
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Schedule I - Revolving Credit Commitments
Schedule II - Applicable Lending Offices and Addresses for Notices
Schedule 1.1 - Refinanced Indebtedness
Schedule 4.2 - Consents
Schedule 4.3 - Ownership of Subsidiaries
Schedule 4.4 - Material Obligations
Schedule 4.7 - Litigation
Schedule 4.8 - Taxes
Schedule 4.14 - Insurance
Schedule 4.15 - Labor Matters
Schedule 4.16 - List of Plans
Schedule 4.17 - Environmental Matters
Schedule 4.19 - Real Property
Schedule 8.1 - Existing Indebtedness
Schedule 8.2 - Existing Liens
Schedule 8.3 - Existing Investments
Schedule 8.9 - Restrictions on Subsidiary Distributions
Schedule 8.10 - Dual Class Structure of Capital Stock
EXHIBITS
Exhibit A - Form of Assignment and Acceptance
Exhibit B - Form of Assumption Agreement
Exhibit C - Form of Revolving Credit Note
Exhibit D - Form of Notice of Borrowing
Exhibit E - Form of Letter of Credit Request
Exhibit F - Form of Borrowing Base Certificate
Exhibit G - Form of Notice of Conversion or Continuation
Exhibit H - Form of Opinion of Counsel for the Loan Parties
Exhibit I - Form of Affirmation of Liens and Guaranties
vi
This AMENDED AND RESTATED CREDIT AGREEMENT, dated as of April 4, 2003,
among TECHNICAL OLYMPIC USA, INC., a Delaware corporation (the "Borrower"), the
Lenders (as defined below), the Issuers (as defined below), CITICORP NORTH
AMERICA, INC. ("CNAI"), as agent for the Lenders and the Issuers (in such
capacity and as agent for the Secured Parties under the Collateral Documents the
"Administrative Agent") and FLEET NATIONAL BANK, as documentation agent for the
lenders, amends and restates in its entirety the Original Credit Agreement (as
defined below).
WITNESSETH:
WHEREAS, pursuant to that certain Credit Agreement dated as of June 25,
2002 among the Borrower, the lenders and issuers party thereto, CNAI, as agent
for the lenders and issuers and as collateral agent, and Fleet National Bank, as
documentation agent (as amended through the date hereof, the "Original Credit
Agreement"), the Borrower requested that the Lenders and Issuers make available
for the purposes specified in the Original Credit Agreement a revolving credit
facility in the amount of $220,000,000, including a letter of credit facility in
the amount of $60,000,000;
WHEREAS, the Borrower has requested (i) an increase in the maximum
aggregate amount of the revolving credit facility to $305,000,000, (ii) an
increase in the maximum amount of the letter of credit facility to $80,000,000
and (iii) certain other changes to the covenants and other terms relating to the
Facility;
WHEREAS, the Lenders and Issuers are willing to amend and restate the
Original Credit Agreement in its entirety to make available to the Borrower such
increased revolving credit facility and letter of credit facility and to make
certain financial and other accommodations, upon the terms and subject to the
conditions set forth herein;
WHEREAS, it is the intent of the parties hereto (i) that this Agreement
does not constitute a novation of rights, obligations and liabilities of the
respective parties (including the Obligations) existing under the Original
Credit Agreement or evidence payment of all or any of such obligations and
liabilities and such rights, obligations and liabilities shall continue and
remain outstanding and (ii) that this Agreement amend and restate in its
entirety the Original Credit Agreement;
NOW, THEREFORE, in consideration of the premises and the covenants and
agreements contained herein, the parties hereto hereby agree as follows:
ARTICLE I
DEFINITIONS, INTERPRETATION AND ACCOUNTING TERMS
SECTION 1.1 DEFINED TERMS
As used in this Agreement, the following terms have the following
meanings (such meanings to be equally applicable to both the singular and plural
forms of the terms defined):
1
"2003 Projections" means those financial projections dated January 1,
2003 covering each Fiscal Quarter for the year 2003 inclusive, delivered to the
Lenders by the Borrower prior to the Effective Date.
"Account" has the meaning specified in the Pledge Agreement.
"Account Debtor" has the meaning specified in the Pledge Agreement.
"Adjusted EBITDA" means, with respect to any Person for any period, (a)
Consolidated Net Income of such Person for such period plus (b) the sum of, in
each case to the extent included in the calculation of such Consolidated Net
Income but without duplication, (i) any provision for income taxes, (ii)
Interest Expense, (iii) loss from extraordinary items, (iv) depreciation,
depletion and amortization of intangibles or financing or acquisition costs and
(v) all other non-cash charges and non-cash losses for such period, including
the amount of any compensation deduction as the result of any grant of Stock or
Stock Equivalents to employees, officers, directors or consultants minus (c) the
sum of, in each case to the extent included in the calculation of such
Consolidated Net Income but without duplication, (i) any credit for income tax,
(ii) interest income, (iii) gains from extraordinary items for such period, (iv)
any aggregate net gain (but not any aggregate net loss) from the sale, exchange
or other disposition of capital assets by such Person, (v) any other non-cash
gains or other items which have been added in determining Consolidated Net
Income, including any reversal of a change referred to in clause (b)(v) above by
reason of a decrease in the value of any Stock or Stock Equivalent, and (vi) one
time charges for expenses related to the Merger.
"Administrative Agent" has the meaning specified in the preamble to
this Agreement.
"Advance Rate" means (a) up to 50% in the case of Unimproved Land, (b)
up to 65% in the case of Land/Lots Under Development, (c) up to 65% in the case
of Finished Lots, (d) up to 80% in the case of Unsold Homes Under Construction,
(e) up to 80% in the case of Completed Unsold Homes Less Than 180 Days Since
Completion, (f) up to 50% in the case of Completed Unsold Homes Over 180 Days
Since Completion, (h) up to 90% in the case of Sold Homes, and (h) up to 90% in
the case of Escrow Proceeds Receivables.
"Affiliate" means, with respect to any Person, any other Person which,
directly or indirectly, controls, is controlled by or is under common control
with such Person, each officer, director, general partner or joint-venturer of
such Person, and each Person who is the beneficial owner of 10% or more of any
class of Voting Stock of such Person. For the purposes of this definition,
"control" means the possession of the power to direct or cause the direction of
management and policies of such Person, whether through the ownership of voting
securities, by contract or otherwise
"Agreement" means the Original Credit Agreement as amended and restated
by this Credit Agreement.
"Applicable Lending Office" means, with respect to each Lender, its
Domestic Lending Office in the case of a Base Rate Loan, and its Eurodollar
Lending Office in the case of a Eurodollar Rate Loan.
2
"Applicable Margin" means from and after the Closing Date, as of any
date of determination, a per annum rate equal to the rate set forth below for
the applicable type of Loan and the then applicable Total Liabilities to
Consolidated Tangible Net Worth Ratio (determined for the twelve-month period
ending on the last day of the most recent Fiscal Quarter or Fiscal Year, as
applicable, for which a Compliance Certificate has been delivered pursuant to
Section 6.1 (Financial Statements)) set forth below:
TOTAL LIABILITIES TO CONSOLIDATED
TANGIBLE NET WORTH RATIO BASE RATE LOANS EURODOLLAR RATE LOANS
------------------------ --------------- ---------------------
Greater than or equal to 2.25 to 1 2.00% 3.00%
Less than 2.25 to 1 and equal to or greater than 2.00 to 1 1.75% 2.75%
Less than 2.00 to 1 and equal to or greater than 1.75 to 1 1.50% 2.50%
Less than 1.75 to 1 and equal to or greater than 1.50 to 1 1.25% 2.25%
Less than 1.50 to 1 1.00% 2.00%
Subsequent changes in the Applicable Margin resulting from a change in the Total
Liabilities to Consolidated Tangible Net Worth Ratio shall become effective as
to all Loans upon the delivery by the Borrower to the Administrative Agent of a
new Compliance Certificate required to be delivered pursuant to Section 6.1(c)
(Compliance Certificate) as of the last day such Compliance Certificate was
required to be delivered pursuant to Section 6.1(c) (Compliance Certificate).
Notwithstanding anything to the contrary set forth in this Agreement (including
the then effective Total Liabilities to Consolidated Tangible Net Worth Ratio),
if the Borrower shall fail to deliver such Compliance Certificate within any of
the time periods specified in Section 6.1(c) (Compliance Certificate), the
Applicable Margin from and including the 46th day after the end of such Fiscal
Quarter or the 91st day after the end of such Fiscal Year, as the case may be,
to but not including the date the Borrower delivers to the Administrative Agent,
such Compliance Certificate shall equal the highest possible Applicable Margin
set forth above.
"Applicable Unused Commitment Fee Rate" means from and after the
Closing Date, a per annum rate equal to the rate set forth below opposite the
then applicable Total Liabilities to Consolidated Tangible Net Worth Ratio
(determined for the twelve-month period ending on the last day of the most
recent Fiscal Quarter or Fiscal Year, as applicable, for which a Compliance
Certificate has been delivered pursuant to Section 6.1 (Financial Statements))
set forth below:
3
TOTAL LIABILITIES TO CONSOLIDATED APPLICABLE UNUSED
TANGIBLE NET WORTH RATIO COMMITMENT FEE RATE
------------------------ -------------------
Greater than or equal to 2.25 to 1 0.50%
Less than 2.25 to 1 and greater than or equal to
2.00 to 1 0.45%
Less than 2.00 to 1 and equal to or greater than
1.75 to 1 0.40%
Less than 1.75 to 1 and equal to or greater than
1.50 to 1 0.375%
Less than 1.50 to 1 0.35%
Subsequent changes in the Applicable Unused Commitment Fee Rate resulting from a
change in the Total Liabilities to Consolidated Tangible Net Worth Ratio shall
become effective upon the delivery by the Borrower to the Administrative Agent
of a new Compliance Certificate required to be delivered pursuant to Section
6.1(c) (Compliance Certificate) as of the last day such Compliance Certificate
was required to be delivered pursuant to Section 6.1(c) (Compliance
Certificate). Notwithstanding anything to the contrary set forth in this
Agreement (including the then effective Total Liabilities to Consolidated
Tangible Net Worth Ratio), if the Borrower shall fail to deliver such Compliance
Certificate within any of the time periods specified in Section 6.1(c)
(Compliance Certificate), the Applicable Unused Commitment Fee from and
including the 46th day after the end of such Fiscal Quarter or the 91st day
after the end of such Fiscal Year, as the case may be, to but not including the
date the Borrower delivers to the Administrative Agent such Compliance
Certificate shall equal the highest possible Applicable Unused Commitment Fee
Rate set forth above. Notwithstanding the foregoing, the Applicable Unused
Commitment Fee shall be increased by 25 basis points in the event that the
average daily amount by which the Revolving Credit Commitments exceed the amount
of the Revolving Credit Outstandings less the amount of any outstanding Swing
Loans for the immediately preceding two calendar quarters, calculated on a
quarterly basis, is greater than 75% of the Revolving Credit Commitments. The
Unused Commitment Fee shall continue to be equal to the sum of the Applicable
Unused Commitment Fee Rate plus 25 basis points until the average daily amount
by which the Revolving Credit Commitments exceed the amount of the Revolving
Credit Outstandings less the amount of any outstanding Swing Loans for the
immediately preceding calendar quarter is less than 75% of the Revolving Credit
Commitments for the immediately preceding calendar quarter.
"Approved Fund" means, with respect to any Fund that is a fund that
invests in bank loans, any other fund that invests in bank loans and is advised
or managed by (a) a Lender, (b) an Affiliate of a Lender or (c) an entity or
Affiliate of an entity that administers or manages a Lender.
"Arranger" means Xxxxxxx Xxxxx Xxxxxx Inc., in its capacity as sole
arranger and sole book manager.
"Asset Sale" has the meaning specified in Section 8.4 (Sale of Assets).
"Assignment and Acceptance" means an assignment and acceptance entered
into by a Lender and an Eligible Assignee, and accepted by the Administrative
Agent, in substantially the form of Exhibit A.
4
"Assumption Agreement" means an assumption agreement entered into by a
Lender or an Eligible Assignee, and accepted by the Administrative Agent,
substantially in the form of Exhibit B.
"Available Credit" means, at any time, an amount equal to (a) the
Maximum Credit, minus (b) the aggregate Revolving Credit Outstandings at such
time.
"Bankruptcy Code" means title 11, United States Code, as amended from
time to time.
"Base Rate" means, for any period, a fluctuating interest rate per
annum as shall be in effect from time to time, which rate per annum shall be
equal at all times to the highest of the following:
(a) the rate of interest announced publicly by Citibank in New
York, New York, from time to time, as Citibank's base rate;
(b) the sum (adjusted to the nearest 0.25% or, if there is no
nearest 0.25%, to the next higher 0.25%) of:
(i) 0.5% per annum,
(ii) the rate per annum obtained by dividing
(A) the latest three-week moving average of
secondary market morning offering rates in the United
States for three-month certificates of deposit of
major United States money market banks, such
three-week moving average being determined weekly on
each Monday (or, if any such day is not a Business
Day, on the next succeeding Business Day) for the
three-week period ending on the previous Friday by
Citibank on the basis of such rates reported by
certificate of deposit dealers to and published by
the Federal Reserve Bank of New York or, if such
publication shall be suspended or terminated, on the
basis of quotations for such rates received by
Citibank from three New York certificate of deposit
dealers of recognized standing selected by Citibank,
by
(B) a percentage equal to 100% minus the
average of the daily percentages specified during
such three-week period by the Federal Reserve Board
for determining the maximum reserve requirement
(including any emergency, supplemental or other
marginal reserve requirement) for Citibank in respect
of liabilities consisting of or including (among
other liabilities) three-month U.S. dollar
nonpersonal time deposits in the United States, and
(iii) the average during such three-week period of
the maximum annual assessment rates estimated by Citibank for
determining the then current annual assessment payable by
Citibank to the Federal Deposit
5
Insurance Corporation (or any successor) for insuring Dollar
deposits in the United States; and
(c) 0.5% per annum plus the Federal Funds Rate.
"Base Rate Loan" means any Loan during any period in which it
bears interest based on the Base Rate.
"Borrowing" means a borrowing consisting of Loans made on the same day
by the Lenders ratably according to their respective Revolving Credit
Commitments.
"Borrowing Base" means, at any time, the sum of:
(a) the product of the Advance Rate then in effect for
Unimproved Land and the GAAP Value of all Unimproved Land owned by the
Borrower or any Guarantor;
(b) the product of the Advance Rate then in effect for
Land/Lots Under Development and the GAAP Value of all Land/Lots Under
Development owned by the Borrower or any Guarantor;
(c) the product of the Advance Rate then in effect for
Finished Lots and the GAAP Value of all Finished Lots owned by the
Borrower or any Guarantor;
(d) the product of the Advance Rate then in effect for Unsold
Homes Under Construction and the GAAP Value of all Unsold Homes Under
Construction owned by the Borrower or any Guarantor;
(e) the product of the Advance Rate then in effect for
Completed Unsold Homes Less Than 180 Days Since Completion and the GAAP
Value of all Completed Unsold Homes Less Than 180 Days Since Completion
owned by the Borrower or any Guarantor;
(f) the product of the Advance Rate then in effect for
Completed Unsold Homes Over 180 Days Since Completion and the GAAP
Value of all Completed Unsold Homes Over 180 Days Since Completion
owned by the Borrower or any Guarantor;
(g) the product at the Advance Rate then in effect for Sold
Homes and the GAAP Value of all Sold Homes owned by the Borrower and
any Guarantor; and
(h) the product of the Advance Rate then in effect for Escrow
Proceeds Receivables and the Dollar amount of Escrow Proceeds
Receivables held in escrow for the benefit of the Borrower or any
Guarantor;
provided, however, that (i) at no time shall more than 10% of the Borrowing Base
be comprised of Unimproved Land, (ii) at no time shall more than 5% of the
Borrowing Base be comprised of Completed Unsold Homes Over 180 Days Since
Completion, (iii) all assets of the Borrower and the Guarantors included in the
Borrowing Base shall not be subject to any Lien (other than
6
Customary Permitted Liens) and shall be owned 100% by the Borrower or a
Guarantor, and (iv) (x) during the period beginning on the Closing Date and
ending on the first anniversary of the Closing Date, no more than 60% of the
Borrowing Base shall be comprised of Land/Lots Under Development and Finished
Lots, (y) during the period beginning on the day after the first anniversary of
the Closing Date and ending on the second anniversary of the Closing Date, no
more than 55% of the Borrowing Base shall be comprised of Land/Lots Under
Development and Finished Lots, and (z) thereafter no more than 50% of the
Borrowing Base shall be comprised of Land/Lots Under Development and Finished
Lots.
"Borrowing Base Assets" means the Unimproved Land, Land/Lots Under
Development, Finished Lots, Unsold Homes Under Construction, Completed Unsold
Homes Less Than 180 Days Since Completion, Completed Unsold Homes Over 180 Days
Since Completion, Sold Homes and Escrow Proceeds Receivables included in the
calculation of the Borrowing Base.
"Borrowing Base Certificate" means a certificate of the Borrower
substantially in the form of Exhibit F.
"Business Day" means a day of the year on which banks are not required
or authorized to close in New York City and, if the applicable Business Day
relates to notices, determinations, fundings and payments in connection with the
Eurodollar Rate or any Eurodollar Rate Loans, a day on which dealings in Dollar
deposits are also carried on in the London interbank market.
"Capital Expenditures" means, with respect to any Person for any
period, the aggregate of amounts that would be reflected as additions to
property, plant or equipment on a Consolidated balance sheet of such Person and
its Subsidiaries prepared in conformity with GAAP, excluding interest
capitalized during construction.
"Capital Lease" means, with respect to any Person, any lease of, or
other arrangement conveying the right to use, property by such Person as lessee
that would be accounted for as a capital lease on a balance sheet of such Person
prepared in conformity with GAAP.
"Capital Lease Obligations" means, with respect to any Person, the
capitalized amount of all obligations of such Person or any of its Subsidiaries
under Capital Leases, as determined on a Consolidated basis in conformity with
GAAP.
"Cash Collateral Account" has the meaning specified in the Pledge
Agreement.
"Cash Equivalents" means (a) securities issued or fully guaranteed or
insured by the United States government or any agency thereof, (b) certificates
of deposit, eurodollar time deposits, overnight bank deposits and bankers'
acceptances of any commercial bank organized under the laws of the United
States, any state thereof, the District of Columbia, any foreign bank, or its
branches or agencies (fully protected against currency fluctuations) which, at
the time of acquisition, are rated at least "A-1" by Standard & Poor's Rating
Services ("S&P") or "P-1" by Xxxxx'x Investors Services, Inc. ("Moody's"), (c)
commercial paper of an issuer rated at least "A-1" by S&P or "P-1" by Moody's,
and (d) shares of any money market fund that (i) has at least 95% of its assets
invested continuously in the types of investments referred to in clauses (a),
(b) and (c) above, (ii) has net assets of not less than $500,000,000 and (iii)
is rated at least "A-1" by
7
S&P or "P-1" by Moody's; provided, however, that the maturities of all
obligations of the type specified in clauses (a), (b) and (c) above shall not
exceed 180 days.
"Change of Control" means the occurrence of any of the following
events: (a) if any "person" or "group" (as such terms are used in Sections 13(d)
and 14(d) of the Exchange Act or any successor provisions to either of the
preceding), including any group acting for the purpose of acquiring, holding,
voting or disposing of securities within the meaning of Rule 13d-5(b)(1) under
the Exchange Act, other than any one or more of the Permitted Holders, becomes
the "beneficial owner" (as defined in Rule 13d-3 under the Exchange Act, except
that a person will be deemed to have "beneficial ownership" of all shares that
any such person has the right to acquire, whether such right is exercisable
immediately or only after the passage of time), directly or indirectly, of 40%
or more of the total voting power of the Voting Stock of the Borrower; (for
purposes of this clause (a), such person or group shall be deemed to
beneficially own any Voting Stock of a corporation held by any other corporation
(the "parent corporation") so long as such person or group beneficially owns,
directly or indirectly, in the aggregate a majority of the total voting power of
the Voting Stock of such parent corporation); or (b) during any period of two
consecutive years, individuals who at the beginning of such period constituted
the board of directors of TOI (together with any new directors whose election or
appointment by such board of directors or whose nomination for election by the
shareholders of TOI was approved by a vote of not less than two-thirds of the
directors then still in office who were either directors at the beginning of
such period or whose election or nomination for election was previously so
approved) cease for any reason to constitute a majority of the board of
directors of TOI then in office; or (c) the shareholders of the Borrower shall
have approved any plan of liquidation or dissolution of the Borrower; or (d)
Xxxxxxx X. Mon (or a successor approved by the Requisite Lenders) shall no
longer be the chief executive officer of the Borrower, and a successor chief
executive officer satisfactory to the Requisite Lenders shall not have (i) been
appointed to such office within 120 days of the date on which Xxxxxxx X. Mon (or
his approved successor) ceased to be the chief executive officer of the Borrower
and (ii) assumed such office within 180 days of such date; or (e) any "change of
control" as defined in the Senior Note Indenture or Subordinated Note Indenture
has occurred.
"Citibank" means Citibank, N.A., a national banking association.
"Closing Date" means June 26, 2002, the date on which Loans were first
made under the Original Credit Agreement.
"CNAI" has the meaning specified in the preamble to this Agreement.
"Code" means the Internal Revenue Code of 1986 (or any successor
legislation thereto), as amended from time to time.
"Collateral" means all property and interests in property and proceeds
thereof now owned or hereafter acquired by any Loan Party in or upon which a
Lien is granted under any of the Collateral Documents.
"Collateral Documents" means the Pledge Agreement, and any other
document executed and delivered by a Loan Party granting a Lien on any of its
property to secure payment of the Secured Obligations.
8
"Completed Unsold Homes Less Than 180 Days Since Completion" means, as
of any date, all Units (including all Model Homes), for which construction has
been "completed" less than 180 days before such date, but for which there is in
existence no written Contract for Sale. Construction will be considered
"completed" when the temporary certificate of occupancy or the certificate of
occupancy has been issued. Notwithstanding the foregoing, Model Homes will
continue to be considered Completed Unsold Homes Less Than 180 Days Since
Completion until the date which is 180 days after the last production unit in
the particular real estate project (for which such Model Home is used as a
model) has been closed.
"Completed Unsold Homes Over 180 Days Since Completion" means, as of
any date, all Units (including all Model Homes), for which construction has been
"completed" over 180 days before such date but less than 360 days before such
date, and for which there is in existence no written Contract for Sale.
Construction will be considered "completed" when the temporary certificate of
occupancy or the certificate of occupancy has been issued.
"Compliance Certificate" has the meaning specified in Section 6.1(c)
(Compliance Certificate).
"Consolidated" means, with respect to any Person, the consolidation of
accounts of such Person and its Subsidiaries in accordance with GAAP.
"Consolidated Net Income" means, for any Person for any period, the net
income (or loss) of such Person and its Subsidiaries for such period, determined
on a Consolidated basis in conformity with GAAP, provided, however, that (a) the
net income of any other Person in which such Person or one of its Subsidiaries
has a joint interest with a third party (which interest does not cause the net
income of such other Person to be Consolidated into the net income of such
Person in accordance with GAAP) shall be included only to the extent of the
amount of dividends or distributions paid to such Person or Subsidiary, (b) the
net income of any Subsidiary of such Person that is subject to any restriction
or limitation on the payment of dividends or the making of other distributions
shall be excluded to the extent of such restriction or limitation, (c) the net
income (or loss) of any Person acquired in a pooling of interest transaction for
any period prior to the date of such acquisition shall be excluded and (d)
extraordinary gains and losses and any one-time increase or decrease to net
income that is required to be recorded because of the adoption of new accounting
policies, practices or standards required by GAAP shall be excluded.
"Consolidated Tangible Net Worth" means for the Borrower, at any date,
the Net Worth of the Borrower and its Subsidiaries at such date determined on a
Consolidated basis in conformity with GAAP, excluding, however, from the
determination of the Total Assets of such Person at such date, (a) all
unamortized goodwill, organizational expenses, research and development
expenses, trademarks, trade names, copyrights, patents, patent applications,
licenses and rights in any thereof, and other similar intangibles, (b)
Securities which are not readily marketable, (c) cash held in a sinking or other
analogous fund established for the purpose of redemption, retirement or
prepayment of any Stock or Indebtedness, (d) any write-up in the book value of
any asset resulting from a revaluation thereof, (e) any amounts that pertain to
or are attributable to the Borrower's or any of its Subsidiaries' equity
interest in any Subsidiary of the Borrower that is in default with respect to
the payment of monetary obligations owing under any land loan, acquisition and
development loan, construction loan, secured or unsecured credit facility, or
any other loan or indebtedness for borrower money, net of any income tax
benefits to be realized upon write-off of such amounts and (f) any items not
included in clauses (a) through (e) above which are treated as intangibles in
conformity with GAAP.
9
"Constituent Documents" means, with respect to any Person, (a) the
articles of incorporation, certificate of incorporation or certificate of
formation (or the equivalent organizational documents) of such Person, (b) the
by-laws or operating agreement (or the equivalent governing documents) of such
Person and (c) any document setting forth the manner of election and duties of
the directors or managing members of such Person (if any) and the designation,
amount or relative rights, limitations and preferences of any class or series of
such Person's Stock.
"Contaminant" means any material, substance or waste that is
classified, regulated or otherwise characterized under any Environmental Law as
hazardous, toxic, a contaminant or a pollutant or by other words of similar
meaning or regulatory effect, including any petroleum or petroleum-derived
substance or waste, asbestos and polychlorinated biphenyls.
"Contract For Sale" means a sale and purchase agreement between the
Borrower or one of its Subsidiaries and an unrelated third party purchaser, who
has made an xxxxxxx money deposit of not less than $250 and who has been
pre-qualified by the Borrower, one of its Subsidiaries or an institutional
lender; provided, however, that such agreement shall not contain any contingency
clause other than a clause conditioning such purchaser's obligation upon the
sale of such purchaser's property.
"Contractual Obligation" of any Person means any obligation, agreement,
undertaking or similar provision of any Security issued by such Person or of any
agreement, undertaking, contract, lease, indenture, mortgage, deed of trust or
other instrument (excluding a Loan Document) to which such Person is a party or
by which it or any of its property is bound or to which any of its property is
subject.
"Customary Permitted Liens" means, with respect to any Person, any of
the following Liens:
(a) Liens with respect to the payment of taxes, assessments or
governmental charges in each case that are not yet due or that are
being contested in good faith by appropriate proceedings and with
respect to which adequate reserves or other appropriate provisions are
being maintained to the extent required by GAAP;
(b) Liens of landlords arising by statute and liens of
suppliers, mechanics, carriers, materialmen, warehousemen or workmen
and other liens imposed by law created in the ordinary course of
business for amounts not yet due or that are being contested in good
faith by appropriate proceedings and with respect to which adequate
reserves or other appropriate provisions are being maintained to the
extent required by GAAP;
(c) deposits made in the ordinary course of business in
connection with workers' compensation, unemployment insurance or other
types of social security benefits or to secure the performance of bids,
tenders, sales, options, contracts (other than for the repayment of
borrowed money) and surety, appeal, customs, payment or performance
bonds;
(d) encumbrances arising by reason of zoning restrictions,
easements, licenses, reservations, covenants, rights-of-way, utility
easements,
10
building restrictions and other similar encumbrances on the use of real
property which do not materially detract from the value of such real
property or interfere with the ordinary conduct of the business
conducted and proposed to be conducted at such real property;
(e) encumbrances arising under leases or subleases of real
property which do not in the aggregate materially detract from the
value of such real property or interfere with the ordinary conduct of
the business conducted and proposed to be conducted at such real
property; and
(f) financing statements with respect to a lessor's rights in
and to personal property leased to such Person in the ordinary course
of such Person's business.
"Debt Issuance" means the incurrence of Indebtedness of the type
specified in clause (a) or (b) of the definition of "Indebtedness" by the
Borrower or any of its Subsidiaries.
"Default" means any event that with the passing of time or the giving
of notice or both would become an Event of Default.
"Disclosure Documents" means, collectively, (a) the Information
Statement, filed by Newmark with the Securities and Exchange Commission on April
9, 2002, as amended from time to time through June 3, 2002, (b) the Offering
Memorandum dated January 29, 2003 in respect of the January 2003 Senior Notes,
and (c) the Borrower's annual report on Form 10-K filed with the Securities and
Exchange Commission on February 12, 2002.
"Disqualified Stock" means with respect to any Person, any Stock which,
by its terms (or by the terms of any security into which it is convertible or
for which it is exchangeable), or upon the happening of any event, matures or is
mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or
is exchangeable for Indebtedness of such Person, or is redeemable at the option
of the holder thereof, in whole or in part, on or prior to the Scheduled
Termination Date.
"Documentary Letter of Credit" means any Letter of Credit that is
drawable upon presentation of documents evidencing the sale or shipment of goods
purchased by the Borrower or any of its Subsidiaries in the ordinary course of
its business.
"Dollars" and the sign "$" each mean the lawful money of the United
States of America.
"Domestic Lending Office" means, with respect to any Lender, the office
of such Lender specified as its "Domestic Lending Office" opposite its name on
Schedule II or on the Assignment and Acceptance by which it became a Lender or
such other office of such Lender as such Lender may from time to time specify to
the Borrower and the Administrative Agent.
"Domestic Subsidiary" means any Subsidiary of the Borrower organized
under the laws of any state of the United States of America or the District of
Columbia.
"Effective Date" has the meaning set forth in Section 3.1 (Conditions
Precedent to the Effectiveness of this Agreement).
11
"Eligible Assignee" means (a) a Lender or any Affiliate or Approved
Fund of such Lender; (b) a commercial bank having total assets in excess of
$5,000,000,000; (c) a finance company, insurance company, or any other financial
institution or fund, in each case reasonably acceptable to the Administrative
Agent and regularly engaged in making, purchasing or investing in loans, and
having a net worth, determined in accordance with GAAP, in excess of
$250,000,000 (or, to the extent net worth is less than such amount, a finance
company, insurance company, other financial institution or fund, reasonably
acceptable to the Administrative Agent and, so long as there is no Event of
Default continuing, the Borrower) or (d) a savings and loan association or
savings bank organized under the laws of the United States or any State thereof
having a net worth, determined in accordance with GAAP, in excess of
$250,000,000.
"Xxxxx" means Xxxxx Holdings Corp., a Delaware corporation and a
predecessor in interest to the Borrower.
"Entitled Land" means all land, owned by the Borrower or its
Subsidiaries as part of their respective real estate development business, that
has all requisite residential zoning for the construction of Units.
"Environmental Laws" means all applicable Requirements of Law now or
hereafter in effect, as amended or supplemented from time to time, relating to
pollution or the regulation and protection of human health, safety, the
environment or natural resources, including the Comprehensive Environmental
Response, Compensation, and Liability Act of 1980, as amended (42 U.S.C. Section
9601 et seq.); the Hazardous Material Transportation Act, as amended (49 U.S.C.
Section 1801 et seq.); the Federal Insecticide, Fungicide, and Rodenticide Act,
as amended (7 U.S.C. Section 136 et seq.); the Resource Conservation and
Recovery Act, as amended (42 U.S.C. Section 6901 et seq.); the Toxic Substance
Control Act, as amended (42 U.S.C. Section 7401 et seq.); the Clean Air Act, as
amended (42 U.S.C. Section 740 et seq.); the Federal Water Pollution Control
Act, as amended (33 U.S.C. Section 1251 et seq.); the Occupational Safety and
Health Act, as amended (29 U.S.C. Section 651 et seq.); the Safe Drinking Water
Act, as amended (42 U.S.C. Section 300f et seq.); and each of their state and
local counterparts or equivalents and any transfer of ownership notification or
approval statute, including the New Jersey Industrial Site Recovery Act (N.J.
Stat. Xxx. Section 13:1K-6 et seq.).
"Environmental Liabilities and Costs" means, with respect to any
Person, all liabilities, obligations, responsibilities, Remedial Actions,
losses, damages, punitive damages, consequential damages, treble damages, costs
and expenses (including all fees, disbursements and expenses of counsel, experts
and consultants and costs of investigation and feasibility studies), fines,
penalties, sanctions and interest incurred as a result of any claim or demand by
any other Person, whether based in contract, tort, implied or express warranty,
strict liability, criminal or civil statute, including any thereof arising under
any Environmental Law, Permit, order or agreement with any Governmental
Authority or other Person, which relate to any environmental, health or safety
condition or a Release or threatened Release, and result from the past, present
or future operations of, or ownership of property by, such Person or any of its
Subsidiaries.
"Environmental Lien" means any Lien in favor of any Governmental
Authority for Environmental Liabilities and Costs.
"Equity Issuance" means the issue or sale of any Stock of the Borrower
or any of the Subsidiaries of the Borrower by TOI, the Borrower or any of the
Subsidiaries of the Borrower to any Person other than the Borrower or any of
such Subsidiaries.
12
"ERISA" means the Employee Retirement Income Security Act of 1974 (or
any successor legislation thereto), as amended from time to time.
"ERISA Affiliate" means any trade or business (whether or not
incorporated) under common control or treated as a single employer with the
Borrower or any of its Subsidiaries within the meaning of Section 414 (b), (c),
(m) or (o) of the Code.
"ERISA Event" means (a) a reportable event described in Section 4043(b)
or 4043(c)(1), (2), (3), (5), (6), (8) or (9) of ERISA with respect to a Title
IV Plan with respect to which the notice requirement has not been waived
pursuant to applicable regulations; (b) the withdrawal of the Borrower, any of
its Subsidiaries or any ERISA Affiliate from a Title IV Plan subject to Section
4063 of ERISA during a plan year in which it was a substantial employer, as
defined in Section 4001(a)(2) of ERISA; (c) the complete or partial withdrawal
of the Borrower, any of its Subsidiaries or any ERISA Affiliate from any
Multiemployer Plan; (d) notice of reorganization or insolvency of a
Multiemployer Plan; (e) the filing of a notice of intent to terminate a Title IV
Plan or the treatment of a plan amendment as a termination under Section 4041 of
ERISA; (f) the institution of proceedings to terminate a Title IV Plan by the
PBGC; (g) the failure of the Borrower, any of its Subsidiaries or any ERISA
Affiliate to make any required contribution to a Title IV Plan or Multiemployer
Plan; (h) the imposition of a lien under Section 412 of the Code or Section 302
of ERISA on the Borrower or any of its Subsidiaries or any ERISA Affiliate; or
(i) any other event or condition which might reasonably be expected to
constitute grounds under Section 4042 of ERISA for the termination of, or the
appointment of a trustee to administer, any Title IV Plan or the imposition of
any liability under Title IV of ERISA, other than for PBGC premiums due but not
delinquent under Section 4007 of ERISA.
"Escrow Proceeds Receivables" means, with respect to the Borrower and
any of its Subsidiaries that is a Loan Party at a particular date, the aggregate
amount of funds held in escrow by a title company or other acceptable escrow
agent which are payable (without any requirement of the satisfaction or waiver
of any further condition) to the Borrower or such Subsidiary and which
constitute proceeds of sales of Units.
"Eurocurrency Liabilities" has the meaning assigned to that term in
Regulation D of the Federal Reserve Board, as in effect from time to time.
"Eurodollar Base Rate" means, with respect to any Interest Period for
any Eurodollar Rate Loan, the rate determined by the Administrative Agent to be
the offered rate for deposits in Dollars for the applicable Interest Period
appearing on the Dow Xxxxx Markets Telerate Page 3750 as of 11:00 a.m., London
time, two Business Days prior to the first day of each Interest Period. In the
event that such rate does not appear on the Dow Xxxxx Markets Telerate Page 3750
(or otherwise on the Dow Xxxxx Markets screen), the Eurodollar Base Rate for the
purposes of this definition shall be determined by reference to such other
comparable publicly available service for displaying eurodollar rates as may be
selected by the Administrative Agent.
"Eurodollar Lending Office" means, with respect to any Lender, the
office of such Lender specified as its "Eurodollar Lending Office" opposite its
name on Schedule II or on the Assignment and Acceptance by which it became a
Lender (or, if no such office is specified, its Domestic Lending Office) or such
other office of such Lender as such Lender may from time to time specify to the
Borrower and the Administrative Agent.
13
"Eurodollar Rate" means, with respect to any Interest Period for any
Eurodollar Rate Loan, an interest rate per annum equal to the rate per annum
obtained by dividing (a) the Eurodollar Base Rate by (b) a percentage equal to
100% minus the reserve percentage applicable two Business Days before the first
day of such Interest Period under regulations issued from time to time by the
Federal Reserve Board for determining the maximum reserve requirement (including
any emergency, supplemental or other marginal reserve requirement) for a member
bank of the Federal Reserve System in New York City with respect to liabilities
or assets consisting of or including Eurocurrency Liabilities (or with respect
to any other category of liabilities that includes deposits by reference to
which the Eurodollar Rate is determined) having a term equal to such Interest
Period.
"Eurodollar Rate Loan" means any Loan that, for an Interest Period,
bears interest based on the Eurodollar Rate.
"Event of Default" has the meaning specified in Section 9.1 (Events of
Default).
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Extending Lender" has the meaning specified in Section 2.18(c)
(Facility Extension).
"Extension Assuming Lender" has the meaning specified in Section
2.18(c) (Facility Extension).
"Facility" means the Revolving Credit Commitments and the provisions
herein related to the Revolving Loans, Swing Loans and Letters of Credit.
"Facility Extension" has the meaning specified in Section 2.18
(Facility Extension).
"Facility Increase" has the meaning specified in Section 2.19 (Facility
Increase).
"Facility Increase Effective Date" has the meaning specified in Section
2.19 (Facility Increase).
"Fair Market Value" means (a) with respect to any asset or group of
assets (other than a marketable Security) at any date, the value of the
consideration obtainable in a sale of such asset at such date assuming a sale by
a willing seller to a willing purchaser dealing at arm's length and arranged in
an orderly manner over a reasonable period of time having regard to the nature
and characteristics of such asset, as reasonably determined by the Board of
Directors of the Borrower, or, if such asset shall have been the subject of a
relatively contemporaneous appraisal by an independent third party appraiser,
the basic assumptions underlying which have not materially changed since its
date, the value set forth in such appraisal, and (b) with respect to any
marketable Security at any date, the closing sale price of such Security on the
Business Day next preceding such date, as appearing in any published list of any
national securities exchange or the Nasdaq Stock Market or, if there is no such
closing sale price of such Security, the final price for the purchase of such
Security at face value quoted on such business day by a financial institution of
recognized standing which regularly deals in securities of such type selected by
the Administrative Agent.
14
"Federal Funds Rate" means, for any period, a fluctuating interest rate
per annum equal for each day during such period to the weighted average of the
rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers, as published for such day (or,
if such day is not a Business Day, for the next 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 for such day on such
transactions received by the Administrative Agent from three Federal funds
brokers of recognized standing selected by it.
"Federal Reserve Board" means the Board of Governors of the Federal
Reserve System, or any successor thereto.
"Fee Letter" means, collectively, (i) the letter dated as of March 22,
2002, addressed to the Borrower from CNAI and the Arranger and accepted by the
Borrower on March 22, 2002, with respect to certain fees to be paid from time to
time to CNAI and the Arranger, and (ii) the letter dated April 4, 2003,
addressed to the Borrower from CNAI and the Arranger and accepted by the
Borrower on April 4, 2003, with respect to fees to be paid on the Effective Date
to CNAI and the Arranger.
"Financial Statements" means the financial statements of the Borrower
and its Subsidiaries delivered in accordance with Section 4.4 (Financial
Statements) and 6.1 (Financial Statements).
"Finished Lots" means lots of Entitled Land as to which offsite
construction has been substantially completed, utilities and all major
infrastructure have been completed and stubbed to the site, and building permits
for Units may be promptly pulled and construction commenced by the Borrower
without the satisfaction of any further conditions.
"Fiscal Quarter" means each of the three month periods ending on March
31, June 30, September 30 and December 31.
"Fiscal Year" means the twelve month period ending on December 31.
"Fixed Charge Coverage Ratio" means, with respect to the Borrower for
any period, the ratio of (a) Adjusted EBITDA of the Borrower for such period
minus Capital Expenditures of the Borrower for such period to (b) the Fixed
Charges of the Borrower for such period.
"Fixed Charges" means, with respect to the Borrower for any period, the
sum of (a) the Interest Incurred of the Borrower for such period determined on a
Consolidated basis, (b) the principal amount of Indebtedness (other than surety
bonds, performance bonds and undrawn letters of credit incurred, in each case,
in the ordinary course of business) of the Borrower and each of its Subsidiaries
determined on a Consolidated basis having a scheduled due date during such
period and (c) all cash dividends payable by the Borrower and its Subsidiaries
on Stock in respect of such period to Persons other than the Borrower and its
Subsidiaries.
"Four Year Projections" means those financial projections dated April
9, 2002 covering each Fiscal Quarter ending in 2002 through 2005 inclusive,
delivered to the Administrative Agent on the Closing Date in connection with the
Original Credit Agreement.
15
"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.
"GAAP" means generally accepted accounting principles in the United
States of America as in effect from time to time set forth in the opinions and
pronouncements of the Accounting Principles Board and the American Institute of
Certified Public Accountants and the statements and pronouncements of the
Financial Accounting Standards Board, or in such other statements by such other
entity as may be in general use by significant segments of the accounting
profession, which are applicable to the circumstances as of the date of
determination.
"GAAP Value" means, with respect to each Borrowing Base Asset, the GAAP
basis asset value for such property or asset (but in no event greater than cost
minus accumulated depreciation). In determining GAAP Value, costs for Land/Lots
Under Development and Unimproved Land shall include land costs and costs
associated with obtaining requisite zoning requirements and governmental
approvals, capitalized expenses associated with pulling permits and the
commencement of physical site improvement and soft and hard costs incurred, and
costs for Finished Lots, Unsold Units and Sold Homes shall include the
proportional costs of (a) the land per lot/unit, and (b) the site improvements
and soft and hard costs incurred; and the cost of any land which is subject to a
purchase option shall be excluded until the Borrower has acquired title.
"Governmental Authority" means any nation or government, any state or
other political subdivision thereof and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government.
"Guarantor" means each Subsidiary of the Borrower party to the
Guaranty.
"Guaranty" means the guaranty, dated as of the Closing Date executed by
each Subsidiary of the Borrower named therein or that has executed a Guaranty
Supplement pursuant to Section 7.13 (Additional Collateral and Guaranties).
"Guaranty Obligation" means, as applied to any Person, any direct or
indirect liability, contingent or otherwise, of such Person with respect to any
Indebtedness of another Person, if the purpose or intent of such Person in
incurring the Guaranty Obligation is to provide assurance to the obligee of such
Indebtedness that such Indebtedness will be paid or discharged, or that any
agreement relating thereto will be complied with, or that any holder of such
Indebtedness will be protected (in whole or in part) against loss in respect
thereof including, (a) the direct or indirect guaranty, endorsement (other than
for collection or deposit in the ordinary course of business), co-making,
discounting with recourse or sale with recourse by such Person of Indebtedness
of another Person and (b) any liability of such Person for Indebtedness of
another Person through any agreement (contingent or otherwise) (i) to purchase,
repurchase or otherwise acquire such Indebtedness or any security therefor, or
to provide funds for the payment or discharge of such Indebtedness (whether in
the form of a loan, advance, stock purchase, capital contribution or otherwise),
(ii) to maintain the solvency or any balance sheet item, level of income or
financial condition of another Person, (iii) to make take-or-pay or similar
payments, if required, regardless of non-performance by any other party or
parties to an agreement, (iv) to purchase, sell or lease (as lessor or lessee)
property, or to purchase or sell services, primarily for the purpose of enabling
the debtor to make payment of such Indebtedness or to assure the holder of such
Indebtedness against loss, or (v) to supply funds to or in any other manner
invest in such
16
other Person (including to pay for property or services irrespective of whether
such property is received or such services are rendered), if in the case of any
agreement described under subclause (i), (ii), (iii), (iv) or (v) of clause (b)
of this sentence the primary purpose or intent thereof is to provide assurance
that Indebtedness of another Person will be paid or discharged, that any
agreement relating thereto will be complied with or that any holder of such
Indebtedness will be protected (in whole or in part) against loss in respect
thereof. The amount of any Guaranty Obligation shall be equal to the guaranteed
amount of the Indebtedness which is guaranteed or otherwise supported by such
Guaranty Obligation.
"Hedging Contracts" means all Interest Rate Contracts, foreign exchange
contracts, currency swap or option agreements, forward contracts, commodity
swap, purchase or option agreements, other commodity price hedging arrangements,
and all other similar agreements or arrangements designed to alter the risks of
any Person arising from fluctuations in interest rates, currency values or
commodity prices.
"Indebtedness" of any Person means without duplication (a) all
indebtedness of such Person for borrowed money, (b) all obligations of such
Person evidenced by notes, bonds, debentures or similar instruments that bear
interest, (c) all reimbursement and all obligations with respect to letters of
credit, bankers' acceptances, surety bonds and performance bonds incurred other
than in the ordinary course, whether or not matured, (d) all indebtedness for
the deferred purchase price of property or services, other than trade payables
incurred in the ordinary course of business that are not overdue, (e) all
indebtedness of such Person created or arising under any conditional sale or
other title retention agreement with respect to property acquired by such Person
(even though the rights and remedies of the seller or lender under such
agreement in the event of default are limited to repossession or sale of such
property), (f) all Capital Lease Obligations of such Person and the present
value of future rental payments under all synthetic leases, (g) all Guaranty
Obligations of such Person, (h) all obligations of such Person to purchase,
redeem, retire, defease or otherwise acquire for value any Stock or Stock
Equivalents of such Person, valued, in the case of redeemable preferred stock,
at the greater of its voluntary liquidation preference and its involuntary
liquidation preference plus accrued and unpaid dividends, (i) all payments that
such Person would have to make in the event of an early termination on the date
Indebtedness of such Person is being determined in respect of Hedging Contracts
of such Person and (j) all Indebtedness of the type referred to above secured by
(or for which the holder of such Indebtedness has an existing right, contingent
or otherwise, to be secured by) any Lien upon or in property (including Accounts
and general intangibles) owned by such Person, even though such Person has not
assumed or become liable for the payment of such Indebtedness but only to the
extent of the lesser of (x) the amount of such Indebtedness and (y) the Fair
Market Value of the property securing such Indebtedness.
"Indemnified Matter" has the meaning specified in Section 11.4
(Indemnities).
"Indemnitees" has the meaning specified in Section 11.4 (Indemnities).
"Interest Expense" means, for any Person for any period, (a) total
interest expense of such Person and its Subsidiaries for such period determined
on a Consolidated basis in conformity with GAAP and including, in any event,
interest expensed through cost of goods sold in such period and net costs under
Interest Rate Contracts for such period minus (b) net gains of such Person and
its Subsidiaries under Interest Rate Contracts for such period determined on a
Consolidated basis in conformity with GAAP.
17
"Interest Incurred" means for any period, without duplication, the
aggregate amount of interest that, in conformity with GAAP, would be set forth
opposite the caption "interest expense" or any like caption on a Consolidated
income statement of the Borrower and its Subsidiaries or allocated to joint
ventures, or otherwise (including, without limitation, all commissions,
discounts and other fees and charges owed with respect to letters of credit and
bankers' acceptance financing, the net costs associated with Interest Rate
Contracts, and the interest portion of any deferred payment obligation) and,
without duplication, all capitalized interest for such period, all interest
attributable to discontinued operations for such period, and all interest
actually paid by the Borrower and its Subsidiaries on a consolidated basis, in
each case, to the extent not set forth opposite the caption "interest expense"
or any like caption on a Consolidated income statement for the Borrower and its
Subsidiaries, minus any interest income of the Borrower and its Subsidiaries for
such period determined on a Consolidated basis in conformity with GAAP, plus the
product of (a) cash dividends paid on any preferred stock of the Borrower,
multiplied by (b) a fraction, the numerator of which is one, and the denominator
of which is one minus the then current aggregate federal, state and local tax
rate of the Borrower expressed as a decimal.
"Interest Period" means, in the case of any Eurodollar Rate Loan, (a)
initially, the period commencing on the date such Eurodollar Rate Loan is made
or on the date of conversion of a Base Rate Loan to such Eurodollar Rate Loan
and ending one, two, three or six months thereafter as selected by the Borrower
in its Notice of Borrowing or Notice of Conversion or Continuation given to the
Administrative Agent pursuant to Section 2.2 (Borrowing Procedures) or 2.11
(Conversion/Continuation Option), and (b) thereafter, if such Loan is continued,
in whole or in part, as a Eurodollar Rate Loan pursuant to Section 2.11
(Conversion/Continuation Option), a period commencing on the last day of the
immediately preceding Interest Period therefor and ending one, two, three or six
months thereafter as selected by the Borrower in its Notice of Conversion or
Continuation given to the Administrative Agent pursuant to Section 2.11
(Conversion/Continuation Option); provided, however, that all of the foregoing
provisions relating to Interest Periods in respect of Eurodollar Rate Loans are
subject to the following:
(i) if any Interest Period would otherwise end on a day which
is not a Business Day, such Interest Period shall be extended to the
next succeeding Business Day, unless the result of such extension would
be to extend such Interest Period into another calendar month, in which
event such Interest Period shall end on the immediately preceding
Business Day;
(ii) any Interest Period that begins on the last Business Day
of a calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest
Period) shall end on the last Business Day of a calendar month;
(iii) the Borrower may not select any Interest Period in
respect of Loans having an aggregate principal amount of less than
$5,000,000; and
(iv) there shall be outstanding at any one time no more than
six Interest Periods in the aggregate.
"Interest Rate Contracts" means all interest rate swap agreements,
interest rate cap agreements, interest rate collar agreements and interest rate
insurance.
18
"Investment" means, with respect to any Person, (a) any purchase or
other acquisition by such Person of (i) any Security issued by, (ii) a
beneficial interest in any Security issued by, or (iii) any other equity
ownership interest in, any other Person, (b) any purchase by such Person of all
or a significant part of the assets of a business conducted by another Person or
all or substantially all of the assets constituting the business of a division,
branch or other unit operation of any other Person, and (c) any loan, advance
(other than deposits with financial institutions available for withdrawal on
demand, prepaid expenses, accounts receivable and similar items made or incurred
in the ordinary course of business as presently conducted), or capital
contribution by such Person to any other Person, including all Indebtedness of
any other Person to such Person arising from a sale of property by such Person
other than in the ordinary course of its business and (d) any Guaranty
Obligation incurred by such Person in respect of Indebtedness of any other
Person.
"IRS" means the Internal Revenue Service of the United States or any
successor thereto.
"Issue" means, with respect to any Letter of Credit, to issue, extend
the expiry of, renew or increase the maximum stated amount (including by
deleting or reducing any scheduled decrease in such maximum stated amount) of,
such Letter of Credit. The terms "Issued" and "Issuance" shall have a
corresponding meaning.
"Issuer" means each Lender or Affiliate of a Lender that (a) is listed
on the signature pages hereof as an "Issuer" or (b) hereafter becomes an Issuer
with the approval of the Administrative Agent and the Borrower by agreeing
pursuant to an agreement with and in form and substance satisfactory to the
Administrative Agent and the Borrower to be bound by the terms hereof applicable
to Issuers.
"January 2003 Senior Notes" means the 9% senior notes issued by the
Borrower pursuant to the January 2003 Senior Note Indenture.
"January 2003 Senior Note Indenture" means the Indenture dated as of
February 3, 2003 between the Borrower and Xxxxx Fargo Bank Minnesota, National
Association, as trustee.
"Land Bank Arrangement" means any arrangement (a) whereby (i) the
Borrower or any of its Subsidiaries enters into a purchase agreement to purchase
land and immediately assigns such purchase agreement to an unaffiliated special
purpose entity or (ii) an unaffiliated special purpose entity directly enters
into a purchase agreement to purchase land, in each case, if such special
purpose entity thereafter grants the Borrower or such Subsidiary an option to
purchase such land at a predetermined price (such special purpose entity, a
"Land Bank") and (b) which contains all of the following characteristics: (i)
the sole asset of the Borrower or any of its Subsidiaries subject to financial
risk in such arrangement is an initial deposit of a percentage of the costs of
the land purchased, (ii) none of the Borrower or any of its Subsidiaries is an
obligor in respect of any Indebtedness obligations of such Land Bank, (iii) none
of the Borrower or any of its Subsidiaries guaranties any obligations of such
Land Bank and (iv) none of the Borrower or any of its Subsidiaries is a related
party of such Land Bank.
"Land Bank Indebtedness" means, any Indebtedness of any Land Bank that
would be required to be included on the balance sheet of the Borrower or any of
its Subsidiaries pursuant to Interpretation Number 46 issued by the Financial
Accounting Standards Board in January of 2003 (as such Interpretation may be
amended from time to time).
19
"Landholding Interest" means any land-holding joint venture (or the
proceeds thereof) of any (i) Wholly-Owned Subsidiary of the Borrower that
purchases and jointly develops a fractional undivided interest in land, or (ii)
Subsidiary of the Borrower that is not a Wholly-Owned Subsidiary but is formed
for the purpose of entering into a specific project which purchases a whole and
undivided interest in land.
"Land/Lots Under Development" means Entitled Land on which grading or
construction of on-site infrastructure improvements has begun, and for which all
necessary zoning approvals have been obtained and are in full force and effect,
and which does not qualify as a Sold Home or an Unsold Home Under Construction.
"Leases" means, with respect to any Person, all of those leasehold
estates in real property of such Person, as lessee, as such may be amended,
supplemented or otherwise modified from time to time.
"Lender" means each financial institution or other entity that (a) is
listed on the signature pages hereof as a "Lender" or (b) from time to time
becomes a party hereto by execution of an Assignment and Acceptance.
"Letter of Credit" means any letter of credit issued or deemed issued
pursuant to Section 2.4 (Letters of Credit).
"Letter of Credit Obligations" means, at any time, the aggregate of all
liabilities at such time of the Borrower to all Issuers with respect to Letters
of Credit, whether or not any such liability is contingent, and includes the sum
of (a) the Reimbursement Obligations at such time and (b) the Letter of Credit
Undrawn Amounts at such time.
"Letter of Credit Reimbursement Agreement" has the meaning specified in
Section 2.4(e) (Letters of Credit).
"Letter of Credit Request" has the meaning specified in Section 2.4(c)
(Letters of Credit).
"Letter of Credit Undrawn Amounts" means, at any time, the aggregate
undrawn face amount of all Letters of Credit outstanding at such time.
"Lien" means any pledge, hypothecation, assignment, charge, deposit
arrangement, encumbrance, lien (statutory or other), security interest or
preference, priority or other security agreement or preferential arrangement of
any kind or nature whatsoever intended to assure payment of any Indebtedness or
the performance of any other obligation, including any conditional sale or other
title retention agreement, the interest of a lessor under a Capital Lease,
mortgage, deed of trust, lease, option, right of first refusal, easement,
servitude, right-of-way, license, securities purchase option, call or similar
right, restrictions under any shareholder agreement or any other Contractual
Obligation, encumbrance or any other restriction or limitation whatsoever on any
right incident to the ownership of property (including rights to transfer, use
or possess property) whether contingent or non-contingent, matured or unmatured,
known or unknown, any financing lease having substantially the same economic
effect as any of the foregoing, and the filing of any financing statement under
the UCC or comparable law of any jurisdiction naming the owner of the asset to
which such financing statement relates as debtor.
20
"Loan" means any loan made by any Lender pursuant to this Agreement.
"Loan Documents" means, collectively, this Agreement, the Revolving
Credit Notes (if any), the Guaranty, the Fee Letter, each Letter of Credit
Reimbursement Agreement, each Hedging Contract to which a Loan Party and a
Lender or an Affiliate of a Lender is a party entered into in connection
herewith, each agreement pursuant to which a Lender or an Affiliate of a Lender
provides cash management services to a Loan Party, the Collateral Documents and
each certificate, agreement or document executed by a Loan Party and delivered
to the Administrative Agent or any Lender in connection with or pursuant to any
of the foregoing.
"Loan Party" means each of the Borrower, each Guarantor and each other
Subsidiary of the Borrower that executes and delivers a Loan Document.
"Management Services Agreement" means the Management Services
Agreement, dated as of June 1, 2000 between the Borrower and TOI.
"Material Adverse Change" means a material adverse change in any of (a)
the business, condition (financial or otherwise), performance, properties or
prospects, operations or properties of any Loan Party or the Borrower and its
Subsidiaries, taken as a whole, (b) the legality, validity or enforceability of
any Loan Document or any Related Document, (c) the perfection or priority of the
Liens granted pursuant to the Collateral Documents, (d) the ability of the
Borrower or of the other Loan Parties to perform their respective obligations
under the Loan Documents, or (e) the rights and remedies of the Administrative
Agent, the Lenders or Issuers under any of the Loan Documents.
"Material Adverse Effect" means an effect that results in or causes, or
could reasonably be expected to result in or cause, a Material Adverse Change.
"Maximum Credit" means, at any time, the lesser of (a) the Revolving
Credit Commitments in effect at such time and (b) the amount by which Borrowing
Base at such time exceeds the amount of the Other Indebtedness outstanding at
such time.
"Merger" shall mean the merger of Xxxxx with and into Newmark, with
Newmark being the surviving entity pursuant to, and in consummation of the
transaction contemplated by, the Merger Agreement.
"Merger Agreement" means the Merger Agreement, dated as of April 6,
2002, between Xxxxx and Newmark, pursuant to which subject to certain terms and
conditions Xxxxx will merge with and into Newmark and Newmark shall be the
surviving corporation.
"Model Homes" means all Units which are used as models or sales offices
to market a particular real estate development project.
"Multiemployer Plan" means a multiemployer plan, as defined in Section
4001(a)(3) of ERISA, to which the Borrower, any of its Subsidiaries or any ERISA
Affiliate has any obligation or liability, contingent or otherwise.
"Net Cash Proceeds" means proceeds received by the Borrower or any of
its Subsidiaries after the Closing Date in cash or Cash Equivalents from any (a)
Asset Sale, other than an Asset Sale permitted under clauses (a), (b) and (d) of
Section 8.4 (Sale of Assets), net of
21
(i) the reasonable cash costs of sale, assignment or other disposition, (ii)
taxes paid or reasonably estimated to be payable as a result thereof and (iii)
any amount required to be paid or prepaid on Indebtedness (other than the
Obligations) secured by the assets subject to such Asset Sale; provided,
however, that evidence of each of (i), (ii) and (iii) above is provided to the
Administrative Agent in form and substance satisfactory to it, (b) Property Loss
Event or (c) any Debt Issuance (other than any Debt Issuance permitted under
clause (a) through (k) of Section 8.1) (Indebtedness), in each case net of
brokers' and advisors' fees and other costs incurred in connection with such
transaction; provided, however, that in the case of this clause (c), evidence of
such costs is provided to the Administrative Agent in form and substance
satisfactory to it.
"Net Worth" of any Person means, at any date, the lesser of (a) the
stockholders' equity that would be reflected on a Consolidated balance sheet of
such Person and its Subsidiaries at such date prepared in conformity with GAAP
and (b) (i) the Total Assets of such Person at such date (other than investments
in and moneys due from Affiliates) minus (ii) Total Liabilities of such Person
at such date.
"Newmark" means Newmark Homes Corp., a Delaware corporation and a
predecessor in interest to the Borrower.
"Non-Consenting Lender" has the meaning specified in Section 11.1(c)
(Amendments, Waivers, Etc.).
"Non-Extending Lender" has the meaning specified in Section 2.18(c)
(Facility Extension).
"Non-Funding Lender" has the meaning specified in Section 2.2(d)
(Borrowing Procedures).
"Non-U.S. Lender" means each Lender or Administrative Agent that is not
a United States person as defined in Section 7701(a)(30) of the Code.
"Notes" means, collectively, the Senior Notes, the January 2003 Senior
Notes and the Subordinated Notes.
"Notice of Borrowing" has the meaning specified in Section 2.2(a)
(Borrowing Procedures).
"Notice of Conversion or Continuation" has the meaning specified in
Section 2.11 (Conversion/Continuation Option).
"Obligations" means, without duplication, the Loans, the Letter of
Credit Obligations and all other amounts, obligations, covenants and duties
owing by the Borrower to the Administrative Agent, any Lender, any Issuer, any
Affiliate of any of them or any Indemnitee, of every type and description
(whether by reason of an extension of credit, opening or amendment of a letter
of credit or payment of any draft drawn thereunder, loan, guaranty,
indemnification, foreign exchange or currency swap transaction, interest rate
hedging transaction or otherwise), present or future, arising under this
Agreement, any other Loan Document, any Hedging Contract, whether direct or
indirect (including those acquired by assignment), absolute or contingent, due
or to become due, now existing or hereafter arising and however acquired and
whether or not evidenced by any note, guaranty or other instrument or for the
payment of money,
22
including all letter of credit and other fees, interest, charges, expenses,
attorneys' fees and disbursements and other sums chargeable to the Borrower
under this Agreement, any other Loan Document, any Hedging Contract or any
agreement for cash management services entered into in connection with this
Agreement or any other Loan Document and all obligations of the Borrower to
provide cash collateral for Letter of Credit Obligations.
"Other Indebtedness" means, at any time, the Indebtedness of the
Borrower and its Subsidiaries comprised of (a) the outstanding principal amount
of the Senior Notes and the January 2003 Senior Notes at such time, (b) the
outstanding principal amount of Indebtedness (including the Subordinated Notes)
that is subordinated to the Obligations and that is due within one year of such
time, (c) the outstanding principal amount of all other Indebtedness which is
pari passu to the Obligations, other than trade payables that are not more than
90 days past the original invoice date thereof; provided, however, "Other
Indebtedness" shall not include (i) the Indebtedness under the Warehouse Line of
Credit to the extent permitted hereunder, and (ii) Indebtedness attributable to
the Landholding Interests permitted pursuant to clause (l) and (m) of Section
8.1 (Indebtedness).
"PBGC" means the Pension Benefit Guaranty Corporation or any successor
thereto.
"Permit" means any permit, approval, authorization, license, variance
or permission required from a Governmental Authority under an applicable
Requirement of Law.
"Permitted Acquisition" means the acquisition by the Borrower or any of
its Subsidiaries of all or substantially all of the assets or Stock of any
Person or of any operating division thereof (the "Target"), or the merger of the
Target with or into the Borrower or any Subsidiary of the Borrower (with the
Borrower, in the case of a merger with the Borrower, being the surviving
corporation) (each an "Acquisition") subject to the satisfaction of each of the
following conditions:
(a) for any Acquisition for which the aggregate consideration
paid (including all cash, the value of all Stock, Stock Equivalents and
asset consideration, the amount of all Indebtedness assumed and the
value of all other consideration) equals or exceeds 5% of Consolidated
Tangible Net Worth,
(i) the Administrative Agent shall receive at least
10 Business Days' prior written notice of such proposed
acquisition, which notice shall include a reasonably detailed
description of such proposed acquisition;
(ii) concurrently with delivery of the notice
referred to in clause (i) above, the Borrower shall have
delivered to the Administrative Agent such other financial
information, financial analysis, documentation or other
information relating to such Acquisition as the Administrative
Agent or any Lender shall reasonably request;
(iii) on or prior to the date of such Acquisition,
the Administrative Agent shall have received copies of the
acquisition agreement and related agreements and instruments,
and all opinions, certificates, lien search results and other
documents reasonably requested by the Administrative Agent;
23
(b) such Acquisition shall only involve assets located in the
Permitted Markets and for use in the lines of business of the Borrower
or its Subsidiaries existing on the Closing Date;
(c) such Acquisition shall be consensual (including, where
applicable, approved by the Target's board of directors, or analogous
governing body, or approved by the Target's trustee or receiver, or
such analogous fiduciary, in the case of Target in bankruptcy or
receivership) and duly authorized by the Borrower or the applicable
Subsidiary of the Borrower;
(d) no additional Indebtedness or other liabilities shall be
incurred, assumed or otherwise be reflected on a consolidated balance
sheet of the Borrower and Target after giving effect to such
Acquisition, except (i) Loans made hereunder, (ii) ordinary course
trade payables and accrued expenses and (iii) Indebtedness of the
Target permitted under Section 8.1 (Indebtedness);
(e) at or prior to the closing of any Acquisition, the
Borrower (or the Subsidiary making the Acquisition) and the Target
shall have executed such documents and taken such actions as are
described in Section 7.13 (Additional Collateral and Guaranties)
irrespective of the financial tests set forth therein; and
(f) a Responsible Officer of the Borrower shall have delivered
a certificate to the Administrative Agent to the effect that at the
time of such Acquisition and after giving effect thereto, (i) no
Default or Event of Default shall have occurred and be continuing, (ii)
all representations and warranties contained in Article IV and in the
other Loan Documents shall be true and correct in all material
respects, (iii) the Borrower and its Subsidiaries shall be in pro forma
compliance on a historical basis for the preceding four Fiscal Quarters
with the covenants set forth in Article V, and (iv) the Revolving
Credit Outstandings shall not exceed the Maximum Credit.
"Permitted Holders" means TOI and Technical Olympic SA or any Person of
which either of the preceding companies "beneficially owns" (as defined in Rule
13d-3 under the Exchange Act), individually or collectively with the other
company, at least a majority of the total voting power of the Voting Stock of
such Person.
"Permitted Markets" means housing markets located in the continental
United States of America.
"Person" means an individual, partnership, corporation (including a
business trust), joint stock company, estate, trust, limited liability company,
unincorporated association, joint venture or other entity, or a Governmental
Authority.
"Pledge Agreement" means the pledge agreement, dated as of the Closing
Date, executed by the Borrower, and each Guarantor.
"Pledged Stock" has the meaning specified in the Pledge Agreement.
"Preferred Home Mortgage Company" means Preferred Home Mortgage
Company, a Florida corporation.
24
"Pro Forma Balance Sheet" has the meaning specified in Section 4.4(d)
(Financial Statements).
"Property Loss Event" means any loss of or damage to property of the
Borrower or any of its Subsidiaries that results in the receipt by such Person
of proceeds of insurance in excess of $2,500,000 (individually or in the
aggregate) or any taking of property of the Borrower or any of its Subsidiaries
by condemnation, eminent domain or any similar proceeding that results in the
receipt by such Person of a compensation payment in respect thereof in excess of
$2,500,000 (individually or in the aggregate).
"Proposed Change" has the meaning specified in Section 11.1(c)
(Amendments, Waivers, Etc.).
"Ratable Portion" or "ratably" means, with respect to any Lender, the
percentage obtained by dividing (a) the Revolving Credit Commitment of such
Lender by (b) the aggregate Revolving Credit Commitments of all Lenders (or, at
any time after the Revolving Credit Termination Date, the percentage obtained by
dividing the aggregate outstanding principal balance of the Revolving Credit
Outstandings owing to such Lender by the aggregate outstanding principal balance
of the Revolving Credit Outstandings owing to all Lenders).
"Real Property" means all of those plots, pieces or parcels of land now
owned, leased or hereafter acquired or leased by the Borrower or any of its
Subsidiaries (the "Land"), together with the right, title and interest of the
Borrower or any of its Subsidiaries, if any, 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.
"Refinanced Indebtedness" means the Indebtedness of the Borrower
described in Schedule 1.1.
"Register" has the meaning specified in Section 11.8 (Notices, Etc.).
"Reimbursement Obligations" means all matured reimbursement or
repayment obligations of the Borrower to any Issuer with respect to amounts
drawn under Letters of Credit.
"Reimbursement Date" has the meaning specified in Section 2.4(b)
(Letters of Credit).
"Reinvestment Deferred Amount" means, with respect to any Reinvestment
Event, the aggregate Net Cash Proceeds received by the Borrower or any of its
Subsidiaries in connection therewith which are not initially applied to prepay
the Loans pursuant to Section 2.9 (Mandatory Prepayments) as a result of the
delivery of a Reinvestment Notice.
25
"Reinvestment Event" means any Asset Sale (other than an Asset Sale in
the ordinary course) or Property Loss Event in respect of which the Borrower has
delivered a Reinvestment Notice.
"Reinvestment Notice" means a written notice executed by a Responsible
Officer of the Borrower stating that no Default or Event of Default has occurred
and is continuing and that the Borrower (directly or indirectly through one of
its Subsidiaries) intends and expects to use all or a specified portion of the
Net Cash Proceeds of an Asset Sale (other than an Asset Sale in the ordinary
course) or Property Loss Event (or to borrow an equivalent amount under the
Facility) to acquire replacement assets useful in its or one of its
Subsidiaries' businesses or, in the case of a Property Loss Event not requiring
the acquisition of replacement assets, to effect repairs.
"Reinvestment Prepayment Amount" means, with respect to any
Reinvestment Event, the Reinvestment Deferred Amount relating thereto less any
amount expended or required to be expended pursuant to a Contractual Obligation
entered into prior to the relevant Reinvestment Prepayment Date to acquire
replacement assets useful in the Borrower's business or effect repairs in the
case of a Property Loss Event.
"Reinvestment Prepayment Date" means, with respect to any Reinvestment
Event, the earlier of (i) the date occurring 270 days after such Reinvestment
Event and (ii) the date five Business Days after the date on which the Borrower
shall have notified the Administrative Agent of the Borrower's determination not
to acquire replacement assets useful in the Borrower's or a Subsidiary's
business (or not to effect repairs in the case of a Property Loss Event) with
all or any portion of the relevant Reinvestment Deferred Amount.
"Related Documents" means the Merger Agreement, Senior Note Indenture,
the Subordinated Note Indenture, and the Notes, the Tax Allocation Agreement and
each other document and instrument executed with respect to any of them.
"Release" means, with respect to any Person, any release, spill,
emission, leaking, pumping, injection, deposit, disposal, discharge, dispersal,
leaching or migration, in each case, of any Contaminant into the indoor or
outdoor environment or into or out of any property owned or operated by such
Person, including the movement of Contaminants through or in the air, soil,
surface water, ground water or property.
"Remedial Action" means all actions required to (a) clean up, remove,
treat or in any other way address any Contaminant in the indoor or outdoor
environment, (b) prevent the Release or threat of Release or minimize the
further Release so that a Contaminant does not migrate or endanger or threaten
to endanger public health or welfare or the indoor or outdoor environment or (c)
perform pursuant to Environmental Laws pre-remedial studies and investigations
and post-remedial monitoring and care.
"Requirement of Law" means, with respect to any Person, the common law
and all federal, state, local and foreign laws, rules and regulations, orders,
judgments, decrees and other determinations of any Governmental Authority or
arbitrator, applicable to or binding upon such Person or any of its property or
to which such Person or any of its property is subject.
"Requisite Lenders" means, collectively, Lenders having 51% or more of
the aggregate outstanding amount of the Revolving Credit Commitments or, after
the Revolving
26
Credit Termination Date, 51% or more of the aggregate Revolving Credit
Outstandings. A Non-Funding Lender shall not be included in the calculation of
"Requisite Lenders."
"Responsible Officer" means, with respect to any Person, any of the
principal executive officers, managing members or general partners of such
Person, but in any event, with respect to financial matters, the chief financial
officer, chief accounting officer, treasurer, vice president of finance or
controller of such Person.
"Restricted Payment" means (a) any dividend, distribution or any other
payment whether direct or indirect, on account of any Stock or Stock Equivalents
of the Borrower or any of its Subsidiaries now or hereafter outstanding, and (b)
any redemption, retirement, sinking fund or similar payment, purchase or other
acquisition for value, direct or indirect, of any Stock or Stock Equivalents of
the Borrower or any of its Subsidiaries now or hereafter outstanding.
"Revolving Credit Commitment" means, with respect to each Lender, the
commitment of such Lender to make Revolving Loans and acquire interests in other
Revolving Credit Outstandings in the aggregate principal amount outstanding not
to exceed the amount set forth opposite such Lender's name on Schedule I under
the caption "Revolving Credit Commitment," as amended to reflect each Assignment
and Acceptance or Assumption Agreement executed by such Lender and as such
amount may be increased or reduced pursuant to this Agreement.
"Revolving Credit Note" means a promissory note of the Borrower payable
to the order of any Lender in a principal amount equal to the amount of such
Lender's Revolving Credit Commitment evidencing the aggregate Indebtedness of
the Borrower to such Lender resulting from the Revolving Loans owing to such
Lender.
"Revolving Credit Outstandings" means, at any particular time, the sum
of (a) the principal amount of the Revolving Loans outstanding at such time plus
(b) the Letter of Credit Obligations outstanding at such time plus (c) the
principal amount of the Swing Loans outstanding at such time.
"Revolving Credit Termination Date" shall mean the earliest of (a) the
Scheduled Termination Date, (b) the date of termination of the Revolving Credit
Commitments pursuant to Section 2.5 (Reduction and Termination of the Revolving
Credit Commitments) and (c) the date on which the Obligations become due and
payable pursuant to Section 9.2 (Remedies).
"Revolving Loan" has the meaning specified in Section 2.1 (The
Revolving Credit Commitments).
"Scheduled Termination Date" means the third anniversary of the Closing
Date subject to the provisions for the extension of the Scheduled Termination
Date set forth in Section 2.18 (Facility Extension).
"Secured Obligations" means, in the case of the Borrower, the
Obligations, and, in the case of any other Loan Party, the obligations of such
Loan Party under the Guaranty and the other Loan Documents to which it is a
party.
"Secured Parties" means the Lenders, the Issuers, the Administrative
Agent and any other holder of any of the Obligations.
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"Security" means any Stock, Stock Equivalent, voting trust certificate,
bond, debenture, note or other evidence of Indebtedness, whether secured,
unsecured, convertible or subordinated, or any certificate of interest, share or
participation in, or any temporary or interim certificate for the purchase or
acquisition of, or any right to subscribe to, purchase or acquire, any of the
foregoing, but shall not include any evidence of the Obligations.
"Selling Lender" has the meaning specified in Section 11.7 (Sharing of
Payments, Etc.).
"Senior Note Indenture" means the Indenture dated as of June 25, 2002,
between the Borrower and Xxxxx Fargo Bank Minnesota, National Association, as
trustee.
"Senior Notes" means the 9% senior notes issued by the Borrower
pursuant to the Senior Note Indenture.
"Sold Homes" means all Units (including Model Homes) on which a
building permit has been issued and construction has begun or has been
completed, and for which the Borrower or its Subsidiaries has entered into a
written Contract for Sale.
"Solvent" means, with respect to any Person, that the value of the
assets of such Person (both at fair value and present fair saleable value) is,
on the date of determination, greater than the total amount of liabilities
(including contingent and unliquidated liabilities) of such Person as of such
date and that, as of such date, such Person is able to pay all liabilities of
such Person as such liabilities mature and does not have unreasonably small
capital. In computing the amount of contingent or unliquidated liabilities at
any time, such liabilities will be computed at the amount which, in light of all
the facts and circumstances existing at such time, represents the amount that
can reasonably be expected to become an actual or matured liability.
"Standby Letter of Credit" means any letter of credit issued pursuant
to Section 2.4 (Letters of Credit) which is not a Documentary Letter of Credit.
"Stock" means shares of capital stock (whether denominated as common
stock or preferred stock), beneficial, partnership or membership interests,
participations or other equivalents (regardless of how designated) of or in a
corporation, partnership, limited liability company or equivalent entity,
whether voting or non-voting.
"Stock Equivalents" means all securities convertible into or
exchangeable for Stock and all warrants, options or other rights to purchase or
subscribe for any Stock, whether or not presently convertible, exchangeable or
exercisable.
"Subordinated Note Indenture" means the Indenture dated as of June 25,
2002, between the Borrower and Xxxxx Fargo Bank Minnesota, National Association,
as trustee.
"Subordinated Notes" means the 10 3/8% Senior subordinated notes issued
by the Borrower pursuant to the Subordinated Note Indenture.
"Subsidiary" means, with respect to any Person, any corporation,
partnership, limited liability company or other business entity of which an
aggregate of 50% or more of the outstanding Voting Stock is, at the time,
directly or indirectly, owned or controlled by such Person and/or one or more
Subsidiaries of such Person.
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"Swing Loan" has the meaning specified in Section 2.3(a) (Swing Loans).
"Swing Loan Borrowing" means a borrowing consisting of a Swing Loan.
"Swing Loan Lender" means CNAI or any other Lender that becomes the
Administrative Agent or that agrees with the approval of the Administrative
Agent and the Borrower to act as the Swing Loan Lender hereunder.
"Swing Loan Request" has the meaning specified in Section 2.3(b) (Swing
Loans).
"Tax Affiliate" means, with respect to any Person, (a) any Subsidiary
of such Person, and (b) any Affiliate of such Person with which such Person
files or is eligible to file consolidated, combined or unitary tax returns.
"Tax Allocation Agreement" means the Tax Allocation Agreement dated as
of March 15, 2000 between TOI and the Borrower.
"Tax Return" has the meaning specified in Section 4.8(a) (Taxes).
"Taxes" has the meaning specified in Section 2.16(a) (Taxes).
"Title IV Plan" means a pension plan, other than a Multiemployer Plan,
covered by Title IV of ERISA and to which the Borrower, any of its Subsidiaries
or any ERISA Affiliate has any obligation or liability (contingent or
otherwise).
"TOI" means Technical Olympic, Inc., a Delaware corporation.
"Total Assets" of any Person means, at any date, (a) the total assets
of such Person and its Subsidiaries at such date determined on a Consolidated
basis in conformity with GAAP minus (b) any Securities issued by such Person
held as treasury securities.
"Total Indebtedness" means, with respect to any Person, all
Indebtedness of such Person and its Subsidiaries. For the avoidance of doubt, no
Land Bank Indebtedness shall be included in the calculation of Total
Indebtedness.
"Total Indebtedness to Consolidated Tangible Net Worth Ratio" means,
with respect to the Borrower at any date of determination, the ratio of (a)
Total Indebtedness of the Borrower as of such date less Unrestricted Cash in
excess of $20,000,000 to (b) Consolidated Tangible Net Worth of the Borrower at
such date.
"Total Liabilities" of any Person means, at any date, all obligations
which in conformity with GAAP would be included in determining total liabilities
as shown on the liabilities side of a Consolidated balance sheet of such Person
and its Subsidiaries at such date, and in any event includes all Indebtedness
(of such Person or any of its Subsidiaries at such date (other than intercompany
Indebtedness and surety and performance bonds incurred in the ordinary course of
business), whether or not the same would be so shown, and exclusive of the
greater of the liquidation preference or the redemption price of any outstanding
Disqualified Stock of such Person at such date. For avoidance of doubt, no Land
Bank Indebtedness shall be included in the calculation of Total Liabilities.
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"Total Liabilities to Consolidated Tangible Net Worth Ratio" means,
with respect to the Borrower at any date of determination, the ratio of (a)
Total Liabilities of the Borrower at such date less Unrestricted Cash in excess
of $20,000,000 at such date to (b) Consolidated Tangible Net Worth of the
Borrower at such date.
"UCC" means the Uniform Commercial Code then in effect for the State of
New York, or such other jurisdiction as the context may require.
"Unentitled Land" means all land which is not Entitled Land.
"Unimproved Land" means all Entitled Land on which no construction of
on-site infrastructure improvements has begun.
"Unit" means a single family residential unit, including a condominium
and townhouse unit and a one-to-four family detached residence.
"Units Closed" means a Unit for which the purchase price therefor has
been paid and the title therefor has been delivered to a purchaser in accordance
with a contract of sale for such Unit.
"Unrestricted Cash" means all cash and Cash Equivalents of the Borrower
and the Guarantors that is not subject to a Lien (other than a Lien securing the
Obligations) or other restriction (including, without limitation, any escrow in
connection with Contract for Sale).
"Unsold Homes Under Construction" means all Units for which building
permits have been issued and construction has commenced, but not completed, and
for which there is no written binding contract of sale with an unrelated third
party purchaser. Construction will be considered to have "commenced" when the
slab or foundation for the condominium building or one-to-four family residence
has been completed.
"Unsold Land" means Unimproved Land, Land/Lot Under Development and
Finished Lots.
"Unsold Units" means Unsold Homes Under Construction, Completed Unsold
Homes Less Than 180 Days Since Completion, and Completed Unsold Homes Over 180
Days Since Completion.
"Unused Commitment Fee" has the meaning specified in Section 2.12(a)
(Unused Commitment Fee).
"Voting Stock" means Stock of any Person having ordinary power to vote
in the election of members of the board of directors, managers, trustees or
other controlling Persons, of such Person (irrespective of whether, at the time,
Stock of any other class or classes of such entity shall have or might have
voting power by reason of the happening of any contingency).
"Warehouse Line of Credit" means the Credit Agreement and Mortgage Loan
Purchase Sale Agreement, each dated as of July 5, 2001 between Preferred Home
Mortgage Company and Guaranty Bank, as amended, supplemented or modified from
time to time.
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"Wholly-Owned Subsidiary" means, in respect of any Person, any
Subsidiary of such Person, all of the Stock of which (other than director's
qualifying shares as may be required by law) is owned by such Person either
directly or indirectly through one or more Wholly-Owned Subsidiaries of Such
Person.
"Withdrawal Liability" means, with respect to the Borrower or any of
its Subsidiaries at any time, the aggregate liability incurred (whether or not
assessed) with respect to all Multiemployer Plans pursuant to Section 4201 of
ERISA or for increases in contributions required to be made pursuant to Section
4243 of ERISA.
SECTION 1.2 COMPUTATION OF TIME PERIODS
In this Agreement, in the computation of periods of time from a
specified date to a later specified date, the word "from" means "from and
including" and the words "to" and "until" each mean "to but excluding" and the
word "through" means "to and including."
SECTION 1.3 ACCOUNTING TERMS AND PRINCIPLES
(a) Except as set forth below, all accounting terms not specifically
defined herein shall be construed in conformity with GAAP and all accounting
determinations required to be made pursuant hereto shall, unless expressly
otherwise provided herein, be made in conformity with GAAP.
(b) If any change in the accounting principles used in the preparation
of the most recent Financial Statements referred to in Section 6.1 (Financial
Statements) is hereafter required or permitted by the rules, regulations,
pronouncements and opinions of the Financial Accounting Standards Board or the
American Institute of Certified Public Accountants (or any successors thereto)
and such change is adopted by the Borrower with the agreement of its independent
public accountants and results in a change in any of the calculations required
by Article V or Article VIII had such accounting change not occurred, the
parties hereto agree to enter into negotiations in order to amend such
provisions so as to equitably reflect such change with the desired result that
the criteria for evaluating compliance with such covenants by the Borrower shall
be the same after such change as if such change had not been made; provided,
however, that no change in GAAP that would affect a calculation that measures
compliance with any covenant contained in Article V or Article VIII shall be
given effect until such provisions are amended to reflect such changes in GAAP.
SECTION 1.4 CERTAIN TERMS
(a) The words "herein," "hereof" and "hereunder" and similar words
refer to this Agreement as a whole, and not to any particular Article, Section,
subsection or clause in, this Agreement.
(b) Unless otherwise expressly indicated herein, references in this
Agreement to an Exhibit, Schedule, Article, Section, subsection or clause refer
to the appropriate Exhibit or Schedule to, or Article, Section, subsection or
clause in this Agreement.
(c) Each agreement defined in this Article I shall include all
appendices, exhibits and schedules thereto. Unless the prior written consent of
the Requisite Lenders is required hereunder for an amendment, restatement,
supplement or other modification to any such
31
agreement and such consent is not obtained, references in this Agreement to such
agreement shall be to such agreement as so amended, restated, supplemented or
modified.
(d) References in this Agreement to any statute shall be to such
statute as amended or modified and in effect at the time any such reference is
operative.
(e) The term "including" when used in any Loan Document means
"including without limitation" except when used in the computation of time
periods.
(f) The terms "Lender," "Issuer" and "Administrative Agent" include
their respective successors.
(g) Upon the appointment of any successor Administrative Agent pursuant
to Section 10.6 (Successor Administrative Agent), references to CNAI in Section
10.3 (The Administrative Agent Individually) and to Citibank in the definitions
of Base Rate, Eurodollar Rate shall be deemed to refer to the financial
institution then acting as the Administrative Agent or one of its Affiliates if
it so designates.
ARTICLE II
THE FACILITY
SECTION 2.1 THE REVOLVING CREDIT COMMITMENTS
On the terms and subject to the conditions contained in this Agreement,
each Lender severally agrees to make loans (each a "Revolving Loan") in Dollars
to the Borrower from time to time on any Business Day during the period from the
Effective Date until the Revolving Credit Termination Date in an aggregate
amount not to exceed at any time outstanding for all such loans by such Lender
such Lender's Revolving Credit Commitment, which Revolving Credit Commitments
are being increased as of the Effective Date as set forth in Schedule I
(Revolving Credit Commitments) hereto; provided, however, that at no time shall
any Lender be obligated to make a Revolving Loan in excess of such Lender's
Ratable Portion of the Available Credit. Within the limits of each Lender's
Revolving Credit Commitment, amounts of Revolving Loans repaid may be reborrowed
under this Section 2.1 (The Revolving Credit Commitments).
SECTION 2.2 BORROWING PROCEDURES
(a) Each Borrowing shall be made on written notice (or verbal notice
followed by written notice within six hours of such verbal notice) given by the
Borrower to the Administrative Agent not later than 1:00 p.m. (New York City
time) (i) one Business Day, in the case of a Borrowing of Base Rate Loans and
(ii) three Business Days, in the case of a Borrowing of Eurodollar Rate Loans,
prior to the date of the proposed Borrowing. Each written notice shall be in
substantially the form of Exhibit D (a "Notice of Borrowing"), specifying (A)
the date of such proposed Borrowing, (B) the aggregate amount of such proposed
Borrowing, (C) whether any portion of the proposed Borrowing will be of Base
Rate Loans or Eurodollar Rate Loans, (D) the initial Interest Period or Periods
for any such Eurodollar Rate Loans, and (E) the Available Credit (after giving
effect to the proposed Borrowing). The Revolving Loans shall be made as Base
Rate Loans unless, subject to Section 2.14 (Special Provisions Governing
Eurodollar Rate Loans), the Notice of Borrowing specifies that all or a portion
thereof shall be Eurodollar Rate Loans. Notwithstanding anything to the contrary
contained in Section 2.3(a)
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(Swing Loans), if any Notice of Borrowing requests a Borrowing of Base Rate
Loans, the Administrative Agent may, in its sole discretion, make a Swing Loan
available to the Borrower in an aggregate amount not to exceed such proposed
Borrowing, and the aggregate amount of the corresponding proposed Borrowing
shall be reduced accordingly by the principal amount of such Swing Loan. Each
Borrowing shall be in an aggregate amount of not less than $5,000,000 or an
integral multiple of $1,000,000 in excess thereof, or the remaining Available
Credit, if less.
(b) The Administrative Agent shall give to each Lender prompt notice of
the Administrative Agent's receipt of a Notice of Borrowing and, if Eurodollar
Rate Loans are properly requested in such Notice of Borrowing, the applicable
interest rate determined pursuant to Section 2.14(a) (Determination of Interest
Rate.). Each Lender shall, before 11:00 a.m. (New York City time) on the date of
the proposed Borrowing, make available to the Administrative Agent at its
address referred to in Section 11.8 (Notices, Etc.), in immediately available
funds, such Lender's Ratable Portion of such proposed Borrowing. After the
Administrative Agent's receipt of such funds and upon fulfillment of the
applicable conditions set forth in Section 3.1 (Conditions Precedent to the
Effectiveness of this Agreement) and Section 3.2 (Conditions Precedent to Each
Loan and Letter of Credit), the Administrative Agent will make such funds
available to the Borrower.
(c) Unless the Administrative Agent shall have received notice from a
Lender prior to the date of any proposed Borrowing that such Lender will not
make available to the Administrative Agent such Lender's Ratable Portion of such
Borrowing, the Administrative Agent may assume that such Lender has made such
Ratable Portion available to the Administrative Agent on the date of such
Borrowing in accordance with this Section 2.2 (Borrowing Procedures) and the
Administrative Agent may, in reliance upon such assumption, make available to
the Borrower on such date a corresponding amount. If and to the extent that such
Lender shall not have so made such Ratable Portion available to the
Administrative Agent, such Lender and the Borrower severally agree to repay to
the Administrative Agent forthwith on demand such corresponding amount together
with interest thereon, for each day from the date such amount is made available
to the Borrower until the date such amount is repaid to the Administrative
Agent, at (i) in the case of the Borrower, the interest rate applicable at the
time to the Loans comprising such Borrowing and (ii) in the case of such Lender,
the Federal Funds Rate for the first Business Day and thereafter at the interest
rate applicable at the time to the Loans comprising such Borrowing. If such
Lender shall repay to the Administrative Agent such corresponding amount, such
corresponding amount so repaid shall constitute such Lender's Loan as part of
such Borrowing for purposes of this Agreement. If the Borrower shall repay to
the Administrative Agent such corresponding amount, such payment shall not
relieve such Lender of any obligation it may have hereunder to the Borrower.
(d) The failure of any Lender to make the Loan or any payment required
by it on the date specified (a "Non-Funding Lender"), including any payment in
respect of its participation in Swing Loans and Letter of Credit Obligations,
shall not relieve any other Lender of its obligations to make such Loan or
payment on such date but no such other Lender shall be responsible for the
failure of any Non-Funding Lender to make a Loan or payment required under this
Agreement.
SECTION 2.3 SWING LOANS
(a) On the terms and subject to the conditions contained in this
Agreement, the Swing Loan Lender may in its sole discretion make loans (each a
"Swing Loan") otherwise
33
available to the Borrower under the Facility from time to time on any Business
Day during the period from the date hereof until the Revolving Credit
Termination Date in an aggregate amount at any time outstanding (together with
the aggregate principal amount of any other loans made by the Swing Loan Lender
hereunder in its capacity as a Lender or the Swing Loan Lender) at any time not
to exceed the lesser of $20,000,000 and the Swing Loan Lender's Ratable Portion
of the Available Credit at such time; provided, however, that the Swing Loan
Lender shall not make any Swing Loan to the extent that, after giving effect to
such Swing Loan, the aggregate Revolving Credit Outstandings would exceed the
Maximum Credit. The Swing Loan Lender shall be entitled to rely on the most
recent Borrowing Base Certificate delivered to the Administrative Agent. Each
Swing Loan shall be a Base Rate Loan and must be repaid in full within seven
days of its making or, if sooner, upon any Borrowing hereunder and shall in any
event mature no later than the Revolving Credit Termination Date. Within the
limits set forth in the first sentence of this Section 2.3(a) (Swing Loans)
amounts of Swing Loans repaid may be reborrowed under this Section 2.3(a) (Swing
Loans).
(b) In order to request a Swing Loan, the Borrower shall telecopy to
the Administrative Agent a duly completed request setting forth the date, the
requested amount and date of the Swing Loan (a "Swing Loan Request"), to be
received by the Administrative Agent not later than 12:00 p.m. (New York City
time) on the day of the proposed borrowing. The Administrative Agent shall
promptly notify the Swing Loan Lender of the details of the requested Swing
Loan. Subject to the terms of this Agreement, the Swing Loan Lender shall make a
Swing Loan available to the Administrative Agent which will make such amounts
available to the Borrower on the date of the relevant Swing Loan Request. The
Swing Loan Lender shall not make any Swing Loan in the period commencing on the
first Business Day after it receives written notice from any Lender or the
Administrative Agent (if a Person other than the Swing Loan Lender) that one or
more of the conditions precedent contained in Section 3.2 (Conditions Precedent
to Each Loan and Letter of Credit) shall not on such date be satisfied, and
ending when such conditions are satisfied or waived. The Swing Loan Lender shall
not otherwise be required to determine that, or take notice whether, the
conditions precedent set forth in Section 3.2 (Conditions Precedent to Each Loan
and Letter of Credit) hereof have been satisfied in connection with the making
of any Swing Loan.
(c) The Swing Loan Lender shall notify the Administrative Agent in
writing (which may be by telecopy) weekly, by no later than 10:00 a.m. (New York
City time) on the first Business Day of each week, of the aggregate principal
amount of its Swing Loans then outstanding.
(d) The Swing Loan Lender may demand at any time during the continuance
of an Event of Default that each Lender pay to the Administrative Agent, for the
account of the Swing Loan Lender, in the manner provided in subsection (e)
below, such Lender's Ratable Portion of all or a portion of the outstanding
Swing Loans, which demand shall be made through the Administrative Agent, shall
be in writing and shall specify the outstanding principal amount of Swing Loans
demanded to be paid.
(e) The Administrative Agent shall forward each notice referred to in
clause (c) above and each demand referred to in clause (d) above to each Lender
on the day such notice or such demand is received by the Administrative Agent
(except that any such notice or demand received by the Administrative Agent
after 2:00 p.m. (New York City time) on any Business Day or any such demand
received on a day that is not a Business Day shall not be required to be
forwarded to the Lenders by the Administrative Agent until the next succeeding
Business Day),
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together with a statement prepared by the Administrative Agent specifying the
amount of each Lender's Ratable Portion of the aggregate principal amount of the
Swing Loans stated to be outstanding in such notice or demanded to be paid
pursuant to such demand, and, notwithstanding whether or not the conditions
precedent set forth in Section 3.2 (Conditions Precedent to Each Loan and Letter
of Credit) shall have been satisfied (which conditions precedent the Lenders
hereby irrevocably waive) provided that the Swing Loan Lender has not received
the notice referred to in the penultimate sentence of clause (b) above prior to
any such Swing Loan (and the condition referred to in such notice has not been
waived in accordance with this Agreement), each Lender shall, before 11:00 a.m.
(New York City time) on the Business Day next succeeding the date of such
Lender's receipt of such written demand, make available to the Administrative
Agent, in immediately available funds, for the account of the Swing Loan Lender,
the amount specified in such demand. Upon such payment by a Lender, such Lender
shall, except as provided in clause (f) below, be deemed to have made a
Revolving Loan to the Borrower. The Administrative Agent shall use such funds to
repay the Swing Loans to the Swing Loan Lender. To the extent that any Lender
fails to make such payment available to the Administrative Agent for the account
of the Swing Loan Lender, the Borrower shall repay such Swing Loan on demand.
(f) Upon the occurrence of a Default under Section 9.1(f) (Events of
Default), each Lender shall acquire, without recourse or warranty, an undivided
participation in each Swing Loan otherwise required to be repaid by such Lender
pursuant to clause (e) above, which participation shall be in a principal amount
equal to such Lender's Ratable Portion of such Swing Loan, by paying to the
Swing Loan Lender on the date on which such Lender would otherwise have been
required to make a payment in respect of such Swing Loan pursuant to clause (e)
above, in immediately available funds, an amount equal to such Lender's Ratable
Portion of such Swing Loan. If all or part of such amount is not in fact made
available by such Lender to the Swing Loan Lender on such date, the Swing Loan
Lender shall be entitled to recover any such unpaid amount on demand from such
Lender together with interest accrued from such date at the Federal Funds Rate
for the first Business Day after such payment was due and thereafter at the rate
of interest then applicable to Base Rate Loans.
(g) From and after the date on which any Lender is deemed to have made
a Revolving Loan pursuant to clause (e) above with respect to any Swing Loan or
purchases an undivided participation interest in a Swing Loan pursuant to clause
(f) above, the Swing Loan Lender shall promptly distribute to such Lender such
Lender's Ratable Portion of all payments of principal of and interest received
by the Swing Loan Lender on account of such Swing Loan other than those received
from a Lender pursuant to clause (e) or (f) above.
SECTION 2.4 LETTERS OF CREDIT
(a) On the terms and subject to the conditions contained in this
Agreement, each Issuer agrees to Issue one or more Letters of Credit at the
request of the Borrower for the account of the Borrower from time to time on any
Business Day during the period commencing on the Closing Date and ending on the
earlier of the Revolving Credit Termination Date and 30 days prior to the
Scheduled Termination Date; provided, however, that no Issuer shall be under any
obligation to issue any Letter of Credit if:
(i) any order, judgment or decree of any Governmental
Authority or arbitrator shall purport by its terms to enjoin or
restrain such Issuer from Issuing such Letter of Credit or any
Requirement of Law applicable to such Issuer or any request or
directive (whether or not having the force of law) from any
Governmental Authority with
35
jurisdiction over such Issuer shall prohibit, or request that such
Issuer refrain from, the Issuance of letters of credit generally or
such Letter of Credit in particular or shall impose upon such Issuer
with respect to such Letter of Credit any restriction or reserve or
capital requirement (for which such Issuer is not otherwise
compensated) not in effect on the date of this Agreement or result in
any unreimbursed loss, cost or expense (for which such Issuer is not
otherwise compensated) that was not applicable, in effect or known to
such Issuer as of the date of this Agreement and that such Issuer in
good xxxxx xxxxx material to it;
(ii) such Issuer shall have received written notice from the
Administrative Agent, any Lender or the Borrower, on or prior to the
requested date of Issuance of such Letter of Credit, that one or more
of the applicable conditions contained in Section 3.2 (Conditions
Precedent to Each Loan and Letter of Credit) and Section 2.4 (Letters
of Credit) is not then satisfied;
(iii) after giving effect to the Issuance of such Letter of
Credit, the aggregate Revolving Credit Outstandings would exceed the
Maximum Credit at such time;
(iv) after giving effect to the Issuance of such Letter of
Credit, the Letter of Credit Obligations at such time exceed
$80,000,000;
(v) any fees due in connection with a requested Issuance have
not been paid; or
(vi) such Letter of Credit is requested to be Issued in a form
that is not acceptable to such Issuer.
None of the Lenders (other than the Issuers in their capacity as such) shall
have any obligation to Issue any Letter of Credit.
(b) In no event shall the expiration date of any Letter of Credit (i)
be more than one year after the date of Issuance thereof, or (ii) be less than
five days prior to the Scheduled Termination Date; provided, however, that any
Letter of Credit with a one-year term may provide for the renewal thereof for
additional one-year periods (which shall in no event extend beyond the expiry
date referred to in clause (ii) above).
(c) In connection with the Issuance of each Letter of Credit, the
Borrower shall give the relevant Issuer and the Administrative Agent at least
two Business Days' prior written notice, in substantially the form of Exhibit E
(or in such other written or electronic form as is acceptable to the Issuer), of
the requested Issuance of such Letter of Credit (a "Letter of Credit Request").
Such notice shall be irrevocable and shall specify the Issuer of such Letter of
Credit, the stated amount of the Letter of Credit requested, which stated amount
shall not be less than $10,000, the date of Issuance of such requested Letter of
Credit (which day shall be a Business Day), the date on which such Letter of
Credit is to expire (which date shall be a Business Day), and the Person for
whose benefit the requested Letter of Credit is to be Issued. Such notice, to be
effective, must be received by the relevant Issuer and the Administrative Agent
not later than 11:00 a.m. (New York City time) on the second Business Day prior
to the requested Issuance of such Letter of Credit.
36
(d) Subject to the satisfaction of the conditions set forth in this
Section 2.4 (Letters of Credit), the relevant Issuer shall, on the requested
date, Issue a Letter of Credit on behalf of the Borrower and, if applicable, one
of its Subsidiaries in accordance with such Issuer's usual and customary
business practices. No Issuer shall Issue any Letter of Credit in the period
commencing on the first Business Day after it receives written notice from any
Lender or the Administrative Agent that one or more of the conditions precedent
contained in Section 3.2 (Conditions Precedent to Each Loan and Letter of
Credit) shall not on such date be satisfied, and ending when such conditions are
satisfied. The relevant Issuer shall not otherwise be required to determine
that, or take notice whether, the conditions precedent set forth in Section 3.2
(Conditions Precedent to Each Loan and Letter of Credit) have been satisfied in
connection with the Issuance of any Letter of Credit.
(e) If requested by the relevant Issuer, prior to the Issuance of each
Letter of Credit by such Issuer, and as a condition of such Issuance and of the
participation of each Lender in the Letter of Credit Obligations arising with
respect thereto, the Borrower shall have delivered to such Issuer a letter of
credit reimbursement agreement, in such form as the Issuer may employ in its
ordinary course of business for its own account (a "Letter of Credit
Reimbursement Agreement"), signed by the Borrower, and such other documents or
items as may be required pursuant to the terms thereof. In the event of any
conflict between the terms of any Letter of Credit Reimbursement Agreement and
this Agreement, the terms of this Agreement shall govern.
(f) Each Issuer shall comply with the following:
(i) give the Administrative Agent written notice (or
telephonic notice confirmed promptly thereafter in writing, which
writing may be by telecopier) of the Issuance of a Letter of Credit
Issued by it, of all drawings under a Letter of Credit Issued by it,
the payment (or the failure to pay when due) by the Borrower of any
Reimbursement Obligation when due (which notice the Administrative
Agent shall promptly transmit by telecopy or similar transmission to
each Lender);
(ii) upon the request of any Lender, furnish to such Lender
copies of any Letter of Credit Reimbursement Agreement to which such
Issuer is a party and such other documentation as may reasonably be
requested by such Lender; and
(iii) no later than 10 Business Days following the last day of
each calendar month, provide to the Administrative Agent (and the
Administrative Agent shall provide a copy to each Lender requesting the
same) and the Borrower separate schedules for Documentary and Standby
Letters of Credit issued by it, in form and substance reasonably
satisfactory to the Administrative Agent, setting forth the aggregate
Letter of Credit Obligations outstanding at the end of each month and
any information requested by the Borrower or the Administrative Agent
relating thereto.
(g) Immediately upon the Issuance by an Issuer of a Letter of Credit in
accordance with the terms and conditions of this Agreement, such Issuer shall be
deemed to have sold and transferred to each Lender, and each Lender shall be
deemed irrevocably and unconditionally to have purchased and received from such
Issuer, without recourse or warranty, an undivided interest and participation,
to the extent of such Lender's Ratable Portion, in such Letter of Credit and the
obligations of the Borrower with respect thereto (including all Letter of Credit
Obligations with respect thereto) and any security therefor and guaranty
pertaining thereto.
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(h) The Borrower agrees to pay to the Issuer of any Letter of Credit
the amount of all Reimbursement Obligations owing to such Issuer under any
Letter of Credit Issued for its account no later than the date that is the next
succeeding Business Day after the Borrower receives written notice from such
Issuer that payment has been made under such Letter of Credit (the
"Reimbursement Date"), irrespective of any claim, set-off, defense or other
right that the Borrower may have at any time against such Issuer or any other
Person. In the event that any Issuer makes any payment under any Letter of
Credit and the Borrower shall not have repaid such amount to such Issuer
pursuant to this clause (h) on or before 11:00 a.m. (New York City time) on the
next Business Day following the Borrower's receipt of the aforesaid notice, then
(i) the relevant Issuer shall notify the Administrative Agent of such failure to
repay, (ii) such Reimbursement Obligation shall be payable on demand with
interest thereon computed from the date on which such Reimbursement Obligation
arose to the date of repayment in full at the rate of interest applicable to
past due Revolving Loans bearing interest at a rate based on the Base Rate
during such period, (iii) the Borrower shall be deemed to have elected (if a
formal notice of Borrowing has not been received by the Administrative Agent in
respect of such Reimbursement Obligation) to have the Reimbursement Obligation
satisfied by the Borrowing of a Base Rate Loan in an amount equal to such
Reimbursement Obligation and (iv) each Lender shall, except during the
continuance of a Default or Event of Default under Section 9.1(f) (Events of
Default) and notwithstanding whether or not the conditions precedent set forth
in Section 3.2 (Conditions Precedent to Each Loan and Letter of Credit) shall
have been satisfied (which conditions precedent the Lenders hereby irrevocably
waive) provided that such Issuer has not received the notice referred to in the
penultimate sentence of clause (d) above (and the condition referred to in such
notice has not been waived in accordance with this Agreement), pay to the
Administrative Agent for the account of such Issuer the amount of such Lender's
Ratable Portion of such Reimbursement Obligations and be deemed to have made a
Revolving Loan to the Borrower in the principal amount of such payment. Prior to
the funding of such Revolving Loan, if the Administrative Agent so notifies such
Lender prior to 11:00 a.m. (New York City time) on any Business Day, such Lender
shall make available to the Administrative Agent for the account of such Issuer
its Ratable Portion of the amount of such payment on such Business Day in
immediately available funds. Whenever any Issuer receives from the Borrower a
payment of a Reimbursement Obligation as to which the Administrative Agent has
received for the account of such Issuer any payment from a Lender pursuant to
this clause (h), such Issuer shall pay to the Administrative Agent and the
Administrative Agent shall promptly pay to each Lender, in immediately available
funds, an amount equal to such Lender's Ratable Portion of the amount of such
payment adjusted, if necessary, to reflect the respective amounts the Lenders
have paid in respect of such Reimbursement Obligation.
(i) The Borrower's obligation to pay each Reimbursement Obligation and
the obligations of the Lenders to make payments to the Administrative Agent for
the account of the Issuers with respect to Letters of Credit shall be absolute,
unconditional and irrevocable, and shall be performed strictly in accordance
with the terms of this Agreement, under any and all circumstances whatsoever,
including the occurrence of any Default or Event of Default, and irrespective
of:
(i) any lack of validity or enforceability of any Letter of
Credit or any Loan Document, or any term or provision therein;
(ii) any amendment or waiver of or any consent to departure
from all or any of the provisions of any Letter of Credit or any Loan
Document;
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(iii) the existence of any claim, set off, defense or other
right that the Borrower, any other party guaranteeing, or otherwise
obligated with, the Borrower, any Subsidiary or other Affiliate thereof
or any other Person may at any time have against the beneficiary under
any Letter of Credit, any Issuer, the Administrative Agent or any
Lender or any other Person, whether in connection with this Agreement,
any other Loan Document or any other related or unrelated agreement or
transaction;
(iv) any draft or other document presented under a Letter of
Credit proving to be forged, fraudulent, invalid or insufficient in any
respect or any statement therein being untrue or inaccurate in any
respect;
(v) payment by the Issuer under a Letter of Credit against
presentation of a draft or other document that does not comply with the
terms of such Letter of Credit; and
(vi) any other act or omission to act or delay of any kind of
any Issuer, the Lenders, the Administrative Agent or any other Person
or any other event or circumstance whatsoever, whether or not similar
to any of the foregoing, that might, but for the provisions of this
Section 2.4 (Letters of Credit), constitute a legal or equitable
discharge of the Borrower's obligations hereunder.
Any action taken or omitted to be taken by the relevant Issuer under or in
connection with any Letter of Credit, if taken or omitted in the absence of
gross negligence or willful misconduct, shall not put such Issuer under any
resulting liability to the Borrower or any Lender. In determining whether drafts
and other documents presented under a Letter of Credit comply with the terms
thereof, the Issuer may accept documents that appear on their face to be in
order, without responsibility for further investigation, regardless of any
notice or information to the contrary and, in making any payment under any
Letter of Credit, the Issuer may rely exclusively on the documents presented to
it under such Letter of Credit as to any and all matters set forth therein,
including reliance on the amount of any draft presented under such Letter of
Credit, whether or not the amount due to the beneficiary thereunder equals the
amount of such draft and whether or not any document presented pursuant to such
Letter of Credit proves to be insufficient in any respect, if such document on
its face appears to be in order, and whether or not any other statement or any
other document presented pursuant to such Letter of Credit proves to be forged
or invalid or any statement therein proves to be inaccurate or untrue in any
respect whatsoever and any noncompliance in any immaterial respect of the
documents presented under such Letter of Credit with the terms thereof shall, in
each case, be deemed not to constitute willful misconduct or gross negligence of
the Issuer.
(j) If and to the extent such Lender shall not have so made its Ratable
Portion of the amount of the payment required by clause (h) above available to
the Administrative Agent for the account of such Issuer, such Lender agrees to
pay to the Administrative Agent for the account of such Issuer forthwith on
demand any such unpaid amount together with interest thereon, for the first
Business Day after payment was first due at the Federal Funds Rate, and
thereafter until such amount is repaid to the Administrative Agent for the
account of such Issuer, at the rate per annum applicable to Base Rate Loans
under the Facility. The failure of any Lender to make available to the
Administrative Agent for the account of such Issuer its Ratable Portion of any
such payment shall not relieve any other Lender of its obligation hereunder to
make available to the Administrative Agent for the account of such Issuer its
Ratable Portion of any payment on the date such payment is to be made, but no
Lender shall be responsible for the failure of any other
39
Lender to make available to the Administrative Agent for the account of the
Issuer such other Lender's Ratable Portion of any such payment.
SECTION 2.5 REDUCTION AND TERMINATION OF THE REVOLVING
CREDIT COMMITMENTS
(a) The Borrower may, upon same Business Day's notice to the
Administrative Agent, terminate in whole or reduce in part ratably the unused
portions of the respective Revolving Credit Commitments of the Lenders;
provided, however, that each partial reduction shall be in an aggregate amount
of not less than $10,000,000 or an integral multiple of $1,000,000 in excess
thereof.
(b) The then current Revolving Credit Commitments shall be reduced on
each date on which a prepayment of Revolving Loans or Swing Loans is made
pursuant to Section 2.9(a) (Mandatory Prepayments) or would be required to be
made had the outstanding Revolving Loans and Swing Loans equaled the Revolving
Credit Commitments then in effect, in each case in the amount of such prepayment
(or deemed prepayment) (and the Revolving Credit Commitment of each Lender shall
be reduced by its Ratable Portion of such amount); provided, however, that in
the case of any prepayment of Revolving Loans or Swing Loans that is made
pursuant to Section 2.9(a) (Mandatory Prepayments) in connection with a
Reinvestment Event, the Revolving Credit Commitments shall not be permanently
reduced by the amount of such prepayment until the occurrence of the
Reinvestment Prepayment Date with respect to such Reinvestment Event, and then
the Revolving Credit Commitments shall be permanently reduced only to the extent
that the amount of such Net Cash Proceeds exceeds the amount of proceeds of
Revolving Loans or Swing Loans identified in a Reinvestment Notice relating to
such Reinvestment Event as being used or to be used to acquire replacement
assets useful in the Borrower's or one or more of its Subsidiaries' business
and, in the case of Reinvestment Events relating to a Property Loss Event, to
effect repairs.
SECTION 2.6 REPAYMENT OF LOANS
The Borrower promises to repay the entire unpaid principal amount of
the Revolving Loans, the Swing Loans and any Reimbursement Obligations (unless
required to be paid sooner hereunder) on the Revolving Credit Termination Date.
SECTION 2.7 EVIDENCE OF DEBT
(a) Each Lender shall maintain in accordance with its usual practice an
account or accounts evidencing Indebtedness of the Borrower to such Lender
resulting from each Loan of such Lender from time to time, including the amounts
of principal and interest payable and paid to such Lender from time to time
under this Agreement.
(b) The Administrative Agent shall maintain accounts in accordance with
its usual practice in which it shall record (i) the amount of each Loan made
and, if a Eurodollar Rate Loan, the Interest Period applicable thereto, (ii) the
amount of any principal or interest due and payable by the Borrower to each
Lender hereunder and (iii) the amount of any sum received by the Administrative
Agent hereunder from the Borrower, whether such sum constitutes principal or
interest, fees, expenses or other amounts due under the Loan Documents and each
Lender's Ratable Portion thereof, if applicable.
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(c) The entries made in the accounts maintained pursuant to clauses (a)
and (b) of this Section 2.7 (Evidence of Debt) shall, to the extent permitted by
applicable law, be prima facie evidence of the existence and amounts of the
obligations recorded therein; provided, however, that the failure of any Lender
or the Administrative Agent to maintain such accounts or any error therein shall
not in any manner affect the obligations of the Borrower to repay the Loans in
accordance with their terms.
(d) Notwithstanding any other provision of the Agreement, in the event
that any Lender requests that the Borrower execute and deliver a promissory note
or notes payable to such Lender in order to evidence the Indebtedness owing to
such Lender by the Borrower hereunder, the Borrower will promptly execute and
deliver a Revolving Credit Note or Revolving Credit Notes to such Lender
evidencing any Revolving Loans of such Lender, substantially in the form of
Exhibit C.
SECTION 2.8 OPTIONAL PREPAYMENTS
(a) The Borrower may, upon at least three Business Days' prior notice
to the Administrative Agent, stating the proposed date and aggregate principal
amount of the prepayment, prepay the outstanding principal amount of the
Revolving Loans in whole or in part; provided, however, that (i) if any
prepayment of any Eurodollar Rate Loan is made by the Borrower other than on the
last day of an Interest Period for such Loan, the Borrower shall also pay any
amounts owing pursuant to Section 2.14(e) (Breakage Costs.), (ii) each partial
prepayment shall be in an aggregate principal amount not less than $5,000,000 or
integral multiples of $1,000,000 in excess thereof (or the remaining balance of
the Loans, if less) and (iii) the Borrower may prepay the outstanding principal
amount of any Swing Loan in whole or in part, with no minimum partial prepayment
requirement. Upon the giving of such notice of prepayment, the principal amount
of Revolving Loans specified to be prepaid shall become due and payable on the
date specified for such prepayment.
(b) The Borrower shall have no right to prepay the principal amount of
any Loan other than as provided in this Section 2.8 (Optional Prepayments).
SECTION 2.9 MANDATORY PREPAYMENTS
(a) Upon receipt by the Borrower or any of its Subsidiaries of Net Cash
Proceeds arising from an Asset Sale, Property Loss Event or Debt Issuance, the
Borrower shall immediately prepay the Loans (or provide cash collateral in
respect of Letters of Credit) in an amount equal to 100% of such Net Cash
Proceeds. Any such mandatory prepayments shall be applied in accordance with
clause (b) below; provided, however, that in the case of any Net Cash Proceeds
arising from a Reinvestment Event, any proceeds in excess of the amounts
required to repay the Loans and to fully cash collateralize Letter of Credit
Obligations as provided in clause (b) below shall be paid to the Administrative
Agent to be held in a Cash Collateral Account pending application of such
proceeds as specified in the Reinvestment Notice relating to such Reinvestment
Event.
(b) Any prepayments made by the Borrower required to be applied in
accordance with this clause (b) shall be applied as follows: first, to repay the
outstanding principal balance of the Swing Loans until such Swing Loans shall
have been repaid in full; second, to repay the outstanding principal balance of
the Revolving Loans until such Revolving Loans shall have been paid in full; and
then, to provide cash collateral for any Letter of Credit Obligations in the
manner
41
set forth in Section 9.3 (Actions in Respect of Letters of Credit) until all
such Letter of Credit Obligations have been fully cash collateralized in the
manner set forth therein. All prepayments of Revolving Loans and Swing Loans
required to be made pursuant to this Section 2.9(b) (Mandatory Prepayments)
shall result in a permanent reduction of the Revolving Credit Commitments to the
extent provided in Section 2.5 (Reduction and Termination of the Revolving
Credit Commitments); provided, however, that in the case of any prepayment of
Revolving Loans and Swing Loans made in connection with the receipt by the
Borrower or any of its Subsidiaries of Net Cash Proceeds arising from a
Reinvestment Event, the Revolving Credit Commitments shall not be permanently
reduced by the amount of such prepayment until the occurrence of the
Reinvestment Prepayment Date with respect to such Reinvestment Event, and then
the Revolving Credit Commitments shall be permanently reduced only to the extent
that the amount of such Net Cash Proceeds exceeds the amount of proceeds of
Revolving Loans or Swing Loans identified in a Reinvestment Notice relating to
such Reinvestment Event as being used or to be used to acquire replacement
assets useful in the Borrower's or one or more of its Subsidiaries' business
and, in the case of Reinvestment Events relating to a Property Loss Event, to
effect repairs.
(c) If at any time, the aggregate principal amount of Revolving Credit
Outstandings exceeds the Maximum Credit at such time, the Borrower shall
forthwith prepay the Swing Loans first and then the Revolving Loans then
outstanding in an amount equal to such excess. If any such excess remains after
repayment in full of the aggregate outstanding Swing Loans and Revolving Loans,
the Borrower shall provide cash collateral for the Letter of Credit Obligations
in the manner set forth in Section 9.3 (Actions in Respect of Letters of Credit)
to the extent required to eliminate such excess.
SECTION 2.10 INTEREST
(a) Rate of Interest.
All Loans and the outstanding amount of all other Obligations shall
bear interest, in the case of Loans, on the unpaid principal amount thereof from
the date such Loans are made and, in the case of such other Obligations, from
the date such other Obligations are due and payable until, in all cases, paid in
full, except as otherwise provided in Section 2.10(c) (Default Interest), as
follows:
(i) if a Base Rate Loan or such other Obligation, at a rate
per annum equal to the sum of (A) the Base Rate as in effect from time
to time, plus (B) the Applicable Margin; and
(ii) if a Eurodollar Rate Loan, at a rate per annum equal to
the sum of (A) the Eurodollar Rate determined for the applicable
Interest Period, plus (B) the Applicable Margin in effect from time to
time during such Interest Period.
(b) Interest Payments.
(i) Interest accrued on each Base Rate Loan (other than Swing Loans)
shall be payable in arrears (A) on the last day of each calendar quarter,
commencing on the first such day following the making of such Base Rate Loan and
(B) if not previously paid in full, at maturity (whether by acceleration or
otherwise) of such Base Rate Loan; (ii) interest accrued on Swing Loans shall be
payable in arrears on the last day of each calendar quarter; (iii) interest
accrued on each Eurodollar Rate Loan shall be payable in arrears (A) on the last
day of each Interest Period
42
applicable to such Loan and if such Interest Period has a duration of more than
three months, on each day during such Interest Period occurring every three
months from the first day of such Interest Period, (B) upon the payment or
prepayment thereof in full or in part and (C) if not previously paid in full, at
maturity (whether by acceleration or otherwise) of such Eurodollar Rate Loan;
and (iv) interest accrued on the amount of all other Obligations shall be
payable on demand from and after the time such Obligation becomes due and
payable (whether by acceleration or otherwise).
(c) Default Interest.
Notwithstanding the rates of interest specified in Section 2.10(a)
(Rate of Interest) or elsewhere herein, effective immediately upon the
occurrence of an Event of Default, and for as long thereafter as such Event of
Default shall be continuing, the principal balance of all Loans and the amount
of all other Obligations then due and payable shall bear interest at a rate that
is two percent per annum in excess of the rate of interest applicable to such
Obligations from time to time.
SECTION 2.11 CONVERSION/CONTINUATION OPTION
(a) The Borrower may elect (i) at any time on any Business Day to
convert Base Rate Loans (other than Swing Loans) or any portion thereof to
Eurodollar Rate Loans, and (ii) at the end of any applicable Interest Period, to
convert Eurodollar Rate Loans or any portion thereof into Base Rate Loans or to
continue such Eurodollar Rate Loans or any portion thereof for an additional
Interest Period; provided, however, that the aggregate amount of the Eurodollar
Loans for each Interest Period must be in the amount of $5,000,000 or an
integral multiple of $1,000,000 in excess thereof. Each conversion or
continuation shall be allocated among the Loans of each Lender in accordance
with its Ratable Portion. Each such election shall be in substantially the form
of Exhibit G (a "Notice of Conversion or Continuation") and shall be made by
giving the Administrative Agent at least three Business Days' prior written
notice specifying (A) the amount and type of Loan being converted or continued,
(B) in the case of a conversion to or a continuation of Eurodollar Rate Loans,
the applicable Interest Period, and (C) in the case of a conversion, the date of
conversion.
(b) The Administrative Agent shall promptly notify each Lender of its
receipt of a Notice of Conversion or Continuation and of the options selected
therein. Notwithstanding the foregoing, no conversion in whole or in part of
Base Rate Loans to Eurodollar Rate Loans, and no continuation in whole or in
part of Eurodollar Rate Loans upon the expiration of any applicable Interest
Period, shall be permitted at any time at which (i) a Default or an Event of
Default shall have occurred and be continuing or (ii) the continuation of, or
conversion into, would violate or otherwise not be permitted under any of the
provisions of Section 2.14 (Special Provisions Governing Eurodollar Rate Loans).
If, within the time period required under the terms of this Section 2.11
(Conversion/Continuation Option), the Administrative Agent does not receive a
Notice of Conversion or Continuation from the Borrower containing a permitted
election to continue any Eurodollar Rate Loans for an additional Interest Period
or to convert any such Loans, then, upon the expiration of the applicable
Interest Period, such Loans shall be automatically converted to Base Rate Loans.
Each Notice of Conversion or Continuation shall be irrevocable.
43
SECTION 2.12 FEES
(a) Unused Commitment Fee.
The Borrower agrees to pay to each Lender a commitment fee on the daily
average amount by which the Revolving Credit Commitment of such Lender exceeds
such Lender's Ratable Portion of the Revolving Credit Outstandings less the
amount of any outstanding Swing Loans (the "Unused Commitment Fee") from the
date hereof until the Revolving Credit Termination Date at the Applicable Unused
Commitment Fee Rate, payable in arrears (i) on the last day of each calendar
quarter, commencing on the first such day following the Closing Date and (ii) on
the Revolving Credit Termination Date.
(b) Letter of Credit Fees.
The Borrower agrees to pay the following amounts with respect to
Letters of Credit issued by any Issuer:
(i) to the Administrative Agent for the account of each Issuer
of a Letter of Credit, with respect to each Letter of Credit issued by
such Issuer, an issuance fee equal to 0.125% per annum of the maximum
amount available from time to time to be drawn under such Letter of
Credit, payable in arrears (A) on the last day of each calendar
quarter, commencing on the first such day following the issuance of
such Letter of Credit and (B) on the Revolving Credit Termination Date;
(ii) to the Administrative Agent for the ratable benefit of
the Lenders, with respect to each Letter of Credit, a fee accruing at a
rate per annum equal to the Applicable Margin for Revolving Loans that
are Eurodollar Rate Loans of the maximum amount available from time to
time to be drawn under such Letter of Credit, payable in arrears (A) on
the last day of each calendar quarter, commencing on the first such day
following the issuance of such Letter of Credit and (B) on the
Revolving Credit Termination Date; provided, however that during the
continuance of an Event of Default, such fee shall be increased by two
percent per annum and shall be payable on demand; and
(iii) to the Issuer of any Letter of Credit, with respect to
the issuance, amendment or transfer of each Letter of Credit and each
drawing made thereunder, documentary and processing charges in
accordance with such Issuer's standard schedule for such charges in
effect at the time of issuance, amendment, transfer or drawing, as the
case may be.
(c) Facility Fees.
The Borrower shall pay:
(i) upon the occurrence of a Facility Extension pursuant to
Section 2.18 (Facility Extension), a fee to each Extending Lender and
each Extension Assuming Lender in an amount equal to 0.25% of such
Lender's Revolving Credit Commitment outstanding on the Extension Date
applicable to such Facility Extension, which fee shall be payable on
such Extension Date; and
44
(ii) upon the occurrence of a Facility Increase pursuant to
Section 2.19 (Facility Increase), a fee to each Lender that
participates in such Facility Increase (including any Eligible Assignee
that executes an Assumption Agreement in connection with such Facility
Increase) and each new Lender to be determined by the Arranger based on
market conditions at the time of such Facility Increase, which fee
shall be payable in the Facility Increase Effective Date.
(d) Additional Fees.
The Borrower has agreed to pay to CNAI, the Administrative Agent and
the Arranger additional fees, the amount and dates of payment of which are
embodied in the Fee Letter.
SECTION 2.13 PAYMENTS AND COMPUTATIONS
(a) The Borrower shall make each payment hereunder (including fees and
expenses) not later than 1:00 p.m. (New York City time) on the day when due, in
Dollars, to the Administrative Agent at its address referred to in Section 11.8
(Notices, Etc.) in immediately available funds without deduction, set-off or
counterclaim. The Administrative Agent will promptly thereafter cause to be
distributed immediately available funds relating to the payment of principal or
interest or fees to the Lenders, in accordance with the application of payments
set forth in clauses (e) and (f) of this Section 2.13 (Payments and
Computations), as applicable, for the account of their respective Applicable
Lending Offices; provided, however, that amounts payable pursuant to Section
2.14(c) (Increased Costs), Section 2.14(e) (Breakage Costs), Section 2.15
(Capital Adequacy) or Section 2.16 (Taxes) shall be paid only to the affected
Lender or Lenders and amounts payable with respect to Swing Loans shall be paid
only to the Swing Loan Lender. Payments received by the Administrative Agent
after 1:00 p.m. (New York City time) shall be deemed to be received on the next
Business Day.
(b) All computations of interest and of fees based on the Base Rate
shall be made by the Administrative Agent on the basis of a year of 365/366
days, as the case may be and all computations of all other interest and all fees
shall be made by the Administrative Agent on the basis of a year of 360 days, in
each case for the actual number of days (including the first day but excluding
the last day) occurring in the period for which such interest and fees are
payable. Each determination by the Administrative Agent of an interest rate
hereunder shall be conclusive and binding for all purposes, absent manifest
error.
(c) Whenever any payment hereunder shall be stated to be due on a day
other than a Business Day, the due date for such payment shall be extended to
the next succeeding Business Day, and such extension of time shall in such case
be included in the computation of payment of interest or fees, as the case may
be; provided, however, that if such extension would cause payment of interest on
or principal of any Eurodollar Rate Loan to be made in the next calendar month,
such payment shall be made on the immediately preceding Business Day. All
repayments of any Revolving Loans shall be applied as follows: first, to repay
such Loans outstanding as Base Rate Loans and then to repay such Loans
outstanding as Eurodollar Rate Loans with those Eurodollar Rate Loans having
earlier expiring Interest Periods being repaid prior to those having later
expiring Interest Periods.
(d) Unless the Administrative Agent shall have received notice from the
Borrower to the Lenders prior to the date on which any payment is due hereunder
that the
45
Borrower will not make such payment in full, the Administrative Agent may assume
that the Borrower has made such payment in full to the Administrative Agent on
such date and the Administrative Agent may, in reliance upon such assumption,
cause to be distributed to each Lender on such due date an amount equal to the
amount then due such Lender. If and to the extent that the Borrower shall not
have made such payment in full to the Administrative Agent, each Lender shall
repay to the Administrative Agent forthwith on demand such amount distributed to
such Lender together with interest thereon at the Federal Funds Rate, for the
first Business Day, and, thereafter, at the rate applicable to Base Rate Loans,
for each day from the date such amount is distributed to such Lender until the
date such Lender repays such amount to the Administrative Agent.
(e) Subject to the provisions of clause (f) of this Section 2.13
(Payments and Computations) (and except as otherwise provided in Section 2.9
(Mandatory Prepayments), all payments and any other amounts received by the
Administrative Agent from or for the benefit of the Borrower shall be applied as
follows: first, to pay principal of and interest on any portion of the Loans
that the Administrative Agent may have advanced pursuant to the express
provisions of this Agreement on behalf of any Lender, for which the
Administrative Agent has not then been reimbursed by such Lender or the
Borrower, second, to pay all other Obligations then due and payable, and third,
as the Borrower so designates. Payments in respect of Swing Loans received by
the Administrative Agent shall be distributed to the Swing Loan Lender; payments
in respect of Revolving Loans received by the Administrative Agent shall be
distributed to each Lender in accordance with such Lender's Ratable Portion; and
all payments of fees and all other payments in respect of any other Obligation
shall be allocated among such of the Lenders and Issuers as are entitled
thereto, and, for such payments allocated to the Lenders, in proportion to their
respective Ratable Portions.
(f) During the continuance of an Event of Default, the Borrower hereby
irrevocably waives the right to direct the application of any and all payments
in respect of the Obligations and any proceeds of Collateral, and agrees that,
notwithstanding the provisions of Section 2.9 (Mandatory Prepayments)and clause
(e) above, the Administrative Agent may, and shall upon either (A) the written
direction of the Requisite Lenders or (B) the acceleration of the Obligations
pursuant to Section 9.2 (Remedies), apply all payments (subject in any event to
the restrictions set forth in Section 9.3 (Actions in Respect of Letters of
Credit) in respect of the application of amounts funded to a Cash Collateral
Account in respect of outstanding Letter of Credit Obligations) in respect of
any Obligations and all funds on deposit in any Cash Collateral Account
(including all proceeds arising from a Reinvestment Event that are held in the
Cash Collateral Account pending application of such proceeds as specified in a
Reinvestment Notice) and all other proceeds of Collateral in the following
order:
(i) first, to pay interest on and then principal of any
portion of the Revolving Loans which the Administrative Agent may have
advanced on behalf of any Lender for which the Administrative Agent has
not then been reimbursed by such Lender or the Borrower;
(ii) second, to pay interest on and then principal of any
Swing Loan;
(iii) third, to pay Obligations in respect of any expense
reimbursements or indemnities then due the Administrative Agent;
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(iv) fourth, to pay Obligations in respect of any expense
reimbursements or indemnities then due to the Lenders and the Issuers;
(v) fifth, to pay Obligations in respect of any fees then due
to the Administrative Agent, the Lenders and the Issuers;
(vi) sixth, to pay interest then due and payable in respect of
the Loans and Reimbursement Obligations;
(vii) seventh, to pay or prepay principal payments on the
Loans and Reimbursement Obligations and to provide cash collateral for
outstanding Letter of Credit Undrawn Amounts in the manner described in
Section 9.3 (Actions in Respect of Letters of Credit), ratably to the
aggregate principal amount of such Loans, Reimbursement Obligations and
Letter of Credit Undrawn Amounts, and Obligations owing with respect to
Hedging Contracts; and
(viii) eighth, to the ratable payment of all other
Obligations;
provided, however, that if sufficient funds are not available to fund all
payments to be made in respect of any Obligation described in any of clauses
first through eighth, the available funds being applied with respect to any such
Obligation (unless otherwise specified in such clause) shall be allocated to the
payment of such Obligations ratably, based on the proportion of the
Administrative Agent's and each Lender's or Issuer's interest in the aggregate
outstanding Obligations described in such clauses. The order of priority set
forth in clauses first through eighth of this clause (f) may at any time and
from time to time be changed by the agreement of all Lenders without necessity
of notice to or consent of or approval by the Borrower, any Secured Party that
is not a Lender or Issuer, or any other Person. The order of priority set forth
in clauses first through fifth of this clause (f) may be changed only with the
prior written consent of the Administrative Agent in addition to all Lenders.
The order of priority in clause second above may be changed only with the prior
written consent of all Lenders and the Administrative Agent.
(g) At the option of the Administrative Agent, principal on
the Swing Loans, Reimbursement Obligations, interest, fees, expenses and other
sums due and payable in respect of the Revolving Loans may be paid from the
proceeds of Swing Loans or Revolving Loans. The Borrower hereby authorizes the
Swing Loan Lender to make Swing Loans pursuant to Section 2.3(a) (Swing Loans),
and the Lenders to make Revolving Loans pursuant to Section 2.2(a) (Borrowing
Procedures), from time to time in the Swing Loan Lender's, or such Lender's
discretion, that are in the amounts of any and all principal payable with
respect to the Swing Loans and interest, fees, expenses and other sums payable
in respect of the Revolving Loans, and further authorizes the Administrative
Agent to give the Lenders notice of any Borrowing with respect to such Swing
Loans and Revolving Loans and to distribute the proceeds of such Swing Loans and
Revolving Loans to pay such amounts. The Borrower agrees that all such Swing
Loans and Revolving Loans so made shall be deemed to have been requested by it
(irrespective of the satisfaction of the conditions in Section 3.2 (Conditions
Precedent to Each Loan and Letter of Credit), which conditions the Lenders
irrevocably waive) and directs that all proceeds thereof shall be used to pay
such amounts.
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SECTION 2.14 SPECIAL PROVISIONS GOVERNING EURODOLLAR RATE LOANS
(a) Determination of Interest Rate.
The Eurodollar Rate for each Interest Period for Eurodollar Rate Loans
shall be determined by the Administrative Agent pursuant to the procedures set
forth in the definition of "Eurodollar Rate." The Administrative Agent's
determination shall be presumed to be correct, absent manifest error, and shall
be binding on the Borrower.
(b) Interest Rate Unascertainable, Inadequate or Unfair.
In the event that: (i) the Administrative Agent determines that
adequate and fair means do not exist for ascertaining the applicable interest
rates by reference to which the Eurodollar Rate then being determined is to be
fixed; or (ii) the Requisite Lenders notify the Administrative Agent that the
Eurodollar Rate for any Interest Period will not adequately reflect the cost to
such Lenders of making or maintaining such Loans for such Interest Period, the
Administrative Agent shall forthwith so notify the Borrower and the Lenders,
whereupon each Eurodollar Loan shall automatically, on the last day of the
current Interest Period for such Loan, convert into a Base Rate Loan and the
obligations of the Lenders to make Eurodollar Rate Loans or to convert Base Rate
Loans into Eurodollar Rate Loans shall be suspended until the Administrative
Agent shall notify the Borrower that the Requisite Lenders have determined that
the circumstances causing such suspension no longer exist.
(c) Increased Costs.
If at any time any Lender determines that the introduction of or any
change in or in the interpretation of any law, treaty or governmental rule,
regulation or order (other than any change by way of imposition or increase of
reserve requirements included in determining the Eurodollar Rate) or the
compliance by such Lender with any guideline, request or directive from any
central bank or other Governmental Authority (whether or not having the force of
law), shall have the effect of increasing the cost to such Lender of agreeing to
make or making, funding or maintaining any Eurodollar Rate Loans, then the
Borrower shall from time to time, upon demand by such Lender (with a copy of
such demand to the Administrative Agent), pay to the Administrative Agent for
the account of such Lender additional amounts sufficient to compensate such
Lender for such increased cost. A certificate as to the amount of such increased
cost, submitted to the Borrower and the Administrative Agent by such Lender,
shall be conclusive and binding for all purposes, absent manifest error.
(d) Illegality.
Notwithstanding any other provision of this Agreement, if any Lender
determines that the introduction of or any change in or in the interpretation of
any law, treaty or governmental rule, regulation or order after the date of this
Agreement shall make it unlawful, or any central bank or other Governmental
Authority shall assert that it is unlawful, for any Lender or its Eurodollar
Lending Office to make Eurodollar Rate Loans or to continue to fund or maintain
Eurodollar Rate Loans, then, on notice thereof and demand therefor by such
Lender to the Borrower through the Administrative Agent, (i) the obligation of
such Lender to make or to continue Eurodollar Rate Loans and to convert Base
Rate Loans into Eurodollar Rate Loans shall be suspended, and each such Lender
shall make a Base Rate Loan as part of any requested Borrowing of Eurodollar
Rate Loans and (ii) if the affected Eurodollar Rate Loans are then
48
outstanding, the Borrower shall immediately convert each such Loan into a Base
Rate Loan. If at any time after a Lender gives notice under this Section 2.14(d)
(Illegality) such Lender determines that it may lawfully make Eurodollar Rate
Loans, such Lender shall promptly give notice of that determination to the
Borrower and the Administrative Agent, and the Administrative Agent shall
promptly transmit the notice to each other Lender. The Borrower's right to
request, and such Lender's obligation, if any, to make Eurodollar Rate Loans
shall thereupon be restored.
(e) Breakage Costs.
In addition to all amounts required to be paid by the Borrower pursuant
to Section 2.10 (Interest), the Borrower shall compensate each Lender, upon
demand, for all losses, expenses and liabilities (including any loss or expense
incurred by reason of the liquidation or reemployment of deposits or other funds
acquired by such Lender to fund or maintain such Lender's Eurodollar Rate Loans
to the Borrower but excluding any loss of the Applicable Margin on the relevant
Loans) which that Lender may sustain (i) if for any reason a proposed Borrowing,
conversion into or continuation of Eurodollar Rate Loans does not occur on a
date specified therefor in a Notice of Borrowing or a Notice of Conversion or
Continuation given by a Borrower or in a telephonic request by it for borrowing
or conversion or continuation or a successive Interest Period does not commence
after notice therefor is given pursuant to Section 2.11 (Conversion/Continuation
Option), (ii) if for any reason any Eurodollar Rate Loan is prepaid (including
(x) as a result of any conversion into a Base Rate Loan or (y) mandatorily
pursuant to Section 2.9 (Mandatory Prepayments) on a date which is not the last
day of the applicable Interest Period, (iii) as a consequence of a required
conversion of a Eurodollar Rate Loan to a Base Rate Loan as a result of any of
the events indicated in Section 2.14(d) (Illegality), or (iv) as a consequence
of any failure by a Borrower to repay Eurodollar Rate Loans when required by the
terms hereof. The Lender making demand for such compensation shall deliver to
the Borrower concurrently with such demand a written statement as to such
losses, expenses and liabilities, and this statement shall be conclusive as to
the amount of compensation due to such Lender, absent manifest error.
SECTION 2.15 CAPITAL ADEQUACY
If at any time any Lender determines that (a) the adoption of or any
change in or in the interpretation of any law, treaty or governmental rule,
regulation or order after the date of this Agreement regarding capital adequacy,
(b) compliance with any such law, treaty, rule, regulation, or order, or (c)
compliance with any guideline or request or directive from any central bank or
other Governmental Authority (whether or not having the force of law) shall have
the effect of reducing the rate of return on such Lender's (or any corporation
controlling such Lender's) capital as a consequence of its obligations hereunder
or under or in respect of any Letter of Credit to a level below that which such
Lender or such corporation could have achieved but for such adoption, change,
compliance or interpretation, then, upon demand from time to time by such Lender
(with a copy of such demand to the Administrative Agent), the Borrower shall pay
to the Administrative Agent for the account of such Lender, from time to time as
specified by such Lender, additional amounts sufficient to compensate such
Lender for such reduction. A certificate as to such amounts submitted to the
Borrower and the Administrative Agent by such Lender shall be conclusive and
binding for all purposes absent manifest error.
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SECTION 2.16 TAXES
(a) Any and all payments by any Loan Party under each Loan Document
shall be made free and clear of and without deduction for any and all present or
future taxes, levies, imposts, deductions, charges or withholdings, and all
liabilities with respect thereto, excluding (i) in the case of each Lender and
the Administrative Agent (A) taxes measured by its net income, and franchise
taxes imposed on it, by the jurisdiction (or any political subdivision thereof)
under the laws of which such Lender or the Administrative Agent (as the case may
be) is organized and (B) any United States withholding taxes payable with
respect to payments under the Loan Documents under laws (including any statute,
treaty or regulation) in effect on the Closing Date (or, in the case of an
Eligible Assignee, the date of the Assignment and Acceptance) applicable to such
Lender or the Administrative Agent, as the case may be, but not excluding any
United States withholding taxes payable as a result of any change in such laws
occurring after the Closing Date (or the date of such Assignment and Acceptance)
and (ii) in the case of each Lender, taxes measured by its net income, and
franchise taxes imposed on it as a result of a present or former connection (but
not any such connection arising solely from the Administrative Agent or such
Lender having executed, delivered or performed its obligations or received a
payment under, or enforced, this Agreement or any other Loan Document) between
such Lender and the jurisdiction of the Governmental Authority imposing such tax
or any taxing authority thereof or therein (all such non-excluded taxes, levies,
imposts, deductions, charges, withholdings and liabilities being hereinafter
referred to as "Taxes"). If any Taxes shall be required by law to be deducted
from or in respect of any sum payable under any Loan Document to any Lender or
the Administrative Agent (w) the sum payable shall be increased as may be
necessary so that after making all required deductions (including deductions
applicable to additional sums payable under this Section 2.16 (Taxes) such
Lender or the Administrative Agent (as the case may be) receives an amount equal
to the sum it would have received had no such deductions been made, (x) the
relevant Loan Party shall make such deductions, (y) the relevant Loan Party
shall pay the full amount deducted to the relevant taxing authority or other
authority in accordance with applicable law, and (z) the relevant Loan Party
shall deliver to the Administrative Agent evidence of such payment.
(b) In addition, the Borrower agrees to pay any present or future stamp
or documentary taxes or any other excise or property taxes, charges or similar
levies of the United States or any political subdivision thereof or any
applicable foreign jurisdiction, and all liabilities with respect thereto, which
arise from any payment made under any Loan Document or from the execution,
delivery or registration of, or otherwise with respect to, any Loan Document
(collectively, "Other Taxes").
(c) Except for amounts due as a result of a breach of a Lender's
obligations under clause (f) of Section 2.16 (Taxes), the Borrower will
indemnify each Lender and the Administrative Agent for the full amount of Taxes
and Other Taxes (including any Taxes and Other Taxes imposed by any jurisdiction
on amounts payable under this Section 2.16 (Taxes) paid by such Lender or the
Administrative Agent (as the case may be) and any liability (including for
penalties, interest and expenses) arising therefrom or with respect thereto,
whether or not such Taxes or Other Taxes were correctly or legally asserted.
This indemnification shall be made within 30 days from the date such Lender or
the Administrative Agent (as the case may be) makes written demand therefor.
(d) Within 30 days after the date of any payment of Taxes or Other
Taxes by any Loan Party, the Borrower shall furnish to the Administrative Agent,
at its address referred to in
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Section 11.8 (Notices, Etc.), the original or a certified copy of a receipt
evidencing payment thereof.
(e) Without prejudice to the survival of any other agreement of the
Borrower hereunder, the agreements and obligations of the Borrower contained in
this Section 2.16 (Taxes) shall survive the payment in full of the Obligations.
(f) On or prior to the Closing Date in the case of each Non-U.S. Lender
that is a signatory hereto, and on the date of the Assignment and Acceptance
pursuant to which it becomes a Lender in the case of each other Non-U.S. Lender
and from time to time thereafter if requested by the Borrower or the
Administrative Agent, each Non-U.S. Lender that is entitled at such time to an
exemption from United States withholding tax, or that is subject to such tax at
a reduced rate under an applicable tax treaty, shall provide the Administrative
Agent and the Borrower with two completed originals of the following: (i) Form
W-8ECI (claiming exemption from withholding because the income is effectively
connected with a U.S. trade or business) (or any successor form); (ii) Form
W-8BEN (claiming exemption from, or a reduction of, withholding tax under an
income tax treaty) (or any successor form); (iii) in the case of a Non-U.S.
Lender claiming exemption under Sections 871(h) or 881(c) of the Code, a Form
W-8BEN (claiming exemption from withholding under the portfolio interest
exemption) or any successor form; or (iv) any other applicable form, certificate
or document prescribed by the IRS certifying as to such Non-U.S. Lender's
entitlement to such exemption from United States withholding tax or reduced rate
with respect to all payments to be made to such Non-U.S. Lender under the Loan
Documents. Unless the Borrower and the Administrative Agent have received forms
or other documents satisfactory to them indicating that payments under any Loan
Document to or for a Non-U.S. Lender are not subject to United States
withholding tax or are subject to such tax at a rate reduced by an applicable
tax treaty, the Borrower or the Administrative Agent shall withhold amounts
required to be withheld by applicable Requirements of Law from such payments at
the applicable statutory rate.
(g) Any Lender claiming any additional amounts payable pursuant to this
Section 2.16 (Taxes) shall use its reasonable efforts (consistent with its
internal policy and legal and regulatory restrictions) to change the
jurisdiction of its Applicable Lending Office if the making of such a change
would avoid the need for, or reduce the amount of, any such additional amounts
that would be payable or may thereafter accrue and would not, in the sole
determination of such Lender, be otherwise disadvantageous to such Lender.
SECTION 2.17 SUBSTITUTION OF LENDERS
In the event that (a) (i) any Lender makes a claim under Section
2.14(c) (Increased Costs) or Section 2.15 (Capital Adequacy), or (ii) it becomes
illegal for any Lender to continue to fund or make any Eurodollar Rate Loan and
such Lender notifies the Borrower pursuant to Section 2.14(d) (Illegality), or
(iii) the Borrower is required to make any payment pursuant to Section 2.16
(Taxes) that is attributable to any Lender, or (iv) any Lender is a Non-Funding
Lender, (b) in the case of clause (a)(i) above, as a consequence of increased
costs in respect of which such claim is made, the effective rate of interest
payable to such Lender under this Agreement with respect to its Loans materially
exceeds the effective average annual rate of interest payable to the Requisite
Lenders under this Agreement and (c) Lenders holding at least 75% of the
Revolving Credit Commitments are not subject to such increased costs or
illegality, payment or proceedings (any such Lender, an "Affected Lender"), the
Borrower may substitute another financial institution for such Affected Lender
hereunder, upon reasonable prior written
51
notice (which written notice must be given within 90 days following the
occurrence of any of the events described in clauses (a)(i), (ii), (iii) or
(iv)) by the Borrower to the Administrative Agent and the Affected Lender that
the Borrower intends to make such substitution, which substitute financial
institution must be an Eligible Assignee and, if not a Lender, reasonably
acceptable to the Administrative Agent; provided, however, that if more than one
Lender claims increased costs, illegality or right to payment arising from the
same act or condition and such claims are received by the Borrower within 30
days of each other then the Borrower may substitute all, but not (except to the
extent the Borrower has already substituted one of such Affected Lenders before
the Borrower's receipt of the other Affected Lenders' claim) less than all,
Lenders making such claims. In the event that the proposed substitute financial
institution or other entity is reasonably acceptable to the Administrative Agent
and the written notice was properly issued under this Section 2.17 (Substitution
of Lenders), the Affected Lender shall sell and the substitute financial
institution or other entity shall purchase at par, pursuant to an Assignment and
Acceptance, all rights and claims of such Affected Lender under the Loan
Documents and the substitute financial institution or other entity shall assume
and the Affected Lender shall be relieved of its Revolving Credit Commitments
and all other prior unperformed obligations of the Affected Lender under the
Loan Documents (other than in respect of any damages (other than exemplary or
punitive damages, to the extent permitted by applicable law) in respect of any
such unperformed obligations). Upon the effectiveness of such sale, purchase and
assumption (which, in any event shall be conditioned upon the payment in full by
the Borrower to the Affected Lender in cash of all fees, unreimbursed costs and
expenses and indemnities accrued and unpaid through such effective date), the
substitute financial institution or other entity shall become a "Lender"
hereunder for all purposes of this Agreement having a Revolving Credit
Commitment in the amount of such Affected Lender's Revolving Credit Commitment
assumed by it and such Revolving Credit Commitment of the Affected Lender shall
be terminated, provided that all indemnities under the Loan Documents shall
continue in favor of such Affected Lender.
SECTION 2.18 FACILITY EXTENSION
(a) At any time at least 60 days but not more than 90 days prior to the
date which is one year prior to the then existing Scheduled Termination Date,
the Borrower, by written notice to the Administrative Agent, may request an
extension of the Scheduled Termination Date then in effect for an additional
one-year period; provided, that the Borrower may request no more than two
extensions of the Scheduled Termination Date pursuant to this Section 2.18
(Facility Extension).
(b) The Administrative Agent shall promptly (and in any event within
five Business Days) notify each Lender of any extension request made by the
Borrower pursuant to Section 2.18(a) (Facility Extension), and each Lender shall
in turn, in its sole discretion, after receipt of such extension request not
earlier than 30 days prior to the Scheduled Termination Date and not later than
20 days prior to the Scheduled Termination Date, notify the Administrative Agent
in writing as to whether such Lender will consent to such extension. If any
Lender shall fail to notify the Administrative Agent in writing of its consent
(or refusal to consent) to any such extension of the Scheduled Termination Date
by the end of such 10 day period, such Lender shall be deemed to be a
Non-Extending Lender (as defined below) with respect to such request. The
Administrative Agent shall promptly notify the Borrower in writing of the
decision of the Lenders regarding the Borrower's request for an extension of
such Scheduled Termination Date. It is understood and agreed that no Lender
shall have any obligation to agree to any request made by the Borrower for an
extension of the Scheduled Termination Date.
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(c) If Lenders holding at least 75% of the Revolving Credit Commitments
at such time (after giving effect to any assumptions of the Revolving Credit
Commitments of Non-Extending Lenders (as defined below) in accordance with
subsection (d) of this Section 2.18 (Facility Extension)) consent in writing to
any such request in accordance with subsection (b) of this Section 2.18
(Facility Extension), the Scheduled Termination Date in effect at such time
shall, upon payment by the Borrower to the Administrative Agent for the ratable
benefit of the Extending Lenders of the fee set forth in Section 2.12(c)(i)
(Facility Fees.), effective as of the then current Scheduled Termination Date
(the "Extension Date"), be extended for a period of one year as to those
Extending Lenders that so consented (each an "Extending Lender") but shall not
be extended as to any other Lender (each a "Non-Extending Lender"). The
Administrative Agent shall notify the Borrower, in writing, of the Lenders'
decision no later than 15 days prior to the Scheduled Termination Date. To the
extent that the Scheduled Termination Date is not extended as to any Lender
pursuant to this Section 2.18 (Facility Extension) and the Revolving Credit
Commitment or Loans of such Lender are not assumed in accordance with subsection
(d) of this Section 2.18 (Facility Extension) on or prior to the applicable
Extension Date, the Revolving Credit Commitment and Obligations of such
Non-Extending Lender shall automatically terminate and become due and payable,
in whole on such unextended Scheduled Termination Date, without any further
notice or other action by the Borrower, such Extending Lender or any other
Person and the failure of the Borrower to pay the same shall constitute an Event
of Default pursuant to clauses (a) and (b) of Section 9.1 (Events of Default).
(d) If less than all of the Lenders consent to any such request
pursuant to subsection (b) of this Section 2.18 (Facility Extension), the
Borrower shall first offer to the Extending Lenders (and, to the extent such
offer is not promptly accepted, to other Eligible Assignees) to assume,
effective as of the Extension Date, any Non-Extending Lender's Revolving Credit
Commitment and Loans, and all of the rights and obligations of such
Non-Extending Lender under this Agreement thereafter arising in respect of such
Revolving Credit Commitment or Loans, as applicable (each Eligible Assignee
assuming the Revolving Credit Commitment and Loans, of one of more Non-Extending
Lenders pursuant to this Section 2.18 (Facility Extension) being an "Extension
Assuming Lender"), without recourse to or warranty by, or expense to, such
Non-Extending Lender; provided, however, that the additional Revolving Credit
Commitment of any such Extension Assuming Lender, when aggregated with other
existing Revolving Credit Commitment of such Person, shall in no event be less
than $5,000,000 unless the Revolving Credit Commitment, as applicable, of such
Non-Extending Lender hereunder at such time is less than $5,000,000, in which
case such Extension Assuming Lender shall assume all of such lesser amount; and
provided, further, that:
(i) the Extending Lenders and Extension Assuming Lenders shall
collectively have paid to the Non-Extending Lenders the aggregate
principal amount of, and any interest accrued and unpaid to the
effective date of such assumption on, the outstanding Loans, if any, of
such Non-Extending Lenders;
(ii) any accrued and unpaid fees owing to such Non-Extending
Lenders as of the effective date of such assumption, and all additional
cost and expense reimbursements and indemnification payments payable to
such Non-Extending Lenders, and all other accrued and unpaid amounts
owing to such Non-Extending Lenders under this Agreement and the
Revolving Credit Notes, as applicable, as of the effective date of such
assumption, shall have been paid to such Non-Extending Lenders by the
Borrower or such Extending Lenders and Extension Assuming Lenders; and
53
(iii) with respect to any Extending Lender or any such
Extension Assuming Lender, the applicable fee required under Section
2.12 (Fees) shall have been paid.
(e) At least three Business Days prior to each Extension Date, (A) each
such Extension Assuming Lender, if any, shall have delivered to the Borrower and
the Administrative Agent an Assignment and Acceptance duly executed by such
Extension Assuming Lender, such Non-Extending Lender, the Borrower and the
Administrative Agent, (B) each such Extending Lender, if any, shall have
delivered written confirmation satisfactory to the Borrower and the
Administrative Agent as to any increase in the amount of its Revolving Credit
Commitment resulting from its assumption of one or more Revolving Credit
Commitments of the Non-Extending Lenders and (C) each Non-Extending Lender being
replaced pursuant to this Section 2.18 (Facility Extension) shall have delivered
to the Administrative Agent, to be held in escrow on behalf of such
Non-Extending Lender until the payment in full of all amounts owing to such
Non-Extending Lender under clauses (i) through (iii) of Section 2.18(d)
(Facility Extension), any Revolving Credit Note, as applicable, held by such
Non-Extending Lender. Upon the payment or prepayment of all amounts referred to
in clauses (i), (ii) and (iii) of Section 2.18(d) (Facility Extension), each
such Extending Lender or Extension Assuming Lender, as of the Extension Date,
will be substituted for the applicable Non-Extending Lenders under this
Agreement and shall be a Lender for all purposes of this Agreement in proportion
to the actual amount of the Revolving Credit Commitment assumed, without any
further acknowledgment by or the consent of any of the other Lenders, and the
obligations of each such Non-Extending Lender hereunder shall, by the provisions
hereof, be released and discharged.
(f) All references in this Agreement and in the Notes to the "Scheduled
Termination Date" shall, with respect to each Extending Lender and each
Extension Assuming Lender for each Extension Date, refer to the Scheduled
Termination Date. Promptly following the effectiveness of any extension
contemplated by this Section 2.18 (Facility Extension), the Administrative Agent
shall notify the Lenders (including, without limitation, each Extension Assuming
Lender) of such extension and shall thereupon record in the Register the
relevant information with respect to each such Extending Lender and each such
Extension Assuming Lender.
SECTION 2.19 FACILITY INCREASE
The Borrower may request, in writing, an increase in the aggregate
Revolving Credit Commitments by up to $20,000,000 (the "Facility Increase");
provided, however, that such increase will only become effective if (i) the
Borrower shall have given the Administrative Agent at least 10 Business Days'
notice of its intention to effect a Facility Increase and the desired amount of
such Facility Increase, (ii) at the time of and after giving effect to such
increase, the Borrower is in pro forma compliance with the financial covenants
set forth in Article V (Financial Covenants) hereof, (iii) no Default or Event
of Default has occurred and is continuing, (iv) at least one Lender agrees to
participate in such Facility Increase (or an Eligible Assignee or Eligible
Assignees acceptable to the Arranger in its sole and absolute discretion agrees
to accept the offer of such increase as provided below), (v) the conditions
precedent to a Borrowing set forth in Section 3.2 (Conditions Precedent to Each
Loan and Letter of Credit) are satisfied as of such date, and (vi) an opinion of
counsel to the Loan Parties in form and substance and from counsel satisfactory
to the Administrative Agent and addressed to the Administrative Agent, the
Issuers and the Lenders and addressing such matters as any Lender through the
Administrative Agent may reasonably request shall be delivered to the
Administrative Agent.
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The Borrower shall have the right to offer such increase to (x) the existing
Lenders, and each existing Lender will have the right, but not the obligation,
to commit to all or a portion of the proposed increase or (y) other Eligible
Assignees acceptable to the Arranger in its sole and absolute discretion;
provided, however, that the minimum Revolving Credit Commitment of each such new
Eligible Assignee accepting a Revolving Credit Commitment as part of such
Facility Increase equals or exceeds $5,000,000, and such Lender or Eligible
Assignee executes an Assumption Agreement pursuant to which such Lender agrees
to commit to all or a portion of such Facility Increase and, in the case of an
Eligible Assignee, to be bound by the terms of this Agreement as a Lender. On
the effective date provided for in the Assumption Agreement providing for a
Facility Increase (each a "Facility Increase Effective Date"), the Revolving
Credit Commitments will be increased by the amount committed to by each Lender
or Eligible Assignee on the Facility Increase Effective Date. In the event there
are Lenders and Eligible Assignees that have committed to a Facility Increase in
excess of the maximum amount requested (or permitted), then the Administrative
Agent shall have the right to allocate such commitments, first to Lenders and
then to Eligible Assignees, on whatever basis the Administrative Agent
determines is appropriate in consultation with the Borrower.
ARTICLE III
CONDITIONS TO LOANS AND LETTERS OF CREDIT
SECTION 3.1 CONDITIONS PRECEDENT TO THE EFFECTIVENESS OF
THIS AGREEMENT
This Agreement shall be effective on the date (the "Effective Date") on
which all of the following conditions precedent have been first satisfied
(unless waived by the Requisite Lenders or unless the time for satisfaction
thereof has been extended by the Administrative Agent):
(a) Certain Documents.
The Administrative Agent shall have received on the Effective Date each
of the following, each dated the Effective Date unless otherwise indicated or
agreed to by the Administrative Agent, in form and substance satisfactory to the
Administrative Agent and in sufficient copies for each Lender:
(i) this Agreement, duly executed and delivered by the
Borrower and each Lender, and, for the account of each Lender
requesting the same, a Revolving Credit Note or Revolving Credit Notes
of the Borrower conforming to the requirements set forth herein;
(ii) the Affirmation of Liens and Guaranties substantially in
the Form of Exhibit I duly executed by each Guarantor;
(iii) a favorable opinion of Xxxxxxxxx Xxxxxxx, LLP, counsel
to the Loan Parties in substantially the form of Exhibit H;
(iv) a copy of the articles or certificate of incorporation
(or equivalent Constituent Document) of each Loan Party, certified as
of a recent date by the Secretary of State of the state of organization
or formation of such Loan Party, together with certificates of such
official attesting to the good standing of each such Loan Party;
55
(v) a certificate of the Secretary or an Assistant Secretary
of each Loan Party certifying (A) the names and true signatures of each
officer of such Loan Party who has been authorized to execute and
deliver any Loan Document or other document required hereunder to be
executed and delivered by or on behalf of such Loan Party, (B) the
by-laws (or equivalent Constituent Document) of such Loan Party as in
effect on the date of such certification, (C) the resolutions of such
Loan Party's Board of Directors (or equivalent governing body)
approving and authorizing the execution, delivery and performance of
this Agreement and the other Loan Documents to which it is a party and
(D) that there have been no changes in the certificate of incorporation
(or equivalent Constituent Document) of such Loan Party from the
certificate of incorporation (or equivalent Constituent Document)
delivered pursuant to the immediately preceding clause;
(vi) a certificate of a Responsible Officer to the effect that
(i) there is no Default or Event of Default which has occurred and is
continuing under this Agreement and (ii) that the representations and
warranties set forth in Article IV and in the other Loan Documents
shall be true and correct as of the Effective Date, except to the
extent such representations and warranties expressly relate to an
earlier date, in which case such representation and warranties shall
have been true and correct on and as of such earlier date; and
(vii) such other certificates, documents, agreements and
information respecting any Loan Party as any Lender through the
Administrative Agent may reasonably request.
(b) Guaranty Supplements and Joinders.
Each Subsidiary of the Borrower that has any Guaranty Obligation in
respect of any of the Notes shall have become a party to (i) the Guaranty by
executing a Guaranty Supplement and (ii) the applicable Collateral Documents by
the execution of a joinder agreement in form and substance satisfactory to the
Administrative Agent.
(c) Fee and Expenses Paid.
There shall have been paid to the Administrative Agent, for the account
of the Administrative Agent and the Lenders, as applicable, all fees due and
payable on or before the Effective Date (including all such fees described in
the Fee Letter and all reasonable fees and expenses of counsel for which
invoices in reasonable detail have been presented) and all expenses due and
payable on or before the Effective Date.
(d) Consents, Etc.
Each of the Borrower and its Subsidiaries shall have received all
material consents and authorizations required pursuant to any material
Contractual Obligation with any other Person and shall have obtained all
material consents and authorizations of, and effected all notices to and filings
with, any Governmental Authority, in each case, as may be necessary to allow
each of the Borrower and its Subsidiaries lawfully (A) to execute, deliver and
perform, in all material respects, their respective obligations hereunder and
under the Loan Documents, the Senior Note Indenture, the January 2003 Senior
Note Indenture, the Subordinated Note Indenture, the Notes, and the other
Related Documents to which each of them, respectively, is, or shall be, a
56
party and each other agreement or instrument to be executed and delivered by
each of them, respectively, pursuant thereto or in connection therewith, and (B)
to create and perfect (or continue the existence or perfection of) the Liens on
the Collateral owned and to be owned by each of them in the manner and for the
purpose contemplated by the Loan Documents.
SECTION 3.2 CONDITIONS PRECEDENT TO EACH LOAN AND LETTER OF CREDIT
The obligation of each Lender on any date (including the Effective
Date) to make any Loan and of each Issuer on any date (including the Effective
Date) to Issue any Letter of Credit is subject to the satisfaction of each of
the following conditions precedent:
(a) Request for Borrowing or Issuance of Letter of Credit.
With respect to any Loan, the Administrative Agent shall have received
a duly executed Notice of Borrowing (or, in the case of Swing Loan, a duly
executed Swing Loan Request) and with respect to any Letter of Credit, the
Administrative Agent and the Issuer shall have received a duly executed Letter
of Credit Request.
(b) Representations and Warranties; No Defaults.
The following statements shall be true on and as of the date of such
Loan or Issuance, both before and after giving effect thereto and, in the case
of any Loan, to the application of the proceeds therefrom:
(i) the representations and warranties set forth in Article IV
and in the other Loan Documents shall be true and correct on and as of
the Effective Date and shall be true and correct in all material
respects on and as of any such date after the Closing Date with the
same effect as though made on and as of such date, except to the extent
such representations and warranties expressly relate to an earlier
date, in which case such representation and warranties shall have been
true and correct on and as of such earlier date; and
(ii) no Default or Event of Default has occurred and is
continuing.
(c) No Legal Impediments.
The making of the Loans or the Issuance of such Letter of Credit on
such date does not violate any Requirement of Law on the date of or immediately
following such Loan or Issuance of such Letter of Credit and is not enjoined,
temporarily, preliminarily or permanently.
(d) Additional Matters.
The Administrative Agent shall have received such additional documents,
information and materials as any Lender, through the Administrative Agent, may
reasonably request.
Each submission by the Borrower to the Administrative Agent of a Notice of
Borrowing or a Swing Loan Request and the acceptance by the Borrower of the
proceeds of each Loan requested therein, and each submission by the Borrower to
an Issuer of a Letter of Credit Request and the Issuance of each Letter of
Credit requested therein, shall be deemed to constitute a representation
57
and warranty by the Borrower as to the matters specified in Section 3.2(b)
(Representations and Warranties; No Defaults) on the date of the making of such
Loan or the Issuance of such Letter of Credit.
SECTION 3.3 DETERMINATIONS OF INITIAL BORROWING CONDITIONS
For purposes of determining compliance with the conditions specified in
Section 3.1 (Conditions Precedent to the Effectiveness of this Agreement), each
Lender shall be deemed to have consented to, approved, accepted or be satisfied
with, each document or other matter required thereunder to be consented to or
approved by or acceptable or satisfactory to the Lenders unless an officer of
the Administrative Agent responsible for the transactions contemplated by the
Loan Documents shall have received notice from such Lender prior to the initial
Borrowing or Issuance hereunder specifying its objection thereto and such Lender
shall not have made available to the Administrative Agent such Lender's Ratable
Portion of such Borrowing.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
To induce the Lenders, the Issuers and the Administrative Agent to
enter into this Agreement, the Borrower represents and warrants to the Lenders,
the Issuers and the Administrative Agent, on and as of the Effective Date, after
giving effect to the issuance of the Notes, the making of the Loans and the
other financial accommodations (including the Issuance of Letters of Credit) on
the Effective Date and on and as of each date as required by Section 3.2(b)(i)
(Representations and Warranties; No Defaults.):
SECTION 4.1 CORPORATE EXISTENCE; COMPLIANCE WITH LAW
Each of the Borrower and its Subsidiaries (a) is duly organized or
incorporated, validly existing and in good standing under the laws of the
jurisdiction of its organization; (b) is duly qualified to do business as a
foreign corporation or entity and in good standing under the laws of each
jurisdiction where such qualification is necessary, except where the failure to
be so qualified or in good standing would not have a Material Adverse Effect;
(c) has all requisite power and authority and the legal right to own, pledge,
mortgage and operate its properties, to lease the property it operates under
lease and to conduct its business as now or currently proposed to be conducted;
(d) is in compliance with its Constituent Documents; (e) is in compliance with
all applicable Requirements of Law except where the failure to be in compliance
would not in the aggregate have a Material Adverse Effect; and (f) has all
necessary licenses, permits, consents or approvals from or by, has made all
necessary filings with, and has given all necessary notices to, each
Governmental Authority having jurisdiction, to the extent required for such
ownership, operation and conduct, except for licenses, permits, consents,
approvals or filings that can be obtained or made by the taking of ministerial
action to secure the grant or transfer thereof or the failure to obtain or make
would not, in the aggregate, have a Material Adverse Effect.
SECTION 4.2 CORPORATE POWER; AUTHORIZATION; ENFORCEABLE OBLIGATIONS
(a) The execution, delivery and performance by each Loan Party of the
Loan Documents to which it is a party and the consummation of the transactions
contemplated thereby:
58
(i) are within such Loan Party's corporate, limited liability
company, partnership or other powers;
(ii) have been or, at the time of delivery thereof,pursuant to
Article III will have been duly authorized by all necessary corporate
or other entity action, including the consent of shareholders, partners
and members where required;
(iii) do not and will not (A) contravene any Loan Party's or
any of its Subsidiaries' respective Constituent Documents, (B) violate
any other Requirement of Law applicable to any Loan Party (including
Regulations T, U and X of the Federal Reserve Board), or any order or
decree of any Governmental Authority or arbitrator applicable to any
Loan Party, (C) conflict with or result in the breach of, or constitute
a default under, or result in or permit the termination or acceleration
of, any Contractual Obligation of any Loan Party or any of its
Subsidiaries, or (D) result in the creation or imposition of any Lien
upon any of the property of any Loan Party or any of its Subsidiaries,
other than those in favor of the Secured Parties pursuant to the
Collateral Documents; and
(iv) do not require the consent of, authorization by, approval
of, notice to, or filing or registration with, any Governmental
Authority or any other Person, other than those listed on Schedule 4.2
and which have been or will be, prior to the Effective Date, obtained
or made, copies of which have been or will be delivered to the
Administrative Agent pursuant to Section 3.1 (Conditions Precedent to
the Effectiveness of this Agreement), and each of which on the
Effective Date will be in full force and effect and, with respect to
the Collateral, filings required to perfect the Liens created by the
Collateral Documents.
(b) This Agreement has been, and each of the other Loan Documents will
have been upon delivery thereof, pursuant to the terms of this Agreement, duly
executed and delivered by each Loan Party thereto. This Agreement is, and the
other Loan Documents will be, when delivered hereunder, the legal, valid and
binding obligation of each Loan Party party thereto, enforceable against such
Loan Party in accordance with its terms, subject to applicable bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and similar laws
affecting creditors' rights and remedies generally.
SECTION 4.3 OWNERSHIP OF BORROWER; SUBSIDIARIES
(a) As of the Effective Date, the authorized capital stock of the
Borrower consists of 67,000,000 shares of common stock, $0.01 par value per
share, of which 27,889,036 shares are issued and outstanding, and 3,000,000
shares of preferred stock, of which no shares are issued and outstanding. As of
the Effective Date, all of the outstanding capital stock of the Borrower has
been validly issued, is fully paid and non-assessable and 91.72% is owned
beneficially and of record by TOI, free and clear of all Liens. Except as set
forth on Schedule 4.3, no Stock of the Borrower is subject to any option,
warrant, right of conversion or purchase or any similar right. There are no
agreements or understandings to which the Borrower is a party with respect to
the voting, sale or transfer of any shares of Stock of the Borrower or any
agreement restricting the transfer or hypothecation of any such shares.
(b) Set forth on Schedule 4.3 is a complete and accurate list showing,
as of the Effective Date, all Subsidiaries of the Borrower and, as to each such
Subsidiary, the jurisdiction
59
of its organization, the number of shares of each class of Stock authorized (if
applicable), the number outstanding on the Effective Date and the number and
percentage of the outstanding shares of each such class owned (directly or
indirectly) by the Borrower. Except as set forth on Schedule 4.3, no Stock of
any Subsidiary of the Borrower is subject to any outstanding option, warrant,
right of conversion or purchase or any similar right. All of the outstanding
Stock of each Subsidiary of the Borrower owned (directly or indirectly) by the
Borrower has been validly issued, is fully paid and non-assessable (to the
extent applicable) and is owned by the Borrower or a Subsidiary of the Borrower,
free and clear of all Liens (other than the Lien in favor of the Secured Parties
created pursuant to the Pledge Agreement). Neither the Borrower nor any such
Subsidiary is a party to, or has knowledge of, any agreement restricting the
transfer or hypothecation of any Stock of any such Subsidiary, other than the
Loan Documents. The Borrower does not own or hold, directly or indirectly, any
Stock of any Person other than such Subsidiaries and Investments permitted by
Section 8.3 (Investments).
SECTION 4.4 FINANCIAL STATEMENTS
(a) The Consolidated balance sheets of the Borrower and its
Subsidiaries as at December 31, 2002, and the related Consolidated statements of
income, retained earnings and cash flows of the Borrower and its Subsidiaries
for the fiscal year then ended, certified by Ernst & Young LLP, copies of which
have been furnished to each Lender, fairly present the Consolidated financial
condition of the Borrower and its Subsidiaries as at such date and the
Consolidated results of the operations of the Borrower and its Subsidiaries for
the period ended on such date, all in conformity with GAAP.
(b) Except as set forth on Schedule 4.4, neither the Borrower nor any
of its Subsidiaries has any material obligation, material contingent liability
or material liability for taxes, material long-term leases or unusual forward or
long-term material commitment that is not reflected in the Financial Statements
referred to in clause (a) above or in the notes thereto and not otherwise
permitted by this Agreement.
(c) The Four Year Projections were prepared by the Borrower in light of
the past operations of its business, and reflect projections for the three year
period beginning on January 1, 2002 on a quarterly basis. The Four Year
Projections are based upon estimates and assumptions stated therein, that the
Borrower believes in each case to be reasonable and fair in light of current
conditions and current facts known to the Borrower and, as of the Closing Date,
reflect the Borrower's good faith and reasonable estimates of the future
financial performance of the Borrower and its Subsidiaries and of the other
information projected therein for the periods set forth therein.
(d) The 2003 Projections were prepared by the Borrower in light of the
past operations of its business, and reflect projections for the one-year period
beginning on January 1, 2003 on a quarterly basis. The 2003 Projections are
based upon estimates and assumptions stated therein, that the Borrower believes
in each case to be reasonable and fair in light of current conditions and
current facts known to the Borrower and, as of the Effective Date, reflect the
Borrower's good faith and reasonable estimates of the future financial
performance of the Borrower and its Subsidiaries and of the other information
projected therein for the periods set forth therein.
(e) The unaudited pro forma Consolidated and consolidating balance
sheet of the Borrower and its Subsidiaries, a copy of which has been delivered
to each Lender pursuant to the
60
Original Credit Agreement, were prepared as of March 31, 2002, reflect as of
such date, on a pro forma basis after giving effect to the Merger, the issuance
of the Notes (other than the January 2003 Senior Notes), and the Loans to be
made and the Letters of Credit to be Issued on the Closing Date and the other
financing transactions contemplated hereby, the Consolidated financial condition
of the Borrower and its Subsidiaries, and the assumptions expressed therein were
reasonable based on the information available to the Borrower at the time so
furnished and on the Closing Date.
SECTION 4.5 MATERIAL ADVERSE CHANGE
There has been no material adverse change to the business, condition
(financial or otherwise), performance, properties or prospects, operations or
properties of any Loan Party or the Borrower and its Subsidiaries, taken as a
whole, since December 31, 2002, and there have been no events or developments
that in the aggregate have had a Material Adverse Effect.
SECTION 4.6 SOLVENCY
Both before and after giving effect to (a) the Loans and Letter of
Credit Obligations to be made or extended on the Effective Date or such other
date as Loans and Letter of Credit Obligations requested hereunder are made or
extended, (b) the disbursement of the proceeds of such Loans pursuant to the
instructions of the Borrower, (c) the issuance of the Notes, and the Loans to be
made and the Letters of Credit to be Issued on the Effective Date and the
consummation of the other financing transactions contemplated hereby and (d) the
payment and accrual of all transaction costs in connection with the foregoing,
each Loan Party is Solvent.
SECTION 4.7 LITIGATION
Except as set forth on Schedule 4.7, there are no pending or, to the
knowledge of the Borrower, threatened actions, investigations or proceedings
affecting the Borrower, or any of its Subsidiaries before any court,
Governmental Authority or arbitrator other than those that in the aggregate are
not reasonably likely to be determined adversely to any Loan Party and, if so
determined, would not have a Material Adverse Effect. The performance of any
action by any Loan Party required or contemplated by any Loan Documents or any
Related Document is not restrained or enjoined (either temporarily,
preliminarily or permanently).
SECTION 4.8 TAXES
(a) All federal, state, local and foreign income and franchise and
other material tax returns, reports and statements (collectively, the "Tax
Returns") required to be filed by the Borrower or any of its Tax Affiliates have
been filed with the appropriate Governmental Authorities in all jurisdictions in
which such Tax Returns are required to be filed, all such Tax Returns are true
and correct in all material respects, and all taxes, charges and other
impositions reflected therein have been paid prior to the date on which any
fine, penalty, interest, late charge or loss may be added thereto for
non-payment thereof except where contested in good faith and by appropriate
proceedings if adequate reserves therefor have been established on the books of
the Borrower or such Tax Affiliate in conformity with GAAP. Except as set forth
on Schedule 4.8, no Tax Return is under audit or examination by any Governmental
Authority and no notice of such an audit or examination or any assertion of any
claim for Taxes has been given or made by any Governmental Authority. Proper and
accurate amounts have been withheld by the Borrower and each of its Tax
Affiliates from their respective employees for all periods in full
61
and complete compliance with the tax, social security and unemployment
withholding provisions of applicable Requirements of Law and such withholdings
have been timely paid to the respective Governmental Authorities.
(b) Except as set forth on Schedule 4.8, none of the Borrower or any of
its Tax Affiliates has (i) executed or filed with the IRS or any other
Governmental Authority any agreement or other document extending, or having the
effect of extending, the period for the filing of any Tax Return or the
assessment or collection of any charges, (ii) incurred any obligation under any
tax sharing agreement or arrangement other than those of which the
Administrative Agent has received a copy prior to the date hereof, or (iii) been
a member of an affiliated, combined or unitary group other than the group of
which the Borrower (or its Tax Affiliate) is the common parent.
SECTION 4.9 FULL DISCLOSURE
(a) The information prepared or furnished by or on behalf of the
Borrower or any Loan Party in connection with this Agreement, the other Loan
Documents or the Related Documents or the consummation of the transactions
contemplated hereby or thereby and the Merger taken as a whole, including the
information contained in the Disclosure Documents, does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements contained therein or herein not misleading.
(b) The Borrower has delivered to each Lender a true, complete and
correct copy of the Disclosure Documents. The Disclosure Documents comply as to
form in all material respects with all applicable requirements of all applicable
state and Federal securities laws.
SECTION 4.10 MARGIN REGULATIONS
The Borrower is not engaged in the business of extending credit for the
purpose of purchasing or carrying margin stock (within the meaning of Regulation
U of the Federal Reserve Board), and no proceeds of any Loan or Letter of Credit
will be used to purchase or carry any such margin stock or to extend credit to
others for the purpose of purchasing or carrying any such margin stock in
contravention of Regulation T, U or X of the Federal Reserve Board.
SECTION 4.11 NO BURDENSOME RESTRICTIONS; NO DEFAULTS
(a) Neither the Borrower nor any of its Subsidiaries (i) is a party to
any Contractual Obligation the performance of which by any thereof, either
unconditionally or upon the happening of an event, would result in the creation
of a Lien (other than a Lien permitted under Section 8.2 (Liens, Etc.)) on the
property or assets of any thereof or (ii) is subject to any charter or corporate
restrictions that would, in the aggregate, have a Material Adverse Effect.
(b) Neither the Borrower nor any of its Subsidiaries is in default
under or with respect to any Contractual Obligation owed by it and, to the
knowledge of the Borrower, no other party is in default under or with respect to
any Contractual Obligation owed to any Loan Party or to any Subsidiary of a Loan
Party, other than, in either case, those defaults that in the aggregate would
not have a Material Adverse Effect.
(c) No Default or Event of Default has occurred and is continuing.
62
(d) To the best knowledge of the Borrower, there are no Requirements of
Law applicable to any Loan Party or any Subsidiary of any Loan Party the
compliance with which by such Loan Party or such Subsidiary, as the case may be,
would, in the aggregate, have a Material Adverse Effect.
SECTION 4.12 INVESTMENT COMPANY ACT; PUBLIC UTILITY HOLDING
COMPANY ACT
Neither the Borrower nor any of its Subsidiaries is (a) an "investment
company" or an "affiliated person" of, or "promoter" or "principal underwriter"
for, an "investment company," as such terms are defined in the Investment
Company Act of 1940, as amended or (b) a "holding company," or an "affiliate" of
a "holding company" or a "subsidiary company" of a "holding company," as each
such term is defined and used in the Public Utility Holding Company Act of 1935,
as amended.
SECTION 4.13 USE OF PROCEEDS
The proceeds of the Loans and the Letters of Credit have been or are
being used by the Borrower solely (a) to repay the Refinanced Indebtedness, (b)
to pay transaction costs, fees and expenses related to the Merger, this
Agreement and the transactions contemplated hereby and thereby and (c) to
provide working capital from time to time for the Borrower and its Subsidiaries
and for other general corporate purposes.
SECTION 4.14 INSURANCE
Except as set forth on Schedule 4.14, all policies of insurance of any
kind or nature of the Borrower or any of its Subsidiaries, including policies of
life, fire, theft, product liability, public liability, property damage, other
casualty, employee fidelity, workers' compensation and employee health and
welfare insurance, are in full force and effect and are of a nature and provide
such coverage as is customarily carried by, and to the best knowledge and belief
of the Borrower is sufficient for, businesses of the size and character of such
Person. Except as set forth on Schedule 4.14, none of the Borrower or any of its
Subsidiaries has in the three years preceding the Effective Date been refused
insurance for any material coverage for which it had applied or had any policy
of insurance terminated (other than at its request).
SECTION 4.15 LABOR MATTERS
(a) There are no strikes, work stoppages, slowdowns or lockouts pending
or threatened against or involving the Borrower or any of its Subsidiaries,
other than those that in the aggregate would not have a Material Adverse Effect.
(b) There are no unfair labor practices, grievances or complaints
pending, or, to the Borrower's knowledge, threatened, against or involving the
Borrower or any of its Subsidiaries, nor are there any pending or, to the
Borrower's knowledge, threatened arbitrations or grievances involving the
Borrower or any of its Subsidiaries, other than those that, in the aggregate, if
resolved adversely to the Borrower or such Subsidiary, would not have a Material
Adverse Effect.
(c) Except as set forth on Schedule 4.15, as of the Effective Date,
there is no collective bargaining agreement covering any employee of the
Borrower or its Subsidiaries.
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(d) Schedule 4.15 sets forth as of the date hereof, all material
consulting agreements, executive employment agreements, executive compensation
plans, deferred compensation agreements, employee stock purchase and stock
option plans and severance plans of the Borrower and any of its Subsidiaries.
SECTION 4.16 ERISA
(a) Schedule 4.16 separately identifies as of the date hereof all Title
IV Plans and all of the employee benefit plans within the meaning of Section
3(3) of ERISA to which the Borrower or any of its Subsidiaries has any
obligation or liability, contingent or otherwise.
(b) Each employee benefit plan of the Borrower or any of its
Subsidiaries which is intended to qualify under Section 401 of the Code does so
qualify, and any trust created thereunder is exempt from tax under the
provisions of Section 501 of the Code, except where such failures in the
aggregate would not have a Material Adverse Effect.
(c) Each Title IV Plan is in compliance in all material respects with
applicable provisions of ERISA, the Code and other Requirements of Law except
for non-compliances that in the aggregate would not have a Material Adverse
Effect.
(d) There has been no, nor is there reasonably expected to occur, any
ERISA Event other than those that, in the aggregate, would not have a Material
Adverse Effect.
(e) Neither the Borrower nor any ERISA Affiliate has contributed or
been obligated to contribute to, any Multiemployer Plan within the last six
years.
SECTION 4.17 ENVIRONMENTAL MATTERS
(a) The operations of the Borrower and each of its Subsidiaries have
been and are in compliance with all Environmental Laws, including obtaining and
complying with all required environmental, health and safety Permits, other than
non-compliances that in the aggregate are not reasonably likely to result in the
Borrower and its Subsidiaries incurring Environmental Liabilities and Costs
after the date hereof in excess of $15,000,000.
(b) None of the Borrower or any of its Subsidiaries or any Real
Property currently or, to the knowledge of the Borrower, previously owned,
operated or leased by or for the Borrower or any of its Subsidiaries is subject
to any pending or, to the knowledge of the Borrower, threatened, claim, order,
agreement, notice of violation, notice of potential liability or is the subject
of any pending or, to the knowledge of the Borrower, threatened proceeding or
governmental investigation under or pursuant to Environmental Laws other than
those that in the aggregate are not reasonably likely to result in the Borrower
and its Subsidiaries incurring Environmental Liabilities and Costs in excess of
$15,000,000.
(c) Except as disclosed on Schedule 4.17, none of the Borrower or any
of its Subsidiaries is a treatment, storage or disposal facility requiring a
Permit under the Resource Conservation and Recovery Act, 42 U.S.C. Section 6901
et seq., the regulations thereunder or any state analog.
(d) There are no facts, circumstances or conditions arising out of or
relating to the operations of the Borrower or any it its Subsidiaries or
ownership of Real Property owned,
64
operated or leased by the Borrower or any of its Subsidiaries which are not
specifically included in the financial information furnished to the Lenders
other than those that in the aggregate are not reasonably likely to result in
the Borrower and its Subsidiaries incurring Environmental Liabilities and Costs
of $15,000,000 or more.
(e) As of the date hereof, no Environmental Lien has attached to any
property of the Borrower or any of its Subsidiaries and, to the knowledge of the
Borrower, no circumstances or conditions exist that could reasonably be expected
to result in any such Lien attaching to any such property.
(f) The Borrower and each of its Subsidiaries has made available for
inspection to the Lenders copies of all environmental, health or safety audits,
studies, assessments, inspections, investigations or other environmental health
and safety reports relating to the operations of the Borrower or any of its
Subsidiaries or any Real Property of any of them that are in the possession,
custody or control of the Borrower or any of its Subsidiaries.
SECTION 4.18 INTELLECTUAL PROPERTY
The Borrower and its Subsidiaries own or license or otherwise have the
right to use all licenses, permits, patents, patent applications, trademarks,
trademark applications, service marks, trade names, copyrights, copyright
applications, franchises, authorizations and other intellectual property rights
that are material for the operations of their respective businesses, without
infringement upon or conflict with the rights of any other Person with respect
thereto, including all trade names associated with any private label brands of
the Borrower or any of its Subsidiaries. To the Borrower's knowledge, no slogan
or other advertising device, product, process, method, substance, part or
component, or other material now employed, or now contemplated to be employed,
by the Borrower or any of its Subsidiaries infringes upon or conflicts with any
rights owned by any other Person, and no action, proceeding, claim or litigation
regarding any of the foregoing is pending or threatened.
SECTION 4.19 TITLE; REAL PROPERTY
(a) Each of the Borrower and its Subsidiaries has good and marketable
or indefeasible title to, or valid leasehold interests in, all Real Property and
good title to all material personal property in each case that is purported to
be owned or leased by it, including those reflected on the most recent Financial
Statements delivered by the Borrower, and none of such properties and assets is
subject to any Lien, except Liens permitted under Section 8.2 (Liens, Etc.).
(b) Set forth on Schedule 4.19 is a complete and accurate list of all
Real Property not held for sale owned by each Loan Party and its Subsidiaries
showing as of the Effective Date the current street address including, where
applicable, county, state or other relevant jurisdiction, state, and record
owner.
(c) All Permits required to have been issued or appropriate to enable
all Real Property of the Borrower or any of its Subsidiaries to be lawfully
occupied and used for all of the purposes for which they are currently occupied
and used have been lawfully issued and are in full force and effect, other than
those that in the aggregate would not have a Material Adverse Effect.
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(d) None of the Borrower or any of its Subsidiaries has received any
notice, or has any knowledge, of any pending, threatened or contemplated
condemnation proceeding affecting any Real Property of the Borrower or any of
its Subsidiaries or any part thereof, except those that, in the aggregate, would
not have a Material Adverse Effect.
SECTION 4.20 RELATED DOCUMENTS
(a) The execution, delivery and performance by each Loan Party of the
Related Documents to which it is a party and the consummation of the
transactions contemplated thereby by such Loan Party:
(i) are within such Loan Party's respective corporate, limited
liability company, partnership or other powers;
(ii) at the Effective Date will have been duly authorized by
all necessary corporate or other action, including the consent of
stockholders where required;
(iii) do not and will not (A) contravene or violate any Loan
Party's or any of its Subsidiaries' respective Constituent Documents,
(B) violate any other Requirement of Law applicable to any Loan Party,
or any order or decree of any Governmental Authority or arbitrator, (C)
conflict with or result in the breach of, or constitute a default
under, or result in or permit the termination or acceleration of, any
Contractual Obligation of any Loan Party or any of its Subsidiaries,
except for those that in the aggregate would not have a Material
Adverse Effect or (D) result in the creation or imposition of any Lien
upon any property of any Loan Party or any of its Subsidiaries; and
(iv) do not require the consent of, authorization by, approval
of, notice to, or filing or registration with, any Governmental
Authority or any other Person, other than those that (A) have been
obtained, each of which will be in full force and effect on the
Effective Date, none of which on the Effective Date impose materially
adverse conditions upon the exercise of control by the Borrower over
any of its Subsidiaries or (B) that in the aggregate, if not obtained,
would not have a Material Adverse Effect.
(b) Each of the Related Documents has been duly executed and delivered
by each Loan Party party thereto and as of the Closing Date is the legal, valid
and binding obligation of each Loan Party party thereto, enforceable against
such Loan Party in accordance with its terms, subject to applicable bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and similar laws
affecting creditors' rights and remedies generally.
(c) None of the Related Documents has been amended or modified in any
respect and no provision therein has been waived, except in each case to the
extent permitted by Section 8.11 (Modification of Related Documents), and each
of the representations and warranties therein are true and correct in all
material respects and no default or event that with the giving of notice or
lapse of time or both would be a default has occurred thereunder.
(d) The Obligations and the Guaranty constitute "Senior Debt" as
defined in the January 2003 Senior Note Indenture, the Senior Note Indenture and
the Subordinated Note Indenture.
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SECTION 4.21 NON-GUARANTOR SUBSIDIARIES
The Subsidiaries of the Borrower that are not Guarantors do not own, in
the aggregate for all such Subsidiaries, 5% or more of the Total Assets of the
Borrower and its Subsidiaries or contribute 5% or more of the Consolidated Net
Income of the Borrower and its Subsidiaries.
ARTICLE V
FINANCIAL COVENANTS
As long as any of the Obligations or the Revolving Credit Commitments
remain outstanding, unless the Requisite Lenders otherwise consent in writing,
the Borrower agrees with the Lenders and the Administrative Agent that:
SECTION 5.1 CONSOLIDATED TANGIBLE NET WORTH
The Borrower shall maintain Consolidated Tangible Net Worth at all
times during any Fiscal Quarter ending after the Closing Date of (a)
$270,000,000 plus (b) in the case of each Fiscal Quarter ending after the
Closing Date, 50% of the Consolidated Net Income of the Borrower for the
preceding Fiscal Quarter plus (c) 90% of the Net Cash Proceeds of any Equity
Issuance from and after the Closing Date.
SECTION 5.2 MAXIMUM TOTAL INDEBTEDNESS TO CONSOLIDATED TANGIBLE
NET WORTH RATIO
The Borrower shall maintain a Total Indebtedness to Consolidated
Tangible Net Worth Ratio at all times of not more than (a) 2.50 to 1, if at such
time the Fixed Charge Coverage Ratio, determined as of the last Fiscal Quarter,
for the four Fiscal Quarter period ending on the last day of such Fiscal
Quarter, is greater than or equal to 2.50 to 1, and (b) 2.25 to 1 if at such
time the Fixed Charge Coverage Ratio, determined as of the last Fiscal Quarter,
for the four Fiscal Quarter period ending on the last day of such Fiscal
Quarter, is less than 2.50 to 1.
SECTION 5.3 LAND BANK INDEBTEDNESS TO CONSOLIDATED TANGIBLE NET
WORTH RATIO
The Borrower shall maintain a Land Bank Indebtedness to Consolidated
Tangible Net Worth ratio at all times of not more than 1.50 to 1.
SECTION 5.4 MINIMUM FIXED CHARGE COVERAGE RATIO
The Borrower shall maintain a Fixed Charge Coverage Ratio, as
determined as of the last day of each Fiscal Quarter, for the four Fiscal
Quarter period ending on such day, of greater than or equal to 2.00 to 1.
SECTION 5.5 UNSOLD LAND TO CONSOLIDATED TANGIBLE NET WORTH
The Borrower shall maintain at all times a ratio of (a) the GAAP Value
of Unsold Land of the Borrower and its Subsidiaries to (b) Consolidated Tangible
Net Worth of not more than 1.25 to 1.
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SECTION 5.6 UNSOLD UNITS TO UNITS CLOSED
The Borrower shall maintain at all times a ratio of (a) the aggregate
number of Units owned by the Borrower and its Subsidiaries that constitute
Unsold Units to (b) Units Closed by the Borrower and its Subsidiaries,
determined as of the last day of each calendar month, for the twelve months
ending on such day, of not more than 1 to 4.
SECTION 5.7 UNIMPROVED LAND TO CONSOLIDATED TANGIBLE NET WORTH
The Borrower shall maintain at all times a ratio of (a) the GAAP Value
of Unimproved Land of the Borrower and its Subsidiaries to (b) Consolidated
Tangible Net Worth of not more than 0.15 to 1.
SECTION 5.8 MODEL HOMES TO UNITS CLOSED
The Borrower shall maintain a ratio of (a) the aggregate number of
Model Homes owned by the Borrower and its Subsidiaries to (b) the aggregate
number of Units Closed by the Borrower and its Subsidiaries, determined as of
the last day of each calendar month, for the twelve months ending on such day
(which compliance shall be maintained from the beginning of the first day of
such twelve month period through the end of the last day of such period), of not
more than 0.1 to 1.
ARTICLE VI
REPORTING COVENANTS
As long as any of the Obligations or the Revolving Credit Commitments
remain outstanding, unless the Requisite Lenders otherwise consent in writing,
the Borrower agrees with the Lenders and the Administrative Agent that:
SECTION 6.1 FINANCIAL STATEMENTS
The Borrower shall furnish to the Administrative Agent (with sufficient
copies for each of the Lenders which the Administrative Agent shall distribute
to the Lenders) each of the following:
(a) Quarterly Reports.
Within 45 days after the end of each Fiscal Quarter (other than Fiscal
Quarters ending December 31), financial information regarding the Borrower and
its Subsidiaries consisting of Consolidated and consolidating unaudited balance
sheets as of the close of such quarter and the related statements of income and
cash flow for such quarter and that portion of the Fiscal Year ending as of the
close of such quarter, setting forth in comparative form the figures for the
corresponding period in the prior year and the figures contained in the
Projections, or, if applicable the latest business plan provided pursuant to
clause (d) below, for the current Fiscal Year, in each case certified by the
Chief Financial Officer of the Borrower as fairly presenting the Consolidated
and consolidating financial position of the Borrower and its Subsidiaries as at
the dates indicated and the results of their operations and cash flow for the
periods indicated in accordance with GAAP (subject to the absence of footnote
disclosure and normal year-end audit adjustments).
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(b) Annual Reports.
Within 90 days after the end of each Fiscal Year, financial information
regarding the Borrower and its Subsidiaries consisting of Consolidated and
consolidating balance sheets of the Borrower and its Subsidiaries as of the end
of such year and related statements of income and cash flows of the Borrower and
its Subsidiaries for such Fiscal Year, all prepared in conformity with GAAP and
certified, in the case of such Consolidated Financial Statements, without
qualification as to the scope of the audit or as to the Borrower being a going
concern by Ernst & Young LLP or other independent certified public accountants
acceptable to the Administrative Agent, together with the report of such
accounting firm stating that (i) such Financial Statements fairly present the
Consolidated financial position of the Borrower and its Subsidiaries as at the
dates indicated and the results of their operations and cash flow for the
periods indicated in conformity with GAAP applied on a basis consistent with
prior years (except for changes with which such independent certified public
accountants shall concur and which shall have been disclosed in the notes to the
Financial Statements) and (ii) the examination by such accountants in connection
with such Consolidated Financial Statements has been made in accordance with
generally accepted auditing standards, and accompanied by a certificate stating
that in the course of the regular audit of the business of the Borrower and its
Subsidiaries such accounting firm has obtained no knowledge that a Default or
Event of Default in respect of the financial covenant contained in Section 5.2
(Maximum Total Indebtedness to Consolidated Tangible Net Worth Ratio) has
occurred and is continuing, or, if in the opinion of such accounting firm, a
Default or Event of Default has occurred and is continuing in respect of such
financial covenant, a statement as to the nature thereof.
(c) Compliance Certificate.
Together with each delivery of any financial statement pursuant to
clauses (a) and (b) of this Section 6.1 (Financial Statements), a certificate of
a Responsible Officer of the Borrower (each, a "Compliance Certificate") (i)
showing in reasonable detail the calculations used in determining the Total
Liabilities to Consolidated Tangible Net Worth Ratio (for purposes of
determining the Applicable Margin and the Applicable Unused Commitment Fee Rate)
and demonstrating compliance with each of the financial covenants contained in
Article V as of the end of such quarter, (ii) showing such information and
calculations reasonably requested by the Administrative Agent relating to Land
Bank Arrangements of the Borrower and its Subsidiaries or with respect to which
the Borrower or any of its Subsidiaries has options (or similar rights) to
purchase land and (iii) stating that no Default or Event of Default has occurred
and is continuing or, if a Default or an Event of Default has occurred and is
continuing, stating the nature thereof and the action that the Borrower proposes
to take with respect thereto.
(d) Projections/Business Plan.
Not later than 15 days prior to the end of each Fiscal Year, and
containing substantially the types of financial information contained in the
Four Year Projections, the annual business and financial plans of the Borrower
for the next succeeding Fiscal Year certified by the Chief Financial Officer of
the Borrower, with updates to such plans provided on July 31 of each year
beginning in 2002, or more frequently as reasonably requested by the Lenders.
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(e) Management Letters, Etc.
Within five Business Days after receipt thereof by any Loan Party,
copies of each management letter, exception report or similar letter or report
received by such Loan Party from its independent certified public accountants.
SECTION 6.2 DEFAULT NOTICES
As soon as practicable, and in any event within five Business Days
after a Responsible Officer of any Loan Party has actual knowledge of the
existence of any Default, Event of Default or other event having had a Material
Adverse Effect, the Borrower shall give the Administrative Agent notice
specifying the nature of such Default or Event of Default or other event,
including the anticipated effect thereof, which notice, if given by telephone,
shall be promptly confirmed in writing on the next Business Day.
SECTION 6.3 LITIGATION
Promptly after the commencement thereof, the Borrower shall give the
Administrative Agent written notice of the commencement of all actions, suits
and proceedings before any domestic or foreign Governmental Authority or
arbitrator, affecting the Borrower or any of its Subsidiaries, that (a) seeks
injunctive or similar relief or (b) in the reasonable judgment of the Borrower
or such Subsidiary, expose the Borrower or such Subsidiary to liability in an
amount aggregating $15,000,000 or more or which, if adversely determined, would
have a Material Adverse Effect.
SECTION 6.4 NOTICES UNDER RELATED DOCUMENTS
Promptly after the sending or filing thereof, the Borrower shall send
the Administrative Agent copies of all material notices, certificates or reports
delivered pursuant to, or in connection with, any Related Document.
SECTION 6.5 SEC FILINGS; PRESS RELEASES
Promptly after the sending or filing thereof, the Borrower shall send
the Administrative Agent copies of (a) all reports which the Borrower or TOI
sends to its security holders generally, (b) all reports and registration
statements which the Borrower or TOI or any of its Subsidiaries files with the
Securities and Exchange Commission or any national or foreign securities
exchange or the National Association of Securities Dealers, Inc. and (c) all
other statements concerning material changes or developments in the business of
such Loan Party made available by any Loan Party to the public.
SECTION 6.6 LABOR RELATIONS
Promptly after becoming aware of the same, the Borrower shall give the
Administrative Agent written notice of (a) any material labor dispute to which
the Borrower or any of its Subsidiaries is or may become a party, including any
strikes, lockouts or other disputes relating to any of such Person's plants and
other facilities and (b) any Worker Adjustment and Retraining Notification Act
or related liability incurred with respect to the closing of any plant or other
facility of any of such Person.
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SECTION 6.7 TAX RETURNS
Upon the request of the Administrative Agent, the Borrower will provide
copies of all federal, state, local and foreign tax returns and reports filed by
the Borrower or any of its Subsidiaries in respect of taxes measured by income
(excluding sales, use and like taxes).
SECTION 6.8 INSURANCE
As soon as is practicable and in any event within 90 days after the end
of each Fiscal Year, the Borrower shall furnish the Administrative Agent (in
sufficient copies for each of the Lenders) with (a) a report in form and
substance reasonably satisfactory to the Administrative Agent and the Lenders
outlining all material insurance coverage maintained as of the date of such
report by the Borrower and its Subsidiaries and the duration of such coverage
and (b) an insurance broker's statement that all premiums then due and payable
with respect to such coverage have been paid.
SECTION 6.9 ERISA MATTERS
The Borrower shall furnish the Administrative Agent (with sufficient
copies for each of the Lenders) each of the following:
(a) promptly and in any event within 30 days after the Borrower, any of
its Subsidiaries or any ERISA Affiliate knows or has reason to know that any
ERISA Event has occurred, written notice describing such event;
(b) promptly and in any event within 10 days after the Borrower, any of
its Subsidiaries or any ERISA Affiliate knows or has reason to know that a
request for a minimum funding waiver under Section 412 of the Code has been
filed with respect to any Title IV Plan or Multiemployer Plan, a written
statement of a Responsible Officer of the Borrower describing such ERISA Event
or waiver request and the action, if any, that the Borrower, its Subsidiaries
and ERISA Affiliates propose to take with respect thereto and a copy of any
notice filed by the Borrower, any of its Subsidiaries or any ERISA Affiliate
with the PBGC or the IRS pertaining thereto; and
(c) simultaneously with the date that the Borrower, any of its
Subsidiaries or any ERISA Affiliate files a notice of intent to terminate any
Title IV Plan, if such termination would require material additional
contributions in order to be considered a standard termination within the
meaning of Section 4041(b) of ERISA, a copy of each notice.
SECTION 6.10 ENVIRONMENTAL MATTERS
The Borrower shall provide the Administrative Agent promptly and in any
event within 10 days after the Borrower or any Subsidiary learning of each of
the following, written notice of any of the following:
(a) that any Loan Party is or may be liable to any Person as a result
of a Release or threatened Release that could reasonably be expected to subject
such Loan Party to Environmental Liabilities and Costs of $15,000,000 or more;
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(b) the receipt by any Loan Party of notification that any
real or personal property of such Loan Party is or is reasonably likely to be
subject to any Environmental Lien;
(c) the receipt by any Loan Party of any notice of violation of or
potential liability under, or knowledge by such Loan Party that there exists a
condition that could reasonably be expected to result in a violation of or
liability under any Environmental Law, except for violations and liabilities the
consequence of which in the aggregate would not be reasonably likely to subject
the Loan Parties collectively to Environmental Liabilities and Costs of
$15,000,000 or more;
(d) the commencement of any judicial or administrative proceeding or
investigation alleging a violation of or liability under any Environmental Law,
that in the aggregate, if adversely determined, would have a reasonable
likelihood of subjecting the Loan Parties collectively to Environmental
Liabilities and Costs of $15,000,000 or more;
(e) any proposed acquisition of stock, assets or real estate, any
proposed leasing of property, or any other action by any Loan Party or any of
its Subsidiaries other than those the consequences of which in the aggregate
have reasonable likelihood of subjecting the Loan Parties collectively to
Environmental Liabilities and Costs of $15,000,000 or less;
(f) any proposed action by any Loan Party or any of its Subsidiaries or
any proposed change in Environmental Laws that in the aggregate have a
reasonable likelihood of requiring the Loan Parties to obtain additional
environmental, health or safety Permits or make additional capital improvements
to obtain compliance with Environmental Laws that in the aggregate would cost
$15,000,000 or more or subject the Loan Parties to additional Environmental
Liabilities and Costs of $15,000,000; and
(g) upon written request by any Lender through the Administrative
Agent, a report providing an update of the status of any environmental, health
or safety compliance, hazard or liability issue identified in any notice or
report delivered pursuant to this Agreement.
SECTION 6.11 BORROWING BASE DETERMINATION
(a) No later than 15 days after the last day of each calendar month or
more frequently as requested by the Administrative Agent, a Borrowing Base
Certificate as of the first day of such month executed by a Responsible Officer
of the Borrower. The Borrower agrees that each Borrowing Base Certificate
delivered by the Borrower shall be accompanied by appropriate supporting data
and shall not be deemed delivered until verified by the Administrative Agent to
the Administrative Agent's satisfaction. Upon verification by the Administrative
Agent, each Borrowing Base Certificate shall be deemed delivered for purposes of
determining the Borrowing Base as of the date of its actual delivery. The
Borrower agrees that the Administrative Agent in the process of its verification
may determine, in its reasonable discretion, the particular category to which
any Borrowing Base Asset belongs.
(b) The Administrative Agent may (prior to the occurrence of an Event
of Default, at its sole cost and expense, and, after and during the continuance
of an Event of Default, at the Borrower's sole cost and expense) make physical
verifications of the Borrowing Base Assets in any manner and through any medium
that the Administrative Agent considers advisable, and the Borrower shall
furnish all such assistance and information as the Administrative Agent may
require in connection therewith.
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SECTION 6.12 MATERIAL CONTRACTUAL OBLIGATIONS
Promptly after becoming aware of the same, the Borrower shall give the
Administrative Agent written notice of any cancellation, termination or loss of
any material Contractual Obligation.
SECTION 6.13 OTHER INFORMATION
The Borrower will provide the Administrative Agent or any Lender with
such other information respecting the business, properties, condition, financial
or otherwise, or operations of the Borrower or any of its Subsidiaries as the
Administrative Agent or any Lender through the Administrative Agent may from
time to time reasonably request.
ARTICLE VII
AFFIRMATIVE COVENANTS
As long as the Obligations or the Revolving Credit Commitments remain
outstanding, unless the Requisite Lenders otherwise consent in writing, the
Borrower agrees with the Lenders and the Administrative Agent that:
SECTION 7.1 PRESERVATION OF CORPORATE EXISTENCE, ETC.
The Borrower shall, and shall cause each of its Subsidiaries to,
preserve and maintain its legal existence, rights (charter and statutory) and
franchises, except as permitted by Section 8.3 (Investments), Section 8.6
(Restriction on Fundamental Changes) and Section 8.10 (Modification of
Constituent Documents).
SECTION 7.2 COMPLIANCE WITH LAWS, ETC.
The Borrower shall, and shall cause each of its Subsidiaries to, comply
with all applicable Requirements of Law, Contractual Obligations and Permits,
except where the failure so to comply would not in the aggregate have a Material
Adverse Effect.
SECTION 7.3 CONDUCT OF BUSINESS
The Borrower shall, and shall cause each of its Subsidiaries to, (a)
conduct its business in the ordinary course and (b) use its reasonable efforts,
in the ordinary course and consistent with past practice, to preserve its
business and the goodwill and business of the customers, advertisers, suppliers
and others having business relations with the Borrower or any of its
Subsidiaries, except where the failure to comply with the covenants in each of
clauses (a) and (b) above would not in the aggregate have a Material Adverse
Effect.
SECTION 7.4 PAYMENT OF TAXES, ETC.
The Borrower shall, and shall cause each of its Subsidiaries to, pay
and discharge before the same shall become delinquent, all lawful material
governmental claims, taxes, assessments, charges and levies, except where
contested in good faith, by proper proceedings and adequate reserves therefor
have been established on the books of the Borrower or the appropriate Subsidiary
in conformity with GAAP.
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SECTION 7.5 MAINTENANCE OF INSURANCE
The Borrower shall (a) maintain for, and cause to be maintained by,
each of its Subsidiaries insurance with responsible and reputable insurance
companies or associations in such amounts and covering such risks as is usually
carried by companies engaged in similar businesses and owning similar properties
in the same general areas in which the Borrower or such Subsidiary operates, and
such other insurance as may be reasonably requested by the Requisite Lenders,
and, in any event, all insurance required by any Collateral Documents and (b)
cause all such insurance to provide that no cancellation, material addition in
amount or material change in coverage shall be effective until after 30 days'
written notice thereof to the Administrative Agent.
SECTION 7.6 MAINTENANCE OF CONTRACTUAL OBLIGATIONS
The Borrower shall, and shall cause each of its Subsidiaries to,
perform, observe and comply with each of the covenants, conditions and
agreements set forth in the Related Documents and under each other Contractual
Obligation under which it or any of its Subsidiaries may be bound (including to
pay all rent and other charges payable under any lease and all Indebtedness and
other obligations as the same become due) and do all things necessary to
preserve and to keep unimpaired any rights the Borrower or any of its
Subsidiaries may have under any Contractual Obligation; provided, however, that
the Borrower shall not be deemed in default under this Section 7.6 (Maintenance
of Contractual Obligations) if all such failures in the aggregate would have no
Material Adverse Effect.
SECTION 7.7 TRANSACTIONS WITH AFFILIATES
The Borrower shall conduct, and cause each of its Subsidiaries to
conduct, all transactions otherwise not prohibited under this Agreement with any
of their Affiliates (including payment of management fees) on terms that are
fair and reasonable and no less favorable to the Borrower or such Subsidiary
than it would obtain in an arm's length transaction with a Person not an
Affiliate thereof; provided, however, that (a) the Borrower may make payments to
TOI of up to $3,500,000 in any Fiscal Year under the Management Services
Agreement (or another similar agreement) and (b) the Borrower may perform its
obligations under the Tax Allocation Agreement.
SECTION 7.8 ACCESS
The Borrower shall from time to time permit the Administrative Agent
and the Lenders, or any agents or representatives thereof, within five Business
Days after written notification of the same (except that during the continuance
of an Event of Default, no such notice shall be required) to (a) examine and
make copies of and abstracts from the records and books of account of the
Borrower and each of its Subsidiaries, (b) visit the properties of the Borrower
and each of its Subsidiaries, (c) discuss the affairs, finances and accounts of
the Borrower and each of its Subsidiaries with any of their respective officers
or directors and (d) communicate directly with any of the Borrower's certified
public accountants. The Borrower shall authorize its independent certified
public accountants to disclose to the Administrative Agent or any Lender during
the continuance of an Event of Default of the type described in clause (a) or
(b) of Section 9.1 (Events of Default) any and all Financial Statements and
other information of any kind, as the Administrative Agent or any Lender
reasonably requests from the Borrower and that such accountants may have with
respect to the business, financial condition, results of operations or other
affairs of the Borrower or any of its Subsidiaries.
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SECTION 7.9 KEEPING OF BOOKS
The Borrower shall, and shall cause each of its Subsidiaries to keep,
proper books of record and account, in which full and correct entries shall be
made in conformity with GAAP (to the extent GAAP is applicable thereto) of all
financial transactions and the assets and business of the Borrower and each such
Subsidiary.
SECTION 7.10 MAINTENANCE OF PROPERTIES, ETC.
The Borrower shall, and shall cause each of its Subsidiaries to,
maintain and preserve, (a) all of its properties which are necessary in the
conduct of its business in good working order and condition, subject to ordinary
wear and tear, (b) all rights, permits, licenses, approvals and privileges
(including all Permits) used or useful or necessary in the conduct of its
business and (c) all registered patents, trademarks, trade names, copyrights,
service marks and other intellectual property with respect to its business,
except where the failure to so maintain and preserve would not in the aggregate
have a Material Adverse Effect.
SECTION 7.11 APPLICATION OF PROCEEDS
The Borrower shall use the entire amount of the proceeds of the Loans
as provided in Section 4.13 (Use of Proceeds).
SECTION 7.12 ENVIRONMENTAL
The Borrower shall, and shall cause each of its Subsidiaries to comply
in all material respects with Environmental Laws and, without limiting the
foregoing, the Borrower shall, at its sole cost and expense, upon receipt of any
notification or otherwise obtaining knowledge of any Release or other event that
has any reasonable likelihood of the Borrower and its Subsidiaries incurring
Environmental Liabilities and Costs in excess of $15,000,000 in the aggregate,
(a) conduct or pay for consultants to conduct, tests or assessments of
environmental conditions at such operations or properties, including the
investigation and testing of subsurface conditions and (b) take such Remedial
Action, and undertake such investigation or other action as required by
Environmental Laws or as any Governmental Authority requires or as is
appropriate and consistent with good business practice to address the Release or
event and otherwise ensure compliance with Environmental Laws.
SECTION 7.13 ADDITIONAL COLLATERAL AND GUARANTIES
To the extent not delivered to the Administrative Agent on or before
the Effective Date, the Borrower promptly shall, and shall cause each of its
Subsidiaries promptly to, (a) execute and deliver to the Administrative Agent
such amendments to the Collateral Documents and take such actions as the
Administrative Agent deems necessary or advisable in order to grant to the
Administrative Agent, for the benefit of the Secured Parties, a perfected first
priority security interest in the Stock and Stock Equivalents of any Subsidiary
that are owned by the Borrower or any of its Subsidiaries (and in the case of
any such Subsidiary that is not a Domestic Subsidiary, requested to be pledged
by the Administrative Agent); provided, however, that in no event shall the
Borrower or any of its Subsidiaries be required to pledge in excess of 65% of
the outstanding Voting Stock of any direct Subsidiary of the Borrower that is
not a Domestic Subsidiary or any of the Stock of such Subsidiary's Subsidiaries;
and provided, further, that (i) unless required to join the Guaranty as set
forth below, the Borrower and its
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Subsidiaries shall not be required to pledge the Stock of any Landholding
Interest which prohibits such pledge and (ii) the Borrower and its Subsidiaries
shall not be required to pledge the Stock of any of Prestige Abstract & Title,
LLC, a Florida limited liability company, Professional Advantage Title, Ltd., a
Florida limited partnership, Universal Land Title of South Florida, Ltd., a
Florida limited partnership, and Universal Land Title of the Palm Beaches, Ltd.,
a Florida limited partnership, for so long as the organizational documents of
such Subsidiary prohibit such pledge (it being understood that such Subsidiaries
may be required to join the Guaranty), (b) deliver to the Administrative Agent
the certificates (if any) representing such Stock and Stock Equivalents,
together with undated stock powers endorsed in blank, in each case executed and
delivered by a Responsible Officer of the Borrower or such Subsidiary, as the
case may be, (c) in the case of any Subsidiary that is a Domestic Subsidiary
owning 5% or more of the Total Assets of the Borrower and its Subsidiaries or
contributing 5% or more of the Consolidated Net Income of the Borrower and its
Subsidiaries for the immediately preceding four Fiscal Quarters, cause such
Subsidiary (A) to become a party to (I) the Guaranty by executing a Guaranty
Supplement and (II) the applicable Collateral Documents by the execution of a
joinder agreement in form and substance satisfactory to the Administrative Agent
and (B) to take such actions necessary or advisable to grant to the
Administrative Agent for the benefit of the Secured Parties a perfected security
interest in the Collateral described in the Collateral Documents with respect to
such new Subsidiary, including the filing of Uniform Commercial Code financing
statements in such jurisdictions as may be required by the Collateral Documents
or by law or as may be reasonably requested by the Administrative Agent and (d),
if requested by the Administrative Agent, deliver to the Administrative Agent
legal opinions relating to the matters described above, which opinions shall be
in form and substance, and from counsel, reasonably satisfactory to the
Administrative Agent. Notwithstanding anything herein to the contrary, in the
event that at any time the Subsidiaries of the Borrower that are not Guarantors
own, in the aggregate for all such Subsidiaries, 5% or more of the Total Assets
of the Borrower and its Subsidiaries or contribute 5% or more of the
Consolidated Net Income of the Borrower and its Subsidiaries for the immediately
preceding four Fiscal Quarters, the Borrower shall promptly cause such number of
its Subsidiaries to become a party to (x) the Guaranty by executing a Guaranty
Supplement and (y) the applicable Collateral Documents by the execution of a
joinder agreement in form and substance satisfactory to the Administrative Agent
so that the Subsidiaries of the Borrower that are not Guarantors do not own, in
the aggregate for all such Subsidiaries, 5% or more of the Total Assets of the
Borrower and its Subsidiaries or contribute 5% or more of the Consolidated Net
Income of the Borrower and its Subsidiaries for the immediately preceding four
Fiscal Quarters. In the event that any Subsidiary of the Borrower incurs any
Guaranty Obligation in respect of the Senior Notes, the January 2003 Senior
Notes, or the Subordinated Notes, the Borrower shall promptly cause such
Subsidiary to become a party to (x) the Guaranty by executing a Guaranty
Supplement and (y) the applicable Collateral Documents by the execution of a
joinder agreement in form and substance satisfactory to the Administrative
Agent.
SECTION 7.14 INTEREST RATE CONTRACTS
The Borrower shall, at all times, maintain policies with respect to
Interest Rate Contracts and Hedging Contracts, which policies must be reasonably
satisfactory to the Administrative Agent.
SECTION 7.15 REAL PROPERTY
(a) The Borrower shall, and shall cause each of its Subsidiaries to,
(i) comply in all material respects with all of their respective obligations
under all of their respective Leases
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now or hereafter held respectively by them with respect to Real Property, (ii)
not modify, amend, cancel, extend or otherwise change in any materially adverse
manner any term, covenant or condition of any such Lease, (iii) not assign or
sublet any other Lease if such assignment or sublet would have a Material
Adverse Effect, (iv) provide the Administrative Agent with a copy of each notice
of default under any material Lease received by the Borrower or any Subsidiary
of the Borrower as soon as practicable upon receipt thereof and deliver to the
Administrative Agent a copy of each notice of default sent by the Borrower or
any Subsidiary of the Borrower under any material Lease simultaneously with its
delivery of such notice under such Lease and (v) notify the Administrative Agent
at least 14 days prior to the date the Borrower or any Subsidiary takes
possession of, or becomes liable under, any new leased premises or Lease,
whichever is earlier.
(b) At least 15 Business Days prior to (i) entering into any Lease
(other than a renewal of an existing Lease) for the principal place of business
and chief executive office of the Borrower or any other Guarantor or any other
Lease (including any renewal) in which the annual rental payments are
anticipated to equal or exceed $1,000,000 or (ii) acquiring of any material
owned Real Property, the Borrower shall, and shall cause such Guarantor to,
provide the Administrative Agent written notice thereof.
ARTICLE VIII
NEGATIVE COVENANTS
As long as any of the Obligations or the Revolving Credit Commitments
remain outstanding, without the written consent of the Requisite Lenders, the
Borrower agrees with the Lenders and the Administrative Agent that:
SECTION 8.1 INDEBTEDNESS
The Borrower shall not, and shall not permit any of its Subsidiaries
to, directly or indirectly, create, incur, assume or otherwise become or remain
directly or indirectly liable with respect to any Indebtedness except:
(a) the Obligations;
(b) Indebtedness existing on the date of this Agreement and disclosed
on Schedule 8.1;
(c) Guaranty Obligations incurred by the Borrower or any Guarantor in
respect of Indebtedness of the Borrower or any Guarantor otherwise permitted by
this Section 8.1 (Indebtedness);
(d) (i) Capital Lease Obligations incurred by the Borrower or a
Subsidiary of the Borrower to finance the acquisition of fixed assets in an
aggregate principal amount not to exceed $5,000,000 at any time and (ii)
purchase money Indebtedness incurred by the Borrower or a Subsidiary of the
Borrower to finance the acquisition of land in respect of which recourse is
limited to the satisfaction of the Liens on such land that secure such
Indebtedness;
(e) Renewals, extensions, refinancings and refundings of Indebtedness
permitted by clause (b), (d) or (e) of this Section 8.1 (Indebtedness);
provided, however, that any such renewal, extension, refinancing or refunding is
in an aggregate principal amount not greater than
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the principal amount of, and is on terms, taken as a whole, no less favorable to
the Borrower or such Subsidiary, including as to weighted average maturity, than
the Indebtedness being renewed, extended, refinanced or refunded;
(f) Indebtedness arising from intercompany loans (i) from the Borrower
to any Guarantor or from any Guarantor to the Borrower or any other Guarantor
and (ii) from the Borrower or any Guarantor to any Subsidiary of the Borrower
that is not a Guarantor; provided, however, that the Investment in the
intercompany loan to such Subsidiary is permitted under Section 8.3
(Investments);
(g) Indebtedness arising under any performance or surety bond entered
into in the ordinary course of business;
(h) Obligations under Interest Rate Contracts pursuant to Section 7.14
(Interest Rate Contracts);
(i) unsecured Indebtedness (other than Guaranty Obligations) not
otherwise permitted under this Section 8.1 (Indebtedness); provided, however,
that the incurrence of such Indebtedness does not cause a default under any
other Indebtedness of the Borrower and its Subsidiaries;
(j) Indebtedness (i) in respect of the Senior Notes in an aggregate
principal amount not in excess of $200,000,000, and (ii) in respect of the
Subordinated Notes in an aggregate principal amount not in excess of
$150,000,000;
(k) Indebtedness in respect of the January 2003 Senior Notes in an
aggregate principal amount not in excess of $100,000,000;
(l) Indebtedness (other than Guaranty Obligations) of any Subsidiary of
the Borrower in respect of which recourse is limited to the satisfaction of
Liens securing such Indebtedness encumbering Real Property constituting, or held
by, a Landholding Interest;
(m) In addition to amounts excluded pursuant to clause(l) above,
Indebtedness (other than Guaranty Obligations) of any Subsidiary of the Borrower
in respect of Landholding Interests not to exceed at any time 5% of Consolidated
Tangible Net Worth; and
(n) Indebtedness under the Warehouse Line of Credit owed by Preferred
Home Mortgage Company or its Wholly-Owned Subsidiaries not to exceed in the
aggregate the principal amount of $100,000,000.
SECTION 8.2 LIENS, ETC.
The Borrower shall not, and shall not permit any of its Subsidiaries
to, create or suffer to exist any Lien upon or with respect to any of its
properties or assets, whether now owned or hereafter acquired, or assign, or
permit any of its Subsidiaries to assign, any right to receive income, except
for:
(a) Liens created pursuant to the Loan Documents;
(b) Liens existing on the date of this Agreement and disclosed on
Schedule 8.2;
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(c) Customary Permitted Liens of the Borrower and its Subsidiaries;
(d) purchase money Liens granted by the Borrower or any Subsidiary of
the Borrower (including the interest of a lessor under a Capital Lease and Liens
to which any property is subject at the time of the Borrower's or such
Subsidiary's acquisition thereof) securing Indebtedness permitted under Section
8.1(d) (Indebtedness) and limited in each case to the property purchased with
the proceeds of such purchase money Indebtedness or subject to such Capital
Lease; provided, however, that no Lien that attaches to any Borrowing Base Asset
shall be permitted by this clause (d);
(e) any Lien securing the renewal, extension, refinancing or refunding
of any Indebtedness secured by any Lien permitted by clause (b), (d) or (e) of
this Section 8.2 (Liens, Etc.) without any change in the assets subject to such
Lien;
(f) Liens on the assets of any Subsidiary of the Borrower holding any
Landholding Interest securing Indebtedness of such Subsidiary permitted under
clause (l) and (m) of Section 8.1 (Indebtedness);
(g) Liens on the property and assets of Preferred Home Mortgage Company
and its Wholly-Owned Subsidiaries to secure Indebtedness permitted under clause
(n) of Section 8.1 (Indebtedness);
(h) Liens pursuant to warranty deeds of trust securing profit
participations and marketing fees payable at the time of a third party house
closing not to exceed $200,000 in the aggregate at any time; and
(i) Liens on the property and assets of Subsidiaries of the Borrower
that are not Domestic Subsidiaries.
SECTION 8.3 INVESTMENTS
The Borrower shall not, and shall not permit any of its Subsidiaries
to, directly or indirectly, make or maintain any Investment except:
(a) Investments existing on the date of this Agreement and disclosed on
Schedule 8.3;
(b) Investments in cash and Cash Equivalents;
(c) Investments in accounts, contract rights and chattel paper (each as
defined in the Uniform Commercial Code), notes receivable and similar items
arising or acquired in the ordinary course of business consistent with the past
practice of the Borrower and its Subsidiaries;
(d) Investments received in settlement of amounts due to the Borrower
or any Subsidiary of the Borrower effected in the ordinary course of business;
(e) Investments by (i) the Borrower in any Guarantor, or by any
Guarantor in the Borrower or any other Guarantor, or (ii) a Subsidiary that is
not a Guarantor in the Borrower or any other Subsidiary; provided, however, that
Investments made in Preferred Home Mortgage
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Company and its Subsidiaries shall not exceed in the aggregate at any time the
greater of (x) $60,000,000 and (y) 20% of Consolidated Tangible Net Worth;
(f) loans or advances to employees of the Borrower or any of its
Subsidiaries in the ordinary course of business, which loans and advances shall
not exceed the aggregate outstanding principal amount of $2,000,000 at any time;
(g) Investments constituting Guaranty Obligations permitted by clause
(c) of Section 8.1 (Indebtedness);
(h) Investments in the same or a complimentary line of business as the
Borrower not otherwise permitted hereby in an aggregate outstanding amount not
to exceed $10,000,000 at any time;
(i) equity Investments in Landholding Interests the book value of which
shall not at any time exceed in the aggregate for all such Investments 25% of
Consolidated Tangible Net Worth; and
(j) Investments in Permitted Acquisitions.
SECTION 8.4 SALE OF ASSETS
The Borrower will not, and will not permit any of its Subsidiaries to,
sell, convey, transfer, lease or otherwise dispose of, any of its assets or any
interest therein (including the sale or factoring at maturity or collection of
any accounts) to any Person, or permit or suffer any other Person to acquire any
interest in any of its assets or, in the case of any Subsidiary, issue or sell
any shares of such Subsidiary's Stock or Stock Equivalent (any such disposition
being an "Asset Sale"), except for the following:
(a) the sale or disposition of assets held for sale in the ordinary
course of business (including Asset Sales made in the ordinary course of
business pursuant to the Warehouse Line of Credit);
(b) the sale or disposition of equipment that has become obsolete or is
replaced in the ordinary course of business;
(c) assignments and licenses of intellectual property of the Borrower
and its Subsidiaries in the ordinary course of business; and
(d) any Asset Sale to the Borrower or any Guarantor.
SECTION 8.5 RESTRICTED PAYMENTS
The Borrower shall not, and shall not permit any of its Subsidiaries
to, directly or indirectly, declare, order, pay, make or set apart any sum for
any Restricted Payment except for the following:
(a) Restricted Payments by any Subsidiary of the Borrower to the
Borrower or any Guarantor; and
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(b) cash dividends in any period of four consecutive Fiscal Quarters
not to exceed:
(i) 3% of the aggregate amount of Consolidated Net Income for
such four Fiscal Quarter period, if the Total Liabilities to
Consolidated Tangible Net Worth Ratio of the Borrower for such four
Fiscal Quarter period is greater than or equal to 1.5 to 1; and
(ii) 10% of the aggregate amount of Consolidated Net Income
for such four Fiscal Quarter period, if the Total Liabilities to
Consolidated Tangible Net Worth Ratio of the Borrower for such four
Fiscal Quarter period is less than the 1.5 to 1;
provided, however, that in the event that as a result of the application of the
formulae in clause (b) above the Borrower declares or pays a cash dividend or
dividends in an amount which is permitted under clause (b) above in one or more
Fiscal Quarters and the result of such permitted cash dividend or dividends is
that, as a consequence of changes in the Consolidated Net Income of the Borrower
and its Subsidiaries, in a subsequent Fiscal Quarter the Borrower has exceeded
the amount permitted under clause (b) above such cash dividend shall not be
required to be refunded to the Borrower and the same shall not constitute a
Default or Event of Default hereunder, but the Borrower shall not be permitted
to declare or pay any cash dividend in such Fiscal Quarter; provided further
that the Restricted Payments described in clause (b) above shall not be
permitted if either (A) an Event of Default or Default shall have occurred and
be continuing at the date of declaration or payment thereof or would result
therefrom or (B) such Restricted Payment is prohibited under the terms of any
Indebtedness (other than the Obligations) of the Borrower or any of its
Subsidiaries; provided further that (i) the Restricted Payments described in
clause (b) above shall not be permitted unless before and after giving effect to
such Restricted Payments, the Borrower shall be in compliance with the financial
covenants contained in Article IV on a pro forma basis and (ii), for purposes of
calculating Total Liabilities to Consolidated Tangible Net Worth Ratio in clause
(b) above, the Net Worth of the Borrower for the immediately preceding Fiscal
Quarter shall be calculated as if any Equity Issuance that occurs in the current
Fiscal Quarter prior to such cash dividend had occurred in the previous Fiscal
Quarter.
SECTION 8.6 RESTRICTION ON FUNDAMENTAL CHANGES
Except for Permitted Acquisitions, the Borrower shall not, and shall
not permit any of its Subsidiaries to (a) merge (other than the Merger) with any
Person other than any Subsidiary into the Borrower or any Guarantor, as long as
the surviving entity of such merger is the Borrower or a Guarantor, (b)
consolidate with any Person other than any Subsidiary into the Borrower or any
Guarantor, as long as the surviving entity of such consolidation is the Borrower
or a Guarantor, (c) acquire all or substantially all of the Stock or Stock
Equivalents of any Person, (d) acquire all or substantially all of the assets of
any Person or all or substantially all of the assets constituting the business
of a division, branch or other unit operation of any Person, (e) enter into any
joint venture or partnership with any Person, other than pursuant to an
Investment made pursuant to clause (h) of Section 8.3 (Investments) or (f)
create any Subsidiary unless, after giving effect to such creation or
acquisition, the Borrower is in compliance with Section 7.13 (Additional
Collateral and Guaranties), and such Subsidiary is either (i) a Wholly-Owned
Subsidiary or (ii) created in connection with an Investment permitted pursuant
to clauses (h) and (i) of Section 8.3 (Investments).
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SECTION 8.7 CHANGE IN NATURE OF BUSINESS
The Borrower shall not, and shall not permit any of its Subsidiaries
to, make any material change in the nature or conduct of its business as carried
on at the date hereof.
SECTION 8.8 TRANSACTIONS WITH AFFILIATES
The Borrower shall not, and shall not permit any of its Subsidiaries
to, except as otherwise expressly permitted herein, do any of the following: (a)
make any Investment in an Affiliate of the Borrower that is not a Subsidiary of
the Borrower; (b) transfer, sell, lease, assign or otherwise dispose of any
asset to any Affiliate of the Borrower that is not a Subsidiary of the Borrower;
(c) merge (other than the Merger) into or consolidate with or purchase or
acquire assets from any Affiliate of the Borrower that is not a Subsidiary of
the Borrower; (d) repay any Indebtedness to any Affiliate of the Borrower that
is not a Subsidiary of the Borrower; or (e) enter into any other transaction
directly or indirectly with or for the benefit of any Affiliate of the Borrower
that is not a Guarantor (including guaranties and assumptions of obligations of
any such Affiliate), except for (i) transactions in the ordinary course of
business on a basis no less favorable to the Borrower or such Guarantor as would
be obtained in an arm's length transaction with a Person not an Affiliate, (ii)
salaries and other director or employee compensation or benefits to officers or
directors of the Borrower or any of its Subsidiaries commensurate with current
compensation and benefits levels, and (iii) indemnities of officers, directors
and employees of the Borrower and its Subsidiaries permitted by their respective
organizational documents and by applicable law; provided, however, that the
Borrower shall not be prohibited under this Section 8.8 (Transactions with
Affiliates) from (x) making payments of up to $3,500,000 per Fiscal Year to TOI
under the Management Services Agreement (or another similar agreement) or (y)
performing its obligations under the Tax Allocation Agreement.
SECTION 8.9 RESTRICTIONS ON SUBSIDIARY DISTRIBUTIONS; NO NEW
NEGATIVE PLEDGE
Other than pursuant to the Loan Documents and any agreements governing
any purchase money Indebtedness or Capital Lease Obligations permitted by clause
(b), (d), (e), (k) or (n) of Section 8.1 (Indebtedness) (in which latter case,
any prohibition or limitation shall only be effective against the assets
financed thereby), the Borrower shall not, and shall not permit any of its
Subsidiaries to (a), except as set forth on Schedule 8.9, agree to enter into or
suffer to exist or become effective any consensual encumbrance or restriction of
any kind on the ability of such Subsidiary to pay dividends or make any other
distribution or transfer of funds or assets or make loans or advances to or
other Investments in, or pay any Indebtedness owed to, the Borrower or any other
Subsidiary of the Borrower or (b) enter into or suffer to exist or become
effective any agreement prohibiting or limiting the ability of the Borrower or
any Subsidiary of the Borrower to create, incur, assume or suffer to exist any
Lien upon any of its property, assets or revenues, whether now owned or
hereafter acquired, to secure the Obligations, including any agreement requiring
any other Indebtedness or Contractual Obligation to be equally and ratably
secured with the Obligations.
SECTION 8.10 MODIFICATION OF CONSTITUENT DOCUMENTS
The Borrower shall not, and shall not permit any of its Subsidiaries
to, change its capital structure (including in the terms of its outstanding
Stock) or otherwise amend its Constituent Documents, except for changes and
amendments that do not materially affect the
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rights and privileges of the Borrower or any of its Subsidiaries, or the
interests of the Administrative Agent, the Lenders and the Issuers under the
Loan Documents or in the Collateral; provided, however, that the capital Stock
of the Borrower may be reorganized to create a dual class structure as more
fully described on Schedule 8.10.
SECTION 8.11 MODIFICATION OF RELATED DOCUMENTS
The Borrower shall not, and shall not permit any of its Subsidiaries
to, (a) alter, rescind, terminate, amend, supplement, waive or otherwise modify
any provision of any Related Document other than the Notes and the Senior Note
Indenture, the January 2003 Senior Note Indenture and the Subordinated Note
Indenture (except for modifications that do not materially affect the rights and
privileges of the Borrower or any of its Subsidiaries under such Related
Document, and that do not, when taken as a whole, materially affect the
interests of the Secured Parties under the Loan Documents or in the Collateral)
or (b) permit any breach or default to exist under any Related Document or take
or fail to take any action thereunder, if to do so could reasonably be expected
to have a Material Adverse Effect.
SECTION 8.12 MODIFICATION OF OTHER INDEBTEDNESS AGREEMENTS
The Borrower shall not, and shall not permit any of its Subsidiaries
to, change or amend the terms of any Other Indebtedness or the Subordinated Note
Indenture (or any indenture or agreement in connection therewith) if such change
or amendment would materially increase the obligations of the obligor or confer
additional material rights to the holder of such Other Indebtedness or the
Subordinated Notes in a manner materially adverse to the Borrower, any of its
Subsidiaries, the Administrative Agent or any Lender, including, without
limitation, any amendment the effect of which is to (a) materially increase the
interest rate on such Other Indebtedness or the Subordinated Note Indenture, (b)
materially accelerate the dates upon which payments of principal interest, fees
or other annuity are due on such Other Indebtedness or the Subordinated Note
Indenture, (c) materially change any material default or event of default other
than to delete or make less restrictive any default provision therein, or add
any covenant with respect to such Other Indebtedness or the Subordinated Note
Indenture, or (d) materially change the redemption or prepayment provisions of
such Other Indebtedness or the Subordinated Note Indenture other than to extend
the dates therefor or to reduce the premiums payable in connection therewith;
provided, however, with respect to the Notes, any change or acceleration
described in (a) though (d) above shall automatically be deemed to be material;
and provided further that nothing herein shall be deemed to restrict or limit
the ability of the Borrower to incur Indebtedness pursuant to clause (j) or (n)
of Section 8.1 (Indebtedness).
SECTION 8.13 ACCOUNTING CHANGES; FISCAL YEAR
The Borrower shall not, and shall not permit any of its Subsidiaries
to, change its (a) accounting treatment and reporting practices or tax reporting
treatment, except as required by GAAP or any Requirement of Law and disclosed to
the Lenders and the Administrative Agent or (b) Fiscal Year.
SECTION 8.14 MARGIN REGULATIONS
The Borrower shall not, and shall not permit any of its Subsidiaries
to, use all or any portion of the proceeds of any credit extended hereunder to
purchase or carry Margin Stock.
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SECTION 8.15 OPERATING LEASES; SALE/LEASEBACKS
(a) The Borrower shall not, and shall not permit any of its
Subsidiaries to, become or remain liable as lessee or guarantor or other surety
with respect to any operating lease, unless that aggregate amount of all rents
paid or accrued under all such operating leases (other than operating leases in
respect of Model Homes not prohibited by clause (b) below) shall not exceed
$10,000,000 in any Fiscal Year.
(b) The Borrower shall not, and shall not permit any of its
Subsidiaries to, enter into any sale and leaseback transaction covering any
property with an aggregate Fair Market Value in excess of $10,000,000; provided,
however, that the Borrower and its Subsidiaries may sell Model Homes in the
ordinary course of business and leaseback such Model Homes for a term not to
exceed three years so long as none of the Borrower or any of its Subsidiaries
has any obligation to sell or repurchase the leased Model Homes at the end of
the lease term.
SECTION 8.16 CANCELLATION, PREPAYMENT OF INDEBTEDNESS
(a) The Borrower shall not, and shall not permit any of its
Subsidiaries to, cancel any claim or Indebtedness owed to it except in the
ordinary course of business consistent with past practice.
(b) The Borrower shall not, and shall not permit any of its
Subsidiaries to, (i) prepay, redeem, purchase, repurchase or exchange, defease
or otherwise satisfy prior to the scheduled maturity thereof in any manner, or
make any payment in violation of any subordination terms of, any Indebtedness;
provided, however, that the Borrower may (A) prepay the Obligations in
accordance with the terms of this Agreement, (B) make regularly scheduled or
otherwise required repayments or redemptions of Indebtedness permitted pursuant
to Section 8.1 (Indebtedness), (C) prepay any other Indebtedness in order to
incur Indebtedness permitted under Section 8.1(e) (Indebtedness), (D) prepay any
Indebtedness payable to the Borrower by any of its Subsidiaries and (E) so long
as no Event of Default has occurred and is continuing, prepay Indebtedness in an
aggregate amount not to exceed $10,000,000 together with all such prepayments
pursuant to this clause (E), or (ii) amend, modify or change in any manner that
is material in the aggregate with all other such amendments, modifications and
changes any terms or conditions of any Indebtedness other than as (x) permitted
under Section 8.1(e) (Indebtedness) and (y) not prohibited under Section 8.12
(Modification of Other Indebtedness Agreements).
SECTION 8.17 NO SPECULATIVE TRANSACTIONS
The Borrower shall not, and shall not permit any of its Subsidiaries
to, engage in any speculative transaction or in any transaction involving
Hedging Contracts except as required by Section 7.14 (Interest Rate Contracts)
or for the sole purpose of hedging in the normal course of business and
consistent with industry practices.
SECTION 8.18 COMPLIANCE WITH ERISA
The Borrower shall not cause or permit to occur, and shall not permit
any of its Subsidiaries to cause or permit to occur, or cause or permit any
ERISA Affiliate to cause or permit to occur (a) an event which could result in
the imposition of a Lien under Section 412 of the IRC or Section 302 or 4068 of
ERISA or (b) an ERISA Event that would have a Material Adverse Effect.
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SECTION 8.19 ENVIRONMENTAL
The Borrower shall not, and shall not permit any of its Subsidiaries
to, allow a Release of any Contaminant in violation of any Environmental Law;
provided, however, that the Borrower shall not be deemed in violation of this
Section 8.19 (Environmental) if, as the consequence of all such Releases, such
Loan Party would not incur Environmental Liabilities and Costs in excess of
$15,000,000 in the aggregate.
SECTION 8.20 ACQUISITIONS OF UNENTITLED LAND PROHIBITED
The Borrower shall not, and shall not permit any of its Subsidiaries to
acquire or purchase any Unentitled Land; provided, however, that after the
Effective Date, the Borrower or any of its Subsidiaries may acquire or purchase
Unentitled Land having a purchase price or Fair Market Value not in excess of
$10,000,000 in the aggregate together with all such other Unentitled Land then
owned by the Borrower and its Subsidiaries.
SECTION 8.21 HIGH-RISE CONSTRUCTION PROHIBITED
The Borrower shall not, and shall not permit any of its Subsidiaries
to, engage in any development of a residential building having more than six (6)
stories.
ARTICLE IX
EVENTS OF DEFAULT
SECTION 9.1 EVENTS OF DEFAULT
Each of the following events shall be an Event of Default:
(a) the Borrower shall fail to pay any principal of any Loan or any
Reimbursement Obligation when the same becomes due and payable; or
(b) the Borrower shall fail to pay any interest on any Loan, any fee
under any of the Loan Documents or any other Obligation (other than one referred
to in clause (a) above) and such non-payment continues for a period of three
Business Days after the due date therefor;
(c) any representation or warranty made or deemed made by any Loan
Party in any Loan Document or by any Loan Party (or any of its officers) in
connection with any Loan Document shall prove to have been incorrect in any
material respect when made or deemed made; or
(d) any Loan Party shall fail to perform or observe (i) any term,
covenant or agreement contained in Article V, Section 6.1 (Financial
Statements), Section 6.2 (Default Notices), Section 7.1 (Preservation of
Corporate Existence, Etc.), Section 7.6 (Maintenance of Contractual
Obligations), Section 7.11 (Application of Proceeds), Section 7.12
(Environmental), Section 7.13 (Additional Collateral and Guaranties), or Section
7.15 (Real Property), Article VIII, or (ii) any other term, covenant or
agreement contained in this Agreement or in any other Loan Document if such
failure under this clause (ii) shall remain unremedied for 30 days after the
earlier of (A) the date on which a Responsible Officer of the Borrower becomes
aware of such
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failure and (B) the date on which written notice thereof shall have been given
to the Borrower by the Administrative Agent or any Lender; or
(e) (i) the Borrower or any of the Guarantors shall fail to make any
payment on any Indebtedness (other than the Obligations) of the Borrower or any
such Guarantor or any Guaranty Obligation in respect of Indebtedness of any
other Person, and in each such case, such failure relates to Indebtedness having
a principal amount of $2,500,000 or more, when the same becomes due and payable
(whether by scheduled maturity, required prepayment, acceleration, demand or
otherwise), or (ii) any other event shall occur or condition shall exist under
any agreement or instrument relating to any Indebtedness of the Borrower or any
of the Guarantors having a principal amount of $2,500,000 or more, if the effect
of such event or condition is to accelerate, or to permit the acceleration of,
the maturity of such Indebtedness, or (iii) any Indebtedness of the Borrower and
any of the Guarantors having a principal amount of $2,500,000 or more shall
become or be declared to be due and payable, or required to be prepaid or
repurchased (other than by a regularly scheduled required prepayment), prior to
the stated maturity thereof; or
(f) (i) the Borrower or any of its Subsidiaries shall generally not pay
its debts as such debts become due, shall admit in writing its inability to pay
its debts generally or shall make a general assignment for the benefit of
creditors, (ii) any proceeding shall be instituted by or against the Borrower or
any of its Subsidiaries seeking to adjudicate it a bankrupt or insolvent, or
seeking liquidation, winding up, reorganization, arrangement, adjustment,
protection, relief or composition of it or its debts under any Requirement of
Law relating to bankruptcy, insolvency or reorganization or relief of debtors,
or seeking the entry of an order for relief or the appointment of a custodian,
receiver, trustee or other similar official for it or for any substantial part
of its property; provided, however, in the case of any such proceedings
instituted against the Borrower or any of its Subsidiaries (but not instituted
by the Borrower or any of its Subsidiaries), either such proceedings shall
remain undismissed or unstayed for a period of 30 days or any of the actions
sought in such proceedings shall occur, or (iii) the Borrower or any of its
Subsidiaries shall take any corporate action to authorize any of the actions set
forth above in clauses (i) and (ii) of this subsection (f); or
(g) one or more judgments or orders (or other similar process)
involving, in any single case or in the aggregate, an amount in excess of
$2,500,000 in the case of a money judgment, to the extent not covered by
insurance, or that could reasonably be expected to have a Material Adverse
Effect, in the case of a non-monetary judgment, shall be rendered against one or
more of the Borrower and its Subsidiaries and either (i) enforcement proceedings
shall have been commenced by any creditor upon such judgment or order or (ii)
there shall be any period of 10 consecutive days during which a stay of
enforcement of such judgment or order, by reason of a pending appeal or
otherwise, shall not be in effect; or
(h) an ERISA Event shall occur and the amount of all liabilities and
deficiencies resulting therefrom that are or are reasonably likely to be imposed
on the Borrower, any Subsidiary of the Borrower or any ERISA Affiliate, whether
or not assessed, exceeds $1,000,000 in the aggregate; or
(i) any material provision of any Collateral Document or any Guaranty
after delivery thereof pursuant to this Agreement or any other Loan Document
shall for any reason cease to be valid and binding, or enforceable against, on
any Loan Party thereto, or any Loan Party shall so state in writing; or
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(j) any Collateral Document shall for any reason cease to create a
valid Lien on any of the Collateral purported to be covered thereby or except as
permitted by the Loan Documents, such Lien shall cease to be a perfected and
first priority Lien or any Loan Party shall so state in writing; or
(k) there shall occur any Change of Control; or
(l) there shall occur a Material Adverse Change or any event or
circumstances which would have a Material Adverse Effect; or
(m) one or more of the Borrower and its Subsidiaries shall have entered
into one or more consent or settlement decrees or agreements or similar
arrangements with a Governmental Authority or one or more judgments, orders,
decrees or similar actions shall have been entered against one or more of the
Borrower and its Subsidiaries based on or arising from the violation of or
pursuant to any Environmental Law, or the generation, storage, transportation,
treatment, disposal or Release of any Contaminant and, in connection with all
the foregoing, the Borrower and its Subsidiaries are likely to incur
Environmental Liabilities and Costs in excess of $15,000,000 in the aggregate;
or
(n) TOI shall engage in any business or activity other than holding (i)
the capital stock of the Borrower and Technical Olympic Nevada, Inc., a Nevada
corporation, and (ii) a 1% general partnership interest in Techolym, L.P., a
Texas limited partnership.
SECTION 9.2 REMEDIES
During the continuance of any Event of Default, the Administrative
Agent (a) may, and shall at the request of the Requisite Lenders shall, by
notice to the Borrower declare that all or any portion of the Revolving Credit
Commitments be terminated, whereupon the obligation of each Lender to make any
Loan and each Issuer to Issue any Letter of Credit shall immediately terminate,
and/or (b) may and shall at the request of the Requisite Lenders shall, by
notice to the Borrower, declare the Loans, all interest thereon and all other
amounts and Obligations payable under this Agreement to be forthwith due and
payable, whereupon the Loans, all such interest and all such amounts and
Obligations shall immediately become and be forthwith due and payable, without
presentment, demand, protest or further notice of any kind, all of which are
hereby expressly waived by the Borrower; provided, however, that upon the
occurrence of the Events of Default specified in Section 9.1(f) (Events of
Default), the Revolving Credit Commitments of each Lender to make Loans and the
commitments of each Lender and Issuer to Issue or participate in Letters of
Credit shall each automatically be terminated and the Loans, all such interest
and all such amounts and Obligations shall automatically become and be due and
payable, without presentment, demand, protest or any notice of any kind, all of
which are hereby expressly waived by the Borrower. In addition to the remedies
set forth above, the Administrative Agent may exercise any remedies provided for
by the Collateral Documents in accordance with the terms thereof or any other
remedies provided by applicable law.
SECTION 9.3 ACTIONS IN RESPECT OF LETTERS OF CREDIT
At any time after the Revolving Credit Termination Date when the funds
in a Cash Collateral Account shall be less than the Letter of Credit
Obligations, the Borrower shall pay to the Administrative Agent in immediately
available funds at the Administrative Agent's office referred to in Section 11.8
(Notices, Etc.), for deposit in a Cash Collateral Account, an
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amount equal to 105% of the sum of all outstanding Letter of Credit Obligations.
Amounts held in such Cash Collateral Account shall be applied by the
Administrative Agent to the payment of Reimbursement Obligations, and the unused
portion thereof after all such Letters of Credit shall have expired or been
fully drawn upon, if any, shall be applied in accordance with clause (f) of
Section 2.13 (Payments and Computations). The Administrative Agent shall
promptly give notice of any such application; provided, however, that the
failure to give such written notice shall not invalidate any such application.
SECTION 9.4 RESCISSION
If at any time after termination of the Revolving Credit Commitments
and/or acceleration of the maturity of the Loans, the Borrower shall pay all
arrears of interest and all payments on account of principal of the Loans and
Reimbursement Obligations that shall have become due otherwise than by
acceleration (with interest on principal and, to the extent permitted by law, on
overdue interest, at the rates specified herein) and all Events of Default and
Defaults (other than non-payment of principal of and accrued interest on the
Loans due and payable solely by virtue of acceleration) shall be remedied or
waived pursuant to Section 11.1 (Amendments, Waivers, Etc.), then upon the
written consent of the Requisite Lenders and written notice to the Borrower, the
termination of the Revolving Credit Commitments and/or the acceleration and
their consequences may be rescinded and annulled; provided, however, that such
action shall not affect any subsequent Event of Default or Default or impair any
right or remedy consequent thereon. The provisions of the preceding sentence are
intended merely to bind the Lenders and the Issuers to a decision that may be
made at the election of the Requisite Lenders; and such provisions are not
intended to benefit the Borrower and do not give the Borrower the right to
require the Lenders to rescind or annul any acceleration hereunder, even if the
conditions set forth herein are met.
ARTICLE X
THE ADMINISTRATIVE AGENT
SECTION 10.1 AUTHORIZATION AND ACTION
(a) Each Lender and each Issuer hereby appoints CNAI as the
Administrative Agent hereunder and each Lender and each Issuer authorizes the
Administrative Agent to take such action as agent on its behalf and to exercise
such powers under this Agreement and the other Loan Documents as are delegated
to the Administrative Agent under such agreements and to exercise such powers as
are reasonably incidental thereto. Without limiting the foregoing, each Lender
and each Issuer hereby authorizes the Administrative Agent to execute and
deliver, and to perform its obligations under, each of the Loan Documents to
which the Administrative Agent is a party and to exercise all rights, powers and
remedies that the Administrative Agent may have under such Loan Documents
pursuant to which the Administrative Agent is acting as agent for the Lenders,
Issuers and the other Secured Parties.
(b) As to any matters not expressly provided for by this Agreement and
the other Loan Documents (including enforcement or collection), the
Administrative Agent shall not be required to exercise any discretion or take
any action, but shall be required to act or to refrain from acting (and shall be
fully protected in so acting or refraining from acting) upon the instructions of
the Requisite Lenders, and such instructions shall be binding upon all Lenders
and each Issuer; provided, however, that the Administrative Agent shall not be
required to take any action that (i) the Administrative Agent in good faith
believes exposes it to personal liability
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unless the Administrative Agent receives an indemnification satisfactory to it
from the Lenders and the Issuers with respect to such action or (ii) is contrary
to this Agreement or applicable law. The Administrative Agent agrees to give to
each Lender and each Issuer prompt notice of each notice given to it by any Loan
Party pursuant to the terms of this Agreement or the other Loan Documents.
(c) In performing its functions and duties hereunder and under the
other Loan Documents, the Administrative Agent is acting solely on behalf of the
Lenders and the Issuers and its duties are entirely administrative in nature.
The Administrative Agent does not assume and shall not be deemed to have assumed
any obligation other than as expressly set forth herein and in the other Loan
Documents or any other relationship as the agent, fiduciary or trustee of or for
any Lender, Issuer or holder of any other Obligation. The Administrative Agent
may perform any of its duties under any Loan Document by or through its agents
or employees.
SECTION 10.2 ADMINISTRATIVE AGENT'S RELIANCE, ETC.
None of the Administrative Agent, any of its Affiliates or any of their
respective directors, officers, agents or employees shall be liable for any
action taken or omitted to be taken by it, him, her or them under or in
connection with this Agreement or the other Loan Documents, except for its, his,
her or their own gross negligence or willful misconduct. Without limiting the
foregoing, the Administrative Agent (a) may treat the payee of any Revolving
Credit Note as its holder until such Revolving Credit Note has been assigned in
accordance with Section 11.2 (Assignments and Participations), (b) may rely on
the Register to the extent set forth in Section 11.2(c) (Assignments and
Participations), (c) may consult with legal counsel (including counsel to the
Borrower or any other Loan Party), independent public accountants and other
experts selected by it and shall not be liable for any action taken or omitted
to be taken in good faith by it in accordance with the advice of such counsel,
accountants or experts, (d) makes no warranty or representation to any Lender or
Issuer and shall not be responsible to any Lender or Issuer for any statements,
warranties or representations made by or on behalf of the Borrower or any of its
Subsidiaries in or in connection with this Agreement or any other Loan Document,
(e) shall not have any duty to ascertain or to inquire either as to the
performance or observance of any terms, covenant or condition of this Agreement
or any other Loan Document, as to the financial condition of any Loan Party or
as to the existence or possible existence of any Default or Event of Default;
(f) shall not be responsible to any Lender or Issuer for the due execution,
legality, validity, enforceability, genuineness, sufficiency or value of, or the
attachment, perfection or priority of any Lien created or purported to be
created under or in connection with, this Agreement, any other Loan Document or
any other instrument or document furnished pursuant hereto or thereto; and (g)
shall incur no liability under or in respect of this Agreement or any other Loan
Document by acting upon any notice, consent, certificate or other instrument or
writing (which may be a telecopy or electronic mail) or any telephone message
believed by it to be genuine and signed or sent by the proper party or parties.
SECTION 10.3 THE ADMINISTRATIVE AGENT INDIVIDUALLY
With respect to its Ratable Portion, CNAI shall have and may exercise
the same rights and powers hereunder and is subject to the same obligations and
liabilities as and to the extent set forth herein for any other Lender. The
terms "Lenders" or "Requisite Lenders", "Lenders", and any similar terms shall,
unless the context clearly otherwise indicates, include, without limitation, the
Administrative Agent in its individual capacity as a Lender or as one of the
Requisite Lenders. CNAI and its Affiliates may accept deposits from, lend money
to, and
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generally engage in any kind of banking, trust or other business with any Loan
Party as if CNAI were not acting as the Administrative Agent.
SECTION 10.4 LENDER CREDIT DECISION
Each Lender and each Issuer acknowledges that it shall, independently
and without reliance upon the Administrative Agent or any other Lender conduct
its own independent investigation of the financial condition and affairs of the
Borrower and each other Loan Party in connection with the making and continuance
of the Loans and with the issuance of the Letters of Credit. Each Lender and
each Issuer also acknowledges that it shall, independently and without reliance
upon the Administrative Agent 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
other Loan Documents.
SECTION 10.5 INDEMNIFICATION
Each Lender agrees to indemnify the Administrative Agent and each of
its Affiliates, and each of their respective directors, officers, employees,
agents and advisors (to the extent not reimbursed by the Borrower), from and
against such Lender's aggregate Ratable Portion of any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses and disbursements (including reasonable fees, expenses and
disbursements of financial and legal advisors) of any kind or nature whatsoever
that may be imposed on, incurred by, or asserted against, the Administrative
Agent or any of its Affiliates, directors, officers, employees, agents and
advisors in any way relating to or arising out of this Agreement or the other
Loan Documents or any action taken or omitted by the Administrative Agent under
this Agreement or the other Loan Documents; provided, however, that no Lender
shall be liable to the Administrative Agent and any of its Affiliates, and any
of their respective directors, officers, employees, agents and advisors for any
portion of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements resulting from such
Administrative Agent's, Affiliates', directors', officers', employees', agents'
or advisors' gross negligence or willful misconduct. Without limiting the
foregoing, each Lender agrees to reimburse the Administrative Agent promptly
upon demand for its ratable share of any out-of-pocket expenses (including
reasonable fees, expenses and disbursements of financial and legal advisors)
incurred by the Administrative Agent in connection with the preparation,
execution, delivery, administration, modification, amendment or enforcement
(whether through negotiations, legal proceedings or otherwise) of, or legal
advice in respect of its rights or responsibilities under, this Agreement or the
other Loan Documents, to the extent that the Administrative Agent is not
reimbursed for such expenses by the Borrower or another Loan Party. The
indemnification provided for above shall apply, mutatis mutandis, to any Lender
in its capacity as a sub-agent of the Administrative Agent pursuant to Section
10.7 (Concerning the Collateral and the Collateral Documents).
SECTION 10.6 SUCCESSOR ADMINISTRATIVE AGENT
The Administrative Agent may resign at any time by giving written
notice thereof to the Lenders and the Borrower. Upon any such resignation, the
Requisite Lenders shall have the right to appoint a successor Administrative
Agent. If no successor Administrative Agent shall have been so appointed by the
Requisite Lenders, and shall have accepted such appointment, within 30 days
after the retiring Administrative Agent's giving of notice of resignation, then
the retiring Administrative Agent may, on behalf of the Lenders, appoint a
successor Administrative
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Agent, selected from among the Lenders. In either case, such appointment shall
be subject to the prior written approval of the Borrower (which approval may not
be unreasonably withheld and shall not be required upon the occurrence and
during the continuance of an Event of Default). Upon the acceptance of any
appointment as Administrative Agent by a successor Administrative Agent, such
successor Administrative Agent shall succeed to and become vested with all the
rights, powers, privileges and duties of the retiring Administrative Agent, and
the retiring Administrative Agent shall be discharged from its duties and
obligations under this Agreement and the other Loan Documents. Prior to any
retiring Administrative Agent's resignation hereunder as Administrative Agent,
the retiring Administrative Agent shall take such action as may be reasonably
necessary to assign to the successor Administrative Agent its rights as
Administrative Agent under the Loan Documents. After such resignation, the
retiring Administrative Agent shall continue to have the benefit of this Article
X as to any actions taken or omitted to be taken by it while it was
Administrative Agent under this Agreement and the other Loan Documents. Anything
herein to the contrary notwithstanding, the Administrative Agent shall resign if
at any time the Administrative Agent is not a Lender having a Revolving Credit
Commitment of at least $10,000,000 (or such ratably lesser amount if the
Revolving Credit Commitments have been reduced in accordance with this
Agreement).
SECTION 10.7 CONCERNING THE COLLATERAL AND THE COLLATERAL DOCUMENTS
(a) Each Lender and each Issuer agrees that any action taken by the
Administrative Agent or the Requisite Lenders (or, where required by the express
terms of this Agreement, a greater proportion of the Lenders) in accordance with
the provisions of this Agreement or of the other Loan Documents, and the
exercise by the Administrative Agent or the Requisite Lenders (or, where so
required, such greater proportion of the Lenders) of the powers set forth herein
or therein, together with such other powers as are reasonably incidental
thereto, shall be authorized and binding upon all of the Lenders, Issuers and
other Secured Parties. Without limiting the generality of the foregoing, the
Administrative Agent shall have the sole and exclusive right and authority to
(i) act as the disbursing and collecting agent for the Lenders and the Issuers
with respect to all payments and collections arising in connection herewith and
with the Collateral Documents; (ii) execute and deliver each Collateral Document
and accept delivery of each such agreement delivered by the Borrower or any of
its Subsidiaries; (iii) act as collateral agent for the Lenders, the Issuers and
the other Secured Parties for purposes of the perfection of all security
interests and Liens created by such agreements and all other purposes stated
therein; provided, however, that the Administrative Agent hereby appoints,
authorizes and directs each Lender and Issuer to act as collateral sub-agent for
the Administrative Agent, the Lenders and the Issuers for purposes of the
perfection of all security interests and Liens with respect to the Borrower's
and its Subsidiaries' respective Deposit Accounts maintained with, and cash and
Cash Equivalents held by, such Lender or such Issuer; (iv) manage, supervise and
otherwise deal with the Collateral; (v) take such action as is necessary or
desirable to maintain the perfection and priority of the security interests and
Liens created or purported to be created by the Collateral Documents; and (vi)
except as may be otherwise specifically restricted by the terms hereof or of any
other Loan Document, exercise all remedies given to the Administrative Agent,
the Lenders, the Issuers and the other Secured Parties with respect to the
Collateral under the Loan Documents relating thereto, applicable law or
otherwise.
(b) Each of the Lenders and the Issuers hereby directs, in accordance
with the terms hereof, the Administrative Agent to release (or, in the case of
clause (ii) below, release or
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subordinate) any Lien held by the Administrative Agent for the benefit of the
Lenders and the Issuers against any of the following:
(i) all of the Collateral, upon termination of the Revolving
Credit Commitments and payment and satisfaction in full of all Loans,
Reimbursement Obligations and all other Obligations that the
Administrative Agent has been notified in writing are then due and
payable (and, in respect of contingent Letter of Credit Obligations,
with respect to which cash collateral has been deposited or a back-up
letter of credit has been issued, in either case on terms satisfactory
to the Administrative Agent and the applicable Issuers); and
(ii) any part of the Collateral sold or disposed of by a Loan
Party if such sale or disposition is permitted by this Agreement (or
permitted pursuant to a waiver or consent of a transaction otherwise
prohibited by this Agreement) or, if not pursuant to such sale or
disposition, if such release is consented to by all the Lenders
required to consent thereto pursuant to clause (a)(viii) of Section
11.1 (Amendments, Waivers, Etc.).
Each of the Lenders and the Issuers hereby directs the Administrative Agent to
execute and deliver or file such termination and partial release statements and
do such other things as are necessary to release Liens to be released pursuant
to this Section 10.7 (Concerning the Collateral and the Collateral Documents)
promptly upon the effectiveness of any such release.
SECTION 10.8 COLLATERAL MATTERS RELATING TO RELATED OBLIGATIONS
The benefit of the Loan Documents and of the provisions of this
Agreement relating to the Collateral shall extend to and be available in respect
of any Secured Obligation arising under any Hedging Contract relating to a Loan
Document or that is otherwise owed to Persons other than the Administrative
Agent, the Lenders and the Issuers (collectively, "Related Obligations") solely
on the condition and understanding, as among the Administrative Agent and all
Secured Parties, that (a) the Related Obligations shall be entitled to the
benefit of the Loan Documents and the Collateral to the extent expressly set
forth in this Agreement and the other Loan Documents and to such extent the
Administrative Agent shall hold, and have the right and power to act with
respect to, the Guaranty and the Collateral on behalf of and as agent for the
holders of the Related Obligations, but the Administrative Agent is otherwise
acting solely as agent for the Lenders and the Issuers and shall have no
fiduciary duty, duty of loyalty, duty of care, duty of disclosure or other
obligation whatsoever to any holder of Related Obligations, (b) all matters,
acts and omissions relating in any manner to the Guaranty, the Collateral, or
the omission, creation, perfection, priority, abandonment or release of any
Lien, shall be governed solely by the provisions of this Agreement and the other
Loan Documents and no separate Lien, right, power or remedy shall arise or exist
in favor of any Secured Party under any separate instrument or agreement or in
respect of any Related Obligation, (c) each Secured Party shall be bound by all
actions taken or omitted, in accordance with the provisions of this Agreement
and the other Loan Documents, by the Administrative Agent and the Requisite
Lenders, each of whom shall be entitled to act at its sole discretion and
exclusively in its own interest given its own Revolving Credit Commitments and
its own interest in the Loans, Letter of Credit Obligations and other
Obligations to it arising under this Agreement or the other Loan Documents,
without any duty or liability to any other Secured Party or as to any Related
Obligation and without regard to whether any Related Obligation remains
outstanding or is deprived of the benefit of the Collateral or becomes unsecured
or is otherwise affected or put in jeopardy thereby, (d) no holder of Related
Obligations and no other Secured Party (except the Administrative Agent, the
Lenders
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and the Issuers, to the extent set forth in this Agreement) shall have any right
to be notified of, or to direct, require or be heard with respect to, any action
taken or omitted in respect of the Collateral or under this Agreement or the
Loan Documents and (e) no holder of any Related Obligation shall exercise any
right of setoff, banker's lien or similar right except as expressly provided in
Section 11.6 (Right of Set-off).
ARTICLE XI
MISCELLANEOUS
SECTION 11.1 AMENDMENTS, WAIVERS, ETC.
(a) No amendment or waiver of any provision of this Agreement or any
other Loan Document nor consent to any departure by any Loan Party therefrom
shall in any event be effective unless the same shall be in writing and signed
by the Requisite Lenders (or by the Administrative Agent with the consent of the
Requisite Lenders) and, in the case of any amendment, by the Borrower, and then
any such waiver or consent shall be effective only in the specific instance and
for the specific purpose for which given; provided, however, that no amendment,
waiver or consent shall, unless in writing and signed by each Lender affected
thereby, in addition to the Requisite Lenders, do any of the following:
(i) waive any condition specified in Section 3.1 (Conditions
Precedent to the Effectiveness of this Agreement) or Section 3.2(b) or
(c) (Conditions Precedent to Each Loan and Letter of Credit) (it being
understood that the making of any Loan during the continuance of an
Event of Default under Section 9.1(a) or (b) (Events of Default)
affects each Lender), except with respect to a condition based upon
another provision hereof, the waiver of which requires only the
concurrence of the Requisite Lenders;
(ii) increase the Revolving Credit Commitment of such Lender
or subject such Lender to any additional obligation; provided, however,
that, except as provided in Section 2.19 (Facility Increase), any such
increase in the Revolving Credit Commitment shall require the consent
of all Lenders;
(iii) extend the scheduled final maturity of any Loan owing to
such Lender, or waive (including any waiver of the maturity of the
Loans held by any Non-Extending Lender), reduce or postpone any
scheduled date fixed for the payment or reduction of principal of any
such Loan (it being understood that Section 2.9 (Mandatory
Prepayments)) does not provide for scheduled dates fixed for payment)
or for the reduction of such Lender's Revolving Credit Commitment;
(iv) reduce the principal amount of any Loan or Reimbursement
Obligation owing to such Lender (other than by the payment or
prepayment thereof);
(v) reduce the rate of interest on any Loan or Reimbursement
Obligations outstanding to such Lender or any fee payable hereunder to
such Lender;
(vi) postpone any scheduled date fixed for payment of such
interest or fees owing to such Lender;
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(vii) change the aggregate Ratable Portions of Lenders
required for any or all Lenders to take any action hereunder;
(viii) increase the Advance Rate in respect of any Borrowing
Base Asset or add any new category of Borrowing Base Asset to the
Borrowing Base or change or modify the definition of any category of
Borrowing Base Assets (other than to make any change the effect of
which is to make a ministerial clarification of such definition);
(ix) release a material amount of the Collateral except as
provided in Section 10.7(b) (Concerning the Collateral and the
Collateral Documents) or release the Borrower from its payment
obligation to such Lender under this Agreement or the Revolving Credit
Notes owing to such Lender (if any) or release any Guarantor from its
obligations under the Guaranty except in connection with sale or other
disposition of a Guarantor (or all or substantially all of the assets
thereof) permitted by this Agreement (or permitted pursuant to a waiver
or consent of a transaction otherwise prohibited by this Agreement); or
(x) amend Section 10.7(b) (Concerning the Collateral and the
Collateral Documents), this Section 11.1 (Amendments, Waivers, Etc.) or
either definition of the terms "Requisite Lenders" or "Ratable
Portion";
and provided, further, that no amendment, waiver or consent shall, unless in
writing and signed by the Administrative Agent in addition to the Lenders
required above to take such action, affect the rights or duties of the
Administrative Agent under this Agreement or the other Loan Documents.
(b) The Administrative Agent may, but shall have no obligation to, with
the written concurrence of any Lender, execute amendments, modifications,
waivers or consents on behalf of such Lender. Any waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
it was given. No notice to or demand on the Borrower in any case shall entitle
the Borrower to any other or further notice or demand in similar or other
circumstances.
(c) If, in connection with any proposed amendment, modification, waiver
or termination (a "Proposed Change") requiring the consent of all affected
Lenders, the consent of Requisite Lenders is obtained, but the consent of other
Lenders whose consent is required is not obtained (any such Lender whose consent
is not obtained as described in this Section 11.1 (Amendments, Waivers, Etc.)
being referred to as a "Non-Consenting Lender"), then, so long as the Lender
that is acting as the Administrative Agent is not a Non-Consenting Lender, at
the Borrower's request, each other Lender shall have a right to purchase its pro
rata share of such Non-Consenting Lender's Revolving Credit Commitment and
Revolving Credit Outstandings, and if such Lenders do not purchase all of such
Non-Consenting Lender's Revolving Credit Commitment or Revolving Credit
Outstandings, an Eligible Assignee acceptable to the Administrative Agent shall
have the right with the Administrative Agent's consent and in the Administrative
Agent's sole discretion (but shall have no obligation) to purchase from such
Non-Consenting Lender, and such Non-Consenting Lender agrees that it shall, upon
the Administrative Agent's request, sell and assign to the Lender acting as the
Administrative Agent or such Eligible Assignee, all of the Revolving Credit
Commitments, and Revolving Credit Outstandings of such Non-Consenting Lender for
an amount equal to the principal balance of all
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Loans held by the Non-Consenting Lender and all accrued interest and fees with
respect thereto and all other amounts through the date of sale, provided,
however, that such purchase and sale shall not be effective until the
Administrative Agent shall have received from such Eligible Assignee an
agreement in form and substance satisfactory to the Administrative Agent and the
Borrower whereby such Eligible Assignee shall agree to be bound by the terms
hereof. Each Lender agrees that, if it becomes a Non-Consenting Lender, it shall
execute and deliver to the Administrative Agent an Assignment and Acceptance to
evidence such sale and purchase and shall deliver to the Administrative Agent
any Revolving Credit Note (if the assigning Lender's Loans are evidenced by a
Revolving Credit Note) subject to such Assignment and Acceptance; provided,
however, that the failure of any Non-Consenting Lender to execute an Assignment
and Acceptance shall not render such sale and purchase (and the corresponding
assignment) invalid.
SECTION 11.2 ASSIGNMENTS AND PARTICIPATIONS
(a) Each Lender may sell, transfer, negotiate or assign to one or more
Eligible Assignees all or a portion of its rights and obligations hereunder
(including all of its rights and obligations with respect to the Revolving
Loans, the Swing Loans and the Letters of Credit); provided, however, that (i)
if any such assignment shall be of the assigning Lender's Revolving Credit
Outstandings and Revolving Credit Commitments, such assignment shall cover the
same percentage of such Lender's Revolving Credit Outstandings and Revolving
Credit Commitments, (ii) the aggregate amount being assigned pursuant to each
such assignment (determined as of the date of the Assignment and Acceptance with
respect to such assignment) shall in no event (if less than the Assignor's
entire interest) be less than $5,000,000 or an integral multiple of $1,000,000
in excess thereof, except, in either case, (A) with the consent of the Borrower
and the Administrative Agent or (B) if such assignment is being made to a Lender
or an Affiliate or Approved Fund of such Lender, and (iii) if such Eligible
Assignee is not, prior to the date of such assignment, a Lender or an Affiliate
or Approved Fund of a Lender, such assignment shall be subject to the prior
consent of the Administrative Agent and the Borrower (which consent shall not be
unreasonably withheld or delayed); and provided, further, that, notwithstanding
any other provision of this Section 11.2 (Assignments and Participations), the
consent of the Borrower shall not be required for any assignment occurring when
any Event of Default shall have occurred and be continuing.
(b) The parties to each such assignment shall execute and deliver to
the Administrative Agent, for its acceptance and recording, an Assignment and
Acceptance, together with any Revolving Credit Note (if the assigning Lender's
Loans are evidenced by a Revolving Credit Note) subject to such assignment. In
addition, any Lender or Eligible Assignee assuming a Revolving Credit Commitment
in connection with a Facility Increase shall execute an Assumption Agreement in
accordance with Section 2.19 (Facility Increase). Upon such execution, delivery,
acceptance and recording of any Assignment and Acceptance or Assumption
Agreement, as the case may be, and, other than in respect of assignment made
pursuant to Section 2.17 (Substitution of Lenders) and Section 11.1(c)
(Amendments, Waivers, Etc.), the receipt by the Administrative Agent from the
assignee of an assignment/assumption fee in the amount of $3,500, then from and
after the effective date specified in such Assignment and Acceptance or
Assumption Agreement, as the case may be, (i) the assignee thereunder shall
become a party hereto and, to the extent that rights and obligations under the
Loan Documents have been assigned to such assignee pursuant to such Assignment
and Acceptance or assumed by such assuming party pursuant to such Assumption
Agreement, have the rights and obligations of a Lender, and, in the case of an
assignment, if such Lender were an Issuer, of such Issuer hereunder
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and thereunder, and (ii) the assignor under an Assignment and Acceptance shall,
to the extent that rights and obligations under this Agreement have been
assigned by it pursuant to such Assignment and Acceptance, relinquish its rights
(except for those surviving the payment in full of the Obligations) and be
released from its obligations under the Loan Documents, other than those
relating to events or circumstances occurring prior to such assignment (and, in
the case of an Assignment and Acceptance covering all or the remaining portion
of an assigning Lender's rights and obligations under the Loan Documents, such
Lender shall cease to be a party hereto).
(c) The Administrative Agent shall maintain at its address referred to
in Section 11.8 (Notices, Etc.) a copy of each Assignment and Acceptance and
each Assumption Agreement delivered to and accepted by it and a register for the
recording of the names and addresses of the Lenders and the Revolving Credit
Commitments of and principal amount of the Loans and Letter of Credit
Obligations owing to each Lender from time to time (the "Register"). Any
assignment pursuant to this Section 11.2 (Assignments and Participations) shall
not be effective until such assignment is recorded in the Register. The entries
in the Register shall be conclusive and binding for all purposes, absent
manifest error, and the Loan Parties, the Administrative Agent and the Lenders
may treat each Person whose name is recorded in the Register as a Lender for all
purposes of this Agreement. The Register shall be available for inspection by
the Borrower, the Administrative Agent or any Lender at any reasonable time and
from time to time upon reasonable prior notice.
(d) Notwithstanding anything to the contrary contained in clause (b)
above, the Loans (including the Revolving Credit Notes evidencing such Loans)
are registered obligations and the right, title, and interest of the Lenders and
their assignees in and to such Loans shall be transferable only upon notation of
such transfer in the Register. A Revolving Credit Note shall only evidence the
Lender's or an assignee's right, title and interest in and to the related Loan,
and in no event is any such Revolving Credit Note to be considered a bearer
instrument or obligation. This Section 11.2 (Assignments and Participations)
shall be construed so that the Loans are at all times maintained in "registered
form" within the meaning of Sections 163(f), 871(h)(2) and 881(c)(2) of the
Internal Revenue Code or such regulations. Solely for purposes of this and for
tax purposes only, the Administrative Agent shall act as the Borrower's agent
for purposes of maintaining such notations of transfer in the Register.
(e) Upon its receipt of an Assignment and Acceptance executed by an
assigning Lender and an assignee or an Assumption Agreement executed by the
Borrower and a Lender or an Eligible Assignee, the Administrative Agent shall,
if such Assignment and Acceptance or Assumption Agreement has been completed,
(i) accept such Assignment and Acceptance or Assumption Agreement, (ii) record
the information contained therein in the Register and (iii) in the case of an
Assignment and Acceptance, give prompt notice thereof to the Borrower. Within
five Business Days after its receipt of such notice, the Borrower, at its own
expense, shall, if requested by such assignee, execute and deliver to the
Administrative Agent, new Revolving Credit Notes to the order of such assignee
in an amount equal to the Revolving Credit Commitments assumed by it pursuant to
such Assignment and Acceptance or Assumption Agreement and, if the assigning
Lender, in the case of an Assignment and Acceptance, has surrendered any
Revolving Credit Note for exchange in connection with the assignment and has
retained Revolving Credit Commitments hereunder, new Revolving Credit Notes to
the order of the assigning Lender in an amount equal to the Revolving Credit
Commitments retained by it hereunder. Such new Revolving Credit Notes shall be
dated the same date as the surrendered
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Revolving Credit Notes and be in substantially the form of Exhibit C (Form of
Revolving Credit Note).
(f) In addition to the other assignment rights provided in this Section
11.2 (Assignments and Participations), each Lender may assign, as collateral or
otherwise, any of its rights under this Agreement, whether now owned or
hereafter acquired (including rights to payments of principal or interest on the
Loans), to (x) any Federal Reserve Bank pursuant to Regulation A of the Federal
Reserve Board without notice to or consent of the Borrower or (y) in the case of
any Lender that is a Fund, any holders of obligations owed or Securities issued
by such Lender as security for such obligations or Securities or any trustee
for, or other representative of, such holders, and this Section shall not apply
to any such pledge or assignment of a security interest; provided, however, that
no such assignment shall release the assigning Lender from any of its
obligations hereunder or substitute any such pledgee or assignee for such Lender
as a party hereto.
(g) Each Lender may sell participations to one or more Persons in or to
all or a portion of its rights and obligations under the Loan Documents
(including all its rights and obligations with respect to the Revolving Loans
and Letters of Credit). The terms of such participation shall not, in any event,
require the participant's consent to any amendments, waivers or other
modifications of any provision of any Loan Documents, the consent to any
departure by any Loan Party therefrom, or to the exercising or refraining from
exercising any powers or rights such Lender may have under or in respect of the
Loan Documents (including the right to enforce the obligations of the Loan
Parties), except if any such amendment, waiver or other modification or consent
would (i) reduce the amount, or postpone any date fixed for, any amount (whether
of principal, interest or fees) payable to such participant under the Loan
Documents, to which such participant would otherwise be entitled under such
participation or (ii) result in the release of all or substantially all of the
Collateral other than in accordance with Section 10.7(b) (Concerning the
Collateral and the Collateral Documents). In the event of the sale of any
participation by any Lender, (w) such Lender's obligations under the Loan
Documents shall remain unchanged, (x) such Lender shall remain solely
responsible to the other parties for the performance of such obligations, (y)
such Lender shall remain the holder of such Obligations for all purposes of this
Agreement, and (z) the Borrower, the Administrative Agent and the other Lenders
shall continue to deal solely and directly with such Lender in connection with
such Lender's rights and obligations under this Agreement. Each participant
shall be entitled to the benefits of Section 2.15 (Capital Adequacy) and Section
2.16 (Taxes) and of Section 2.14(d) (Illegality) as if it were a Lender;
provided, however, that anything herein to the contrary notwithstanding, the
Borrower shall not, at any time, be obligated to make under Section 2.15
(Capital Adequacy), or Section 2.16 (Taxes) or Section 2.14(d) (Illegality) to
the participant in the rights and obligations of any Lender (together with such
Lender) any payment in excess of the amount the Borrower would have been
obligated to pay to such Lender in respect of such interest had such
participation not been sold.
(h) Any Issuer may at any time assign its rights and obligations
hereunder to any other Lender by an instrument in form and substance
satisfactory to the Borrower, the Administrative Agent, such Issuer and such
Eligible Assignee. If any Issuer ceases to be a Lender hereunder by virtue of
any assignment made pursuant to this Section 11.2 (Assignments and
Participations), then, as of the effective date of such cessation, such Issuer's
obligations to Issue Letters of Credit pursuant to Section 2.4 (Letters of
Credit) shall terminate and such Issuer
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shall be an Issuer hereunder only with respect to outstanding Letters of Credit
issued prior to such date.
SECTION 11.3 COSTS AND EXPENSES
(a) The Borrower agrees upon demand to pay, or reimburse the
Administrative Agent for, all of the Administrative Agent's reasonable internal
and external audit, legal, appraisal, valuation, filing, document duplication
and reproduction and investigation expenses and for all other reasonable
out-of-pocket costs and expenses of every type and nature (including, without
limitation, after receipt of invoice documentation, the reasonable fees,
expenses and disbursements of the Administrative Agent's counsel, Weil, Gotshal
& Xxxxxx LLP, local legal counsel, auditors, accountants, appraisers, printers,
insurance and environmental advisors, and other consultants and agents) incurred
by the Administrative Agent in connection with any of the following: (i) the
Administrative Agent's audit and investigation of the Borrower and its
Subsidiaries in connection with the preparation, negotiation or execution of any
Loan Document, (ii) the preparation, negotiation, execution or interpretation of
this Agreement (including, without limitation, the satisfaction or attempted
satisfaction of any conditions set forth in Article III (Conditions To Loans And
Letters Of Credit)), any Loan Document or any proposal letter or commitment
letter issued in connection therewith or the making of the Loans hereunder,
(iii) the creation, perfection or protection of the Liens under any Loan
Document (including any reasonable fees, and disbursements and expenses for
local counsel in various jurisdictions), (iv) the ongoing administration of this
Agreement and the Loans, including consultation with attorneys in connection
therewith and with respect to the Administrative Agent's rights and
responsibilities hereunder and under the other Loan Documents, (v) the
protection, collection or enforcement of any Obligation or the enforcement of
any Loan Document, (vi) the commencement, defense or intervention in any court
proceeding relating in any way to the Obligations, any Loan Party, any of the
Borrower's Subsidiaries, the Related Documents, this Agreement or any other Loan
Document, (vii) the response to, and preparation for, any subpoena or request
for document production with which the Administrative Agent is served or
deposition or other proceeding in which the Administrative Agent is called to
testify, in each case, relating in any way to the Obligations, any Loan Party,
any of the Borrower's Subsidiaries, the Acquisition, the Related Documents, this
Agreement or any other Loan Documents or (viii) any amendment, consent, waiver,
assignment, restatement, or supplement to any Loan Document or the preparation,
negotiation, and execution of the same.
(b) The Borrower further agrees to pay or reimburse the Administrative
Agent and each of the Lenders and Issuers upon demand for all out-of-pocket
costs and expenses, including, without limitation, reasonable attorneys' fees
(including allocated costs of internal counsel and costs of settlement),
incurred by the Administrative Agent, such Lenders or Issuers in connection with
any of the following: (i) in enforcing any Loan Document or Obligation or any
security therefor or exercising or enforcing any other right or remedy available
by reason of an Event of Default, (ii) in connection with any refinancing or
restructuring of the credit arrangements provided hereunder in the nature of a
"work-out" or in any insolvency or bankruptcy proceeding, (iii) in commencing,
defending or intervening in any litigation or in filing a petition, complaint,
answer, motion or other pleadings in any legal proceeding relating to the
Obligations, any Loan Party, any of the Borrower's Subsidiaries and related to
or arising out of the transactions contemplated hereby or by any other Loan
Document or Related Document or (iv) in taking any other action in or with
respect to any suit or proceeding (bankruptcy or otherwise) described in clause
(i), (ii) or (iii) above.
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SECTION 11.4 INDEMNITIES
(a) The Borrower agrees to indemnify and hold harmless the
Administrative Agent, the Arranger, each Lender and each of their respective
Affiliates, and each of the directors, officers, employees, agents,
representative, attorneys, consultants and advisors of or to any of the
foregoing (including those retained in connection with the satisfaction or
attempted satisfaction of any condition set forth in Article III (Conditions To
Loans And Letters Of Credit) (each such Person being an "Indemnitee") from and
against any and all claims, damages, liabilities, obligations, losses,
penalties, actions, judgments, suits, costs, disbursements and expenses of any
kind or nature (including fees, disbursements and expenses of financial and
legal advisors to any such Indemnitee) that may be imposed on, incurred by or
asserted against any such Indemnitee in connection with or arising out of any
investigation, litigation or proceeding, whether or not any such Indemnitee is a
party thereto, whether direct, indirect, or consequential and whether based on
any federal, state or local law or other statutory regulation, securities or
commercial law or regulation, or under common law or in equity, or on contract,
tort or otherwise, in any manner relating to or arising out of this Agreement,
any other Loan Document, any Obligation, any Letter of Credit, the Disclosure
Document, any Related Documents, the Notes or any act, event or transaction
related or attendant to any thereof, or the use or intended use of the proceeds
of the Loans or Letters of Credit or in connection with any investigation of any
potential matter covered hereby (collectively, the "Indemnified Matters");
provided, however, that the Borrower shall not have any obligation under this
Section 11.4 (Indemnities) to an Indemnitee with respect to any Indemnified
Matter caused by or resulting from the gross negligence or willful misconduct of
that Indemnitee, as determined by a court of competent jurisdiction in a final
non-appealable judgment or order. Without limiting the foregoing, Indemnified
Matters include: (i) all Environmental Liabilities and Costs arising from or
connected with the past, present or future operations of the Borrower or any of
its Subsidiaries involving any property subject to a Collateral Document, or
damage to real or personal property or natural resources or harm or injury
alleged to have resulted from any Release of Contaminants on, upon or into such
property or any contiguous real estate; (ii) any costs or liabilities incurred
in connection with any Remedial Action concerning any Borrower or any of its
Subsidiaries; (iii) any costs or liabilities incurred in connection with any
Environmental Lien and (iv) any costs or liabilities incurred in connection with
any other matter under any Environmental Law, including the Comprehensive
Environmental Response, Compensation and Liability Act of 1980 (49 U.S.C. 9601
et seq.) and applicable state property transfer laws, whether, with respect to
any of such matter, such Indemnitee is a mortgagee pursuant to any leasehold
mortgage, a mortgagee in possession, the successor in interest to the Borrower
or any of its Subsidiaries, or the owner, lessee or operator of any property of
the Borrower or any of its Subsidiaries by virtue of foreclosure, except, with
respect to those matters referred to in clauses (i), (ii), (iii) and (iv) above,
to the extent (x) incurred following foreclosure by the Administrative Agent,
any Lender or any Issuer, or the Administrative Agent, any Lender or any Issuer
having become the successor in interest to the Borrower or any of its
Subsidiaries, and (y) attributable solely to acts of the Administrative Agent,
such Lender or such Issuer or any agent on behalf of the Administrative Agent,
such lender or such Issuer. In the case of an investigation, litigation or other
proceeding to which the indemnity in this Section 11.4 (Indemnities) applies,
such indemnity shall be effective whether or not such investigation, litigation
or proceeding is brought by the Borrower, any of its directors, securityholders
or creditors, an Indemnitee or any other person, or an Indemnitee is otherwise a
party thereto and whether or not the transactions contemplated hereby are
consummated.
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(b) The Borrower shall indemnify the Administrative Agent, the Lenders
and each Issuer for, and hold the Administrative Agent, the Lenders and each
Issuer harmless from and against, any and all claims for brokerage commissions,
fees and other compensation made against the Administrative Agent, the Lenders
and the Issuers for any broker, finder or consultant with respect to any
agreement, arrangement or understanding made by or on behalf of any Loan Party
or any of its Subsidiaries in connection with the transactions contemplated by
this Agreement.
(c) The Borrower, at the request of any Indemnitee, shall have the
obligation to defend against such investigation, litigation or proceeding or
requested Remedial Action and the Borrower, in any event, may participate in the
defense thereof with legal counsel of the Borrower's choice. In the event that
such Indemnitee requests the Borrower to defend against such investigation,
litigation or proceeding or requested Remedial Action, the Borrower shall
promptly do so and such Indemnitee shall have the right to have legal counsel of
its choice participate in such defense. No action taken by legal counsel chosen
by such Indemnitee in defending against any such investigation, litigation or
proceeding or requested Remedial Action, shall vitiate or in any way impair the
Borrower's obligation and duty hereunder to indemnify and hold harmless such
Indemnitee.
(d) The Borrower agrees that any indemnification or other protection
provided to any Indemnitee pursuant to this Agreement (including pursuant to
this Section 11.4 (Indemnities)) or any other Loan Document shall (i) survive
payment in full of the Obligations and (ii) inure to the benefit of any Person
that was at any time an Indemnitee under this Agreement or any other Loan
Document.
SECTION 11.5 LIMITATION OF LIABILITY
The Borrower agrees that no Indemnitee shall have any liability
(whether in contract, tort or otherwise) to any Loan Party or any of their
respective Subsidiaries or any of their respective equity holders or creditors
for or in connection with the transactions contemplated hereby and in the other
Loan Documents and Related Documents, except for direct damages (as opposed to
special, indirect, consequential or punitive damages (including, without
limitation, any loss of profits, business or anticipated savings)) determined in
a final non-appealable judgment by a court of competent jurisdiction to have
resulted from such Indemnitee's gross negligence or willful misconduct. The
Borrower hereby waives, releases and agrees (each for itself and on behalf of
its Subsidiaries) not to xxx upon any such claim for any special, indirect,
consequential or punitive damages, whether or not accrued and whether or not
known or suspected to exist in its favor.
SECTION 11.6 RIGHT OF SET-OFF
Upon the occurrence and during the continuance of any Event of Default
each Lender and each Affiliate of a Lender is hereby authorized at any time and
from time to time, to the fullest extent permitted by law, to set off and apply
any and all deposits (general or special, time or demand, provisional or final)
at any time held and other indebtedness at any time owing by such Lender or its
Affiliates to or for the credit or the account of the Borrower against any and
all of the Obligations now or hereafter existing whether or not such Lender
shall have made any demand under this Agreement or any other Loan Document and
even though such Obligations may be unmatured. Each Lender agrees promptly to
notify the Borrower after any such set-off and application made by such Lender
or its Affiliates; provided, however, that the failure to give
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such notice shall not affect the validity of such set-off and application. The
rights of each Lender under this Section 11.6 (Right of Set-off) are in addition
to the other rights and remedies (including other rights of set-off) that such
Lender may have.
SECTION 11.7 SHARING OF PAYMENTS, ETC.
(a) If any Lender obtains any payment (whether voluntary, involuntary,
through the exercise of any right of set-off or otherwise) of the Loans owing to
it, any interest thereon, fees in respect thereof or amounts due pursuant to
Section 11.3 (Costs and Expenses) or Section 11.4 (Indemnities) (other than
payments pursuant to Section 2.14 (Special Provisions Governing Eurodollar Rate
Loans), Section 2.15 (Capital Adequacy) or Section 2.16 (Taxes) in excess of its
Ratable Portion of all payments of such Obligations obtained by all the Lenders,
such Lender (a "Purchasing Lender") shall forthwith purchase from the other
Lenders (each, a "Selling Lender") such participations in their Loans or other
Obligations as shall be necessary to cause such Purchasing Lender to share the
excess payment ratably with each of them.
(b) If all or any portion of any payment received by a Purchasing
Lender is thereafter recovered from such Purchasing Lender, such purchase from
each Selling Lender shall be rescinded and such Selling Lender shall repay to
the Purchasing Lender the purchase price to the extent of such recovery together
with an amount equal to such Selling Lender's ratable share (according to the
proportion of (i) the amount of such Selling Lender's required repayment in
relation to (ii) the total amount so recovered from the Purchasing Lender) of
any interest or other amount paid or payable by the Purchasing Lender in respect
of the total amount so recovered.
(c) The Borrower agrees that any Purchasing Lender so purchasing a
participation from a Selling Lender pursuant to this Section 11.7 (Sharing of
Payments, Etc.) may, to the fullest extent permitted by law, exercise all its
rights of payment (including the right of set-off) with respect to such
participation as fully as if such Lender were the direct creditor of the
Borrower in the amount of such participation.
SECTION 11.8 NOTICES, ETC.
All notices, demands, requests and other communications provided for in
this Agreement shall be given in writing, or by any telecommunication device
capable of creating a written record (including electronic mail), and addressed
to the party to be notified as follows:
(a) if to the Borrower:
TECHNICAL OLYMPIC USA, INC.
0000 Xxxxxxxxx Xxxxxxxxx
Xxxxx 000 X.
Xxxxxxxxx, XX 00000
Attention: Xxxxx XxXxxx, Chief Financial Officer
Telecopy no: (000) 000-0000
E-Mail Address: xxxxxxx@xxxxx.xxx
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with a copy to:
TECHNICAL OLYMPIC USA, INC.
0000 Xxxxxxxxx Xxxxxxxxx,
Xxxxx 000 X.
Xxxxxxxxx, Xxxxxxx 00000
Attention: Xxxxxxxx X. Xxxxxxxx, Esq., General Counsel
Telecopy no: (000) 000-0000
E-Mail Address: xxxxxxxxx@xxxxx.xxx
(b) if to any Lender, at its Domestic Lending Office specified opposite
its name on Schedule II (Applicable Lending Offices and Addresses for Notices)
or on the signature page of any applicable Assignment and Acceptance;
(c) if to any Issuer, at the address set forth under its name on
Schedule II (Applicable Lending Offices and Addresses for Notices); and
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(d) if to the Administrative Agent or the Swing Loan Lender:
CITICORP NORTH AMERICA, INC.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxxxx
Telecopy no: (000) 000-0000
E-Mail Address: xxxxx.xxxxxx@xxxx.xxx
with a copy to:
WEIL, GOTSHAL & XXXXXX LLP
000 Xxxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Xxxxxx X. Xxxxx, Esq.
Telecopy no: (000) 000-0000
E-Mail Address: xxxxxx.xxxxx@xxxx.xxx
or at such other address as shall be notified in writing (i) in the case of the
Borrower, the Administrative Agent and the Swing Loan Lender to the other
parties and (y) in the case of all other parties, to the Borrower and the
Administrative Agent. All such notices and communications shall be effective
upon personal delivery (if delivered by hand, including any overnight courier
service), when deposited in the mails (if sent by mail), or when properly
transmitted (if sent by a telecommunications device or through the Internet);
provided, however, that notices and communications to the Administrative Agent
pursuant to Article II (The Facility) or X (The Administrative Agent) shall not
be effective until received by the Administrative Agent.
SECTION 11.9 NO WAIVER; REMEDIES
No failure on the part of any Lender, Issuer or the Administrative
Agent to exercise, and no delay in exercising, any right hereunder shall operate
as a waiver thereof; nor shall any single or partial exercise of any such right
preclude any other or further exercise thereof or the exercise of any other
right. The remedies herein provided are cumulative and not exclusive of any
remedies provided by law.
SECTION 11.10 BINDING EFFECT
This Agreement shall become effective when it shall have been executed
by the Borrower and the Administrative Agent and when the Administrative Agent
shall have been notified by each Lender and Issuer that such Lender or Issuer
has executed it and thereafter shall be binding upon and inure to the benefit of
the Borrower, the Administrative Agent and each Lender and Issuer and, in each
case, their respective successors and assigns, provided, however, that the
Borrower shall not have the right to assign its rights hereunder or any interest
herein without the prior written consent of the Lenders.
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SECTION 11.11 GOVERNING LAW
This Agreement and the rights and obligations of the parties hereto
shall be governed by, and construed and interpreted in accordance with, the law
of the State of New York.
SECTION 11.12 SUBMISSION TO JURISDICTION; SERVICE OF PROCESS
(a) Any legal action or proceeding with respect to this Agreement or
any other Loan Document may be brought in the courts of the State of New York
sitting in the City of New York or of the United States of America for the
Southern District of New York, and, by execution and delivery of this Agreement,
the Borrower hereby accepts for itself and in respect of its property, generally
and unconditionally, the jurisdiction of the aforesaid courts. The parties
hereto hereby irrevocably waive any objection, including any objection to the
laying of venue or based on the grounds of forum non conveniens, that any of
them may now or hereafter have to the bringing of any such action or proceeding
in such respective jurisdictions.
(b) The Borrower irrevocably consents to the service of any and all
process in such action or proceeding arising out of or in connection with this
Agreement or any Loan Document by the mailing (by registered or certified mail,
postage prepaid) of copies of such process to the Process Agent or the Borrower
at its address specified in Section 11.8 (Notices, Etc.). The Borrower agrees
that a final judgment in any such action or proceeding shall be conclusive and
may be enforced in other jurisdictions by suit on the judgment or in any other
manner provided by law.
(c) Nothing contained in this Section 11.12 (Submission to
Jurisdiction; Service of Process) shall affect the right of the Administrative
Agent or any Lender to serve process in any other manner permitted by law or
commence legal proceedings or otherwise proceed against the Borrower or any
other Loan Party in any other jurisdiction.
(d) If for the purposes of obtaining judgment in any court it is
necessary to convert a sum due hereunder in Dollars into another currency, the
parties hereto agree, to the fullest extent that they may effectively do so,
that the rate of exchange used shall be that at which in accordance with normal
banking procedures the Administrative Agent could purchase Dollars with such
other currency at the spot rate of exchange quoted by the Administrative Agent
at 11:00 a.m. (New York time) on the Business Day preceding that on which final
judgment is given, for the purchase of Dollars, for delivery two Business Days
thereafter.
SECTION 11.13 WAIVER OF JURY TRIAL
EACH OF THE ADMINISTRATIVE AGENT, THE LENDERS, THE ISSUERS AND THE
BORROWER IRREVOCABLY WAIVES TRIAL BY JURY IN ANY ACTION OR PROCEEDING WITH
RESPECT TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT.
SECTION 11.14 MARSHALING; PAYMENTS SET ASIDE
None of the Administrative Agent, any Lender or any Issuer shall be
under any obligation to marshal any assets in favor of the Borrower or any other
party or against or in payment of any or all of the Obligations. To the extent
that the Borrower makes a payment or payments to the Administrative Agent, the
Lenders or the Issuers or any such Person receives
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payment from the proceeds of the Collateral or exercise their rights of set-off,
and such payment or payments or the proceeds of such enforcement or setoff or
any part thereof are subsequently invalidated, declared to be fraudulent or
preferential, set aside or required to be repaid to a trustee, receiver or any
other party, then to the extent of such recovery, the obligation or part thereof
originally intended to be satisfied, and all Liens, right and remedies therefor,
shall be revived and continued in full force and effect as if such payment had
not been made or such enforcement or setoff had not occurred.
SECTION 11.15 SECTION TITLES
The section titles contained in this Agreement are and shall be without
substantive meaning or content of any kind whatsoever and are not a part of the
agreement between the parties hereto, except when used to reference a section.
Any reference to the number of a clause, sub-clause or subsection hereof
immediately followed by a reference in parenthesis to the title of the Section
containing such clause, sub-clause or subsection is a reference to such clause,
sub-clause or subsection and not to the entire Section; provided, however, that,
in case of direct conflict between the reference to the title and the reference
to the number of such Section, the reference to the title shall govern absent
manifest error. If any reference to the number of a Section (but not to any
clause, sub-clause or subsection thereof) is followed immediately by a reference
in parenthesis to the title of a Section, the title reference shall govern in
case of direct conflict absent manifest error.
SECTION 11.16 EXECUTION IN COUNTERPARTS
This Agreement may be executed in any number of counterparts and by
different parties in separate counterparts, each of which when so executed shall
be deemed to be an original and all of which taken together shall constitute one
and the same agreement. Signature pages may be detached from multiple separate
counterparts and attached to a single counterpart so that all signature pages
are attached to the same document. Delivery of an executed signature page of
this Agreement by facsimile transmission shall be as effective as delivery of a
manually executed counterpart hereof. A set of the copies of this Agreement
signed by all parties shall be lodged with the Borrower and the Administrative
Agent.
SECTION 11.17 ENTIRE AGREEMENT
This Agreement, together with all of the other Loan Documents and all
certificates and documents delivered hereunder or thereunder, embodies the
entire agreement of the parties and supersedes all prior agreements and
understandings relating to the subject matter hereof.
SECTION 11.18 CONFIDENTIALITY
(a) The Borrower, the Lenders and the Administrative Agent hereby agree
that each of the Borrower, the Lenders and the Administrative Agent (and each of
their respective, and their respective Affiliates', employees, officers,
directors, agents and advisors) is, and has been from the commencement of
discussions with respect to the Facility, permitted to disclose to any and all
Persons, without limitation of any kind, the structure and tax aspects (as such
terms are used in Code Sections 6011, 6111 and 6112 and the regulations
promulgated thereunder) of the Facility, and all materials of any kind
(including opinions or other tax analyses) that are or have been provided to the
Borrower, such Lender or the Administrative Agent related to such
105
structure and tax aspects. In this regard, each of the Borrower, the Lenders and
the Administrative Agent acknowledge and agree that its disclosure of the
structure or tax aspects of the Facility is not limited in any way by an express
or implied understanding or agreement, oral or written (whether or not such
understanding or agreement is legally binding). Furthermore, each of the
Borrower, the Lenders and the Administrative Agent acknowledge and agree that it
does not know or have reason to know that its use or disclosure of information
relating to the structure or tax aspects of the Facility is limited in any other
manner (such as where the Facility is claimed to be proprietary or exclusive)
for the benefit of any other Person. To the extent that disclosure of the
structure or tax aspects of the Facility by the Borrower, the Administrative
Agent or the Lenders is limited by any existing agreement between or among any
of the Borrower, the Administrative Agent or the Lenders, such limitation is
agreed to be void ab initio and such agreement is hereby amended to permit
disclosure of the structure and tax aspects of the Facility as provided in this
clause (a).
(b) Subject to clause (a) of this Section 11.18 (Confidentiality), none
of the Administrative Agent or any Lender may disclose to any Person any
confidential, proprietary or non-public information of the Borrower and its
Subsidiaries furnished to the Administrative Agent or the Lenders by the
Borrower (such information being referred to collectively herein as the
"Borrower Information"), except that the Administrative Agent and each of the
Lenders may disclose Borrower Information (i) to its and its Affiliates'
employees, officers, directors, agents and advisors (it being understood that
the Persons to whom such disclosure is made will be informed of the confidential
nature of such Borrower Information and instructed to keep such Borrower
Information confidential on substantially the same terms as provided herein),
(ii) to the extent requested by any regulatory authority, (iii) to the extent
required by applicable laws or regulations or by any subpoena or similar legal
process, (iv) to any other party to this Agreement, (v) if reasonably necessary
in connection with the exercise of any remedies hereunder or under any other
Loan Document or any suit, action or proceeding relating to this Agreement or
any other Loan Document or the enforcement of rights hereunder or thereunder,
(vi) subject to an agreement containing provisions substantially the same as
those of this Section 11.18 (Confidentiality), to any assignee of or participant
in, or any prospective assignee of or participant in, any of its rights or
obligations under this Agreement, (vii) to the extent such Borrower Information
(A) is or becomes generally available to the public on a non-confidential basis
other than as a result of a breach of this Section 11.18 (Confidentiality) by
the Administrative Agent or such Lender, or (B) is or becomes available to such
Agent or such Lender on a nonconfidential basis from a source other than the
Borrower and (viii) with the prior written consent of the Borrower.
(c) Subject to clause (a) of this Section 11.18 (Confidentiality), the
Borrower may not disclose to any Person the amount or terms of any fees payable
to the Administrative Agent, the Arranger or any Lender (such information being
collectively referred to herein as the "Facility Information"), except that the
Borrower may disclose the Facility Information (i) to its and its respective
Affiliates' employees, officers, directors, agents and advisors who have a need
to know the Facility Information in connection with this Agreement and the
transactions contemplated hereby or (ii) to the extent required by applicable
laws or regulations or by any subpoena or similar legal process.
SECTION 11.19 DOCUMENTS EVIDENCE THE SAME INDEBTEDNESS.
Upon the occurrence of the Effective Date, this Agreement amends and
restates in its entirety the Original Credit Agreement and the Original Credit
Agreement shall be of no
106
further force and effect except as to evidence the incurrence by the Borrower of
the Obligations thereunder, as to evidence the representations and warranties
made by the Borrower prior to the Effective Date and as to evidence any failure
to comply with the covenants contained in such Original Credit Agreement
occurring prior to the Effective Date. The terms and conditions of this
Agreement and the Agents', the Lenders' and the Issuers' rights and remedies
under this Agreement and the other Loan Document shall apply to all of the
Obligations incurred under the Original Credit Agreement. This Agreement does
not constitute and shall not be construed to evidence a novation of or a payment
and readvance of the loan principal, interest and other sums, if any, heretofore
outstanding under the Original Credit Agreement, it being the intention of the
Borrower, and by its signature hereto, Administrative Agent, Lenders and
Issuers, that this Agreement provide for the terms and conditions of, and
evidences, the same Indebtedness as was then outstanding under the Original
Credit Agreement. All references to the Original Credit Agreement in the Loan
Documents shall be deemed to refer to this Agreement. This Agreement and each of
the other Loan Documents shall be construed to the extent reasonable to be
consistent with the other, but to the extent that the terms and conditions of
this Agreement are actually inconsistent with the terms of any other Loan
Document, this Agreement shall govern. The indebtedness and obligations
evidenced by this Agreement and the Loan Documents shall be and shall continue
to be secured as set forth in the Original Credit Agreement, as amended and
restated by this Agreement, and all of the Loan Documents, and the Liens granted
to the Administrative Agent pursuant to the Loan Documents shall continue in
full force and effect during the term of this Agreement and any renewals
thereof.
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TECHNICAL OLYMPIC USA, INC.
as Borrower
By: /s/ Xxxxx XxXxxx
-------------------------------------
Name: Xxxxx XxXxxx
Title: Vice President and Chief
Financial Officer
CITICORP NORTH AMERICA, INC.
as Administrative Agent
By: /s/ Xxxxxxx Xxxxxxx
-------------------------------------
Name: Xxxxxxx Xxxxxxx
Title: Vice President
CITIBANK, N.A.
as Issuer
By: /s/ Xxxxxxx Xxxxxxx
-------------------------------------
Name: Xxxxxxx Xxxxxxx
Title: Vice President
FLEET NATIONAL BANK
as Documentation Agent
By: /s/ XX Xxxxxxxxx
-------------------------------------
Name: XX Xxxxxxxxx
Title: Group Manager
000
XXXXXXXX XXXXX XXXXXXX, INC.
as Lender
By: /s/ Xxxxxxx Xxxxxxx
-------------------------------------
Name: Xxxxxxx Xxxxxxx
Title: Vice President
109
WASHINGTON MUTUAL BANK, F.A.
as Lender
By: /s/ Xxxx Xxxxxx
-------------------------------------
Name: Xxxx Xxxxxx
Title: Senior Vice President
110
FLEET NATIONAL BANK
as Lender
By: /s/ XX Xxxxxxxxx
------------------------------------
Name: XX Xxxxxxxxx
Title: Group Manager
111
GUARANTY BANK, A FEDERAL SAVINGS BANK
as Lender
By: /s/ Xxxxxxx X. Xxxx
------------------------------------
Name: Xxxxxxx X. Xxxx
Title: Vice President
112
COMERICA BANK
as Lender
By: /s/ Xxxxxxx X. Xxxxxxx
------------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Vice President
113
CREDIT LYONNAIS NEW YORK BRANCH
as Lender
By: /s/ Xxxxxx Xxx
------------------------------------
Name: Xxxxxx Xxx
Title: Senior Vice President
114
DEUTSCHE BANK AG, CAYMAN ISLANDS BRANCH
as Lender
By: /s/ Xxxxx Xxxxxx
------------------------------------
Name: Xxxxx Xxxxxx
Title: Director
115
OHIO SAVINGS BANK
as Lender
By: /s/ Xxxxx X. Xxxx
------------------------------------
Name: Xxxxx X. Xxxx
Title: Vice President
116
Wachovia Bank, N.A.
By: /s/ Xxxxx X. Xxxxxxx, Xx.
------------------------------------
Xxxxx X. Xxxxxxx, Xx.
Senior Vice President
117
